LMIA Lmi Aerospace, Inc.

PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE TRANSACTIONS CONTEMPLATED THEREBY

We are asking you to adopt the Merger Agreement and approve the transactions contemplated thereby, including the Merger.

For a summary of and detailed information regarding this proposal, see the information about the Merger Agreement and the Merger throughout this proxy statement, including the information set forth in the sections captioned “ The Merger ” and “ The Merger Agreement .” A copy of the Merger Agreement is attached to this proxy statement as Annex A. You are urged to read the Merger Agreement carefully in its entirety.

Under applicable law, we cannot complete the Merger without the affirmative vote of two-thirds of the outstanding shares of our common stock voting in favor of the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your broker, bank, trustee or other nominee, it will have the same effect as a vote against the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby.

The Board of Directors, with Daniel G. Korte abstaining, unanimously recommends that you vote “FOR” this proposal.

THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Parties Involved in the Merger

LMI Aerospace, Inc.

LMI is a leading supplier of structural assemblies, kits and components, and design engineering services to the aerospace and defense markets. LMI provides a broad array of manufacturing capabilities, as well as engineering and value-added services to the large commercial, corporate and regional, and military aircraft markets. LMI also provides prototyping, testing and design capabilities to customers in support of new product development and in-service aircraft. LMI is a preferred supplier to aircraft original equipment manufacturers and Tier 1 aerospace suppliers. In addition to aerospace products, LMI produces components and assemblies for laser equipment used by semiconductor equipment manufacturers, electronic and electrical wire harnesses, cable assemblies, and mechanical sub-assemblies for the air and rail traffic control, medical equipment, telecommunications, and heavy equipment industries.

Founded in 1948 as a manufacturer of components for the large commercial aircraft market of the aerospace industry, LMI became a publicly-held company in 1998. Historically, its business was primarily dependent on the large commercial aircraft market, specifically with one principal customer. In order to diversify its product and customer base, LMI implemented an acquisition and marketing strategy in the late 1990’s that has broadened the number of industries to which LMI sells its products and services and, within the aerospace industry, diversified its customer base to reduce its dependence on any one principal customer.

LMI’s common stock is listed on the NASDAQ under the symbol “LMIA.”

LMI’s principal executive office is located at 411 Fountain Lakes Blvd., St. Charles, Missouri 63301, and its telephone number is (636) 946-6525.

Sonaca S.A.

Sonaca is a limited liability company validly existing under the laws of Belgium. Sonaca develops, manufactures and assembles advanced structures for civil, military and space markets. In particular, Sonaca is known for its wing movables expertise where it is regarded as one of the world leaders. Sonaca also supplies engineering services, large sheet metal elements, wing panels, composite structures, and machined components. Sonaca is headquartered in Gosselies, Belgium and has production facilities in China, Romania, Canada and Brazil. Sonaca employs over 2,500 people, including 350 engineers. For more information, visit www.sonaca.com.

Sonaca’s principal executive office is located at Route nationale 5, 6041 Gosselies, Belgium, and its telephone number is +32.71.25.51.11.

Sonaca USA Inc.

Intermediate Co is a Delaware corporation and a direct, wholly-owned subsidiary of Sonaca. Intermediate Co was formed in September 2015 by Sonaca as a future platform for Sonaca’s United States operations and for the purpose of potentially serving as an acquisition vehicle, but it does not have, and has never had, any operations.

Intermediate Co’s principal executive office is located at c/o Sonaca S.A. Route nationale 5, 6041 Gosselies, Belgium, and its telephone number is +32.71.25.51.11 .

Luminance Merger Sub, Inc.

Sub is a Missouri corporation, an indirect wholly-owned subsidiary of Sonaca and direct wholly-owned subsidiary of Intermediate Co. Sub formed on February 14, 2017 solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement. Sub has not engaged in any business activities except activities incidental to its formation and in connection with the Merger and the other transactions contemplated by the Merger Agreement.

Sub’s principal executive office is located at c/o Sonaca S.A. Route nationale 5, 6041 Gosselies, Belgium, and its telephone number is +32.71.25.51.11.

Effect of the Merger

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Sub will merge with and into LMI, and LMI will continue as the surviving corporation, and as a wholly-owned indirect subsidiary of Sonaca, and a wholly-owned direct subsidiary of Intermediate Co. As a result of the Merger, LMI common stock will no longer be publicly traded and will be delisted from NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic or current reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the surviving corporation.

The effective time of the Merger will occur upon the filing of summary articles of merger with the Secretary of State of Missouri, or at such other time as Sonaca and LMI shall agree and specify in the summary articles of merger.

Effect on LMI if the Merger is Not Completed

If the Merger Agreement is not adopted and the Merger and the other transactions contemplated thereby are not approved by shareholders or if the Merger is not completed for any other reason, LMI shareholders will not receive any payment for their shares of our common stock. Instead, LMI will remain an independent public company, and our common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act and we will continue to file periodic and current reports with the SEC. In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that shareholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, among other things, the nature of the industry on which our business largely depends, and general industry, economic, regulatory and market conditions.

Furthermore, if the Merger is not completed, depending on the circumstances that caused the Merger not to be completed, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of our common stock. If the Merger is not completed, the Board of Directors will continue to evaluate and review LMI’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement is not adopted and the Merger and the other transactions contemplated thereby are not approved by shareholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board of Directors will be offered or that LMI’s business, prospects or results of operation will not be adversely impacted.

If the Merger Agreement is terminated under certain circumstances, we will be obligated to pay Sonaca a break-up fee of either $10 million or $15 million, depending upon the circumstance. For more information, see the section of this proxy statement captioned “The Merger Agreement—Break-Up Fees .”

Merger Consideration

At the effective time of the Merger, each share of our common stock issued and outstanding immediately prior to the effective time of the Merger (including any shares resulting from the settlement of Restricted Shares and RSUs which become vested immediately prior to the effective time of the Merger as a result of the consummation of the Merger, but excluding excluded shares and appraisal shares), will be cancelled and automatically converted into the right to receive $14.00 in cash, without interest, and subject to deduction for any required withholding tax. As of the effective time of the Merger, all shares of our common stock will be cancelled and will thereafter represent only the right to receive the Merger Consideration to be paid in accordance with, and subject to, the conditions of the Merger Agreement. At the effective time of the Merger, each share of our common stock held by the Parent, Intermediate Co, or Sub, will be automatically canceled without payment of any consideration. In addition, each share of our common stock held by a shareholder who is entitled to and who properly exercises and perfects appraisal rights under the MGBCL, will not be converted into the right to receive Merger Consideration, unless and until such shareholder fails to perfect or effectively withdraws or loses such shareholder’s right to appraisal under Section 351.455 of the MGBCL, at which time each such share of our common stock will be converted into and will be exchangeable only for the right to receive, as of the later of the effective time of the Merger and the time that such right to appraisal is irrevocably lost, the Merger Consideration. Appraisal shares shall be treated in accordance with Section 351.455, as more fully described in the section of this proxy statement captioned “ The Merger—Appraisal Rights .”

Background of the Merger

The Board of Directors and management of the Company regularly evaluate the Company’s long-term strategic plan with the goal of maximizing shareholder value. As part of this ongoing process, the Board of Directors and management of the Company have periodically considered a variety of potential strategic alternatives relating to the Company’s business, including the continuation of the Company’s business plan as a standalone enterprise, potential strategic alliances and other commercial arrangements, modifications to the Company’s strategy, prospects for strategic mergers and acquisitions and other business combinations and sales of certain divisions.

On November 4, 2016, and without prior solicitation from the Company or its advisors, a representative of Sonaca’s financial advisor, Credit Suisse AG (“ Credit Suisse ”), contacted Gregory Summe, a member of the Board of Directors, and verbally indicated that Sonaca was interested in making an offer to acquire 100% of the stock of the Company for cash. Credit Suisse had first attempted to contact Gerald Daniels, Chairman of the Board of Directors, but had been unable to reach him prior to contacting Mr. Summe. Mr. Summe immediately referred the inquiry to Mr. Daniels.

