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EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
SIERRACITIES.COM INC.
AT
$5.68 NET PER SHARE
BY
AMTRS CORP.
A WHOLLY-OWNED SUBSIDIARY OF
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, MARCH 26, 2001, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF FEBRUARY 14, 2001, BY AND AMONG SIERRACITIES.COM INC., AMERICAN EXPRESS
TRAVEL RELATED SERVICES COMPANY, INC. AND AMTRS CORP. THE BOARD OF DIRECTORS OF
SIERRACITIES.COM INC. HAS BY UNANIMOUS VOTE OF ALL DIRECTORS PRESENT APPROVED
THE AGREEMENT AND PLAN OF MERGER, OUR TENDER OFFER AND THE PROPOSED MERGER OF
AMTRS CORP. WITH SIERRACITIES.COM INC. THE BOARD ALSO DETERMINED THAT THE
AGREEMENT AND PLAN OF MERGER, OUR TENDER OFFER AND THE PROPOSED MERGER OF AMTRS
CORP. WITH SIERRACITIES.COM INC. ARE FAIR TO AND IN THE BEST INTERESTS OF
SIERRACITIES.COM INC. AND ITS STOCKHOLDERS AND, BY THAT SAME UNANIMOUS VOTE,
RECOMMENDED THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF SIERRACITIES.COM INC. COMMON STOCK WHICH, TOGETHER WITH THE SHARES
THEN BENEFICIALLY OWNED BY AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY,
INC. OR AMTRS CORP., REPRESENTS AT LEAST TWO-THIRDS OF THE OUTSTANDING SHARES
CALCULATED ON A FULLY DILUTED BASIS AND (2) ANY APPLICABLE WAITING PERIOD UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR
TERMINATED BEFORE THE EXPIRATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. HOWEVER, THE
OFFER IS NOT SUBJECT TO A FINANCING CONDITION. SEE SECTION 14.
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares (as defined in the Introduction to this Offer to Purchase)
should either (1) complete and sign the Letter of Transmittal that accompanies
this Offer to Purchase in accordance with the instructions in the Letter of
Transmittal and (a) mail or deliver the Letter of Transmittal, together with the
certificate(s) evidencing the tendered Shares and all other required documents,
to EquiServe Trust Company, N.A., as depositary and disbursing agent, at its
address set forth on the back cover of this Offer to Purchase or (b) tender such
Shares pursuant to the procedures for book-entry transfer set forth in Section 3
or (2) request that such stockholder's broker, dealer, commercial bank, trust
company or other nominee effect the transaction for such stockholder. A
stockholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such stockholder desires to
tender such Shares.
Any stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Disbursing Agent by the expiration of
the Offer or who cannot comply with the procedures for book-entry transfer on a
timely basis must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
References to Shares include references to the associated preferred share
purchase rights. See Introduction. The tender of a Share will constitute the
tender of the associated right. See Section 3.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal and other related materials, may be
directed to Morrow & Co., Inc., as Information Agent, at its address and
telephone numbers set forth on the back cover of this Offer to Purchase.
Stockholders may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
FEBRUARY 27, 2001
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TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET......................................................... 1
INTRODUCTION............................................................... 6
THE OFFER.................................................................. 9
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE......................... 9
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES............... 11
SECTION 3. PROCEDURES FOR TENDERING SHARES............................. 12
SECTION 4. WITHDRAWAL RIGHTS........................................... 15
SECTION 5. CERTAIN TAX CONSIDERATIONS.................................. 16
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS............................ 16
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 17
SECTION 8. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT AND
AMERICAN EXPRESS............................................ 18
SECTION 9. SOURCE AND AMOUNT OF FUNDS.................................. 20
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.......... 20
SECTION 11. PURPOSE OF THE OFFER AND MERGER; PLANS FOR THE COMPANY;
MERGER AGREEMENT; TENDER AGREEMENTS AND OTHER AGREEMENTS;
OTHER MATTERS............................................... 21
SECTION 12. DIVIDENDS AND DISTRIBUTIONS................................. 40
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, THE NASDAQ
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION....... 40
SECTION 14. CERTAIN CONDITIONS OF THE OFFER............................. 41
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.............. 43
SECTION 16. FEES AND EXPENSES........................................... 45
SECTION 17. MISCELLANEOUS............................................... 45
SCHEDULES
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT, PURCHASER AND
AMERICAN EXPRESS................................................ I-1
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SUMMARY TERM SHEET
American Express Travel Related Services Company, Inc., through its
wholly-owned subsidiary, AMTRS Corp., is offering to purchase all of the
outstanding common stock of SierraCities.com Inc. for $5.68 per share, net to
the seller in cash. The following are some of the questions that you, as a
stockholder of SierraCities.com Inc., may have and the answers to those
questions. We urge you to carefully read the remainder of this Offer to Purchase
and the accompanying Letter of Transmittal because the information in this
summary is not complete and additional important information is contained in the
remainder of this Offer to Purchase and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is AMTRS Corp. We are a Delaware corporation formed for the
purpose of making a cash tender offer for all of the outstanding common stock of
SierraCities.com Inc. We are a wholly-owned subsidiary of American Express
Travel Related Services Company, Inc., a New York corporation. See
"Introduction."
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding common stock, par value
$.01 per share, of SierraCities.com Inc. (which automatically includes the
preferred share purchase rights issued under the Rights Agreement, dated as of
December 30, 1998, between SierraCities.com Inc. and Harris Trust and Savings
Bank, as rights agent, that are associated with your shares). See
"Introduction."
