PREM14A 1 g082133_prem14a.htm PREM14A

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 ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☒

Preliminary Proxy Statement

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material Pursuant to §240.14a-12

HOUSTON WIRE & CABLE COMPANY

(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):

☐

No fee required.

☒

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 $0.001 per share, of Houston Wire & Cable Company
	(2)	Aggregate number of securities to which transaction applies:
		17,183,287 shares
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		$5.30 per share
	(4)	Proposed maximum aggregate value of transaction:
		$91,071,421
	(5)	Total fee paid:
		$9,936

☐

Fee paid previously with preliminary materials.

☐

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:

PRELIMINARY PROXY STATEMENT DATED APRIL 21, 2021

[·], 2021

Dear Stockholders:

You are cordially invited to attend a special meeting of stockholders of Houston Wire & Cable Company, a Delaware corporation (the “Company”), which will be held on [·], [·], 2021, at 10:00 a.m., Central Time. Due to the continuing impact of the COVID-19 pandemic on public health, and out of concern for the health and safety of our stockholders, employees and directors, the special meeting will be a virtual meeting of stockholders rather than an in-person meeting. You will be able to attend the special meeting online by visiting [INSERT URL].

At the special meeting, our stockholders will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger that we entered into on March 24, 2021, which we refer to as the “merger agreement,” providing for the acquisition of the Company by Omni Cable, LLC in a transaction that we refer to as the “merger.” If the merger agreement is adopted and the merger is completed, each share of our common stock (other than certain shares specified in the merger agreement) will be converted into the right to receive $5.30 per share in cash, without interest and subject to any required withholding taxes, representing a premium of approximately 36% over the trailing 30-day volume weighted average price of our common stock for the period ended March 24, 2021.

The Company’s board of directors unanimously recommends that our stockholders vote “FOR” the proposal to adopt the merger agreement and “FOR” the other matters to be considered at the special meeting.

The enclosed proxy statement describes the merger agreement, the merger and related matters, and includes a copy of the merger agreement. We urge stockholders to read the entire proxy statement carefully, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. Whether or not you plan to attend the special meeting and regardless of the number of shares you own, your careful consideration of, and vote on, the proposal to adopt the merger agreement is important, and we encourage you to vote promptly. The merger cannot be completed unless a majority of the outstanding shares of our common stock entitled to vote on the adoption of the merger agreement vote in favor of the proposal to adopt the merger agreement. The failure to vote, or to instruct your broker on how to vote, will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

On behalf of the entire board of directors, I want to thank you for your continued support.

	Sincerely,

	James L. Pokluda III
	President and Chief Executive Officer

Neither the United States Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [·], 2021 and is being mailed to Company stockholders on or about [·], 2021.

PRELIMINARY PROXY STATEMENT DATED APRIL 21, 2021

HOUSTON WIRE & CABLE COMPANY

10201 North Loop East

Houston, Texas 77029

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD [·], 2021

To the Stockholders of Houston Wire & Cable Company:

A special meeting of stockholders of Houston Wire & Cable Company (the “Company”) will be held on [·], [·], 2021, at 10:00 a.m., Central Time. Due to the continuing impact of the COVID-19 pandemic on public health, and out of concern for the health and safety of our stockholders, employees and directors, the special meeting will be a virtual meeting of stockholders rather than an in-person meeting. Stockholders will be able to attend the special meeting online, vote their shares electronically, and submit questions during the special meeting by visiting [INSERT URL].

The special meeting of stockholders is being held for the following purposes:

1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of March 24, 2021 (the “merger agreement”), by and among Omni Cable, LLC, a Pennsylvania limited liability company (“OmniCable”), OCDFH Acquisition Sub Inc., a Delaware corporation and wholly owned subsidiary of OmniCable (“Merger Sub”), and the Company;

2. To consider and vote on a proposal to approve, by a non-binding advisory vote, the compensation that may be paid or become payable to the Company’s named executive officers and that is based on, or otherwise relates to, the merger contemplated by the merger agreement; and

3. To consider and vote on a proposal to adjourn the special meeting from time to time to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

Stockholders of record at the close of business on [·], 2021 are entitled to vote at the special meeting or at any postponement or adjournment thereof.

For more information concerning the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement, please review the accompanying proxy statement and the copy of the merger agreement attached as Annex A to the proxy statement.

The board of directors of the Company carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. By a unanimous vote, the board (i) determined that the transactions contemplated by the merger agreement, including the merger, are in the best interests of the Company and its stockholders, (ii) approved and declared advisable the execution, delivery and performance of the merger agreement, and, subject to receiving the Company stockholder approval, the consummation by the Company of the transactions contemplated by the merger agreement, including the merger, (iii) directed that the merger agreement be submitted for adoption by a vote of the stockholders of the Company and (iv) resolved to recommend the adoption of the merger agreement by the stockholders of the Company.

The board unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement, “FOR” the approval, by a non-binding advisory vote, of the compensation that may be paid or become payable to the Company’s named executive officers and that is based on, or otherwise relates to, the merger and “FOR” the proposal to adjourn the special meeting from time to time if necessary or appropriate, including to solicit additional proxies.

To assure that your shares are represented at the special meeting, regardless of whether you plan to attend the meeting, please fill in your vote, sign and mail the enclosed proxy form as soon as possible. We have enclosed a return envelope, which requires no postage if mailed in the United States. Alternatively, you may vote by telephone or through the internet. Instructions regarding each of the methods of voting are provided on the enclosed proxy form. If you are voting by telephone or through the internet, then your voting instructions must be received by 11:59 p.m. Eastern Time on the day before the special meeting. If

your shares are held in “street name” through a bank, broker, trust or other nominee, please instruct your bank, broker, trust or other nominee on how to vote your shares using the voting instructions furnished by your bank, broker, trust or other nominee as soon as possible. Your proxy is being solicited by the board of directors of the Company.

If you have any questions about the merger, the meeting or how to submit your proxy, or if you need additional copies of the proxy statement or the enclosed proxy form or voting instructions, please call our proxy solicitor, [Broadridge], toll-free at ____________or ___________ (call collect).

If you fail to return your proxy, vote by telephone or through the internet, or attend the special meeting and vote online, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

	By order of the Board of Directors.

	Eric W. Davis
	Vice President, Chief Financial Officer,
	Treasurer and Secretary

[·], 2021

TABLE OF CONTENTS

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD [·], 2021	2
SUMMARY	6
The Parties to the Merger	6
The Merger	6
The Special Meeting	7
Stockholders Entitled to Vote; Vote Required for Approval	7
How to Vote	7
Recommendation of the Board Regarding the Merger; Reasons for Recommending the Adoption of the Merger Agreement	7
Opinion of Our Financial Advisor	8
Market Price	8
Treatment of Outstanding Equity Awards	8
Interests of Directors and Executive Officers in the Merger	8
Conditions to the Merger	9
Solicitation of Competing Proposals	9
Change in Board Recommendation	10
Termination of the Merger Agreement	11
Termination Fee	11
Appraisal Rights	11
Material U.S. Federal Income Tax Consequences of the Merger	12
Voting Agreements	12
Where You Can Find More Information	12
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER	13
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	18
THE SPECIAL MEETING	19
Date, Time and Place of the Special Meeting	19
Purpose of the Special Meeting	19
Recommendation of the Board	19
Record Date and Quorum	19
Vote Required for Approval	20
Effect of Abstentions and Broker Non-Votes	20
How to Vote	21
Revocation of Proxies	21
Adjournments and Postponements	22
Solicitation of Proxies	22
Stockholder List	22
Questions and Additional Information	22
PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT	23
PROPOSAL 2: NON-BINDING ADVISORY MERGER-RELATED COMPENSATION PROPOSAL	24
PROPOSAL 3: AUTHORITY TO ADJOURN THE SPECIAL MEETING	25
THE MERGER	26
Overview	26
Background of the Merger	26
Recommendation of the Board	28
Reasons for Recommending the Adoption of the Merger Agreement	28
Financial Projections Prepared by the Company’s Management	32
Opinion of the Company’s Financial Advisor	34
Interests of Directors and Executive Officers in the Merger	40
Material U.S. Federal Income Tax Consequences of the Merger	45

THE AGREEMENT AND PLAN OF MERGER	49
Explanatory Note Regarding the Merger Agreement	49
The Merger	49
Closing; Effective Time of the Merger	49
Organizational Documents; Directors and Officers	49
Merger Consideration	50
Treatment of Outstanding Equity Awards and Deferred Compensation	50
Payment Procedures	51
Voting Agreements	52
Representations and Warranties	52
Covenants Regarding Conduct of Business by the Company Prior to the Merger	54
Access to Information	56
The “Go-Shop” Period—Solicitation of Other Takeover Proposals	56
The “No-Shop” Period—No Solicitation of Other Takeover Proposals	57
Change in Board Recommendation	59
Proxy Statement and Stockholders Meeting	59
Employee Matters	60
Director and Officer Indemnification and Insurance	60
Efforts to Complete the Merger	61
Other Covenants and Agreements	61
Financing	61
Conditions to the Merger	62
Termination of the Merger Agreement	63
Effect of Termination	64
Expenses; Termination Fee	64
Amendment	66
APPRAISAL RIGHTS	66
MARKET PRICE DATA	70
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	71
OTHER MATTERS	73
FUTURE STOCKHOLDER PROPOSALS	73
WHERE YOU CAN FIND MORE INFORMATION	74
Annex A – Agreement and Plan of Merger, including form of Voting Agreement	A-1
Annex B – Opinion of Johnson Rice & Company, L.L.C	B-1
Annex C – Section 262 of the Delaware General Corporation Law	C-1

SUMMARY

This summary highlights certain information in this proxy statement, but may not contain all of the information that may be important to you. You should carefully read this entire proxy statement and the attached annexes and the other documents to which this proxy statement refers you for a more complete understanding of the matters being considered at the special meeting. In addition, this proxy statement incorporates by reference important business and financial information about Houston Wire & Cable Company. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section entitled “Where You Can Find More Information” on page 74. Unless the context otherwise indicates, we refer to Houston Wire & Cable Company as “HWCC,” the “Company,” “we,” “us” or “our.”