Later that same day, on November 4, 2016, and without prior solicitation from the Company or its advisors, Bernard Delvaux, Chief Executive Officer of Sonaca, submitted a written letter addressed to Mr. Daniels, expressing Sonaca’s interest in a possible business combination transaction with the Company. The letter envisioned a transaction whereby Sonaca would acquire 100% of the stock of the Company for cash and indicated that, based on Sonaca’s review of publicly-available information, it currently assigned a value range to the Company of $11.00 – $12.50 per share of Company common stock. The letter stated that Sonaca was familiar with the Company’s business and described a number of perceived corporate and business synergies between the Company and Sonaca. The letter noted that a potential acquisition of the Company was a strategic priority for Sonaca and that Sonaca was prepared promptly to commit the necessary resources to complete confirmatory due diligence and negotiate a definitive merger agreement. The letter indicated that Sonaca had already retained Credit Suisse as its financial advisor and Kaye Scholer LLP (now known as Arnold & Porter Kaye Scholer) (“ APKS ”) as its outside legal counsel. The letter requested a 30-day exclusivity period in which to perform additional due diligence, after which Sonaca would be willing to consider increasing the proposed price if its due diligence identified additional value. Enclosed with the letter was a proposed form of exclusivity agreement. On November 4, 2016, the closing price per share of Company common stock on NASDAQ was $7.49.

On November 5, 2016, the Company contacted Lazard and expressed its desire to retain Lazard as the Company’s financial advisor in evaluating and responding to Sonaca’s proposal.

On November 7, 2016, the Board of Directors contacted Gibson, Dunn & Crutcher LLP (“ Gibson Dunn ”) and expressed its desire to retain Gibson Dunn as its outside legal advisor to advise on matters relating to the Sonaca proposal.

On November 7, 2016, the Board of Directors held a telephonic meeting, with members of Company management present, to discuss the particulars of Sonaca’s proposal and the merits and risks of exploring a potential transaction with Sonaca, including preliminary perspectives on the price range indicated in the November 4 letter from Mr. Delvaux. At the request of the Board of Directors, representatives of both Gibson Dunn and Lazard, each of which has extensive experience in transactions of this type, were also present for the meeting. The Board of Directors discussed with representatives of Gibson Dunn and Lazard various alternatives to a transaction with Sonaca and processes for exploring a potential strategic transaction with Sonaca, including an initial discussion about the merits and challenges of proceeding exclusively with Sonaca for a period of time. A representative of Gibson Dunn reviewed the fiduciary duties of the Board of Directors in the context of an acquisition proposal generally and with respect to Sonaca’s proposal specifically.

On November 8, 2016, Mr. Daniels, on behalf of the Board of Directors, delivered a written letter to Mr. Delvaux acknowledging receipt of Sonaca’s letter and explaining that the Board of Directors had met to discuss the proposal and had engaged resources to assist in its investigation of the matter. The letter did not provide any feedback to Mr. Delvaux on either the valuation of Sonaca’s indication of interest or its request for exclusivity.

On November 11, 2016, the Board of Directors entered into an engagement letter to formally retain Gibson Dunn as its outside legal counsel.

On November 12, 2016, the Board of Directors convened a telephonic meeting, with members of Company management and representatives of Lazard and Gibson Dunn present. The Board of Directors discussed certain financial analyses prepared by Lazard at the request of the Board of Directors. The Board of Directors also further discussed the merits and risks of proceeding exclusively with Sonaca and, if the Company were to consider proceeding exclusively with Sonaca for a period of time, the appropriate parameters of any exclusivity period. A representative of Gibson Dunn reviewed the fiduciary duties of the Board of Directors in considering and responding to an acquisition proposal as well as in relation to Sonaca’s request for exclusivity. It was decided that Daniel G. Korte, President and Chief Executive Officer of the Company, would call Mr. Delvaux to suggest a meeting between the Company and Sonaca management teams, and would indicate on that call that the Company was not prepared to grant exclusivity at the time. After further discussion, the Board of Directors established an ad hoc board committee, referred to as the “ Sunburst Committee ,” consisting of independent directors Mr. Daniels, John Eulich and Mr. Summe; Lawrence Resnick (who was then a special advisor to the Board of Directors on strategic and industry matters) was appointed to advise the Sunburst Committee. Mr. Resnick later became a member of the Sunburst Committee upon joining the Board of Directors effective January 1, 2017. The Sunburst Committee was empowered to evaluate the potential transaction and report back to the full Board of Directors as material developments should arise.

On November 13, 2016, Mr. Korte and Mr. Delvaux spoke by telephone to discuss general perspectives on and Sonaca’s rationale regarding the potential fit and strategic alignment of the Company’s and Sonaca’s respective businesses. Mr. Korte also expressed to Mr. Delvaux that, in light of the Company’s status as a publicly-traded company and its fiduciary duties to shareholders, the Board of Directors could not, without sufficient justification, at the time entertain a grant of exclusivity and would in any event require ample opportunity for a market check either before doing so or affirmatively after signing any definitive agreement that may evolve.

On November 14, 2016, Mr. Delvaux sent a written letter to Mr. Korte reiterating Sonaca’s requirement for exclusivity in order to conduct further due diligence for the purpose of determining its ability to increase its previously indicated value range. The letter indicated that, while Sonaca was not prepared to proceed on any basis other than exclusivity, it would be willing to consider a shorter, 21-day exclusivity period and was also prepared to narrow the range of its diligence inquiry to a short list of what it considered to be the most important items based on its prior review of publicly-available information. Mr. Delvaux also acknowledged that Sonaca envisioned that any definitive agreement between the two companies would include a post-signing market check provision.

On November 15, 2016, the Sunburst Committee held a telephonic meeting, with members of Company management and representatives of Lazard also present. The Sunburst Committee discussed the November 14 letter from Mr. Delvaux and, in particular, Sonaca’s expressed willingness to agree to a shorter exclusivity period, agreement in principle to a go-shop provision and the proposed scope of the initial diligence effort. Following discussion of various options with respect to exclusivity, the Sunburst Committee agreed that it was in the best interests of the Company’s shareholders for the Company to negotiate and execute with Sonaca a confidentiality agreement containing a standstill provision and granting exclusivity for a period of ten calendar days, after which time a higher value range would need to be provided in order for the Company to agree to extend exclusivity for an additional 11 calendar days.

On November 17, 2016, the Board of Directors held a telephonic meeting, with Company management present, to discuss the Sunburst Committee’s recommendation that the Company agree to the exclusivity framework previously discussed by the Sunburst Committee. Namely, the Company would provide Sonaca with exclusivity for an initial period of ten calendar days, during which period the Company would furnish Sonaca with a limited set of non-public information (to be agreed upon in advance by the Company and Sonaca) in order to facilitate the submission by Sonaca of a revised non-binding proposal reflecting an increased value range. If the higher value range justified doing so, the Company would agree to extend the exclusivity period for an additional 11 calendar days. After discussion, the Board of Directors agreed that it was in the best interests of the Company’s shareholders to enter into an appropriate confidentiality and standstill agreement with Sonaca, which would contain an exclusivity provision, and to prepare information about the Company that would allow Sonaca to possibly revise upwards the value range it would assign to the Company.

Between November 16, 2016 and November 23, 2016, the Company, Sonaca and their respective counsel negotiated the terms of a confidentiality agreement that included customary standstill and non-solicitation provisions. The Company and Sonaca executed the confidentiality agreement on November 23, 2016. The confidentiality agreement provided Sonaca exclusivity with respect to a potential acquisition of the Company until December 6, 2016, longer than the originally proposed ten calendar day period in part because of the upcoming Thanksgiving holiday weekend. The confidentiality agreement also provided for the possibility of an exclusivity extension for an additional 11 calendar days if, on or before December 6, 2016, Sonaca submitted to the Company an updated written indication of interest with a per share purchase price range reflecting the results of Sonaca’s due diligence findings, and such per share purchase price range represented a range which the Board of Directors determined warranted a continuation of discussions. Under the confidentiality agreement, the initial exclusivity end date of December 6, 2016 would extend on a daily basis until the Company provided to Sonaca substantially all of the items enumerated in an agreed-upon due diligence request list that was negotiated in parallel with the confidentiality agreement.

Also on November 23, 2016, the Company executed a formal engagement letter with Lazard in connection with the potential sale of the Company.

On November 24, 2016, the Company provided substantially all of the due diligence materials enumerated in the initial due diligence request list, such that the initial exclusivity period would expire on December 7, 2016 unless extended by the Board of Directors in its discretion pursuant to the confidentiality agreement. These initial due diligence materials provided by the Company to Sonaca included the Company’s August 2016 Plan, which had been previously approved by the Board of Directors in August 2016 and is defined and described in the section captioned “— Management Projections. ”

On November 29, 2016, the Board of Directors convened a brief telephonic meeting, with members of Company management present. Mr. Korte updated the Board of Directors on the Company’s execution of a confidentiality agreement with Sonaca just prior to the Thanksgiving holiday weekend, the key terms of the agreement and the status of the initial diligence production.