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM OF
PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $5.68 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees, commissions or similar expenses. If you own
your shares through a broker or other nominee, and your broker tenders your
shares on your behalf, your broker or nominee may charge you a fee for doing so.
You should consult your broker or nominee to determine whether any charges will
apply. See "Introduction."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
American Express Travel Related Services Company, Inc., our parent company,
will provide us with sufficient funds to purchase all shares validly tendered
and not withdrawn in the offer and to complete the merger which is expected to
follow the successful completion of the offer. It is anticipated that all of
such funds will be readily available from American Express Travel Related
Services Company, Inc.'s corporate funds. See "Section 9 -- Source and Amount of
Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because the form of payment consists solely of
cash and we believe our funding will be readily obtainable. Additionally, the
offer is not subject to any financing condition and, if we consummate the offer,
we will acquire all remaining shares for the same cash price in the merger. See
"Section 9 -- Source and Amount of Funds."
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Monday,
March 26, 2001, to tender your shares in the offer. Further, if you are unable
to deliver the required documents in order to make a valid tender by that time,
you may be able to use the guaranteed delivery procedure that is described later
in this Offer to Purchase. In addition, if we extend the expiration date of the
offer or if we
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decide to include a subsequent offering period, as described below, you will
have an additional opportunity to tender your shares. See "Section 1 -- Terms of
the Offer; Expiration Date" and "Section 3 -- Procedures for Tendering Shares."
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
- We have agreed in the merger agreement that we will extend the expiration
date of the offer for one additional period of 10 business days if the
conditions to the offer are not satisfied or waived at the scheduled
expiration date of the offer.
- If the conditions to the offer are not satisfied or waived at the end of
that first extension period, we will extend the offer for a second
additional period of 10 business days to permit the conditions to the
offer to be satisfied or waived.
- If certain conditions to the offer are still not satisfied or waived at
that point, we must extend the offer for a third additional period of 10
business days.
- In addition, we may extend the offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission.
See "Section 1 -- Terms of the Offer; Expiration Date."
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we decide to extend the offer, we will inform EquiServe Trust Company,
N.A., the depositary and disbursing agent for the offer, of that fact and will
make a public announcement of the extension, not later than 9:00 a.m., New York
City time, on the business day after the date on which the offer was to expire.
See "Section 1 -- Terms of the Offer; Expiration Date."
WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
We currently have no intention to provide a subsequent offering period,
although we may later elect to do so. A subsequent offering period would be a
period of three business days to 20 business days, in addition to the scheduled
period of the offer and the extensions described above, in which you could
tender your shares. If we do later elect to provide a subsequent offering
period, we will do so, and make an announcement, as required by the Securities
and Exchange Commission's rules. See "Section 1 -- Terms of the Offer;
Expiration Date."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares that you validly tender
unless the number of shares validly tendered and not withdrawn before the
expiration date of the offer represents, together with shares already
owned, directly or indirectly, by American Express Travel Related
Services Company, Inc. or AMTRS Corp., at least two-thirds of the
outstanding common stock of SierraCities.com Inc., which, for purposes of
computing this amount, includes the number of shares of common stock that
SierraCities.com Inc. is obligated to issue under its outstanding stock
options, other benefit plans or otherwise.
- We are also not obligated to purchase any shares that you validly tender
if, among other things, the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has not
expired or been terminated.
Other conditions to the offer are described in "Section 14 -- Certain
Conditions of the Offer."
HOW DO I TENDER MY SHARES?
If you are a record holder, you may tender your shares by delivering the
certificates representing your shares, together with a completed Letter of
Transmittal and any other documents required, to EquiServe
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Trust Company, N.A., the depositary and disbursing agent for the offer, not
later than the time the offer expires. If your shares are held in street name,
the shares can be tendered by your nominee through The Depository Trust Company.
If you are unable to deliver the required documents to EquiServe Trust
Company, N.A. by the expiration of the offer, you may get a little extra time to
do so by having a broker, a bank or other fiduciary that is a member of the
Securities Transfer Agents Medallion Program or other eligible institution
guarantee that the missing items will be received by EquiServe Trust Company,
N.A. within three trading days. A trading day is any day on which The Nasdaq
National Market is open for business. However, EquiServe Trust Company, N.A.
must receive the missing items within that three trading day period. See
"Section 3 -- Procedures for Tendering Shares."
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a properly executed written notice of
withdrawal with the required information to EquiServe Trust Company, N.A. while
you still have the right to withdraw the shares. See "Section 4 -- Withdrawal
Rights."
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not accepted your shares for payment by April 27, 2001, you can withdraw
them at any time after such time until we accept shares for payment. This right
to withdraw will not apply to shares tendered during a subsequent offering
period, if any is provided. See "Section 1 -- Terms of the Offer; Expiration
Date" and "Section 4 -- Withdrawal Rights."
WHAT ARE THE TAX CONSEQUENCES OF THE TRANSACTION?
The receipt of cash by you in exchange for your shares pursuant to the
offer, the merger or upon exercise of appraisal rights is generally a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local and other tax laws. In general, you
will recognize capital gain or loss equal to the difference between the adjusted
tax basis of your shares and the amount of cash that you receive from us for the
shares. We encourage you to consult with your own tax advisor about the
particular effect a tender would have on you for U.S. federal, state, local and,
if applicable, foreign income and other tax purposes. See "Section 5 -- Certain
Tax Considerations."
