prem14a
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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.     )

  Filed by the Registrant   x
  Filed by a Party other than the Registrant   o
 
  Check the appropriate box:

  x   Preliminary Proxy Statement
  o   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  o   Definitive Proxy Statement
  o   Definitive Additional Materials
  o   Soliciting Material Pursuant to §240.14a-12

LaBarge, 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(i)(4) and 0-11.

        1) Title of each class of securities to which transaction applies:

Common stock, par value $0.01 per share.


        2) Aggregate number of securities to which transaction applies:

15,706,589 shares of common stock, 411,565 options to purchase common stock with an exercise price below $19.25 per share, and 119,338 restricted shares of common stock


        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):

Solely for the purpose of calculating the filing fee, the underlying value of the transaction was calculated as the sum of (A) 15,706,589 shares of common stock, multiplied by $19.25 per share, (B) 411,565 options to purchase common stock with an exercise price below $19.25 multiplied by $13.70 per option (which is the difference between $19.25 and the $5.55 weighted average exercise price of such options), and (C) 119,338 restricted shares of common stock multiplied by $19.25 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the proposed maximum aggregate value of the transaction by 0.00011610.


        4) Proposed maximum aggregate value of transaction:

$310,287,535


        5) Total fee paid:

$36,024.18


        o   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:

        2) Form, Schedule or Registration Statement No.:

        3) Filing Party:

        4) Date Filed:

SEC 1913 (02-02) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


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PRELIMINARY PROXY MATERIAL — SUBJECT TO COMPLETION
 
LaBarge, Inc.
9900 Clayton Road
St. Louis, Missouri 63124

PROXY STATEMENT AND NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON
[ • ], 2011
 
Dear Stockholder:
 
The officers and directors of LaBarge, Inc. cordially invite you to attend the special meeting of stockholders to be held at the [ • ], on [ • ], 2011 at [ • ], local time, unless adjourned or postponed to a later date. The special meeting will be held for the following purposes:
 
1. To adopt the Agreement and Plan of Merger, dated as of April 3, 2011 (the “merger agreement”), among Ducommun Incorporated, DLBMS, Inc. and LaBarge, Inc. pursuant to which DLBMS, Inc. will merge with and into LaBarge, Inc. in accordance with Delaware law, whereupon the separate existence of DLBMS, Inc. shall cease, and LaBarge, Inc. shall be the surviving corporation and each share of LaBarge, Inc. common stock shall be converted into the right to receive $19.25 in cash (the “merger”). A copy of the merger agreement is attached as Annex A to the accompanying proxy statement.
 
2. To approve adjournments or postponements of the LaBarge, Inc. special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the LaBarge, Inc. special meeting to adopt the merger agreement.
 
3. To transact such other business as may properly come before the special meeting, or any adjournment or postponement of the special meeting.
 
These items of business are described in the accompanying proxy statement. Only stockholders of record at the close of business on [ • ], 2011, are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements of the special meeting. We expect to mail this proxy statement to our stockholders on or about [ • ], 2011.
 
The LaBarge, Inc. board of directors has unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and has unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, LaBarge, Inc. and LaBarge, Inc.’s stockholders. The LaBarge, Inc. board of directors unanimously recommends that you vote “FOR” the adoption of the merger agreement and “FOR” any motion to adjourn or postpone the LaBarge, Inc. special meeting to a later date or dates if necessary or appropriate to solicit additional proxies.
 
In deciding to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, the LaBarge, Inc. board of directors considered a number of factors, including those listed under “The Merger — LaBarge’s Reasons for the Merger and Recommendation of LaBarge’s Board of Directors” on page [ • ]. When you consider the recommendation of the LaBarge, Inc. board of directors, you should be aware that some of our directors and officers have interests in the merger that may be different from, or in addition to, the interests of LaBarge, Inc. stockholders generally.
 
LaBarge, Inc. stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of LaBarge, Inc. common stock if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all the requirements of Delaware law, which are summarized in the accompanying proxy statement and reproduced in their entirety in Annex C to the proxy statement.
 
Your vote is very important, regardless of the number of shares of LaBarge, Inc. common stock you own. The merger cannot be completed unless the merger agreement is adopted by the affirmative vote of the holders of two-thirds of LaBarge, Inc.’s shares of common stock entitled to vote thereon. Whether or not you plan to attend the special meeting in person, please complete, sign and date the enclosed proxy card(s) as soon


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as possible and return it in the postage-prepaid envelope provided, or vote your shares by telephone or over the internet as described in the accompanying proxy statement. Submitting a proxy or voting by telephone or internet now will not prevent you from being able to vote at the special meeting by attending in person and casting a vote. However, if you do not return or submit your proxy or vote your shares by telephone or over the internet or vote in person at the LaBarge, Inc. special meeting, the effect will be the same as a vote “AGAINST” the proposal to adopt the merger agreement.
 
By order of the board of directors,
 
Donald H. Nonnenkamp
Vice President, Chief Financial Officer and Secretary
 
Please vote your shares promptly. You can find instructions for voting on the enclosed proxy card.
 
Please do not send your LaBarge, Inc. common stock certificate to us at this time. If the merger is completed, you will be sent instructions regarding surrender of your certificates.
 
If you have questions, contact:
 
LaBarge, Inc.
9900 Clayton Road
St. Louis, Missouri 63124
Attention: Corporate Secretary
(314) 997-0800
 
Phoenix Advisory Partners
110 Wall Street, 27th Floor
New York, NY 10005
(877) 478-5038
 
St. Louis, Missouri, [ • ], 2011
 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE MERGER, OR PASSED UPON THE FAIRNESS OR MERITS OF THE AGREEMENT AND PLAN OF MERGER OR THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, OR THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THE ENCLOSED PROXY STATEMENT. ANY CONTRARY REPRESENTATION IS A CRIMINAL OFFENSE.
 
 
YOUR VOTE IS VERY IMPORTANT.
 
Please complete, date, sign and return your proxy card(s) or vote your shares by telephone or over the internet at your earliest convenience so that your shares are represented at the LaBarge, Inc. special meeting.
 
 


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SUMMARY
 
This summary highlights material information from this proxy statement. It may not contain all of the information that is important to you. You should read carefully this entire proxy statement and the other documents to which this proxy statement refers to understand fully the merger and the related transactions. See “Where You Can Find More Information” beginning on page [ • ]. Most items in this summary include a page reference directing you to a more complete description of those items.
 
Information About LaBarge, Inc. (page [ • ])
 
In this proxy statement, the terms “LaBarge,” the “Company,” “we,” “our,” and “us” refer to LaBarge, Inc. and its subsidiaries. LaBarge provides custom high-performance electronic, electromechanical and interconnect systems on a contract basis for customers in diverse technology-driven markets. Its core competencies are manufacturing, engineering and design of interconnect systems, printed circuit board assemblies, high-level assemblies and complete electronic systems for its customers’ specialized applications.
 
LaBarge is headquartered in St. Louis, Missouri and was incorporated in 1968. LaBarge’s principal offices are located at 9900 Clayton Road, St. Louis, Missouri 63124 and its telephone number is (314) 997-0800. LaBarge’s website is www.labarge.com. LaBarge common stock is listed on the AMEX and trades under the symbol “LB.” Additional information about LaBarge is included in documents incorporated by reference into this proxy statement. See the section entitled “Where You Can Find More Information” beginning on page [ • ].
 
Information About Ducommun (page [ • ])
 
Ducommun Incorporated provides engineering and manufacturing services to the aerospace and defense industry. Ducommun is a supplier of critical components and assemblies for commercial aircraft, military aircraft, and missile and space programs through its three business units: Ducommun AeroStructures (DAS), Ducommun Technologies (DTI), and Miltec.
 
Ducommun is headquartered in Carson, California and was founded in 1849. Ducommun’s website is www.ducommun.com. Ducommun’s common stock is listed on The New York Stock Exchange and trades under the symbol “DCO.”
 
Information About Merger Subsidiary (page [ • ])
 
DLBMS, Inc., a wholly-owned subsidiary of Ducommun, is a Delaware corporation formed on March 29, 2011, for the purpose of effecting the merger of merger subsidiary with and into LaBarge. At the effective time of the merger, LaBarge will be the surviving corporation and a wholly-owned subsidiary of Ducommun.
 
The Merger (page [ • ])
 
Upon the terms and subject to the conditions of the merger agreement, and in accordance with Delaware law, at the effective time, the merger subsidiary will merge with and into LaBarge in accordance with Delaware law, whereupon the separate existence of the merger subsidiary shall cease, with LaBarge continuing as the surviving corporation and a wholly-owned subsidiary of Ducommun and each share of LaBarge common stock shall be converted into the right to receive $19.25 in cash, without interest.
 
We encourage you to read the merger agreement, which governs the merger and is attached as Annex A to this proxy statement, because it sets forth the terms of the merger.
 
Merger Consideration (page [ • ])
 
At the effective time, each share of LaBarge common stock outstanding immediately prior to the effective time will be converted into the right to receive $19.25 in cash, without interest (we refer to this as the “merger consideration”).


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Effect of the Merger on LaBarge’s Equity Awards (page [ • ])
 
Upon completion of the merger, each outstanding option to purchase LaBarge common stock will be canceled in exchange for the right to receive an amount of cash equal to $19.25, without interest, less the exercise price of the option multiplied by the number of shares of LaBarge common stock subject to the option immediately prior to the completion of the merger.
 
Each LaBarge restricted share that is outstanding and unvested immediately prior to the merger will fully vest and the holder will be entitled to receive the merger consideration for each such restricted share. Participants in the LaBarge Employee Stock Purchase Plan, or “ESPP,” will be entitled to receive the merger consideration for each share of LaBarge common stock purchased through the ESPP prior to the effective time. No new offering periods under the ESPP will commence after the date of the merger agreement.
 
Performance units outstanding as of the effective time will be converted into an unvested right to receive a cash payment at the maximum level, $1.50 per unit, upon subsequent vesting of such right, which is generally one year from the effective time, although the chief executive officer, Craig E. LaBarge (sometimes referred to herein as “Chief Executive Officer” or “CEO”), and chief financial officer, Donald H. Nonnenkamp (sometimes referred to herein as “Chief Financial Officer” or “CFO”), will receive this cash payment no later than March 15, 2012. However, if the merger is not completed until after July 3, 2011, outstanding performance units with a performance period ending on July 3, 2011 that are held by participants other than Mr. LaBarge, Mr. Nonnenkamp, Randy L. Buschling (sometimes referred to herein as “Chief Operating Officer” or “COO”), Teresa K. Huber, William D. Bitner and John R. Parmley (collectively, the “Senior Executive Officers”), will be converted into the right to receive $1.50 in cash per unit within ten days of the effective time rather than an unvested cash right. In this scenario, all outstanding performance units held by the Senior Executive Officers will be converted into the unvested cash right described above.
 
Financing Relating to the Merger (page [ • ])
 
To provide financing for the merger, UBS Loan Finance LLC, UBS Securities LLC, Credit Suisse Securities (USA) LLC and Credit Suisse AG (hereinafter referred to as the “Lenders”) have provided a commitment to Ducommun for a senior secured term loan facility of $190,000,000 and a senior secured revolving credit facility of up to $40,000,000, subject to the conditions set forth in a debt commitment letter dated April 3, 2011 (such commitment letter and any schedules, exhibits, and annexes thereto are collectively hereinafter referred to as the “Debt Commitment Letter”). In the Debt Commitment Letter, the Lenders also committed to provide a senior unsecured bridge facility of $200,000,000, to be available to Ducommun if it does not complete an anticipated offering of senior unsecured notes on or before the date on which the merger is consummated. The senior secured term loan facility of $190,000,000, the senior secured revolving credit facility of up to $40,000,000 and the $200,000,000 of financing to be obtained through either the anticipated offering of senior unsecured notes or the senior unsecured bridge facility are hereinafter collectively referred to as the “Debt Financing.” The financing commitments are subject to certain conditions, as further described under “The Merger — Financing Relating to Merger” beginning on page [ • ]. Ducommun’s obligation to consummate the merger is not subject to receipt of the proceeds from the Debt Financing. Funds needed to complete the merger include funds to:
 
  •  pay LaBarge stockholders (and holders of LaBarge’s equity-based interests and any payable cash awards) amounts due to them under the merger agreement, which based upon the shares (and LaBarge’s other equity-based interests) outstanding as of April 13, 2011 would total approximately $310 million; and
 
  •  pay fees and expenses related to the merger and the Debt Financing,
 
which will be funded through proceeds from the Debt Financing in an expected aggregate principal amount of approximately $390,000,000.
 
LaBarge’s Reasons for the Merger (page [ • ])
 
In evaluating the merger, the LaBarge board of directors consulted with LaBarge’s management, as well as LaBarge’s legal and financial advisors and, in reaching its decision to approve the merger agreement and


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the transactions contemplated thereby and to recommend that LaBarge stockholders adopt the merger agreement, the LaBarge board of directors considered a number of factors, including those listed in “The Merger — LaBarge’s Reasons for the Merger and Recommendation of LaBarge Inc.’s Board of Directors” beginning on page [ • ].
 
Recommendations of the Board of Directors to LaBarge Stockholders (page [ • ])
 
The LaBarge board of directors has unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable and fair to, and in the best interests of, LaBarge and its stockholders and has unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger. The LaBarge board of directors has resolved to recommend that LaBarge stockholders vote “FOR” the adoption of the merger agreement.
 
Opinion of LaBarge’s Financial Advisor (page [ • ])
 
LaBarge retained Stifel, Nicolaus & Company, Incorporated (“Stifel”) as its financial advisor in connection with the merger. On April 3, 2011, at a meeting of the LaBarge board of directors, Stifel delivered its opinion to the board of directors of LaBarge that, based upon and subject to the factors, considerations, qualifications, limitations and assumptions set forth in the opinion, as of that date, the per share merger consideration to be received by the holders of shares of LaBarge common stock (other than shares owned by LaBarge, Ducommun or their subsidiaries, or as to which dissenters’ rights are perfected) in connection with the merger pursuant to the merger agreement was fair to such holders of shares of LaBarge common stock, from a financial point of view.
 
The full text of Stifel’s written opinion, dated April 3, 2011, which is attached to this proxy statement as Annex B, sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion. LaBarge stockholders should read the opinion in its entirety, as well as the section of this proxy statement entitled “The Merger — Opinion of LaBarge’s Financial Advisor” beginning on page [ • ]. Stifel addressed its opinion to the board of directors of LaBarge, and its opinion does not constitute a recommendation to any LaBarge stockholder as to how such stockholder should vote at the special meeting with respect to the merger or as to any other action that a stockholder should take with respect to the merger. See “The Merger — Opinion of LaBarge’s Financial Advisor” beginning on page [ • ].
 
Record Date; Outstanding Shares; Shares Entitled to Vote (page [ • ])
 
The record date for the special meeting of LaBarge stockholders is [ • ], 2011. This means that you must be a stockholder of record of LaBarge common stock at the close of business on [ • ], 2011 in order to vote at the LaBarge special meeting. You are entitled to one vote for each share of LaBarge common stock you own. As of the record date, there were [ • ] shares of LaBarge common stock outstanding and entitled to vote at the LaBarge special meeting. A majority of the shares of LaBarge common stock outstanding at the close of business on the record date and entitled to vote, present in person or represented by proxy, at the special meeting constitutes a quorum for purposes of the special meeting.
 
Voting Agreement
 
In connection with the transactions contemplated by the merger agreement, all of LaBarge’s executive officers and certain directors, in their capacities as stockholders, together beneficially owning in the aggregate approximately 19% of the outstanding shares of LaBarge common stock as of April 3, 2011 (excluding any shares of LaBarge common stock deliverable upon exercise or conversion of any options), have entered into a voting agreement with Ducommun, dated April 3, 2011. Pursuant to the terms of the voting agreement, each such stockholder has agreed to vote its shares in favor of the merger and the adoption of the merger agreement and against alternative transaction proposals. The voting agreement will terminate (i) if the merger agreement is terminated, (ii) if the merger is not consummated by September 30, 2011 or (iii) upon consummation of the merger. Due to the vote required to approve the merger agreement, the voting agreement does not assure


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approval by stockholders to adopt the merger agreement. Therefore, your vote on the adoption of the merger agreement is very important.
 
The foregoing description of the voting agreement is not complete and is qualified in its entirety by reference to the voting agreement, a copy of which is filed as Annex D hereto and incorporated herein by reference.
 
Vote Required (page [ • ])
 
Approval of the proposal to adopt the merger agreement requires the affirmative vote of at least two-thirds of the shares of LaBarge common stock entitled to vote thereon at the special meeting. Approval of the proposal to adjourn or postpone the special meeting requires the affirmative vote of the majority of stockholders present, in person or by proxy, and entitled to vote at the special meeting, whether or not a quorum is present.
 
Stock Ownership of Directors and Executive Officers (page [ • ])
 
At the close of business on April 13, 2011, the directors and executive officers of LaBarge beneficially owned and were entitled to vote 3,395,944 shares of LaBarge common stock, collectively representing approximately 21.3% of the shares of LaBarge common stock outstanding on that date.
 
Interests of LaBarge Directors and Executive Officers in the Merger (page [ • ])
 
In considering the recommendation of the LaBarge board of directors, you should be aware that LaBarge directors and executive officers may have financial interests in the merger that are in addition to or different from their interests as stockholders and the interests of LaBarge stockholders generally and may present actual or potential conflicts of interest. LaBarge’s board of directors was aware of these interests and considered them, among other matters, in unanimously approving the merger agreement and the transactions contemplated thereby. You should consider these and other interests of LaBarge directors and executive officers that are described in this proxy statement.
 
Such interests of LaBarge directors and executive officers include:
 
  •  the accelerated cash payment for restricted shares held by LaBarge executive officers;
 
  •  the cash payment for stock options held by LaBarge executive officers;
 
  •  the entry of certain executive officers into employment agreements in connection with the merger attached hereto as Annex E;
 
  •  the payment of severance benefits pursuant to agreements with LaBarge executive officers in connection with certain qualifying terminations of employment that may occur following the merger;
 
  •  the conversion of performance units outstanding as of the effective time into an unvested right to receive a cash payment at the maximum level upon subsequent vesting; and
 
  •  the right to continued indemnification and insurance coverage by the surviving corporation for acts or omissions occurring prior to the merger.
 
De-listing of LaBarge Common Stock (page [ • ])
 
Shares of LaBarge common stock are currently traded on the AMEX under the symbol “LB.” If the merger is completed, LaBarge common stock will no longer be listed on the AMEX and will be deregistered under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” and LaBarge will no longer file periodic reports with the SEC.


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Appraisal Rights (page [ • ])
 
LaBarge stockholders have the right under Delaware law to dissent from the approval and adoption of the merger agreement, to exercise appraisal rights and to receive payment in cash of the judicially determined fair value for their shares, plus interest, if any, on the amount determined to be the fair value, in accordance with Delaware law. The fair value of shares of LaBarge common stock, as determined in accordance with Delaware law, may be more or less than, or equal to, the merger consideration to be paid to non-dissenting stockholders in the merger. To preserve their rights, LaBarge stockholders who wish to exercise appraisal rights must not vote in favor of the proposal to adopt the merger agreement and must follow the specific procedures provided under Delaware law for perfecting appraisal rights. Dissenting stockholders must precisely follow these specific procedures to exercise appraisal rights or their appraisal rights may be lost. These procedures are described in this proxy statement, and a copy of Section 262 of the DGCL (which we refer to as “Section 262”), which grants appraisal rights and governs such procedures, is attached as Annex C to this proxy statement. See “The Merger — LaBarge Stockholders’ Rights of Appraisal” beginning on page [ • ].
 
Non-solicitation Provisions (page [ • ])
 
LaBarge is subject to a “no shop” restriction on its ability to solicit third party proposals or provide information and engage in discussions with third parties relating to alternative business combination transactions. The “no shop” provision is subject to a “fiduciary-out” provision that allows LaBarge, prior to obtaining stockholder approval of the merger, (i) to engage in negotiations or discussions (including making any counterproposal or counter offer to) with any third party that has made after the date of the merger agreement a “superior proposal” or a bona fide unsolicited written acquisition proposal that the board of directors of LaBarge believes in good faith (after consultation with a financial advisor of nationally recognized reputation and outside legal counsel) is reasonably likely to lead to a “superior proposal”, (ii) furnish to any third party that has made after the date of the merger agreement a “superior proposal” nonpublic information, (iii) terminate or amend any provision of any confidentiality or standstill agreement to which it is a party with respect to a “superior proposal” and (iv) make an “adverse recommendation change,” but in each case only if the board determines in good faith, after consultation with outside legal counsel, that failure to take such action would likely result in a breach of its fiduciary duties under applicable law, taking into account all adjustments to the terms of the merger agreement that may be offered by Ducommun in response to any such proposed action by LaBarge. See “The Merger — No Solicitation” beginning on page [ • ]
 
Conditions to Completion of the Merger (page [ • ])
 
The obligations of LaBarge, Ducommun and merger subsidiary to complete the merger are subject to the satisfaction (or, to the extent permissible, waiver) on or prior to the closing date of the merger of certain conditions, including:
 
  •  the adoption of the merger agreement by holders of two-thirds of the shares of LaBarge common stock entitled to vote thereon at the LaBarge special meeting;
 
  •  the absence of any pending or threatened action by any governmental authority, having a reasonable likelihood of success, that seeks to (i) challenge or make illegal or otherwise prohibit or materially delay the consummation of the merger or any of the other transactions contemplated by the merger agreement, or to make materially more costly the merger, or to obtain from LaBarge, Ducommun or merger subsidiary any damages that are material in relation to LaBarge and its subsidiaries taken as a whole, (ii) prohibit or limit the ownership, operation or control by LaBarge, Ducommun or any of their respective subsidiaries of any material portion of their respective business or assets or to compel LaBarge, Ducommun or any of their respective subsidiaries to dispose of or hold separate any material portion of the business or assets of LaBarge, Ducommun or any of their respective subsidiaries or (iii) impose limitations on the ability of Ducommun to acquire or hold, or exercise full rights of ownership of, any shares of common stock of LaBarge;
 
  •  no applicable law shall have been enacted, entered, promulgated, enforced or deemed applicable by any governmental entity that, in any case, prohibits the consummation of the merger;


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  •  the expiration or early termination of the waiting periods applicable to the consummation of the merger under the HSR Act (as defined below); and
 
  •  the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the merger agreement.
 
In addition, the obligations of Ducommun and merger subsidiary to complete the merger are subject to the satisfaction (or, to the extent permissible, waiver) on or prior to the closing date of the merger of certain conditions, including:
 
  •  LaBarge shall not have suffered a Material Adverse Effect (as defined in the merger agreement); and
 
  •  The staff of the Securities and Exchange Commission shall not have rejected or expressly disapproved any material terms or conditions of the Offer of Settlement executed by LaBarge on March 18, 2011.
 
Regulatory Approvals Required for the Merger (page [ • ])
 
The completion of the merger is subject to compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the “HSR Act”). The notifications required under the HSR Act to the U.S. Federal Trade Commission (which we refer to as the “FTC”) and the Antitrust Division of the U.S. Department of Justice (which we refer to as the “Antitrust Division”) were filed on April 14, 2011.
 
Termination of the Merger Agreement (page [ • ])
 
The merger agreement may be terminated at any time before the effective time, whether or not the LaBarge stockholders have adopted the merger agreement:
 
  •  by mutual written agreement of Ducommun and LaBarge;
 
  •  by either Ducommun or LaBarge if:
 
  •  the merger has not been consummated on or before September 30, 2011 (which we refer to as the “end date”), unless the breach of the merger agreement by the party seeking to terminate resulted in the failure to consummate the merger by the end date;
 
  •  any applicable law, judgment or decree makes consummation of the merger illegal or otherwise prohibited or permanently enjoins the consummation of the merger and such enjoinment has become final and non-appealable, provided the party seeking to terminate the merger agreement shall have used all reasonable best efforts to prevent, oppose and remove such applicable law; or
 
  •  the adoption of the merger agreement by the LaBarge stockholders was not obtained at the LaBarge special meeting (or adjournment or postponement of the meeting).
 
  •  by Ducommun if:
 
  •  LaBarge breaches its representations or warranties or fails to perform any covenants set forth in the merger agreement, which breach or failure would cause the conditions to the closing relating to the accuracy of the representations and warranties of LaBarge or compliance by LaBarge with its obligations under the merger agreement not to be satisfied and such breach, is not cured by the earlier of the end date or 30 days after the receipt of written notice thereof, provided that, at the time of the delivery of written notice of breach, Ducommun is not in material breach of its obligations under the merger agreement;
 
  •  the LaBarge board of directors has effected an adverse recommendation change (as defined in merger agreement and on page [ • ]);
 
  •  LaBarge or the LaBarge board of directors shall approve or recommend an alternative acquisition agreement;
 
  •  LaBarge materially breaches its non-solicitation obligations set forth in the merger agreement; or


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  •  the LaBarge board of directors fails to publicly reaffirm its recommendation of the merger within 10 business days of a request by Ducommun that it do so, or at least two business days prior to the special meeting of LaBarge’s stockholders following a request to do so by Ducommun or merger subsidiary.
 
  •  by LaBarge if:
 
  •  the LaBarge board of directors authorizes LaBarge, subject to complying with the terms of the merger agreement, to enter into a written definitive agreement concerning a superior proposal (as defined on page [ • ]) provided that LaBarge has paid any applicable fees and expenses owed to Ducommun; or
 
  •  Ducommun breaches its representations or warranties or fails to perform any covenants set forth in the merger agreement, which breach or failure would cause the conditions to the closing relating to the accuracy of the representations and warranties of Ducommun or compliance by Ducommun with its obligations under the merger agreement not to be satisfied and such breach, is not cured by the earlier of the end date or 30 days after the receipt of written notice thereof, provided that, at the time of the delivery of written notice of breach, LaBarge is not in material breach of its obligations under the merger agreement.
 
Termination Fees and Expenses (page [ • ])
 
If the merger agreement is terminated in certain circumstances described under “The Merger Agreement — Termination of the Merger Agreement” beginning on page [ • ], LaBarge may be obligated to pay to Ducommun a termination fee of $12,410,000 or reimburse Ducommun for its or merger subsidiary’s reasonable transaction expenses up to $5,000,000.
 
In general, each of Ducommun and LaBarge will bear its own expenses in connection with the merger agreement and the related transactions, except Ducommun and LaBarge will equally bear the filing fees of the filings made under applicable antitrust laws.
 
Litigation Related to the Merger (page [ • ])
 
LaBarge is aware of five purported class actions against LaBarge, LaBarge’s directors and Ducommun filed by purported stockholders of LaBarge and relating to the merger. The complaints allege, among other things, that LaBarge’s directors breached their fiduciary duties to the LaBarge stockholders, and that LaBarge and Ducommun aided and abetted LaBarge’s directors in such alleged breaches of their fiduciary duties. Each plaintiff purports to bring his claims on behalf of himself and a class of LaBarge stockholders. The actions seek judicial declarations that the merger agreement was entered into in breach of the directors’ fiduciary duties, rescission of the transactions contemplated by the merger agreement, and the award of attorneys’ fees and expenses for the plaintiffs. Three lawsuits challenging the proposed transaction have been filed in Missouri state court, all in the Circuit Court of St. Louis County by the same plaintiffs’ attorneys. All seek declaratory, rescissory and other, unspecified, equitable relief against the directors and officers on a theory of breach of fiduciary duty to the stockholders and against LaBarge and Ducommun on a theory of “aiding and abetting” the individual defendants. No money damages are sought, except for attorneys’ fees and costs, and no injunctive relief is expressly sought. All three Missouri suits are identical in content, and two were filed on successive days on behalf of the same named plaintiff.
 
The three Missouri cases are:
 
1. John M. Foley, Jr. v. LaBarge, Inc. et al., St. Louis County Circuit Court Cause No. 11SL-CC01383, filed April 5, 2011.


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2. John M. Foley, Jr. v. LaBarge, Inc., et al., St. Louis County Circuit Court Cause No. 11SL-CC01391, filed April 6, 2011.
 
3. William W. Wheeler v. LaBarge, Inc., et al., St. Louis County Circuit Court Cause No. 11SL-CC01392, filed April 6, 2011.
 
Two other nearly identical lawsuits have been filed in the Chancery Court of the State of Delaware by different attorneys than the above-described matters. Barry P. Borodkin v. Craig E. LaBarge, et al., transaction ID 36985939, Case No. 6368- (filed on April 12, 2011) and Insulators and Asbestos Workers Local No. 14 v. Craig LaBarge, et al. (filed on April 15, 2011) are putative class actions that mirror the claims raised in the Missouri cases, but also seek injunctive relief to prevent the proposed transaction with Ducommun in addition to an accounting and attorneys’ fees and costs.
 
LaBarge and Ducommun and the other defendants believe that the lawsuits are without merit and intend to defend them vigorously.
 
Material United States Federal Income Tax Consequences (page [ • ])
 
The merger will be a taxable transaction to U.S. holders of LaBarge common stock for U.S. federal income tax purposes. You should read “Material United States Federal Income Tax Consequences of the Merger” beginning on page [ • ] for a more complete discussion of the U.S. federal income tax consequences of the transaction. Tax matters can be complicated, and the tax consequences of the transaction to LaBarge stockholders will depend on their particular tax situations. LaBarge stockholders should consult their tax advisors to determine the tax consequences of the transaction to them.
 
Risk Factors (page [ • ])
 
In evaluating the merger and the merger agreement, you should read carefully this proxy statement and especially consider the factors discussed in the section titled “Risk Factors” beginning on page [ • ].


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QUESTIONS AND ANSWERS ABOUT THE LABARGE SPECIAL MEETING, MERGER
AGREEMENT AND THE MERGER
 
The following questions and answers briefly address some commonly asked questions about the special meeting, the merger agreement and the merger. These questions and answers may not include all the information that is important to you. LaBarge urges you to read carefully this entire proxy statement, including the annexes and the other documents to which we have referred you. We have included page references in certain parts of this section to direct you to a more detailed description of each topic presented elsewhere in this proxy statement.
 
The Merger
 
Q: Why am I receiving this proxy statement?
 
A: The board of directors of LaBarge has unanimously agreed to the merger of merger subsidiary, a wholly-owned subsidiary of Ducommun, with and into LaBarge, with LaBarge continuing as the surviving corporation and a wholly-owned subsidiary of Ducommun. A copy of the merger agreement is attached to this proxy statement as Annex A. See “The Merger Agreement — The Merger; Closing” beginning on page [ • ].
 
In order to complete the transactions contemplated by the merger and merger agreement, holders of two-thirds of the shares of LaBarge common stock entitled to vote thereon must adopt the merger agreement and all other conditions to the merger set forth in the merger agreement must be satisfied (or waived, to the extent permitted). LaBarge stockholders will vote on the adoption of the merger agreement at the LaBarge special meeting. See “LaBarge Special Meeting” beginning on page [ • ].
 
This proxy statement contains important information about the merger agreement, the transactions contemplated by the merger agreement, including the merger, and the special meeting of LaBarge, which you should read carefully and in its entirety. The enclosed proxy materials allow you to grant a proxy or vote your shares by telephone or internet without attending the special meeting in person.
 
Your vote is very important. We encourage you to complete, date, sign and return your proxy card(s) or vote your shares by telephone or internet as soon as possible.
 
Q: What is the proposed transaction for which I am being asked to vote?
 
A: LaBarge stockholders are being asked to adopt the merger agreement at its special meeting. A copy of the merger agreement is attached to this proxy statement as Annex A. The approval of the proposal to adopt the merger agreement by the holders of two-thirds of the shares of LaBarge common stock entitled to vote thereon is a condition to the obligation of the parties to the merger agreement to complete the merger. See “The Merger Agreement — Conditions to Completion of the Merger” beginning on page [ • ] and “Summary — Conditions to Completion of the Merger” beginning on page [ • ].
 
Q: What will happen in the merger?
 
A: In the merger, the merger subsidiary will merge with and into LaBarge in accordance with Delaware law, whereupon the separate existence of the merger subsidiary shall cease, with LaBarge continuing as the surviving corporation and a wholly-owned subsidiary of Ducommun. You will thereafter cease to be a stockholder of LaBarge.
 
Q: What will LaBarge stockholders receive in the merger?
 
A: Each share of LaBarge common stock, other than shares owned by Ducommun or LaBarge or their respective wholly-owned subsidiaries, or shares owned by stockholders who have properly exercised and perfected appraisal rights under Delaware law, will be converted into the right to receive $19.25 in cash, without interest.
 
Q: How does the per share merger consideration to be received by LaBarge stockholders compare to the market price of LaBarge common stock prior to the announcement of the merger?
 
A: The per share merger consideration represents a premium of 10.4% over the closing price of $17.43 per share of LaBarge common stock on the New York Stock Exchange Amex LLC, which we refer to as “AMEX,” on April 1, 2011, the last trading day prior to the public announcement of the merger agreement,


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a 17.2% premium over LaBarge’s average daily closing price of $16.43 during the 30 trading days ending April 1, 2011, and a 23.0% premium over LaBarge’s average daily closing price of $15.65 during the 90 trading days ending April 1, 2011.
 
Q: Why is LaBarge proposing the merger?
 
A: The board of directors of LaBarge has concluded that the merger will maximize stockholder value as compared to any other strategic alternative of LaBarge, including the continued operation of LaBarge as an independent public company. To review the reasons for the merger in greater detail, see “The Merger — LaBarge’s Reasons for the Merger and Recommendation of LaBarge’s Board of Directors” beginning on page [ • ].
 
Q: What is the position of the LaBarge board of directors regarding the merger and the proposals relating to the adoption of the merger agreement?
 
A: The board of directors has unanimously approved and declared advisable the merger agreement and the transaction contemplated thereby, including the merger, and has unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of its stockholders. The LaBarge board of directors unanimously recommends that LaBarge stockholders vote “FOR” the proposal to adopt the merger agreement at the LaBarge special meeting. See “The Merger — LaBarge’s Reasons for the Merger and Recommendation of LaBarge’s Board of Directors” beginning on page [ • ], and “Summary — The Merger” beginning on page [ • ].
 
Q: What vote is needed by LaBarge stockholders to adopt the merger agreement?
 
A: LaBarge’s adoption of the merger agreement requires the affirmative vote of two-thirds of the shares of LaBarge common stock entitled to vote thereon. If you are a LaBarge stockholder and you fail to vote or abstain from voting, that will have the same effect as a vote “AGAINST” the adoption of the merger agreement. See “The LaBarge Special Meeting — Quorum and Vote Required” beginning on page [ • ].
 
Q: Do LaBarge stockholders have appraisal rights?
 
A: Yes. Under the Delaware General Corporation Law, which we refer to as the “DGCL,” holders of LaBarge common stock who do not vote for the adoption of the merger agreement have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery, which we refer to as the “Court of Chancery,” if the merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this proxy statement. See “The Merger — LaBarge Stockholders’ Rights of Appraisal” beginning on page [ • ] and “Summary — Appraisal Rights” beginning on page [ • ]. Please see Annex C for the text of the applicable provisions of the DGCL as in effect with respect to this transaction.
 
Q: What happens if I sell or transfer my shares of LaBarge common stock after the record date but before the special meeting?
 
A: The record date for LaBarge stockholders entitled to vote at the LaBarge special meeting is earlier than both the date of the LaBarge special meeting and the consummation of the merger. If you sell or transfer your shares of LaBarge common stock after the record date but before the special meeting, you will, unless other arrangements are made (such as provision of a proxy), retain your right to vote at the special meeting but will transfer the right to receive the merger consideration to the person to whom you sell or transfer your shares.
 
Q: What are the federal income tax consequences of the merger to LaBarge stockholders?
 
A: In general, the exchange of shares of LaBarge common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. See “Material United States Federal Income Tax Consequences” beginning on page [ • ] for more information. LaBarge stockholders should consult a tax advisor about the tax consequences of the exchange of the shares of LaBarge common stock for cash pursuant to the merger in light of the particular circumstances of each LaBarge stockholder.


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Q: When do you expect to complete the merger?
 
A: If the merger agreement is adopted at the LaBarge special meeting, we expect to complete the merger as soon as possible after the satisfaction of the other conditions to the merger. The closing of the merger, which we refer to as the “closing,” will occur no later than the second business day following the date on which all of the conditions to the merger, other than conditions that, by their nature are to be satisfied at the closing have been satisfied or, to the extent permissible, waived, that is the earlier of (a) any business day during the marketing period provided for with respect to the financing to be obtained by Ducommun as may be specified by Ducommun on no later than three business days prior notice to LaBarge and (b) the final day of the marketing period provided for with respect to the financing to be obtained by Ducommun, or at such place, at such other time or on such date as Ducommun and LaBarge mutually agree. LaBarge expects that the transaction will be completed in June 2011. However, we cannot assure you that such timing will occur or that the merger will be completed as expected. See “The Merger Agreement — The Merger; Closing” beginning on page [ • ].
 
Q: What happens if the merger is not consummated?
 
A: If the merger agreement is not adopted by the holders of two-thirds of LaBarge’s shares of common stock entitled to vote thereon or if the merger is not consummated for any other reason, LaBarge stockholders will not receive any payment for their shares in connection with the merger. Instead, LaBarge will remain an independent public company and LaBarge common stock will continue to be listed and traded on the AMEX. Under specified circumstances, LaBarge may be required to pay to Ducommun a fee with respect to the termination of the merger agreement, as described under “The Merger Agreement — Termination Fees and Expenses” beginning on page [ • ].
 
Q: Should I send in my stock certificates now?
 
A: NO, PLEASE DO NOT SEND YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY CARD(S). If the merger is completed, LaBarge stockholders will be sent written instructions for sending in their stock certificates or, in the case of book-entry shares, for surrendering their book-entry shares. See “The LaBarge Special Meeting — Proxy Solicitations and Expenses” beginning on page [ • ].
 
Q: Who can answer my questions about the merger?
 
A: If you have any questions about the merger or the LaBarge special meeting, need assistance in voting your shares, or need additional copies of this proxy statement or the enclosed proxy card(s), you should contact:
 
LaBarge, Inc.
9900 Clayton Road
St. Louis, Missouri 63124
Attn: Corporate Secretary
(314) 997-0800
 
Phoenix Advisory Partners
110 Wall Street, 27th Floor
New York, NY 10005
(877) 478-5038
 
Q: When and where will the special meeting be held?
 
A: The LaBarge special meeting will be held on [ • ], at [ • ], local time, or at any adjournments or postponements of the special meeting, for the purposes set forth in the proxy statement and in the accompanying notice of special meeting.
 
Q: Who is eligible to vote at the LaBarge special meeting?
 
A: Owners of LaBarge common stock are eligible to vote at the LaBarge special meeting if they were stockholders of record at the close of business on [ • ], 2011. See “The LaBarge Special Meeting — Record Date; Outstanding Shares; Shares Entitled to Vote” beginning on page [ • ].


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Q: What is a proxy?
 
A: A proxy is a stockholder’s legal designation of another person, referred to as a “proxy,” to vote shares of such stockholder’s common stock at a stockholders’ meeting. The document used to designate a proxy to vote your shares of LaBarge common stock is called a “proxy card.”
 
Q: What should I do now?
 