The Parties to the Merger

Houston Wire & Cable Company

HWCC, a Delaware corporation, is a provider of industrial products including electrical wire and cable, industrial fasteners, hardware and related services to the U.S. market. HWCC sells electrical products through wholesale electrical distributors and fastener products through industrial distributors. As of December 31, 2020, HWCC also sold mechanical wire and cable, fabricated steel wire rope and synthetic lifting and hardware products through two divisions, Southern Wire, which was sold on December 31, 2020, and Southwest Wire Rope, which was sold on March 12, 2021. Our executive office is located at 10201 North Loop East, Houston, Texas 77029, and our telephone number is (713) 609-2100.

The Company’s common stock is traded on the Nasdaq Global Market under the ticker symbol “HWCC.”

Omni Cable, LLC

OmniCable, a Pennsylvania limited liability company, is a premier redistributor of wire and cable, electrical products, and value-added services. OmniCable is a subsidiary of Dot Holdings Co, which is owned by Dot Family Holdings LLC (“DFH”), a privately-owned company that owns and operates Dot Foods, Inc., the largest food industry redistributor in North America. DFH is focused exclusively on acquiring leading middle-market distribution companies, with a special interest in master/two-step distribution and any national distribution business models. OmniCable’s executive office is located at 17050 Baxter Road, # 130, St. Louis, Missouri 63005, and its telephone number is (636) 449-3157.

OCDFH Acquisition Sub Inc.

OCDFH Acquisition Sub Inc., a Delaware corporation (“Merger Sub”), is a wholly-owned subsidiary of OmniCable newly formed for purposes of engaging in the transactions contemplated by the merger agreement. Merger Sub has not conducted any activities except in connection with OmniCable’s proposed acquisition of the Company. Merger Sub’s executive offices and telephone number are the same as OmniCable’s.

The Merger

On March 24, 2021, the Company, OmniCable and Merger Sub entered into an Agreement and Plan of Merger (as may be amended from time to time, the “merger agreement”). Under the terms of the merger agreement, subject to the satisfaction or waiver of specified conditions, Merger Sub will merge with and into the Company (the “merger”), whereupon the separate existence of Merger Sub will cease and the Company will continue as the surviving corporation (which we refer to as the “surviving corporation”) and a wholly-owned subsidiary of OmniCable.

At the effective time of the merger, each share of common stock, par value $0.001 per share, of the Company issued and outstanding immediately prior to the effective time (other than (i) shares of Company common stock that are held in the treasury of the Company or owned of record by the Company, OmniCable or any of their respective subsidiaries, in each case immediately prior to the effective time, and (ii) shares of Company common stock held by stockholders who have not voted in favor of, or consented to the adoption of, the merger agreement and who have properly demanded appraisal of such shares and complied in all respects with all the provisions of the Delaware General Corporation Law (the “DGCL”) concerning the right of holders of shares to request appraisal of their shares) will be cancelled and cease to exist and will be automatically converted into the right to receive $5.30 in cash, without interest, subject to any applicable withholding taxes. The consideration to be paid by OmniCable in the merger as described in this paragraph is referred to as the “merger consideration.”

Following the completion of the merger, shares of Company common stock will no longer be traded on the Nasdaq Global Market or any other public market, and the registration of the Company common stock under the Securities Exchange Act of 1934 will be terminated.

The Special Meeting

The special meeting will be held on [●], at [●], Central Time, as a webcast virtual meeting that you can attend by visiting [INSERT URL]. At the special meeting, you will be asked to vote for, among other things, the proposal to adopt the merger agreement. See the section entitled “The Special Meeting,” beginning on page 19, for additional information on the special meeting, including how to vote your shares of Company common stock.

Stockholders Entitled to Vote; Vote Required for Approval

You may vote at the special meeting if you were a holder of record of shares of Company common stock as of the close of business on [·], 2021, which is the record date for the special meeting. You will be entitled to one vote for each share of Company common stock that you owned on the record date. As of the record date, there were 16,882,826 shares of Company common stock issued and outstanding and entitled to vote at the special meeting.

The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on that matter. Approval of the other matters to be presented at the special meeting requires the affirmative vote of the holders of a majority of the shares of Company common stock voted on the matter.

How to Vote

Stockholders of record have a choice of voting by proxy by completing a proxy form and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or by visiting a site on the internet. Please refer to your proxy form to see which options are available to you. The telephone and internet voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on the day before the special meeting. Stockholders of record may also vote by attending the special meeting and voting online.

If you wish to vote by proxy and your shares are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of Company common stock, your bank, broker, trust or other nominee will not be able to vote your shares on any of the proposals.

If you wish to vote online at the special meeting and your shares are held in the name of a bank, broker or other holder of record, you must obtain a legal proxy, executed in your favor, from such bank, broker or other holder of record authorizing you to vote at the special meeting.

YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY FORM. A letter of transmittal with instructions for the surrender of certificates representing shares of Company common stock will be mailed to stockholders if the merger is completed.

For additional information regarding the procedure for delivering your proxy, see the sections entitled “The Special Meeting—How to Vote,” beginning on page 21, and “The Special Meeting—Solicitation of Proxies,” on page 22. If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy form or voting instructions, please call our proxy solicitor, Broadridge Investor Communication Services, Inc. (“Broadridge”), toll-free at [·] or [·] (call collect).

Recommendation of the Board Regarding the Merger; Reasons for Recommending the Adoption of the Merger Agreement

After careful consideration, our board unanimously declared the merger agreement and the transactions contemplated thereby, including the merger, to be advisable and in the best interests of the Company and its stockholders. Accordingly, the board unanimously recommends that at the special meeting you vote “FOR” the proposal to adopt the merger agreement, “FOR” the approval, by a non-binding advisory vote, of compensation that may be paid or become payable to the Company’s named executive officers and that is based on, or otherwise relates to, the merger and “FOR” the proposal to adjourn the special meeting from time to time if necessary or appropriate, including to solicit additional proxies.

For a discussion of the material factors considered by the board in reaching its conclusions, see the section entitled “The Merger—Reasons for Recommending the Adoption of the Merger Agreement,” beginning on page 28. In addition, in considering the recommendation of the board with respect to the merger agreement, you should be aware that members of the board and our executive officers have certain interests in the merger that may be in addition to, or different from, the interests of Company stockholders generally. See the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 40.

Opinion of Our Financial Advisor

The Company engaged Johnson Rice & Company, L.L.C. (“Johnson Rice”) as its financial advisor to render a fairness opinion in connection with the merger. Johnson Rice has delivered to the Company’s board of directors a written opinion, dated March 24, 2021 as to the fairness, as of such date, from a financial point of view, to the Company’s stockholders of the consideration to be received by such stockholders pursuant to the merger agreement. The full text of Johnson Rice’s written opinion, which describes various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Johnson Rice, is attached as Annex B to this proxy statement and is incorporated herein by reference. Johnson Rice’s opinion was provided for the use and benefit of the Company’s board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger. Johnson Rice’s opinion did not address the underlying business decision by the Company to pursue the proposed merger or the relative merits of the transaction contemplated by the merger agreement as compared to any alternative strategies or transactions that might exist for the Company. Johnson Rice’s opinion did not constitute a recommendation as to how any holder of Company common stock should vote on the proposed merger or any matter related thereto. See the section entitled “The Merger—Opinion of the Company’s Financial Advisor,” beginning on page 34. The summary of Johnson Rice’s opinion is qualified in its entirety by reference to the full text of Johnson Rice’s opinion.

Market Price

On March 24, 2021, the last full trading day prior to the public announcement of the entry into the merger agreement, the closing price for Company common stock on the Nasdaq Global Market was $3.80 per share. On [●], 2021, the last full trading day prior the date of this proxy statement, the closing price for Company common stock was $[●] per share.

Treatment of Outstanding Equity Awards

The merger agreement provides that, at the effective time of the merger,

each outstanding share of restricted stock will immediately vest in full and become free of restrictions and be converted into the right to receive the merger consideration;

each outstanding restricted stock unit award, whether or not vested, will be cancelled and converted into the right to receive an amount in cash equal to (i) the number of shares of Company common stock subject to such award times (ii) the merger consideration;

each outstanding performance stock unit, whether or not vested, will be cancelled and converted into the right to receive an amount in cash equal to (i) the number of shares of Company common stock subject to such award, assuming that 100% of the applicable target had been achieved, times (ii) the merger consideration; and

each outstanding stock unit under the Company’s Nonemployee Director Deferred Compensation Plan will be cancelled and converted into the right to receive an amount in cash equal to (i) the number of shares of Company common stock subject to such unit times (ii) the merger consideration.