On the evening of December 1, 2016, Mr. Korte, Clifford C. Stebe, Jr., the Company’s Chief Financial Officer, and Lawrence E. (Ed) Dickinson, principal at Aerospace Consulting, LLC, the former chief financial officer of the Company and currently a strategic consultant to the Company, met over dinner in New York City with Mr. Delvaux, Pierre Sonveaux, Chairman and President of Sonaca, and Erik van Ockenburg, Chief Financial Officer and Strategy Officer of Sonaca. Messrs. Korte, Stebe, Dickinson, Delvaux, Sonveaux and van Ockenburg were also accompanied by representatives of Lazard and Credit Suisse. The dinner was primarily of a social and introductory nature in advance of the next day’s scheduled diligence session.

On December 2, 2016, representatives of the Company and Sonaca, including Messrs. Korte, Stebe, Dickinson, Delvaux, Sonveaux and van Ockenburg, along with additional Sonaca executives and accompanied by representatives of Lazard, Credit Suisse and Deloitte (Sonaca’s accounting and tax advisor), held an in-person meeting at Lazard’s New York office to review the initial due diligence materials that the Company had provided on November 24, 2016. The discussion covered aspects of the Company’s operations, content programs and financial performance.

On December 5, 2016, Mr. Delvaux submitted a written letter addressed to Messrs. Daniels and Korte revising Sonaca’s non-binding indication of interest to acquire 100% of the Company’s stock for cash at an increased value range of $12.50 – $13.75 per share. The closing price per share of Company common stock on NASDAQ on December 5, 2016 was $9.03. In light of the increased value range stated in Sonaca’s revised proposal, the letter requested (in accordance with the confidentiality agreement) an 11 calendar day extension to the original December 7, 2016 exclusivity termination date, in order to provide Sonaca an opportunity to review additional due diligence materials to be set forth in an expanded due diligence request list for the purpose of enabling Sonaca to formalize an offer by the expiration of such 11-day period.

The next day, on December 6, 2016, the Sunburst Committee convened a telephonic meeting to consider Sonaca’s revised indication of interest and request for extension of exclusivity, with members of Company management and representatives of Lazard and Gibson Dunn present. Members of Company management and representatives of Lazard recounted meetings and discussions with Sonaca and Credit Suisse to date. The Sunburst Committee instructed Lazard to update certain financial analyses on the basis of Sonaca’s most recent offer for presentation to the Sunburst Committee at another meeting scheduled for the next day, at which the Sunburst Committee would decide on a response to Sonaca’s December 5 proposal.

On December 7, 2016, the Sunburst Committee convened a telephonic meeting, with members of Company management and representatives of Lazard present. After discussing with Lazard certain of its updated financial analyses and deliberating further, the Sunburst Committee determined that Sonaca’s December 5, 2016 revised indication of interest offered inadequate value for the Company’s shareholders and did not warrant a continuation of discussions with Sonaca nor an extension of exclusivity.

On December 7, 2016, the Company sent a written letter to Mr. Delvaux informing him that, after careful consideration of Sonaca’s December 5, 2016 revised indication of interest, including consultations with its financial and legal advisors, the Board of Directors had determined a continuation of discussions with Sonaca was not warranted and that, consequently, the exclusivity period contemplated in the confidentiality agreement had expired.

Following delivery of the December 7, 2016 letter to Sonaca until December 16, 2016, there was no further contact between the Company and Sonaca.

On December 8, 2016, Mr. Daniels held an informal telephone conference with two other members of the Board of Directors (who were not serving on the Sunburst Committee) to update them on developments to date.

On December 16, 2016, Mr. Delvaux submitted a written letter to Mr. Daniels, which included a revised non-binding indication of interest to acquire 100% of the stock of the Company for cash at a value range of $13.00 – $16.00 per share. The letter indicated that the increased value range was predicated on fulfillment of certain additional due diligence requests and further discussions and meetings with Company management in order to confirm Sonaca’s revised assumptions. The letter also stated that Sonaca would seek, as part of a transaction, an agreement in principle on the terms of an employment agreement with Mr. Korte until at least December 31, 2019. The letter requested a new exclusivity period ending at 11:59 p.m. Eastern time on January 22, 2017, assuming receipt of the specified further due diligence information on or before 11:59 p.m. Eastern time on January 2, 2017.

Later in the afternoon on December 16, 2016, the Sunburst Committee, with Company management and representatives of Lazard and Gibson Dunn present, convened a telephonic meeting to discuss the revised indication of interest from Sonaca and the merits and risks of entering into a new exclusivity period with Sonaca until January 22, 2017. The Sunburst Committee sought input from Company management on the feasibility of the outlined process. A representative of Gibson Dunn reviewed again the fiduciary duties of the Board of Directors and recommended inclusion of a go-shop provision in a definitive acquisition agreement, should one be executed. After discussion, the Sunburst Committee instructed Gibson Dunn to prepare an addendum to the existing confidentiality agreement with Sonaca that would provide Sonaca with exclusivity as outlined in its December 16, 2016 letter, but subject to a “drop-dead” exclusivity termination date of January 31, 2017 at 11:59 p.m. Eastern time regardless of whether the Company had delivered substantially all of the requested additional due diligence information by 11:59 p.m. Eastern time on January 2, 2017 or thereafter. Based on the facts then known to it and to the Board of Directors, the Sunburst Committee also instructed Lazard to verbally communicate to Credit Suisse that Sonaca’s next revised proposal would need to fall at the higher end of the indicated value range in order for the Board of Directors to view it as compelling at such time.

On December 19, 2016, the Company and Sonaca entered into an addendum to the November 23, 2016 confidentiality agreement. Under this addendum, the Company endeavored to provide certain requested additional due diligence information to Sonaca regarding the Company’s businesses and products and agreed to provide Sonaca with exclusivity from December 19, 2016 until 11:59 p.m. Eastern time on January 22, 2017. The exclusivity period would extend on a daily basis if the Company did not provide substantially all of the agreed-upon additional due diligence information by 11:59 p.m. Eastern time on January 2, 2017 but would in any event terminate on January 31, 2017 at 11:59 p.m. Eastern time. The addendum reiterated the Company’s expectation that if a definitive agreement were to be executed, such definitive agreement would include a post-signing market check provision.

On January 2, 2017, in accordance with the confidentiality agreement (as amended by the December 19, 2016 addendum), Lazard, on behalf of the Company, delivered the agreed-upon additional due diligence materials to Credit Suisse, on behalf of Sonaca. The Company concurrently notified Sonaca in writing that such delivery constituted substantially all of the requested information, and that, in accordance with the terms of the confidentiality agreement (as amended by the December 19, 2016 addendum), exclusivity would terminate on January 22, 2017.

On January 4, 2017, Messrs. Korte, Stebe and Dickinson held a financial diligence call with representatives of the Sonaca management team, including Paul Costanzo, Chief Financial Officer of Sonaca Montreal.

On January 6, 2017, Mr. Stebe and other members of the Company’s management team, accompanied by the Company’s independent auditor, held two due diligence calls with Mr. Costanzo and other representatives of the Sonaca management team covering tax and audit diligence matters, respectively.

In response to Sonaca’s legal and confirmatory due diligence requests, the Company established an online data room that was populated with certain non-public information regarding the Company’s organization, business and operations, properties and employees, as well as tax, legal and miscellaneous matters, in response to Sonaca’s specific legal diligence requests. On January 9, 2017, Lazard provided access to these due diligence materials to Sonaca through the online data room in order to facilitate the completion of Sonaca’s confirmatory due diligence.

Also on January 9, 2017, and from time to time thereafter through the execution of the Merger Agreement (including on January 17, 2017, January 23, 2017 and February 6, 2017), members of the Company’s in-house legal team held telephone calls and exchanged e-mails with representatives of APKS regarding legal diligence requests.

On January 9-10, 2017, Mr. Korte accompanied Sonaca operations executives on facility site visits to the Company’s facilities located in Vista, California; Fredonia, Kansas; Tulsa, Oklahoma; Cottonwood, Kansas; Washington, Missouri; and St. Charles, Missouri.

On January 11-12, 2017, representatives of the Company, including Messrs. Korte, Stebe, Dickinson, and Ms. Renée Skonier, General Counsel and Chief Compliance Officer of the Company, and representatives of Sonaca, including Messrs. Delvaux, van Ockenburg, Costanzo and other Sonaca executives, accompanied by representatives of Lazard and Credit Suisse, conducted in-person meetings in St. Louis, Missouri to review ongoing due diligence requests.