A: You should read this proxy statement carefully, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or over the internet as soon as possible so that your shares will be represented and voted at the special meeting. A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by telephone or over the internet. This option, if available, will be reflected in the voting instructions from the bank or brokerage firm that accompany this proxy statement. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. See “The LaBarge Special Meeting — How to Vote” beginning on page [ • ].
 
Q: May I attend the LaBarge special meeting?
 
A: All LaBarge stockholders of record as of the close of business on [ • ], 2011, the record date for the LaBarge special meeting, may attend the LaBarge special meeting. If your shares are held in “street name” by your broker, bank or other nominee, and you plan to attend the LaBarge special meeting, you must present proof of your ownership of LaBarge common stock, such as a bank or brokerage account statement, to be admitted to the meeting. You also must present at the meeting a proxy issued to you by the holder of record of your shares.
 
Q: If I am going to attend the LaBarge special meeting, should I return my proxy card(s)?
 
A: Yes. Returning your completed, signed and dated proxy card(s) or voting by telephone or over the internet ensures that your shares will be represented and voted at the LaBarge special meeting. See “The LaBarge Special Meeting — How to Vote” beginning on page [ • ].
 
Q: How will my proxy be voted?
 
A: If you complete, sign and date your proxy card(s) or vote by telephone or over the internet, your shares will be voted in accordance with your instructions. If you sign and date your proxy card(s) but do not indicate how you want to vote at the LaBarge special meeting your shares will be voted “FOR” the adoption of the merger agreement and “FOR” the proposal to approve adjournments or postponements of the LaBarge special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the LaBarge special meeting to adopt the merger agreement.
 
Q: What if my broker holds my shares in “street name?”
 
A: If a broker holds your shares for your benefit but not in your own name, your shares are in “street name.” A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by telephone or over the internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the internet through such a program must be received by 11:59 p.m., Eastern Daylight Time, on [ • ], 2011. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the LaBarge special meeting. If your shares are held in “street name” by your broker, bank or other nominee, and you plan to attend the LaBarge special meeting, you must present proof of your ownership of LaBarge common stock, as applicable, such as a bank or brokerage account statement, to be admitted to the


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meeting. In addition, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the LaBarge special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the internet with respect to your shares.
 
Q. Can I change my vote after I mail my proxy card(s) or vote by telephone or over the internet?
 
A: Yes. If you are a stockholder of record (that is, you hold your shares in your own name), you can change your vote by:
 
• sending a written notice to the corporate secretary of LaBarge, bearing a date later than the date of the proxy, that is received prior to the LaBarge special meeting and states that you revoke your proxy;
 
• voting again by telephone or over the internet by 11:59 p.m., Eastern Daylight Time, on [ • ], 2011;
 
• signing, dating and delivering a new valid proxy card(s) bearing a later date that is received prior to the LaBarge special meeting; or
 
• attending the LaBarge special meeting and voting in person, although your attendance alone will not revoke your proxy.
 
If your shares of LaBarge common stock are held in “street name” by your broker, you will need to follow the instructions you receive from your broker to revoke or change your proxy.
 
Q: What if I don’t provide my broker with instructions on how to vote?
 
A: If you wish to vote on the proposal to adopt the merger agreement, you must provide instructions to your broker because this proposal is not routine. If you do not provide your broker with instructions, your broker will not be authorized to vote with respect to the adoption of the merger agreement, and a broker non-vote will occur. This will have the same effect as a vote “AGAINST” the adoption of the merger agreement. A broker non-vote will have no effect on the adjournment or postponement proposal. Broker non-votes will be counted for purposes of determining whether a quorum is present at the LaBarge special meeting.
 
Q: What if I abstain from voting?
 
A: Abstentions will be counted in determining whether a quorum is present at the LaBarge special meeting. If you abstain from voting with respect to the proposal to adopt the merger agreement, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. With respect to the proposal to adjourn or postpone the LaBarge special meeting, if necessary or appropriate, to solicit further proxies in connection with the merger agreement adoption proposal, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn or postpone the LaBarge special meeting.
 
Q: What does it mean if I receive multiple proxy cards?
 
A: Your shares may be registered in more than one account, such as brokerage accounts and 401(k) accounts. It is important that you complete, sign, date and return each proxy card or voting instruction form you receive or vote using the telephone or over the internet as described in the instructions included with your proxy card(s) or voting instruction form(s).
 
Q: Where can I find more information about LaBarge?
 
A: You can find more information about LaBarge from various sources described under “Where You Can Find More Information” beginning on page [ • ].
 
THE LABARGE SPECIAL MEETING
 
Overview
 
This proxy statement is being provided to LaBarge stockholders as part of a solicitation of proxies by the LaBarge board of directors for use at the special meeting of LaBarge stockholders and at any adjournments or


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postponements thereof. This proxy statement is first being furnished to stockholders of LaBarge on or about [ • ], 2011. This proxy statement provides LaBarge stockholders with information they need to know to be able to vote or instruct their vote to be cast at the special meeting of LaBarge stockholders.
 
Date, Time and Place of the LaBarge Special Meeting
 
The special meeting of LaBarge stockholders will be held at [ • ] on [ • ], 2011, at [ • ], local time.
 
Purposes of the LaBarge Special Meeting
 
At the LaBarge special meeting, LaBarge stockholders will be asked:
 
  •  to adopt the merger agreement;
 
  •  to approve a proposal to approve adjournments or postponements of the LaBarge special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the LaBarge special meeting to adopt the merger agreement; and
 
  •  to transact such other business as may properly come before the special meeting.
 
LaBarge stockholders must approve the proposal to adopt the merger agreement in order for the merger to occur. If LaBarge stockholders fail to approve the proposal to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement, which we encourage you to read carefully in its entirety.
 
LaBarge Board of Directors Recommendation
 
The LaBarge board of directors has unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of LaBarge and LaBarge’s unaffiliated stockholders and has unanimously approved the merger, the merger agreement and the transactions contemplated thereby. The LaBarge board of directors unanimously recommends that you vote “FOR” the adoption of the merger agreement and “FOR” the approval of adjournment or postponement of the special meeting to a later date, if necessary or appropriate, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.
 
Record Date; Outstanding Shares; Shares Entitled to Vote
 
The record date for the special meeting of LaBarge stockholders is [ • ], 2011. This means that you must be a stockholder of record of LaBarge common stock at the close of business on [ • ], 2011, in order to vote at the LaBarge special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of LaBarge common stock at the close of business on the record date. At the close of business on the record date, there were [ • ] shares of LaBarge common stock outstanding and entitled to vote, held by approximately [ • ] holders of record. Each share of LaBarge common stock entitles its holder to one vote on all matters properly presented at the special meeting.
 
Quorum and Vote Required
 
A quorum of stockholders is necessary to hold a valid special meeting of LaBarge The required quorum for the transaction of business at the LaBarge special meeting is comprised of the holders of a majority of the outstanding shares of LaBarge common stock. Votes will be counted by the inspector appointed for the special meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. Shares of LaBarge common stock represented at the special meeting but not voted, including shares of common stock for which a stockholder directs an “abstention” from voting, as well as broker non-votes, will be counted for purposes of establishing a quorum. Once a share of LaBarge common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and at any adjourned or postponed special meeting. However, if a new record date is set for the adjourned or postponed special meeting, then a


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new quorum will have to be established. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed.
 
Adoption of the merger agreement requires the affirmative vote of two-thirds of the holders of the outstanding shares of LaBarge common stock entitled to vote. The required vote of LaBarge stockholders on the merger agreement is based upon the number of outstanding shares of LaBarge common stock as of the record date, and not the number of shares that are actually voted. Abstentions will not be counted as votes cast in favor of the proposal to adopt the merger agreement, but will count for the purposes of determining whether a quorum is present. If you fail to submit a proxy or to vote in person at the special meeting, or abstain, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.
 
Banks, brokerage firms or other nominees who hold shares in street name for customers have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the proposal to adopt the merger agreement, and, as a result, absent specific instructions from the beneficial owner of such shares of LaBarge common stock, banks, brokerage firms or other nominees are not empowered to vote those shares on non-routine matters. These broker non-votes will be counted for purposes of determining a quorum, but will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.
 
Approval of the adjournment or postponement of the special meeting to a later date, if necessary or appropriate, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares of LaBarge common stock present, in person or by proxy, and entitled to vote at the special meeting on that matter, even if less than a quorum.
 
For purposes of the adjournment or postponement proposal, if your shares of LaBarge common stock are present at the special meeting, but are not voted on this proposal, or if you have given a proxy and abstained on the proposal, this will have the same effect as if you voted “AGAINST” the proposal. If you fail to submit a proxy or vote in person at the special meeting, or there are broker non-votes on the issue, as applicable, the shares of LaBarge common stock not voted, will not be counted in respect of, and will not have an effect on, the proposal to adjourn or postpone the special meeting.
 
ITEM 1 — PROPOSAL TO ADOPT THE MERGER AGREEMENT
 
As discussed elsewhere in this proxy statement, LaBarge stockholders are considering and voting on a proposal to adopt the merger agreement. You should carefully read this proxy statement in its entirety for more detailed information concerning the transactions contemplated by the merger agreement, including the merger. In particular, you are directed to the merger agreement, which is attached as Annex A to this proxy statement.
 
The LaBarge board of directors unanimously recommends that LaBarge stockholders vote “FOR” the adoption of the merger agreement, and your properly completed, signed and dated proxy will be so voted unless you specify otherwise.
 
ITEM 2 — PROPOSAL TO APPROVE ADJOURNMENT OR POSTPONEMENT OF THE LABARGE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO PERMIT FURTHER SOLICITATION OF PROXIES IF THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF THE LABARGE SPECIAL MEETING TO ADOPT THE MERGER AGREEMENT
 
LaBarge stockholders may be asked to vote on a proposal to adjourn or postpone the LaBarge special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the LaBarge special meeting to approve the proposal to adopt the merger agreement.
 
The LaBarge board of directors unanimously recommends that LaBarge stockholders vote “FOR” the proposal to adjourn or postpone the LaBarge special meeting under certain circumstances, and your properly completed, signed and dated proxy will be so voted unless you specify otherwise.


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Stock Ownership and Voting by LaBarge’s Directors and Executive Officers
 
At the close of business on April 13, 2011, LaBarge’s directors and executive officers had the right to vote 3,395,944 shares of the then-outstanding LaBarge voting stock (excluding any shares of LaBarge common stock deliverable upon exercise or conversion of any options) at the LaBarge special meeting. At the close of business on April 13, 2011, these shares represented approximately 21.3% of the LaBarge common stock outstanding and entitled to vote at the special meeting. It is expected that LaBarge’s executive officers will vote their shares “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn or postpone the special meeting to a later date, if necessary or appropriate, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, and executive officers and certain directors collectively holding approximately 19% of the stock entitled to vote have entered into voting agreements to so vote.
 
Voting Securities and Ownership Thereof by Management and Certain Beneficial Owners
 
Set forth below is information, as of April 13, 2011, concerning all persons known to LaBarge to be beneficial owners of more than 5% of the common stock outstanding on the record date, and beneficial ownership of common stock by each director, each named executive officer of LaBarge and all executive officers and directors as a group (unless otherwise indicated, such ownership represents sole voting and sole investment power).
 
             
    Amount and Nature of
  Percent of
Name and Address of Beneficial Owner(1)
  Beneficial Ownership   Class(2)
 
Directors and Named Executive Officers:
           
William D. Bitner
  17,431 - (3)(5)     *  
Randy L. Buschling
  212,453 - (3)(4)(5)     1.3 %
Robert G. Clark
  8,385     *  
Thomas A. Corcoran
  1,500     *  
John G. Helmkamp, Jr. 
  365,196 - (6)     2.3 %
Teresa K. Huber
  53,427 - (3)(4)(5)     *  
Craig E. LaBarge
  1,789,834 - (3)(4)(5)(7)     11.2 %
Lawrence J. LeGrand
  1,218,485 - (8)(9)     7.6 %
Donald H. Nonnenkamp
  213,111 - (3)(4)(5)     1.3 %
John R. Parmley
  73,745 - (3)(4)(5)     *  
Jack E. Thomas, Jr. 
  3,685     *  
All executive officers and directors as a group (11 persons)
  3,957,252 - (4)     24.8 %
5% Stockholders
           
Joanne V. Lockard
c/o Plancorp, Inc.
540 Maryville Centre Drive, Suite 105
St. Louis, MO 63141
  1,217,035 - (9)(10)     7.6 %
Leo V. Garvin, Jr. 
c/o Plancorp, Inc.
540 Maryville Centre Drive, Suite 105
St. Louis, MO 63141
  1,208,485 - (9)     7.6 %
Wentworth, Hauser & Violich, Inc. 
301 Battery Street, Suite 400
San Francisco, CA 94111
  765,800 - (11)     4.8 %
 
 
* Less than 1%.
 
(1) The address of each named executive officer and director is c/o LaBarge, Inc., 9900 Clayton Road, St. Louis, Missouri 63124.


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(2) Percent of class is calculated on the basis of 15,958,839 common shares outstanding on April 13, 2011.
 
(3) Includes the following number of shares awarded under the 2004 Long Term Incentive Plan that are restricted until July 1, 2012: Mr. Bitner, 9,484; Mr. Buschling, 28,100; Ms. Huber, 9,484; Mr. LaBarge, 43,906; Mr. Nonnenkamp, 18,880; and Mr. Parmley, 9,484.
 
(4) Includes options exercisable within 60 days for the following number of shares under the 1995 Incentive Stock Option Plan and the 1999 Non-Qualified Stock Option Plan: Mr. Bitner, -0-; Mr. Buschling, 20,000; Ms. Huber, 15,000; Mr. LaBarge, 220,452; Mr. Nonnenkamp, 68,600; Mr. Parmley, 24,500. All executive officers and Directors as a group — 348,552 shares.
 
(5) Includes the following number of shares held in employee contribution accounts, LaBarge unrestricted match accounts and LaBarge restricted match accounts, respectively, of LaBarge’s 401(k) Benefit Plan: Mr. Bitner: -0-, 829 and -0-; Mr. Buschling: -0-, 6,956 and -0-; Ms. Huber: -0-, 1,873 and -0-; Mr. LaBarge: 105,019, 126,835 and -0-; Mr. Nonnenkamp: -0-, 6,074 and -0-; and Mr. Parmley: -0-, 6,968 and -0-. The named persons have sole voting power with respect to all shares held in their accounts, and have sole dispositive power with respect to the shares held in their LaBarge unrestricted match accounts. Except as noted below, the named persons have no dispositive power with respect to shares held in their LaBarge restricted match accounts. In addition, Messrs. LaBarge and Nonnenkamp as administrators of the Company 401(k) Benefit Plan have shared dispositive power and no voting power (except for shares in their own accounts) as to 1,760 shares held in the LaBarge restricted match accounts. Messrs. LaBarge and Nonnenkamp disclaim beneficial ownership of all shares held in the LaBarge restricted match accounts of employees other than themselves.
 
(6) Includes 2,600 shares held by Mr. Helmkamp’s spouse in her name, 3,911 shares in her IRA and 22,000 shares held in a trust, of which she acts as trustee. Also includes 45,300 shares held in three trusts for the benefit of Mr. Helmkamp’s children and 43,500 shares held in a charitable remainder trust. Mr. Helmkamp is trustee of the aforesaid trusts. Mr. Helmkamp disclaims beneficial ownership of all these shares.
 
(7) Includes 75,298 shares held by Mr. LaBarge’s spouse in her name, 34,000 shares held in her IRA and 14,702 shares as custodian for their two children. Mr. LaBarge disclaims beneficial ownership of these shares. Also includes 18,172 shares held by a trust for two children of Mr. LaBarge. Mr. LaBarge is a co-trustee of the trusts and disclaims beneficial ownership. Also includes 918,694 shares owned in Mr. LaBarge’s individual capacity and 20,000 shares held in his IRA. Also includes 212,756 shares held in a generation skipping trust for the benefit of Mr. LaBarge’s two children, of which Mr. LaBarge disclaims beneficial ownership.
 
(8) Includes 5,000 shares held in Mr. LeGrand’s individual capacity and 5,000 shares held by Mr. LeGrand’s spouse.
 
(9) Includes 1,208,485 shares of common stock held by various trusts, the beneficiaries of which are generation skipping trusts for the benefit of the children of the late Pierre L. LaBarge, Jr. Ms. Lockard and Messrs. Garvin and LeGrand, as personal representatives of Pierre L. LaBarge, Jr.’s estate, each has shared voting and shared dispositive power of the these trusts.
 
(10) Includes 1,106 shares owned jointly with Ms. Lockard’s spouse of which she has shared voting and dispositive power and 7,444 shares held in her IRA as to which she has sole voting power.
 
(11) Based on information submitted on Form 13G/A filed on February 14, 2011.
 
How to Vote
 
You may vote in person at the LaBarge special meeting or by proxy. LaBarge recommends you submit your proxy even if you plan to attend the special meeting. If you vote by proxy, you may change your vote if you attend and vote at the special meeting.
 
If you own LaBarge common stock in your own name, you are an “owner of record.” This means that you may use the enclosed proxy card(s) to tell the persons named as proxies how to vote your shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the internet, your shares will be voted in accordance with your instructions. The named proxies will vote all


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shares at the meeting for which proxies have been properly submitted (whether by mail, telephone or over the internet) and not revoked. If you sign and return your proxy card(s) but do not mark your card(s) to tell the proxies how to vote your shares on each proposal, your shares will be voted as recommended by the LaBarge board of directors. If you receive more than one proxy card, it means that you have multiple accounts at the transfer agent and/or with brokers, banks or other nominees. Please complete, sign and return all the proxy cards you have received to ensure that all your shares are voted.
 
If you are an “owner of record,” you have three voting options:
 
  •  Internet:  You can vote over the internet at the web address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote over the internet, do not return your proxy card(s).
 
  •  Telephone:  You can vote by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote by telephone, do not return your proxy card(s).
 
  •  Mail:  You can vote by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this proxy statement.
 
Please refer to the instructions on your proxy or voting instruction card to determine the deadlines for voting over the internet or by telephone. If you choose to vote by mailing a proxy card, your proxy card must be filed with LaBarge’s Corporate Secretary by the time the special meeting begins. Please do not send your stock certificates with your proxy card. When the merger is completed, a separate letter of transmittal will be mailed to you that will enable you to receive the per share merger consideration in exchange for your stock certificates.
 
If you have any questions or need assistance voting your shares, please call Phoenix Advisory Partners at (877) 478-5038.
 
If you hold shares of LaBarge common stock in a stock brokerage account or through a bank, broker or other nominee, or, in other words, in “street name,” please follow the voting instructions provided by that entity. With respect to the proposal to adopt the merger agreement, if you do not instruct your bank, broker or other nominee how to vote your shares, your bank, broker or other nominee will not be authorized to vote with respect to this proposal and a broker non-vote will occur, which will have the same effect as a vote “AGAINST” the adoption of the merger agreement. In addition, if you do not instruct your bank, broker or other nominee how to vote your shares with respect to the proposal to adjourn or postpone the meeting to solicit further proxies to approve the proposal to adopt the merger agreement, a broker non-vote will occur.
 
A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by telephone or over the internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the internet through such a program must be received by 11:59 p.m., Eastern Daylight Time, on [ • ], 2011. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the LaBarge special meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the LaBarge special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the internet with respect to your shares.
 
It is important that you vote your shares of LaBarge common stock promptly. Whether or not you plan to attend the special meeting, please complete, date, sign and return, as promptly as possible, the


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enclosed proxy card in the accompanying prepaid reply envelope, or submit your proxy by telephone or over the internet. LaBarge stockholders who attend the special meeting may revoke their proxies by voting in person.
 
Voting of Proxies
 
Shares of LaBarge common stock represented by duly executed and unrevoked proxies in the form of the enclosed proxy card received by the Corporate Secretary of LaBarge will be voted at the special meeting in accordance with specifications made therein by the LaBarge stockholders, unless authority to do so is withheld. If no specification is made, shares represented by duly executed and unrevoked proxies in the form of the enclosed proxy card will be voted “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn or postpone the special meeting to a later date, if necessary or appropriate, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.
 
If your shares of LaBarge common stock are held in “street name” by your bank, brokerage form or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of LaBarge common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or vote in person at the special meeting, or abstain, or do not provide your bank, brokerage firm or other nominee with voting instructions, as applicable, your shares will not be voted on the proposal to adopt the merger agreement, which will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.
 
Revoking Your Proxy
 
If you are the owner of record of your shares, you can revoke your proxy at any time before its exercise at the special meeting by:
 
  •  sending a written notice to LaBarge, Inc., 9900 Clayton Road, St. Louis, Missouri 63124, Attention: Donald H. Nonnenkamp, Corporate Secretary, bearing a date later than the date of the proxy, that is received prior to the LaBarge special meeting and states that you revoke your proxy;
 
  •  submitting your proxy again by telephone or over the internet so long as you do so before the deadline of [ • ];
 
  •  signing another proxy card(s) bearing a later date and mailing it so that it is received prior to the special meeting; or
 
  •  attending the special meeting and voting in person, although attendance at the special meeting will not, by itself, revoke a proxy.
 
If your shares of LaBarge common stock are held in “street name” by your broker, you will need to follow the instructions you receive from your broker to revoke or change your proxy.
 
Other Voting Matters
 
Voting in Person
 
If you plan to attend the LaBarge special meeting and wish to vote in person, we will give you a ballot at the special meeting. However, if your shares are held in “street name,” you must first obtain from your broker, bank or other nominee a legal proxy authorizing you to vote the shares in person, which you must bring with you to the special meeting. If your shares are held in “street name” by your broker, bank or other nominee, and you plan to attend the LaBarge special meeting, you must present proof of your ownership of LaBarge common stock such as a bank or brokerage account statement, to be admitted to the meeting.
 
Electronic Access to Proxy Materials
 
This proxy statement is available on LaBarge’s website at www.labarge.com.


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People with Disabilities
 
LaBarge can provide reasonable assistance to help you to participate in the special meeting if you tell LaBarge about your disability and how you plan to attend. Please write to LaBarge at 9900 Clayton Road, St. Louis, Missouri 63124, Attention: Donald H. Nonnenkamp, Corporate Secretary, or call at (314) 997-0800.
 
Proxy Solicitations and Expenses
 
LaBarge has engaged Phoenix Advisory Partners to assist in the solicitation of proxies for the special meeting. LaBarge estimates that it will pay Phoenix Advisory Partners a fee of approximately $15,125, and will reimburse Phoenix Advisory Partners for reasonable out-of-pocket expenses. LaBarge may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing owners of shares held in “street name” for their expenses in forwarding soliciting materials to such owners of shares of LaBarge common stock and in obtaining voting instructions from those owners. LaBarge’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, over the internet or in person, but they will not be paid any additional amounts for soliciting proxies.
 
Adjournment or Postponement of the LaBarge Special Meeting
 
Although it is not currently expected, the LaBarge special meeting may be adjourned or postponed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the LaBarge special meeting to approve the proposal to adopt the merger agreement or if a quorum is not present at the LaBarge special meeting. Other than an announcement to be made at the LaBarge special meeting of the time, date and place of an adjourned or postponed meeting, an adjournment or postponement generally may be made without notice. Any adjournment or postponement of the LaBarge special meeting for the purpose of soliciting additional proxies will allow LaBarge stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.
 
Stock Certificates
 
Stockholders should not submit any stock certificates with their proxy cards.  If the merger is completed, LaBarge stockholders will be sent written instructions for sending their stock certificates or, in the case of book-entry shares, for surrendering their book-entry shares.
 
Other Business
 
The LaBarge board of directors is not aware of any other business to be acted upon at the LaBarge special meeting. If, however, other matters are properly brought before the LaBarge special meeting, your proxies will have discretion to vote or act on those matters according to their best judgment and they intend to vote the shares as the LaBarge board of directors may recommend.
 
Assistance
 
If you need assistance in completing your proxy card or have questions regarding the LaBarge special meeting, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact Phoenix Advisory Partners at (877) 478-5038.


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MARKET PRICE DATA AND DIVIDENDS
 
LaBarge common stock is traded on the AMEX under the symbol “LB.” The following table shows the high and low daily closing sales prices per share during the period indicated for LaBarge common stock on the AMEX. For current price information, you are urged to consult publicly available sources.
 
                         
    LaBarge
    Price Range of
   
    Common Stock   Dividends
Fiscal Year Ended
  High   Low   Paid
 
June 28, 2009:
                       
First Quarter
  $ 15.75     $ 12.49        
Second Quarter
    15.32       9.12        
Third Quarter
    14.35       4.45        
Fourth Quarter
    9.44       6.94        
June 27, 2010:
                       
First Quarter
  $ 11.33     $ 8.31        
Second Quarter
    12.01       10.75        
Third Quarter
    13.12       10.56        
Fourth Quarter
    13.74       11.03        
July 3, 2011:
                       
First Quarter
  $ 13.07     $ 9.72        
Second Quarter
    16.24       12.02        
Third Quarter (through April 1, 2011)
  $ 17.70     $ 13.76        
 
The LaBarge board of directors has the power to determine the amount and frequency of the payment of dividends. Decisions regarding whether to pay dividends and the amount of any dividends are based upon compliance with the DGCL, compliance with agreements governing LaBarge’s indebtedness, earnings, cash requirements, results of operations, cash flows, financial condition and other factors that the board of directors considers important. LaBarge has not paid dividends in respect of its common stock in the past. If the merger were not consummated LaBarge does not anticipate that it would commence paying dividends. Under the merger agreement, until the effective time, LaBarge is prohibited without Ducommun’s consent from declaring, setting aside or paying any dividends on, or making any other distributions in respect of, any of its capital stock.


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RISK FACTORS
 
In deciding whether to vote for the adoption of the merger agreement, we urge you to consider carefully all of the information included or incorporated by reference in this proxy statement. See “Where You Can Find More Information” beginning on page [ • ]. You should also read and consider the risks associated with the business of LaBarge The risks associated with the business of LaBarge can be found in the LaBarge Annual Report on Form 10-K for the year ended June 27, 2010, which is incorporated by reference in this proxy statement.
 
Management’s focus on the merger may divert their attention from ongoing business concerns.
 
Consummation of the merger, and satisfaction of various conditions to closing the merger, will require a significant investment of resources by LaBarge, including the time and attention of our management. We cannot predict or estimate the impact that our management’s attention to these matters will have on the operation of our business.
 
The announcement of the merger agreement may cause disruptions that will harm LaBarge’s operating results and business generally, customer relationships, and relationships with our employees and suppliers.
 
The inclination of LaBarge customers and suppliers to continue their business relationships with LaBarge may be negatively impacted by the announcement of the merger. In addition, certain of our employees may elect to pursue other employment opportunities as a result of the merger and the transactions contemplated under the merger agreement. Any significant disruption to our customer, supplier or employee relationships could have an adverse effect on our financial condition and results of operations.
 
LaBarge must obtain governmental and regulatory approvals to consummate the merger, which, if delayed, not granted or granted with unacceptable conditions, may jeopardize or delay the consummation of the merger, result in additional expenditure of time and resources and reduce the anticipated benefits of the acquisition.
 
The merger is conditioned on the receipt of clearance under the HSR Act. If LaBarge does not receive such approvals, or does not receive such approvals on terms that satisfy the conditions set forth in the merger agreement, then LaBarge will not be obligated to consummate the merger.
 
The governmental authorities from which LaBarge must seek these regulatory approvals have broad discretion in their review of the transaction. As a condition to their approval of the merger, the governmental authorities may impose requirements, limitations or costs on the combined company, require divestitures of the combined company or place restrictions on the conduct of the business of the combined company. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the merger and could reduce its anticipated benefits to LaBarge LaBarge cannot make any assurances that it will obtain all of the required regulatory approvals or that Ducommun will obtain them on any particular terms. The merger agreement also contains a condition that the staff of the SEC has not rejected or expressly disapproved any of the material terms or conditions of that certain Offer of Settlement of LaBarge executed by LaBarge on March 18, 2011. See “The Merger — Regulatory Approvals Required for the Merger” beginning on page [ • ].
 
LaBarge must obtain approval of the holders of two-thirds of its shares of common stock entitled to vote in order to consummate the merger, which, if delayed or not obtained, may jeopardize or prevent the consummation of the merger.
 
The merger is conditioned on the holders of two-thirds of LaBarge’s shares of common stock entitled to vote thereon adopting the merger agreement at the LaBarge special meeting. If the LaBarge stockholders do not adopt the merger agreement, then LaBarge cannot consummate the merger.


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LaBarge will incur significant transaction and merger-related integration costs in connection with the merger.
 
LaBarge expects to incur a number of costs associated with completing the merger. The substantial majority of these costs will be non-recurring expenses and will primarily consist of transaction costs related to the merger. It is possible that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
 
An event, change or other circumstance could occur that could give rise to the termination of the merger agreement, including a termination under circumstances that could require us to pay a termination fee or reimburse Ducommun for its expenses incurred in connection with the proposed transaction up to $5,000,000.
 
The market price of LaBarge common stock may decline as a result of investor perceptions of the merger.
 
In response to the announcement of the merger, the market price of LaBarge common stock may decline as a result of investor perceptions about the terms or benefits of the transaction.
 
LaBarge officers and directors may have financial interests in the merger that are different from, or in addition to, the interests of LaBarge stockholders.
 
When considering the recommendation of the LaBarge board of directors with respect to the merger, LaBarge stockholders should be aware that some directors and executive officers of LaBarge have interests in the merger that might be different from, or in addition to, their interests as stockholders and the interests of stockholders of LaBarge generally. These interests include, among others, potential payments under severance agreements, cash payments in respect of restricted stock as a result of the merger, cash payments upon subsequent vesting of performance units, which units are valued at the maximum level provided for thereunder, cash payments in respect of stock options in connection with the merger, the potential to serve as directors and/or officers of Ducommun, the potential to enter into new employment agreements with Ducommun, and the right to continued indemnification and insurance coverage by the surviving corporation for acts or omissions occurring prior to the merger. See “The Merger — Interests of LaBarge Directors and Executive Officers in the Merger” beginning on page [ • ].
 
As of the close of business on April 13, 2011, LaBarge directors and executive officers were entitled to vote approximately 24.7% of the then-outstanding shares of LaBarge common stock. See “The Merger — Stock Ownership of Directors and Executive Officers of LaBarge” beginning on page [ • ].
 
The condition of the financial markets, including volatility and weakness in the credit markets, could affect the availability and terms of debt sources to finance Ducommun’s undertaking in connection with the merger.
 
In connection with the merger, Ducommun obtained the Debt Commitment Letter from the Lenders. The funds to be made available pursuant to the terms and conditions of the Debt Commitment Letter should be sufficient to finance the cash consideration to LaBarge stockholders, to refinance certain existing LaBarge and Ducommun debt and to pay fees and expenses related to the merger and the Debt Financing. Subject to the conditions set forth in the Debt Commitment Letter, Ducommun expects to have in place approximately $390 million in debt financing available on the date on which the merger is consummated. The condition of the financial markets could affect the availability and terms of debt financing sources to finance Ducommun’s undertaking in connection with the merger. See “The Merger — Financing Relating to the Merger” beginning on page [ • ].
 
Legal proceedings in connection with the merger could delay or prevent the completion of the merger.
 
Four lawsuits have been filed questioning the terms of the merger and whether they are fair to the LaBarge stockholders. Additional purported class action lawsuits may also be filed by stockholders and/or third parties challenging the proposed merger and seeking, among other things, to enjoin the consummation of the merger. One of the conditions to the closing of the merger is that no governmental authority has enjoined


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the consummation of the merger. If a plaintiff is successful in obtaining an injunction prohibiting consummation of the merger, then the injunction may delay the merger or prevent the merger from being completed. See “The Merger — Litigation Related to the Merger” beginning on page [ • ].
 
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
 
This proxy statement includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”) and Section 21E of the Exchange Act. All statements regarding LaBarge’s expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “will,” “intend,” “may” and other similar expressions, are forward-looking statements. These forward-looking statements are made based upon expectations and beliefs concerning future events affecting LaBarge and are subject to uncertainties and factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond its control, that could cause its actual results to differ materially from those matters expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on any of the forward-looking statements in this proxy statement, which are likewise subject to numerous uncertainties, and you should consider all of such information in light of the various risks identified in this proxy statement and in the reports filed by LaBarge with the SEC, as well as the other information that LaBarge provides with respect to the merger.
 
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements:
 
  •  the adoption of the merger agreement by LaBarge’s stockholders or other conditions to the completion of the merger may not be satisfied, or the regulatory approvals required for the merger may not be obtained on the terms expected or on the anticipated schedule, if at all;
 
  •  the effect of the announcement of the merger on LaBarge’s business relationships, operating results and business generally;
 
  •  the retention of certain key employees by LaBarge;
 
  •  the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;
 
  •  liability for litigation, administrative actions, and similar disputes;
 
  •  the outcome of any legal proceedings that have been or may be instituted against LaBarge related to the merger and the merger agreement;
 
  •  changes in laws and regulations or interpretations or applications thereof;
 
  •  the amount of the costs, fees, expenses and charges related to the merger;
 
  •  the ability to recognize the benefits of the merger;
 
  •  the failure of Ducommun to obtain the necessary debt financing; and
 
  •  LaBarge’s and Ducommun’s ability to meet expectations regarding the timing and completion of the merger.
 
Additional factors that may affect future results are contained in LaBarge’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. Many of these factors are beyond the control of LaBarge
 
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not guarantees of performance or results. There can be no assurance that forward-looking statements will prove to be accurate. Stockholders should also understand that it is not possible to predict or identify all risk factors and that neither this list nor the factors


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identified in LaBarge’s SEC filings should be considered a complete statement of all potential risks and uncertainties. LaBarge undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof except as required by law.
 
THE MERGER
 
The following is a description of the material aspects of the merger, which does not contain all of the information that is important to you and is qualified in its entirety by reference to the merger agreement attached to this proxy statement as Annex A. We encourage you to read carefully this entire proxy statement, including the merger agreement attached to this proxy statement as Annex A, for a more complete understanding of the merger.
 
Overview
 
The LaBarge board of directors has unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger. The merger subsidiary will merge with and into LaBarge in accordance with Delaware law, whereupon the separate existence of the merger subsidiary shall cease, with LaBarge continuing as the surviving corporation and a wholly-owned subsidiary of Ducommun and each share of LaBarge common stock shall be converted into the right to receive $19.25 in cash, without interest.
 
As a result of the merger, LaBarge will cease to be a publicly traded company.
 
Background of the Merger
 
As part of its continuing evaluation of strategic alternatives, the LaBarge board of directors and management regularly evaluate LaBarge’s business strategy and prospects for growth as an independent company and consider opportunities to improve LaBarge’s operations and financial performance in order to maximize value for LaBarge stockholders. As part of this process, and in light of its relatively small market capitalization, the LaBarge board of directors, in consultation with LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and outside legal and financial advisors, evaluated and pursued a number of opportunities to expand and to diversify LaBarge’s business.
 
On July 27, 2010, the LaBarge board met to review and to consider various strategic alternatives for LaBarge. Among other things, the LaBarge board assessed the electronics manufacturing industry and business environment generally, reviewed LaBarge’s recent stock price performance and considered LaBarge’s business prospects, and its financial metrics relative to other companies within LaBarge’s industry. Over the course of the months leading up to this meeting, the LaBarge board met with representatives of Stifel and Goldman Sachs & Company, to solicit each of their views on LaBarge’s position as an independent company, as well as their views on LaBarge as a potential acquisition candidate. The closing price of LaBarge common stock on July 27, 2010 was $12.60 per share.
 
As a result of the LaBarge board of directors’ review, on July 30, 2010, the LaBarge board determined that it was in the best interests of LaBarge’s stockholders to engage an outside financial advisor to assist the board and management in exploring a potential sale transaction.
 
On August 16, 2010, LaBarge engaged Stifel to begin a process to explore a potential sale of LaBarge.
 
From August 16, 2010 through November 1, 2010, Stifel representatives conducted due diligence on LaBarge, including tours of LaBarge’s manufacturing facilities. Stifel also worked with LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer to prepare a confidential information memorandum and management presentation for prospective acquirors.
 
On November 2, 2010, Stifel reviewed with the LaBarge board certain key considerations of a potential sale of LaBarge, including a list of potential strategic and financial buyers, and an illustrative timeline for a potential sale transaction. The LaBarge board considered each of the potential strategic buyers’ merits,


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including each such party’s financial capacity to consummate a transaction with LaBarge as well as strategic considerations related to each of those potential buyers and LaBarge. At that meeting, the LaBarge board also discussed the possibility of concurrently contacting potential financial buyers, but decided to initiate the process with strategic buyers before widening the process to include financial buyers in order to protect the confidentiality of the process while determining whether there was interest from strategic buyers. At this meeting, the LaBarge board directed Stifel to contact 11 potential strategic buyers (including Ducommun) to ascertain levels of interest in a potential transaction with LaBarge. The closing price of LaBarge common stock on November 2, 2010 was $12.34 per share.
 
Following the November 2, 2010 meeting, at the direction of the LaBarge board, Stifel contacted the 11 prospective strategic buyers that LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and Stifel had identified as potential interested parties. Of these 11 prospective buyers, five indicated that they were not interested in participating in the process. The remaining six prospective buyers (including Ducommun) entered into nondisclosure agreements, received a descriptive confidential information memorandum containing certain non-public information regarding LaBarge and confirmed their interest in continuing to pursue a potential acquisition of LaBarge.
 
During the weeks of December 6, 2010 and December 13, 2010, LaBarge management and representatives from Stifel met with representatives from the six prospective strategic buyers to provide a detailed overview of LaBarge’s business.
 
Following the last meeting during the week of December 13, 2010, each of the six prospective buyers was invited to submit an initial indication of interest by January 13, 2011. In advance of January 13, 2011, Stifel received notification from three of the six prospective buyers that they were formally withdrawing from the process and would not submit initial indications of interest.
 
On January 13, 2011, three parties, including Ducommun, submitted initial indications of interest with values ranging from $16.50 — $19.25 per outstanding share of LaBarge common stock. The closing price of LaBarge common stock on January 13, 2011 was $15.10 per share.
 
On January 18, 2011, the LaBarge board held a meeting at which representatives from Stifel reviewed with the LaBarge board each of the three preliminary indications of interest and provided an update on its financial analysis. Representatives from Stifel reviewed with the LaBarge board an illustrative timeline for continuing a potential sale process with the prospective buyers, which included detailed due diligence, solicitations of final offers and negotiation of definitive agreements. The LaBarge board and Stifel representatives considered the merits of soliciting interest of potential financial buyers at this time in the sale process. At this meeting, the LaBarge board instructed Stifel to invite the potential buyers that submitted offers to continue with the process and directed Stifel to contact a select group of potential financial buyers to solicit their interest in pursuing an acquisition of LaBarge. The LaBarge board selected a group of five financial buyers based on their capacity to consummate an acquisition of LaBarge and their demonstrated interest in making acquisitions in LaBarge’s industry. Immediately following this meeting, Stifel informed each of the potential strategic buyers of the LaBarge board’s decision and on January 19, 2011, arranged for the three potential strategic buyers to have access to LaBarge’s electronic dataroom.
 