WHAT DOES THE BOARD OF DIRECTORS OF SIERRACITIES.COM INC. THINK OF THE OFFER?
We are making the offer under the terms of the merger agreement. The Board
of Directors of SierraCities.com Inc., acting by unanimous vote of all directors
present, has approved the merger agreement, our tender offer and our proposed
merger with SierraCities.com Inc. The Board of Directors of SierraCities.com
Inc., acting by unanimous vote of all directors present, has determined that the
offer and merger are fair and in the best interests of SierraCities.com Inc. and
its stockholders and recommended that the stockholders of SierraCities.com Inc.
accept the offer and tender their shares. See "Section 10 -- Background of the
Offer; Contacts with the Company" and "Section 11 -- Purpose of the Offer and
Merger; Plans for the Company; Merger Agreement; Tender Agreements and Other
Agreements; Other Matters."
HAVE ANY STOCKHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Holders of approximately 20% of the outstanding common stock of
SierraCities.com Inc. have agreed to tender all of their shares in the offer.
See "Introduction" and "Section 11 -- Purpose of the Offer and Merger; Plans for
the Company; Merger Agreement; Tender Agreements and Other Agreements; Other
Matters."
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IF TWO-THIRDS OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL
SIERRACITIES.COM INC. CONTINUE AS A PUBLIC COMPANY?
No. Following our purchase of the shares in the offer, we expect to
consummate the merger. If the merger takes place, SierraCities.com Inc. will be
owned directly by American Express Travel Related Services Company, Inc. Even if
the merger does not take place, if we purchase all the tendered shares, there
may be so few remaining stockholders and publicly held shares that:
- SierraCities.com Inc.'s common stock will no longer be eligible to be
quoted on The Nasdaq National Market,
- there may not be a public trading market for SierraCities.com Inc.'s
stock and
- SierraCities.com Inc. may cease making filings with the Securities and
Exchange Commission or otherwise cease being required to comply with the
rules of the Securities and Exchange Commission relating to publicly held
companies.
See "Section 13 -- Effect of the Offer on the Market for the Shares, The
Nasdaq National Market Listing and Exchange Act Registration."
WILL THE OFFER BE FOLLOWED BY A MERGER IF ALL SIERRACITIES.COM INC. SHARES ARE
NOT TENDERED IN THE OFFER?
Yes. If in the offer we acquire at least two-thirds of the outstanding
shares of SierraCities.com Inc., which, for purposes of computing this amount,
includes the number of shares of common stock that SierraCities.com Inc. is
obligated to issue under its outstanding stock options, other benefit plans or
otherwise, AMTRS Corp. will be merged with and into SierraCities.com Inc. If
that merger takes place, American Express Travel Related Services Company, Inc.
will own all of the shares of SierraCities.com Inc. and all stockholders of
SierraCities.com Inc. (other than AMTRS Corp., American Express Travel Related
Services Company, Inc. and their wholly-owned direct or indirect subsidiaries
and stockholders of SierraCities.com Inc. properly exercising appraisal rights)
will receive $5.68 per share in cash (or any higher price per share that is paid
in the offer). See "Section 13 -- Effect of the Offer on the Market for the
Shares, The Nasdaq National Market Listing and Exchange Act Registration."
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, stockholders (other than those
properly exercising appraisal rights under Delaware law) not tendering in the
offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only differences to you between tendering your shares and not
tendering your shares are that you will be paid earlier if you tender your
shares in the offer, you will not have appraisal rights if you tender your
shares in the offer and you may have different income tax results because of the
longer period of time during which you would hold the shares that are not
purchased pursuant to the offer if you do not tender your shares in the offer.
However, even if the merger does not take place, the number of stockholders
and shares of SierraCities.com Inc. that are still in the hands of the public
may be so small that there no longer will be an active public trading market
(or, possibly, any public trading market) for SierraCities.com Inc.'s common
stock. The shares may no longer be eligible to be quoted on The Nasdaq National
Market, and SierraCities.com Inc. may cease making filings with the Securities
and Exchange Commission or otherwise may no longer be required to comply with
the rules of the Securities and Exchange Commission relating to publicly held
companies. See "Section 13 -- Effect of the Offer on the Market for the Shares;
The Nasdaq National Market Listing and Exchange Act Registration" and "Section
15 -- Certain Legal Matters and Regulatory Approvals."
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WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On February 13, 2001, the last full trading day before we announced the
signing of the merger agreement, the closing price per share of SierraCities.com
Inc. common stock on The Nasdaq National Market was 4 1/16. On February 26,
2001, the last full trading day before we commenced the offer, the closing price
per share of SierraCities.com Inc. common stock on The Nasdaq National Market
was 5 19/32. We advise you to obtain a recent quotation for shares of
SierraCities.com Inc.'s common stock in deciding whether to tender your shares.
See "Section 6 -- Price Range of Shares; Dividends."
WHO WILL DETERMINE THE VALIDITY OF MY TENDER OF SHARES?
We have reserved the sole right to decide any questions concerning the
validity, form, eligibility, timeliness and other questions relating to tenders
of shares. We have also reserved the right to waive any defect or irregularity.
In exercising our waiver power we may choose not to treat similar defects or
irregularities in the same manner. All of our decisions relating to the validity
of tenders will be final and binding.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call Morrow & Co., Inc., at (800) 607-0088 or collect at (212)
754-8000. Morrow & Co., Inc. is acting as the information agent for our offer.