Also on the evening of January 11, 2017, Messrs. Korte and Delvaux met in St. Louis, Missouri, over dinner and held general discussions regarding the employment arrangements envisioned for Mr. Korte and potentially certain other executives of the Company if a transaction were to occur, the negotiation of which arrangements was being directed and overseen by the Compensation Committee of the Board of Directors (which is comprised solely of independent directors). Messrs. Korte and Delvaux also further discussed their views on the potential strategic alignment of the Company’s and Sonaca’s respective businesses.

On January 12, 2017, Messrs. Stebe and Dickinson held a telephone conference with financial executives of Sonaca regarding various financial diligence matters.

On January 13, 2017, Messrs. Stebe and Costanzo spoke again by telephone regarding certain follow-up financial diligence matters.

On January 16, 2017, Messrs. Korte, Stebe and Dickinson held a call with representatives of Sonaca to discuss the diligence process and address particular follow-up diligence inquiries.

Between January 18-27, 2017 Messrs. Korte and Delvaux spoke from time to time by telephone about potential compensation structures for the Company leadership team following a transaction, if a transaction should occur, the negotiation of which was being directed and overseen by the Compensation Committee of the Board of Directors (which is comprised solely of independent directors).

On January 18, 2017, Messrs. Stebe and Costanzo spoke by telephone regarding certain follow-up financial diligence matters.

On January 19, 2017, Mr. Delvaux submitted a written letter to Mr. Korte, expressing Sonaca’s continued interest in a potential transaction and requesting an extension of the exclusivity period from 11:59 p.m. Eastern time on January 22, 2017 until 5:00 p.m. Eastern time on January 27, 2017, in order to give Sonaca additional time to evaluate recently received due diligence information in order to be able to make a final price per share proposal. The letter transmitted a preliminary draft Merger Agreement for the Company’s review.

On January 20, 2017 (and again on February 7, 2017), Mr. Stebe e-mailed Mr. Costanzo in response to particular follow-up financial diligence inquiries.

On January 21, 2017, Mr. Korte sent a written letter to Mr. Delvaux agreeing to extend the exclusivity period until 5:00 p.m. Eastern time on January 27, 2017 in light of Sonaca’s need to complete its review of the diligence materials provided and obtain required approvals of its final price per share proposal.

On January 23, 2017, the Sunburst Committee held a telephonic meeting, with representatives of Lazard and Gibson Dunn present, to review key terms of the preliminary draft Merger Agreement prepared by APKS. The draft Merger Agreement provided for the acquisition of the Company pursuant to a reverse triangular merger of an indirect, wholly-owned subsidiary of Sonaca with and into the Company, with the Company surviving the Merger as an indirect wholly-owned subsidiary of Sonaca. The draft also provided for the full acceleration of outstanding equity awards of the Company and a 21-day “go-shop” period during which the Company could actively solicit alternative proposals from other parties, followed by a “no-shop” period during which the Company could only pursue certain unsolicited alternative proposals (in addition to continuing to pursue certain qualifying proposals received during the “go-shop” period). The draft provided for Sonaca to obtain a combination of debt and equity financing to fund the merger consideration, and included a break-up fee payable by the Company to Sonaca as Sonaca’s sole remedy in certain specified circumstances and a reverse break-up fee payable by Sonaca to the Company as the Company’s sole remedy in certain specified circumstances (including in the event of Sonaca’s failure to obtain financing). The Sunburst Committee discussed with the representatives of Gibson Dunn and Lazard the potential implications of various key provisions in the draft Merger Agreement, including in particular the potential risks that the proposed financing structure and reverse break-up fee construct could pose to deal certainty.

Later that same day, on January 23, 2017, representatives of Gibson Dunn called representatives of APKS to provide initial feedback on material issues raised by the draft Merger Agreement, including the Company’s requirement for greater deal certainty and comfort regarding Sonaca’s financing arrangements (specifically, a right to full specific performance and uncapped damages for breach, including in a circumstance where Sonaca was unable to perform due to a financing failure, and removal of the reverse break-up fee concept), a longer “go-shop” period, and a more flexible standard under which the Board of Directors could exercise its “fiduciary out.”

On January 27, 2017, a representative of Credit Suisse called a representative of Lazard to verbally indicate a revised proposal with a value of $14.00 per share of Company common stock. On January 27, 2017, the closing price per share of Company common stock on NASDAQ was $8.90.

On January 27, 2017, the Compensation Committee of the Board of Directors held a telephonic meeting, with members of Company management and representatives of the Compensation Committee’s outside compensation consultant also present. The Compensation Committee discussed the potential impact of a transaction with Sonaca on executive employment agreements and incentives and sought input from its consultant on certain matters, including the proposed treatment of outstanding equity awards in the transaction, insight into current market practices and the consultant’s in-process analysis of certain tax-related considerations under Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”).

The next morning, on January 28, 2017, the Sunburst Committee convened a telephonic meeting to consider Sonaca’s revised proposal of $14.00 per share. Also in attendance were members of Company management and representatives of Gibson Dunn and Lazard. In addition to discussing the price terms of the latest offer, the Sunburst Committee also discussed certain other terms of the proposal including Sonaca’s request for a commitment on new employment contracts with four to six members of the Company management team and the scheduling of introductory telephone calls with Messrs. Korte and Delvaux and the Company’s three largest customers. After deliberating on the merits and risks of possible alternative responses to Sonaca’s current proposal, the Sunburst Committee decided to instruct Lazard to counter Sonaca’s $14.00 per share proposal with a price of $15.00 per share. In addition, the Sunburst Committee instructed Lazard to request removal of the reverse break-up fee and to offer employment agreements for Messrs. Korte and Stebe only (with no associated closing condition) and calls with only two of the Company’s largest customers. A representative of management then discussed the Company’s ongoing work to update management’s financial forecasts.

Shortly following the conclusion of the Sunburst Committee meeting on January 28, 2017, based on the instructions of the Sunburst Committee, a representative of Lazard called Credit Suisse and indicated that the Company was only willing to proceed on the basis of a price per share of at least $15.00 and on the other terms discussed by the Sunburst Committee.

The next morning, on January 29, 2017, the full Board of Directors held a telephonic meeting, with members of the Company management team and representatives of Lazard and Gibson Dunn present, at which the Sunburst Committee briefed the other directors on the Sunburst Committee’s decision to reject the $14.00 per share offer and counter at a price per share of $15.00. A representative of Lazard reported that he had delivered this message to a representative of Credit Suisse, and had also communicated the Company’s position that the reverse break-up fee concept must be deleted, that Mr. Korte and Mr. Stebe would agree to post-closing employment arrangements with Sonaca but that there could be no associated closing condition or requirement for any other executive to enter into an employment agreement, and that the Company would not facilitate more than two confirmatory customer calls. A representative of Gibson Dunn reviewed the fiduciary duties of the Board in considering and responding to an acquisition proposal as well certain legal terms of Sonaca’s proposal and answered questions. The Board of Directors also discussed its assessment of certain risks relating to certainty of closing a transaction with Sonaca.

On January 31, 2017, the Board of Directors held a telephonic meeting, with members of Company management and representatives of Lazard and Gibson Dunn present. The meeting began with a representative of Lazard reporting that he had not yet received a response from Credit Suisse to the Company’s $15.00 counter-proposal delivered on January 28, 2017. Members of the Company management team and the Compensation Committee of the Board of Directors (which is comprised solely of independent directors) then updated the Board of Directors on the Compensation Committee’s consideration, direction and oversight of various compensation matters relating to the potential transaction with Sonaca, including the contemplated acceleration of equity awards and certain analyses being performed by the Compensation Committee’s outside compensation consultant. Mr. Stebe updated the Board of Directors on preliminary financial results for the fourth quarter and fiscal year ended December 31, 2016, which indicated an earnings shortfall and higher net debt balance relative to expectations. With respect to net debt, Mr. Stebe informed the Board of Directors that preliminary results indicated an actual net debt balance of $240.8 million at December 31, 2016, approximately $10 million higher than management’s expected net balance of $231.052 million that had been communicated to Sonaca on November 24, 2016 together with the August 2016 Plan. Mr. Stebe also discussed the bridge from the August 2016 Plan to management’s updated January 2017 Plan and to its Risk-Adjusted January 2017 Plan, which are defined and described further in the section of this proxy statement captioned “— Management Projections ,” noting adjustments made relative to the August 2016 Plan to account for market conditions, rate changes, the Company’s 2017 budget and delays in implementation of the Company’s enterprise resource planning system. Discussion ensued, addressing major drivers to sales and profit number reductions reflected in the updated forecasts, and Mr. Stebe answered questions. The Board of Directors and the members of management present discussed at length these results and management’s rationale for the revised forecasts, notably management’s belief that the Risk-Adjusted January 2017 Plan reflected its most up-to-date and balanced forecasts, reflecting in particular completion of the 2017 budget, learnings from the Company’s preliminary 2016 full year financial results, anticipated reductions in certain platform build rate outlooks, management changes, potential challenges in winning new opportunities and potential execution risks on new programs that were not included in the August 2016 Plan and the January 2017 Plan. Representatives of Lazard then reviewed with the Board of Directors certain preliminary valuation analyses and performance statistics of the Company and answered questions.