Beginning on January 19, 2011, Stifel contacted the five prospective financial buyers and informed them that LaBarge had initiated a process in December 2010 but would provide them with the opportunity to meet with management and, upon receiving a preliminary indication of interest that was acceptable to the LaBarge board, would provide them adequate time to conduct a complete due diligence review of LaBarge. Four of the five prospective financial buyers signed nondisclosure agreements and received a descriptive confidential information memorandum containing non-public information regarding LaBarge. One prospective financial buyer indicated that it was not interested in pursuing an acquisition of LaBarge and therefore declined to sign a nondisclosure agreement. Within approximately one week after receiving the confidential information memorandum and publicly available information on LaBarge, each of the prospective financial buyers indicated that it was not interested in further pursuing an acquisition of LaBarge.


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On February 9, 2011, Stifel, on behalf of LaBarge, sent a bid submission letter to each of the remaining prospective strategic buyers requesting the submission of formal bid proposals, including a marked merger agreement, by March 8, 2011.
 
On February 10, 2011, LaBarge received a Wells notice from the staff of the SEC indicating that the staff intended to recommend the filing of a civil enforcement action against LaBarge. Later that day, at the request of the LaBarge board, Stifel notified the potential buyers of the receipt of the Wells notice and indicated that although the process could potentially be delayed, LaBarge would continue to facilitate each of the potential buyers’ due diligence reviews and that a revised bid deadline would be set when LaBarge had more clarity with respect to the outcome of the SEC’s investigation. The closing price of LaBarge common stock on February 10, 2011 was $16.93 per share.
 
Over the next several weeks, all of the potential buyers continued their business, financial and legal due diligence review of LaBarge, and on separate days during the week of February 21, 2010, each of the potential buyers met with members of LaBarge management to conduct in-person due diligence meetings. Additionally, each of the potential buyers visited certain of LaBarge’s manufacturing facilities.
 
On February 25, 2011, Stifel, on behalf of LaBarge, sent a revised bid submission letter to each of the potential strategic buyers requesting the submission of a formal bid proposal, including a marked merger agreement, by March 15, 2011.
 
On March 8, 2011, one of the potential buyers, “Party A,” informed Stifel that it intended to submit a proposal but would not do so until the evening of March 21, 2011 or the morning of March 22, 2011.
 
On the evening of March 15, 2011, Ducommun submitted its formal bid package, which included a proposed purchase price of $18.75 per outstanding share of LaBarge common stock, a mark-up of the merger agreement and draft financing commitment letters from the Lenders. In addition, in its cover letter, Ducommun indicated that its proposal was contingent upon the amendment of existing severance agreements with the senior management of LaBarge. On that same evening, one of the prospective buyers, “Party B,” indicated that it would not submit a formal bid proposal and would not continue to pursue an acquisition of LaBarge. The closing price of LaBarge common stock on March 15, 2011 was $16.51 per share.
 
During the morning of March 18, 2011, before the LaBarge board meeting scheduled for that afternoon, LaBarge’s CEO, Craig LaBarge, received a call from the Chief Executive Officer of Party A, who indicated that Party A intended to submit a formal proposal on March 22, 2011, but that Party A’s proposal would be at the low end of the range Party A had provided in its preliminary indication of interest, or $16.50 per outstanding share of LaBarge common stock. On that same morning, a representative from Party A’s financial advisor called Stifel and reiterated that Party A intended to submit a proposal of $16.50 per share.
 
In a telephonic meeting of the LaBarge board on March 18, 2011, Stifel reviewed with the LaBarge board the sale process to date, as well as its financial analysis of the bids received by Ducommun and Party A. Bryan Cave LLP, outside counsel to the board, and Armstrong Teasdale LLP, outside counsel to LaBarge, reviewed the merger agreement comments submitted by Ducommun. Stifel, Bryan Cave, Armstrong Teasdale and LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer discussed Ducommun’s ability to finance an acquisition of LaBarge. The LaBarge board directed Stifel to inform Party A that it should submit its proposal in writing but that it should reconsider its price as the LaBarge board was not prepared to consider a bid at the low end of its range, or $16.50 per outstanding share of LaBarge common stock. The LaBarge board of directors also directed Stifel to communicate to Ducommun that the LaBarge board would not proceed based upon Ducommun’s current proposed purchase price of $18.75 per share and asked Ducommun to revise its price and clarify and improve certain terms of the merger agreement by March 21, 2011.
 
On the morning of March 19, 2011, Stifel communicated to Party A that it should submit its proposal in writing and that it should reconsider its price as the LaBarge board was not prepared to consider a bid at the low end of its range, or $16.50 per outstanding share of LaBarge common stock. Later that evening, a representative from Party A’s financial advisor informed Stifel that Party A would proceed with a board


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meeting on March 21, 2011, but was not likely to improve its per share purchase price. Party A did not ultimately submit a written proposal, nor did it indicate a willingness to increase its per share price.
 
On the evening of March 21, 2011, Ducommun submitted a formal written response to the LaBarge board’s request to clarify and to improve certain aspects of Ducommun’s proposal, including price. Later that evening, representatives from Stifel discussed Ducommun’s written response with Ducommun’s financial advisor and were informed that Ducommun might be willing to improve certain aspects of its proposal but reiterated its proposed price of $18.75 per outstanding share of LaBarge common stock.
 
In a telephonic meeting of the LaBarge board of directors on March 22, 2011, Stifel reviewed its financial analysis with the LaBarge board in light of Ducommun’s $18.75 per share price. After the meeting, at the direction of the LaBarge board, Stifel informed Ducommun’s financial advisor that LaBarge would be willing to move forward at a price of $20.50 per share, provided that Ducommun improved certain terms of the merger agreement regarding the timing of Ducommun’s required financing, the amount of the termination fee, and the restrictive nature of the non-solicitation provision. In addition, at the direction of the LaBarge board, Stifel requested additional clarification of the amendments to the existing senior management severance agreements that Ducommun required.
 
On March 23, 2011, Ducommun’s financial advisor informed representatives from Stifel that Ducommun was willing to increase its proposed purchase price to $19.25 per outstanding share of LaBarge common stock, but that this price represented Ducommun’s best and final offer. The closing price of LaBarge common stock on March 23, 2011 was $16.67 per share. Ducommun also clarified and improved certain aspects of its merger agreement, including the timing of Ducommun’s required financing, the size of the termination fee and the language regarding the non-solicitation provision. Later that evening, Mr. LaBarge contacted Ducommun’s CEO, Tony Reardon, to inform him that he was prepared to recommend to the LaBarge board that LaBarge pursue a transaction with Ducommun if Ducommun improved its proposed purchase price to $19.75 per share and materially improved several remaining aspects of the merger agreement.
 
On March 24, 2011, Mr. Reardon informed Mr. LaBarge that, while Ducommun was willing to negotiate several aspects of the merger agreement, it was not able to increase its proposed purchase price above $19.25 per share and that such price reflected its best and final offer.
 
In a telephonic meeting of the LaBarge board on March 25, 2011, the LaBarge board authorized LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and its advisors to continue final negotiations on the terms of the merger agreement with Ducommun. Following the LaBarge board meeting, Mr. LaBarge informed Mr. Reardon that LaBarge was prepared to accept Ducommun’s proposed purchase price of $19.25 per share and that the LaBarge board authorized LaBarge management to proceed with final negotiations on the terms of the merger agreement. On March 25, 2011, Bryan Cave delivered to Ducommun’s outside legal counsel a revised draft of the merger agreement.
 
At a meeting of the LaBarge board on March 31, 2011, representatives of Stifel updated the LaBarge board on the process relating to the sale of LaBarge that had been undertaken between November 2, 2010 and the current meeting, and reviewed with the LaBarge board its financial analysis of the per share merger consideration. Representatives of Armstrong Teasdale and Bryan Cave reviewed with the LaBarge board the board’s fiduciary duties and the terms and conditions of the merger agreement and the debt commitment letter to be obtained by Ducommun.
 
From March 28 through April 3, 2011, LaBarge’s senior management and legal and financial advisors continued to negotiate with Ducommun’s senior management and legal and financial advisors to finalize the terms of the proposed transaction, including exchanging several drafts of the merger agreement.
 
At a board meeting on April 3, 2011, representatives of Bryan Cave and Armstrong Teasdale reviewed the final draft of the merger agreement with the LaBarge board. Also at this meeting, Stifel reviewed with the LaBarge board its financial analysis of the per share merger consideration and delivered to the LaBarge board of directors an oral opinion, which was confirmed by delivery of a written opinion dated April 3, 2011, to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and limitations of the review undertaken in the written opinion, the per share


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merger consideration to be received in the merger by holders of LaBarge common stock was fair to such holders, from a financial point of view.
 
After additional discussion and deliberation, the LaBarge board unanimously resolved that the merger agreement and the transactions contemplated thereby are advisable and fair to, and in the best interests of, LaBarge and its stockholders, approved the merger agreement and the transactions contemplated thereby, and recommended that LaBarge’s stockholders vote to approve and adopt the merger agreement and the transaction contemplated thereby.
 
The merger agreement was executed by LaBarge and Ducommun on April 3, 2011. On the morning of April 4, 2011, prior to the commencement of trading on the NYSE and AMEX, LaBarge and Ducommun each issued a press release announcing the signing of the merger agreement.
 
LaBarge’s Reasons for the Merger and Recommendation of LaBarge’s Board of Directors
 
At a meeting on April 3, 2011, after careful consideration, including detailed presentations by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and its legal and financial advisors, the LaBarge board of directors unanimously determined that the merger is fair to, and in the best interests of, LaBarge and its stockholders and approved and declared advisable the merger agreement, the merger and other transactions contemplated by the merger agreement. The LaBarge board of directors resolved that the merger agreement be submitted for consideration by the LaBarge stockholders at a special meeting of its stockholders, and recommended that the LaBarge stockholders vote “FOR” the adoption of the merger agreement. The merger agreement was finalized and executed on behalf of LaBarge on April 3, 2011.
 
In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the LaBarge board of directors consulted with LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and its legal and financial advisor and reviewed a significant amount of information and considered a number of factors, including but not limited to the material factors discussed below (not in any relative order of importance).
 
Financial Considerations
 
The LaBarge board of directors considered the financial terms of the merger based on, among other things, the following factors:
 
  •  the financial terms of the merger, including:
 
  •  the per share merger consideration represents a premium of 10.4% over the closing price of $17.43 per share of LaBarge common stock on the “AMEX” on April 1, 2011, the last trading day prior to the public announcement of the merger agreement, a 17.2% premium over LaBarge’s average daily closing price of $16.43 during the 30 trading days ending on April 1, 2011, and a 23.0% premium over LaBarge’s average daily closing price of $15.65 during the 90 trading days ending on April 1, 2011;
 
  •  the limited public trading volume and liquidity of LaBarge common stock; and
 
  •  the various background data and analyses relating to the combination of LaBarge and Ducommun, reviewed with the LaBarge board of directors by LaBarge’s outside financial and legal advisors and management, as well as the opinion of Stifel, dated April 3, 2011, to the LaBarge board of directors as to the fairness, from a financial point of view, as of the date of the opinion and based upon and subject to the factors and assumptions set forth in such opinion, of the per share merger consideration of $19.25 to be received by the holders of LaBarge common stock in connection with the merger pursuant to the merger agreement, as more fully described below in the section entitled “Opinion of LaBarge’s Financial Advisor.”


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Strategic Considerations
 
The LaBarge board of directors considered a number of strategic advantages of the merger in comparison to a stand-alone strategy, including, but not limited to the following factors:
 
  •  the possibility of continuing to operate as an independent public company, including the perceived risks and uncertainties of remaining an independent public company. In considering the alternative of pursuing growth as an independent company, the board considered management’s and the board’s understanding of the business, operations, financial condition, competitive position, business strategy, succession planning, earnings and prospects of LaBarge.
 
  •  LaBarge’s ability to compete with its current and potential future competitors within its markets, including other larger companies that may have significantly greater resources or market presence; and
 
  •  the degree of risk and uncertainty associated with various alternative or other proposals or of proposed or potential transaction structures, specifically considering factors such as regulatory approvals and financing commitments.
 
Other Considerations
 
The LaBarge board of directors also considered the following factors, among others:
 
  •  the fact that the cash merger consideration will provide LaBarge stockholders with immediate value in cash for their shares;
 
  •  the judgment of the LaBarge board of directors, after consultation with management and advisors, that continuing discussions with Ducommun or soliciting interest from additional third parties would be unlikely to lead to a better offer and could lead to the loss of Ducommun’s proposed offer;
 
  •  the structure of the merger and the terms and conditions of the merger agreement, including the following:
 
  •  the limited conditions to the parties’ obligations to complete the merger and the probability that such conditions would be satisfied, including the parties’ agreement to use reasonable best efforts to satisfy such conditions, as more fully described below in “The Merger Agreement — Conditions to Completion of the Merger” beginning on page [ • ];
 
  •  the provisions that allow LaBarge, under certain circumstances, to engage in negotiations or discussions with, third parties, prior to the adoption of the merger agreement by its stockholders, in response to an unsolicited takeover proposal that LaBarge’s board of directors determines in good faith, after consultation with outside legal counsel and its financial advisor, constitutes or is reasonably likely to lead to a superior proposal (as defined on page [ • ]);
 
  •  the provisions that allow LaBarge, under certain circumstances, to terminate the merger agreement prior to adoption by its stockholders, in order to enter into an alternative transaction in response to an unsolicited takeover proposal that LaBarge’s board of directors determines in good faith, after consultation with outside legal counsel and financial advisor, constitutes a superior proposal (as defined on page [ • ]);
 
  •  the fact that the termination date under the merger agreement allows for time that is expected to be sufficient to complete the merger;
 
  •  the fact that there is a date certain for terminating the transaction if the merger has not been consummated;
 
  •  the likelihood that the merger would be completed based on, among other things, the receipt of an executed debt commitment letter, the terms of the debt commitment letter and the identity of the Lenders, all of which, in the reasonable judgment of the LaBarge board of directors, increase the likelihood of such financing being completed;


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  •  the willingness of the holders of approximately 19% of the outstanding LaBarge common stock to support the proposed merger;
 
  •  the availability of appraisal rights under the DGCL to holders of LaBarge common stock who comply with all of the required procedures under the DGCL, which allows such holders to seek appraisal of the fair value of their shares of LaBarge common stock as determined by the Delaware Court of Chancery; and
 
  •  the belief by the LaBarge board of directors that the merger is more favorable to LaBarge stockholders than the alternatives to the merger, which belief was formed based on the review by the LaBarge board of directors, with assistance of its financial advisor, of the strategic alternatives available to LaBarge.
 
Consideration of Risks and Other Potentially Negative Factors
 
The LaBarge board of directors also considered a variety of risks and other potentially negative factors, including, without limitation, the following:
 
  •  the risks and contingencies relating to the announcement and pendency of the merger and the risks and costs to LaBarge if the merger does not close timely or does not close at all, including the impact on LaBarge’s relationships with employees and with third parties;
 
  •  the risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the merger;
 
  •  the risk that the parties may incur significant costs and unexpected delays resulting from seeking governmental consents and approvals necessary for completion of the merger;
 
  •  the fact that, while LaBarge expects that the merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the merger agreement (including the condition that the parties obtain all required regulatory approvals) will be satisfied, and, as a result, the merger may not be consummated;
 
  •  the fact that the merger is subject to a condition that the staff of the SEC has not rejected or expressly disapproved any of the material terms or conditions of that certain Offer of Settlement of LaBarge executed by LaBarge on March 18, 2011;
 
  •  the fact that the merger consideration would be taxable to LaBarge stockholders that are U.S. holders for U.S. federal income tax purposes;
 
  •  the fact that LaBarge’s directors and executive officers have interests in the merger that are different from, or in addition to, the LaBarge stockholders, as described below in “Interests of LaBarge Directors and Executive Officers in the Merger” beginning on page [ • ];
 
  •  the fact that the transaction will prevent current stockholders from participating in future growth and earnings of LaBarge;
 
  •  the risk that Ducommun might not obtain the necessary Debt Financing set forth in the commitment letter received in connection with the merger, or alternative financing, or that any such financing might not be sufficient to complete the merger and the transactions contemplated thereby;
 
  •  the terms and conditions of the merger agreement, including:
 
  •  restrictions on the conduct of LaBarge’s business prior to the completion of the merger, any of which may delay or prevent LaBarge from pursuing business opportunities that may arise or may delay or preclude LaBarge from taking actions that would be advisable if it were to remain an independent company;
 
  •  the non-solicitation covenants and the requirement that LaBarge must pay to Ducommun a termination fee of $12,410,000 or expense reimbursement up to $5,000,000 if the merger agreement is


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  terminated under circumstances specified in the merger agreement, as described below in “The Merger Agreement — Termination Fees and Expenses” beginning on page [ • ]; and
 
  •  the risks described in the section entitled “Risk Factors” beginning on page [ • ].
 
LaBarge’s board of directors concluded that the anticipated benefits of the merger would outweigh the preceding considerations.
 
The reasons set forth above are not intended to be exhaustive, but include material facts considered by the LaBarge board of directors in approving the merger agreement. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the LaBarge board of directors did not find it useful to and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and to make its recommendations to LaBarge stockholders. In addition, individual members of the LaBarge board of directors may have given differing weights to different factors. The LaBarge board of directors carefully considered all of the factors described above as a whole.
 
The LaBarge board of directors unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.
 
The LaBarge stockholders should be aware that LaBarge’s directors and executive officers have interests in the merger that are different from, or in addition to, the LaBarge stockholders. The LaBarge board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement be adopted by the LaBarge stockholders, as described below in “Interests of LaBarge Directors and Executive Officers in the Merger” beginning on page [ • ].
 
Opinion of LaBarge’s Financial Advisor
 
On August 16, 2010, the LaBarge board of directors retained Stifel to act as its financial advisor and to provide a fairness opinion in connection with the merger contemplated by the merger agreement. The LaBarge board of directors selected Stifel based on Stifel’s qualifications, expertise and reputation. Stifel, as part of its investment banking business, is continuously engaged in the evaluation of businesses and their debt and equity securities in connection with mergers and acquisitions, underwritings, private placements and other securities, valuations and general corporate advisory services. On April 3, 2011, Stifel delivered its written opinion, dated April 3, 2011, to the LaBarge board of directors that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and limitations of the review undertaken in such opinion, the per share merger consideration to be received by the holders of LaBarge common stock in connection with the merger pursuant to the merger agreement was fair to such holders of LaBarge common stock, from a financial point of view. There are no other material relationships that existed during the two years prior to the date of Stifel’s opinion or that are mutually understood to be contemplated in which any compensation was received or is intended to be received as a result of the relationship between Stifel and any party to the merger.
 
The full text of the written opinion of Stifel is attached as Annex B to this proxy statement and is incorporated into this document by reference. The summary of Stifel’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of the opinion. LaBarge stockholders are urged to read the opinion in its entirety carefully for a discussion of the procedures followed, assumptions made, other matters considered and limits of the review undertaken by Stifel in connection with the delivery of such opinion.
 
The opinion of Stifel is solely for the information of, and is directed to, the LaBarge board of directors for its information and assistance in connection with its evaluation of the financial terms of the merger and is not to be relied upon by any stockholder of LaBarge or Ducommun or any other person or entity. Stifel’s opinion does not constitute a recommendation to LaBarge or the LaBarge board of directors as to how to vote on the merger or whether to enter into the merger agreement, or effect the merger or any other transaction


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contemplated by the merger agreement, or to any LaBarge stockholder as to how such stockholder should vote at any stockholders’ meeting at which the merger is considered, or whether or not any such stockholder should enter into a voting or stockholders’ agreement with respect to the merger, or exercise any dissenters’ or appraisal rights that may be available to such stockholder. Further, Stifel’s opinion does not compare the relative merits of the merger with any other alternative transaction or business strategy which may have been available to or considered by the LaBarge board of directors or LaBarge, and does not address the underlying business decision of the LaBarge board of directors or LaBarge to proceed with or effect the merger, or any other aspect of the merger. No limitations were imposed by LaBarge’s board of directors upon Stifel with respect to the investigations made or procedures followed by it in rendering its opinion.
 
Stifel’s opinion is limited to whether, as of the date of the opinion, the per share merger consideration was fair to the holders of LaBarge common stock, from a financial point of view. Stifel’s opinion does not consider, address or include: (i) any other strategic alternatives currently (or which may have been or may be) contemplated by LaBarge or the LaBarge board of directors; (ii) the legal, tax or accounting consequences of the merger on LaBarge or the holders of LaBarge common stock; (iii) the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of LaBarge; nor does it address the fairness of the amount or nature of any compensation to be paid or payable to any of LaBarge’s officers, directors or employees, or class of such persons, in connection with the merger, whether relative to the per share consideration or otherwise; or (iv) the treatment of, or effect of the merger on, any LaBarge stock options or performance units. Furthermore, Stifel did not express any opinion as to the prices, trading range or volume at which LaBarge’s securities would trade following public announcement of the merger.
 
In connection with its opinion, Stifel, among other things:
 
  •  reviewed and analyzed a draft copy of the merger agreement dated April 3, 2011;
 
  •  reviewed certain publicly available financial and other data with respect to LaBarge, including the consolidated financial statements for recent years and interim periods up to January 2, 2011, and certain other relevant financial and operating data relating to LaBarge made available to Stifel from published sources and from the internal records of LaBarge;
 
  •  made inquiries regarding and discussed the merger and a draft copy of the merger agreement dated April 3, 2011, a draft copy of the voting agreement described in the merger agreement dated April 3, 2011, and other matters related thereto with LaBarge counsel;
 
  •  reviewed certain publicly available information concerning the trading of, and the trading market for, LaBarge’s common stock;
 
  •  reviewed and analyzed certain publicly available financial and stock market data and pricing metrics for selected publicly traded companies in the electronics manufacturing and, to a lesser extent, the aerospace and defense industries which Stifel considered relevant to its analysis;
 
  •  reviewed the financial terms and valuation metrics, to the extent publicly available, of selected recent business combinations which Stifel considered relevant to its analysis;
 
  •  reviewed and discussed with representatives of the management of LaBarge certain information of a business and financial nature regarding LaBarge, furnished to Stifel by them, including financial forecasts and related assumptions of LaBarge;
 
  •  reviewed and discussed with representatives of the management of LaBarge their assessments as to existing and anticipated commercial relationships with key accounts of LaBarge, including the ability to retain existing accounts; and
 
  •  conducted such other financial studies, analyses and investigations as Stifel deemed necessary or appropriate for purposes of its opinion.
 
In connection with its review, Stifel relied upon and assumed, without independent verification, the accuracy and completeness of all financial, production, reserve, cash flow and other information that was made


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available, supplied, or otherwise communicated to Stifel by or on behalf of LaBarge, Ducommun or their respective advisors, or that was otherwise provided to, discussed with or reviewed by Stifel, and Stifel did not assume any obligation to independently verify, and has not independently verified, any of such information.
 
With respect to the financial forecasts for LaBarge provided to Stifel by the management of LaBarge, upon the advice of the management of LaBarge and with LaBarge’s consent, Stifel assumed for purposes of its opinion that the forecasts had been reasonably prepared on bases reflecting the best available estimates and judgments of the management of LaBarge at the time of preparation as to the future operating and financial performance of LaBarge and that they provided a reasonable basis upon which Stifel could form its opinion. Such forecasts and projections were not prepared with the expectation of public disclosure. All such projected financial information is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic, market and competitive conditions. Accordingly, actual results could vary significantly from those set forth in such projected financial information. Stifel relied on this projected information without independent verification or analysis and does not in any respect assume any responsibility for the accuracy or completeness thereof. Stifel further relied upon the assurances by LaBarge that it is unaware of any facts that would make any information provided by or on behalf of it incomplete or misleading. Stifel assumed, with the consent of LaBarge, that any material liabilities (contingent or otherwise, known or unknown), if any, relating to LaBarge have been disclosed to Stifel.
 
Stifel also assumed that there have been no material changes in the assets, liabilities, financial condition, results of operations, reserves, production levels, business or prospects of LaBarge since the date of the financial statements contained in LaBarge’s Quarterly Report on Form 10-Q for the period ended January 2, 2011. With the consent of LaBarge, Stifel relied on advice of counsel and independent accountants to LaBarge as to all legal, financial reporting, tax, accounting and regulatory matters with respect to LaBarge, the merger, and the merger agreement. Stifel has not been requested to make, and has not made, an independent evaluation, appraisal or physical inspection of any of the assets or liabilities (including, without limitation, any contingent, derivative or other off-balance sheet assets or liabilities) of LaBarge, nor has Stifel been furnished with any such evaluations or appraisals. Stifel’s opinion does not address the consequences of, nor does Stifel express any opinion as to any consideration that may be received in the merger by, holders of LaBarge common stock perfecting and pursuing appraisal rights as permitted by applicable law. Stifel assumed that the merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable statutes, rules and regulations, and that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on the expected benefits of the merger in any way meaningful to Stifel’s analysis or opinion. Stifel further assumed with the consent of LaBarge that the merger will be consummated on the terms and conditions described in the draft merger agreement, without any waiver, modification or amendment of any material term, condition, obligation or agreement.
 
Stifel’s opinion is necessarily based upon financial, economic, monetary, market and other conditions and circumstances existing on, and the information made available to Stifel as of, the date of such opinion. It is understood that subsequent developments may affect the conclusions reached in its opinion, and that Stifel does not have or assume any obligation to update, revise or reaffirm its opinion. Further, the credit, financial and stock markets have been experiencing unusual volatility and Stifel expresses no opinion or view as to any potential effects of such volatility on LaBarge, Ducommun, their respective affiliates, or the merger.
 
The summary set forth below does not purport to be a complete description of the analyses performed by Stifel, but describes, in summary form, the material elements of the presentation that Stifel made to the LaBarge board of directors on April 3, 2011, in connection with Stifel’s fairness opinion.
 
In accordance with customary investment banking practice, Stifel employed generally accepted valuation methods and financial analyses in reaching its opinion. The following is a summary of the material financial analyses performed by Stifel in arriving at its opinion. These summaries of financial analyses alone do not constitute a complete description of the financial analyses Stifel employed in reaching its conclusions. None of the analyses performed by Stifel were assigned a greater significance by Stifel than any other, nor does the


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order of analyses described represent relative importance or weight given to those analyses by Stifel. Some of the summaries of the financial analyses performed by Stifel include information presented in tabular format. In order to understand the financial analyses performed by Stifel more fully, you should read the tables together with the text of each summary. The tables alone do not constitute a complete description of Stifel’s financial analyses, including the methodologies and assumptions underlying the analyses, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed by Stifel. The summary data set forth below do not represent and should not be viewed by anyone as constituting conclusions reached by Stifel with respect to any of the analyses performed by it in connection with its opinion. Rather, Stifel made its determination as to the fairness to the holders of LaBarge common stock of the per share merger consideration, from a financial point of view, on the basis of its experience and professional judgment after considering the results of all of the analyses performed. Accordingly, the data included in the summary tables and the corresponding imputed ranges of value for LaBarge should be considered as a whole and in the context of the full narrative description of all of the financial analyses set forth in the following pages, including the assumptions underlying these analyses. Considering the data included in the summary table without considering the full narrative description of all of the financial analyses, including the assumptions underlying these analyses, could create a misleading or incomplete view of the financial analyses performed by Stifel.
 
Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before April 3, 2011 and is not necessarily indicative of current market conditions. The analyses described below do not purport to be indicative of actual future results, or to reflect the prices at which any securities may trade in the public markets, which may vary depending upon various factors, including changes in interest rates, dividend rates, market conditions, economic conditions and other factors that influence the price of securities.
 
No company or transaction used in any analysis as a comparison is identical to LaBarge or the merger, and they all differ in material ways. Stifel selected publicly traded companies and publicly announced transactions on the basis of various factors, including the size of the public companies and the similarity of the lines of business to LaBarge. Accordingly, an analysis of the results described below is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the selected companies or transactions to which they are being compared. In addition, because the market conditions, rationale and circumstances surrounding each of the transactions analyzed were specific to each transaction and because of the inherent differences between LaBarge’s businesses, operations and prospects and those of the selected companies analyzed, Stifel believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the analyses. Accordingly, Stifel also made qualitative judgments concerning the differences between the characteristics of these transactions (including market conditions, rationale and circumstances surrounding each of the transactions, and the timing, type and size of each of the transactions) and the merger that could affect LaBarge’s acquisition value.
 
In conducting its analysis, Stifel used four methodologies to determine the approximate valuation of LaBarge. The methodologies used to determine the value of LaBarge included: selected publicly traded companies analysis, selected precedent transactions analysis, discounted cash flow analysis, and discounted equity analysis. These analyses were developed and applied collectively. Consequently, each individual methodology was not given a specific weight, nor can any methodology be viewed individually. Stifel used these analyses to determine the impact of various operating metrics on the implied equity value of LaBarge. Each of these analyses yielded a range of implied equity values, and therefore, such implied equity value ranges developed from these analyses must be viewed collectively and not individually. Unless noted otherwise, all analyses are based on the LaBarge closing stock price as of April 1, 2011 of $17.43 per share.
 
Selected Publicly Traded Companies Analysis
 
Based on public and other available information, Stifel calculated LaBarge’s implied enterprise value (which Stifel defined as fully diluted market capitalization, plus total debt, less cash, cash equivalents and marketable securities) and LaBarge’s implied fully diluted equity value, in each case, using multiples of last


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twelve months (“LTM”) earnings before interest, taxes, stock-based compensation, depreciation and amortization, or EBITDA, and net income, and projected calendar year (“CY”) 2011 and CY 2012 EBITDA and net income, which multiples were implied by the estimated enterprise values and equity values, and projected EBITDA and net income of the selected companies listed below. LTM and projected CY 2011 and CY 2012 information for LaBarge was provided by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. CY 2011 and CY 2012 information was based on two sets of forecasts relating to LaBarge prepared by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer under scenarios reflecting varying assumptions of LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, which we refer to as the Base Case and the SG Case. The SG Case takes into account assumptions made by the management of LaBarge with respect to the timing and impact of the SG program, a system developed by one of LaBarge’s top customers that was being deployed in limited quantities as of December 31, 2010. Projections for the selected companies were based upon First Call Consensus estimates, publicly available investment banking research and public filings. Stifel believes that the seven companies listed below in the electronics manufacturing services industry and, to a lesser extent, the seven companies listed below in the aerospace and defense industry, have operations similar to certain operations of LaBarge, but noted that none of these companies have identical management, composition, size and/or combination of businesses as LaBarge:
 
             
Electronics Manufacturing Services
 
Aerospace & Defense
 
  Benchmark Electronics Inc.;     Ametek Inc.;
  Celestica Inc.;     Astronics Corp.;
  CTS Corporation;     Cubic Corporation;
  Flextronics International Ltd.;     Esterline Technologies Corp.;
  Jabil Circuit Inc.;     Mercury Computer Systems, Inc.;
  Plexus Corp.; and     OSI Systems, Inc.; and
  Sanmina-SCI Corporation     Teledyne Technologies Inc.
 
The following table sets forth the multiples indicated by this analysis:
 
                                 
    First
          Third
Enterprise Value to:
  Quartile   Median   Mean   Quartile
 
Electronics Manufacturing Services
                               
LTM EBITDA
    5.4 x     5.8 x     6.4 x     7.0 x
CY 2011 Projected (“P”) EBITDA
    4.6 x     5.5 x     6.0 x     6.7 x
CY 2012P EBITDA
    4.2 x     5.0 x     5.3 x     6.1 x
LTM net income
    9.8 x     12.9 x     12.0 x     14.2 x
CY 2011P net income
    7.8 x     11.4 x     10.6 x     13.1 x
CY 2012P net income
    7.0 x     10.1 x     9.3 x     11.5 x
Aerospace & Defense
                               
LTM EBITDA
    9.9 x     10.8 x     11.8 x     13.3 x
CY 2011P EBITDA
    9.1 x     9.7 x     10.3 x     11.3 x
CY 2012P EBITDA
    7.9 x     8.2 x     8.9 x     9.1 x
LTM net income
    16.1 x     19.2 x     19.5 x     22.3 x
CY 2011P net income
    16.8 x     18.8 x     19.5 x     20.5 x
CY 2012P net income
    14.3 x     15.2 x     16.3 x     18.1x  
 
The multiples derived from the implied estimated enterprise values and equity values, and applicable EBITDA and net income of the companies listed above, were calculated using data that excluded all extraordinary items and non-recurring charges.
 
The implied LaBarge per share equity values below were each calculated based on a range of multiples of first quartile to third quartile. The quartiles were calculated using statistical interpolation to divide the


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probability distribution into four equal areas. In each case, Stifel multiplied the ratios derived from its analysis by LaBarge’s actual or estimated Base Case EBITDA (there was not a material difference between LaBarge’s Base Case and SG Case NTM EBITDA), as applicable, to calculate enterprise value, and subtracted LaBarge’s net debt position to derive equity value. Using the Treasury Stock Method, Stifel then derived LaBarge’s implied per share equity value. Stifel also multiplied the ratios derived from its analysis by LaBarge’s actual or estimated net income, as applicable, to calculate equity value. Using the Treasury Stock Method, Stifel then derived LaBarge’s implied per share equity value.
 
                 
Enterprise Value to:
  Low   High
 
Electronics Manufacturing
               
LTM EBITDA
  $ 11.30     $ 15.14  
CY 2011P EBITDA
  $ 10.32     $ 15.64  
CY 2012P EBITDA (Base Case)
  $ 11.21     $ 17.04  
CY 2012P EBITDA (SG Case)
  $ 11.49     $ 17.45  
LTM Net Income
  $ 11.13     $ 16.16  
CY 2011P Net Income
  $ 9.98     $ 16.71  
CY 2012P Net Income (Base Case)
  $ 11.40     $ 18.49  
CY 2012P Net Income (SG Case)
  $ 11.70     $ 18.98  
Aerospace & Defense
               
LTM EBITDA
  $ 22.11     $ 30.42  
CY 2011P EBITDA
  $ 21.59     $ 27.23  
CY 2012P EBITDA (Base Case)
  $ 22.85     $ 26.42  
CY 2012P EBITDA (SG Case)
  $ 23.38     $ 27.02  
LTM Net Income
  $ 18.32     $ 25.25  
CY 2011P Net Income
  $ 21.40     $ 25.96  
CY 2012P Net Income (Base Case)
  $ 23.06     $ 29.08  
CY 2012P Net Income (SG Case)
  $ 23.67     $ 29.85  
 
Stifel noted that LaBarge’s business model as an outsourced manufacturer of high-performance electronic, electromechanical and interconnect systems on a contract basis, LaBarge’s primary competitors, and LaBarge’s significant focus on and exposure to industries other than the aerospace and defense industry, are more similar to companies in the electronics manufacturing services industry. As a result, Stifel viewed the valuation multiples implied by the seven companies listed above in the electronics manufacturing services industry as more relevant.
 
Selected Precedent Transactions Analysis
 
Based on public and other available information, Stifel calculated LaBarge’s implied enterprise value and implied equity value based on multiples of LTM and estimated next twelve months (“NTM”) revenues and EBITDA, implied by 16 acquisitions of companies listed below in the electronics manufacturing services and aerospace and defense industries that had been announced since January 1, 2004. Estimated NTM information


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for LaBarge was based on projections provided by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. The acquisitions reviewed in this analysis were the following:
 
         
Announcement Date
 
Acquirer
 
Target
 
February 7, 2011
  Kratos Defense & Security Solutions, Inc.   Herley Industries Inc.
October 4, 2010
  B/E Aerospace, Inc.   TSI Group, Inc.
August 6, 2010
  TransDigm Group, Inc.   Semco Instruments Inc.
March 30, 2010
  Microsemi Corp.   White Electronic Designs Corp.
March 22, 2010
  Smiths Group plc   Interconnect Devices, Inc.
December 23, 2009
  Crane Co.   Merrimac Industries, Inc.
November 17, 2009
  Goodrich Corp.   Atlantic Inertial Systems
February 27, 2009
  Woodward Governor Company   HR Textron, Inc.
August 19, 2008
  Woodward Governor Company   MPC Products Corporation
June 10, 2008
  LS Corp.   Superior Essex, Inc.
May 13, 2008
  Cobham plc   M/A-COM Technology Solutions
June 4, 2007
  Flextronics International Ltd.   Solectron Corporation
October 17, 2006
  Benchmark Electronics, Inc.   Pemstar, Inc.
August 3, 2006
  TTM Technologies Inc.   Tyco Electronics PCB Group
February 7, 2005
  Jabil Circuit, Inc.   Varian’s EMS Division
November 17, 2004
  CTS Corp.   SMTEK International
 
The following table sets forth the multiples indicated by this analysis:
 
                                 
    First
          Third
Enterprise Value to:
  Quartile   Median   Mean   Quartile
 
LTM EBITDA
    7.5 x     9.3 x     9.7 x     10.1 x
NTM EBITDA
    7.6 x     7.8 x     7.8 x     8.0 x
 
The implied LaBarge per share equity values below were each calculated based on a range of multiples of first quartile to third quartile. The quartiles were calculated using statistical interpolation to divide the probability distribution into four equal areas. In each case, Stifel multiplied the ratios derived from its analysis by LaBarge’s actual or estimated Base Case EBITDA (there was not a material difference between LaBarge’s Base Case and SG Case NTM EBITDA), as applicable, to calculate enterprise value, and subtracted LaBarge’s net debt position to derive equity value. Using the Treasury Stock Method, Stifel then derived LaBarge’s implied per share equity value.
 
                 
Enterprise Value to:
  Low   High
 
LTM EBITDA
  $ 16.45     $ 22.70  
NTM EBITDA
  $ 17.75     $ 18.96  
 
No transaction used in the selected precedent transactions analysis is identical to the merger. However, Stifel chose such transactions based on, among other things, a review of transactions involving companies in the electronics manufacturing services and aerospace and defense industries announced since January 1, 2004, Stifel’s knowledge about LaBarge, the industries in which LaBarge operates, the geographical and operational nature of LaBarge’s business and the similarity of the applicable target companies in the selected precedent transactions to LaBarge with respect to the size, mix, margins and other characteristics of their businesses. Accordingly, an analysis of the results of the foregoing is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the target companies and other factors that could affect the public trading value of the companies and the transactions to which LaBarge and the merger are being compared.


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Discounted Cash Flow Analysis
 
Stifel performed a discounted cash flow analysis of LaBarge based on the Base Case and the SG Case forecasts prepared by the management of LaBarge through 2015. Stifel estimated the terminal value of the projected cash flows by applying exit multiples to LaBarge’s estimated 2015 EBITDA for each of the Base Case and the SG Case, which multiples ranged from 7.0x to 9.0x. Stifel then discounted the cash flows projected through 2015 and the terminal value for each of the Base Case and the SG Case to present values using discount rates for each of the Base Case and the SG Case ranging from 12.5% to 14.5%. This analysis indicated a range of aggregate values, which were then decreased by LaBarge’s estimated net debt, to calculate a range of equity values. These equity values were then divided by fully diluted shares outstanding to calculate implied equity values per share ranging from $18.39 to $23.13 for the Base Case and implied equity values per share ranging from $19.29 to $24.40 for the SG Case. Stifel noted that the value of the per share merger consideration to be received by holders of LaBarge common stock pursuant to the merger was $19.25. This analysis did not purport to be indicative of actual future results and did not purport to reflect the prices at which LaBarge common stock may trade in the public markets. A discounted cash flow analysis was included because it is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, including earnings growth rates, asset growth rates, dividend payout rates, terminal multiples and discount rates.
 
