SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
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
/X/ Soliciting material under Rule 14a-12
MAXWORLDWIDE, INC.
(Name of Registrant as Specified in Its Charter)
NEWCASTLE PARTNERS, L.P.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies: Not
applicable
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(2) Aggregate number of securities to which transaction applies: Not
applicable
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(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): Not
applicable
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(4) Proposed maximum aggregate value of transaction: Not applicable
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(5) Total fee paid: Not applicable
/ / 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: Not applicable
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(2) Form, Schedule or Registration Statement No.: Not applicable
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(3) Filing Party: Not applicable
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(4) Date Filed: Not applicable
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On September 18, 2002, Newcastle Partners, L.P. ("Newcastle") sent
the following letter to William M. Apfelbaum, Chairman of the Board of Directors
of MaxWorldwide, Inc. (the "Company"):
NEWCASTLE PARTNERS, L.P.
200 Crescent Court, Suite 670
Dallas, Texas 75201
September 18, 2002
BY FAX AND FEDERAL EXPRESS
William M. Apfelbaum
Chairman of the Board
MaxWorldwide, Inc.
50 West 23rd Street
Fourth Floor
New York, New York 10010
Dear Mr. Apfelbaum:
Newcastle Partners, L.P. ("Newcastle") currently owns an aggregate
of 1,104,200 shares of common stock (the "Common Stock") of MaxWorldwide, Inc.
(the "Company"), representing approximately 4.5% of the issued and outstanding
Common Stock. Newcastle has been extremely disappointed with recent actions
taken by the Company, which Newcastle believes are not in the best interest of
stockholders.
Major negative developments include:
o The Company terminated its merger with EUniverse. As part of the
transaction, the stockholders would have received a special cash
distribution. Since management's termination of the merger, the
Common Stock has fallen to a recent price of $.43 per share, or a
decline of 76% from the low end of the expected distribution level.
o Instead of the EUniverse transaction, the Company issued
approximately 4.8 million shares, representing approximately 19.2%
of its then outstanding shares, and paid $5 million (plus up to $6
million of contingent payments), to acquire assets of Doubleclick.
The Company did not seek, or obtain, stockholder approval for this
transaction. Since announcing the acquisition of the Doubleclick
assets on July 1, 2002, the price of the Common Stock has fallen
from $.94 (closing price on the day prior to the announcement) to a
recent price of $.43 per share, or a decline of 54% from the
pre-announcement price.
o Since becoming a public company, the Company has generated net
operating losses for nine consecutive quarters in the aggregate
amount of $80.3 million.
o The Company restated certain of its 2000 and 2001 financial
statements in May 2002, then just three months later in August 2002,
the Company announced that a re-audit of prior period results would
be needed and that it would likely restate certain of its financial
statements. This restatement is pending.
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o Two weeks prior to the end of its third quarter of 2002, the Company
has not yet released its operating results for the second quarter of
2002, and has not certified its financials in compliance with the
Sarbanes-Oxley Act of 2002.
o The Company's Common Stock has been delisted by NASDAQ, thereby
reducing the Company's Common Stock to being traded only on the
"pink sheets."
Newcastle believes that the best way to maximize value for
stockholders is for the Company to be sold. Newcastle believes that the Board of
Directors and management should promptly pursue the sale of the Company.
In connection therewith, Newcastle hereby sets forth its offer to
acquire the Company, through an appropriate acquisition entity to be formed, for
$.75 per share in cash. This offer represents an approximately 74% premium to
the Company's current market price of $.43. We believe that our proposal
presents stockholders with the immediate opportunity to maximize their
investment in the Company. Our all-cash offer will provide immediate liquidity
to all the Company's stockholders and a significant premium to the current
market price of the Common Stock. Our offer has very limited conditions, and is
only subject to satisfactory completion of due diligence, obtaining all
necessary consents and approvals, including board and stockholder approvals, and
certain other customary conditions, including no material adverse change in the
Company's business and confirmation that there are appropriate reserves for all
contingent liabilities. OUR OFFER IS NOT BASED ON ANY FINANCING CONTINGENCY. We
are prepared to enter into a confidentiality and exclusivity agreement and
commence work immediately in order to satisfy the due diligence requirement.