On February 2, 2017, a representative of Credit Suisse called Lazard to verbally indicate a final revised proposal with a value of $14.50 per share of Company common stock.

That afternoon, on February 2, 2017, the Sunburst Committee convened a telephonic meeting, which was also attended by members of Company management and representatives of Lazard and Gibson Dunn. A representative of Lazard began by updating the Sunburst Committee on his conversation with Credit Suisse regarding Sonaca’s counter proposal of $14.50 per share. Credit Suisse had characterized the offer as Sonaca’s absolute “best and final” offer and explained that Sonaca’s delay in responding had been due to its need to seek formal approvals from its shareholders, all of which approvals had now been obtained according to Credit Suisse. Credit Suisse had also conveyed that Sonaca had agreed to most of the other terms of the Company’s January 28 counter-proposal, namely that it would require only two confirmatory customer calls, it had agreed to delete the concept of a reverse break-up fee as a limitation on the Company’s damages and to delete all other financing contingency-like provisions from the draft Merger Agreement, would request the delivery at signing of conditional employment agreements only with Messrs. Korte and Stebe with no associated closing condition and would agree to a physical inspection of certain other due diligence items at a location specified by the Company. The Sunburst Committee discussed Sonaca’s proposal and asked questions of Lazard, noting that the mathematical difference between a purchase price of $15.00 versus $14.50 per share represented a relatively small percentage of enterprise and equity value and also a small difference in EBITDA multiples. After further deliberation, the Sunburst Committee directed Lazard to communicate to Credit Suisse that the Company would move forward with negotiating the definitive Merger Agreement on the basis of a $14.50 price per share, while emphasizing that this price remained subject to approval of the full Board of Directors and that the Company continued to seek a longer, 35 calendar day “go-shop” period in lieu of Sonaca’s proposed 21 days. After a review of market data regarding break-up fees involving similarly leveraged transactions presented by representatives of Lazard, and following a discussion with a representative of Gibson Dunn on the legal implications of the break-up fee amount, the Sunburst Committee instructed Lazard to propose to Credit Suisse a single break-up fee of $7.5 million, equal to approximately 3.7% of equity value and 1.7% of enterprise value. The Sunburst Committee authorized Gibson Dunn to reflect this proposal in its revised draft of the Merger Agreement.

On February 2, 2017, shortly following the telephonic meeting of the Sunburst Committee, Lazard called Credit Suisse to communicate the Company’s desire to move forward on the basis of a value of $14.50 per share subject to successful negotiation of a mutually acceptable Merger Agreement and final approval of the full Board of Directors. On this call, Lazard also communicated the Company’s counter-proposal regarding certain terms of the Merger Agreement, including the length of the “go-shop” period and size of the break-up fee.

On the morning of February 3, 2017, Gibson Dunn sent to APKS a revised draft of the Merger Agreement reflecting the Company’s previously articulated positions, including with respect to the length of the “go-shop” period and the amount of the break-up fee.

Later in the afternoon on February 3, 2017, the Board of Directors held a telephonic meeting, with members of Company management and representatives of Lazard and Gibson Dunn present. During the meeting, members of the Company management team reviewed with the Board of Directors the content of management’s January 2017 Plan and Risk-Adjusted January 2017 Plan, incorporating the most current market and Company operating performance data and management’s updated forecast for 2017, 2018, 2019, and 2020 financial performance provided to the Board of Directors in advance of the meeting. The presentation reviewed certain assumptions of management underlying the January 2017 Plan and Risk-Adjusted January 2017 Plan, as well as differences in the updated plans as compared to the August 2016 Plan that had been previously approved by the Board of Directors in August 2016 and provided to Sonaca on November 24, 2016. Following discussion, the Board of Directors approved the January 2017 Plan and Risk-Adjusted January 2017 Plan and authorized Lazard to provide both of these forecasts, together with management’s update on preliminary financial results for the fourth quarter and fiscal year ended December 31, 2016, to Credit Suisse as soon as possible. The Board of Directors also formally instructed Lazard to rely on the Risk-Adjusted January 2017 Plan for the purpose of rendering its Fairness Opinion to be presented to the Board of Directors at a subsequent meeting, based on its conclusion that the Risk-Adjusted January 2017 Plan represented the most realistic and appropriate basis for Lazard’s analysis. Representatives of Gibson Dunn then reviewed in detail the key terms of the draft Merger Agreement, with a focus on the proposed deal protections and closing conditions. A discussion then ensued regarding the course of negotiations of the deal protections, including the break-up fee, the go-shop and no-shop provisions in the draft Merger Agreement, and the absence of a financing contingency. The Board of Directors asked questions about the extent of operating flexibility afforded by the interim negative covenants and a discussion ensued.

On the evening of February 3, 2017 following the Board of Directors telephonic meeting, Lazard, on behalf of the Company, provided to Sonaca and Credit Suisse an update on preliminary financial results for the fourth quarter and fiscal year ended December 31, 2016, which indicated an earnings shortfall and higher net debt balance relative to expectations. Lazard also provided to Credit Suisse Company management’s revised forecasts as reflected in the January 2017 Plan and Risk-Adjusted January 2017 Plan.

Also on February 3, 2017 and February 4, 2017, Messrs. Korte and Delvaux had further discussions regarding the terms of the employment agreements expected to be executed by Messrs. Korte and Stebe concurrently with the execution of a definitive Merger Agreement, which were being directed and overseen and would be subject to review and approval by the Compensation Committee of the Board of Directors (which is comprised solely of independent directors). Messrs. Korte and Delvaux also discussed procedures for the two upcoming planned introductory calls with customers of the Company.

On February 5, 2017, Messrs. Korte and Stebe and representatives of Lazard held a conference call with members of Sonaca’s management team and representatives of Credit Suisse to discuss the preliminary financial results of the fourth quarter and fiscal year ended December 31, 2016 and the revised financial forecasts that had been provided to Credit Suisse on February 3, 2017.

On the morning of February 6, 2017, the Board of Directors convened a telephonic meeting with members of the Board of Directors, members of Company management and representatives of Gibson Dunn. A representative of the management team updated the Board of Directors on the conversation that had taken place the day before with Sonaca and Credit Suisse regarding the preliminary financial results of the fourth quarter and fiscal year ended December 31, 2016 and Company management’s revised financial forecasts. Following that conversation, Sonaca had communicated both to Mr. Korte and via Credit Suisse to representatives of Lazard that Sonaca believed the updated financial information (and in particular the higher than expected net debt balance) necessitated a decrease in Sonaca’s offer of between $0.75 to $1.00 per share. A member of the management team also then informed the Board of Directors that the Company had received certain letters from a major customer with respect to the Company’s performance under the contract with that customer, and provided information on the Company’s recovery plan regarding such matters. The Board of Directors then reviewed with members of Company management and representatives of Gibson Dunn certain share price projections that had been included in a presentation to the Company in August 2016 by a financial advisor other than Lazard (and which other financial advisor was neither engaged by, involved in nor advising the Company or the Board of Directors with respect to a potential transaction). The Board of Directors discussed and agreed that the assumptions on EBITDA and net debt underlying such projections were invalid and, therefore, that the projections were not useful. Accordingly, the Board of Directors gave no weight to such projections in its consideration of matters relating to a potential transaction with Sonaca. Representatives of Lazard joined the meeting and recounted for the Board of Directors their conversations with Sonaca management and Credit Suisse, during which the Sonaca and Credit Suisse representatives had reiterated that a $0.75 to $1.00 reduction in Sonaca’s offer price was likely forthcoming. After further discussion, the Board of Directors, with the concurrence of Lazard, instructed the Company management team to present an overall business update to Sonaca as soon as possible and prior to receiving a revised offer.