Discounted Equity Analysis
 
Stifel used earnings per share projections prepared by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer for CY 2012 and CY 2013 for each of the Base Case and the SG Case to calculate a range of present equity values per share for LaBarge. In conducting this analysis, Stifel applied a range of CY 2011 price-to-earnings multiples to LaBarge’s projected CY 2012 and CY 2013 earnings per share and applied a discount rate of 13.5% to these ranges. This analysis indicated implied equity values per share ranging from $15.75 to $22.28 for the Base Case and implied equity values per share ranging from $16.17 to $23.53 for the SG Case. Stifel noted that the value of per share merger consideration to be received by holders of LaBarge common stock pursuant to the merger was $19.25.
 
Conclusion
 
Based upon the foregoing analyses and the assumptions and limitations set forth in full in the text of Stifel’s opinion letter, Stifel was of the opinion that, as of the date of Stifel’s opinion, the per share merger consideration to be received by the holders of LaBarge common stock in connection with the merger pursuant to the merger agreement was fair to such holders of LaBarge common stock, from a financial point of view.
 
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Stifel considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered by it. Stifel believes that the summary provided and the analyses described above must be considered as a whole and that selecting portions of these analyses, without considering all of them, would create an incomplete view of the process underlying Stifel’s analyses and opinion; therefore the range of valuations resulting from any particular analysis described above should not be taken to be Stifel’s view of the actual value of LaBarge.
 
Miscellaneous
 
Stifel acted as financial advisor to LaBarge in connection with the merger and will receive a fee of approximately $5,000,000 for its services, a significant portion of which is contingent upon the consummation of the merger (the “Advisory Fee”). Stifel also acted as financial advisor to the LaBarge board of directors and received a fee of $750,000 upon the delivery of its opinion that is not contingent upon consummation of the merger (the “Opinion Fee”), provided that such Opinion Fee is creditable against any Advisory Fee. Other than the Advisory Fee, Stifel will not receive any other payment or compensation contingent upon the successful consummation of the merger. In addition, LaBarge has agreed to indemnify Stifel for certain liabilities arising out of its engagement. In the ordinary course of its business, Stifel may actively trade the


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equity securities of LaBarge and Ducommun for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. There are no other material relationships that existed during the two years prior to the date of Stifel’s opinion or that are mutually understood to be contemplated in which any compensation was received or is intended to be received as a result of the relationship between Stifel and any party to the merger. Stifel may seek to provide investment banking services to Ducommun or its affiliates in the future, for which Stifel would seek customary compensation. Stifel’s internal Fairness Opinion Committee has approved the issuance of Stifel’s opinion.
 
Summary of LaBarge Projections
 
In the course of the process resulting in the merger agreement, LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer prepared and provided to Stifel, Ducommun and the other parties that entered into confidentiality agreements certain non-public, projected financial information, which was based on LaBarge’s Chief Executive Officer’s, Chief Financial Officer’s and Chief Operating Officer’s estimate of LaBarge’s future financial performance as of the date they were prepared (the “Base Case Projections”). The projected financial information covered the fiscal years 2011 through 2015. The information for fiscal year 2011 was based on actual results for the first two fiscal quarters and projected results for the third and fourth fiscal quarters of that year.
 
In addition, LaBarge’s provided certain projected financial information from fiscal 2012 through 2015 that included the impact of a system developed by one of LaBarge’s top customers that was being deployed in limited quantities as of December 31, 2010 (the “SG Projections”). The program is not expected to have a material impact on LaBarge’s forecast until fiscal year 2012, and given its recent implementation, its potential future results are inherently more uncertain and speculative than the factors underlying the Base Case Projections. The projected financial information provided to Stifel and the potential buyers (the “Projections”) were also provided by LaBarge’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer to the LaBarge board of directors.
 
The Projections were not prepared with a view to public disclosure and are included in this proxy statement only because Projections were provided to the LaBarge board of directors, Stifel and the potential buyers. The Projections were not prepared with a view to compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections. LaBarge’s Independent Registered Public Accounting Firm has not examined, compiled or performed any procedures with respect to the Projections and accordingly does not provide any form of assurance with respect to the Projections. Neither LaBarge nor any of LaBarge’s representatives, including Stifel, has made or makes any representations regarding the ultimate performance of LaBarge compared to the information contained in the Projections, and LaBarge does not intend to provide any update or revision thereof, and undertakes no obligation to do so except as required by law.
 
Furthermore, the Projections:
 
  •  while presented with numerical specificity, necessarily make numerous assumptions, many of which are beyond LaBarge’s control, including with respect to industry performance, general business, economic, regulatory, market and financial conditions, as well as matters specific to LaBarge’s business, and may not prove to have been, or may no longer be, accurate;
 
  •  do not necessarily reflect revised prospects for LaBarge’s business, changes in general business, economic, regulatory, market and financial conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the Projections were prepared;
 
  •  are not necessarily indicative of actual current values or future performance, which may be significantly more favorable or less favorable than as set forth below;
 
  •  do not reflect the impact of the merger; and
 
  •  should not be regarded as a representation that the Projections will be achieved and readers of this proxy statement are cautioned not to place undue reliance on the projections.
 
LaBarge cannot assure you that the Projections will be realized and actual results may vary materially from those shown. Important factors that may affect actual results and result in the Projections not being


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  achieved include, but are not limited to, the risks described in LaBarge’s most recent annual and quarterly reports filed with the SEC on Forms 10-K and 10-Q, respectively, and in this proxy statement under the heading “Cautionary Statement Concerning Forward-Looking Statements.” The Projections also cover multiple years and by their nature become subject to greater uncertainty with each successive year. Furthermore, and for the same reasons, the Projections should not be construed as commentary by LaBarge’s management as to how management expects LaBarge’s actual results to compare to research analysts’ estimates. The inclusion of the Projections in this proxy statement should not be regarded as an indication that LaBarge or any of its affiliates, advisors or representatives considered or considers the Projections to be necessarily predictive of actual future events, and the Projections should not be relied on as such.
 
The Projections are summarized in the following tables showing both the Base Case Projections and the SG Projections:
 
BASE CASE PROJECTIONS
 
                                         
    Fiscal Year Ending(1),
    June 2011   June 2012   June 2013   June 2014   June 2015
    (In millions, except per share amounts)
 
Revenue
  $ 333.8     $ 386.2     $ 437.8     $ 481.5     $ 539.1  
Gross profit
  $ 66.4     $ 77.1     $ 88.2     $ 96.9     $ 108.3  
EBIT
  $ 29.7     $ 37.2     $ 45.5     $ 50.9     $ 58.5  
EBITDA
  $ 38.2     $ 45.7     $ 54.1     $ 59.9     $ 68.0  
Net Income
  $ 18.2     $ 23.2     $ 28.8     $ 32.4     $ 37.3  
Diluted EPS
  $ 1.14     $ 1.45     $ 1.80     $ 2.03     $ 2.33  
 
 
(1) LaBarge operates on a 52-week reporting period.
 
SG PROJECTIONS
 
                                         
    Fiscal Year Ending(1),
    June 2011   June 2012   June 2013   June 2014   June 2015
    (In millions, except per share amounts)
 
Revenue
  $ 333.8     $ 391.7     $ 465.3     $ 525.5     $ 605.1  
Gross profit
  $ 66.4     $ 77.8     $ 91.5     $ 102.2     $ 116.3  
EBIT
  $ 29.7     $ 37.3     $ 47.5     $ 54.3     $ 63.8  
EBITDA
  $ 38.2     $ 45.8     $ 56.1     $ 63.3     $ 73.3  
Net Income
  $ 18.2     $ 23.3     $ 30.1     $ 34.6     $ 40.7  
Diluted EPS
  $ 1.14     $ 1.46     $ 1.88     $ 2.16     $ 2.54  
 
 
(1) LaBarge operates on a 52-week reporting period.
 
Voting Agreement
 
In connection with the execution of the merger agreement, all of LaBarge’s executive officers and certain directors (each, a “Voting Agreement Stockholder”) entered into a voting agreement with Ducommun attached as Annex D. Each Voting Agreement Stockholder has agreed to vote all shares of LaBarge common stock owned of record or beneficially (representing approximately 19% of the outstanding shares of LaBarge common stock as of the record date (excluding any shares of LaBarge common stock deliverable upon exercise or conversion of any option) (the “Voting Shares”)) at any meeting of the stockholders of LaBarge however called (or any action by written consent in lieu of a meeting) or any adjournment thereof in favor of the adoption of the merger agreement, the merger and each of transactions contemplated by the merger agreement.


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Each Voting Agreement Stockholder also agreed to vote such Voting Shares held by such stockholder against the following actions (referred to herein as the “frustrating transactions”), whether or not the LaBarge board of directors recommends approval of such action, proposal or transaction:
 
  •  any merger agreement or merger involving LaBarge other than the merger agreement and merger with Ducommun;
 
  •  any acquisition proposal (as defined on page [ • ]) or any other proposal which could reasonably be expected to prevent, impede, interfere or delay consummation of the merger or the transactions contemplated by the merger agreement;
 
  •  any change in LaBarge’s capitalization or dividend policy or any amendment or other change to LaBarge’s certificate of incorporation or bylaws; and
 
  •  any proposal for any recapitalization, reorganization, liquidation, dissolution, merger or other business combination between LaBarge and any other person.
 
Each Voting Agreement Stockholder also appointed Ducommun and Anthony J. Reardon, Joseph P. Bellino and James S. Heiser as his or her proxy and attorney-in-fact (with full power of substitution) to vote all of such person’s shares (at any meeting of stockholders of the LaBarge however called or any adjournment thereof), or to execute one or more written consents in respect of such shares, (i) in favor of the adoption of the merger agreement, and each of the transactions contemplated thereby and approval of any proposal to adjourn or postpone such meeting to a later date if there are not sufficient votes for approval on the foregoing on the date on which such meeting is held and (ii) against any frustrating transaction. The proxy granted is irrevocable until termination of the voting agreement, as described below.
 
Each Voting Agreement Stockholder further agreed not to, directly or indirectly:
 
  •  sell, transfer, gift, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement with respect to the sale, transfer, gift, pledge, encumbrance, assignment or other disposition of, any of such Voting Stockholder’s shares (or any right, title or interest thereto or therein) except as otherwise permitted in the Voting Agreement;
 
  •  enter into any other voting arrangement, whether by proxy, voting agreement or otherwise in connection with any acquisition proposal or frustrating transaction with respect to any of such shares; or
 
  •  knowingly take any action that would have the effect of preventing or disabling such stockholder from performing its obligations under the voting agreement.
 
Each Voting Agreement Stockholder also agreed to not solicit any acquisition proposal or any inquiry or offer that is reasonably likely to lead to any acquisition proposal, enter into, continue or otherwise participate in any discussions with respect to an acquisition proposal, execute any agreement relating to, or approve or recommend, an acquisition proposal or make a solicitation of proxies or seek to advise or influence any person with respect to the voting of shares of capital stock of LaBarge intending to facilitate any acquisition proposal.
 
The voting agreement and the proxy granted by each Voting Agreement Stockholder shall terminate upon the earlier of (a) the effective time of the merger, (ii) September 30, 2011 and (iii) the termination of the merger agreement in accordance with its terms.
 
Stock Ownership of Directors and Executive Officers of LaBarge
 
At the close of business on April 13, 2011, for the LaBarge special meeting, the directors and executive officers of LaBarge beneficially owned and were entitled to vote approximately 3,395,944 shares of LaBarge common stock, collectively representing approximately 21.3% of the shares of LaBarge common stock outstanding on that date. See “Stock Ownership and Voting by LaBarge’s Directors and Executive Officers” on page [ • ] for further information about the beneficial ownership of shares of LaBarge common stock of LaBarge directors and executive officers.


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Merger Consideration
 
At the effective time, each share of LaBarge common stock outstanding immediately prior to the effective time, other than shares owned by Ducommun or LaBarge or their respective wholly-owned subsidiaries, or shares owned by stockholders who have properly exercised and perfected appraisal rights under Delaware law, will be converted into the right to receive the merger consideration.
 
Holders of LaBarge common stock will receive an amount in cash of $19.25 per share, without interest.
 
Interests of LaBarge Directors and Executive Officers in the Merger
 
When considering the unanimous recommendation of the LaBarge board of directors with respect to the approval of the merger agreement and the transactions contemplated by the merger agreement, including the merger, LaBarge stockholders should be aware that some directors and executive officers of LaBarge have interests in the transactions contemplated by the merger agreement that may be different from, or in addition to, their interests as stockholders and the interests of LaBarge stockholders generally. Such interests relate to, or arise from, among other things, the following:
 
  •  the fact that restricted shares held by LaBarge’s executive officers will fully vest and be treated as described below in “The Merger Agreement — Effect of the Merger on LaBarge Inc.’s Equity Awards” beginning on page [ • ];
 
  •  the fact that stock options held by LaBarge’s executive officers will be entitled to a cash payment in connection with cancellation of such stock options;
 
  •  the fact that LaBarge’s executive officers may receive severance payments pursuant to agreements with such executive officers in the event of a qualified termination of employment following the merger;
 
  •  the fact that performance units outstanding as of the effective time will be converted into an unvested right (vested right for Craig E. LaBarge and Donald H. Nonnenkamp) to receive a cash payment at the maximum level upon subsequent vesting;
 
  •  the fact that six of LaBarge’s executive officers have entered into new employment agreements with LaBarge effective at the effective time attached hereto as Annex E; and
 
  •  the fact that LaBarge’s directors and executive officers will be entitled to continued indemnification and insurance coverage by the surviving corporation for acts or omissions occurring prior to the merger for a period of six years following the effective time.
 
The LaBarge board of directors was aware of the interests of LaBarge’s directors and executive officers during its deliberations on the merits of the merger and in deciding to recommend that LaBarge stockholders vote “FOR” the adoption of the merger agreement at the LaBarge special meeting. For purposes of all of the agreements and plans described below, the completion of the transactions contemplated by the merger agreement will constitute a change in control.
 
Stock Options
 
Certain of LaBarge’s executive officers hold stock options, issued pursuant to various LaBarge stock option plans to purchase shares of LaBarge common stock. All such options are fully vested. At the effective time, each LaBarge stock option outstanding immediately prior to such time will be canceled in exchange for the right to receive an amount of cash equal to the product of (1) the number of shares of LaBarge common stock subject to the option and (2) the excess, of $19.25 over the exercise price per share less any applicable taxes. The following chart sets forth, as of April 13, 2011, for each of LaBarge’s executive officers:
 
  •  the number of shares subject to outstanding options for LaBarge common stock held by such person;
 
  •  the weighted average exercise price for such options; and
 
  •  the aggregate value of such options (without regard to deductions or withholdings for applicable taxes), assuming the closing of the merger as of July 3, 2011.


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    No. of Shares
      Aggregate
    Subject to
  Weighted Average
  Value of
    Options   Exercise Price   Options
 
Name of Executive
                       
Craig E. LaBarge
    220,452     $ 4.67       3,214,190  
Randy L. Buschling
    20,000       2.85       328,000  
Donald H. Nonnenkamp
    68,600       6.22       893,858  
William D. Bitner
                 
Teresa K. Huber
    15,000       8.54       160,650  
John R. Parmley
    24,500       8.54       262,395  
 
Restricted Shares
 
Certain of LaBarge’s executive officers hold restricted shares. All such restricted shares shall vest as of the effective time of the merger. At the effective time, each restricted share shall be exchanged for the same merger consideration paid for a share of LaBarge common stock. The following chart sets forth, as of April 13, 2011, for each of the executive officers, the total number of restricted shares held by such person or group.
 
         
    No. of
    Restricted
    Shares Held
 
Name of Executive
       
Craig E. LaBarge
    43,906  
Randy L. Buschling
    28,100  
Donald H. Nonnenkamp
    18,880  
William D. Bitner
    9,484  
Teresa K. Huber
    9,484  
John R. Parmley
    9,484  
 
LaBarge Performance Units
 
The performance objectives underlying all of LaBarge’s outstanding performance units held by executive officers will be deemed to be achieved at the maximum level of $1.50 per unit at the effective time and will be converted upon consummation of the merger, into an unvested right to receive payment, in cash, equal to the holder’s outstanding performance units multiplied by $1.50, payable within ten days following the vesting of such unvested cash rights. The unvested cash rights will vest, except as described below for Craig E. LaBarge and Donald H. Nonnenkamp, on the earlier to occur of the holder’s (i) voluntary termination of employment with LaBarge for good reason, (ii) involuntary termination of employment with LaBarge for a reason other than cause, (iii) termination of employment with LaBarge on account of disability, (iv) death or (v) completion of twelve consecutive months of service with LaBarge following the effective time. Except as set forth below regarding Mr. LaBarge and Mr. Nonnenkamp, if a holder’s employment with LaBarge is terminated for cause or voluntarily terminated before vesting, he or she will forfeit his or her right to payment with respect to performance units. The terms “good reason,” “cause” and “disability” are defined in the LaBarge 2004 Long Term Incentive Plan and the new employment agreements entered into with the Senior Executive Officers. Pursuant to new employment agreements entered into with LaBarge, Mr. LaBarge’s and Mr. Nonnenkamp’s performance units will be paid, as applicable, upon the earlier of (i) such executive officer’s termination of employment with LaBarge for any reason following the effective time or (ii) March 15, 2012. If the effective time occurs after July 3, 2011, outstanding performance units with a performance period ending on July 3, 2011, other than those held by the Senior Executive Officers shall not be converted into an unvested cash right as described above, but instead shall be cancelled in exchange for payment to such holders in cash at $1.50 per unit within ten days of the effective time. The following chart sets forth, as of April 12, 2011, for each of LaBarge’s Senior Executive Officers the number of performance units held by such person and the aggregate amount payable to such person upon vesting.
 


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    No. of
  Aggregate
    Performance
  Amount
    Units   Payable
 
Name of Executive
               
Craig E. LaBarge
    1,525,000     $ 2,287,500  
Randy L. Buschling
    975,000       1,462,500  
Donald H. Nonnenkamp
    660,000       990,000  
William D. Bitner
    336,000       504,000  
Teresa K. Huber
    336,000       504,000  
John R. Parmley
    336,000       504,000  
 
Employee Benefits
 
The merger agreement requires Ducommun to use commercially reasonable efforts to during the period commencing on the effective date and ending on December 31, 2011, waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements for the LaBarge employees under any employee benefit plan in which such employees will be eligible to participate following the effective time. Ducommun will also use commercially reasonable efforts to credit the LaBarge employees for their prior service with LaBarge under the new employee benefit plans in which the employees are eligible to participate. Credit will be given to the same extent such service was credited under the similar LaBarge employee benefit plans for purposes of eligibility to participate and vesting under those plans, but not for purposes of benefit accrual. No credit will be given to the extent it would result in the duplication of benefits for the same period of service.
 
New Employment Arrangements
 
LaBarge has entered into new employment agreements with six executive officers: Craig E. LaBarge, Donald H. Nonnenkamp, Randy L. Buschling, Teresa K. Huber, John R. Parmley and William D. Bitner. These employment agreements set forth the terms of each officer’s employment following the effective time and are attached hereto as Annex E and replace certain executive severance agreements previously entered into with LaBarge.
 
Craig LaBarge has entered into an employment agreement that provides that he will serve as the Vice Chairman of LaBarge. Mr. LaBarge’s employment agreement has a one year term, and provides both base salary ($571,500) and a lump-sum bonus ($255,000). Mr. LaBarge’s employment agreement also provides that if he remains employed through the first anniversary of the closing date, he will be paid a single lump-sum in satisfaction of his performance units, which shall be reduced by any amount earlier paid under or in respect of the performance units. Mr. LaBarge’s employment is terminable by either party at any time upon at least 90 days written notice. If Mr. LaBarge’s employment is terminated without cause within the first three months of the beginning of his employment term, is terminated by Mr. LaBarge for good reason within three months of the beginning of his employment term, or is terminated for any reason after three months of the beginning of his employment term, Mr. LaBarge will be entitled to (i) a lump sum amount equal to any base salary and bonus that would have been paid had Mr. LaBarge remained employed during the employment term, (ii) a lump sum amount in satisfaction of his performance units to the extent not previously paid, (iii) continuation of those benefits and perquisites that would have been provided to him had he remained employed by LaBarge during his employment term, and (iv) accrued but unpaid salary, expenses, and other benefits. If Mr. LaBarge’s employment is terminated during the first three months of his employment term for cause, death, disability, or by Mr. LaBarge without good reason, Mr. LaBarge will be entitled to a lump sum payment in satisfaction of his performance units and accrued but unpaid salary, expenses, and other benefits.
 
Donald Nonnenkamp has entered into an employment agreement that provides that he will serve as the Vice President of Finance of LaBarge. Mr. Nonnenkamp’s employment agreement has a one year term, and provides both base salary ($327,500) and a lump-sum bonus ($123,000). Mr. Nonnenkamp’s employment is terminable by either party at any time upon at least 90 days written notice. If Mr. Nonnenkamp’s employment is terminated without cause within the first three months of the beginning of his employment term, is terminated by Mr. Nonnenkamp for good reason within three months of the beginning of his employment

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term, or is terminated for any reason after three months of the beginning of his employment term, Mr. Nonnenkamp will be entitled to (i) a lump sum amount equal to any base salary and bonus that would have been paid had he remained employed during the employment term, (ii) a lump sum amount in satisfaction of his performance units to the extent not previously paid, (iii) continuation of those benefits and perquisites that would have been provided to him had he remained employed by LaBarge during his employment term, and (iv) accrued but unpaid salary, expenses, and other benefits. If Mr. Nonnenkamp’s employment is terminated during the first three months of his employment term for cause, death, disability, or by Mr. Nonnenkamp without good reason, Mr. Nonnenkamp will be entitled to a lump sum payment in satisfaction of his performance units and accrued but unpaid salary, expenses, and other benefits.
 
Mr. Buschling, Mr. Parmley, Mr. Bitner, and Ms. Huber have entered into employment agreements to serve as, respectively, SVP — Operations, VP — Sales and Marketing, VP — Operations, and VP — Operations of Ducommun LaBarge Technologies, Inc. These employment agreements have an initial term of one year, and following that initial term, each employee will be on an at-will basis. The employment agreements provide for both base salary ($390,000 for Mr. Buschling, $268,500 for Mr. Parmley, $253,000 for Mr. Bitner and $260,000 for Ms. Huber) and bonus payments. These employment agreements are terminable by either party at any time upon at least 90 days written notice. Bonuses for the period beginning July 1, 2011 and ending on December 31, 2011 are to be no less than a guaranteed minimum amount ($88,500 for Mr. Buschling, $53,500 for Mr. Parmley, $54,500 for Mr. Bitner and $52,000 for Ms. Huber). Bonuses for Ducommun’s 2012 fiscal year are to be no less than the above specified respective amounts reduced by the amount by which each executive’s actual bonus for the period from July 1, 2011 until December 31, 2011 exceeds the guaranteed minimum bonus for that period. In addition, these employment agreements also provide that if the executive remains employed through the first anniversary of the closing date, the executive will be paid a single lump-sum in satisfaction of his or her performance units, which shall be reduced by any amount earlier paid under or in respect of the performance units. These employment agreements also provide that upon termination of employment during the initial term of the agreement without cause or by the executive for good reason, the executive will be entitled to (i) a lump sum amount equal to any base salary that would have been paid had the executive remained employed during the employment term, (ii) a lump sum equal to any minimum guaranteed bonus accruing during the term of the employment agreement to the extent not previously paid, (iii) a lump sum amount in satisfaction of the executive’s performance units to the extent not previously paid, (iv) continuation of those benefits and perquisites that would have been provided to the executive had the executive remained employed by LaBarge during the executive’s employment term, and (v) accrued but unpaid salary, expenses, and other benefits. If the executive’s employment is terminated without cause or the executive terminates employment for good reason during the first six months following the initial employment term, the executive is entitled to payment of the lump-sum minimum bonus payment, to the extent not previously paid, and payment of accrued but unpaid salary, expenses, and other benefits. These employment agreements also provide that if the executive’s employment is terminated during the employment term for cause or by the executive without good reason, the executive is only entitled to accrued but unpaid salary, expenses, and other benefits. If an executive’s employment is terminated for death or disability, the executive is entitled to a payment in satisfaction of his or her performance units to the extent not previously paid and accrued but unpaid salary, expenses, and other benefits.
 
For illustrative purposes only, it is currently estimated that, assuming the closing of the merger will occur on July 3, 2011 and the employment of each of LaBarge’s executive officers is terminated by Ducommun, without cause, immediately following consummation of the merger, LaBarge’s executive officers would be entitled to receive, in the aggregate, approximately $9.3 million in termination payments and benefits,


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excluding payments related to equity-based incentive awards discussed separately above. The following table sets forth, using the same assumptions, such payments for each of LaBarge’s executive officers.
 
         
    Termination
    Payments
 
Name of Executive
       
Craig E. LaBarge
  $ 3,145,460.00  
Randy L. Buschling
  $ 2,059,441.00  
Donald H. Nonnenkamp
  $ 1,467,667.00  
John R. Parmley
  $ 906,557.00  
Teresa K. Huber
  $ 880,405.00  
William D. Bitner
  $ 878,405.00  
 
The foregoing descriptions of the employment agreements with executives are not complete and are qualified in their entirety by reference to the employment agreement for each executive, copies of which are attached hereto as Annex F and incorporated herein by reference.
 
Indemnification and Insurance
 
For a period of six years following the effective time, Ducommun shall cause the surviving corporation to, indemnify and hold harmless each current and former officer, director, trustee, member and fiduciary of LaBarge and its affiliates, against any costs or expenses (including advancing reasonable attorneys’ fees and expenses upon receipt of an undertaking by the person seeking indemnification to repay such amount if it shall be ultimately determined that the indemnified person is not entitled to be indemnified), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened action or investigation in respect of or arising out of acts or omissions occurring or alleged to have occurred at or prior to the effective time, to the fullest extent permitted by Delaware law or any other applicable law or provided under LaBarge’s organizational documents in effect on the date of merger agreement.
 
In addition, Ducommun shall cause the surviving corporation to continue in full force and effect for a period of six years following the effective time the provisions in existence under LaBarge’s organizational documents in effect on the date of the merger agreement regarding elimination of liability of directors, indemnification and exculpation of officers, directors and employees and advancement of expenses.
 
For six years after the effective time, Ducommun shall cause the surviving corporation to provide officers’ and directors’ liability and similar insurance (which we refer to as “D&O insurance”) in respect of acts or omissions occurring prior to the effective time covering each indemnified person covered as of the date of the merger agreement by LaBarge’s D&O insurance policies on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date of the merger agreement. Alternatively, LaBarge may purchase such “tail policy” at its option prior to the effective time and pay the premium due thereon when due, provided that the surviving corporation shall not be obligated to pay annual premiums in the aggregate in excess of $250,000 provided that if the annual premium of such coverage exceeds such amount, the surviving corporation shall be obligated to obtain the greatest coverage available, with respect to matters occurring prior to the effective time of the merger, for a cost not exceeding such amount.
 
For additional information about the indemnification rights of LaBarge directors and executive officers under the merger agreement, see “The Merger Agreement — Covenants and Agreements — Indemnification and Insurance” beginning on page [ • ].
 
De-listing and Deregistration of LaBarge Common Stock
 
If the merger is completed, LaBarge common stock will no longer be listed on the AMEX, will be deregistered under the Exchange Act and LaBarge and will no longer file periodic reports with the SEC.


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Regulatory Approvals Required for the Merger
 
The HSR Act and the regulations promulgated thereunder require LaBarge and Ducommun to file premerger notification and report forms with respect to the merger and related transactions with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission. LaBarge filed its required premerger notification and report form on April 14, 2011, and Ducommun filed its required form on April 14, 2011.
 
Nevertheless, at any time before or after the completion of the merger, and before or after the expiration of the premerger waiting period under the HSR Act, the Antitrust Division of the U.S. Department of Justice or the Federal Trade Commission or any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, to rescind the merger or to seek divestiture of particular assets. Private parties also may seek to take legal action under the antitrust laws under certain circumstances. Although there is no assurance that they will not do so, we do not expect any regulatory authority, state or private party to take legal action under the antitrust laws.
 
Although we do not expect these regulatory authorities to raise any significant concerns in connection with their review of the merger, there is no assurance that we will obtain all required regulatory approvals, or that those approvals will not include terms, conditions or restrictions that may have an adverse effect on LaBarge or, after the completion of the transaction, on Ducommun or the surviving corporation.
 
The merger may be subject to certain regulatory requirements of other municipal, state, federal and foreign governmental and self-regulatory agencies and authorities, including those relating to the offer and sale of securities. Together with Ducommun, we are currently working to evaluate and comply in all material respects with these requirements, as appropriate, and do not currently anticipate that they will hinder, delay or restrict completion of the merger. However, there is no guarantee that we will be able to obtain all necessary approvals. Even if we could obtain all necessary approvals, and the merger agreement is approved by our stockholders, conditions may be placed on the merger that could cause us to abandon it.
 
Litigation Related to the Merger
 
LaBarge is aware of five purported class actions against LaBarge, LaBarge’s directors and Ducommun filed by purported stockholders of LaBarge and relating to the merger. The complaints allege, among other things, that LaBarge’s directors breached their fiduciary duties to the LaBarge stockholders, and that LaBarge and Ducommun aided and abetted LaBarge’s directors in such alleged breaches of their fiduciary duties. Each plaintiff purports to bring his claims on behalf of himself and a class of LaBarge stockholders. The actions seek judicial declarations that the merger agreement was entered into in breach of the directors’ fiduciary duties, rescission of the transactions contemplated by the merger agreement, and the award of attorneys’ fees and expenses for the plaintiffs. Three lawsuits challenging the proposed transaction have been filed in Missouri state court, all in the Circuit Court of St. Louis County by the same plaintiffs’ attorneys. All seek declaratory, rescissory and other, unspecified, equitable relief against the directors and officers on a theory of breach of fiduciary duty to the stockholders and against LaBarge and Ducommun on a theory of “aiding and abetting” the individual defendants. No money damages are sought, except for attorneys’ fees and costs, and no injunctive relief is expressly sought. All three Missouri suits are identical in content, and two were filed on successive days on behalf of the same named plaintiff.
 
The three Missouri cases are:
 
1. John M. Foley, Jr. v. LaBarge, Inc. et al., St. Louis County Circuit Court Cause No. 11SL-CC01383, filed April 5, 2011.


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2. John M. Foley, Jr. v. LaBarge, Inc., et al., St. Louis County Circuit Court Cause No. 11SL-CC01391, filed April 6, 2011.
 
3. William W. Wheeler v. LaBarge, Inc., et al., St. Louis County Circuit Court Cause No. 11SL-CC01392, filed April 6, 2011.
 
Two other nearly identical lawsuits have been filed in the Chancery Court of the State of Delaware by different attorneys than the above-described matters. Barry P. Borodkin v. Craig E. LaBarge, et al., transaction ID 36985939, Case No. 6368- (filed on April 12, 2011) and Insulators and Asbestos Workers Local No. 14 v. Craig LaBarge, et al. (filed on April 15, 2011) are putative class actions that mirror the claims raised in the Missouri cases, but also seek injunctive relief to prevent the proposed transaction with Ducommun in addition to an accounting and attorneys’ fees and costs. LaBarge and Ducommun and the other defendants believe that the lawsuits are without merit and intend to defend them vigorously.
 
Financing Relating to the Merger
 
In connection with the entry into the merger agreement, Ducommun received a debt commitment letter, dated April 3, 2011 (such commitment letter and any schedules, exhibits and annexes thereto, collectively, the “Debt Commitment Letter”), from UBS Loan Finance LLC, UBS Securities LLC, Credit Suisse Securities (USA) LLC and Credit Suisse AG (the “Lenders”) for a senior secured term loan facility of $190,000,000 and a senior secured revolving credit facility of up to $40,000,000. In the Debt Commitment Letter, the Lenders also committed to provide a senior unsecured bridge facility of $200,000,000, to be available to Ducommun if it does not complete an anticipated offering of senior unsecured notes on or before the date on which the merger is consummated.
 
The obligations of the Lenders to provide financing under the Debt Commitment Letter are subject to a number of customary closing conditions included in the Debt Commitment Letter, including, without limitation:
 
  •  there shall not have been any material adverse effect (which term is defined in the same or substantially the same way as in the merger agreement) on LaBarge and its subsidiaries since January 2, 2011;
 
  •  delivery of certain customary closing documents (including, among others, a customary solvency certificate or solvency opinion, “know your customer” documentation and similar information);
 
  •  delivery of certain customary LaBarge financial statements, including pro forma financial statements and information; and
 
  •  payment of applicable costs, fees and expenses and other compensation, as contemplated by the Debt Commitment Letter and fee arrangements and compliance with certain other provisions thereof.
 
The Debt Commitment Letter is subject to neither a due diligence nor a “market out” condition, which would allow the Lenders not to fund their commitments if the financial markets are materially adversely affected. There is a risk that the conditions to the Debt Financing will not be satisfied and the Debt Financing may not be funded when required. As of the date of this proxy statement, no alternative financing arrangements or alternative financing plans have been made in the event the Debt Financing described in this proxy statement is not available as anticipated.
 
In the merger agreement, Ducommun and merger subsidiary have agreed to use their reasonable best efforts to obtain the Debt Financing on the terms and conditions described in the Debt Commitment Letter. Ducommun and merger subsidiary may not amend, replace or supplement the Debt Commitment Letter if such amendment, modification or waiver:
 
  •  imposes any additional conditions precedent or expands upon the conditions precedent to the financing as set forth in the Debt Commitment Letter;
 
  •  adversely impacts the rights of Ducommun or merger subsidiary to enforce its rights against the other parties to the Debt Commitment Letter; or


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  •  prevents or impedes or delays the consummation of the merger or the other transactions contemplated by the merger agreement.
 
Ducommun has advised LaBarge that it is expected that on or before the date on which the merger is consummated, senior unsecured notes will be issued and sold in reliance on Rule 144A of the Securities Act in lieu of a portion or all of bridge financing described above. The merger agreement provides for a marketing period for such notes prior to the closing of the merger, which is described in more detail under “The Merger Agreement — Covenants and Agreements; Financing Matters” beginning on page [ • ].
 
LaBarge Stockholders’ Rights of Appraisal
 
If the merger is consummated, dissenting holders of LaBarge common stock who follow the procedures specified in Section 262 of the DGCL (“Section 262”) within the appropriate time periods will be entitled to have their shares of LaBarge common stock appraised by the Court of Chancery, and to receive the “fair value” of such shares in cash as determined by the Court of Chancery, together with a fair rate of interest, if any, to be paid on the amount determined to be the fair value, in lieu of the merger consideration that such stockholder would otherwise be entitled to receive pursuant to the merger agreement. The fair value of LaBarge common stock as determined by the Court of Chancery may be more or less than, or the same as, the merger consideration that you are otherwise entitled to receive under the terms of the merger agreement.
 
This section provides a brief summary of Section 262, which sets forth the procedures for dissenting from the merger and demanding and perfecting appraisal rights. Failure to follow the procedures set forth in Section 262 precisely will result in the loss of appraisal rights. This summary is not a complete statement regarding the appraisal rights of LaBarge stockholders or the procedures that they must follow in order to seek and perfect appraisal rights under Delaware law and is qualified in its entirety by reference to the text of Section 262, a copy of which is attached to this proxy statement as Annex C. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that LaBarge stockholders exercise appraisal rights under Section 262.
 
IF YOU WISH TO EXERCISE APPRAISAL RIGHTS OR WISH TO PRESERVE YOUR RIGHT TO DO SO, YOU SHOULD REVIEW ANNEX C CAREFULLY AND SHOULD CONSULT YOUR LEGAL ADVISOR, AS FAILURE TO TIMELY COMPLY WITH THE PROCEDURES SET FORTH IN ANNEX C WILL RESULT IN THE LOSS OF YOUR APPRAISAL RIGHTS.
 
Under Section 262, where a merger is to be submitted for adoption at a meeting of stockholders, such as the LaBarge special meeting, not less than 20 days prior to the meeting a constituent corporation, such as LaBarge, must notify each of its stockholders for whom appraisal rights are available that such appraisal rights are available and include in each such notice a copy of Section 262. This proxy statement constitutes such notice to holders of LaBarge common stock concerning the availability of appraisal rights under Section 262. LaBarge stockholders wishing to assert appraisal rights must hold the shares of LaBarge common stock on the date of making the written demand for appraisal rights with respect to such shares and must continuously hold such shares through the effective time. LaBarge stockholders who desire to exercise appraisal rights must also satisfy all of the conditions of Section 262. A written demand for appraisal of shares must be delivered to LaBarge before the vote on the merger occurs. This written demand for appraisal of shares must be in addition to and separate from a vote against the proposal to adopt the merger agreement, or an abstention or failure to vote for the proposal to adopt the merger agreement. LaBarge stockholders electing to exercise their appraisal rights must not vote FOR the adoption of the merger agreement. A vote against the adoption of the merger agreement will not constitute a demand for appraisal within the meaning of Section 262. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the proposal to adopt the merger agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a LaBarge stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote against the proposal to adopt the merger agreement or abstain from voting on the proposal to adopt the merger agreement.


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To be effective, a demand for appraisal by a LaBarge stockholder must be made by, or in the name of, the stockholder of record, fully and correctly, as the stockholder’s name appears on the stockholder’s stock certificate(s) or in the transfer agent’s records, in the case of uncertificated shares. The demand cannot be made by the beneficial owner if he or she does not also hold the shares of LaBarge common stock of record. The beneficial holder must, in such cases, have the registered owner, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of LaBarge common stock. If you hold your shares of LaBarge common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.
 
If shares of LaBarge common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made in that capacity. If the shares of LaBarge common stock are owned of record by more than one person, as in a tenancy or tenancy in common, the demand should be executed by or for all owners. An authorized agent, including an authorized agent for two or more owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of LaBarge common stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of LaBarge common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of LaBarge common stock as to which appraisal is sought. Where no number of shares of LaBarge common stock is expressly mentioned, the demand will be presumed to cover all shares of LaBarge common stock held in the name of the record owner.
 
All demands for appraisal should be addressed to LaBarge, 9900 Clayton Road, St. Louis, Missouri 63124, Attention: Donald H. Nonnenkamp, Corporate Secretary. The demand must reasonably inform LaBarge of the identity of the LaBarge stockholder as well as the stockholder’s intention to demand an appraisal of the “fair value” of the shares held by the stockholder. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the merger agreement at the special meeting will constitute a waiver of appraisal rights.
 
Within 10 days after the effective time, LaBarge must provide notice of the effective time to all of its stockholders who have complied with Section 262 and have not voted “FOR” the adoption of the merger agreement. At any time within 60 days after the effective time, any LaBarge stockholder who has not commenced an appraisal proceeding or joined an appraisal proceeding as a named party will have the right to withdraw his, her or its demand for appraisal and to accept the merger consideration specified in the merger agreement. After this period, a LaBarge stockholder may withdraw his, her or its demand for appraisal and receive payment for his, her or its shares as provided in the merger agreement only with the consent of the surviving corporation. Unless the demand is properly withdrawn by the LaBarge stockholder within 60 days after the effective time, no appraisal proceeding in the Court of Chancery will be dismissed as to any LaBarge stockholder without the approval of the Court of Chancery, with such approval conditioned upon such terms as the Court of Chancery deems just. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or if the Court of Chancery does not approve the dismissal of an appraisal proceeding, the LaBarge stockholder will be entitled to receive only the appraised value determined in any such appraisal proceeding, which value could be less than, equal to or more than the consideration offered pursuant to the merger agreement.
 