Interests of Directors and Executive Officers in the Merger

Members of the board and the Company’s executive officers have various interests in the merger described in this section that may be in addition to, or different from, the interests of the Company stockholders generally. You should keep this in mind when considering the recommendation of the Board “FOR” the adoption of the merger agreement. The members of the board were aware of these interests and considered them at the time they approved the merger agreement and in making their recommendation that Company stockholders adopt the merger agreement. See the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 40.

Conditions to the Merger

The Company’s, OmniCable’s and Merger Sub’s respective obligations to complete the merger are subject to the satisfaction or waiver (where permitted under applicable law) of the following conditions:

adoption of the merger agreement by the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote thereon;

receipt of any required regulatory approvals; and

the absence of any law or governmental order that makes the consummation of the merger illegal or otherwise prohibits consummation of the merger or any governmental investigation seeking to prohibit consummation of the merger.

The obligations of OmniCable and Merger Sub to effect the merger are also subject to the satisfaction or waiver (where permitted by applicable law) by OmniCable and Merger Sub at or prior to the effective time of the following additional conditions:

subject to materiality qualifiers in certain instances, the accuracy of the representations and warranties of the Company contained in the merger agreement;

the Company having performed or complied in all material respects with all obligations and covenants required by the merger agreement to be performed or complied with by it at or prior to the effective time;

the absence of any Company material adverse effect (as described in the section entitled “The Agreement and Plan of Merger—Representations and Warranties—Representations and Warranties of the Company,” beginning on page 52);

the aggregate net tangible book value of the Company’s electrical distribution and Vertex fastener distribution divisions being at least $80,829,000, provided that for purpose of this calculation the net tangible book value of the Vertex division will not be greater than $19,380,000;

OmniCable having received a certificate signed by an executive officer of the Company as to the satisfaction of the conditions described above;

the Company’s aggregate indebtedness for borrowed money, excluding certain amounts, not exceeding $18,247,000; and

the Company having (i) disposed of two parcels of real estate used by the Company’s former Southwest Wire Rope division and (ii) purchased and paid for a premises pollution liability policy on the property having terms and conditions reasonably satisfactory to OmniCable.

The obligation of the Company to effect the merger is also subject to the satisfaction or waiver (where permitted by applicable law) by the Company at or prior to the effective time of the following additional conditions:

subject to materiality qualifiers in certain instances, the accuracy of the representations and warranties of OmniCable and Merger Sub contained in the merger agreement;

OmniCable and Merger Sub having performed or complied in all material respects with all obligations and covenants as required by the merger agreement to be performed or complied with by them at or prior to the effective time; and

the Company having received a certificate signed by an officer of OmniCable as to the satisfaction of the conditions described above.

Solicitation of Competing Proposals

The “Go-Shop” Period—Solicitation of Other Takeover Proposals

Under the merger agreement, from the date of the merger agreement until 11:59 p.m., Eastern Time, on April 24, 2021 (referred to as the “no-shop period start date”), the Company and its representatives have the right to initiate, solicit , encourage, discuss and negotiate with respect to any proposal, inquiry or offer from any person that would constitute, or would reasonably

be expected to lead to, a competing takeover proposal, subject to such person entering into a confidentiality agreement similar to the confidentiality agreement between the Company and DFH (an “acceptable confidentiality agreement”), and provided that the Company delivers to OmniCable any non-public information relating to the Company that was not previously made available to OmniCable promptly after it is made available to any person in connection with a competing proposal. After the no-shop period start date, the Company may continue to discuss and negotiate with a party (referred to as an “Excluded Party”) that, among other requirements, submitted a bona fide written takeover proposal to the Company before the no-shop period start date that the board determines in good faith (after consultation with its financial advisors and outside counsel) within one business day after the no-shop period start date is or would reasonably be expected to result in a “superior proposal” (as described in the section entitled “The Agreement and Plan of Merger— The “Go-Shop” Period—Solicitation of Other Takeover Proposals,” beginning on page 56), provided the Company notifies OmniCable of receipt of the competing proposal and delivers to OmniCable copies of all written proposal documents.

The “No-Shop” Period—No Solicitation of Other Takeover Proposals

The Company has agreed that, except as may relate to any Excluded Party, from the no-shop period start date until the earlier of the effective time of the merger or termination of the merger agreement, it will not, and will cause its subsidiaries not to, and will not authorize or permit its and its subsidiaries’ respective directors, officers, employees, investment bankers, attorneys, accountants and other advisors or representatives not to, directly or indirectly:

solicit, initiate or knowingly facilitate or encourage the submission of any takeover proposal, any inquiries, discussions or requests with respect to or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, a takeover proposal;

conduct or engage in any discussions or negotiations with, disclose any non-public information relating to the Company to, afford access to the business, properties, books or records of the Company to, or knowingly assist facilitate or encourage any third party that is seeking to make or has made a takeover proposal;

amend or waive any standstill or similar agreement with respect to the Company common stock or take any action to make the provisions of any takeover statute inapplicable to any transactions contemplated by any takeover proposal; or

enter into any other agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or similar agreement (other than an acceptable confidentiality agreement) with respect to a takeover proposal.

Notwithstanding the prohibitions described above, under certain limited circumstances at any time following the no-shop period start date and prior to the receipt of the Company stockholder approval, if the Company receives an unsolicited written takeover proposal that the board believes in good faith is a superior proposal and determines in good faith that the failure to take such action would cause the board to be in breach of its fiduciary duties under applicable law, then the board may engage in discussions and negotiations with the person making such competing proposal.

Change in Board Recommendation

The board is required to recommend that the Company’s stockholders adopt the merger agreement and not change its recommendation or recommend other transactions. However, at any time prior to the receipt of the Company stockholder approval, the board may change its recommendation in favor of the merger if and only if (i) the Company notifies OmniCable that the Company has received a competing takeover proposal that the board intends to declare a superior proposal and that the board intends to change its recommendation in favor of the merger, (ii) the Company identifies the party making the superior proposal and furnishes a copy of the proposal to OmniCable, (iii) during the five business day period following such notice, the Company negotiates with OmniCable in good faith to make such adjustments in the terms and conditions of the merger agreement so that such competing proposal ceases to constitute a superior proposal and (iv) the board determines in good faith, after consultation with outside legal counsel and the board’s financial advisors, that such competing proposal continues to constitute a superior proposal after taking into account any adjustments made by OmniCable.

Termination of the Merger Agreement

The merger agreement may be terminated at any time prior to the effective time, whether before or after receipt of the Company stockholder approval by the mutual written consent of the Company, OmniCable and Merger Sub. In addition, either the Company or OmniCable may terminate the merger agreement:

if the merger has not been consummated on or before September 30, 2021 (the “end date”), provided that this right to terminate the merger agreement shall not be available to any party whose breach of any representation, warranty, covenant or agreement under the merger agreement was the cause of, or resulted in, the failure to consummate the merger by the end date;

if any governmental entity of competent jurisdiction enacts, issues, promulgates, enforces or enters any law or order making illegal, permanently enjoining or otherwise permanently prohibiting the consummation of the merger and such law or order becomes final and non-appealable, provided that this right to terminate the merger agreement will not be available to any party whose breach of any representation, warranty, covenant or agreement under the merger agreement was the cause of, or resulted in, the issuance, promulgation, enforcement or entry of any such law or order; or

if the merger agreement is submitted to the Company’s stockholders for adoption at a duly convened meeting of stockholders and the stockholders do not adopt the merger agreement at such meeting (including any adjournments or postponements thereof).

OmniCable may also terminate the merger agreement:

if the Company’s board changes its recommendation in favor of the merger or if the Company breaches its covenants and agreements with respect to competing takeover proposals; or

if (i) the Company breaches any of its representations, warranties, covenants or agreements contained in the merger agreement, in any case such that the conditions to the merger described above would not be satisfied, and (ii) either such breach is not capable of cure by the end date or at least 20 days elapse after the date of delivery of written notice to the Company without such breach having been cured, provided that this right to terminate the merger agreement will not be available if OmniCable or Merger Sub is then in material breach of any representation, warranty, covenant or agreement under the merger agreement, which breach has not been cured.

The Company may also terminate the merger agreement:

if, prior to receipt of the Company stockholder approval, the Company board authorizes the Company, to the extent permitted by and subject to compliance with the merger agreement, to enter into a takeover agreement in respect of a superior proposal, provided that the Company pays to OmniCable a $4 million termination fee and enters into such takeover agreement; or

if (i) OmniCable or Merger Sub breaches any of its representations, warranties, covenants or agreements contained in the merger agreement, in any case such that the conditions to the merger described above would not be satisfied and (ii) either such breach is not capable of cure by the end date or at least 20 days elapse after the date of delivery of written notice to OmniCable without such breach having been cured, provided that this right to terminate the merger agreement will not be available if the Company is then in material breach of any representation, warranty, covenant or agreement under the merger agreement, which breach has not been cured.

Termination Fee

Upon termination of the merger agreement under specified circumstances, the Company will be required to pay OmniCable a termination fee of $4 million. For more information, see the section entitled “The Agreement and Plan of Merger—Expenses; Termination Fee,” beginning on page 64.