On February 8, 2017, members of the Company management team and representatives of Lazard held a conference call with members of the Sonaca management team and representatives of Credit Suisse to discuss additional business updates, including various opportunities in the Company’s business pipeline that were not reflected in the Company’s 2016 year-end financial results. During that call, a member of the Company management team also disclosed to the representatives of the Sonaca management team that certain performance issues had recently been brought to the Company’s attention by one of its customers, but that such issues were already in the process of being addressed and that, based on subsequent discussions with and new orders subsequently received from that same customer, Company management believed that the ongoing customer relationship remained sound. The members of the Company management also communicated their belief that the identified performance issues did not impact any of the financial forecasts that had been provided to Sonaca and that the Company was willing to facilitate an introductory call with Sonaca and the relevant customer in addition to the two introductory calls with other customers the Company had already agreed to facilitate.

On February 9, 2017, a representative of Credit Suisse called a representative of Lazard to verbally indicate a revised proposal with a value of $13.75 per share, which represented a $0.75 reduction from the previously agreed-upon price of $14.50 per share. Credit Suisse communicated that this revised value incorporated the preliminary 2016 fourth quarter financial results, Company management’s revised financial forecasts and the Company’s higher-than-expected net debt balance.

The same afternoon, on February 9, 2017, the Sunburst Committee convened a telephonic meeting to consider Sonaca’s revised proposal. Members of the Company management team and representatives of Lazard and Gibson Dunn were also present. After deliberation, the Sunburst Committee instructed Lazard to counter Sonaca’s offer with a value of $14.25 per share.

Immediately after the Sunburst Committee meeting on February 9, 2017, a representative of Lazard called a representative of Credit Suisse to counter Sonaca’s offer with a value of $14.25 per share of Company common stock.

On February 10, 2017, a representative of Credit Suisse called a representative of Lazard to verbally indicate a final revised proposal with a value of $14.00 per share of Company common stock.

The same afternoon, on February 10, 2017, the Sunburst Committee convened a telephonic meeting, with members of the Company management team and representatives of Lazard and Gibson Dunn present, to consider whether to move forward on the basis of Sonaca’s final offer of $14.00 per share. After deliberation, the Sunburst Committee instructed Lazard to communicate to Credit Suisse that the Company would be willing to move forward on the basis of a $14.00 per share price, subject to successful negotiation of a mutually acceptable Merger Agreement and final approval by the full Board of Directors. A representative of Lazard then called a representative of Credit Suisse to communicate the Company’s interest in moving forward.

In the late afternoon on February 10, 2017, representatives of Gibson Dunn and APKS held a conference call to discuss open issues in the revised draft of the Merger Agreement APKS was preparing to send to Gibson Dunn. Shortly after that call, APKS sent to Gibson Dunn a revised draft of the Merger Agreement. Although this draft reflected a resolution of a number of issues in the agreement, some material open issues remained, in particular the length of the go-shop period (Sonaca proposed 25 calendar days versus the Company’s desired 35 calendar days), the amount of the break-up fee (Sonaca proposed $15.4 million versus the Company’s desired $7.5 million), certain of the interim operating covenants and Sonaca’s proposed inclusion of an additional termination right for Sonaca based on an interim revenue test in the event of certain adverse changes in relations with customers or suppliers.

On Saturday morning, February 11, 2017, Messrs. Korte and Delvaux held the first of three introductory calls with customers of the Company. The second and third such calls were held on February 13, 2017 and February 15, 2017, respectively.

Also on February 11, 2017, representatives of Company management and representatives of Sonaca management, accompanied by representatives of Lazard and Credit Suisse, held a telephone conference regarding certain aspects of Sonaca’s proposed financing structure for the transaction.

On February 13, 2017, representatives of Gibson Dunn and APKS held an in-person negotiating session in New York City concerning the Merger Agreement, during which additional issues were resolved but key remaining business issues, including the length of the go-shop period, the outside date for satisfaction of closing conditions, an additional termination right for Sonaca based on an interim revenue test in the event of certain adverse changes in relations with customers or suppliers, the amount of the break-up fee, and the scope of certain interim operating covenants, were deferred to resolution among the business principals.

Also on February 13, 2017, Messrs. Korte and Delvaux discussed by telephone the post-closing compensation structure currently contemplated for the Company leadership team following a transaction. Messrs. Korte and Delvaux also discussed logistics for an upcoming customer introductory call.

On February 14, 2017, the Compensation Committee of the Board of Directors convened a telephonic meeting to discuss compensation and employee-related matters in the draft Merger Agreement, including the terms of Messrs. Korte’s and Stebe’s contemplated post-closing employment arrangements, the treatment of long-term incentive plan awards under the Merger Agreement and various analyses by the Compensation Committee’s external compensation consultant.

On February 14, 2017, Gibson Dunn sent to APKS a revised draft of the Merger Agreement, which proposed a compromise of 30 calendar days for the length of the go-shop period and also reflected the Company’s compromise proposal for a two-tiered break-up fee, which would remain relatively lower ($7.5 million) if triggered by a termination (i) within the 30-day “go-shop” period in order to enter into a superior proposal, or (ii) within 60 days after signing and relating to an acquisition proposal received during or as a result of the go-shop period, but would be relatively higher ($11 million) if triggered by a termination under any other circumstance.

Later on February 14, 2017, representatives of Gibson Dunn and APKS discussed the latest revised draft of the Merger Agreement and further narrowed the list of open issues, the resolution of which was deferred to an all-hands call including business principals scheduled for the next day.

On February 15, 2017, members of the Company management team and Sonaca management teams, including Messrs. Korte and Delvaux, along with representatives of Gibson Dunn and APKS, convened an all-hands telephone conference with the intent of resolving all remaining open issues in the draft Merger Agreement. During this call, Sonaca agreed to a 30-day go-shop period, the Company agreed to a final outside date of September 29, 2017, the business principals agreed on the scope of interim operating covenants, and, on the issue of the break-up fee, Sonaca countered with a fee of $10 million if triggered by a termination within the first 60 days and relating to an acquisition proposal received during or as a result of the go-shop period and $15 million otherwise. Members of the Sonaca management team indicated they would consider withdrawing their request for the additional revenue test and termination right based on adverse changes in customer or supplier relations as part of an overall resolution of issues.

Later that same afternoon, on February 15, 2017, the Board of Directors convened a telephonic meeting, with members of the Company management team and representatives of Lazard and Gibson Dunn present. A representative of Gibson Dunn updated the Board of Directors on the current status of negotiations regarding the Merger Agreement and material issues that had been resolved since the last Board of Directors meeting, including the length of the go-shop period, as well as remaining open issues, including the amount of the break-up fee and Sonaca’s proposed addition of a revenue test and termination right based on adverse changes in customer or supplier relations. The representative of Gibson Dunn also reviewed with the Board of Directors certain details of Sonaca’s equity and debt financing commitments based on Gibson Dunn’s recent review of such documents and summarized Sonaca’s current proposal regarding the amount of the two-tiered break-up fee. The Board of Directors also discussed with the representatives of Gibson Dunn and Lazard the perceived likelihood of a topping bid and how the proposed break-up fee structure would be expected to affect the ability and willingness of a topping bidder to emerge. After further discussion, the Board of Directors concluded it would be willing to accept Sonaca’s proposed break-up fee structure as part of a package resolution conditioned on the removal of Sonaca’s additional termination right that had been introduced in the last draft circulated by APKS.

Later on February 15, 2017 and throughout the day on February 16, 2017, representatives of Gibson Dunn and APKS exchanged multiple drafts of and negotiated the final open issues in the Merger Agreement, ultimately agreeing to the break-up fee construct Sonaca had last proposed and the deletion of the additional termination right that had been requested by Sonaca and the related interim notice covenant and revenue test.

Also on February 15-16, 2017, Messrs. Stebe and van Ockenburg exchanged e-mails and telephone calls to discuss certain technical details in the Merger Agreement as well as the Company’s and Sonaca’s respective views on a communications plan for announcement of the transaction once the Merger Agreement was executed, which was expected to occur sometime in the evening on February 16, 2017.