Within 120 days after the effective time (but not thereafter), either the surviving corporation or any LaBarge stockholder who has complied with the requirements of Section 262 and who is otherwise entitled to appraisal rights may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the fair value of the shares of LaBarge common stock owned by stockholders entitled to appraisal rights. The surviving corporation has no obligation to file such a petition if demand for appraisal is made, and holders should not assume that it will file a petition. If no petition for appraisal is filed with the Court of Chancery within 120 days after the effective time, stockholders’ rights to appraisal (if available) will cease. Accordingly, it is the obligation of the holders of LaBarge common stock to initiate all


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necessary action to perfect their appraisal rights in respect of shares of LaBarge common stock within the time prescribed in Section 262.
 
Within 120 days after the effective time, any LaBarge stockholder who has complied with Section 262 will be entitled, upon written request, to receive from the surviving corporation a statement listing the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within 10 days after a written request therefore has been received by the surviving corporation. A person who is the beneficial owner of shares of LaBarge common stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition for appraisal or request from the surviving corporation the statement described in this paragraph.
 
Upon the filing of any petition by a LaBarge stockholder in accordance with Section 262, service of a copy must be made upon the surviving corporation. The surviving corporation must, within 20 days after service, file in the office of the Delaware Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares of LaBarge common stock and with whom LaBarge has not reached agreements as to the value of their shares. The Court of Chancery may require the stockholders who have demanded an appraisal for their shares (and who hold stock represented by certificates) to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings and the Court of Chancery may dismiss the proceedings as to any stockholder that fails to comply with such direction.
 
After notice to the stockholders as required by the Court of Chancery, the Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. After the Court of Chancery determines the holders of LaBarge common stock entitled to appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Court of Chancery shall determine the “fair value” of shares of LaBarge common stock as of the effective time, after taking into account all relevant factors, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. Unless the Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective time through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time and the date of payment of the judgment.
 
LaBarge stockholders considering seeking appraisal of their shares should note that the fair value of their shares determined under Section 262 could be more or less than, or equal to, the consideration they would receive pursuant to the merger agreement if they did not seek appraisal of their shares of LaBarge common stock. Stockholders should be aware that an investment banking opinion as to the fairness from a financial point of view of the consideration payable in a transaction such as the merger is not an opinion as to, and does not address, fair value under Section 262. Although LaBarge believes that the merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Court of Chancery. Moreover, LaBarge does not anticipate offering more than the merger consideration to any stockholder exercising appraisal rights and reserves the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the “fair value” of a share of LaBarge common stock is less than the merger consideration. In determining “fair value,” the Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “fair price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that in making this determination of fair value the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any


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element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”
 
The costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Court of Chancery and taxed against the parties as the Court of Chancery deems equitable under the circumstances. Upon application of a dissenting stockholder, the Court of Chancery may order all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. In the absence of a contrary determination, each party bears his, her or its own expenses.
 
Any LaBarge stockholder who has demanded appraisal will not, after the effective time, be entitled to vote for any purpose the shares of LaBarge common stock subject to demand or to receive payment of dividends or other distributions on such shares, except for dividends or distributions payable to stockholders of record at a date prior to the effective time.
 
Failure by any LaBarge stockholder to comply fully with the procedures of Section 262 of the DGCL (as reproduced in Annex C to this proxy statement) may result in termination of such stockholder’s appraisal rights and the stockholder will be entitled to receive the merger consideration (without interest) for his, her or its shares of LaBarge common stock pursuant to the merger agreement.
 
THE PROCESS OF DISSENTING REQUIRES STRICT COMPLIANCE WITH TECHNICAL PREREQUISITES. THOSE INDIVIDUALS OR ENTITIES WISHING TO DISSENT AND TO EXERCISE THEIR APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR OWN LEGAL COUNSEL IN CONNECTION WITH COMPLIANCE UNDER SECTION 262 OF THE DGCL. TO THE EXTENT THERE ARE ANY INCONSISTENCIES BETWEEN THE FOREGOING SUMMARY AND SECTION 262 OF THE DGCL, THE DGCL WILL CONTROL.
 
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
 
The following is a summary of the material U.S. federal income tax consequences of the merger to U.S. holders and non-U.S. holders (as defined below) of LaBarge common stock who hold their stock as a capital asset (generally, assets held for investment). This summary is based on the provisions of the Code, Treasury regulations, administrative rulings and judicial authority, all as in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. No assurances can be given that any change in these laws or authorities will not affect the accuracy of the discussion set forth herein.
 
This summary is not a complete description of all the tax consequences of the merger and, in particular, may not address U.S. federal income tax considerations applicable to holders of LaBarge common stock who are subject to special treatment under U.S. federal income tax law, including, for example certain U.S. expatriates, financial institutions, an S corporation, partnership, a tax exempt organization, limited liability company taxed as a partnership, or other pass-through entity (or an investor in such pass-through entity), dealers in securities, traders in securities that elect mark-to-market treatment, insurance companies, tax-exempt entities, persons subject to tax under section 897 of the Code, persons whose “functional currency” is not the U.S. dollar, holders who acquired LaBarge common stock pursuant to the exercise of an employee stock option or right or otherwise as compensation, holders exercising dissenters’ rights or appraisal rights, and holders who hold LaBarge common stock as part of a hedge, straddle, constructive sale or conversion transaction.
 
This summary does not address U.S. federal income tax considerations applicable to holders of options to purchase LaBarge common stock. In addition, this summary does not address any aspect of state, local or non-U.S. laws or estate, gift, excise or other non-income tax laws. Neither Ducommun nor LaBarge has


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requested a ruling from the Internal Revenue Service (hereinafter referred to as the “IRS”) in connection with the merger. Accordingly, the discussions below neither bind the IRS nor preclude it from adopting a contrary position. Furthermore, no opinion of counsel has been, or is expected to be, rendered with respect to the tax consequences of the merger.
 
WE URGE HOLDERS TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES OF THE MERGER UNDER U.S. FEDERAL NON-INCOME TAX LAWS AND STATE, LOCAL AND NON-U.S. TAX LAWS.
 
For purposes of this discussion, the term “U.S. holder” means a beneficial holder of LaBarge common stock that is, for U.S. federal income tax purposes:
 
  •  a citizen or resident of the U.S.;
 
  •  a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the U.S. or any of its political subdivisions;
 
  •  a trust that (i) is subject to the supervision of a court within the U.S. and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or
 
  •  an estate that is subject to U.S. federal income tax on its income regardless of its source.
 
If a partnership (including any entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) holds LaBarge common stock, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisors about the tax consequences of the merger to them.
 
U.S. Holders
 
Tax Consequences of the Merger.  The exchange of LaBarge common stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder whose LaBarge common stock is converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between (1) the amount of cash received by such holder in the merger, and (2) the U.S. holder’s adjusted tax basis in such LaBarge common stock. A U.S. holder’s adjusted tax basis will generally equal the price the U.S. holder paid for such LaBarge common stock. Gain or loss will be determined separately for each block of LaBarge common stock. A block of stock is generally a group of shares acquired at the same cost in a single transaction. Such gain or loss will be long-term capital gain or loss provided that a U.S. holder’s holding period for such LaBarge common stock is more than one year at the time of the completion of the merger. Currently, long-term capital gain for non-corporate taxpayers is taxed at a maximum federal income tax rate of 15%. The deductibility of capital losses is subject to certain limitations.
 
Non-U.S. Holders
 
A “non-U.S. holder” is a beneficial owner of LaBarge common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder.
 
Tax Consequences of the Merger.  Any gain a non-U.S. holder recognizes from the exchange of LaBarge common stock for cash in the merger generally will not be subject to U.S. federal income tax unless (a) the gain is effectively connected with a trade or business conducted by the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment), or (b) in the case of a non-U.S. holder who is an individual, such holder is present in the United States for 183 days or more in the taxable year of the sale and other conditions are met or (c) with respect to non-U.S. holders who hold more than 5 percent of LaBarge common stock, LaBarge is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time within a specified time period and certain other requirements are satisfied. LaBarge is not, and has not been, a “U.S. real


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property holding corporation” during the specified time period. Non-U.S. Holders should consult their tax advisors about the application of the rules generally described in (c) to their dispositions of stock.
 
Non-U.S. holders described in (a) above, will be subject to tax on gain recognized at applicable U.S. federal income tax rates (or in the manner specified by an applicable income tax treaty provided certain certification requirements are satisfied) and, in addition, non-U.S. holders that are corporations (or treated as corporations for U.S. federal income tax purposes) may be subject to a branch profits tax equal to 30% (or lesser rate under an applicable income tax treaty) on your effectively connected earnings and profits for the taxable year, which would include such gain. Non-U.S. holders described in (b) above, will be subject to a flat 30% tax (or at a reduced rate under an applicable income tax treaty provided that certain certification requirements are satisfied) on any gain recognized, which may be offset by U.S. source capital losses.
 
Information Reporting and Backup Withholding
 
In general, information reporting requirements may apply to the amounts paid to U.S. holders and non-U.S. holders in connection with the consideration received in connection with the merger, unless an exemption applies. Backup withholding may be imposed (currently at a 28% rate) on the above payments if a U.S. holder or non-U.S. holder (1) fails to provide a taxpayer identification number or appropriate certifications or (2) fails to report certain types of income in full.
 
Any amounts withheld under the backup withholding rules are not additional tax and will be allowed as a refund or credit against applicable U.S. federal income tax liability provided the required information is furnished to the IRS.
 
THE FOREGOING DISCUSSION OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO CONSTITUTE A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES RELATING TO THE MERGER. TAX MATTERS ARE VERY COMPLICATED, AND THE TAX CONSEQUENCES OF THE MERGER TO HOLDERS WILL DEPEND UPON THE FACTS OF THEIR PARTICULAR SITUATION. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICABILITY TO THEM OF THE RULES DISCUSSED ABOVE AND THE PARTICULAR TAX EFFECTS TO THEM OF THE MERGER, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS.
 
THE MERGER AGREEMENT
 
The following is a summary of certain material provisions of the merger agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated into this proxy statement by reference. LaBarge urges you to read carefully this entire proxy statement, including the annexes and the other documents which have been referred to you. You should also review the section titled “Where You Can Find More Information” beginning on page [ • ].
 
This summary does not purport to be complete and may not contain all of the information about the merger that is important to you. The merger agreement has been included for your convenience to provide you with information regarding its terms, and we recommend that you read it in its entirety. Except for its status as the contractual document that establishes and governs the legal relations between LaBarge, Ducommun and merger subsidiary with respect to the merger, LaBarge does not intend for the merger agreement to be a source of factual, business or operational information about LaBarge. The merger agreement contains representations and warranties that Ducommun and LaBarge have made to each other for the principal purpose of establishing the circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstances or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing matters as facts. Those representations and warranties are qualified in several important respects, which you should consider as you read them in the merger agreement.


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First, except for the parties themselves, under the terms of the merger agreement, only certain other specifically identified persons are third party beneficiaries of the merger agreement who may enforce it and rely on its terms.
 
Second, the representations and warranties are qualified in their entirety by certain information of LaBarge filed with the SEC prior to the date of the merger agreement.
 
Third, certain of the representations and warranties made by Ducommun, on the one hand, and LaBarge, on the other hand, were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, and may have been used for the purpose of allocating risk between the parties to the merger agreement rather than as establishing matters as facts.
 
Fourth, none of the representations or warranties will survive the closing of the merger and they will therefore have no legal effect under the merger agreement after the closing. The parties will not be able to assert the inaccuracy of the representations and warranties as a basis for refusing to close unless all such inaccuracies individually or in the aggregate have, and would reasonably be expected to have, a material adverse effect on the party that made the representations and warranties, except for certain limited representations and warranties that must be true and correct in all, or all material respects. Otherwise, for purposes of the merger agreement, the representations and warranties will be deemed to have been sufficiently accurate to require a closing.
 
For the foregoing reasons, you should not rely on the representations and warranties as statements of factual information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, and subsequently developed or new information qualifying a representation or warranty may have been included in a filing with the SEC made since the date of the merger agreement (including in this proxy statement.)
 
The Merger; Closing
 
Upon the terms and subject to the conditions of the merger agreement, and in accordance with Delaware law, at the effective time, the merger subsidiary will merge with and into LaBarge in accordance with Delaware law, whereupon the separate existence of the merger subsidiary shall cease, and LaBarge shall be the surviving corporation and a wholly-owned subsidiary of Ducommun and each share of LaBarge common stock shall be converted into the right to receive $19.25 in cash, without interest.
 
Unless Ducommun and LaBarge agree otherwise, the closing of the merger will occur as soon as possible, but no later than the two business days following the date on which all of the conditions to the merger, other than conditions that, by their nature are to be satisfied at the closing (but subject to satisfaction, or, to the extent permissible, waiver of those conditions at closing) have been satisfied or, to the extent permissible, waived that is the earlier of (a) any business day during the marketing period (as defined on page [ • ]) as may be specified by Ducommun on no less than three business days’ prior notice to LaBarge and (b) the final day of the marketing period, or at such other place, at such other time or on such date as Ducommun and LaBarge may mutually agree.
 
Assuming timely satisfaction of the necessary closing conditions, LaBarge is targeting a closing of the merger on or about June 2011. However, we cannot assure you that such timing will occur or that the merger will be completed as expected.
 
Upon the closing, the merger subsidiary and LaBarge will file a certificate of merger with the Secretary of State of the State of Delaware. The effective time will be the time the certificate of merger is filed or at a later time as permitted by Delaware Law as upon which Ducommun and LaBarge shall agree to and specify in the certificate of merger.


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Certificate of Incorporation and Bylaws of the Surviving Corporation
 
At the effective time, the certificate of incorporation of LaBarge shall be amended in its entirety as set forth in Annex I to the merger agreement and, as amended, shall be the certificate of incorporation of the surviving corporation.
 
At the effective time, the bylaws of merger subsidiary in effect at the effective time shall be the bylaws of the surviving corporation.
 
Directors and Officers of the Surviving Corporation
 
At the effective time, the directors of merger subsidiary shall be the directors of the surviving corporation and the officers of merger subsidiary shall be the officers of the surviving corporation.
 
Merger Consideration
 
At the effective time, each share of LaBarge common stock outstanding immediately prior to the effective time (other than shares owned by (i) Ducommun or LaBarge or their respective wholly-owned subsidiaries (which will be cancelled) or (ii) stockholders who have properly exercised and perfected appraisal rights under the DGCL) will be converted into the right to receive the merger consideration, without interest.
 
LABARGE STOCK CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED PROXY CARD(S). LaBarge stock certificates should be returned with a validly executed transmittal letter and accompanying instructions that will be provided to LaBarge stockholders following the effective time.
 
Lost Stock Certificates
 
If any stock certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the stock certificate to be lost, stolen or destroyed and, if reasonably required by the surviving corporation, the posting by such person of a bond in a reasonable amount as the surviving corporation (or the exchange agent in accordance with its standard procedures) may direct as indemnity against any claim that may be made against it with respect to the stock certificate, the exchange agent will issue, in exchange for such lost, stolen or destroyed stock certificate, the merger consideration in respect of such shares. These procedures will be described in the letter of transmittal that LaBarge stockholders will receive, which such stockholders should read carefully in its entirety.
 
Effect of the Merger on LaBarge’s Equity Awards
 
Stock Options
 
At the effective time, each LaBarge stock option outstanding immediately prior to such time under any LaBarge equity plan will be canceled in exchange for the right to receive an amount of cash equal to $19.25, without interest, over the exercise price of the option and applicable withholding taxes.
 
Restricted Shares
 
At or immediately prior to the effective time, each LaBarge restricted share will vest and become free of any other lapsing restrictions, and the holder will be entitled to receive the merger consideration for such shares, subject to applicable withholding for taxes.
 
Employee Stock Purchase Plan
 
The merger agreement provides that as soon as practicable following the date of the merger agreement, the LaBarge board of directors or the compensation committee of the LaBarge board of directors will take all reasonable actions, including adopting any necessary resolutions, to (a) terminate the ESPP as of immediately prior to the effective time, (b) ensure that no new offering period will be commenced after the date of the merger agreement, (c) for any offering period with an end date after the effective time, cause a new exercise


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date to be set for the business day immediately prior to the effective time; (d) prohibit participants in the ESPP from altering their payroll deductions from those in effect on the date of the merger agreement (other than to discontinue participation), (e) provide for the automatic exercise as of such date for each option outstanding under the ESPP as of the date the ESPP is terminated, and (f) provide that the amount of the accumulated contributions of each participant under the ESPP as of immediately prior to the termination date of the ESPP will, to the extend not used to purchase shares, be refunded to such participant as promptly as practicable following the effective date, without interest. Shares of LaBarge common stock previously purchased pursuant to the ESPP will receive the merger consideration, as described above.
 
Performance Units
 
The performance objectives underlying all of LaBarge’s outstanding performance units held by executive officers will be deemed to be achieved at the maximum level of $1.50 per unit at the effective time. Within ten days of vesting of such units, the holder will receive a single sum payment of cash equal to the holder’s outstanding performance units multiplied by $1.50. This amount shall vest, except as described below for Mr. LaBarge and Mr. Nonnenkamp, on the earlier to occur of the holder’s (i) voluntary termination of employment with LaBarge for good reason, (ii) involuntary termination of employment with LaBarge for other than cause, (iii) termination of employment with the LaBarge on account of disability, (iv) death or (v) completion of twelve consecutive months of service with LaBarge following the effective time. Except as set forth below regarding Mr. LaBarge and Mr. Nonnenkamp, if a holder’s employment with LaBarge is terminated for cause or voluntarily terminated before vesting, he or she will forfeit his or her right to payment with respect to performance units. The terms “good reason,” “cause” and “disability” are defined in the LaBarge 2004 Long Term Incentive Plan and employment contracts with the Senior Executive Officers. Pursuant to new employment agreements with LaBarge, Mr. LaBarge’s and Mr. Nonnenkamp’s performance units will be paid upon the earlier of (i) termination of employment with LaBarge for any reason following the effective time or (ii) March 15, 2012. If the effective time occurs after July 3, 2011, performance units that have not yet been settled for restricted shares of LaBarge common stock, other than such units held by the Senior Executive Officers of LaBarge, for the performance period ending July 3, 2011, shall not be treated as described above, but instead shall be cancelled in exchange for payment to such holders in cash at $1.50 per unit within ten days of the effective time. Such performance units for the Senior Executive Officers shall be settled in the manner described above.
 
Representations and Warranties
 
The merger agreement contains customary representations and warranties made by each party to the other, which are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement and the matters contained in the confidential disclosure schedule that LaBarge prepared and delivered to the other prior to signing the merger agreement. These representations and warranties relate to, among other things:
 
  •  due organization, good standing and the requisite corporate power and authority to carry on their respective businesses;
 
  •  capitalization;
 
  •  ownership of subsidiaries;
 
  •  corporate power and authority to enter into the merger agreement, the valid and binding nature of the merger agreement and enforceability of the merger agreement;
 
  •  board of directors approval and recommendation to LaBarge stockholders to adopt the merger agreement;
 
  •  the affirmative vote required by two-thirds LaBarge stockholders to adopt the merger agreement;


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  •  absence of conflicts with organizational documents, breaches of contracts and agreements, liens upon assets and violations of applicable law resulting from the execution and delivery of the merger agreement and consummation of the transactions contemplated by the merger agreement;
 
  •  absence of required governmental or other third party consents in connection with execution, delivery and performance of the merger agreement and consummation of the transactions contemplated by the merger agreement other than governmental filings specified in the merger agreement;
 
  •  timely filing of by LaBarge required documents with the SEC since June 28, 2009, compliance of such documents with the requirements of the Securities Act, and the Exchange Act, and the absence of untrue statements of material facts or omissions of material facts in those documents;
 
  •  compliance of LaBarge financial statements with GAAP;
 
  •  absence of any transaction that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Securities Act;
 
  •  absence of any liabilities other than liabilities disclosed and provided for in the consolidated audited balance sheet of LaBarge as of January 2, 2011, or the notes thereto, liabilities incurred since the consolidated audited balance sheet of LaBarge as of January 2, 2011, in the ordinary course of business or in connection with the merger agreement and liabilities or obligations that have not had or would not reasonably be expected to have, individually or in the aggregate, a material adverse effect;
 
  •  absence since January 2, 2011, of any material adverse effect or any material loss, damage, destruction or other casualty affecting any of the material properties or assets of LaBarge or any of its subsidiaries;
 
  •  absence of misleading information contained or incorporated into this proxy statement or any other filings made by LaBarge with the SEC in connection with the merger;
 
  •  compliance with applicable laws, including regulatory laws, and holding of all necessary permits;
 
  •  employee benefits matters and ERISA compliance;
 
  •  labor matters and compliance with labor and employment law;
 
  •  absence of litigation;
 
  •  tax matters;
 
  •  environmental matters and compliance with environmental laws;
 
  •  intellectual property;
 
  •  insurance;
 
  •  government contracts and export controls;
 
  •  occupational safety and health matters;
 
  •  major suppliers and customers;
 
  •  receipt of an opinion from LaBarge’s financial advisor; and
 
  •  no brokers’ or finders’ fees.
 
Ducommun made certain representations and warranties to LaBarge in the merger agreement, including with respect to the following matters in connection with the Debt Financing arrangements:
 
  •  that Ducommun has paid fees due under the Debt Commitment Letter;
 
  •  sufficiency of funds;
 
  •  validity and enforceability of the Debt Commitment Letter;
 
  •  absence of default under the Debt Commitment Letter; and


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  •  absence of contingencies related to the funding of financing other than as set forth in the Debt Commitment Letter.
 
Many of the representations and warranties in the merger agreement are qualified as to “materiality” or “material adverse effect.” For purposes of the merger agreement, a “material adverse effect” on LaBarge means:
 
  •  any change, effect, development or event that (a) has had or would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, assets, or results of operations of LaBarge and its subsidiaries, taken as a whole or (b) materially impairs the ability of LaBarge and its subsidiaries to consummate, or prevents or materially delays, the merger or any of the other transactions, contemplated by the merger agreement or would reasonably be expected to do so. In making this determination with respect to clause (a), no change, effect, development or event resulting from, arising out of or attributable to any of the following shall be deemed to be or constitute a material adverse effect or be taken into account when determining whether a material adverse effect has occurred or may occur:
 
  •  any changes, effects, developments or events in the economy or the financial, credit or securities markets in general (including changes in interest or exchange rates);
 
  •  any changes, effects, developments or events in the industries in which LaBarge and its subsidiaries operate;
 
  •  any changes, effects, developments or events resulting from the announcement or pendency of the transactions contemplated by the merger agreement, the identity of Ducommun or the performance or compliance with the terms of the merger agreement (including, in each case, any loss of customers, suppliers or employees or any disruption in business relationships);
 
  •  any failure, in and of itself, of LaBarge to meet internal forecasts, budgets or financial projections or fluctuations, in and of themselves, in the trading price or volume of LaBarge common stock (it being understood that the facts, events, circumstances or occurrences giving rise or contributing to such failure or fluctuations may be deemed to be, constitute or be taken into account when determining the occurrence of a material adverse effect);
 
  •  acts of God, natural disasters, calamities, national or international political or social conditions, including the engagement by any country in hostility (whether commenced before, on or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war), or the occurrence of a military or terrorist attack; or
 
  •  any changes in applicable law or GAAP (or any interpretation thereof);
 
provided that with respect to the first, second, fifth and last bullet, the impact of such changes, effects, developments or events is not materially and disproportionately adverse to LaBarge and its subsidiaries.
 
The representations and warranties contained in the merger agreement will expire at the effective time, and not survive the consummation of the merger, but they form the basis of specified conditions to the parties’ obligations to complete the merger.
 
Covenants and Agreements
 
Operating Covenants
 
LaBarge has agreed that from the date of the merger agreement until the effective time, LaBarge shall, and shall cause each of its subsidiaries to:
 
  •  conduct its business in the ordinary course consistent with past practice and in compliance with all material applicable laws and all material authorizations from governmental authorities; and
 
  •  use its commercially reasonable efforts to preserve intact its present business organization, maintain in effect all material permits, keep available the services of its directors, officers and employees, and


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  maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it.
 
In addition, with specified exceptions set forth in the merger agreement or with Ducommun’s prior consent (not to be unreasonably withheld, conditioned or delayed), LaBarge has agreed, among other things, not to, and not to permit its subsidiaries to:
 
  •  amend its organizational documents;
 
  •  (i) split, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock or other securities (other than dividends or distributions by any of its wholly-owned subsidiaries) or (iii) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any of its securities or any securities of any of its subsidiaries, other than the cancellation of LaBarge stock options in connection with the exercise thereof;
 
  •  (i) grant, issue, deliver or sell, or authorize the grant, issuance, delivery or sale of, any shares of any of its securities or any securities of its subsidiaries, other than the issuance of any shares upon the exercise of outstanding LaBarge stock options or (ii) amend the terms of any of its securities or securities of its subsidiaries (in each case, whether by merger, consolidation or otherwise);
 
  •  (i) directly or indirectly (i) acquire all or substantially all the equity interest or assets of any business organization, or division thereof, (ii) merge or consolidate with any other person or (iii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
 
  •  sell, lease, license or otherwise dispose of any subsidiary or any material amount of assets, securities or property having in the aggregate either a book value or fair market value in excess of $1,000,000, except pursuant to existing contracts or sales of inventory in the ordinary course consistent with past practice;
 
  •  create or incur any lien on any asset other than permitted liens;
 
  •  make any loan, advance or investment other than to or in its wholly-owned subsidiaries, advances to suppliers in the ordinary course of business consistent with past practice, in each case, that do not exceed the advance received by LaBarge from its customer under the order or contract for which such supplier is providing supplies to LaBarge, or advances in an amount not in excess of $50,000;
 
  •  (i) incur any indebtedness for borrowed money or guarantees thereof other than under existing credit facilities or new indebtedness of up to $50,000 in the aggregate or (ii) amend or refinance any indebtedness other than indebtedness in an amount not to exceed $50,000 in the aggregate;
 
  •  (i) enter into, amend, or terminate any contract that provides for payments to or from LaBarge or any of its subsidiaries in excess of $500,000 over any twelve month period other than with any customer or supplier entered into in the ordinary course of business consistent with past practices or (ii) waive any material right thereunder;
 
  •  terminate, suspend, abrogate, amend or modify in any material respect any material permit;
 
  •  assign, sell, otherwise transfer or grant any license or other rights with respect to any LaBarge intellectual property or fail to prosecute and maintain all patents, registrations and applications included in the LaBarge intellectual property, including by paying any related fees when due;
 
  •  except as required by the merger agreement, applicable laws or existing employee plans or contracts (i) grant, increase or accelerate any severance, termination pay to or benefits to (or amend any existing arrangement with) any of their respective directors, officers or employees; (ii) enter into any employment, deferred compensation or similar agreement (or any amendment to such existing agreement) with any of their respective directors, officers, or employees’ (iii) establish, adopt or amend (except as required by applicable law) any collective bargaining arrangement bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option restricted stock other benefit


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  plan or arrangement covering any of their respective existing directors, officers or employees; or (iv) increase or accelerate the compensation, bonus or other benefits payable to any of their respective directors, executives, employees or independent contractors, except, in the case of employees who are not officers, increases that are not material, are made in the ordinary course of business consistent with past practice;
 
  •  make any material change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Securities Act, as approved by its independent public accountants;
 
  •  settle or compromise any material liability for taxes, amend any material tax return, make or revoke any material tax election, adopt or change any material method of accounting for tax purposes, surrender any right to a claim for refund of material taxes, or change any material tax reporting method policy or procedure;
 
  •  commence any action or settle, or offer or propose to settle, any action or other claim involving or against LaBarge or any of its subsidiaries involving a payment by or to LaBarge or its subsidiaries in excess of $100,000 or that would impose any equitable relief on, or the admission of wrongdoing by, LaBarge;
 
  •  fail to use reasonable best efforts to maintain existing material insurance policies or comparable replacement policies to the extent available for a similar reasonable cost;
 
  •  (i) pay, discharge, settle or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice or as required by their terms as in effect on the date of the merger agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of LaBarge included in all the reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed with the SEC or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (ii) cancel any material indebtedness or (iii) waive, release, grant or transfer any right of material value;
 
  •  enter into any material new line of business outside of its existing business;
 
  •  renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of LaBarge or any of its subsidiaries other than as permitted by the fiduciary out provision included in the merger agreement;
 
  •  enter into any new lease or amend the terms of any existing lease with respect the leased real property;
 
  •  purchase, lease or license or make any commitment to purchase, lease or license, any real property or personal property (including any software) or incur or commit to incur any capital expenditure or authorization or commitment with respect thereto, in each case, at a cost in excess of $300,000 for any individual item or $3,000,000 in the aggregate;
 
  •  intentionally take any action (or intentionally omit to take any action) that would, to the knowledge of LaBarge at the time the action is taken, materially and adversely affect Ducommun’s and merger subsidiary’s ability to consummate the Debt Financing;
 
  •  intentionally take any action (or intentionally omit to take any action) that would, to the knowledge of LaBarge at the time the action is taken, result in any of the conditions to the merger not being satisfied; or
 
  •  agree, resolve or commit to take, any of the foregoing actions.


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No Solicitation
 
The merger agreement provides that LaBarge will not, and will cause its subsidiaries and its and their respective officers, directors, employees, investment bankers, attorneys, accountants, consultants, and other authorized agents, advisors or representatives not to, directly or indirectly:
 
  •  solicit, initiate or take any action to facilitate or encourage the submission of any acquisition proposal as defined on page [ • ];
 
  •  enter into or participate in any discussions or negotiations with, furnish any information relating to LaBarge or any of its subsidiaries or afford access to the business, properties, assets, books or records of LaBarge or any of its subsidiaries to, any party that is seeking to make, or has made, an acquisition proposal; or
 
  •  withdraw or modify in a manner adverse to Ducommun or the merger or publicly propose to withdraw or modify in a manner adverse to Ducommun or the merger the LaBarge board of directors recommendation, or recommend, endorse, adopt or approve or publicly propose to recommend, endorse, adopt or approve an acquisition proposal, grant any waiver or release under any standstill or similar agreement with respect to any voting securities of LaBarge or its subsidiaries, enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement or other similar instrument constituting or relating to an acquisition proposal or resolve, agree or publicly propose to take any of the foregoing actions.
 
LaBarge has agreed, and agreed to cause its subsidiaries and its and their respective officers, directors, employees and representatives, to cease all activities with any parties with respect to an acquisition proposal existing at the time the merger agreement was entered into.
 
However, at any time prior to the LaBarge stockholders adopting the merger agreement, LaBarge or the LaBarge board of directors, directly or indirectly through its representatives, may
 
  •  engage in negotiations or discussions with (including, as a part thereof, making any counterproposal or counter offer to) any third party that has made after the date of the merger agreement a superior proposal (as defined on page [ • ]) or a bona fide unsolicited written acquisition proposal that did not arise in connection with any failure of LaBarge to comply with its obligations in the preceding paragraphs and that the LaBarge board of directors believes in good faith (after consultation with a financial advisor of nationally recognized reputation and outside legal counsel) is reasonably likely to lead to a superior proposal;
 
  •  thereafter furnish to any third party that has made after the date of the merger agreement a superior proposal, nonpublic information relating to LaBarge or any of its subsidiaries pursuant to a confidentiality agreement (with terms no less favorable to LaBarge than those contained in the existing confidentiality agreement between Ducommun and LaBarge) provided that all such information (to the extent that such information has not been previously provided or made available to Ducommun) is provided or made available to Ducommun prior to or substantially concurrently with the time it is provided or made available to such other party;
 
  •  terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement to which it or any of its affiliates or representatives is a party with respect to any superior proposal; and
 
  •  make an adverse recommendation change;
 
but in each case only if the LaBarge board of directors determines in good faith, after consultation with outside legal counsel, that failure to take such action would likely result in a breach of its fiduciary duties under applicable law, taking into account all adjustments to the terms of the merger agreement that may be offered by Ducommun.


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The board of LaBarge has agreed that it will not take any of the foregoing actions unless:
 
  •  LaBarge delivers to Ducommun at least three business days prior written notice advising Ducommun that it intends to take such action and specifying the reasons therefore (it being understood that any amendment to the financial terms or any other material term of a superior proposal will require a new two business day period);
 
  •  prior to the expiration of such three business day period (or two business day period, as applicable), Ducommun does not make a proposal to adjust the terms and conditions of the merger agreement that the LaBarge board of directors determines in good faith, after consultation with outside legal counsel and its financial advisors, to be at least as favorable as the superior proposal after giving effect to, among other things the payment of the termination fee to Ducommun; and
 
  •  LaBarge shall continue to advise Ducommun after delivery of such notice of the status and material terms of any discussions and negotiations with the third party.
 
During the three business day period (or two business day period, as applicable) LaBarge has agreed to, and will cause its financial and legal advisors to, negotiate in good faith (to the extent Ducommun seeks to negotiate) regarding any revisions to the terms of the transactions contemplated by the merger agreement.
 
In addition, LaBarge has agreed to notify Ducommun promptly (but in no event later than 24 hours) after receipt of any acquisition proposal, any inquiry that would be reasonably expected to lead to an acquisition proposal or of any request for information relating to LaBarge or any of its subsidiaries or for access to the business, properties, assets, books or records of LaBarge or any of its subsidiaries by any third party that to the knowledge of LaBarge, may be considering making, or has made, an acquisition proposal. The notice shall be in writing and shall identify the materials terms and conditions of such acquisition proposal, inquiry or request and shall be accompanied by a copy of any written acquisition proposal and any other relevant transaction documents with respect to such acquisition proposal. LaBarge has agreed to keep Ducommun informed (in writing) in all material respects on a timely basis of the status and details (including within 24 hours after the occurrence of any amendment, modification, development, discussion or negotiation) of any such acquisition proposal, request or inquiry, including copies of any additional written inquiries, correspondence and draft documentation.
 
The merger agreement does not prohibit LaBarge from complying with Rule 14e-2(a) under the Exchange Act or complying with the requirements of Rule 14d-9 under the Exchange Act with regard to an acquisition proposal so long as any action taken or statement made thereunder is in compliance with LaBarge’s non-solicitation obligations.
 
LaBarge agrees that any violation of the non-solicitation provisions by any representative of LaBarge, whether or not such person is purporting to act on behalf of LaBarge or otherwise, shall be deemed to be a breach by LaBarge. The materiality of any such breach will be determined under applicable law based on the facts and circumstances of any such breach.
 
If the LaBarge board of directors changes its recommendation, Ducommun would have the right to terminate the merger agreement and be paid a $12,410,000 termination fee. See “Termination of the Merger Agreement” beginning on page [ • ] and “Termination Fees and Expenses” beginning on page [ • ].
 
An “acquisition proposal” means any offer or proposal (other than the transactions contemplated by the merger agreement) relating to (i) any acquisition or purchase, direct or indirect of 20% or more of the voting securities of LaBarge, (ii) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 20% or more of the voting securities of LaBarge, or (iii) a sale of assets equal to 20% or more of LaBarge’s consolidated assets or a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, joint venture or similar transaction involving LaBarge or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of LaBarge.
 
An “adverse recommendation change” means withdrawing or modifying in a manner adverse to Ducommun or the merger, or publicly propose to withdraw or modify in a manner adverse to Ducommun or


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the merger, the recommendation by the LaBarge board of directors, or recommend, endorse, adopt or approve or publicly propose to recommend, endorse, adopt or approve an acquisition proposal.
 
A “superior proposal” means any unsolicited bona fide, written acquisition proposal for at least 66.67% of the outstanding shares of LaBarge common stock or all or substantially all of the assets of LaBarge and its subsidiaries on terms that the LaBarge board of directors determines in good faith, after consultation with a financial advisor of nationally recognized reputation and outside legal counsel and taking into account all the terms and conditions of the acquisition proposal would result in a transaction (i) that if consummated, is more favorable to the LaBarge stockholders from a financial point of view than the merger or, if applicable, any binding proposal by Ducommun capable of being accepted by LaBarge, to amend the terms of the merger agreement taking into account all the terms and conditions of the merger agreement and such binding proposal (including the expected timing and likelihood of consummation taking into account any governmental and other approval requirements and any break-up fees and expense reimbursement provisions), (ii) that is reasonably likely to be completed on the terms proposed, taking into account the identity of the person making the proposal, any approval requirements and all other financial, legal and other aspects of such proposal and (iii) for which financing, if a cash transaction (whether in whole or in part), is then fully committed or reasonably determined to be available by the LaBarge board of directors.
 
Stockholder Meeting and Board Recommendation
 
Unless the merger agreement has been validly terminated, LaBarge is required to take all reasonable action necessary to convene a meeting of stockholders as promptly as reasonably practicable after this proxy statement is cleared to be mailed by the SEC to consider and vote upon the adoption of the merger agreement and merger. Subject to the provisions of the merger agreement discussed under “Covenants and Agreements — No Solicitation” beginning on page [ • ], the LaBarge board of directors will recommend that stockholders vote to approve the adoption of the merger and merger agreement. The LaBarge board of directors is required to include such recommendation in this proxy statement, use its commercially reasonable efforts to obtain the required stockholder approval and otherwise comply in all material respects with all legal requirements applicable to such meeting. The LaBarge board of directors is required to publicly reaffirm such recommendation to its stockholders at least two business days prior to the stockholders meeting after a request to do so by Ducommun or merger subsidiary, provided that if LaBarge receives an acquisition proposal and Ducommun requests that LaBarge reaffirm its recommendation less than seven business days prior to the stockholders meeting, LaBarge shall have the right to postpone the stockholders meeting to the seventh business day from the date of Ducommun’s request to reaffirm its recommendation.
 
Access to Information; Confidentiality
 
Except under certain circumstances from the date of the merger agreement until the effective time, and subject to applicable law, LaBarge will, and will cause its subsidiaries to, upon reasonable notice and request to:
 
  •  afford to Ducommun, its counsel, financial advisors, auditors, lenders and other authorized representatives, reasonable access during normal business hours to all of their offices, properties, books and records;
 
  •  furnish to Ducommun and its counsel such financial and operating data and other information as such persons may reasonably request and a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal or state securities law; and
 
  •  instruct its representatives to cooperate with Ducommun in its investigation.
 
However, LaBarge is not required to provide Ducommun with any information that, in its good faith judgment, would constitute a waiver of the attorney-client or similar privilege or trade secret protection held by LaBarge or any of its subsidiaries or violate a confidentiality obligation owed to others; provided that LaBarge must make a good faith effort to accommodate Ducommun’s request for access to information. The


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information will be held in confidence to the extent required by the provisions of the confidentiality agreement between Ducommun and LaBarge.
 