Appraisal Rights

Under Delaware law, holders of shares of Company common stock are entitled to appraisal rights in connection with the merger, provided that such holders meet all of the conditions set forth in Section 262 of the DGCL. A holder of Company

common stock who properly seeks appraisal and complies with the applicable requirements under Delaware law, and does not thereafter lose his, her or its right to, or properly withdraw his, her or its demand for, appraisal rights (which we refer to as a “dissenting stockholder”) will forego the merger consideration and instead receive a cash payment equal to the fair value of his, her or its shares of Company common stock in connection with the merger. Fair value will be determined by the Court of Chancery of the State of Delaware following an appraisal proceeding. Dissenting stockholders will not know the appraised fair value at the time such holders must elect whether to seek appraisal. The ultimate amount dissenting stockholders receive in an appraisal proceeding may be more or less than, or the same as, the amount such holders would have received under the merger agreement. A detailed description of the appraisal rights available to holders of Company common stock and procedures required to exercise statutory appraisal rights is included in the section entitled “Appraisal Rights,” beginning on page 66.

To seek appraisal, a Company stockholder of record must deliver a written demand for appraisal to the Company before the vote on the merger agreement at the special meeting, not vote in favor of the proposal to adopt the merger agreement, continuously hold the shares of Company common stock through the effective time and otherwise comply with the procedures set forth in Section 262 of the DGCL. Failure to follow exactly the procedures specified under Delaware law may result in the loss of appraisal rights. Pursuant to Section 262 of the DGCL, assuming that immediately prior to the merger shares of Company common stock continue to be listed on the Nasdaq Global Market, the Court of Chancery will dismiss the appraisal proceedings as to all holders of shares who are otherwise entitled to appraisal rights unless (i) the total number of shares entitled to appraisal rights exceeds 1% of the outstanding shares of Company common stock eligible for appraisal, or (ii) the value of the merger consideration provided in the merger for such total number of shares exceeds $1,000,000.

A copy of the applicable sections of the DGCL is attached as Annex C to this proxy statement. You should read the statute carefully and consult with your legal counsel if you intend to exercise these rights.

Material U.S. Federal Income Tax Consequences of the Merger

The receipt of cash in exchange for shares of Company common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder (as described in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 45) who receives cash in exchange for shares of Company common stock in the merger will recognize gain or loss equal to the difference, if any, between the cash received and the U.S. holder’s adjusted tax basis in the shares converted into the right to receive cash in the merger. Gain or loss will be determined separately for each block of shares of Company common stock (that is, shares acquired for the same cost in a single transaction). You should refer to the discussion in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 45, and consult your tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of the merger.

Voting Agreements

Concurrently with the execution of the merger agreement, each director and executive officer of the Company and certain of their affiliates entered into voting agreements with OmniCable in which they agreed to vote all of their shares of Company common stock in favor of adoption of the merger agreement at the special meeting of stockholders. The voting agreements cover approximately 19% of the shares of Company common stock outstanding as of [·], 2021. The voting agreements automatically terminate if the merger agreement is terminated. A copy of the form of voting agreement is Exhibit B to the merger agreement attached as Annex A to this proxy statement.

Where You Can Find More Information

You can find more information about the Company in the periodic reports and other information we file with the U.S. Securities and Exchange Commission (“SEC”). The information is available at the website maintained by the SEC at www.sec.gov.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to briefly address some commonly asked questions regarding the special meeting of stockholders and the merger. These questions and answers do not address all questions that may be important to you as a Company stockholder. Please refer to the more detailed information contained elsewhere in this proxy statement, the Annexes to this proxy statement and the documents referred to in this proxy statement.

Why am I receiving this proxy statement?

On March 24, 2021, the Company, OmniCable and Merger Sub entered into the merger agreement. You are receiving this proxy statement in connection with the solicitation of proxies by the Company in favor of the proposal to adopt the merger agreement and the other proposals described in this proxy statement.

As a stockholder, what will I receive in the merger?

At the effective time, each share of Company common stock issued and outstanding immediately prior to the effective time (other than (i) shares of Company common stock that are held in the treasury of the Company or owned of record by the Company, OmniCable or any of their respective subsidiaries, in each case immediately prior to the effective time, and (ii) shares of Company common stock held by stockholders who have not voted in favor of, or consented to the adoption of, the merger agreement and who have properly demanded appraisal of such shares and complied in all respects with all the provisions of the DGCL concerning the right of holders of shares to request appraisal of their shares) will be cancelled and automatically converted into the right to receive $5.30 in cash, without interest, subject to any applicable withholding taxes.

The receipt of cash in exchange for shares of Company common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. Please see the discussion in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 45, for a more detailed description of the U.S. federal income tax consequences of the merger. You should consult your own tax advisor for a full understanding of how the merger will affect your U.S. federal, state, local and foreign taxes.

What will happen to outstanding Company equity awards in the merger?

For information regarding the treatment of outstanding Company equity awards, see the section entitled “The Agreement and Plan of Merger—Treatment of Outstanding Equity Awards and Deferred Compensation” beginning on page 50.

Where and when will the special meeting of stockholders be held?

The special meeting will be held at 10:00 a.m., Central Time, on [●], 2021. Due to the continuing impact of the COVID-19 pandemic on public health, and out of concern for the health and safety of our stockholders, employees and directors, the special meeting will be a virtual meeting of stockholders rather than an in-person meeting. Stockholders will be able to attend the special meeting online, vote their shares electronically, and submit questions during the special meeting by visiting [INSERT URL].

Who is entitled to vote at the special meeting?

Only stockholders of record at the close of business on the record date, [●], 2021, are entitled to receive notice of the special meeting and to vote the shares of common stock that they held on that date at the meeting and any postponement or adjournment of the meeting. If your shares are held in “street name,” please refer to the information forwarded to you by your bank, broker or other holder of record to see what you must do to vote your shares. The Company’s stockholders may examine the list of stockholders entitled to vote at the special meeting by visiting [INSERT URL] and entering the control number found on their proxy form.

What proposals will be considered at the special meeting?

At the special meeting, you will be asked to consider and vote on:

a proposal to adopt the merger agreement;

a proposal to approve, by a non-binding advisory vote, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the merger, as discussed in the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 40; and

a proposal to adjourn the special meeting from time to time to a later date or time, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

What vote is required to approve each of the proposals?

The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on that matter. Abstentions and failures to vote will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. Although the Board intends to consider the vote resulting from this proposal, the vote is advisory only and, therefore, is not binding on the Company, OmniCable or any of their respective subsidiaries, and, if the merger agreement is adopted by Company stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved. Abstaining from voting will have the same effect as a vote “AGAINST” the proposal.

The approval of the proposal to adjourn the special meeting from time to time, if necessary or appropriate, requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. In addition, even if a quorum is not present at the special meeting, either the Chairman of the Board or the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting may adjourn the meeting to another place, date or time. In each case, the abstention from voting will have the same effect as a vote “AGAINST” the proposal.

How does the board recommend that I vote on the proposals?

Upon careful consideration, the board has unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of the Company and its stockholders and unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement, “FOR” the non-binding advisory merger-related compensation proposal and “FOR” the proposal to adjourn the special meeting from time to time if necessary or appropriate.

For a discussion of the factors the Board considered in determining to recommend the adoption of the merger agreement, please see the section entitled “The Merger—Reasons for Recommending the Adoption of the Merger Agreement,” beginning on page 28. In addition, in considering the recommendation of the Board with respect to the merger agreement, you should be aware that members of the Board and our executive officers have various interests in the merger that may be in addition to, or different from, the interests of Company stockholders generally. See the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 40.

Do I need to attend the special meeting in person (via live audio webcast)?

No. It is not necessary for you to attend the special meeting in order to vote your shares. You may vote by mail, by telephone or through the internet, as described in more detail in the section entitled “The Special Meeting—How to Vote,” beginning on page 21.

How many shares need to be represented at the special meeting?

The presence at the special meeting, virtually in person or by proxy, of the holders of a majority of the shares of Company common stock issued and outstanding and entitled to vote at the special meeting constitutes a quorum for the purpose of considering the proposals. As of the close of business on the record date, there were 16,882,826 shares of Company common stock outstanding. If you are a Company stockholder of record (i.e., your shares of Company common stock are registered in your name with the Company’s transfer agent) as of the close of business on the record date and you vote by mail, by telephone, through the internet or online at the special meeting, you will be considered part of the quorum. If you

are a “street name” holder of shares of Company common stock (i.e., you hold your shares in the name of a bank, broker, trust or other nominee and these proxy materials are being forwarded to you by that entity) and you provide your bank, broker, trust or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted as present in determining the presence of a quorum.

All shares of Company common stock held by stockholders that are present virtually in person, or represented by proxy, and entitled to vote at the special meeting, regardless of how such shares are voted or whether such stockholders have indicated on their proxy that they are abstaining from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the special meeting may be adjourned.

Why am I being asked to consider and cast a non-binding advisory vote to approve the compensation that may be paid or become payable to the Company’s named executive officers and that is based on, or otherwise relates to, the merger?