In an effort to insure that the interests of the Company's
stockholders are adequately represented by the Board, we are today sending to
the Company, under separate cover, notice of our nomination of seven nominees
for election to the Board of Directors of the Company at the Company's next
annual meeting of stockholders.
If elected at the next Annual Meeting, each of our nominees, subject
to his fiduciary duties, would work to maximize value to stockholders through
the sale of the Company (whether to Newcastle or pursuant to a superior offer)
or pursuant to another strategic alternative reasonably designed to provide
stockholders with maximum value.
We strongly believe that the proposal described herein is superior
to the current strategy being pursued by the current management and board and is
the superior alternative for stockholders. Please contact me at (214) 664-7474
to discuss any questions you or the Board might have or if you would like
additional information. As stockholders, we feel that the current Board as well
as the Board elected at the next Annual Meeting of Stockholders, has a
responsibility to all of the Company's stockholders to consider fully and
impartially any proposal that may significantly increase stockholder value.
Accordingly, we stand ready to discuss with the Board and members of management
any aspect of our proposal.
Very truly yours,
Newcastle Partners, L.P.
By: Newcastle Capital Management, L.P.,
its general partner
By: Newcastle Capital Group, L.L.C., its
general partner
By: /s/ Mark E. Schwarz
-------------------------------------
Mark E. Schwarz, Managing Member
On September 18, 2002, Newcastle further sent a letter to the
Company notifying it of Newcastle's intention to nominate seven directors for
election to the Company's Board of Directors at the Company's next Annual
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Meeting of Stockholders. Newcastle is a member of The MaxWorldwide Full Value
Committee (the "Committee"). The Committee intends to make a preliminary filing
with the SEC of proxy materials to be used to solicit votes for the election of
its nominees at the Company's next Annual Meeting of Stockholders.
Newcastle strongly advises all stockholders of the Company to read
the proxy statement when it is available because it will contain important
information. Such proxy statement will be available at no charge on the SEC's
web site at http://www.sec.gov.
The participants in any solicitation that may be represented by the
above letter and in the anticipated proxy solicitation are The MaxWorldwide Full
Value Committee, Newcastle, Newcastle Capital Management, L.P. ("Newcastle
Management"), Newcastle Capital Group L.L.C. ("Newcastle Group"), Mark E.
Schwarz, Couchman Partners, L.P. ("Couchman LP"), Couchman Capital LLC
("Couchman Capital"), Jonathan Couchman, Furtherfield Partners, L.P.
("Furtherfield"), DB3 Holdings Corp., Skiles Partners, L.P. ("Skiles"), Daniel
A. Breen III, Steven J. Pully, Timothy A. Bienek, John Murray, Carl E. Esrey and
Daniel Routman. In the aggregate, such parties beneficially own 2,751,562 shares
of Common Stock, representing approximately 11.2% of the issued and outstanding
shares of Common Stock.
As of the filing date of this document, Newcastle beneficially owned
1,104,200 shares of Common Stock, representing approximately 4.5% of the issued
and outstanding shares of Common Stock. Newcastle Management, as the general
partner of Newcastle, Newcastle Group, as the general partner of Newcastle
Management, and Mark E. Schwarz, as the managing member of Newcastle Group, may
each be deemed to beneficially own the shares of Common Stock beneficially owned
by Newcastle.
As of the filing date of this document, Couchman LP beneficially
owned 1,537,362 shares of Common Stock, representing approximately 6.27% of the
issued and outstanding shares of Common Stock. Couchman Capital, as the general
partner of Couchman LP, and Jonathan Couchman, as the sole member of the
Management Board of Couchman Capital, may each be deemed to beneficially own the
shares of Common Stock beneficially owned by Couchman LP.
As of the filing date of this document, Furtherfield beneficially
owned 110,000 shares of Common Stock, representing approximately 0.45% of the
issued and outstanding shares of Common Stock. Skiles, as the general partner of
Furtherfield, DB3 Holdings Corp., as the general partner of Skiles, and Daniel
A. Breen III, as the sole officer and director of DB3 Holdings Corp., may each
be deemed to beneficially own the shares of Common Stock beneficially owned by
Furtherfield.
As of the filing date of this document, Steven J. Pully, Timothy A.
Bienek, John Murray, Carl E. Esrey and Daniel Routman do not beneficially own
any shares of Common Stock.