Reasonable Best Efforts; Covenants and Agreements
 
Ducommun agrees that from and after the date of the merger agreement and until the effective time, except with LaBarge’s prior written consent, it will not, and will cause merger subsidiary not to:
 
  •  intentionally take any action (or intentionally omit to take any action) that would, to the knowledge of Ducommun at the time the action is taken, materially and adversely affect its and merger subsidiary’s ability to consummate the Debt Financing; or
 
  •  intentionally take any action (or intentionally omit to take any action) that would, to the knowledge of Ducommun at the time the action is taken, result in any of the conditions to the merger not being satisfied.
 
In addition, Ducommun and LaBarge have agreed to use their reasonable best efforts to take, or cause to be taken, all actions necessary, proper or advisable under applicable law to consummate the merger in the most expeditious manner possible. This includes:
 
  •  preparing and filing as promptly as practicable with any governmental party or other third party all documentation to effect all necessary filings, notices and other documents;
 
  •  taking all appropriate actions, and doing, or causing to be done, all things necessary, proper or advisable under applicable law to consummate and make effective the transactions contemplated by the merger agreement, including using reasonable best efforts to obtain and maintain all approvals and consents that are necessary, proper or advisable to consummate the merger and to fulfill the conditions to the merger;
 
  •  defending any proceedings threatened or commenced by any governmental authority or arbitrator relating to the transactions contemplated by the merger agreement; and
 
  •  cooperating to the extent reasonable with the other party in its efforts to comply with its obligations under the merger agreement.
 
In connection with the efforts referenced above to obtain all requisite approvals and authorizations for the transactions contemplated by the merger agreement, Ducommun and LaBarge agreed to make a notification pursuant to the HSR Act as promptly as practicable (and in any event within 15 business days of the date of the merger agreement), and to obtain all other approvals and authorizations required under the HSR Act and any other applicable antitrust law.
 
In addition, Ducommun has agreed to use its commercially reasonable efforts to take all necessary actions to obtain any approval relating to the HSR Act that is required for the consummation of the merger, which efforts shall include without limitation, the proffer by Ducommun of its willingness to accept an order providing for the divestiture by Ducommun of such of its assets and businesses as are necessary to fully consummate the transactions contemplated by the merger agreement, and an offer to hold separate such assets and businesses pending such divestiture.
 
For additional information on the regulatory consents and approvals required to be obtained, see “The Merger — Regulatory Approvals Required for the Merger” beginning on page [ • ].
 
Certain Other Filings
 
Ducommun and LaBarge shall cooperate with each other (i) in connection with the preparation of this proxy statement, (ii) in determining whether any action by, or filing with, any governmental authority is required, or any action, consents, approvals or waivers are required to be obtained from parties to any material contracts in connection with the consummation of the transactions contemplated by the merger agreement and (iii) in taking such actions or making any such filings, furnishing information required in connection therewith or with this proxy statement and seeking timely to obtain any such actions, consents, approvals or waivers.


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Indemnification and Insurance
 
The merger agreement contains provisions relating to the indemnification of and insurance for LaBarge’s and its affiliates’ current and former directors, officers, trustees, members and fiduciaries. For a period of six years following the effective time, Ducommun shall cause the surviving corporation to, indemnify and hold harmless each current and former director, officer, trustee, member or fiduciary of LaBarge and its affiliates, against any costs or expenses (including advancing reasonable attorneys’ fees and expenses upon receipt of an undertaking to repay such amount if it shall be ultimately determined that the indemnified person is not entitled to be indemnified), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened action or investigation in respect of or arising out of acts or omissions occurring or alleged to have occurred at or prior to the effective time, to the fullest extent permitted by Delaware law or any other applicable law or provided under LaBarge’s organizational documents in effect on the date of the merger agreement, subject to any limitation imposed under applicable law.
 
All rights in existence under LaBarge’s organizational documents on the date of the merger agreement regarding elimination of liability of directors, indemnification and exculpation of officers, directors and employees and advancement of expenses to them shall survive the merger for a period of six years from the effective time.
 
Ducommun shall cause the surviving corporation to, maintain for a period of six years after the effective time D&O insurance in respect of acts or omissions occurring prior to the effective time covering each indemnified person on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date of the merger agreement. Alternatively, LaBarge may purchase such “tail policy” at its option prior to the effective time and pay the premium due thereon when due, provided that the surviving corporation shall not be obligated to pay annual premiums in the aggregate in excess of $250,000 provided that, if the annual premiums of such insurance coverage exceed such amount, the surviving corporation shall provide a policy with the greatest coverage available for such amount.
 
Employee Benefits Matters
 
Ducommun will use commercially reasonable efforts to during the period commencing on the effective date and ending on December 31, 2011, waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such current LaBarge employees under any employee benefit plan in which such employees will be eligible to participate following the effective time. Ducommun will also use commercially reasonable efforts to credit the former LaBarge employees for their prior service with LaBarge under the new employee benefit plans in which the employees are eligible to participate. Credit will be given to the same extent such service was credited under the similar LaBarge employee benefit plans for purposes of eligibility to participate and vesting under those plans, but not for purposes of benefit accrual. No credit will be given to the extent it would result in the duplication of benefits for the same period of service.
 
Financing Matters
 
In the merger agreement, Ducommun and merger subsidiary have agreed to use their reasonable best efforts to obtain the Debt Financing on the terms and conditions described in the Debt Commitment Letter. See “The Merger — Financing Relating to the Merger” beginning on page [ • ].
 
Ducommun and merger subsidiary may not amend, replace or supplement the Debt Commitment Letter if such amendment, modification or waiver:
 
  •  imposes any additional conditions precedent or expands upon the conditions precedent to the financing as set forth in the Debt Commitment Letter;
 
  •  adversely impacts the rights of Ducommun or merger subsidiary to enforce its rights against the other parties to the Debt Commitment Letter; or


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  •  prevents or impedes or delays the consummation of the merger or the other transactions contemplated by the merger agreement.
 
Ducommun has advised LaBarge that it is expected that on or before the date on which the merger is consummated, senior unsecured notes will be issued and sold in a public offering or in reliance on Rule 144A and Regulation S of the Securities Act in lieu of a portion or all of bridge financing described above. The merger agreement provides for a marketing period for such notes prior to the closing of the merger.
 
A “marketing period” means the period of 35 consecutive calendar days commencing on the later of the date that both (i) Ducommun shall have received the Required Information (as defined in the merger agreement) from LaBarge and (ii) LaBarge has mailed to you this proxy statement; provided, that to the extent Ducommun receives the Required Information prior to the date that this proxy statement is mailed to you, such 35 day period shall be reduced, but not by more than ten days, by the number of days in advance of such mailing date that the Required Information is delivered to Ducommun and provided, further, that (A)(1) throughout and at the end of such 35 day period the Required Information shall at all times remain compliant with applicable provisions of Regulation S-X and Regulation S-K under the Securities Act, (2) throughout and at the end of such 35 day period nothing has occurred and no condition exists that would cause any of the conditions to the obligations of Ducommun and merger subsidiary under the merger agreement to fail to be satisfied assuming the consummation of the merger were to be scheduled for any time during such 35 consecutive calendar day period and (3) at the end of such 35 day period the conditions to the obligations of LaBarge, Ducommun and merger subsidiary under the merger agreement shall be satisfied; provided, that such 35 consecutive calendar day period must (x) end on or prior to June 30, 2011, (y) begin on or after July 5, 2011 and end on or prior to August 19, 2011 or (z) begin on or after September 3, 2011; provided, further, that if LaBarge has mailed this proxy statement to you on or prior to June 21, 2011 and the Required Information is delivered by June 18, 2011, the marketing period will be reduced to 15 consecutive business days solely for the period beginning on July 5, 2011 and ending on July 25, 2011, (B) the marketing period shall end on any earlier date that is the date on which the Debt Financing, including the anticipated offering of senior unsecured notes but excluding any portion of the Debt Financing that resulted from Ducommun’s use of bridge financing described above, is consummated and (C) the marketing period shall not be deemed to have commenced if prior to the completion of such marketing period certain events, as set forth in the merger agreement, have occurred, including (i) the withdrawal by LaBarge’s auditors with respect to any financial statements contained in the LaBarge’s most recently filed audited financial statements contained in the Required Information, (ii) the issuance by LaBarge of a public statement indicating that it is restating, or intends to restate, certain of its historical financial statements and (iii) if LaBarge is delinquent in filing any form 10-Q or form 10-K.
 
Additional Agreements
 
The merger agreement contains additional agreements between Ducommun and LaBarge relating to, among other things:
 
  •  that LaBarge shall not settle any stockholder litigation relating to the merger agreement without Ducommun’s prior written consent (not to be unreasonably withheld, delayed or conditioned) and shall use reasonable best efforts to keep Ducommun informed with respect to such litigation;
 
  •  notifying the other party of any event notice from any governmental authority in connection with the transactions contemplated by the merger agreement;
 
  •  requiring the parties to consult with each other regarding public announcements; and
 
  •  ensuring exemption of certain transactions by LaBarge directors and officers in connection with the merger under Rule 16b-3 of the Exchange Act.


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Conditions to Completion of the Merger
 
Conditions to Each Party’s Obligations
 
The obligations of each of Ducommun, LaBarge and merger subsidiary to complete the merger are subject to the satisfaction (or, to the extent permissible, waiver) on or prior to the closing date of the merger of the following conditions:
 
  •  the adoption of the merger agreement by the LaBarge stockholders;
 
  •  the expiration or termination of the waiting periods applicable to the consummation of the merger under the HSR Act;
 
  •  the absence of any pending or threatened action by any governmental authority, having a reasonable likelihood of success, to (i) challenge or make illegal or otherwise prohibit or materially delay the consummation of the merger or any of the other transactions contemplated by the merger agreement, or to make materially more costly the merger, or to obtain from LaBarge, Ducommun or merger subsidiary any damages that are material in relation to LaBarge and its subsidiaries taken as a whole, (ii) to prohibit or limit the ownership, operation or control by LaBarge, Ducommun or any of their respective subsidiaries of any material portion of their respective business or assets, or to compel LaBarge, Ducommun or any of their respective subsidiaries to dispose of or hold separate any material portion of the business or assets of LaBarge, Ducommun or any of their respective subsidiaries or (iii) to impose limitations on the ability of Ducommun to acquire or hold, or exercise full rights of ownership of, any shares; and
 
  •  no applicable law shall have been enacted, entered, promulgated, enforced or deemed applicable by any governmental entity that, in any case, prohibits the consummation of the merger.
 
Conditions to Obligations of Ducommun and Merger Subsidiary
 
The obligations of each of Ducommun and merger subsidiary to complete the merger are subject to the satisfaction (or, to the extent permissible, waiver) on or prior to the closing date of the merger of the following conditions:
 
  •  LaBarge must have performed in all material respects all of its obligations under the merger agreement that are required to be performed by it at or prior to the effective time of the merger;
 
  •  the representations and warranties of LaBarge relating to corporate existence and power, corporate authorization, non-contravention, capitalization, SEC filings, absence of certain changes and antitakeover statutes must be true and correct in all respects;
 
  •  the representations and warranties of LaBarge relating to certain regulatory matters must be true and correct in all material respects;
 
  •  all other representations and warranties of LaBarge (disregarding all qualifications or limitations as to “materially,” “material adverse effect” and words of similar import set forth therein) must be true and correct in all respects at and as of the date of the merger agreement and as of the effective time as if made at and as of such time (or, in the case of those representations and warranties that are made as of a particular date or period, as of such date or period), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on LaBarge;
 
  •  Ducommun must have received a certificate signed by the chief executive officer or chief financial officer of LaBarge certifying the satisfaction of the conditions described in the previous four bullets;
 
  •  since the date of the merger agreement, there has not occurred and there is not continuing as of the effective time any event, change or circumstance that has had a material adverse effect on LaBarge; and


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  •  the staff of the SEC shall not have rejected or expressly disapproved any of the material terms or conditions of that certain Offer of Settlement of LaBarge, Inc. executed by LaBarge on March 18, 2011.
 
Conditions to LaBarge’s Obligations
 
The obligations of LaBarge to complete the merger are subject to the satisfaction (or, to the extent permissible, waiver) on or prior to the closing date of the merger of the following conditions:
 
  •  each of Ducommun and merger subsidiary must have performed in all material respects all of their obligations under the merger agreement that are required to be performed by them at or prior to the effective time of the merger;
 
  •  the representations and warranties of Ducommun contained in the merger agreement must be true and correct (disregarding all qualifications or limitations as to “materially,” “material adverse effect” and words of similar import set forth therein) at the date of the merger agreement and as of the effective time as if made at and as of such time (or, in the case of those representations and warranties that are made as of a particular date or period, as of such date or period), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected, individually or in the aggregate, to materially delay or impair the ability of Ducommun or merger subsidiary to consummate the transactions contemplated by the merger agreement on a timely basis; and
 
  •  LaBarge must have received a certificate signed by the chief executive officer or chief financial officer of Ducommun certifying the satisfaction of the conditions described in the previous two bullets.
 
Termination of the Merger Agreement
 
The merger agreement may be terminated and the merger may be abandoned at any time before the effective time, whether or not the LaBarge stockholders have adopted the merger agreement:
 
  •  by mutual written agreement of Ducommun and LaBarge;
 
  •  by either Ducommun or LaBarge if:
 
  •  the merger has not been consummated on or before September 30, 2011 (the “end date”), unless the breach of the merger agreement by the party seeking to terminate resulted in the failure to consummate the merger by the end date;
 
  •  any applicable law, judgment or decree that makes consummation of the merger illegal or otherwise prohibited or enjoins consummation of the merger and such enjoinment has become final and non-appealable, provided that the party seeking to terminate has used all reasonable best efforts to prevent, oppose or remove such applicable law; or
 
  •  the adoption of the merger agreement by the LaBarge stockholders was not obtained at the LaBarge stockholder meeting (or adjournment or postponement of the meeting);
 
  •  by Ducommun if:
 
  •  LaBarge breaches its representations or warranties or fails to perform any covenants or agreements set forth in the merger agreement, which breach or failure would cause the conditions to the closing relating to the accuracy of the representations and warranties of LaBarge or compliance by LaBarge with its obligations under the merger agreement not to be satisfied and such breach is not cured by the earlier of the end date or 30 days after the receipt of written notice thereof, provided that, at the time of the delivery of written notice of breach, Ducommun is not in material breach of its obligations under the merger agreement;
 
  •  the LaBarge board of directors has effected an adverse recommendation change;
 
  •  LaBarge materially breaches its non-solicitation obligations;


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  •  the LaBarge board of directors fails to publicly reaffirm its recommendation within 10 business days of a request by Ducommun that it do so, or at least two business days prior to the LaBarge stockholder meeting after a request to do so by Ducommun or merger subsidiary;
 
  •  LaBarge or the board of directors of LaBarge (or any committee thereof) approve or recommend, or cause or permit LaBarge to enter into, an alternative acquisition agreement relating to an acquisition proposal; or
 
  •  LaBarge or the board of directors of LaBarge (or any committee thereof) formally resolve or publicly authorize or publicly propose to take any of the foregoing actions.
 
  •  by LaBarge if:
 
  •  Ducommun breaches its representations or warranties or fails to perform any covenants or agreements set forth in the merger agreement, which breach or failure would cause the conditions to the closing relating to the accuracy of the representations and warranties of Ducommun or compliance by Ducommun with its obligations under the merger agreement not to be satisfied and such breach is not cured by the earlier of the end date or 30 days after the receipt of written notice thereof, provided that, at the time of the delivery of written notice of breach, LaBarge is not in material breach of its obligations under the merger agreement; or
 
  •  the LaBarge board of directors authorizes LaBarge, subject to complying with the terms of the merger agreement, to enter into a written definitive agreement concerning a superior proposal provided that LaBarge shall have paid to Ducommun the termination fee discussed under “The Merger Agreement — Termination Fees and Expenses” beginning on page [ • ]; or
 
Termination Fees and Expenses
 
Termination Fees Payable by LaBarge
 
LaBarge has agreed to pay Ducommun a termination fee of $12,410,000 if any of the following payment events occur:
 
  •  Ducommun terminates the merger agreement due to the LaBarge board of directors having made an adverse recommendation change;
 
  •  Ducommun terminates the merger agreement after LaBarge or the board of directors of LaBarge (or any committee thereof) approves or recommends, or causes or permits LaBarge to enter into, an alternative acquisition agreement relating to an acquisition proposal;
 
  •  Ducommun terminates the merger agreement after LaBarge or the board of directors of LaBarge (or any committee thereof) fails publicly to reaffirm its recommendation of the merger within 10 business days after a request at any time to do so by Ducommun, or at least two business days prior to LaBarge stockholder meeting after a request to do so by Ducommun or merger subsidiary;
 
  •  Ducommun terminates the merger agreement due to LaBarge having materially breached the non-solicitation provisions set forth in the merger agreement;
 
  •  Ducommun terminates the merger agreement after LaBarge or the board of directors of LaBarge (or any committee thereof) formally resolves or publicly authorizes or publicly proposes to take any of the actions set forth in the preceding four bullet points;
 
  •  LaBarge terminates the merger agreement after the board of directors of LaBarge authorizes LaBarge, subject to complying with the terms of merger agreement, to enter into a written definitive agreement concerning a superior proposal;
 
  •  LaBarge or Ducommun terminates because the stockholders of LaBarge have did not adopt the merger agreement at the stockholder meeting held for such purpose and prior to such termination, an acquisition proposal shall have been made to LaBarge and within 18 months following the date of such


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  termination LaBarge enters into a definitive agreement with respect an acquisition proposal or recommends or submits an acquisition proposal to its stockholders;
 
  •  LaBarge or Ducommun terminates because the merger has not been consummated on or before September 30, 2011 and prior to such termination, an acquisition proposal shall have been made to LaBarge and within 18 months following the date of such termination LaBarge enters into a definitive agreement with respect an acquisition proposal or recommends or submits an acquisition proposal to its stockholders; or
 
  •  Ducommun terminates because LaBarge intentionally and materially breaches its representations or warranties or fails to perform any covenant or agreement set forth in the merger agreement, which breach or failure would cause the conditions to the closing relating to the accuracy of the representations and warranties of LaBarge or compliance by LaBarge with its obligations under the merger agreement not to be satisfied and such breach, if curable, is not cured by the earlier of the end date or 30 days after the receipt of written notice thereof or is incapable of being cured, provided that, at the time of the delivery of written notice of breach, Ducommun is not in material breach of its obligations under the merger agreement, and prior to such termination, an acquisition proposal shall have been made to LaBarge and within 18 months following the date of such termination LaBarge enters into a definitive agreement with respect an acquisition proposal or recommends or submits an acquisition proposal to its stockholders.
 
For purposes of the last three bullet points, all references to 20% in the definition of “acquisition proposal” shall be deemed instead to be 50%.
 
In addition, in the event LaBarge stockholders fail to adopt the merger agreement and a termination fee is not otherwise payable to Ducommun, LaBarge has agreed to reimburse the reasonable out-of-pocket expenses and fees (including all fees and expenses of advisors) incurred by Ducommun and its affiliates in connection with the merger agreement, the financing of the merger and transactions contemplated by the merger agreement by Ducommun, merger subsidiary and their affiliates up to $5,000,000.
 
Expenses
 
In general, each of Ducommun and LaBarge will bear its own expenses in connection with the merger agreement and the related transactions, except Ducommun and LaBarge shall equally bear the filing fees of the filings made under applicable antitrust laws.
 
Specific Performance; Damages
 
The parties shall be entitled to an injunction to prevent breaches of the merger agreement or to enforce specifically the performance of the merger agreement. Ducommun and LaBarge have also agreed that damages of a party shall not be limited to reimbursement of expenses or out-of-pocket costs, and may include to the extent proven the benefit of the bargain lost by a party and its stockholders.
 
Amendments and Waivers
 
The merger agreement may be amended or waived at any time prior to the effective time by an instrument in writing signed on behalf of each of the parties in the case of an amendment and by each party to whom the waiver is to be effective in the case of a waiver. However, after the adoption of the merger agreement at the LaBarge special meeting, there will be no amendment to the merger agreement that pursuant to Delaware Law requires further approval of the stockholders of Ducommun or stockholders of LaBarge, as the case may be, without such further approval.
 
The failure of any party to the merger agreement to assert any of its rights under the merger agreement or otherwise will not constitute a waiver of those rights.
 
Rights Agreement Amendment
 
In connection with the merger, LaBarge and Registrar and Transfer Company (the “Rights Agent”) entered into an Amendment No. 2 (the “Rights Amendment”) to the Rights Agreement, dated as of


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November 8, 2001, by and between LaBarge and UMB Bank, N.A. (as succeeded by the Rights Agent), as amended (the “Rights Agreement”). The Rights Amendment provides that none of the merger, the announcement, approval, adoption, execution, delivery or performance of the merger agreement, or the consummation of any other transaction specifically contemplated by the merger agreement, will (i) cause Ducommun, merger subsidiary, or any of their respective affiliates or associates to be deemed to be the beneficial owner of 15% or more of the common shares then outstanding, or an “Acquiring Person,” (as defined therein) (ii) cause (A) the date upon which the rights will be separately certificated and transferable, or the “Distribution Date” (as defined therein) to occur or (B) the date upon which a person has become an Acquiring Person or such earlier date as the majority of the board of directors becomes aware of the existence of an Acquiring Person, or the “Stock Acquisition Date” (as defined therein) to occur, or (iii) trigger an adjustment of purchase price, number of shares or number of rights as described in the Rights Agreement or constitute a consolidation, merger or sale or transfer of assets or earning power for purposes of the Rights Agreement. The Rights Amendment further provides that the effective time of the merger triggers the “expiration date” (as defined in the Rights Agreement).
 
The foregoing description of the Rights Amendment is not complete and is qualified in its entirety by reference to the Rights Amendment, a copy of which is attached hereto as Annex G and incorporated herein by reference.
 
SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS
 
LaBarge expects to hold an annual meeting in 2011 only if the merger is not completed. The deadline for submitting a stockholder proposal to LaBarge for inclusion in the LaBarge proxy statement and form of proxy pursuant to Rule 14a-8 under the Exchange Act for LaBarge’s 2011 annual meeting of stockholders is June 17, 2011. However, if the date of LaBarge’s 2011 annual meeting is more than 30 days after November 17, 2011, the proposal must be received, to be included in LaBarge proxy statement and form of proxy pursuant to Rule 14a-8 under the Exchange Act, a reasonable time before LaBarge begins to print and mail its proxy materials.
 
All proposals and director nominations, including any accompanying supporting statement, should be addressed to LaBarge’s Corporate Secretary, 9900 Clayton Road, St. Louis, Missouri 63124.
 
Householding.  If any LaBarge stockholder who agreed to householding wishes to promptly receive a separate copy of this proxy statement, or, if applicable, a separate proxy statement and annual report in the future (or, if multiple LaBarge stockholders sharing an address wish to receive a single set of reports in the future), he or she may telephone toll free (314) 997-0800, or write to LaBarge, 9900 Clayton Road, St. Louis, Missouri 63124, Attention: Corporate Secretary. LaBarge stockholders holding LaBarge shares in “street name” should contact their banks or brokers to request information about householding.
 
WHERE YOU CAN FIND MORE INFORMATION
 
LaBarge files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy materials that LaBarge has filed with the SEC at the SEC’s Public Reference Room located at:
 
100 F Street, N.E.
Washington, D.C. 20549
 
Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room.
 
LaBarge’s SEC filings are also available for free to the public on the SEC’s internet website at www.sec.gov, which contains reports, proxy and information statements and other information regarding companies that file electronically with the SEC. LaBarge’s SEC filings are also available for free to the public on LaBarge’s website, www.labarge.com. Information contained on LaBarge’s website is not incorporated by reference into this proxy statement, and you should not consider information contained on those websites as part of this proxy statement.
 
LaBarge incorporates by reference into this proxy statement the documents listed below, and any filings LaBarge make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement until the LaBarge special meeting shall be deemed to be incorporated by reference into this


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proxy statement. The information incorporated by reference is an important part of this proxy statement. Any statement in a document incorporated by reference into this proxy statement will be deemed to be modified or superseded for purposes of this proxy statement to the extent that a statement contained in this or any other subsequently filed document that is incorporated by reference into this proxy statement modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this proxy statement.
 
Reports on Form 8-K filed on: September 2, 2010; September 3, 2010; September 8, 2010; September 21, 2010; November 4, 2010; November 17, 2010; November 18, 2010; January 4, 2011; January 13, 2011; February 3, 2011; February 14, 2011; March 18, 2011; April 4, 2011; and April 6, 2011.
 
Report on Form 8-K/A filed on April 4, 2011.
 
Report on Form 10-Q filed on: November 5, 2010 and February 4, 2011.
 
Report on Form 10-K filed on September 3, 2010.
 
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR SHARES OF LABARGE COMMON STOCK AT THE LABARGE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED APRIL [•], 2011. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.


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ANNEX A
 
EXECUTION COPY
 
AGREEMENT AND PLAN OF MERGER


Table of Contents

Annex A
 
 
AGREEMENT AND PLAN OF MERGER
dated as of
April 3, 2011
among
DUCOMMUN INCORPORATED,
DLBMS, INC.
and
LABARGE, INC.
 


Table of Contents

 
TABLE OF CONTENTS
 
                 
        Page
 
ARTICLE 1 DEFINITIONS     A-1  
  Section 1.01     Definitions     A-1  
  Section 1.02     Other Definitional and Interpretative Provisions     A-7  
       
ARTICLE 2 THE MERGER     A-7  
  Section 2.01     The Merger     A-7  
  Section 2.02     Conversion of Shares     A-8  
  Section 2.03     Surrender and Payment     A-9  
  Section 2.04     Dissenting Shares     A-9  
  Section 2.05     Stock Options and Other Equity Awards     A-10  
  Section 2.06     Adjustments     A-11  
  Section 2.07     Withholding Rights     A-11  
  Section 2.08     Lost Certificates     A-11  
       
ARTICLE 3 THE SURVIVING CORPORATION     A-12  
  Section 3.01     Articles of Incorporation     A-12  
  Section 3.02     Bylaws     A-12  
  Section 3.03     Directors and Officers     A-12  
       
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY     A-12  
  Section 4.01     Corporate Existence and Power     A-12  
  Section 4.02     Corporate Authorization     A-12  
  Section 4.03     Governmental Authorization     A-13  
  Section 4.04     Non-contravention     A-13  
  Section 4.05     Capitalization     A-13  
  Section 4.06     Subsidiaries     A-14  
  Section 4.07     SEC Filings and the Sarbanes-Oxley Act     A-15  
  Section 4.08     Financial Statements     A-16  
  Section 4.09     Disclosure Documents     A-17  
  Section 4.10     Absence of Certain Changes     A-17  
  Section 4.11     No Undisclosed Material Liabilities     A-17  
  Section 4.12     Litigation     A-17  
  Section 4.13     Compliance with Applicable Laws     A-18  
  Section 4.14     Material Contracts     A-18  
  Section 4.15     Taxes     A-19  
  Section 4.16     Employees and Employee Benefit Plans     A-20  
  Section 4.17     Intellectual Property     A-23  
  Section 4.18     Properties     A-24  
  Section 4.19     Environmental Matters     A-25  
  Section 4.20     Antitakeover Statutes     A-25  
  Section 4.21     Insurance     A-26  
  Section 4.22     Related Party Transactions     A-26  
  Section 4.23     Certain Payments     A-26  
  Section 4.24     Customers and Suppliers     A-26  
  Section 4.25     Regulatory Matters     A-26  


A-i


Table of Contents

                 
        Page
 
      Occupational Safety and Health Matters     A-29  
      Long Term Incentive Plan     A-29  
      Opinion of Financial Advisor     A-29  
      Finders’ Fees     A-29  
      No Other Representations or Warranties     A-29  
       
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT     A-30  
      Corporate Existence and Power     A-30  
      Corporate Authorization     A-30  
      Governmental Authorization     A-30  
      Non-contravention     A-30  
      Disclosure Documents     A-31  
      Financing     A-31  
      Finders’ Fees     A-32  
      Litigation     A-32  
      Investigation by Parent and Merger Subsidiary     A-32  
      Ownership of Company Common Stock     A-32  
      Employee Matters     A-32  
       
ARTICLE 6 COVENANTS OF THE COMPANY     A-33  
      Conduct of the Company     A-33  
      No Solicitation; Other Offers     A-35  
      Access to Information; Confidentiality     A-37  
      Stockholder Action     A-38  
      FIRPTA Certificate     A-38  
       
ARTICLE 7 COVENANTS OF PARENT     A-38  
      Conduct of Parent     A-38  
      Obligations of Merger Subsidiary     A-38  
      Voting Shares     A-38  
      Director and Officer Liability     A-39  
      Employee Matters     A-40  
       
ARTICLE 8 COVENANTS OF PARENT AND THE COMPANY     A-40  
      Stockholder Meeting; Proxy Material     A-40  
      Reasonable Best Efforts     A-41  
      Certain Filings     A-41  
      Public Announcements     A-42  
      Stock Exchange De-listing     A-42  
      Further Assurances     A-42  
      Notice of Certain Events     A-42  
      Rule 16b-3     A-43  
      Financing     A-43  


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Table of Contents

                 
        Page
 
ARTICLE 9 CONDITIONS TO THE MERGER     A-46  
  Section 9.01     Conditions to the Obligations of Each Party     A-46  
  Section 9.02     Conditions to the Obligations of Parent and Merger Subsidiary     A-47  
  Section 9.03     Conditions to the Obligations of the Company     A-47  
       
ARTICLE 10 TERMINATION     A-48  
  Section 10.01     Termination     A-48  
  Section 10.02     Effect of Termination     A-49  
       
ARTICLE 11 MISCELLANEOUS     A-49  
  Section 11.01     Notices     A-49  
  Section 11.02     Non-Survival of Representations and Warranties     A-50  
  Section 11.03     Amendments and Waivers     A-50  
  Section 11.04     Expenses     A-50  
  Section 11.05     Disclosure Schedule References     A-51  
  Section 11.06     Binding Effect; Benefit; Assignment     A-52  
  Section 11.07     Governing Law     A-52  
  Section 11.08     Jurisdiction     A-52  
  Section 11.09     WAIVER OF JURY TRIAL     A-52  
  Section 11.10     Counterparts; Effectiveness     A-52  
  Section 11.11     Entire Agreement     A-53  
  Section 11.12     Severability     A-53  
  Section 11.13     Specific Performance     A-53  


A-iii


Table of Contents

AGREEMENT AND PLAN OF MERGER
 
AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of April 3, 2011 among Ducommun Incorporated, a corporation organized and existing under the laws of Delaware (“Parent”), DLBMS, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Subsidiary”) and LaBarge, Inc., a Delaware corporation (the “Company”).
 
WHEREAS, the Boards of Directors of Parent, Merger Subsidiary and the Company have approved and declared advisable this Agreement and the Merger (as defined below), on the terms and subject to the conditions set forth in this Agreement; and
 
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Parent’s willingness to enter into this Agreement, certain stockholders of the Company are entering into an agreement pursuant to which each such Person has agreed, among other things, to vote the shares of Company Capital Stock held by such Person in favor of the Merger.
 
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows:
 
ARTICLE 1
 
DEFINITIONS
 
Section 1.01  Definitions.  As used herein, the following terms have the following meanings:
 
“1933 Act” means the Securities Act of 1933, as amended.
 
“1934 Act” means the Securities Exchange Act of 1934, as amended.
 
“Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer or proposal (other than an offer or proposal by Merger Subsidiary or Parent) relating to (A) any acquisition or purchase, direct or indirect, of 20% or more of the voting securities of the Company, (B) any tender offer or exchange offer that, if consummated, would result in a Third Party beneficially owning 20% or more of the voting securities of the Company, or (C) a sale of assets equal to 20% or more of the Company’s consolidated assets, or a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, joint venture or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of the Company.
 
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.
 
“AMEX” means the NYSE Amex LLC.
 
“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, its Subsidiaries or any of their respective assets, as the same may be amended from time to time unless expressly specified otherwise herein.
 
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Company 10-K” means the Company’s annual report on Form 10-K for the fiscal year ended June 27, 2010.


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“Company 10-Q” means the Company’s quarterly report on Form 10-Q for the fiscal quarter ended January 2, 2011.
 
“Company Balance Sheet” means the unaudited consolidated balance sheet of the Company and its Subsidiaries as of January 2, 2011 and the footnotes thereto set forth in the Company 10-Q.
 
“Company Balance Sheet Date” means January 2, 2011.
 
“Company Common Stock” means the common stock, $.01 par value, of the Company.
 
“Company Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by the Company to Parent and Merger Subsidiary.
 
“Company Owned Intellectual Property” means all Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries and includes all Intellectual Property listed on Section 4.17 of the Company Disclosure Schedule.
 
“Company Restricted Share” means each restricted share of Company Common Stock issued under the 2004 LTIP in settlement of Performance Units, and each other share of Company Common Stock outstanding as of the Effective Time that is subject to vesting conditions. For avoidance of doubt, the term “Company Restricted Share” shall not refer to or include any Performance Unit prior to its conversion into restricted shares of Company Common Stock.
 
“Company Rights” means the preferred share purchase rights issued pursuant to the Company Rights Agreement.
 
“Company Rights Agreement” means the Rights Agreement dated November 8, 2001 between the Company and Registrar and Transfer Company, as amended.
 
“Contract” any oral or written contract, agreement, obligation, commitment, arrangement, instrument, permit, lease, license, bond, debenture, note, mortgage, indenture, guarantee, purchase or sale order or other commitment, instrument, understanding, undertaking, concession or franchise (in each case, including all amendments thereto).
 
“Delaware Law” means the Delaware General Corporation Law, as amended.
 
“Environmental Law” means any Applicable Law relating to (i) the control of any potential Hazardous Substance or protection of the air, water or land, (ii) solid, gaseous or liquid waste generation or the handling, treatment, storage, disposal or transportation of a Hazardous Substance, (iii) human health and safety with respect to exposures to and management of Hazardous Substances, or (iv) the environment.
 
“Environmental Permits” means all permits, licenses, franchises, certificates, approvals and other similar authorizations of Governmental Authorities required by Environmental Laws and affecting, or relating to, the business of the Company or any of its Subsidiaries as conducted as of the date of this Agreement.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“ERISA Affiliate” of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.
 
“Facilities” means the facilities, Improvements, buildings, transportation, and storage facilities and other structures that are located on Leased Real Property or Owned Real Property and all fixtures attached or appurtenant thereto or located thereon, and all licenses, privileges and rights relating to the foregoing (other than those included in the Leased Real Property or Owned Real Property), in each case to the extent predominately used in the operation of the Company’s business.
 
“GAAP” means United States generally accepted accounting principles consistently applied.


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“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency, commission or official, including any political subdivision thereof, or any non-governmental self-regulatory agency, commission or authority.
 
“Hazardous Substance” means any chemical, substance, waste or material listed or defined as a “pollutant”, “contaminant”, “toxic,” “radioactive”, “ignitable”, “corrosive”, “reactive”, or “hazardous” and regulated by a Governmental Authority under any Environmental Law.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
 
“Intellectual Property” shall mean (i) trademarks, service marks, brand names, certification marks, trade dress, domain names and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application (collectively, “Marks”); (ii) inventions and discoveries, whether patentable or not, in any jurisdiction; patents, applications for patents (including, without limitation, divisions, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction; (iii) trade secrets and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person (the “Trade Secrets”); (iv) writings and other tangible works, whether copyrightable or not, in any jurisdiction, and any and all copyright rights, whether registered or not; and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; and (v) moral rights, database rights, design rights, industrial property rights, publicity rights and privacy rights.
 
“IT Assets” shall mean computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology equipment, and all associated documentation owned by the Company or its Subsidiaries or licensed or leased by the Company or its Subsidiaries pursuant to written agreement (excluding any public networks).
 
“knowledge of the Company” means the actual knowledge of the Company’s officers.
 
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance, option, right of first refusal or other adverse right of any kind (including any limitation on voting, sale, transfer or other disposition or exercise of any other attribute of ownership) in respect of such property or asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.
 
“Material Adverse Effect” means with respect to any Person, any change, effect, development or event that (a) has or would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, assets or results of operations of such Person and its Subsidiaries, taken as a whole or (b) materially impairs the ability of such Person and its Subsidiaries to consummate, or prevents or materially delays, the Merger or any of the other transactions contemplated by this Agreement or would reasonably be expected to do so; provided, however, that, subject to the last proviso of this sentence, in the case of clause (a) only, no changes, effects, developments or events resulting from, arising out of, or attributable to, any of the following shall be deemed to be or constitute a “Material Adverse Effect” or be taken into account when determining whether a “Material Adverse Effect” has occurred or may, would or could occur: (A) any changes, effects, developments or events in the economy or the financial, credit or securities markets in general (including changes in interest or exchange rates), (B) any changes, effects, developments or events in the industries in which such Person and its Subsidiaries operate, (C) any changes, effects, developments or events resulting from the announcement or pendency of the transactions contemplated by this Agreement, the identity of Parent or the performance or compliance with the terms of this Agreement (including, in each case, any loss of customers, suppliers or employees or any disruption in business relationships), (D) any failure, in and of itself, of such Person to meet internal forecasts, budgets or financial projections or fluctuations, in and of themselves, in the


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trading price or volume of such Person’s common stock (it being understood that the facts, event, circumstances or occurrences giving rise or contributing to such failure or fluctuations may be deemed to be, constitute, or be taken into account when determining the occurrence of, a Material Adverse Effect), (E) acts of God, natural disasters, calamities, national or international political or social conditions, including the engagement by any country in hostility (whether commenced before, on or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war), or the occurrence of a military or terrorist attack, or (F) any changes in Applicable Law or GAAP (or any interpretation thereof); provided further, however, that, with respect to clauses (A), (B), (E), and (F), the impact of such changes, effects, developments or events is not materially and disproportionately adverse to such Person and its Subsidiaries.
 
“Multiemployer Plan” means any “multiemployer plan,” as defined in Section 3(37) of ERISA.
 
“Occupational Safety and Health Law” means the federal Occupational Safety and Health Act of 1970, as amended, 20 U.S.C. §§ 651 et seq. and enforcement policies thereunder, and any similar state or local law.
 
“Occupational Safety and Health Liabilities” means cost, damage, expense, liability, obligation, or other responsibility consisting of or relating to (a) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, remedial costs, and expenses arising under Occupational Safety and Health Law; (b) financial responsibility for corrective action, including without limitation any investigation, or abatement action including but not limited to engineering or administrative controls, or the use of required personal protective equipment, required by applicable Occupational Safety and Health Law, or by any final judgment, decree, or order of any applicable occupational safety and health jurisdiction pursuant to Occupational Safety and Health Law; and (c) any other compliance, corrective, or remedial measures required under Occupational Safety and Health Law.
 
“Organizational Documents” means (i) with respect to any entity that is a corporation, such corporation’s certificate or articles of incorporation and bylaws, (ii) with respect to any entity that is a limited liability company, such limited liability company’s certificate or articles of formation and operating agreement, and (iii) with respect to any other entity, such entity’s organizational or charter documents.
 
“Performance Unit” means each unit issued under the 2004 LTIP that vests based upon the level of achievement of pre-determined performance objectives.
 