In 2010, the SEC adopted rules that require companies to seek a non-binding advisory vote to approve certain compensation that may be paid or become payable to their named executive officers that is based on or otherwise relates to corporate transactions, such as the merger. In accordance with those rules, the Company is providing its stockholders with the opportunity to cast a non-binding advisory vote on compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger. For additional information, see the section entitled “Proposal 2: Non-Binding Advisory Merger-Related Compensation Proposal,” on page 24.

What will happen if Company stockholders do not approve the non-binding advisory merger-related compensation proposal?

The vote to approve the non-binding advisory merger-related compensation proposal is a vote separate and apart from the vote to adopt the merger agreement. Approval of the non-binding advisory merger-related compensation proposal is not a condition to completion of the merger, and it is advisory in nature only, meaning that it will not be binding on the Company or OmniCable or any of their respective subsidiaries. Accordingly, if the merger agreement is adopted by the Company stockholders and the merger is completed, the compensation subject to the non-binding merger-related compensation proposal will be paid to our named executive officers even if the proposal is not approved.

What do I need to do now? How do I vote?

You may vote at the special meeting if you own shares of Company common stock of record at the close of business on the record date for the annual meeting, [●], 2021. Please review the instructions for each of your voting options described on your proxy form. After you have carefully read and considered the information contained in this proxy statement, please vote or submit your proxy to vote by a method described on your proxy form. This will enable your shares to be represented at the special meeting. You may also vote online at the special meeting. If you do not vote by proxy and do not vote at the special meeting, this will make it more difficult to achieve a quorum for the meeting.

Submitting your proxy by mail, by telephone or through the internet will not prevent you from voting online at the special meeting. You are encouraged to submit a proxy by mail, by telephone or through the internet even if you plan to attend the special meeting virtually in person to ensure that your shares of Company common stock are represented at the special meeting. If you vote online at the special meeting, such vote will automatically revoke any proxy you previously submitted.

If you return your signed and dated proxy form, but do not mark the boxes showing how you wish to vote, your shares of Company common stock will be voted “FOR” the proposal to adopt the merger agreement, “FOR” the approval of the non-binding compensation advisory proposal and “FOR” the approval of the proposal to adjourn the special meeting from time to time, if necessary or appropriate.

What if my shares of Company common stock are held for me in “street name” by a bank, broker, trust or other nominee; will my bank, broker, trust or other nominee vote those shares for me with respect to the proposals without my direction?

No. If your shares of Company common stock are held in “street name,” you are not the “stockholder of record” of such shares. If this is the case, this proxy statement has been forwarded to you by your bank, broker, trust or other nominee.

You, as the beneficial holder, generally have the right to direct your bank, broker, trust or other nominee as to how to vote your shares of Company common stock. Your bank, broker, trust or other nominee will NOT have the power to vote your shares of Company common stock at the special meeting unless you provide instructions to your bank, broker, trust or other nominee on how to vote. You should instruct your bank, broker, trust or other nominee on how to vote your shares with respect to the proposals, using the instructions provided by your bank, broker, trust or other nominee. You may be able to vote by telephone or through the internet if your bank, broker, trust or other nominee offers these options.

What if I fail to instruct my bank, broker, trust or other nominee how to vote?

Your bank, broker, trust or other nominee will NOT be able to vote your shares of Company common stock unless you have properly instructed them on how to vote. Under applicable stock exchange rules, banks, brokers, trusts and other nominees have the discretion to vote your shares of Company common stock on routine matters if you fail to instruct them on how to vote your shares of Company common stock with respect to such matters. The proposals in this proxy statement are non-routine matters, and banks, brokers, trusts and other nominees therefore cannot vote on these proposals without your instructions. It is important that you instruct your bank, broker, trust or other nominee on how to vote your shares with respect to the proposals, using the instructions provided by your bank, broker, trust or other nominee. You may be able to vote by telephone or through the internet if your bank, broker, trust or other nominee offers these options. You are invited to attend the special meeting even if you are not a stockholder of record; however, if you are not a stockholder of record, you may not vote your shares at the special meeting unless you obtain a legal proxy, executed in your favor, from such bank, broker or other holder of record authorizing you to vote at the special meeting.

Can I revoke my proxy and change my vote?

You may change your vote or revoke your proxy prior to the special meeting by filing with the Company’s corporate secretary a duly executed revocation of proxy or submitting a new proxy with a later date. You may also revoke a prior proxy by voting online at the special meeting.

All properly submitted proxies received by us before the special meeting that are not revoked or changed prior to being exercised at the special meeting will be voted at the special meeting in accordance with the instructions indicated on the proxies or, if no instructions were provided, “FOR” each of the proposals.

What does it mean if I receive more than one proxy form?

If you receive more than one proxy form, it means that you hold shares of Company common stock that are registered in more than one account. For example, if you own your shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and you will need to sign and return, a separate proxy form for those shares because they are held in a different form of record ownership. Therefore, to ensure that all of your shares of Company common stock are voted, you will need to submit your proxies by properly completing and mailing each proxy form you receive or by telephone or through the Internet by using the different voter control numbers on each proxy form.

What happens if I sell or otherwise transfer my shares of Company common stock after the record date but before the special meeting? What happens if I sell or otherwise transfer my shares of Company common stock after the special meeting but before the effective time?

The record date for the special meeting is earlier than the date of the special meeting and earlier than the expected date of the merger. If you own shares of Company common stock as of the close of business on the record date, but transfer your shares prior to the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or transfer your shares, you will retain your right to vote at the special meeting, but the right to receive the merger consideration will pass to the person who holds your shares as of immediately prior to the effective time. If you sell or transfer your shares of Company common stock after the special meeting but before the effective time, the right to receive the merger consideration will pass to the person who holds your shares as of immediately prior to the effective time. In order to receive the merger consideration, you must hold your shares of Company common stock through the completion of the merger.

Even if you sell or otherwise transfer your shares of Company common stock after the record date, we encourage you to sign, date and return the enclosed proxy or submit your proxy to vote via the internet or by telephone, or, if your shares are held in “street name” through a bank, broker, trust or other nominee, instruct your bank, broker, trust or other nominee on

how to vote your shares using the instructions provided by your bank, broker, trust or other nominee.

May I exercise dissenters’ rights or rights of appraisal in connection with the merger?

Yes. In order to exercise your appraisal rights, you must follow the requirements set forth in Section 262 of the DGCL. Under Delaware law, holders of record of Company common stock who do not vote in favor of adopting the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Court of Chancery if the merger is completed. Appraisal rights will only be available to holders of shares of Company common stock who properly deliver, and do not properly withdraw, a written demand for an appraisal to the Company prior to the vote on the proposal to adopt the merger agreement at the special meeting and who comply with the procedures and requirements set forth in Section 262 of the DGCL, which are summarized in this proxy statement. The appraisal amount could be more than, the same as or less than the amount a stockholder would be entitled to receive under the terms of the merger agreement. A copy of Section 262 of the DGCL is included as Annex C to this proxy statement. For additional information, see the section entitled “Appraisal Rights,” beginning on page 66.

If I hold my shares in certificated form, should I send in my stock certificates now?

No. Shortly after the merger is completed, stockholders holding certificated shares of Company common stock will be sent a letter of transmittal that includes detailed written instructions on how to return such stock certificates. You must return your stock certificates in accordance with such instructions in order to receive the merger consideration. PLEASE DO NOT SEND IN YOUR STOCK CERTIFICATE(S) NOW.

When is the merger expected to be completed?

We and OmniCable are working toward completing the merger as quickly as possible. We currently anticipate that the merger will be completed during the second quarter of 2021, subject to the satisfaction or waiver of closing conditions, but we cannot be certain when or if the conditions to the merger will be satisfied or, to the extent permitted, waived. The merger cannot be completed until the conditions to closing are satisfied (or, to the extent permitted, waived), including the adoption of the merger agreement by Company stockholders. For additional information, see the section entitled “The Agreement and Plan of Merger—Conditions to the Merger,” beginning on page 62.

What happens if the merger is not completed?

The Company cannot assure you of when or if the merger will be completed. If the merger is not completed, the Company’s stockholders will not receive any consideration for their shares of Company common stock and will continue to be stockholders of the Company. The Company and OmniCable will remain independent companies. Under certain circumstances, the Company will be required to pay OmniCable a termination fee with respect to the termination of the merger agreement, as described under “The Agreement and Plan of Merger —Expenses; Termination Fee” on page 64.

Who will tabulate and certify the vote?

Broadridge Financial Solutions, Inc. will tabulate the votes. A representative of Broadridge Financial Solutions, Inc. will be the inspector of elections.

Where can I find the voting results of the special meeting?

The Company intends to announce preliminary results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that the Company files with the SEC are publicly available when filed. See “Where You Can Find More Information” on page 74.

Who can answer my other questions?

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy form, you should contact Broadridge, [·], at [·].