In the early evening on February 16, 2017, the Board of Directors held a telephonic meeting with members of Company management and representatives of Gibson Dunn and Lazard present. A representative of Gibson Dunn reviewed with the Board of Directors its fiduciary duties as well as the proposed final terms of the Merger Agreement and described the material changes to the Merger Agreement from the prior version that had been presented to the Board of Directors. A member of the Compensation Committee of the Board of Directors presented a report on that committee’s independent evaluation of the compensation arrangements involved in the transaction, including the employment agreements to be entered into by Messrs. Korte and Stebe and potentially certain other executives. The Compensation Committee had specifically considered whether such compensation arrangements were of a nature or magnitude that would have diverted value from the Company’s shareholders and determined they were not. The Compensation Committee member reported that the committee’s outside compensation consultant had previously advised that the compensation levels under the proposed employment agreements would bring the executives’ overall compensation closer to the market norm. Representatives of Lazard then reviewed their financial analyses of the merger consideration. The Board of Directors discussed these financial analyses in detail and again reviewed the reasons why the Risk-Adjusted January 2017 Plan was the most appropriate forecast for Lazard to use in its discounted cash flow analysis, namely because the Risk-Adjusted January 2017 Plan incorporated management's most current market and Company operating performance data, and best accounted for the execution risk and challenges facing the Company. The Board of Directors also discussed the possibility that, given uncertainties in the credit markets, rising interest rates and the Company's recent earnings shortfall, the Company's cost of capital in a future refinancing could potentially be higher than originally forecasted and may have posed an additional risk to the Company's operating plan. Following this discussion, a representative of Lazard rendered to the Board of Directors Lazard’s oral opinion, which was subsequently confirmed by delivery of a written opinion dated February 16, 2017, to the effect that, based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth in its written opinion, as of February 16, 2017, the per share merger consideration to be paid to the holders of Company common stock (other than excluded holders) in the Merger was fair, from a financial point of view, to such holders of the Company common stock (other than excluded holders), as of the date of Lazard’s opinion. For a detailed discussion of Lazard’s opinion, please see below under the caption “— Opinion of Lazard Frères & Co. LLC .” After further deliberation and discussion, each member of the Board of Directors (other than Mr. Korte, who abstained out of an abundance of caution due to his current and prospective employment with the Company, among other interests in the transaction) (i) authorized and approved the execution, delivery and performance of the Merger Agreement and the transactions contemplated thereby, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated thereby, (iii) declared that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth in the Merger Agreement, were fair to and in the best interests of the shareholders of the Company, (iv) directed that the approval and adoption of the Merger Agreement be submitted to a vote at a meeting of the shareholders of the Company and (v) recommended that the shareholders of the Company approve and adopt the Merger Agreement.

Later in the evening on February 16, 2017, several hours after the market close, the Company, Sonaca, Intermediate Co. and Sub delivered signatures and entered into the Merger Agreement. The closing price per share of Company common stock on NASDAQ on February 16, 2017 was $9.19.

The transaction was announced pursuant to a joint press release issued by the Company and Sonaca shortly after the Merger Agreement was entered into on the evening of February 16, 2017. The press release disclosed the fact that the Company would be soliciting alternative proposals as part of a go-shop process. The Company also separately announced in parallel its preliminary unaudited financial results for the fourth quarter and fiscal year ended December 31, 2016. Immediately following issuance of the press releases, Mr. Korte sent a Company-wide email to all employees of the Company announcing the transaction.

Prior to the market open on February 17, 2017, the Company filed a Current Report on Form 8-K, which attached (and filed as solicitation material under Rule 14a-12 under the Exchange Act) the Merger Agreement, forms of employment agreements to be entered into by Messrs. Korte and Stebe at the closing of the Merger, the press releases, Mr. Korte’s email to employees and certain other communications issued concurrently with the announcement of the transaction.

The “Go-Shop” Period

Beginning on February 17, 2017 representatives of Lazard reached out to representatives of 52 parties with likely strategic interest in the Company and financial capability to complete an acquisition to invite such companies to consider the acquisition of the Company and to provide a form confidentiality agreement in compliance with the terms of the Merger Agreement to interested companies.

On February 20, 2017, Company A executed the form confidentiality agreement without proposing any changes to it.

On February 21, 2017, Lazard transmitted a process letter to Company A’s financial advisor and provided Company A and its financial advisor with access to diligence materials via an online data room, including the January 2017 Plan, Risk-Adjusted 2017 Plan and the Company’s 2016 full year financial update. On February 27, 2017, representatives of Lazard held a conference call with the chief executive officer and chief financial officer of Company A and representatives of Company A’s financial advisor to discuss Company A’s initial high-level diligence questions.

On February 21, 2017, Company B provided minor comments to the form confidentiality agreement and, on February 23, 2017, executed a confidentiality agreement with the Company (but dated February 21, 2017). On February 23, 2017, Lazard provided Company B with access to the initial set of diligence materials via the online data room, including the January 2017 Plan, Risk-Adjusted 2017 Plan and the Company’s 2016 full year financial update.

On February 21, 2017, Company C reached out to the Company and Lazard to express its potential interest in participating in the go-shop process (although it was not one of the 52 parties initially contacted by Lazard). In a subsequent call with a representative of Lazard on February 22, 2017, however, Company C indicated it was reluctant to sign a confidentiality agreement containing a standstill provision, as required by the terms of the Merger Agreement. On February 28, 2017, Company C sent a markup of the form confidentiality agreement that deleted the standstill provision, among other changes.

On March 1, 2017, the Board of Directors convened a telephonic meeting, with members of management and representatives of Lazard and Gibson Dunn present. Lazard presented an update on the status of the go-shop process and discussed with the Board of Directors Company C’s indication that it would not sign a confidentiality agreement containing a standstill provision as required by the terms of the Merger Agreement. The Board of Directors and Lazard discussed their respective assessments of Company C’s level of interest and capacity to consummate an acquisition. Following that discussion, the Board of Directors determined at that time not to seek a waiver from Sonaca or take any other special action with respect to Company C and instead to focus the Company’s and its advisors’ resources on filing the Company’s preliminary proxy statement as soon as possible.

On March 6, 2017, representatives of Company A informed representatives of Lazard that Company A had determined not to proceed with an acquisition of the Company, indicating that it could not exceed Sonaca’s valuation of $14.00 per share.

Also on March 6, 2017, representatives of Company B informed representatives of Lazard that Company B had determined not to proceed with an acquisition of the Company.

Recommendation of the Board of Directors and Reasons for the Merger

Recommendation of the Board of Directors

The Board of Directors, other than Daniel G. Korte, a member of the Board of Directors and the Company’s President and Chief Executive Officer, who abstained from voting due to his interests in the transaction as described in the section of the proxy statement captioned “ The Merger—Interests of LMI’s Directors and Executive Officers in the Merger ,” has unanimously: (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of LMI and its shareholders; and (2) adopted and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

The Board of Directors, with Mr. Korte abstaining, unanimously recommends that you vote: (1) “ FOR ” the adoption the Merger Agreement and approval of the Merger and the other transactions contemplated thereby; (2) “ FOR ” the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby at the time of the Special Meeting; and (3) “ FOR ” the non-binding, advisory proposal to approve certain compensation that will or may become payable to LMI’s named executive officers in connection with the Merger.

Reasons for the Merger

In evaluating the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Board of Directors consulted with LMI management, and representatives of its financial advisor and outside legal counsel. In recommending that shareholders vote in favor of adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby, the Board of Directors considered a number of factors, including the following (which factors are not necessarily presented in order of relative importance):

The Board of Directors also considered a number of uncertainties and risks concerning the Merger, including the following (which factors are not necessarily presented in order of relative importance):

In addition, our Board of Directors was aware of and considered the interests that certain of our directors and officers may have in the Merger that differ from, or are in addition to, those of LMI’s other shareholders (see below in the section of this proxy statement captioned “ The Merger—Interests of LMI’s Directors and Executive Officers in the Merger ”).

The foregoing discussion is not meant to be an exhaustive, but summarizes many, if not all, of the material factors considered by the Board of Directors in its consideration of the Merger. After considering these and other factors, the Board of Directors concluded that the potential benefits of the Merger outweighed the uncertainties and the risks. In view of the variety of factors considered by the Board of Directors and the complexity of these factors, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the foregoing factors in reaching its determination and recommendations. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have assigned different weights to different factors. The Board of Directors, other than Daniel G. Korte, a member of the Board of Directors and the Company’s President and Chief Executive Officer, who abstained from voting due to his interests in the transaction as described in the section of the proxy statement captioned “ The Merger—Interests of LMI’s Directors and Executive Officers in the Merger ,” unanimously adopted the Merger Agreement and approved the Merger and the other transactions contemplated by the Merger Agreement and recommends that the shareholders adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby based upon the totality of the information presented to and considered by the Board of Directors.

Opinion of Lazard Frères & Co. LLC

The Company retained Lazard to act as financial advisor to the Company and to render an opinion to our Board of Directors as to the fairness, from a financial point of view, to holders of Company common stock (other than excluded holders) of the consideration to be paid to such holders in the Merger. On February 16, 2017, Lazard rendered its oral opinion to our Board of Directors, subsequently confirmed in writing, that, as of such date, and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the per share Merger Consideration to be paid to holders of Company common stock (other than (i) shares of Company common stock directly owned by the Company as treasury stock or directly owned by Sonaca, Intermediate Co, or Sub and (ii) excluded holders) in the Merger was fair, from a financial point of view, to such holders.