“Permitted Liens” shall mean any of the following: (i) Liens for Taxes, assessments and governmental charges or levies either not yet due and delinquent or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP; (ii) mechanics, carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s or other Liens or security interests that are not yet due; (iii) Liens to secure obligations to landlords, lessors or renters under leases or rental agreements or underlying leased property; (iv) Liens imposed by Applicable Law; (v) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; (vi) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (vii) Liens that do not materially detract from the value or materially interfere with the present use of the property or asset subject thereto or affected thereby; (viii) Liens the existence of which are specifically disclosed in the notes to the consolidated financial statements of the Company included in the Company SEC Documents and (ix) Liens on Company Owned Intellectual Property recorded at the United States Patent and Trademark Office.
 
“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
 
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.


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“SEC” means the United States Securities and Exchange Commission.
 
“Severance Agreements” means those certain Executive Severance Agreements entered into by and between the Company and each of Messrs. LaBarge, Buschling, Nonnenkamp, and Parmley, and Ms. Huber, executed January 11, 2005, and Mr. Bitner, executed August 22, 2007, each as subsequently amended.
 
“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such Person.
 
“Third Party” means any Person, including as defined in Section 13(d) of the 1934 Act and the rules of the SEC thereunder, other than Parent, the Company or any Affiliate of Parent.
 
“WARN Act” means the U.S. Worker Adjustment and Retraining Notification Act and any state or local equivalent.
 
Each of the following terms is defined in the Section set forth opposite such term:
 
         
Term
 
Section
 
1993 Option Plan
    Section 4.05(a)  
1995 Option Plan
    Section 4.05(a)  
1999 Option Plan
    Section 4.05(a)  
2004 LTIP
    Section 4.05(a)  
Action
    Section 4.12  
Adverse Recommendation Change
    Section 6.02(a)  
Agreement
    Preamble  
Alternative Acquisition Agreement
    Section 6.02(a)  
Antitrust Filings
    Section 8.02(b)  
Available Financing
    Section 8.09(a)  
Bid
    Section 4.25(a)  
Bridge Financing
    Section 5.06(a)  
Certificate
    Section 2.02(a)  
Certificate of Merger
    Section 2.01(c)  
Closing
    Section 2.01(b)  
Closing Date
    Section 2.01(b)  
Commitment Letter
    Section 5.06(a)  
Company
    Preamble  
Company Board Recommendation
    Section 4.02(b)  
Company Capital Stock
    Section 4.05(a)  
Company Employees
    Section 4.16(m)  
Company Government Contract
    Section 4.25(a)  
Company Government Subcontract
    Section 4.25(a)  
Company Material Contract
    Section 4.14  
Company Payment Event
    Section 11.04(b)  
Company Permits
    Section 4.13  
Company Preferred Stock
    Section 4.05(a)  
Company Proxy Statement
    Section 4.09  
Company SEC Documents
    Section 4.07(a)  
Company Securities
    Section 4.05(b)  


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Term
 
Section
 
Company Software
    Section 4.17(a)  
Company Stock Option
    Section 2.05(a)  
Company Stockholder Approval
    Section 4.02(a)  
Company Stockholder Meeting
    Section 8.01  
Company Subsidiary Securities
    Section 4.06(b)  
Company Termination Fee
    Section 11.04(a)  
Confidentiality Agreement
    Section 6.03(a)  
Current Employees
    Section 5.11  
D&O Insurance
    Section 7.04(c)  
Dissenting Shares
    Section 2.04  
Effective Time
    Section 2.01(c)  
Employee Plans
    Section 4.16(a)  
End Date
    Section 10.01(b)(i)  
Engagement Letter
    Section 5.06(a)  
ESPP
    Section 2.05(b)  
Fee Letter
    Section 5.06(a)  
Filed Company SEC Documents
    Article 4  
Financing
    Section 5.06(a)  
Financing Sources
    Section 8.09(a)  
High-Yield Financing
    Section 5.06(a)  
Improvements
    Section 4.18  
Inbound Licenses
    Section 4.17(b)  
Indebtedness
    Section 6.01(h)  
Indemnified Person
    Section 7.04(a)  
Intellectual Property Agreements
    Section 4.17(b)  
Internal Controls
    Section 4.07(f)  
Leased Real Property
    Section 4.18  
Lender
    Section 5.06(a)  
Marketing Period
    Section 8.09(a)  
Marks
    Section 1.01  
Merger
    Section 2.01(a)  
Merger Consideration
    Section 2.02(a)  
Merger Subsidiary
    Preamble  
Order
    Section 4.12  
Outbound Licenses
    Section 4.17(b)  
Owned Real Property
    Section 4.18  
Parent
    Preamble  
Parent Expenses
    Section 11.04(b)  
Parent Plans
    Section 7.05(b)  
Paying Agent
    Section 2.03(a)  
Payment Fund
    Section 2.03(a)  
Representatives
    Section 6.02(a)  
Required Governmental Authorizations
    Section 4.03  
Required Information
    Section 8.09(b)  


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Term
 
Section
 
Section 409A
    Section 2.05(c)  
Significant Customer
    Section 4.24(a)  
Significant Supplier
    Section 4.24(b)  
Solvent
    Section 5.06(b)  
Stock Plans
    Section 4.05(a)  
Superior Proposal
    Section 6.02(c)  
Surviving Corporation
    Section 2.01(a)  
Tax Return
    Section 4.15(n)  
Taxes
    Section 4.15(m)  
Taxing Authority
    Section 4.15(m)  
Trade Secrets
    Section 1.01  
Uncertificated Share
    Section 2.02(a)  
Unvested Cash Right
    Section 2.05(c)  
 
Section 1.02  Other Definitional and Interpretative Provisions.  The words “hereof ”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. Except as the context may otherwise require, references to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. Any dollar threshold set forth herein shall not be used as a benchmark for determination of what is “material” or a “Material Adverse Effect” or any phrase of similar import under the Agreement. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law. The parties agree that the terms and language of this Agreement were the result of negotiations between the parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any party.
 
ARTICLE 2
 
THE MERGER
 
Section 2.01  The Merger.
 
(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Subsidiary shall be merged (the “Merger”) with and into the Company in accordance with Delaware Law, whereupon the separate existence of Merger Subsidiary shall cease, and the Company shall be the surviving corporation (the “Surviving Corporation”).
 
(b) Subject to the provisions of Article 9, the closing of the Merger (the “Closing”) shall take place in St. Louis, Missouri at the offices of Armstrong Teasdale LLP, 7700 Forsyth Blvd., Suite 1800, St. Louis,


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Missouri 63105, as soon as possible, but in any event no later than two Business Days after the conditions set forth in Article 9 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at the Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions, that is the earlier of (a) any Business Day during the Marketing Period as may be specified by Parent on no less than three Business Days’ prior notice to the Company and (b) the final day of the Marketing Period, or at such other place, at such other time or on such other date as Parent and the Company may mutually agree (the “Closing Date”); provided, that notwithstanding the satisfaction or waiver of the conditions set forth in Article 9, this Agreement may be terminated pursuant to and in accordance with Section 10.01 such that the parties shall not be required to effect the Closing, regardless of whether the final day of the Marketing Period shall have occurred prior to such termination.
 
(c) Upon the Closing, the Company and Merger Subsidiary shall cause the Merger to be consummated by filing a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of Delaware Law. The Merger shall become effective at such time (the “Effective Time”) as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware (or at such later time as permitted by Delaware Law as Parent and the Company shall agree and shall be specified in the Certificate of Merger).
 
(d) The effects of the Merger shall be as provided in this Agreement and in the applicable provisions of Delaware Law. Without limiting the generality of the foregoing and subject thereto, at the Effective Time, the Surviving Corporation shall possess all the properties, rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Subsidiary, all as provided under Delaware Law.
 
Section 2.02  Conversion of Shares.  At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Subsidiary, the Company or the holders of any shares of Company Common Stock or any shares of capital stock of Parent or Merger Subsidiary:
 
(a) except as otherwise provided in Section 2.02(b) or Section 2.04, each share of Company Common Stock (including each Company Restricted Share) outstanding immediately prior to the Effective Time (together with the Company Rights attached to each such share), shall be converted into the right to receive $19.25 in cash, without interest (such per share amount, the “Merger Consideration”). As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each certificate which immediately prior to the Effective Time represented any such shares of Company Common Stock (each, a “Certificate”) and each uncertificated share of Company Common Stock (an “Uncertificated Share”) which immediately prior to the Effective Time was registered to a holder on the stock transfer books of the Company, shall thereafter represent only the right to receive the Merger Consideration. For avoidance of doubt, no Merger Consideration shall be paid under this Section 2.02(a) on account of any Performance Unit or any right or security into which such Performance Unit converts as a result of the transactions contemplated by this Agreement, and the settlement of Performance Units hereunder shall be governed solely by the provisions of Section 2.05 hereof.
 
(b) each share of Company Common Stock held by the Company or any of its Subsidiaries or owned by Parent or any of its Subsidiaries immediately prior to the Effective Time together with the Company Rights attached to each such share shall be canceled, and no payment shall be made with respect thereto; and
 
(c) each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.


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Section 2.03  Surrender and Payment.
 
(a) Prior to the Effective Time, Parent shall appoint a commercial bank or trust company that is reasonably satisfactory to the Company (the “Paying Agent”) for the purpose of paying the Merger Consideration to the holders of Company Common Stock and shall enter into a Paying Agent Agreement with the Paying Agent. At or prior to the Effective Time, Parent shall deposit, or cause Merger Subsidiary to deposit, with the Paying Agent, for the benefit (from and after the Effective Time) of the holders of shares of Company Common Stock, for payment in accordance with this Section 2.03 through the Paying Agent, cash sufficient to pay the aggregate Merger Consideration pursuant to Section 2.02. All cash deposited with the Paying Agent pursuant to this Section 2.03(a) shall herewith be referred to as the “Payment Fund”. Promptly after the Effective Time (and in any event within two Business Days following the Closing Date), Parent shall send, or shall cause the Paying Agent to send, to each Person who was, immediately prior to the Effective Time, a holder of record of shares of Company Common Stock entitled to receive payment of the Merger Consideration pursuant to Section 2.02(a) a letter of transmittal and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Uncertificated Shares to the Paying Agent) for use in such payment.
 
(b) Each holder of shares of Company Common Stock that have been converted into the right to receive the Merger Consideration shall be entitled to receive, upon (i) surrender to the Paying Agent of a Certificate, together with a properly completed letter of transmittal, or (ii) receipt of an “agent’s message” by the Paying Agent (or such other evidence, if any, of transfer as the Paying Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the Merger Consideration in respect of the Company Common Stock represented by a Certificate or Uncertificated Share. Until so surrendered or transferred, as the case may be, each such Certificate or Uncertificated Share shall represent after the Effective Time for all purposes only the right to receive such Merger Consideration.
 
(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Paying Agent any transfer or other taxes required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated Share or establish to the satisfaction of the Paying Agent that such tax has been paid or is not payable.
 
(d) The stock transfer books of the Company shall be closed immediately upon the Effective Time and there shall be no further registration of transfers of shares of Company Common Stock thereafter on the records of the Company. If, after the Effective Time, Certificates or Uncertificated Shares are presented to Parent, the Surviving Corporation or the Paying Agent for any reason, they shall be canceled and converted into the right to receive only the Merger Consideration to the extent provided for, and in accordance with the procedures set forth, in this Article 2.
 
(e) Any portion of the Merger Consideration made available to the Paying Agent pursuant to Section 2.03(a) that remains unclaimed by the holders of shares of Company Common Stock six (6) months after the Effective Time shall be delivered to Parent or otherwise on the instruction of Parent, and any such holder who has not exchanged shares of Company Common Stock for the Merger Consideration in accordance with this Section 2.03 prior to that time shall thereafter look only to Parent for payment of the Merger Consideration, in respect of such shares without any interest thereon. Notwithstanding the foregoing, Parent shall not be liable to any holder of shares of Company Common Stock for any amounts paid to a public official pursuant to applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of shares of Company Common Stock immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by Applicable Law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.
 
Section 2.04  Dissenting Shares.  Notwithstanding any provision in this Agreement to the contrary, shares of Company Common Stock outstanding immediately prior to the Effective Time and held by a holder


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who has not voted in favor of the Merger or consented thereto in writing and who has properly demanded appraisal for such shares in accordance with Section 262 of Delaware Law (collectively, the “Dissenting Shares”) shall not be converted into the right to receive the Merger Consideration. From and after the Effective Time, a holder of Dissenting Shares shall not have, and shall not be entitled to exercise, any of the voting rights or other rights of a holder of shares of the Surviving Corporation. If, after the Effective Time, such holder fails to perfect, withdraws or loses the right to appraisal under Section 262 of Delaware Law, such shares shall be treated as if they had been converted as of the Effective Time into the right to receive the Merger Consideration. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of shares, and Parent shall have the right to direct all negotiations and proceedings with respect to such demands. Except with the prior written consent of Parent, the Company shall not make any payment with respect to, or offer to settle or settle, any such demands.
 
Section 2.05  Stock Options and Other Equity Awards.
 
(a) Options.  At the Effective Time, each outstanding Company Stock Option under any Stock Plan, including without limitation the 1993 Option Plan, the 1995 Option Plan and the 1999 Option Plan, whether or not then exercisable or vested, shall become fully vested and be cancelled in exchange for the right to receive, within ten (10) Business Days after the Effective Time, an amount in cash equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time, multiplied by (B) the excess, if any, of the Merger Consideration over the exercise price per share of Company Common Stock under such Company Stock Option, less any applicable taxes required to be withheld with respect to such payment. As used herein, the term “Company Stock Option” shall mean any outstanding option to purchase shares of capital stock of the Company under any Stock Plan. As of the Effective Time, all Company Stock Options shall no longer be outstanding and shall automatically cease to exist and shall become only the right to receive the option consideration described in this Section 2.05(a), and, without limiting the foregoing, the Board of Directors of the Company or the appropriate committee thereof shall take all necessary action to effect such cancellation, including but not limited to adopting any required amendment to any of the Stock Plans, and obtaining any required participant consents.
 
(b) Employee Stock Purchase Plan.  As soon as practicable following the date of this Agreement, the Board of Directors of the Company or the compensation committee of the Board of Directors of the Company will adopt such resolutions and take such other reasonable actions as may be required to provide that with respect to the Company’s Employee Stock Purchase Plan (the “ESPP”): (A) participants in the ESPP may not alter their payroll deductions from those in effect on the date of this Agreement (other than to discontinue their participation in the ESPP), (B) no offering period will be commenced after the date of this Agreement (it being understood that the current offering(s) in progress as of the date hereof shall continue, and shares of Company Common Stock shall be issued to participants thereunder on the next currently scheduled purchase date thereunder occurring after the date hereof as provided under, and subject to the terms and conditions of, the ESPP), (C) in accordance with the terms of the ESPP, any offering in progress as of the Effective Time shall be shortened, and the “Offering Termination Date” (as defined in the ESPP) shall be the Business Day immediately preceding the Effective Time, (D) each then outstanding option under the ESPP shall be exercised automatically on such Offering Termination Date, (E) the ESPP shall be terminated effective immediately prior to the Effective Time and (F) the amount of the accumulated contributions of each participant under the ESPP as of immediately prior to the Effective Time shall, to the extent not used to purchase shares of capital stock of the Company in accordance with the ESPP, be refunded to such participant as promptly as practicable following the Effective Time (without interest). Notwithstanding any restrictions on transfer of stock in the ESPP, the treatment in the Merger of any stock purchased pursuant to the ESPP as described under this provision shall be in accordance with Section 2.02(a).
 
(c) Performance Units.  At the Effective Time, the performance objectives underlying all Performance Units that are outstanding as of immediately prior to the Effective Time shall be deemed to be achieved at the maximum level, pursuant to the terms of the 2004 LTIP as described in Section 4.27, as amended prior to the date upon which the Company’s Board of Directors approved this Agreement. At such time, such Performance Units shall not be converted into Company Restricted Shares, but rather shall be converted into the unvested right (the “Unvested Cash Right”) to receive, upon vesting, an amount in cash equal to (i) the number of


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Performance Units multiplied by (ii) $1.50. The Unvested Cash Rights shall vest on the 12-month anniversary of the Closing Date, provided that the holder thereof has been continuously employed by Parent or its Affiliates (including the Surviving Corporation) through such date, or shall vest on such earlier date as may be provided under the terms of the 2004 LTIP as described in Section 4.27, as amended prior to the date upon which the Company’s Board of Directors approves this Agreement. The amount of cash to which the holder of any such Unvested Cash Right is entitled shall be paid, without interest, within ten (10) calendar days after the vesting thereof. All amounts payable pursuant to the Unvested Cash Rights are intended to be “short-term deferrals” within the meaning of Treasury Regulation Section 1.409A-1(b)(4), and accordingly, are intended to be exempt from the application of Section 409A of the Internal Revenue Code, the regulations and other guidance of general applicability thereunder, and any state law of similar effect (collectively, “Section 409A”), and accordingly, no payment of the cash underlying Unvested Cash Rights will be subject to the additional income tax under Section 409A, and any ambiguities herein will be interpreted to be so exempt. If the Closing Date occurs after July 3, 2011, in no event will Performance Units (other than Performance Units held by an employee with an employment agreement described in Section 4.27) with a performance period which ends on such date be converted into an Unvested Cash Right under this Section 2.05(c). Instead, to the extent such Performance Units are outstanding immediately prior to the Effective Time due to the fact that the Company has not had sufficient time after the end of such fiscal year to convert such Performance Units into Company Restricted Shares in accordance with the terms of the 2004 LTIP, such Performance Units shall be cancelled in exchange for the right to receive, within ten (10) Business Days after the Effective Time, an amount in cash equal to the product of (a) the number of Performance Units subject to an award and (B) $1.50. Notwithstanding anything in this Section 2.05(c) (except for the first sentence of this Section 2.05(c)) to the contrary, Performance Units, including those Performance Units which are fully earned as of July 3, 2011, held by an employee with an employment agreement described in Exhibit C, D, E or F to Section 4.27, which have not been converted into Company Restricted Shares as of Closing, shall be considered outstanding and converted into Unvested Cash Rights pursuant to this Section 2.05. Notwithstanding anything in this Section 2.05(c) (except for the first sentence of this Section 2.05(c)) to the contrary, Performance Units, including those Units which are fully earned as of July 3, 2011, held by an employee with an employment agreement described in Exhibit A or B to Section 4.27, which have not been converted into Company Restricted Shares as of Closing, shall be settled in accordance with the terms of such employment agreement.
 
Section 2.06  Adjustments.  If, during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of Company Common Stock shall occur, as a result of any reclassification, recapitalization, stock split (including reverse stock split), merger, combination, exchange or readjustment of shares, subdivision or other similar transaction, or any stock dividend thereon with a record date during such period, the Merger Consideration and any other amounts payable pursuant to this Agreement shall be appropriately adjusted to eliminate the effect of such event on the Merger Consideration or any such other amounts payable pursuant to this Agreement.
 
Section 2.07  Withholding Rights.  Each of the Paying Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of any Applicable Law, including federal, state, local or foreign Tax law, and if any such amounts are deducted and withheld, Parent shall, or shall cause the Surviving Corporation to, as the case may be, timely pay such amounts to the appropriate Government Authority. If the Paying Agent, Parent or the Surviving Corporation, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which the Paying Agent, Parent or the Surviving Corporation, as the case may be, made such deduction and withholding.
 
Section 2.08  Lost Certificates.  If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue, in exchange for such lost, stolen or destroyed


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Certificate, the Merger Consideration to be paid in respect of the shares of Company Common Stock represented by such Certificate, as contemplated by this Article 2.
 
ARTICLE 3
 
THE SURVIVING CORPORATION
 
Section 3.01  Articles of Incorporation.  The certificate of incorporation of the Company shall be amended in its entirety as set forth on Annex I and, as amended, shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with Applicable Law.
 
Section 3.02  Bylaws.  The bylaws of Merger Subsidiary in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended in accordance with Applicable Law.
 
Section 3.03  Directors and Officers.  From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Merger Subsidiary at the Effective Time shall be the officers of the Surviving Corporation.
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
Except (i) as disclosed in the Company SEC Documents filed with or furnished to the SEC by the Company since June 28, 2009 and publicly available prior to the date of this Agreement (“Filed Company SEC Documents”) (other than any disclosures set forth in any risk factor section, any disclosures of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly predictive or forward-looking in nature), or (ii) as set forth in the Company Disclosure Schedule (it being agreed that disclosure of any information in a particular section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection of this Agreement to which the relevance of such information is readily apparent on its face), the Company represents and warrants to Parent that:
 
Section 4.01  Corporate Existence and Power.  Each of the Company and its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its formation and has all corporate powers required to carry on its business as conducted as of the date hereof. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified has not had and would not reasonably be expected to have a Material Adverse Effect on the Company. Prior to the date of this Agreement, the Company has made available to Parent true and complete copies of the certificate of incorporation and bylaws of the Company and each of its Subsidiaries as in effect on the date of this Agreement, and each as so delivered is in full force and effect. The Company is not in violation of any provision of its certificate of incorporation or bylaws.
 
Section 4.02 Corporate Authorization.
 
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and, subject to receipt of the affirmative vote of the holders of two-thirds of the outstanding shares of Company Common Stock in connection with the consummation of the Merger (the “Company Stockholder Approval”), to perform its obligations under this Agreement and to consummate the Merger and the other transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Merger Subsidiary, constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity). The Company Stockholder Approval is the only vote of the holders of any class or series of the Company’s capital stock or other securities required in connection with the consummation of the Merger. No vote of the holders of any class or series of the


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Company’s capital stock or other securities is required in connection with the consummation of any of transactions contemplated hereby to be consummated by the Company other than the Merger.
 
(b) At a meeting duly called and held, the Company’s Board of Directors (or a duly appointed committee thereof) has (i) determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the Company’s stockholders, (ii) approved, adopted and declared advisable this Agreement and the transactions contemplated hereby, (iii) approved and adopted all actions necessary to render the Company Rights inapplicable to the Merger, this Agreement and the transactions contemplated hereby and (iv) resolved to recommend approval and adoption of this Agreement by the Company’s stockholders (such recommendation, the “Company Board Recommendation”).
 
Section 4.03  Governmental Authorization.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority other than (i) the filing of the Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any applicable requirements of the HSR Act and under any comparable merger control laws of foreign jurisdictions, if applicable (the consents, approvals orders, authorizations, registrations, declarations and filings required under or in connection with any of the foregoing clauses (i) and (ii) above, the “Required Governmental Authorizations”), (iii) compliance with any applicable requirements of the 1933 Act, the 1934 Act, and any other applicable U.S. state or federal securities laws, (iv) compliance with any requirements of the AMEX and (v) any actions or filings the absence of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
 
Section 4.04  Non-contravention.  Except as set forth on Section 4.04 of the Company Disclosure Schedule, the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 4.03, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law that is material to the Company and its Subsidiaries, taken as a whole, (iii) assuming compliance with the matters referred to in Section 4.03, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under any provision of any Contract binding upon the Company or any of its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of the Company and its Subsidiaries or (iv) result in the creation or imposition of any Lien (other than Permitted Liens) on any asset of the Company or any of its Subsidiaries, with such exceptions, in the case of each of clauses (iii) and (iv), as would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
 
Section 4.05 Capitalization.
 
(a) The authorized capital stock of the Company consists of (i) 40,000,000 shares of Company Common Stock, par value $.01 per share (the “Company Capital Stock”) and (ii) 2,000,000 shares of preferred stock, par value $1.00 per share (“Company Preferred Stock”), of which 300,000 are designated Series C Junior Participating Preferred Stock, of which Series C Junior Participating Preferred Stock 300,000 shares are reserved for issuance upon the exercise of the Company Rights issued pursuant to the Company Rights Agreement. As of March 25, 2011, there were outstanding (A) 15,958,839 shares of Company Common Stock (of which (i) 132,912 shares are held in the Company’s treasury and (ii) 119,338 shares are Company Restricted Shares), (B) no shares of Company Preferred Stock and (C) outstanding Company Stock Options to purchase an aggregate of 411,565 shares of Company Common Stock (all of which Company Stock Options are vested and exercisable). As of March 25, 2011, other than 496,821 shares of Company Common Stock reserved for issuance in the form of Company Restricted Shares upon future settlement of outstanding Performance Units under the Company’s 2004 Long Term Incentive Plan (as amended from time to time, the


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“2004 LTIP”), and pursuant to outstanding Company Stock Options under the 1993 Incentive Stock Option Plan (the “1993 Option Plan”), 1995 Incentive Stock Option Plan (as amended from time to time, the “1995 Option Plan”), and the 1999 Non-Qualified Stock Option Plan (as amended from time to time, the “1999 Option Plan” and, together with the 2004 LTIP, the 1993 Option Plan, the 1995 Option Plan and the 1999 Option Plan, the “Stock Plans”), no Shares are committed to be issued or are otherwise covered by or subject to any Company Security. All outstanding shares of Company Capital Stock have been, and all shares of Company Capital Stock that may be issued pursuant to any Stock Plan or other compensation plan or arrangement will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and are fully paid and nonassessable and are not subject to any preemptive rights. No Subsidiary of the Company owns any shares of capital stock of the Company. Section 4.05 of the Company Disclosure Schedule contains a complete and correct list of (i) each Company Stock Option outstanding as of the date of this Agreement, including with respect to each such option the holder, the Stock Plan under which such Company Stock Option was granted, date of grant, exercise price, vesting schedule and number of shares of Company Common Stock subject thereto and (ii) all outstanding Company Restricted Shares, including with respect to each such share the holder, date of grant and vesting schedule. A true and complete copy of the Company Rights Agreement as in effect as of the date of this Agreement has been made available to Parent prior to the date of this Agreement.
 
(b) There are outstanding no bonds, debentures, notes, other indebtedness or other securities of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. Except as set forth in this Section 4.05 and for changes since March 25, 2011 resulting from the exercise of Company Stock Options outstanding on such date, there are no issued, reserved for issuance or outstanding (i) shares of capital stock or other voting securities of or other ownership interest in the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of or other ownership interest in the Company, (iii) warrants, calls, options or other rights to acquire from the Company, or other obligations of the Company to issue, any capital stock, other voting securities or securities convertible into or exchangeable for capital stock or other voting securities of or other ownership interest in the Company or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights issued by the Company that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities of or ownership interests in, the Company (the items in clauses (i) though (iv) being referred to collectively as the “Company Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Securities. Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any Company Securities.
 
Section 4.06 Subsidiaries.
 
(a) Each Subsidiary of the Company is a corporation or other entity duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all corporate or other organizational powers, as applicable, required to carry on its business as conducted as of the date hereof. Each such Subsidiary is duly qualified to do business as a foreign corporation or other entity, as applicable, and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified has not had a Material Adverse Effect on the Company. Section 4.06 of the Company Disclosure Schedule lists all of the Subsidiaries of the Company.
 
(b) Except as set forth in Section 4.06(b) of the Company Disclosure Schedule, all of the outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary of the Company, is owned by the Company or another Subsidiary of the Company, if applicable, directly or indirectly, free and clear of any Lien and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests). All the outstanding shares of capital stock or other voting securities or equity interests of each Subsidiary of the Company have been duly authorized and validly issued, are fully paid, nonassessable and not subject to any preemptive rights. There are no issued, reserved for issuance or outstanding (i) shares of capital stock or other voting securities of or other ownership interest in the Subsidiaries of the Company other than those owned by the Company,


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(ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or other voting securities of or ownership interests in any Subsidiary of the Company, (iii) warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, or other obligations of the Company or any of its Subsidiaries to issue, any capital stock or other voting securities of or ownership interests in, or any securities convertible into or exchangeable for any capital stock or other voting securities of or ownership interests in, any Subsidiary of the Company or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights issued by any Subsidiary of the Company that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities of or ownership interests in, any Subsidiary of the Company (the items in clauses (i) through (iv) being referred to collectively as the “Company Subsidiary Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Subsidiary Securities. Except as set forth in Section 4.06 of the Company Disclosure Schedule, all of the outstanding Company Subsidiary Securities are owned, directly or indirectly, by the Company, free and clear of all Liens.
 
Section 4.07 SEC Filings and the Sarbanes-Oxley Act.
 
Except as set forth in Section 4.07 of the Company Disclosure Schedule:
 
(a) The Company has filed with or furnished to the SEC all reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed or furnished by the Company since June 28, 2009 (collectively, together with any exhibits and schedules thereto and other information incorporated therein, the “Company SEC Documents”).
 
(b) As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such subsequent filing), each Company SEC Document complied in all material respects with the applicable requirements of the 1933 Act, the 1934 Act and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations promulgated thereunder, as the case may be (including, without limitation, all disclosure requirements thereunder).
 
(c) As of its respective filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such filing), each Company SEC Document filed pursuant to the 1934 Act did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
 
(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such registration statement or amendment became effective, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
 
(e) The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the 1934 Act). Such disclosure controls and procedures are reasonably designed to ensure that all information required to be disclosed by the Company in the reports it files or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and all such information is made known to the Company’s principal executive officer and principal financial officer to allow timely decisions regarding required disclosures as required under the 1934 Act. The principal executive officer and principal financial officer of the Company have evaluated the effectiveness of the Company’s disclosure controls and procedures and, to the extent required by Applicable Law, presented in any applicable Company SEC Document that is a report on Form 10 K or Form 10 Q, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation.
 
(f) The Company and its Subsidiaries have established and maintained a system of internal control over financial reporting (as defined in Rule 13a-15 under the 1934 Act) (“internal controls”) sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the


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preparation of the Company’s financial statements for external purposes in accordance with GAAP, and the Company has disclosed, based on its most recent evaluation of internal controls prior to the date of this Agreement, to the Company’s auditors and audit committee (x) any significant deficiencies and material weaknesses in the design or operation of internal controls known to the Company which would be reasonably expected to materially adversely affect the Company’s ability to record, process, summarize and report financial information and (y) any fraud, whether or not material, known to management, that involves management or other employees who have a significant role in internal controls.
 
(g) Since June 29, 2008, (i) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices and (ii) to the knowledge of the Company, no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Board of Directors of the Company or any committee thereof or to any director or officer of the Company or any of its Subsidiaries.
 
(h) As of the date of this Agreement, there are no outstanding or unresolved comments in the comment letters received from the SEC staff with respect to the Company SEC Documents. Except as set forth on Section 4.07(h) of the Company Disclosure Schedule, to the knowledge of the Company, none of the Company SEC Documents is subject to ongoing review or outstanding SEC comment or investigation.
 
(i) Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off balance sheet partnership or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among the Company and any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any “off balance sheet arrangements” (as defined in Item 303(a) of Regulation S K under the 1934 Act)), where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of its Subsidiaries in the Company’s or such Subsidiary’s published financial statements or other Company SEC Documents.
 
(j) The Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the AMEX.
 
(k) No Subsidiary of the Company is subject to the periodic reporting requirements of the 1934 Act.
 
Section 4.08  Financial Statements.  The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included or incorporated by reference in the Company SEC Documents (a) have been prepared in a manner consistent with the books and records of the Company and its Subsidiaries, (b) have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Form 10 Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto, (c) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto and (d) fairly present in all material respects, in conformity with GAAP, the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject to normal and recurring year-end audit adjustments in the case of any unaudited interim financial statements). Since January 1, 2010, the Company has not made any change in the accounting practices or policies applied in the preparation of its financial statements, except as required by GAAP, SEC rule or policy or Applicable Law. The books and records of the


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Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP (to the extent applicable).
 
Section 4.09  Disclosure Documents.  The proxy statement of the Company to be filed with the SEC in connection with the Merger (together with the letter to stockholders, notice of meeting and form of proxy and any other soliciting material to be distributed to stockholders in connection with the Merger (including any amendments or supplements) and any schedules required to be filed with the SEC in connection therewith, the “Company Proxy Statement”) and any amendments or supplements thereto will, when filed, comply in all material respects with the applicable requirements of the 1934 Act. At the time the Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company, and at the time such stockholders vote on adoption of this Agreement and at the Effective Time, the Company Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 4.09 will not apply to statements or omissions included in the Company Proxy Statement based upon information furnished to the Company by Parent or Merger Subsidiary specifically for use therein.
 
Section 4.10  Absence of Certain Changes.  Since the Company Balance Sheet Date, except as expressly contemplated by this Agreement, the business of the Company and its Subsidiaries has, in all material respects, been conducted in the ordinary course consistent with past practices, and there has not been (i) any Material Adverse Effect on the Company and its Subsidiaries, (ii) any material loss, damage, destruction or other casualty affecting any of the material properties or assets of the Company or any of its Subsidiaries, whether or not covered by insurance or (iii) any action taken by the Company or any of its Subsidiaries that, if taken during the period from the date of this Agreement through the Effective Time without Parent’s consent, would constitute a material breach of Section 6.01.
 
Section 4.11  No Undisclosed Material Liabilities.  Except as set forth in Section 4.11 of the Company Disclosure Schedule, there are no liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, known or unknown, whether due or to become due of the Company or any of its Subsidiaries whether or not required under GAAP to be set forth on a consolidated balance sheet other than (i) liabilities disclosed and provided for in the Company Balance Sheet or in the notes thereto, (ii) liabilities incurred since the Company Balance Sheet Date in the ordinary course of business or in connection with the negotiation, execution, delivery or performance of this Agreement or consummation of the transactions contemplated hereby, and (iii) liabilities or obligations that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
 
Section 4.12  Litigation.  Except as set forth on Section 4.12 of the Company Disclosure Schedule, as of the date of this Agreement, there is no claim, action, suit, arbitration, investigation or proceeding (each, an “Action”) pending against, or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, any of their respective properties or assets, or any present or former officer or director of the Company or any of its Subsidiaries in such individual’s capacity as such or any employee of the Company or any of its Subsidiaries in such individual’s capacity as such for which the Company is obligated to indemnify such employee, before (or, in the case of threatened Actions, would be before) any arbitrator or Governmental Authority, that (a) involves an amount in controversy in excess of $250,000, (b) seeks material injunctive or other non-monetary relief or (c) individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the Company, nor is there any judgment, decree, injunction, rule or order of any arbitrator or Governmental Authority outstanding against, or, to the knowledge of the Company, investigation by any Governmental Authority (each, an “Order”) involving, the Company or any of its Subsidiaries, any of their respective properties or assets, or any present or former officer, director or employee of the Company or any of its Subsidiaries in such individual’s capacity as such, that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. As of the date of this Agreement, there is no Action pending or, to the knowledge of the Company, threatened seeking to prevent, hinder, modify, delay or challenge the transactions contemplated by this Agreement.


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Section 4.13  Compliance with Applicable Laws.  Except as set forth on Section 4.13 of the Company Disclosure Schedule, the Company and each of its Subsidiaries is and, at all times since June 29, 2008 has been, in compliance with Applicable Laws except for failures to comply or violations that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. The Company and its Subsidiaries hold all material governmental licenses, authorizations, permits, consents, approvals, variances, exemptions and orders necessary for the operation of the businesses of the Company and its Subsidiaries, taken as a whole (the “Company Permits”). The Company and each of its Subsidiaries is in compliance with the terms of the Company Permits, except for failures to comply or violations that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, and there has occurred no violation or breach of, default (with or without notice or lapse of time, or both) under or event giving to others any right of revocation, non-renewal, adverse modification or cancellation of, with or without notice or lapse of time or both, any such Company Permit, except for violations, breaches, defaults or events that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. The consummation of the transactions contemplated hereby will not result in any such revocation, non-renewal, adverse modification or cancellation that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
 
Section 4.14  Material Contracts.  Each (a) “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC) to which the Company or any of its Subsidiaries is a party or by which they are bound as of the date of this Agreement, (b) each Contract with a Significant Customer or Significant Supplier, (c) any Contract with respect to the formation, creation, operation, management or control of a joint venture, partnership, limited liability or other similar agreement or arrangement, (d) any Contract involving the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets or capital stock or other equity interests for aggregate consideration (in one or a series of transactions) under such Contract of $500,000 or more (other than acquisitions or dispositions of inventory in the ordinary course of business consistent with past practice), (e) any Contract that limits the ability of the Company or any of its Subsidiaries to compete in any line of business or with any Person or in any geographic area, or that restricts the right of the Company and its Subsidiaries to sell to or purchase from any Person or to hire any Person, or that grants the other party or any third Person “most favored nation” status and (f) any Contract that by its terms calls for aggregate payment or receipt by the Company and its Subsidiaries under such Contract of more than $500,000 over the remaining term of such Contract (other than purchase orders with customers and suppliers entered into in the ordinary course of business consistent with past practice) (each such Contract described in clauses (a) through (f), a “Company Material Contract”) is set forth on Section 4.14 of the Company Disclosure Schedule and is valid and binding on the Company or one of its Subsidiaries, as applicable, and to the knowledge of the Company, each other party thereto and in full force and effect and enforceable in accordance with its terms (except those which are cancelled, rescinded or terminated after the date of this Agreement in accordance with their terms and subject to applicable bankruptcy, insolvency, fraudulent transfers, reorganization, moratorium and other laws, affecting creditors’ rights generally and general principles of equity ), except where the failure to be valid, binding and in full force and effect has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, and no written notice to terminate, in whole or part, any of the same has been served. The Company and each of its Subsidiaries, and, to the knowledge of the Company, each other party thereto, has performed all obligations required to be performed by it under each Company Material Contract, except where failure to perform such obligations have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. There is no default under any Company Material Contract by the Company or any of its Subsidiaries or, to the knowledge of the Company, any other party thereto, except for such defaults that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. No event or condition has occurred that constitutes, or, after notice or lapse of time or both, would constitute, a breach or default on the part of the Company or any of its Subsidiaries or, to the knowledge of the Company, any other party thereto under any such Company Material Contract, nor has the Company or any of its Subsidiaries received any written, or, to the knowledge of the Company, oral notice of any such breach, default, event or


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condition, except for such breaches or defaults that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. To the knowledge of the Company, the Company has made available to Parent true and complete copies of all Company Material Contracts, including any amendments thereto (other than purchase orders with customers and suppliers entered into in the ordinary course of business consistent with past practice).
 
Section 4.15  Taxes.
 
(a) Except as set forth on Section 4.15(a) of the Company Disclosure Schedule, all material Tax Returns required by Applicable Law to be filed with any Taxing Authority by, or on behalf of, the Company or any of its Subsidiaries have been filed on a timely basis in accordance with all Applicable Law, and all such Tax Returns are true and complete in all material respects.
 
(b) The Company and each of its Subsidiaries has paid (or caused to be paid) or has withheld and remitted to the appropriate Taxing Authority all material Taxes due and payable or where payment is not yet due, has established in accordance with GAAP an adequate accrual on the financial statements of the Company and its Subsidiaries included in the Company SEC Documents for all material Taxes through the date thereof. Except as set forth on Section 4.15(b) of the Company Disclosure Schedule, the Company and its Subsidiaries have no present or contingent liability for any material Taxes, other than as reflected as liabilities for Taxes on the most recent financial statements, contained in the Company SEC Documents, incurred in the ordinary course of business since the date of such financial statements in amounts consistent with prior years (adjusted solely for changes in ordinary course business operations).
 
(c) Except as set forth on Section 4.15(c) of the Company Disclosure Schedule, there is no claim, audit, action, suit, proceeding or investigation now pending or, to the knowledge of the Company, threatened against or with respect to the Company or its Subsidiaries in respect of any material Tax. None of the Company nor any of its Subsidiaries has received written notice since January 1, 2005, from a taxing authority in any jurisdiction in which the Company or any Subsidiary has not filed a Tax Return for any period that the Company or such Subsidiary is required to file a Tax Return in such jurisdiction.
 
(d) Neither the Company nor any of its Subsidiaries has, or has ever had, a permanent establishment in any country which would subject the Company or its Subsidiaries to material Tax in such country, other than the country in which it is organized, or has engaged in a trade or business in any country other than the country in which it is organized that subjected it to material Tax in such country.
 
(e) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending on or after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date (including pursuant to Section 481(a) of the Code or any similar provision of Law), (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date, (iii) installment sale or open transaction disposition made on or prior to the Closing Date, (iv) except as disclosed on the financial statements of the Company and its Subsidiaries included in the Company SEC Documents or incurred in the ordinary course of business since the date of the last filed Company SEC Documents, prepaid amount received on or prior to the Closing Date, or (v) elections made under Section 108(i) of the Code on or prior to the Closing Date.
 
(f) No Liens for Taxes exist with respect to any assets or properties of the Company or any of its Subsidiaries, except for Permitted Liens.
 
(g) Neither the Company nor any of its Subsidiaries has participated in any “listed transaction” as defined in Treas. Reg. § 1.6011-4(b)(2).


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(h) To the knowledge of the Company, the Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.
 
(i) Neither the Company nor any of its Subsidiaries has granted (or is subject to) any waiver or extension that is currently in effect, of the statute of limitations for the assessment or payment of any material Tax.
 
(j) During the five-year period ending on the date of this Agreement, neither the Company nor any of its Subsidiaries was a distributing corporation or a controlled corporation in a transaction intended to be governed by Section 355 of the Code.
 
(k) Except as set forth on Section 4.15(k) of the Company Disclosure Schedule, (i) neither the Company nor any of its Subsidiaries is liable for a material amount of Taxes of any person (other than the Company and its Subsidiaries) as a result of (A) being a transferee or successor of such person, (B) being a member of an affiliated, consolidated, combined or unitary group that includes such person as a member, or (C) contract, agreement, assumption or operation of law, (ii) neither the Company nor any Subsidiary the stock of which has been acquired by the Company since January 1, 2003, has been a member of any affiliated, consolidated, combined, or unitary group for any Tax purposes other than a group in which the Company is the common parent or (iii) neither the Company nor any Subsidiary is a party to a Tax sharing, Tax allocation, or Tax indemnity agreement. For purposes of (i)(C) and (iii) of this Section 4.15(k), (I) agreements with customers, vendors, lessors or the like entered into in the ordinary course of business, (II) employment agreements listed in Section 4.15(k) of the Company Disclosure Schedule, credit agreements or other commercial agreements, and (III) agreements solely among the Company or any of its Subsidiaries shall be excluded.
 
(l) The Company and its Subsidiaries have (i) filed or caused to be filed with the appropriate Governmental Authority all unclaimed property reports required to be filed and have remitted to the appropriate Governmental Authority all unclaimed property required to be remitted, or (ii) delivered or paid all unclaimed property to its original or proper recipient.
 
(m) “Taxes” means (A) all taxes, charges, fees, levies, or other like assessments, including without limitation, all federal, possession, state, city, county and non-U.S. (or governmental unit, agency, or political subdivision of any of the foregoing) income, profits, employment (including Social Security, unemployment insurance and employee income Tax withholding), franchise, gross receipts, sales, use, transfer, stamp, occupation, estimated, property, capital, severance, premium, windfall profits, customs, duties, ad valorem, value added and excise taxes, PBGC premiums, and any other Governmental Authority (a “Taxing Authority”) charges of the same or similar nature; including any interest, penalty, or addition thereto, whether disputed or not, and (B) liability for the payment of any amounts of the type described in clause (A) as a result of being a member of an affiliated, consolidated, combined or unitary group. Any one of the foregoing shall be referred to sometimes as a “Tax”.
 
(n) “Tax Return” means any report, return, document, declaration or other information or similar filing supplied or required to be supplied to any Taxing Authority with respect to Taxes, including information returns, amended returns, refund claims, any documents with respect to or accompanying payments of estimated Taxes, or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.
 
Section 4.16  Employees and Employee Benefit Plans.
 
(a) Section 4.16 of the Company Disclosure Schedule contains a correct and complete list identifying each “employee benefit plan,” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), each employment, severance or similar Contract with the Company’s executive officers, directors, employees, or independent contractors, and each other plan, policy, agreement or arrangement (written or oral) providing for compensation, bonuses, profit-sharing, stock option or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) or other form of benefits which is


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maintained, administered or contributed to by the Company or any ERISA Affiliate of the Company and covers any current or former executive officer, director, employee or independent contractor of the Company or any of its Subsidiaries, or with respect to which the Company or any of its Subsidiaries has any liability. Copies of such plans (and, if applicable, related trust or funding agreements or insurance policies) and all amendments thereto and summary plan descriptions and written interpretations thereof have been furnished to Parent together with the two most recent annual reports (Form 5500 including, if applicable, Schedule B thereto) and tax returns (Form 990) prepared in connection with any such plan or trust. Such plans are referred to collectively herein as the “Employee Plans.”
 
(b) Neither the Company nor any ERISA Affiliate of the Company nor any predecessor thereof sponsors, maintains or contributes to, or has within six years prior to the date hereof sponsored, maintained or contributed to, any Employee Plan subject to Title IV of ERISA, Section 302 of ERISA, or Sections 412 or 4971 of the Code, or a Multiemployer Plan.
 
(c) Each Employee Plan which is intended to be qualified under Section 401(a) of the Code utilizes a volume submitter pre-approved plan for which the volume submitter sponsor has received a favorable opinion letter that the volume submitter document is so qualified. Each Employee Plan has been maintained, operated and administered in substantial compliance with its terms, the requirements prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code, and the terms of any collective bargaining agreement which are applicable to such Employee Plan. No events have occurred with respect to any Employee Plan that could reasonably be expected to result in payment or assessment by or against the Company of any excise taxes under Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.
 
(d) Except as set forth in Section 4.16(d) of the Company Disclosure Schedule, with respect to each current or former employee or independent contractor of the Company or any of its Subsidiaries, the consummation of the transactions contemplated by this Agreement will not, either alone or together with any other event: (i) entitle any such person to severance pay, bonus amounts, retirement benefits, job security benefits or similar benefits, (ii) trigger or accelerate the time of payment or funding (through a grantor trust or otherwise) of any compensation or benefits payable to any such person, (iii) accelerate the vesting of any compensation or benefits of any such person (including any stock options or other equity-based awards, any incentive compensation or any deferred compensation entitlement) or (iv) trigger any other material obligation to any such person. Except as set forth in Section 4.16(d) of the Company Disclosure Schedule, there is no Contract or plan (written or otherwise) covering any employee or former employee of the Company or any of its Subsidiaries that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to the terms of Section 280G or 162(m) of the Code. Section 4.16(d) of the Company Disclosure Schedule lists (i) all the agreements, arrangements and other instruments which give rise to an obligation to make or set aside amounts payable to or on behalf of the officers of the Company and its Subsidiaries as a result of the transactions contemplated by this Agreement (either alone or in connection with any subsequent employment termination, whether by the Company or the officer), true and complete copies of which have been provided to Parent prior to the date of this Agreement and (ii) the maximum aggregate amounts so payable to each such individual as a result of the transactions contemplated by this Agreement and/or any subsequent employment termination (whether by the Company or the officer).
 
(e) Except as set forth on Section 4.16(e) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has any liability in respect of post-retirement health, medical or life insurance benefits for retired, former or current employees of the Company or its Subsidiaries except as required to avoid excise tax under Section 4980B of the Code.
 
(f) Except as set forth on Section 4.16(f) of the Company Disclosure Schedule, there has been no amendment to, written interpretation or announcement (whether or not written) by the Company or any of its Affiliates relating to, or change in employee participation or coverage under, an Employee Plan which would materially increase the annual expense of maintaining such Employee Plan above the level of the annual expense incurred in respect thereof for the fiscal year ended June 27, 2010. No condition exists that would


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prevent the Company from amending or terminating any Employee Plan without liability, other than the obligation for ordinary benefits accrued prior to the termination of such plan.
 
(g) There are no Actions pending or, to the knowledge of the Company, threatened on behalf of or against any Employee Plan, the assets of any trust under any Employee Plan, or the plan sponsor, plan administrator or any fiduciary of any Employee Plan that could reasonably be expected to result in a Material Adverse Effect on the Company. No event has occurred and there currently exists no condition or set of circumstances in connection with which the Company or any of its Subsidiaries could be subject to any liability (other than routine claims for benefits) under the terms of any Employee Plan, ERISA, the Code or any other applicable Law that could reasonably be expected to result in a Material Adverse Effect on the Company.
 
(h) No fiduciary or party in interest of any Employee Plan has participated in, engaged in or been a party to any transaction that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA, respectively, and that could reasonably be expected to result in any material liability to the Company. With respect to any Employee Plan, (i) neither the Company nor any of its ERISA Affiliates has had asserted against it any claim for Taxes under Chapter 43 of Subtitle D of the Code and Section 5000 of the Code, or for penalties under ERISA Section 502(c), 502(i) or 502 (l), nor, to the knowledge of the Company, is there a basis for any such claim that could reasonably be expected to result in any material liability to the Company, and (ii) no officer, director or employee of the Company or any Subsidiary has committed a breach of any fiduciary responsibility or obligation imposed by Title I of ERISA that could reasonably be expected to result in any material liability to the Company.
 
(i) Except as set forth in Section 4.16(i) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has been a party to or subject to, or is currently negotiating in connection with entering into, any collective bargaining agreement or other labor agreement with any union or labor organization, and to the knowledge of the Company, there has not been any activity or proceeding of any labor organization or employee group to organize any such employees. In addition, (i) there are no unfair labor practice charges or complaints against Company or any of its Subsidiaries pending before the National Labor Relations Board; (ii) there are no labor strikes, slowdowns or stoppages actually pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries; (iii) there are no representation claims or petitions pending before the National Labor Relations Board with respect to the employees of the Company or its Subsidiaries; (iv) there are no grievance or pending arbitration proceedings against the Company or any of its Subsidiaries that arose out of or under any collection bargaining agreement and (v) there are no discrimination charges or complaints pending before the Equal Employment Opportunity Commission or any other Governmental Authority or arbitrator.
 
(j) The Company and its Subsidiaries are and during the past four years have been in compliance in all material respects with all Applicable Laws relating to labor and employment, including, but not limited to, those relating to wages, hours, collective bargaining, unemployment compensation, worker’s compensation, occupational safety and health, discrimination, immigration, employee classification, information privacy and security, payment and withholding of taxes and continuation coverage with respect to group health plans.
 
(k) To the knowledge of the Company, no current employee or officer of the Company or any of its Subsidiaries intends, or is expected, to terminate his employment relationship with such entity following the consummation of the transactions contemplated hereby.
 
(l) Except as set forth in Section 4.16(l) of the Company Disclosure Schedule, there is no Action pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries relating to any labor or employment matter.
 
(m) Schedule 4.16(m) of the Company Disclosure Schedule contains a complete and accurate list of all employees of the Company or its Subsidiaries as of the date hereof whose base salary exceeds $100,000 (the “Company Employees”) showing for each Company Employee, the name, job title, location, date of hire, whether each individual is treated as exempt or non-exempt, annual salary or wages as of the date hereof and aggregate annual compensation (including bonus information) for the year ended December 31, 2010.


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(n) Since the Balance Sheet Date, neither the Company nor any of its Subsidiaries has effectuated (i) a “plant closing” (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company or any of its Subsidiaries; (ii) a “mass layoff” (as defined in the WARN Act); or (iii) such other transaction, layoff, reduction in force or employment terminations sufficient in number to trigger application of any similar state or local law.
 
Section 4.17  Intellectual Property.
 
(a) Section 4.17(a)(i) of the Company Disclosure Schedule contains a list of all United States or foreign: patents, registered Marks, registered copyrights and applications for any of the foregoing. Section 4.17(a)(ii) of the Company Disclosure Schedule lists all items of material software that are covered by or embodiments of copyrights that are included in the Company Owned Intellectual Property (“Company Software”). Except as has not had and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Company: (i) with respect to all Company Owned Intellectual Property (other than Company Owned Intellectual Property specified on Section 4.17(a)(i) of the Company Disclosure Schedule as exclusively licensed to the Company or its Subsidiaries), the Company or its Subsidiaries, as the case may be, owns such Company Owned Intellectual Property (in each case, free and clear of any Liens except Permitted Liens) except as identified in Section 4.06(b) of the Company Disclosure Schedule, (ii) to the knowledge of the Company, the Company possesses sufficient enforceable legal rights to Company Owned Intellectual Property as is necessary for the operation of the Company’s business as now conducted, (iii) to the knowledge of the Company, neither the Company nor its Subsidiaries is, as of the date of this Agreement, infringing, misappropriating, or otherwise violating, or since June 28, 2009 has infringed, misappropriated or otherwise violated, the Intellectual Property rights of any Person, and, to the knowledge of the Company, no Person is, as of the date of this Agreement, infringing, misappropriating, or otherwise violating, or since June 28, 2009 has infringed, misappropriated or otherwise violated, any Company Owned Intellectual Property; (iv) since June 28, 2009, the Company has not received any written communications alleging that the Company has infringed or, by conducting the Company’s business, would infringe any third party Intellectual Property, nor, to the Company’s knowledge, is there a reasonable basis for any such allegation; (v) the consummation of the transactions contemplated by this Agreement will not alter, encumber, impair or extinguish any Company Owned Intellectual Property right or impair the right of Surviving Corporation to use, sell, license, dispose of or otherwise commercialize or exploit any Company Owned Intellectual Property; (vi) the Company and its Subsidiaries have exercised reasonable care to maintain the confidentiality of all Trade Secrets that are Company Owned Intellectual Property or which the Company or any Subsidiary thereof is obligated to maintain in confidence; (vii) to the knowledge of the Company, no material Trade Secrets that are Company Owned Intellectual Property or which the Company or any Subsidiary thereof is obligated to maintain in confidence have been disclosed other than to employees, representatives and agents of the Company or any of its Subsidiaries all of whom are bound by written confidentiality agreements, or to third parties under a written agreement imposing obligations of confidentiality that the Company reasonably believes is sufficient to maintain the trade secret status of such Trade Secrets; (viii) the IT Assets shall operate and perform in all material respects in a manner that permits the Company and its Subsidiaries to conduct their respective businesses as currently conducted and, to the knowledge of the Company, no person has gained unauthorized access to the IT Assets; and (ix) the Company and its Subsidiaries have implemented reasonable backup and disaster recovery technology and practices consistent with industry practices and with the description thereof set forth on Section 4.17(a)(iv) of the Company Disclosure Schedule.
 
(b) Section 4.17(b)(i) of the Company Disclosure Schedule lists all Contracts pursuant to which the Company or any Subsidiary thereof has the right under any Intellectual Property owned or controlled by any third party to use, duplicate, manufacture, sell, distribute or otherwise commercialize or exploit in any way (the “Inbound Licenses”) (except such Schedule does not list standard end user license agreements for off-the-shelf desktop software not in excess of $1,000 per seat; although excluded from such Schedule, such agreements are included in the definition of Inbound Licenses). Section 4.17(b)(ii) of the Company Disclosure Schedule lists all Contracts to which the Company or any Subsidiary thereof is a party and pursuant to which any Person is authorized under any of the Company Owned Intellectual Property to duplicate, manufacture, sell, distribute or otherwise commercialize or exploit that include any grant of exclusive rights or that involve


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payments in excess of $100,000 (the “Outbound Licenses” and, collectively with the Inbound Licenses, the “Intellectual Property Agreements”). With respect to the Intellectual Property Agreements, except as had not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company: (i) all are valid and binding on the Company or one of its Subsidiaries, as applicable, and to the knowledge of the Company, each other party thereto and in full force and effect in accordance with their terms (except those which are cancelled, rescinded or terminated after the date of this Agreement in accordance with their terms and subject to applicable bankruptcy, insolvency, fraudulent transfers, reorganization, moratorium and other laws, affecting creditors’ rights generally and general principles of equity ), and no written notice to terminate, in whole or part, any of the same has been served; and (ii) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any other party thereto is in default or breach thereunder. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, the consummation of the transactions contemplated by this Agreement will not alter, encumber, modify, impair or extinguish any right or remedy of Surviving Corporation or any of its Subsidiaries under any Intellectual Property Agreement or give rise to any right in the other party thereto to terminate any Intellectual Property Agreement or to change material economic terms of any Intellectual Property Agreement.
 
(c) Neither the Company nor any Subsidiary thereof has received, since June 28, 2009 or, to the Company’s knowledge, before then, any written claim or notice that alleges or asserts any fact or circumstance that would, if true, constitute a breach of this Section 4.17, including any allegation or assertion (i) that any Registered IP is invalid or unenforceable, (ii) challenging the Company’s or any of its Subsidiaries’ sole, unencumbered ownership of any Registered IP, (iii) that the Company, any Subsidiary thereof or any other party has breached any Intellectual Property Agreement, except such claim or notice that has not had or would not reasonably be expected to have a Material Adverse Effect on the Company.
 
(d) There are no claims or actions pending or, to Company’s knowledge, threatened that relate to or involve any Company Owned Intellectual Property (other than Company Owned Intellectual Property specified on Section 4.17(a)(i) of the Company Disclosure Schedule as exclusively licensed to the Company or its Subsidiaries), including any action before any court or the International Trade Commission and any interference, reissue, reexamination, opposition or cancellation proceeding, except such claims that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company. No Company Owned Intellectual Property (other than Company Owned Intellectual Property specified on Section 4.17(a)(i) of the Company Disclosure Schedule as exclusively licensed to the Company or its Subsidiaries) is subject to any outstanding order, judgment, injunction, decree, stipulation or agreement restricting the use or other practice, commercialization or exploitation thereof by the Company or any of its Subsidiaries, except for such orders, judgments, injunctions, decrees, stipulations or agreements that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company. To the knowledge of the Company, no Company Owned Intellectual Property specified on Section 4.17(a)(i) of the Company Disclosure Schedule as exclusively licensed to the Company or its Subsidiaries is subject to any outstanding order, judgment, injunction, or decree restricting the use or other practice, commercialization or exploitation thereof by the Company or any of its Subsidiaries, except for such orders, judgments, injunctions or decrees that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company.
 
Section 4.18  Properties.  (a) With respect to the real property owned by the Company or its Subsidiaries and the Improvements (as defined below) thereon (collectively, “Owned Real Property”), the Company or one of its Subsidiaries, as applicable, has good and marketable title to the Owned Real Property, free and clear of any Lien (other than Permitted Liens); (b) with respect to the real property leased, subleased or licensed to the Company or its Subsidiaries and the Improvements (as defined below) thereon (collectively, “Leased Real Property”), the Company or one of its Subsidiaries, as applicable, has a good and valid leasehold interest, free and clear of any Lien (other than Permitted Liens) in all such Leased Real Property and the lease, sublease or license with respect to such Leased Real Property is valid, and binding on the Company or its Subsidiaries, as applicable, and to the knowledge of the Company, each other party thereto, and in full force and effect, and none of the Company or any of its Subsidiaries is in breach of or default under such lease, sublease or license, and no event has occurred which, with notice, lapse of time or both,


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would constitute a breach or default by any of the Company or its Subsidiaries or permit termination, modification or acceleration by any third party thereunder; (c) with respect to tangible assets, the Company or one of its Subsidiaries, as applicable, has a good and valid fee title or leasehold interest, free and clear of any Lien (other than Permitted Liens) in all such tangible assets that are necessary for the Company and its Subsidiaries to conduct their respective businesses as currently conducted, except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; (d) all buildings, structures, fixtures and improvements included within the Owned Real Property and Leased Real Property (the “Improvements”) are in good repair and operating condition, subject only to ordinary wear and tear, and are adequate and suitable for the purposes for which they are presently being used or held for use, and to the knowledge of the Company, there are no facts or conditions affecting any of the Improvements that, in the aggregate, would substantially interfere with the current use, occupancy or operation thereof; and (e) the Company has not received written notice with respect to the Owned Real Property or the Leased Real Property from any Governmental Entity pertaining to any violation of any law, ordinance, rule or regulation, which would have or would reasonably be expected to have a Material Adverse Effect on the Company. Section 4.18 of the Company Disclosure Schedule contains a true and complete list of all Owned Real Property or Leased Real Property. The applicable Tenant with respect to any Leased Real Property enjoys peaceful and undisturbed possession of such Leased Real Property, except for any such failure to do so that, individually or in the aggregate, would not have or reasonably be expected to have a Material Adverse Effect.
 
Section 4.19  Environmental Matters.  (i) Since June 28, 2009, no notice, notification, demand, request for information, citation, summons or order has been received, no complaint has been filed, no penalty has been assessed, and as of the date of this Agreement, no investigation, action, claim, suit, proceeding or review (or any basis therefor) is pending or, to the knowledge of the Company, is threatened by any Governmental Authority or other Person relating to the Company or any Subsidiary and relating to or arising out of any Environmental Law, except as has not had or would not reasonably be expected to have a Material Adverse Effect on the Company; (ii) the Company and its Subsidiaries are and, since July 2, 2006 have been in compliance with all Environmental Laws and have obtained all Environmental Permits necessary for their operations as currently conducted, except to the extent non-compliance would not have or be reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; (iii) there are no currently accrued liabilities of the Company or any of its Subsidiaries arising under or relating to any violation of any Environmental Law or any Hazardous Substance; (iv) there have been no releases of any Hazardous Substances that could be reasonably likely to form the basis of a claim against the Company or any of its Subsidiaries, except to the extent such releases would not have or be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; (v) neither the Company nor any of its Subsidiaries is currently subject or party to any agreement, order, judgment or decree by or with any Governmental Authority, arbitrator or third party pursuant to which the Company or any of its Subsidiaries has assumed, incurred or suffered any liability under any Environmental Law; (vi) neither the Company nor any of it Subsidiaries has manufactured for sale, marketed or distributed any product incorporating asbestos or asbestos-containing materials; (vii) neither the Company nor any of it Subsidiaries has received notice of any potential liability under any Environmental Law for the transport and disposal of any Hazardous Substance to any site; (viii) to the Knowledge of the Company, the transactions contemplated by this Agreement will not require the Company or any of its Subsidiaries to transfer or amend any Environmental Permit or require any submissions to a Governmental Authority; and (ix) to the knowledge of the Company, complete and accurate copies of all final environmental site assessment reports (including any Phase I or Phase II reports), investigation, remediation or compliance studies or audits which are in the possession, custody or control of either the Company or its Subsidiaries and relate to the environmental conditions at any property currently or formerly owned or leased by either the Company or its Subsidiaries have been provided to Parent.
 
Section 4.20  Antitakeover Statutes.  Assuming the accuracy of Section 5.09, the Company has taken all action necessary to exempt or exclude the Merger, this Agreement and the transactions contemplated hereby from any takeover statute, and, accordingly, none of the restrictions in such Sections or any other antitakeover or similar statute or regulation applies to any such transactions. The Company has taken all action necessary to render the Company Rights inapplicable to the Merger, this Agreement and the transactions contemplated hereby.


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Section 4.21  Insurance.  Section 4.21 of the Company Disclosure Schedule sets forth, as of the date hereof, a true and complete list of all material insurance policies issued in favor of the Company or any of its Subsidiaries, or pursuant to which the Company or any of its Subsidiaries is a named insured or otherwise a beneficiary, as well as any historic incurrence-based policies still in force. With respect to each such insurance policy, (a) such policy is in full force and effect and all premiums due thereon have been paid, (b) neither the Company nor any of its Subsidiaries is in breach or default, and has not taken any action or failed to take any action which (with or without notice or lapse of time, or both) would constitute such a breach or default, or would permit termination or modification of, any such policy, except for such actions or failure to take such actions that have not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and (c) to the knowledge of the Company, no insurer issuing any such policy has been declared insolvent or placed in receivership, conservatorship or liquidation. No written notice of cancellation or termination has been received with respect to any such policy and at the Closing, to the knowledge of the Company after reasonable inquiry, the consummation of the transactions contemplated hereby will not result in cancellation or termination of such policies.
 
Section 4.22  Related Party Transactions.  Since June 28, 2009 through the date of this Agreement, there have been no transactions, agreements, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and the Affiliates of the Company, on the other hand (other than the Company’s Subsidiaries) that would be required to be disclosed under Item 404 of Regulation S K under the 1934 Act and that have not been so disclosed in the Company SEC Documents.
 
Section 4.23  Certain Payments.  Neither the Company nor any of its Subsidiaries (nor, to the knowledge of the Company, any of their respective directors, executives, representatives, agents or employees) (a) has used or is using any corporate funds for any unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) has used or is using any corporate funds for any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees, (c) has violated or is violating any provision of the Foreign Corrupt Practices Act of 1977, (d) has established or maintained, or is maintaining, any unlawful fund of corporate monies or other properties or (e) has made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.
 
Section 4.24  Customers and Suppliers.
 
(a) Section 4.24(a) of the Company Disclosure Schedule lists the ten largest customers of the Company measured in terms of sales volume since June 27, 2010 (each a “Significant Customer”). Since June 27, 2010, the Company has not received written, or to the knowledge of the Company, oral notice from a Significant Customer indicating its intention to terminate or materially reduce its future long term business relationship with the Company from recent historical levels.
 
(b) Section 4.24(b) of the Company Disclosure Schedule lists the ten largest suppliers of the Company since June 27, 2010 (each a “Significant Supplier”). Since June 27, 2010, the Company has not received written or, to the knowledge of the Company, oral notice from a Significant Supplier indicating its intention to terminate or materially reduce its future long term business relationship with the Company from recent historical levels.
 
Section 4.25  Regulatory Matters.
 
(a) With respect to each Contract between the Company or any Subsidiary of the Company, on the one hand, and any Governmental Authority (excluding any non-governmental entity), on the other hand, for which performance is ongoing as of the date hereof, and each outstanding bid, quotation or proposal by the Company or any of its Subsidiaries (each, a “Bid”) that if accepted or awarded could lead to a Contract between the Company or a Subsidiary of the Company, on the one hand, and any Governmental Authority (excluding any non-governmental entity), on the other hand (each such Contract or Bid, a “Company Government Contract”) and each Contract between the Company or any of its Subsidiaries, on the one hand, and any prime contractor or upper-tier subcontractor, on the other hand, that, to the knowledge of the Company, constitutes a subcontract under a Contract between such Person and any Governmental Authority (excluding any non-governmental entity) for which performance is ongoing as of the date hereof, and each outstanding


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Bid that if accepted or awarded could lead to a Contract between the Company or any of its Subsidiaries, on the one hand, and a prime contractor or upper-tier subcontractor, on the other hand, that, to the knowledge of the Company, would constitute, a subcontract under a Contract between such Person and any Governmental Authority (excluding any non-governmental entity) (each such Contract or Bid, a “Company Government Subcontract”):
 
(i) to the knowledge of the Company, each such Company Government Contract or Company Government Subcontract was legally awarded, is binding on the parties thereto, and is in full force and effect, except where the failure to be in full force and effect has not had or would not reasonably be expected to have a Material Adverse Effect on the Company; provided that for purposes of this clause (i), the terms Company Government Contract and Company Government Subcontract shall not include any Bids;
 
(ii) to the knowledge of the Company, no reasonable basis exists to give rise to a material claim by a Governmental Authority (excluding any non-governmental entity) for fraud (as such concept is defined under the state or federal Laws of the United States) in connection with the award or performance of any such Company Government Contract or Company Government Subcontract, except such claims that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company;
 
(iii) since June 29, 2008, neither any Governmental Authority (excluding any non-governmental entity) nor any prime contractor, subcontractor or other Person or entity has notified the Company, in writing, that the Company has, or may have, breached or violated in any material respect any Applicable Law, certification or representation pertaining to any such Company Government Contract or Company Government Subcontract, except for such breaches or violations that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company;
 
(iv) to the knowledge of the Company, since January 1, 2008, all facts set forth in or acknowledged by any representations, claims or certifications submitted by or on behalf of the Company or any of its Subsidiaries in connection with any such Company Government Contract or Company Government Subcontract were current, accurate and complete in all respects as of their effective date, except where failure to be current, accurate and complete has not had and would not reasonably be expected to have a Material Adverse Effect on the Company;
 
(v) the Company and its Subsidiaries have not received any written notice of termination, “show cause” or cure notice pertaining to any such Company Government Contract or Company Government Subcontract, except for such notices that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company; provided that this clause (v) shall not apply to any notice received more than three years prior to the date hereof, which notice is related to a Company Government Contract or Company Government Subcontract that is no longer ongoing as of the date hereof;
 
(vi) with respect to any ongoing Company Government Contract or Company Government Subcontract or completed Company Government Contract or Company Government Subcontract under which final payment was received by the Company within three years prior to the date hereof, the Company and its Subsidiaries do not, to the knowledge of the Company, have credible evidence that a Principal, Employee, Agent, or Subcontractor (as such terms are defined by Federal Acquisition Regulation (FAR) 52.203-13(a)) of the Company or any of its Subsidiaries has committed a violation of Federal criminal Law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code or a violation of the civil False Claims Act and the Company, except for such violations which have not had or would not reasonably be expected to have a Material Adverse Effect on the Company, and its Subsidiaries have not conducted and are not conducting an investigation to determine whether credible evidence exists that a Principal, Employee, Agent, or Subcontractor (as such terms are defined by FAR 52.203-13(a)) of the Company or any of its Subsidiaries has committed a violation of Federal criminal Law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code or a violation of the civil False Claims Act; and


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(vii) with respect to any ongoing Company Government Contract or Company Government Subcontract or completed Company Government Contract or Company Government Subcontract under which final payment was received by the Company or any of its Subsidiaries within three (3) years prior to the date of this Agreement, the Company and its Subsidiaries do not to the knowledge of the Company have credible evidence of any significant overpayment(s) on such Company Government Contract or Company Government Subcontract, other than overpayments resulting from contract financing payment as defined in FAR 32.001, except for such overpayments that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company, and the Company and its Subsidiaries have not conducted and are not conducting an investigation to determine whether credible evidence exists of any significant overpayment(s) on such Company Government Contract or Company Government Subcontract, other than overpayments resulting from contract financing payment as defined in FAR 32.001.
 
(b) The Company and its Subsidiaries are not, nor have any of them ever been, suspended or debarred from doing business with a Governmental Authority (excluding any non-governmental entity) or, to the knowledge of the Company, proposed for suspension or debarment by a Governmental Authority (excluding any non-governmental entity) and, to the knowledge of the Company, has not been the subject of a finding of nonresponsibility or ineligibility for contracting with a Governmental Authority (excluding any non-governmental entity).
 
(c) (i) Neither the Company, its Subsidiaries, nor, to the knowledge of the Company, any of their respective directors or officers or Principals (as such term is defined by FAR 52.209-5(a)(2)) is (or since June 29, 2008 has been) under indictment with respect to any alleged irregularity, misstatement or omission arising under or relating to any Contract or bid with a Governmental Authority (excluding any non-governmental entity) that would reasonably be expected to result in a Material Adverse Effect and (ii) since June 29, 2008, the Company and its Subsidiaries have not entered into any consent order or administrative agreement relating directly or indirectly to any such Contract or bid that has had or would reasonably be expected to result in a Material Adverse Effect.
 
(d) The Company and each of its Subsidiaries are in compliance in all material respects with all statutory and regulatory requirements relating to export controls and trade sanctions under Applicable Laws of the United States, as well as Applicable Laws of each jurisdiction in which the Company or its Subsidiaries are doing business, including, without limitation, the Export Administration Regulations administered by the United States Department of Commerce (including their anti-boycott provisions), the International Traffic in Arms Regulations administered by the United States Department of State, the economic and trade sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury, and the international boycott provisions of the Internal Revenue Code except where such failure to be in compliance has not had and would not reasonably be expected to have a Material Adverse Effect on the Company.
 
(e) The Company and its Subsidiaries have an export control and trade sanctions compliance program designed to assure compliance with applicable government export control and trade sanction statutes, regulations, and other obligations, including obtaining licenses or other authorizations as required for access by foreign nationals to controlled technology.
 
(f) In the past five years, as regards to export controls compliance, the Company has not (i) received written notice from any Governmental Authority of deficiencies in its compliance efforts; (ii) made any voluntary disclosures to any Governmental Authority or other Person of facts that could result in any adverse action being taken by a Governmental Authority against the Company, except for such disclosures that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company; (iii) been notified in writing that it is in violation of any obligation, regulation or license authorization, except for such violations that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company; (iv) been under indictment, or, to the knowledge of the Company, civil or criminal investigation for false claims or other impropriety relating to export activity, except for such indictments, or civil or criminal investigations that have not or would not be reasonably be expected to have a Material Adverse Effect on the Company.


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(g) Neither the Company nor any of its Subsidiaries has undergone or is undergoing any audit inspection or to the knowledge of the Company, any other review regarding export activity that would reasonably be expected to affect adversely its future export activity or otherwise result in government sanctions, except for such audit inspections or other reviews that have not had or would not reasonably be expected to have a Material Adverse Effect on the Company.
 
Section 4.26  Occupational Safety and Health Matters.
 
(a) Since July 2, 2006, the Company is in compliance with, and is not in violation of, or liable under, any applicable Occupational Safety and Health Laws, except as has not had or would not reasonably be expected to have a Material Adverse Effect on the Company, and to the knowledge of the Company, no reason, including the presence of an imminent danger as that term is defined under Occupational Safety and Health Law, exists why the Company would not be capable of continued operation of the business in compliance with applicable Occupational Safety and Health Law without undue expense or burden;
 
(b) Since July 2, 2006, the Company has not received any written notice from any Governmental Authority or any other Person regarding (i) any failure to comply in any material respect with any applicable Occupational Safety and Health Law, or (ii) any obligation to undertake or bear any material cost of any Occupational Safety and Health Liabilities, including, without limitation, any Occupational Safety and Health Liabilities with respect to any of the Facilities, with respect to any Leased Real Property or Owned Real Property at, to, or from which Hazardous Substances have been generated, manufactured, refined, transferred, used or processed, transported, treated, stored, handled, transferred, disposed of, recycled, or received by the Company; and
 
(c) The Company has made available to the Parent copies of any written occupational and safety assessment or audit reports relating to the Company or the Facilities that has been prepared on behalf of the Company since July 2, 2006.
 
Section 4.27  Long Term Incentive Plan.  The Company or its Board of Directors, as applicable, has, prior to the time at which the Company’s Board of Directors approved this Agreement, taken all actions necessary to amend the 2004 LTIP, and has so amended it, to provide that, in respect of the Merger and any antecedent events relating to such Merger, a “Change in Control” as defined under the 2004 LTIP shall be deemed to occur only upon the consummation of the Merger, and not upon any antecedent event relating to the Merger including but not limited to approval, adoption, or recommendation of this Agreement or any other agreement relating to the Merger by the Company’s Board of Directors or stockholders. In addition, the Company or its Board of Directors, as applicable, has, prior to the time at which the Company’s Board of Directors approved this Agreement, taken all actions necessary to approve the employment agreements attached hereto as Exhibits A through F.
 
Section 4.28  Opinion of Financial Advisor.  Stifel, Nicolaus & Company, Incorporated has delivered to the Company’s Board of Directors its written opinion, dated the date hereof, to the effect that, as of the date hereof and based upon and subject to the qualifications, considerations, assumptions and limitations set forth therein, the Merger Consideration to be received by holders of Company Shares in connection with the Merger pursuant to the Merger Agreement is fair to such holders of Company Shares, from a financial point of view, a signed true and complete copy of which opinion will promptly be provided to Parent.
 
Section 4.29  Finders’ Fees.  Except for Stifel, Nicolaus & Company, Incorporated, the terms of whose engagement have been provided to Parent prior to the date of this Agreement, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who is entitled to any fee or commission in connection with the transactions contemplated by this Agreement.
 
Section 4.30  No Other Representations or Warranties.  Except for the representations and warranties contained in this Article 4, the Company expressly disclaims any other representations or warranties of any kind or nature, express or implied, as to liabilities, operations of the facilities, the title, condition, value or quality of the Company. No exhibit to this Agreement, nor any other material or information provided by or communications made by the Company or any of its Affiliates, or by any advisor thereof, whether by use of a


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“data room,” or in any information memorandum or otherwise, or by any broker or investment banker, will cause or create any warranty, express or implied, as to the title, condition, value or quality of the Company.
 
ARTICLE 5
 
REPRESENTATIONS AND WARRANTIES OF PARENT
 
Parent represents and warrants to the Company that:
 
Section 5.01  Corporate Existence and Power.  Each of Parent and Merger Subsidiary is (a) a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and (b) has all corporate powers required to carry on its business as now conducted, except in the case of clause (b) as, individually, or in the aggregate, has not had and would not reasonably be expected to materially delay or impair the ability of Parent or Merger Subsidiary to consummate the transactions contemplated hereby on a timely basis. Since the date of its incorporation, Merger Subsidiary has not engaged in any activities other than in connection with or as contemplated by this Agreement.
 
Section 5.02  Corporate Authorization.  The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby are within the corporate powers of Parent and Merger Subsidiary and have been duly authorized by all necessary corporate action on the part of Parent and Merger Subsidiary. Assuming the due authorization, execution and delivery of this Agreement by the Company, this Agreement constitutes a valid and binding agreement of each of Parent and Merger Subsidiary enforceable against each of Parent and Merger Subsidiary in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).
 
Section 5.03  Governmental Authorization.  The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (a) the Required Governmental Authorizations, (b) compliance with any applicable requirements of the 1933 Act, the 1934 Act, and any other applicable U.S. state or federal securities laws, (c) compliance with any requirements of the Nasdaq Global Market, (d) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware as required by Delaware Law and (e) any actions or filings the absence of which will not, individually or in the aggregate, materially delay or impair the ability of Parent or Merger Subsidiary to consummate the transactions contemplated hereby on a timely basis.
 
Section 5.04  Non-contravention.  The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the articles of incorporation or bylaws of Parent or Merger Subsidiary, (ii) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law, (iii) assuming compliance with the matters referred to in Section 5.03, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, could become a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which Parent or any of its Subsidiaries is entitled under any provision of any agreement or other instrument binding upon Parent or any of its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of the Parent and its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of the Parent or any of its Subsidiaries, except for such contraventions, conflicts and violations referred to in clause (ii) and for such failures to obtain any such consent or other action, defaults, terminations, cancellations, accelerations, changes, losses or Liens referred to in clauses (iii) and (iv) that will not, individually or in the aggregate, materially delay or impair the ability of Parent or Merger Subsidiary to consummate the transactions contemplated hereby on a timely basis.


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Section 5.05  Disclosure Documents.  None of the information provided by Parent for inclusion in the Company Proxy Statement or any amendment or supplement thereto, at the time the Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time the stockholders vote on adoption of this Agreement, will contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, neither Parent nor Merger Subsidiary makes any representation or warranty with respect to statements made by the Company included or incorporated by reference in the Company Proxy Statement, which are based on information not provided by or on behalf of Parent or Merger Subsidiary for the inclusion in the Company Proxy Statement or any amendment