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this proxy statement which are not historical in nature are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "aim," "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," "will be," "will continue," "will likely result," "would" and other words and terms of similar meaning in conjunction with a discussion of future operating or financial performance. These statements are based upon management’s current expectations and speak only as of the date of this proxy statement. The Company cautions readers that there may be events in the future that the Company is not able to accurately predict or control and the information contained in the forward-looking statements is inherently uncertain and subject to a number of risks that could cause actual results to differ materially from those contained in or implied by the forward- looking statements including, without limitation:

the satisfaction of the conditions precedent to the consummation of the proposed merger, including, without limitation, the receipt of stockholder and regulatory approvals;

unanticipated difficulties or expenditures relating to the proposed merger;

legal proceedings, judgments or settlements, including those that may be instituted against the Company, the Company’s board of directors, executive officers and others following the announcement of the proposed merger;

disruptions of current plans and operations caused by the announcement and pendency of the proposed merger;

potential difficulties in employee retention due to the announcement and pendency of the proposed merger;

the response of customers, distributors, suppliers, business partners and regulators to the announcement of the proposed merger;

the Company’s recent investments in pricing analytics, optimization of inventory profile and placement not producing the anticipated benefits and efficiencies to the Company’s electrical distribution business; and

other factors listed under “Risk Factors” in the Company’s annual report on Form 10-K for fiscal year ended December 31, 2020 (see the section entitled “Where You Can Find More Information,” on page 74).

The Company can give no assurance that the expectations expressed or implied in the forward-looking statements contained herein will be attained. The forward-looking statements are made as of the date of this proxy statement, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this proxy statement.

Article VII.

THE SPECIAL MEETING

We are furnishing this proxy statement as part of the solicitation of proxies by the Company for use at the special meeting of the Company stockholders, any postponement thereof, and at any properly reconvened meeting following an adjournment of the special meeting.

Date, Time and Place of the Special Meeting

The special meeting will be held on [●], [●], 2021, at 10:00 a.m., Central Time, as a virtual meeting conducted via live audio webcast. You will be able to attend the special meeting by visiting [INSERT URL].

Purpose of the Special Meeting

At the special meeting, Company stockholders of record will be asked to consider and vote on:

a proposal to adopt the merger agreement, pursuant to which, subject the satisfaction or waiver of certain specified conditions, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of OmniCable;

a proposal to adjourn the special meeting from time to time to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting (Proposal No. 3).

Recommendation of the Board

The board carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. By a unanimous vote, the board (i) determined that the transactions contemplated by the merger agreement, including the merger, are in the best interests of the Company and its stockholders, (ii) approved and declared advisable the execution, delivery and performance of the merger agreement, and, subject to receiving the Company stockholder approval, the consummation by the Company of the transactions contemplated by the merger agreement, including the merger, (iii) directed that the merger agreement be submitted to a vote of the stockholders of the Company to be adopted and (iv) resolved to recommend the adoption of the merger agreement by the stockholders of the Company. Accordingly, the Board unanimously recommends a vote “FOR” the proposal to adopt the merger agreement.

The Board also unanimously recommends a vote “FOR” the non-binding advisory merger-related compensation proposal and “FOR” the approval of the proposal to adjourn the special meeting from time to time, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Record Date and Quorum

Each holder of record of shares of Company common stock as of the close of business on [●], 2021, which is the record date for the special meeting, is entitled to receive notice of, and to vote at, the special meeting. You will be entitled to one vote for each share of Company common stock that you held on the record date. If you sell or transfer your shares of Company common stock after the record date but before the special meeting, you will transfer the right to receive merger consideration, if the merger is completed, to the person to whom you sell or transfer your shares of Company common stock, but you will retain your right to vote those shares at the special meeting. As of the record date, there were 16,882,826 shares of Company common stock issued and outstanding and entitled to vote at the special meeting. The presence at the special meeting, virtually in person or by proxy, of the holders of 8,441,414 shares of Company common stock (a majority of the shares of Company common stock issued and outstanding and entitled to vote at the special meeting) constitutes a quorum for the special meeting.

If you are a Company stockholder of record and you vote by mail, by telephone or through the internet or online at the special meeting, then your shares of Company common stock will be counted as part of the quorum. If you are a “street name” holder of shares of Company common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted as present in determining the presence of a quorum.

All shares of Company common stock held by stockholders of record that are present virtually in person or represented by proxy and entitled to vote at the special meeting, regardless of how such shares are voted or whether such stockholders abstain from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the special meeting may be adjourned.

Vote Required for Approval

The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on such matter.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. The vote is advisory only and, therefore, is not binding on the Company or OmniCable or any of their respective subsidiaries, and, if the merger agreement is adopted by Company stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved.

The approval of the proposal to adjourn the special meeting from time to time if necessary or appropriate requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. In addition, even if a quorum is not present at the special meeting, either the Chairman of the Board or the affirmative vote of a majority of the shares present virtually in person or represented by proxy at the special meeting may adjourn the meeting to another place, date or time.

Each director and executive officer of the Company and certain of their affiliates have entered into voting agreements with OmniCable in which they agreed to vote all of their shares of Company common stock in favor of adoption of the merger agreement at the special meeting. The voting agreements cover approximately 19% of the shares of Company common stock outstanding as of [·], 2021. See “The Agreement and Plan of Merger—Voting Agreements.”

Effect of Abstentions and Broker Non-Votes

The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on such matter. Therefore, the failure to vote or the abstention from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. Consequently, the abstention from voting will have the same effect as a vote “AGAINST” the proposal.

The proposal to adjourn the special meeting from time to time if necessary or appropriate requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. Consequently, the abstention from voting will have the same effect as a vote “AGAINST” the proposal. In addition, even if a quorum is not present at the special meeting, either the Chairman of the Board or he affirmative vote of a majority of the shares present virtually in person or represented by proxy at the special meeting may adjourn the meeting to another place, date or time. In each case, the abstention from voting will have the same effect as a vote “AGAINST” the proposal.

Under applicable stock exchange rules, all of the proposals in this proxy statement are non-routine matters, so there can be no broker non-votes at the special meeting. A broker non-vote occurs when shares held by a bank, broker, trust or other nominee are represented at a meeting, but the bank, broker, trust or other nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares on a particular proposal, but has discretionary voting power on other proposals at such meeting. Accordingly, if your shares are held in “street name,” your bank, broker, trust or other nominee will NOT be able to vote your shares of Company common stock on any of the proposals, and your shares will not

be counted as present in determining the presence of a quorum, unless you have properly instructed your bank, broker, trust or other nominee on how to vote. Because the proposal to adopt the merger agreement requires the affirmative vote of a majority of the outstanding shares of Company common stock, the failure to provide your bank, broker, trust or other nominee with voting instructions will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. Because the approval of each of (i) the non-binding compensation advisory proposal and (ii) the proposal to adjourn the special meeting from time to time if necessary or appropriate requires the affirmative vote of a majority of the shares having voting power present virtually in person or represented by proxy at the special meeting, and because your bank, broker, trust or other nominee does not have discretionary authority to vote on either proposal, the failure to provide your bank, broker, trust or other nominee with voting instructions will have no effect on approval of each such proposal.

How to Vote

Stockholders of record have a choice of voting by proxy by completing a proxy form and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or through the internet. Please refer to your proxy form to see which options are available to you. The telephone and internet voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on the day before the special meeting. If your shares are held in “street name,” please refer to the information forwarded by your bank, broker, trust or other nominee to see which voting options are available to you.

If you submit your proxy by mail, by telephone or through the internet voting procedures, but do not include “FOR,” “AGAINST” or “ABSTAIN” on a proposal to be voted, your shares of Company common stock will be voted in favor of that proposal. If you indicate “ABSTAIN” on a proposal to be voted, it will have the same effect as a vote “AGAINST” that proposal. If you wish to vote by proxy and your shares are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of Company common stock, your bank, broker, trust or other nominee will NOT be able to vote your shares on any of the proposals.

If you wish to vote online at the special meeting and your shares are held in the name of a bank, broker or other holder of record, you must obtain a legal proxy, executed in your favor, from the bank, broker or other holder of record authorizing you to vote at the special meeting.

If you do not submit a proxy or otherwise vote your shares of Company common stock in any of the ways described above, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, but will have no effect on approval of the non-binding compensation advisory proposal or the approval of the proposal to adjourn the special meeting from time to time if necessary or appropriate.

If you have any questions about how to vote or direct a vote in respect of your shares of Company common stock, you may contact our proxy solicitor, [Broadridge], toll-free at ___________or ________ (call collect).

YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY FORM.

A letter of transmittal with instructions for the surrender of certificates representing shares of Company common stock will be mailed to those stockholders who hold certificated shares if the merger is completed.

Revocation of Proxies

Any proxy given by a Company stockholder of record may be revoked at any time before it is voted at the special meeting by doing any of the following:

by submitting another proxy by telephone or through the Internet, in accordance with the instructions on the proxy form;

by delivering a signed written notice of revocation bearing a date later than the date of the proxy to the Company’s Corporate Secretary at Houston Wire & Cable Company, 10201 North Loop East, Houston, Texas 77029, stating that the proxy is revoked;

by submitting a later-dated proxy form relating to the same shares of Company common stock; or

by attending the special meeting and voting online (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote online at the special meeting).

“Street name” holders of shares of Company common stock should contact their bank, broker, trust or other nominee to obtain instructions as to how to revoke or change their proxies.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed from time to time to a later day or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement. Your shares will be voted on any adjournment proposal submitted to stockholders in accordance with the instructions indicated in your proxy or, if no instructions were provided, “FOR” the proposal.