The full text of Lazard’s written opinion, dated February 16, 2017, which sets forth the assumptions made, procedures followed, factors considered, and qualifications and limitations on the review undertaken by Lazard in connection with its opinion is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. The description of Lazard’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Lazard’s written opinion attached as Annex B. We encourage you to read Lazard’s opinion and this section carefully and in their entirety.

Lazard’s opinion was directed to our Board of Directors for the information and assistance of the Board of Directors in connection with its evaluation of the Merger and only addressed the fairness, from a financial point of view, to holders of Company common stock (other than excluded holders) of the per share Merger Consideration to be paid to such holders in the Merger as of the date of Lazard’s opinion. The Company did not request Lazard to consider, and Lazard’s opinion did not address, the relative merits of the Merger as compared to any other transaction or business strategy in which the Company might engage or the merits of the underlying decision by the Company to engage in the Merger. Lazard’s opinion was not intended to and does not constitute a recommendation to any holder of Company common stock as to how such holder should vote or act with respect to the Merger or any matter relating thereto. Lazard’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Lazard as of, the date of Lazard’s opinion. Lazard assumed no responsibility for updating or revising its opinion based on circumstances or events occurring after the date of Lazard’s opinion. Lazard’s opinion did not express any opinion as to the prices at which shares of Company common stock may trade at any time subsequent to the announcement of the Merger.

The following is a summary of Lazard’s opinion. We encourage you to read Lazard’s written opinion carefully in its entirety.

In connection with its opinion, Lazard:

Lazard assumed and relied upon the accuracy and completeness of the foregoing information, without independent verification of such information. Lazard did not conduct any independent valuation or appraisal of any of the assets or liabilities (contingent or otherwise) of the Company or concerning the solvency or fair value of the Company, and Lazard was not furnished with any such valuation or appraisal. The management of the Company advised Lazard that the Risk-Adjusted January 2017 Plan reflected the best currently available estimates and judgments as to the future financial performance of the Company and, accordingly, at the direction of our Board of Directors, Lazard utilized such forecasts for purposes of its financial analyses in connection with its opinion. With respect to the financial forecasts Lazard utilized in its analyses, Lazard assumed, with the consent of the Company, that they were reasonably prepared on bases reflecting the best currently available estimates and judgments as to the future financial performance of the Company. Lazard assumed no responsibility for and expressed no view as to such forecasts or the assumptions on which they were based.

In connection with its engagement, as of the date of its opinion Lazard was not authorized to, and Lazard did not, solicit indications of interest from third parties regarding a potential transaction with the Company.

In rendering its opinion, Lazard assumed, with the consent of the Company, that the Merger would be consummated on the terms described in the Merger Agreement, without any waiver or modification of any material terms or conditions of the Merger Agreement. Representatives of the Company advised Lazard, and Lazard assumed, that the Merger Agreement, when executed, would conform to the draft reviewed by Lazard in all material respects. Lazard also assumed, with the consent of the Company, that obtaining the necessary governmental, regulatory or third party approvals and consents for the Merger would not have an adverse effect on the Company, or the Merger. Lazard’s opinion did not address any legal, tax, regulatory or accounting matters, as to which Lazard understood that the Company obtained such advice as it deemed necessary from qualified professionals. Lazard expressed no view or opinion as to any terms or other aspects (other than the per share Merger Consideration to the extent expressly specified in Lazard’s opinion) of the Merger, including, without limitation, the form or structure of the Merger or any agreements or arrangements entered into in connection with, or contemplated by, the Merger. In addition, Lazard expressed no view or opinion as to the fairness of the amount or nature of, or any other aspects relating to, the compensation to any officers, directors or employees of any parties to the Merger, or class of such persons, relative to the per share Merger Consideration or otherwise.

Summary of Lazard’s Financial Analyses

The following is a brief summary of the material financial analyses and reviews that Lazard deemed appropriate in connection with rendering its opinion. The brief summary of Lazard’s analyses and reviews provided below is not a complete description of the analyses and reviews underlying Lazard’s opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of analysis and review and the application of those methods to particular circumstances, and, therefore, is not readily susceptible to summary description. Considering selected portions of the analyses and reviews or the summary set forth below, without considering the analyses and reviews as a whole, could create an incomplete or misleading view of the analyses and reviews underlying Lazard’s opinion.

In arriving at its opinion, Lazard considered the results of all of its analyses and reviews and did not attribute any particular weight to any factor, analysis or review considered by it; rather, Lazard made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses and reviews.

For purposes of its analyses and reviews, Lazard considered industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company. No company, business or transaction used in Lazard’s analyses and reviews as a comparison is identical to the Company or the Merger, and an evaluation of the results of those analyses and reviews is not entirely mathematical. Rather, the analyses and reviews involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, businesses or transactions used in Lazard’s analyses and reviews. The estimates contained in Lazard’s analyses and reviews and the ranges of valuations resulting from any particular analysis or review are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by Lazard’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Lazard’s analyses and reviews are inherently subject to substantial uncertainty.

The summary of the analyses and reviews provided below includes information presented in tabular format. In order to fully understand Lazard’s analyses and reviews, the tables must be read together with the full text of each summary. The tables alone do not constitute a complete description of Lazard’s analyses and reviews. Considering the data in the tables below without considering the full description of the analyses and reviews, including the methodologies and assumptions underlying the analyses and reviews, could create a misleading or incomplete view of Lazard’s analyses and reviews.

Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before February 16, 2017 and is not necessarily indicative of current market conditions.

Financial Analyses

Selected Comparable Company Multiples Analysis .

Lazard reviewed and analyzed certain financial information, valuation multiples and market trading data related to selected comparable publicly-traded aerospace manufacturing companies whose operations Lazard believed, based on its experience with companies in the aerospace manufacturing industry, to be similar to the Company’s operations for purposes of this analysis. Lazard then compared such information to the corresponding information for the Company.

The selected group of companies used in this analysis, which we refer to in this proxy statement as the “ LMI comparable companies ,” was as follows:

Lazard selected the companies reviewed in this analysis because, among other things, the LMI comparable companies operate businesses similar to the business of the Company. However, no selected company is identical to the Company. Accordingly, Lazard believes that purely quantitative analyses are not, in isolation, determinative in the context of the Merger and that qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of the Company and the LMI comparable companies that could affect the public trading values of each are relevant.

Lazard calculated and compared the ratio of each company’s enterprise value, calculated as the market capitalization of each company (based on its closing share price as of February 15, 2017 and most recently publicly reported fully-diluted share count), plus debt, less cash, cash equivalents and marketable securities (based on the most recent publicly available data) to its calendar year 2016, 2017 and 2018 estimated earnings before interest, taxes, depreciation and amortization, commonly and herein referred to as “ EBITDA .” The EBITDA estimates for each of the LMI comparable companies used by Lazard in its analysis were based on FactSet consensus estimates, except that the calendar year 2016 information for Spirit Aerospace Holdings, Inc., Triumph Group, Inc. and Héroux-Devtek, Inc. was based on actual reported data . The following table summarizes the results of this review:

Based on an analysis of the relevant metrics for each of the LMI comparable companies. Lazard selected reference ranges of 7.0x to 8.5x for enterprise value to estimated 2016 EBITDA, 6.5x to 8.0x for enterprise value to estimated 2017 EBITDA and 6.0x to 7.5x for enterprise value to estimated 2018 EBITDA.

Lazard applied such range of enterprise values to EBITDA multiples for the LMI comparable companies to the estimated Adjusted EBITDA of the Company for 2016, 2017 and 2018, as described in the section of this proxy statement captioned “—Management Projections.”

From this analysis, Lazard estimated implied price per share ranges for shares of the Company common stock as set forth below and as compared to the per share merger consideration of $14.00 provided in the Merger Agreement:

Selected Precedent Transactions Multiples Analysis .

Lazard performed a selected precedent transactions analysis of the Company by reviewing publicly available financial information of the following selected transactions involving target companies in the aerospace manufacturing industry that it viewed as comparable to the Company. In performing this analysis, Lazard reviewed certain financial information and transaction multiples relating to the companies involved in the selected transactions and compared such information to the corresponding information for the Company. Specifically, Lazard reviewed eight merger and acquisition transactions announced since March 2010 involving companies in the aerospace manufacturing industry for which sufficient public information was available.

The selected group of transactions used in this analysis were as follows: