Exhibit 99.1
------------
INSTRUCTIONS FOR USE OF PRECISION AUTO CARE, INC.
SUBSCRIPTION CERTIFICATES
The following instructions relate to a rights offering (the "Rights
Offering") by Precision Auto Care, Inc., a Virginia corporation ("Precision
Auto"), to the holders of its common stock, par value $.01 per share ("Common
Stock"), as described in Precision Auto's prospectus dated ____________, 2002
(the "Prospectus"). Holders of record of Common Stock at the close of business
on ________, 2002 (the "Record Date") will receive one non-transferable
subscription right (the "Subscription Rights") for each 2.5 share of Common
Share held by them as of the close of business on the Record Date. An aggregate
of 4,032,723 Subscription Rights exercisable to purchase an aggregate of
4,032,723 shares of the Common Stock of Precision Auto are being distributed in
connection with the Rights Offering. Each Subscription Right is exercisable,
upon payment of $______ in cash (the "Subscription Price"), to purchase one
share of Common Stock (the "Basic Subscription Privilege"). In addition,
subject to the allocation described below, each Subscription Right also carries
the right to subscribe at the Subscription Price for an unlimited number of
additional shares of Common Stock (the "Oversubscription Privilege") (to the
extent available and subject to proration). See "The Rights Offering" in the
Prospectus.
No fractional Subscription Rights or cash in lieu thereof will be issued or
paid. The number of Subscription Rights issued to each shareholder will be
rounded down to the nearest full Subscription Right.
The Subscription Rights will expire at 5:00 p.m., Eastern Daylight Time, on
________, 2002 (the "Expiration Date").
The number of Subscription Rights to which you are entitled is printed on
the face of your Subscription Certificate. You should indicate your wishes with
regard to the exercise of your Subscription Rights by completing the appropriate
sections on the back of your Subscription Certificate and returning the
Subscription Certificate to the Subscription Agent in the envelope provided.
YOUR SUBSCRIPTION CERTIFICATE MUST BE RECEIVED BY THE SUBSCRIPTION AGENT,
OR GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR SUBSCRIPTION
CERTIFICATES MUST BE COMPLIED WITH, ON OR BEFORE THE EXPIRATION DATE. PAYMENT
OF THE SUBSCRIPTION PRICE OF ALL SUBSCRIPTION RIGHTS EXERCISED, INCLUDING
OVERSUBSCRIPTION SHARES, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE
RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE THE EXPIRATION DATE. ONCE A
HOLDER OF SUBSCRIPTION RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE
AND/OR THE OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED.
1
1. SUBSCRIPTION PRIVILEGES. To exercise Subscription Rights, complete
your Subscription Certificate and send your properly completed and executed
Subscription Certificate, together with payment in full of the Subscription
Price for each share of Common Stock subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege to the Subscription
Agent. Delivery of the Subscription Certificate must be made by mail, by hand or
by overnight delivery. FACSIMILE DELIVERY OF THE SUBSCRIPTION CERTIFICATE WILL
NOT CONSTITUTE VALID DELIVERY. All payments must be made in United States
dollars by (i) check or bank draft drawn upon United States bank or postal,
telegraphic or express money order payable to "American Stock Transfer & Trust
Company, AS SUBSCRIPTION AGENT"; (ii) wire transfer of immediately available
funds; or (iii) in the case of persons acquiring shares at an aggregate
Subscription Price of $________ or more, an alternative payment method arranged
with the Subscription Agent and approved by Precision Auto.
ACCEPTANCE OF PAYMENTS. Payments will be deemed to have been received by
the Subscription Agent only upon the (a) clearance of any uncertified check, (b)
receipt by the Subscription Agent of any certified check or bank draft drawn
upon a United States bank or postal, telegraphic or express money order, or
funds transferred through a wire transfer, or (c) receipt of funds by the
Subscription Agent through an agreed upon alternative payment method. IF PAYING
BY UNCERTIFIED PERSONAL CHECK, PLEASE NOTE THAT THE FUNDS PAID THEREBY MAY TAKE
AT LEAST FIVE BUSINESS DAYS TO CLEAR. ACCORDINGLY, HOLDERS OF SUBSCRIPTION
RIGHTS WHO WISH TO PAY THE SUBSCRIPTION PRICE BY MEANS OF UNCERTIFIED PERSONAL
CHECK ARE URGED TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE
TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY SUCH DATE. YOU ARE URGED
TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY ORDER.
PROCEDURES FOR GUARANTEED DELIVERY. You may cause a written guarantee
substantially in the form available from the Subscription Agent (the "Notice of
Guaranteed Delivery") from a member firm of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States, to be received by the Subscription Agent on or prior to the
Expiration Date guaranteeing delivery of your properly completed and executed
Subscription Certificate within three OTC trading days following the date of the
Notice of Guaranteed Delivery. If this procedure is followed, your Subscription
Certificates must be received by the Subscription Agent within three OTC trading
days of the Notice of Guaranteed Delivery. Additional copies of the Notice of
Guaranteed Delivery may be obtained upon request from the Subscription Agent at
the address, or by calling the telephone number, indicated below. Banks,
brokers and other nominee holders of Subscription Rights who exercise the Basic
Subscription Privilege and the Oversubscription Privilege on behalf of
beneficial owners of Subscription Rights will be required to certify to the
Subscription Agent and Precision Auto as to the aggregate number of Subscription
Rights that have been exercised, and the number of shares of Common Stock that
are being subscribed for pursuant to the Oversubscription Privilege, by each
beneficial owner of Subscription Rights (including such nominee itself) on whose
behalf such nominee holder is acting. In the event such certification is not
delivered in respect of a Subscription Certificate, the Subscription Agent shall
for all purposes (including for purposes of any allocation in connection with
the Oversubscription Privilege) be entitled to assume that such
2
certificate is exercised on behalf of a single beneficial owner. If more shares
are subscribed for pursuant to the Oversubscription Privilege than are available
for sale, shares will be allocated among beneficial owners exercising the
Oversubscription Privilege pro rata according to each owner's number of
Subscription Rights divided by the aggregate number of Subscription Rights.
CONTACTING THE SUBSCRIPTION AGENT. The address and telecopier numbers of
the Subscription Agent are as follows:
BY FIRST CLASS MAIL OR REGISTERED MAIL:
American Stock Transfer & Trust Co.
59 Maiden Lane
New York, NY 10038
BY HAND:
American Stock Transfer & Trust Co.
59 Maiden Lane New
York, NY 10038
BY OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co.
59 Maiden Lane
New York, NY 10038
The Subscription Agent's telephone number is (718) 921-8200 and their
telecopy number is (718) 234-5001.
PARTIAL EXERCISES; EFFECT OF OVER- AND UNDERPAYMENTS. If you exercise less
than all of the Subscription Rights evidenced by your Subscription Certificate,
the Subscription Agent will issue to you a new Subscription Certificate
evidencing the unexercised Subscription Rights. However, if you choose to have
a new Subscription Certificate sent to you, you may not receive any such new
Subscription Certificate in sufficient time to permit exercise of the
Subscription Rights evidenced thereby. If you have not indicated the number of
Subscription Rights being exercised, or if the dollar amount you have forwarded
is not sufficient to purchase (or exceeds the amount necessary to purchase) the
number of shares subscribed for, you will be deemed to have exercised the Basic
Subscription Privilege with respect to the maximum number of Subscription Rights
which may be exercised for the Subscription Price payment delivered by you. To
the extent that the Subscription Price payment delivered by you exceeds the
product of the Subscription Price multiplied by the number of Subscription
Rights evidenced by the Subscription Certificates delivered to you (such excess
being the "Subscription Excess"), you will be deemed to have exercised your
Oversubscription Privilege to purchase, to the extent available, that number of
shares of Common Stock equal to the quotient obtained by dividing the
Subscription Excess by the Subscription Price (subject to proration).
3
2. DELIVERY OF STOCK CERTIFICATES, ETC. The following deliveries and
payments to you will be made to the address shown on the face of your
Subscription Certificate unless you provide instructions to the contrary on the
back of your Subscription Certificate.
(a) BASIC SUBSCRIPTION PRIVILEGE. As soon as practicable after the
valid exercise of Subscription Rights and the Expiration Date, the Subscription
Agent will mail to each exercising Subscription Rights holder certificates
representing shares of Common Stock purchased pursuant to the Basic Subscription
Privilege.
(b) OVERSUBSCRIPTION PRIVILEGE. As soon as practicable after the
Expiration Date and after all prorations and adjustments contemplated by the
terms of the Rights Offering having been effected and taking into account any
delays or extensions in closing the oversubscription purchases, the Subscription
Agent will mail to each Subscription Rights holder who validly exercises the
Oversubscription Privilege the number of shares allocated to such Subscription
Rights holder pursuant to the Oversubscription Privilege. See "The Rights
Offering" in the prospectus.
(c) EXCESS PAYMENTS. As soon as practicable after the Expiration Date
and after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected, the Subscription Agent will mail to each
Subscription Rights holder who exercises the Oversubscription Privilege any
excess funds received (without interest or deduction) in payment of the
Subscription Price for shares that are subscribed for but not allocated to such
Subscription Rights holder pursuant to the Oversubscription Privilege.
3. EXECUTION.
(a) EXECUTION BY REGISTERED HOLDER. The signature on the Subscription
Certificate must correspond with the name of the registered holder exactly as it
appears on the face of the Subscription Certificate without any alteration or
change whatsoever. Persons who sign the Subscription Certificate in a
representative or other fiduciary capacity must indicate their capacity when
signing and, unless waived by the Subscription Agent in its sole and absolute
discretion, must present to the Subscription Agent satisfactory evidence of
their authority so to act.
(b) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the
Subscription Certificate is executed by a person other than the holder named on
the face of the Subscription Certificate, proper evidence of authority of the
person executing the Subscription Certificate must accompany the same unless the
Subscription Agent, in its discretion, dispenses with proof of authority.
(c) SIGNATURE GUARANTEES. Your signature must be guaranteed by an
Eligible Guarantor Institution if you wish Certificates to be issued in a name
other than that in which the old Subscription Certificate was issued, or if you
specify or delivery instructions.
4. METHOD OF DELIVERY. The method of delivery of Subscription
Certificates and payment of the Subscription Price to the Subscription Agent
will be at the election and risk of the Subscription Rights holder. If sent by
mail, it is recommended that they be sent by
4
registered mail, properly insured, with return receipt requested, and that a
sufficient number of days be allowed to ensure delivery to the Subscription
Agent prior to the Expiration Date.
5. SPECIAL PROVISIONS RELATING TO THE DELIVERY OF SUBSCRIPTION RIGHTS
THROUGH DEPOSITORY FACILITY PARTICIPANTS. In the case of holders of Subscription
Rights that are held of record through The Deposit Trust Company ("DTC"),
exercises of the Basic Subscription Privilege and the Oversubscription Privilege
may be effected by instructing DTC to transfer Subscription Rights (such
Subscription Rights, "Depository Rights") from the DTC account of such holder to
the DTC account of the Subscription Agent, together with payment of the
Subscription Price for each share of Common Stock subscribed for pursuant to the
Basic Subscription Privilege and the Oversubsciption Privilege.
5