If a quorum is present at the special meeting, the special meeting may be adjourned if there is an affirmative vote of shares representing a majority of the voting power of the shares present virtually in person or represented by proxy at the special meeting entitled to vote on such matter. In addition, even if a quorum is not present at the special meeting, either the chairman of the Board or the affirmative vote of shares representing a majority of the voting power of the shares present virtually in person or represented by proxy at the special meeting entitled to vote on such matter may adjourn the meeting to another place, date or time. In either case, the adjourned meeting may take place without further notice other than by an announcement made at the special meeting, unless the adjournment is for more than 30 days or if, after the adjournment, a new record date is fixed for the adjourned meeting, in which case a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the special meeting. If a quorum is not present at the special meeting, or if a quorum is present at the special meeting but there are insufficient votes at the time of the special meeting to adopt the merger agreement, then the Company may seek to adjourn the special meeting from time to time. In addition, the Board may, after consultation with OmniCable, postpone the special meeting upon public announcement made prior to the date previously scheduled for the special meeting for the purpose of soliciting additional proxies or as otherwise permitted under the merger agreement.

Solicitation of Proxies

The Company is soliciting the enclosed proxy form on behalf of the board, and the Company will bear the expenses in connection with the solicitation of proxies. In addition to solicitation by mail, the Company and its directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.

The Company has retained Broadridge Investor Communication Services, Inc. to assist in the solicitation process. The Company will pay Broadridge a fee of approximately $[·] plus reimbursement of certain specified out-of-pocket expenses. The Company also has agreed to indemnify Broadridge against various liabilities and expenses that relate to, or arise out of, its solicitation of proxies (subject to certain exceptions).

The Company will ask banks, brokers, trusts and other nominees to forward the Company’s proxy solicitation materials to the beneficial owners of shares of Company common stock held of record by such banks, brokers, trusts or other nominees. The Company will reimburse these banks, brokers, trusts or other nominees for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

Stockholder List

A list of Company stockholders entitled to vote at the special meeting will be available for examination by any Company stockholder at the special meeting website. At least ten days prior to the date of the special meeting, this stockholder list will be available for inspection by Company stockholders, subject to compliance with applicable provisions of Delaware law, in accordance with Delaware law and the Company’s amended and restated by-laws.

Questions and Additional Information

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy form or voting instructions, please call our proxy solicitor, Broadridge, toll-free at [·] or [·] (call collect).

PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

As discussed elsewhere in this proxy statement, Company stockholders will consider and vote on a proposal to adopt the merger agreement. You should carefully read this proxy statement in its entirety for more detailed information concerning the merger agreement and the merger. In particular, you should read in its entirety the merger agreement, which is attached as Annex A to this proxy statement. In addition, see the sections entitled “The Merger,” beginning on page 26, and “The Agreement and Plan of Merger,” beginning on page 49.

The Board unanimously recommends that Company stockholders vote “FOR” the proposal to adopt the merger agreement.

If you return a properly executed proxy form, but do not indicate instructions on your proxy form, your shares of Company common stock represented by such proxy form will be voted “FOR” the proposal to adopt the merger agreement.

The approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on the proposal.

PROPOSAL 2: NON-BINDING ADVISORY MERGER-RELATED COMPENSATION PROPOSAL

Under Section 14A of the Securities Exchange Act of 1934, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are required to provide stockholders the opportunity to vote to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the merger, as disclosed in the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger—Golden Parachute Compensation,” beginning on page 43, including the table entitled “Golden Parachute Compensation” and accompanying footnotes. Accordingly, Company stockholders are being provided with the opportunity to cast a non-binding advisory vote on such payments.

As an advisory vote, this proposal is not binding upon the Company or the board, approval of this proposal is not a condition to completion of the merger, and the merger-related compensation subject to this non-binding advisory vote will not be affected by the outcome of this non-binding advisory vote. However, the Company seeks your support and believes that your support is appropriate because the Company has a comprehensive executive compensation program designed to link the compensation of the Company’s executive officers with the Company’s performance and the interests of Company stockholders. Accordingly, we ask that you vote on the following resolution:

“RESOLVED, that the stockholders of Houston Wire & Cable Company approve, on an advisory, non-binding basis, the compensation that may be paid or become payable to the named executive officers of Houston Wire & Cable Company that is based on or otherwise relates to the merger, as disclosed pursuant to Item 402(t) of Regulation S-K under the heading “The Merger—Interests of Directors and Executive Officers in the Merger—Golden Parachute Compensation,” beginning on page 43 (which disclosure includes the Golden Parachute Compensation Table required pursuant to Item 402(t) of Regulation S-K).”

The Board unanimously recommends that Company stockholders vote “FOR” the non-binding advisory merger-related compensation proposal.

The approval of the non-binding advisory merger-related compensation proposal requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. The approval of the non-binding advisory merger-related compensation proposal is a vote separate and apart from the vote to approve the proposal to adopt the merger agreement and does not affect whether the proposal to adopt the merger agreement is approved. The vote is advisory only and, therefore, is not binding on the Company or OmniCable or any of their respective subsidiaries, and, if the merger agreement is adopted by Company stockholders and the merger is completed, the compensation subject to this non-binding advisory vote will be payable, subject to the terms of the underlying agreements and plans, to the Company’s named executive officers even if this proposal is not approved.

PROPOSAL 3: AUTHORITY TO ADJOURN THE SPECIAL MEETING

The Company may seek to adjourn the special meeting from time to time to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

The Board unanimously recommends that stockholders vote “FOR” the proposal to adjourn the special meeting from time to time to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

The approval of the proposal to adjourn the special meeting from time to time if necessary or appropriate requires the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting. In addition, even if a quorum is not present at the special meeting, either the chairman of the Board or the affirmative vote of a majority of the shares of Company common stock present virtually in person or represented by proxy at the special meeting may adjourn the meeting to another place, date or time.

THE MERGER

Overview

The Company is seeking the adoption by Company stockholders of the Agreement and Plan of Merger (as may be amended from time to time, the “merger agreement”), by and among OmniCable, Merger Sub and the Company, entered into on March 24, 2021. Under the terms of the merger agreement, subject to the satisfaction or waiver of specified conditions, Merger Sub will be merged with and into the Company (the “merger”), whereupon the separate existence of Merger Sub will cease. The Company will continue as the surviving corporation and will succeed to and assume all the rights and obligations of Merger Sub and the Company in accordance with the Delaware General Corporation Law (the “DGCL”), and will continue in existence as a wholly-owned subsidiary of OmniCable. The Company’s board of directors has unanimously approved the merger agreement and unanimously recommends that Company stockholders vote “FOR” the proposal to adopt the merger agreement.

At the effective time, each share of Company common stock issued and outstanding immediately prior to the effective time, other than (i) shares of Company common stock that are held in the treasury of the Company or owned of record by the Company, OmniCable or any of their respective subsidiaries, and (ii) shares of Company common stock held by stockholders who have not voted in favor of, or consented to the adoption of, the merger agreement and who have properly demanded appraisal of such shares and complied in all respects with all the provisions of the DGCL concerning the right of holders of shares to require appraisal of their shares, will be cancelled and cease to exist and will be automatically converted into the right to receive $5.30 in cash, without interest (the “merger consideration”), subject to any applicable withholding taxes.

The Company common stock is currently registered under the Exchange Act and is listed on the Nasdaq Global Market under the symbol “HWCC.” As a result of the merger, the Company will cease to be a publicly traded company and will be directly wholly-owned by OmniCable. Following the completion of the merger, the Company common stock will be delisted from the Nasdaq Global Market and deregistered under the Exchange Act, following which the Company will no longer be required to file periodic reports with the SEC with respect to its common stock in accordance with applicable law, rules and regulations. Following the completion of the merger, the Company will cease to be a publicly traded company.

Background of the Merger

The Company’s board of directors and management have regularly reviewed and discussed our business strategy, performance and opportunities in the context of the economic environment, developments in the distribution industry and the competitive landscape. In connection with our evaluation of strategic alternatives, members of management and the board of directors have had, over the years, communications with representatives of other industrial distributors and have updated the board regarding these discussions. In May 2013, we engaged William Blair & Company, L.L.C. (“William Blair”) to assist us with exploring strategic alternatives, and our board formed a special committee of independent directors to consider any potential business transactions that might be identified. In December 2013, Peter M. Gotsch, then a director of the Company, introduced James L. Pokluda III, the Company’s President and CEO, to John M. Tracy, Executive Chairman of Dot Foods Inc., an affiliate of Dot Family Holdings LLC (“DFH”), and arranged for Mr. Pokluda to visit a Dot Foods distribution facility to observe the operations of a highly successful master distribution business. William Blair continued to identify potential domestic and foreign business partners through the summer of 2014, but we did not identify any possible transactions that our board deemed worth pursuing, and the special committee was disbanded.

In July 2019, Omni Cable Corp. announced that it had agreed to be acquired by a subsidiary of Dot Holdings Co, which is owned by DFH. OmniCable, like the Company, is a master distributor of electrical wire and cable. In August 2019, Mr. Gotsch, who had retired from the board in 2014, contacted William H. Sheffield, then Chairman of the Board of the Company, to ask whether Mr. Sheffield would be willing to meet with Mr. Tracy, who also serves as Executive Chairman of DFH, to discuss a possible combination of the Company’s electrical distribution division (the “Electrical Division”) with OmniCable. Mr. Sheffield met with Mr. Tracy on September 9, 2019. At that meeting, Mr. Tracy said he was interested in acquiring the Electrical Division, but was not in a hurry to act, and Mr. Sheffield agreed that the Electrical Division and OmniCable would be a logical combination.

In early November 2019, Mr. Sheffield contacted Mr. Tracy to ask whether DFH, whose portfolio includes a business that distributes fasteners, would be interested in acquiring the Company’s Vertex fastener distribution business (“Vertex”) separately from the Electrical Division. Mr. Tracy said that DFH would not be interested in Vertex, but he said he expected to resume discussions regarding the Electrical Division in the spring of 2020.

The parties had no further contact until July 2020, when, at the Company’s board’s direction, Mr. Sheffield contacted Mr. Tracy to inquire as to DFH’s continued interest and to offer to introduce G. Gary Yetman, who had become HWCC’s Executive Chairman, to Mr. Tracy. On July 31, 2020, Messrs. Sheffield, Tracy and Yetman had a call for Mr. Yetman to meet Mr. Tracy. Mr. Yetman advised Mr. Tracy that the Company was continuing to consider several strategic alternatives and would let Mr. Tracy know if the Company’s board wanted to pursue discussions regarding a possible business combination with OmniCable. Mr. Yetman and Mr. Tracy next spoke on September 18, 2020, when Mr. Yetman advised Mr. Tracy that the board would be interested in discussing a possible combination, and Mr. Tracy said he would consult with his board to gauge their interest in exploring an acquisition of the Electrical Division only. Following the September 18 call, the Company re-engaged William Blair to advise the Company with respect to a possible transaction. On October 2, 2020, William Blair presented to the Company’s board of directors certain valuation materials, including materials illustrating the additional value expected from the Company’s recent investments in pricing tools and software and a study to optimize inventory, customer service and operational efficiency of the Electrical Division.

On October 6, 2020, Mr. Tracy called Mr. Yetman to confirm the DFH board’s support for an acquisition of the Electrical Division, and on October 14, 2020, DFH and the Company entered into a mutual confidentiality agreement. On October 15, 2020, Mr. Tracy and Mr. Yetman had a telephone conversation in which they reviewed materials prepared by William Blair that summarized income statement and balance sheet data for the Electrical Division and certain incremental value opportunities and potential synergies that William Blair had identified. Over the next two weeks, the Company and William Blair responded to requests for additional information from DFH and OmniCable in preparation for an OmniCable board meeting on October 29, 2020.

On October 30, 2020, Mr. Tracy, Mr. Yetman and representatives of William Blair spoke to continue to discuss a possible transaction for the Electrical Division, and Mr. Tracy reported that OmniCable would be willing to explore including Vertex in the transaction. On November 4, 2020, the Company and William Blair shared with OmniCable a presentation entitled “Corporate Overview and Valuation Considerations” that the Company had prepared in connection with a possible sale of Vertex and began responding to OmniCable’s questions regarding Vertex.

Mr. Tracy and Mr. Yetman spoke again on November 13, 2020, and Mr. Tracy confirmed OmniCable’s interest in including Vertex in the transaction. Mr. Yetman noted that, since the Company had determined to sell its Southern Wire and Southwest Wire Rope divisions, the Company would consist of only the Electrical Division and Vertex. Mr. Yetman proposed that the transaction be for the stock of the entire company rather than the assets of two business units, although Mr. Tracy did not then agree to the proposed structure.

On November 20, 2020, OmniCable presented to the Company a non-binding letter of intent proposing that OmniCable purchase the assets of the Electrical Division and Vertex on a cash-free, debt-free basis for $129.6 million, subject to a working capital adjustment and discounts for aged receivables and inventory. The proposal contemplated that the Company would retain all liabilities other than current liabilities included in calculating working capital. The Company and William Blair determined that, after paying retained liabilities, the implied final equity value of the proposal was $72.8 million, or approximately $4.20 per fully diluted share. At a special meeting on December 8, 2020, the Company’s board rejected the valuation in the proposed letter of intent.

On December 11, 2020, the Company sent OmniCable a one-page sheet prepared by William Blair that identified additional valuation considerations not reflected in OmniCable’s valuation of the Company and proposed a price that equated to $5.81 per share and delivered an updated version of that sheet indicating a valuation of $5.85 per share on December 16, 2020. On December 21, 2020, OmniCable subsequently increased its offer to a range implying a price of $4.70 to $4.77 per share, depending on the appraised value of the Company’s headquarters building. The Company’s board rejected that offer at a special meeting held on December 22, 2020, and the parties agreed to suspend discussions through the year-end holidays.

The Company, William Blair and DFH continued their valuation discussions in January 2021. On January 14, 2021, William Blair provided to DFH a valuation analysis based on the Company’s December 31, 2020 balance sheet that identified certain tax benefits and synergies that the Company believed would be available to the combined companies and indicated a price of $5.65 per share. On January 21, 2021, Mr. Tracy called Mr. Yetman to request preliminary financial results for fiscal 2020, which the Company then provided. On January 26, 2021, OmniCable increased its offer to $5.25 per share, assuming 17,340,000 fully diluted shares of HWCC common stock. At a special meeting held on January 26, 2021, the Company’s board authorized the Company to enter into a non-binding letter of intent with OmniCable contemplating a cash merger for $5.25 per share, subject to negotiation of a definitive agreement. On February 2, 2021, the parties executed the letter of intent, which included a 45-day exclusivity period in favor of OmniCable. The letter of intent identified certain provisions that would

be included in a definitive agreement, including specific conditions precedent, a requirement that directors and officers agree to vote their shares for the transaction, and that OmniCable would be entitled to receive a $4 million termination fee if the Company terminated the merger agreement to accept a superior takeover proposal.

Over the next six weeks, DFH and OmniCable continued conducting comprehensive due diligence on the Company. On March 10, 2021, OmniCable and its counsel provided the Company and its counsel with an initial draft merger agreement for the proposed transaction, and the law firms subsequently negotiated the terms and conditions of a definitive agreement. During the period the merger agreement was being negotiated, the Company refined its share count calculation, resulting in only 17,183,287 fully diluted shares of HWCC common stock, fewer than estimated, so that the proposed merger consideration should be $5.30 per share rather than $5.25. On March 17, 2021, the Company engaged Johnson Rice & Company to provide a fairness opinion as to the proposed merger.

At a special meeting on March 24, 2021, the Company’s board of directors met and reviewed with counsel the principal terms of the merger agreement and the voting agreements that each of the Company’s directors and officers would be required to sign. The board received a presentation from Johnson Rice as to their valuation analysis and a draft of Johnson Rice’s fairness opinion. The board also met with representatives of William Blair to review the sale process and history of negotiations. Following this discussion and consideration, the board determined that the merger agreement and the transactions contemplated thereby were advisable and in the best interests of the Company and its stockholders. Later that day, after OmniCable’s board approved the merger agreement, the parties executed the merger agreement and the Company’s directors and officers executed their voting agreements.

Recommendation of the Board

At the special meeting of the board on March 24, 2021, after careful consideration, the board unanimously:

determined that the transactions contemplated by the merger agreement, including the merger, are in the best interests of the Company and its stockholders;

approved and declared advisable the execution, delivery and performance of the merger agreement, and, subject to receiving the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote thereon to adopt the merger agreement, the consummation by the Company of the transactions contemplated by the merger agreement, including the merger;

directed that the merger agreement be submitted to a vote of the stockholders of the Company to be adopted; and

resolved to recommend the adoption of the merger agreement by the stockholders of the Company.

Reasons for Recommending the Adoption of the Merger Agreement

In evaluating the merger agreement and the transactions contemplated thereby, the board consulted with the Company’s senior management team and outside legal and financial advisors and, in determining that the proposed merger and other transactions contemplated by the merger agreement are advisable, and in the best interests of the Company and its stockholders, considered and evaluated numerous factors over the course of approximately 10 meetings of the board beginning in October 2020, including the following material factors, each of which the board believes supports its unanimous determinations:

•

Merger Consideration. The board considered that the Company’s stockholders will be entitled to receive merger consideration of $5.30 per share in cash upon the closing of the merger. The board considered the current and historical market prices of Company common stock, including the fact that $5.30 per share in cash represented a premium of approximately 39% over the closing price on March 24, 2021, the last trading day prior to the public announcement of the merger agreement, and a premium of approximately 89% over the volume-weighted average closing price of the Company common stock reported for the 12-month period ended on March 24, 2021.

•

Certainty of Value. The cash consideration represents immediate and certain value and liquidity upon the closing of the merger in comparison to the risks and uncertainty that would be inherent in remaining a stand-alone company or pursuing a transaction in which all or a portion of the consideration is payable in stock.

•

Best Alternative for Maximizing Stockholder Value. The board considered that the merger consideration was more favorable to the Company’s stockholders than the potential value that would reasonably be expected to result from other alternatives reasonably available to the Company, including the continued operation of the Company on a stand-alone basis, taking into account its acquisition opportunities, strategic alternatives and financing plans on an ongoing basis, in light of a number of factors, including:

•

the Company’s recent and historical financial condition, results of operations and business, including the Company’s 2020 performance, and the loss of financial contributions from the divested Southern Wire and Southwest Wire Rope business units;

SEC Form PREM14A filed by Houston Wire & Cable Company