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TO THE HOLDERS OF COMMON STOCK OF SIERRACITIES.COM INC.:
INTRODUCTION
AMTRS Corp., a Delaware corporation ("Purchaser") and a wholly-owned
subsidiary of American Express Travel Related Services Company, Inc., a New York
corporation ("Parent"), hereby offers to purchase all of the issued and
outstanding shares of Common Stock, par value $.01 per share (the "Company
Common Stock"), of SierraCities.com Inc., a Delaware corporation (the "Company")
(such shares of Company Common Stock, together with the preferred share purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
December 30, 1998 (the "Rights Agreement"), between the Company and Harris Trust
and Savings Bank, as rights agent, associated with such shares, being
hereinafter collectively referred to herein as the "Shares"), at a purchase
price of $5.68 per Share (such price, or such higher price as may be paid in the
Offer (as defined below), being referred to herein as the "Per Share Amount"),
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (the "Letter of Transmittal" which, together with this Offer to
Purchase and any supplements or amendments, collectively constitute the
"Offer").
Tendering stockholders who are record owners of Shares and tender directly
to the Disbursing Agent (as defined below) will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the transfer and sale of Shares
pursuant to the Offer or the Merger (as defined below). Stockholders of the
Company (the "Stockholders") who hold their Shares through a broker or bank
should consult such institution as to whether it charges any service fee.
Purchaser will pay all fees and expenses of EquiServe Trust Company, N.A., as
the depositary and disbursing agent (the "Disbursing Agent"), Morrow & Co.,
Inc., as information agent (the "Information Agent") and First Union Securities
Inc., as dealer manager (the "Dealer Manager") incurred in connection with the
Offer. See Section 16.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of February 14, 2001, by and among the Company, Parent and Purchaser (the
"Merger Agreement"). The Merger Agreement provides, among other things, that
following the consummation of the Offer and as promptly as practicable, but in
no event later than 10:00 a.m. New York time on the second business day
following satisfaction or waiver of all the conditions (other than conditions
which, by their nature are to be satisfied at the consummation of the Merger,
but subject to those conditions) to the obligations of the parties to effect the
Merger and in accordance with the applicable provisions of the Delaware General
Corporation Law ("DGCL"), Purchaser will merge with and into the Company (the
"Merger"). Upon consummation of the Merger, the Company will be the surviving
corporation of the Merger. Thereupon, each Share that is issued and outstanding
immediately prior to the consummation of the Merger (other than Dissenting
Shares, as hereinafter defined, and Excluded Shares, as hereinafter defined)
shall automatically be converted into and represent the right to receive,
pursuant to the Merger Agreement, the Per Share Amount in cash payable to the
holder thereof, without interest (the "Merger Consideration"), and the Company
will be a wholly-owned subsidiary of Parent. The Merger shall become effective
upon the filing of a certificate of merger or a certificate of ownership and
merger (the "Certificate of Merger") with the Secretary of State of the State of
Delaware (the time the Merger becomes effective being the "Effective Time").
Simultaneously with the execution of the Merger Agreement, and as a
condition and inducement to Parent's and Purchaser's entering into the Merger
Agreement, Parent entered into Tender Agreements, dated as of February 14, 2001
(each a "Tender Agreement"), with Depping 1999 Investment Limited Partnership,
Thomas J. Depping, Sandy B. Ho, Redstone Group, Ltd., David C. Shindeldecker and
David L. Solomon (collectively, the "Identified Stockholders"). Collectively,
the Identified Stockholders have represented in the Tender Agreements that they
are the record and beneficial owners of Shares that represent approximately
20.12% of the Shares as of February 12, 2001. Pursuant to the Tender Agreements,
the Identified Stockholders have agreed to tender all of their Shares in the
Offer.
The Merger Agreement and Tender Agreements are more fully described in
Section 11.
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THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") AT A MEETING
DULY CALLED AND HELD, HAS BY THE UNANIMOUS VOTE OF ALL DIRECTORS OF THE COMPANY
PRESENT, (1) DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND THE STOCKHOLDERS, (2) APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND EACH TENDER AGREEMENT, EACH IN ACCORDANCE WITH THE REQUIREMENTS OF
THE DGCL, (3) DECLARED THAT THE MERGER AGREEMENT IS ADVISABLE AND (4) RESOLVED
TO RECOMMEND THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER.
THE FACTORS CONSIDERED BY THE COMPANY BOARD IN TAKING SUCH ACTIONS ARE
DESCRIBED IN THE COMPANY SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9
(THE "SCHEDULE 14D-9"), WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") AND IS BEING MAILED TO THE STOCKHOLDERS CONCURRENTLY
HEREWITH.
CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFB") HAS ACTED AS THE COMPANY'S
FINANCIAL ADVISOR. THE OPINION OF CSFB, DATED FEBRUARY 14, 2001, THAT, AS OF
SUCH DATE, BASED ON AND SUBJECT TO THE ASSUMPTIONS, LIMITATIONS AND
QUALIFICATIONS SET FORTH IN ITS WRITTEN OPINION, THE CONSIDERATION TO BE
RECEIVED BY THE HOLDERS OF SHARES PURSUANT TO THE OFFER AND THE MERGER IS FAIR
TO SUCH HOLDERS, OTHER THAN PARENT, FROM A FINANCIAL POINT OF VIEW, IS SET FORTH
IN FULL AS A SCHEDULE TO THE SCHEDULE 14D-9. STOCKHOLDERS ARE URGED TO, AND
SHOULD, READ THE SCHEDULE 14D-9 AND SUCH OPINION CAREFULLY IN THEIR ENTIRETY.
The Offer is conditioned upon, among other things, (1) there having been
validly tendered and not withdrawn before the Expiration Date (as defined below)
a number of Shares which, together with the Shares then beneficially owned by
Parent or Purchaser, represents at least two-thirds of the outstanding Shares
calculated on a fully diluted basis (the "Minimum Condition") ("on a fully
diluted basis" means, as of any date: the number of Shares outstanding, together
with the number of Shares the Company is then required to issue pursuant to
obligations outstanding at that date under outstanding stock options, other
benefit plans or otherwise), and (2) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), having expired or terminated before the Expiration Date.
The Company has informed Purchaser that as of February 23, 2001, 18,918,640
Shares were outstanding and 2,126,246 Shares were issuable under the Company
Stock Plans (as hereinafter defined), and no other stock of the Company was
outstanding or committed to be issued. Based on this information, Purchaser
believes that the Minimum Condition will be satisfied if Purchaser acquires at
least 14,036,939 Shares in the Offer. Certain other conditions to the Offer are
described in Section 14.
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of the entire equity interest of the Company. The
Merger Agreement provides that, effective upon the acceptance for payment of any
Shares pursuant to the Offer, and from time to time thereafter, Parent shall be
entitled to designate the number of directors (the "Parent Designees"), rounded
up to the next whole number, on the Company Board that equals the product of (1)
the total number of directors on the Company Board (giving effect to any
increase in the number of directors pursuant to this obligation) multiplied by
(2) the percentage that the number of Shares beneficially owned by Parent or
Purchaser following the acceptance for payment of Shares pursuant to the Offer
bears to the total number of Shares outstanding, and the Company shall promptly
take all action necessary to cause each of the Parent Designees to be elected or
appointed to the Company Board, including increasing the size of the Company
Board and seeking, accepting and securing resignations of incumbent directors.
At such time, and from time to time thereafter, to the extent requested by
Parent, the Company shall use its best efforts to cause individuals designated
by Parent to constitute the number of members, rounded up to the next whole
number, on (A) each committee of the Company Board and (B) each Board of
Directors of each Company Subsidiary (as defined in the Merger Agreement), and
each committee thereof, that represents the same percentage as the Parent
Designees represent on the Company Board. Notwithstanding the foregoing, the
Company, Purchaser and Parent shall use their respective best efforts to ensure
that at least two of the members of the Company Board shall, at all times prior
to the Effective Time, be directors of the Company who were directors of the
Company on the date of the Merger Agreement (the "Continuing Directors"),
provided that if there shall be in office fewer than two
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Continuing Directors for any reason, the Company Board shall cause a person
designated by the remaining Continuing Director to fill such vacancy who shall
be deemed to be a Continuing Director for all purposes of the Merger Agreement,
or if no Continuing Directors then remain, the other directors of the Company
then in office shall designate two persons to fill such vacancies who are not
officers or employees or affiliates of the Company, Parent or Purchaser or any
of their respective affiliates and such persons shall be deemed to be Continuing
Directors for all purposes of the Merger Agreement. See Section 11.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the Stockholders, if such a vote is required. See
Section 11, Section 14 and Section 15. Under the Company's Certificate of
Incorporation, as amended and restated (the "Certificate of Incorporation"), and
the DGCL, the holders of Shares have one vote for each Share owned of record.
Subject to the following paragraph, under the Certificate of Incorporation, the
affirmative vote of two-thirds of the then outstanding Shares is required to
approve and adopt the Merger Agreement and the Merger. Consequently, if the
Minimum Condition is satisfied, Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the affirmative
vote of any other Stockholders.
Under Section 253 of the DGCL, if Purchaser acquires, pursuant to the Offer
or otherwise, at least 90% of the then-outstanding Shares, Purchaser will be
able to consummate the Merger without a vote of the Stockholders. In such event,
Parent and Purchaser will take all necessary and appropriate action to cause the
Merger to become effective as soon as reasonably practicable after such
acquisition without a meeting of the Stockholders. If, however, Purchaser does
not acquire at least 90% of the then-outstanding Shares pursuant to the Offer or
otherwise, and a vote of the Stockholders is required under the DGCL, a longer
period of time will be required to effect the Merger. See Section 11 and Section
15.
No appraisal rights are available in connection with the Offer.
Stockholders may exercise appraisal rights pursuant to the DGCL in connection
with the Merger, however, regardless of whether the Merger is consummated with
or without a vote of the Stockholders.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
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THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will, and Parent will cause Purchaser to, accept for
payment and pay for all Shares validly tendered on or prior to the Expiration
Date, and not properly withdrawn as permitted by Section 4 below. For purposes
of the Offer, the term "Expiration Date" means 12:00 midnight, New York City
time, on March 26, 2001, unless and until Purchaser extends the period of time
for which the Offer is open in accordance with the terms of the Merger
Agreement, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the expiration or termination of any applicable waiting
periods imposed by the HSR Act. The Offer is also subject to certain other
conditions set forth in Section 14. If any of these conditions is not satisfied
or if any events specified in Section 14 have occurred prior to the Expiration
Date, subject to the terms of the Merger Agreement, Purchaser (1) shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), pay for any Shares tendered
pursuant to the Offer, and (subject to any such rules and regulations) may
postpone the acceptance for payment of or payment for any Shares tendered
pursuant to the Offer and (2) to the extent permitted under the Merger
Agreement, may terminate or amend the Offer as to any Shares not then paid for
and not accept for payment any Shares. Purchaser acknowledges that Rule 14e-1(c)
under the Exchange Act requires Purchaser to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of the
Offer. Purchaser further acknowledges that Purchaser may not delay acceptance
for payment of, or delay payment for, any Shares upon the occurrence of any of
the events specified in Section 14 without extending the period of time during
which the Offer is open.
Purchaser reserves the right (but is not obligated), subject to the terms
of the Merger Agreement, at any time and from time to time, to amend the Offer
or waive any of the conditions of the Offer and to make any change in the terms
or conditions of the Offer in its sole discretion; provided, however, that no
change or waiver may be made, without the prior written consent of the Company,
that
- decreases or changes the form of the Per Share Amount,
- decreases the number of Shares sought in the Offer,
- amends or waives the Minimum Condition or imposes conditions to the Offer
other than those set forth in Section 14,
- except as provided below, extends the Expiration Date or
- amends any terms of the Offer in any manner adverse to the Stockholders,
except, in each case, as otherwise permitted under the Merger Agreement.
The Merger Agreement provides that, without the consent of the Company,
Purchaser will not extend the Expiration Date except
- as required by law and
- that, in the event that the conditions to the Offer are not satisfied or
waived at the time that the Expiration Date would otherwise occur,
- Purchaser must extend the Expiration Date for 10 additional business
days to the extent necessary to permit the conditions to the Offer to
be satisfied,
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- if the conditions to the Offer are not satisfied or waived following
the extension described in the preceding sub-bullet, Purchaser must
extend the Expiration Date for 10 additional business days to the
extent necessary to permit the conditions to the Offer to be satisfied
and
- if following the extension described in the preceding sub-bullet any
condition to the Offer other than the Minimum Condition (and any
condition to the Offer that is not capable of being satisfied) is then
not satisfied or waived, Purchaser must extend the Expiration Date for
10 additional business days to the extent necessary to permit the
conditions to the Offer to be satisfied.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by a public announcement thereof, with any
announcement of an extension to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date,
in accordance with the public announcement requirements of Rule 14e-1(d) under
the Exchange Act. Subject to applicable law (including Rules 14d-4(d) and
14d-6(c) under the Exchange Act, which require that material changes in the
information published, sent or given to Stockholders in connection with the
Offer be promptly disseminated to Stockholders in a manner reasonably designed
to inform them of such changes) and without limiting the manner in which
Purchaser may choose to make any public announcement, Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
If Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, Purchaser will extend the Offer and
disseminate additional tender offer materials to the extent required by Rules
14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during
which the Offer must remain open following material changes in the terms of the
Offer, other than a change in price or the percentage of securities sought or
the inclusion of or change to a dealer's soliciting fee, will depend upon the
facts and circumstances, including the materiality, of the changes. In the SEC's
view, an offer should remain open for a minimum of five business days from the
date the material change is first published, sent or given to stockholders.
However, a minimum of 10 business days from the date of such change may be
required to allow for adequate dissemination and investor response if a change
relates to the price to be paid or, subject to certain limitations, a change in
the percentage of securities sought or the inclusion of or change to a dealer's
soliciting fee.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to decrease the number of Shares being sought
(which decrease would require the Company's consent) or to increase or decrease
the Per Share Amount (which decrease would require the Company's consent), such
decrease in the number of Shares being sought or such increase or decrease in
the Per Share Amount will be applicable to all of the Stockholders whose Shares
are accepted for payment pursuant to the Offer. If at the time notice of any
such decrease in the number of Shares being sought or increase or decrease in
the Per Share Amount is first published, sent or given to holders of such
Shares, the Offer is scheduled to expire prior to the tenth business day from
and including the date that such notice is first so published, sent or given,
then the Offer will be extended at least until the expiration of such
10-business day period. For purposes of the Offer, a "business day" means any
day, other than Saturday, Sunday or a federal holiday, and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
During any extension of the Offer, all Shares previously tendered and not
withdrawn will remain tendered pursuant to the Offer, subject to the rights of a
tendering Stockholder to withdraw such Stockholder's Shares. See Section 4.
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser has the right,
but is not required, to provide for a subsequent offering period following the
expiration of the Offer on the Expiration Date (a "Subsequent Offering Period"),
subject to certain conditions set forth in such Rule. A Subsequent Offering
Period is an
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additional period of time from three business days to 20 business days,
following the expiration of the Offer on the Expiration Date and the purchase of
Shares in the Offer, during which Stockholders may tender, but not withdraw,
Shares not tendered in the Offer. If Purchaser decides to provide for a
Subsequent Offering Period, and such Subsequent Offering Period is for a period
of time which is less than 20 business days, Purchaser may extend (and
re-extend) such Subsequent Offering Period up to an aggregate of 20 business
days. A Subsequent Offering Period, if one is provided, is not an extension of
the Offer.
Purchaser does not currently intend to provide for a Subsequent Offering
Period, although it reserves the right to do so in its sole discretion by giving
oral or written notice of such Subsequent Offering Period to the Disbursing
Agent. If a Subsequent Offering Period is held, Purchaser will announce the
approximate number and percentage of Shares deposited as of the Expiration Date
no later than 9:00 a.m., New York City time, on the next business day following
the Expiration Date, and such securities will be immediately accepted and
promptly paid for. All conditions to the Offer must be satisfied or waived prior
to the commencement of any Subsequent Offering Period.
Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights apply
to Shares tendered during a Subsequent Offering Period or Shares tendered in the
Offer and accepted for payment. During a Subsequent Offering Period, Purchaser
will promptly purchase and pay for any Shares tendered the same consideration
paid in the Offer (i.e., the Per Share Amount).
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to all
Stockholders. This Offer to Purchase, the Letter of Transmittal and other
relevant materials will be mailed to record Stockholders whose names appear on
the Company's stockholder list and will be furnished, for subsequent transmittal
to beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the Company's stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and will pay for all Shares
validly tendered and not properly withdrawn on or prior to the Expiration Date
as soon as practicable after the Expiration Date. In addition, Purchaser
reserves the right, in its sole discretion and subject to applicable law and the
Merger Agreement, to delay the acceptance for payment of or payment for Shares
in order to comply in whole or in part with any applicable law.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Disbursing Agent of Purchaser's acceptance of such Shares for payment pursuant
to the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Disbursing Agent, which will act as agent
for tendering Stockholders for the purpose of receiving payments from Purchaser
and transmitting those payments to Stockholders whose Shares have been accepted
for payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Disbursing
Agent of (1) the certificates evidencing such Shares (the "Share Certificates")
or confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Shares, if such procedure is available, into the Disbursing Agent's account at
The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to
the procedures set forth in Section 3, (2) the Letter of Transmittal, properly
completed and duly executed with any required signature guarantees, or an
Agent's Message (as defined in Section 3) in connection with a book-entry
transfer and (3) any other documents required by the Letter of Transmittal. For
a description of the procedures for tendering Shares pursuant to the Offer, see
Section 3. Accordingly, payment may be made to tendering Stockholders at
different times if delivery of the Shares and other required documents occur at
different times. Under no circumstances will Purchaser pay interest on the
consideration paid for Shares pursuant to the Offer, regardless of any delay in
making such payment.
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If, prior to the Expiration Date, Purchaser increases the consideration
offered to Stockholders pursuant to the Offer, such increased consideration will
be paid to all Stockholders whose Shares are purchased pursuant to the Offer,
even if those Shares were tendered prior to the increase in consideration. If
any tendered Shares are not accepted for payment for any reason or if Share
Certificates are submitted for more Shares than are tendered, Share Certificates
evidencing unpurchased or untendered Shares will be returned (or, in the case of
Shares tendered by book-entry transfer into the Disbursing Agent's account at
the Book-Entry Transfer Facility pursuant to the procedures set forth in Section
3, such Shares will be credited to an account maintained at the Book-Entry
Transfer Facility), without expense to the tendering Stockholder, as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
SECTION 3. PROCEDURES FOR TENDERING SHARES.
VALID TENDER. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, (1) the Letter of Transmittal, properly
completed and duly executed with any required signature guarantees, or an
Agent's Message in connection with a book-entry delivery of Shares, and any
other documents required by the Letter of Transmittal, must be received by the
Disbursing Agent at one of its addresses set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date, and either (a) Share
Certificates evidencing tendered Shares must be received by the Disbursing Agent
at such address or (b) such Shares must be tendered pursuant to the procedure
for book-entry transfer described below and a Book-Entry Confirmation must be
received by the Disbursing Agent, in each case on or prior to the Expiration
Date or the expiration of any Subsequent Offering Period, or (2) the tendering
Stockholder must comply with the guaranteed delivery procedures described below.
The term "Agent's Message" means a message from the Book-Entry Transfer Facility
transmitted to, and received by, the Disbursing Agent and forming a part of a
Book-Entry Confirmation, which states that (x) the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of the Book-Entry
Confirmation, (y) the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and (z) Purchaser may enforce such agreement
against the participant.
If Share Certificates are forwarded separately to the Disbursing Agent, a
properly completed and duly executed Letter of Transmittal must accompany each
delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. THE SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY
THE DISBURSING AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY
BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Disbursing Agent will establish an account with
respect to the Shares at the Book-Entry Transfer Facility for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Disbursing Agent's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's transfer procedures. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
a Letter of Transmittal, properly completed and duly executed with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other documents required by the Letter of Transmittal, must in
any case be received by the Disbursing Agent at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
or the expiration of any Subsequent Offering Period, or the tendering
Stockholder must comply with the guaranteed delivery procedures described below.
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DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DISBURSING AGENT.
SIGNATURE GUARANTEES. No signature guarantee is required for Shares
tendered (1) by a registered holder of Shares who has not completed either the
box labeled "Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (2) for the account of an Eligible
Institution (as defined below). See Instructions 1 and 5 of the Letter of
Transmittal. All other tenders of Shares must have the signatures on the Letters
of Transmittal guaranteed by a firm that is a bank, broker, dealer, credit
union, savings association or other entity that is a member in good standing of
a recognized Medallion Signature Guarantee Program or by any other "eligible
guarantor institution," as defined in Rule 17Ad-15 under the Exchange Act (each
of the foregoing, an "Eligible Institution"). See Instruction 1 of the Letter of
Transmittal.
If a Share Certificate is registered in the name of a person other than the
person who signs the Letter of Transmittal, or if payment is to be made, or a
Share Certificate not accepted for payment or not tendered is to be returned, to
a person other than the registered holder(s), the Share Certificate must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as provided above. See Instructions 1 and 5 of the Letter of
Transmittal.
GUARANTEED DELIVERY. If a Stockholder desires to tender Shares pursuant to
the Offer and such Stockholder's Share Certificates are not immediately
available, time will not permit all required documents to reach the Disbursing
Agent on or prior to the Expiration Date or the expiration of any Subsequent
Offering Period, or a Stockholder cannot complete the procedures for delivery by
book-entry transfer on a timely basis, then such Stockholder's Shares may
nevertheless be tendered, provided that all of the following conditions are
satisfied:
- the tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser herewith, is received by
the Disbursing Agent as provided below on or prior to the Expiration Date
or the expiration of any Subsequent Offering Period; and
- the Share Certificates evidencing all tendered Shares, in proper form for
transfer, or a Book-Entry Confirmation, together with the Letter of
Transmittal properly completed and duly executed with any required
signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by the Letter of
Transmittal, are received by the Disbursing Agent within three Nasdaq
National Market trading days after the date of execution of the Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mailed to the Disbursing Agent and must
include a guarantee by an Eligible Institution and a representation that the
Stockholder owns the Shares tendered within the meaning of, and that the tender
of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act,
each in the form set forth in the Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Disbursing Agent of
- Share Certificates evidencing such Shares or a Book-Entry Confirmation of
the delivery of such Shares (if available),
- a properly completed and duly executed Letter of Transmittal or, in the
case of a book-entry transfer, an Agent's Message and
- any other documents required by the Letter of Transmittal.
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Accordingly, payment may not be made to all tendering Stockholders at the
same time and will depend upon when Share Certificates are received by the
Disbursing Agent or Book-Entry Confirmations of tendered Shares are received in
the Disbursing Agent's account at the Book-Entry Transfer Facility.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares pursuant to any of the procedures described above will be determined
by Purchaser, in its sole discretion, which determination shall be final and
binding on all parties. Purchaser reserves the absolute right to reject any and
all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of its counsel, be unlawful. Purchaser also
reserves the absolute right to waive any defect or irregularity in any tender of
Shares of any particular Stockholder, whether or not similar defects or
irregularities are waived in the case of other Stockholders.
No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of Purchaser, Parent,
any of their affiliates or assigns, the Disbursing Agent, the Information Agent
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any such
notification. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, a tendering Stockholder irrevocably appoints Purchaser, its officers and
its designees, and each of them, as the Stockholder's attorneys-in-fact and
proxies, with full power of substitution, in the manner set forth in the Letter
of Transmittal, to the full extent of such Stockholder's rights with respect to
the Shares tendered by such Stockholder and accepted for payment by Purchaser
(and with respect to any and all other Shares or other securities issued or
issuable in respect of the Shares). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective if, when and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by the Stockholder with respect to
such tendered Shares (and such other Shares and securities) will, without
further action, be revoked, and no subsequent powers of attorney, proxies or
written consents may be given or executed (and if given or executed will not be
deemed effective). Purchaser, its officers and its designees will, with respect
to such tendered Shares (and such other Shares and securities) for which such
appointment is effective, be empowered to exercise all voting and other rights
of the Stockholder as they, in their sole discretion, may deem proper at any
annual or special meeting of the Stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's payment for such Shares, Purchaser must
be able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of Stockholders or acting by written
consent without a meeting.
BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the
"backup withholding" provisions of federal income tax law, the Disbursing Agent
may be required to withhold 31% of the amount of any payments of cash made to
certain Stockholders pursuant to the Offer. Any amounts withheld will generally
be allowed as a credit against the Stockholder's U.S. federal income tax
liability for the year. In order to avoid backup withholding, each Stockholder
tendering Shares in the Offer must provide the Disbursing Agent with the
Stockholder's correct Taxpayer Identification Number ("TIN") (which, for a
Stockholder that is an individual, will generally be that Stockholder's social
security number) on a Substitute Form W-9 and certify under penalties of perjury
that such TIN is correct and that the Stockholder is not subject to backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. If a Stockholder does not provide its correct TIN or fails to
provide the certifications described above, the Internal Revenue Service ("IRS")
may impose a penalty on the Stockholder and payment of cash to the Stockholder
pursuant to the Offer may be subject to backup withholding.
Certain Stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Non-corporate foreign Stockholders should complete and sign
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the applicable Form W-8 (a copy of which may be obtained from the Disbursing
Agent), in order to avoid backup withholding. See Instruction 9 of the Letter of
Transmittal.
OTHER REQUIREMENTS. The tender of Shares pursuant to any one of the
procedures described above will constitute the tendering Stockholder's
acceptance of the Offer, as well as the tendering Stockholder's representation
and warranty that
- such Stockholder is the owner of the Shares within the meaning of Rule
14e-4 under the Exchange Act,
- the tender of such Shares complies with such Rule 14e-4,
- such Stockholder has the full power and authority to tender and assign
the Shares tendered, as specified in the Letter of Transmittal and
- when such Shares are accepted for payment by Purchaser, Purchaser will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges, claims and encumbrances and not subject to any
adverse claim.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering Stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
SECTION 4. WITHDRAWAL RIGHTS.
Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after April 27, 2001, unless accepted for
payment. If Purchaser provides a Subsequent Offering Period, Stockholders may
not withdraw Shares tendered in such Subsequent Offering Period or Shares
tendered in the Offer and accepted for payment. If for any reason whatsoever
acceptance for payment of or payment for any Shares tendered pursuant to the
Offer is delayed or Purchaser is unable to accept for payment or pay for Shares
tendered pursuant to the Offer, then, without prejudice to Purchaser's rights
set forth herein, the Disbursing Agent may nevertheless, on behalf of Purchaser,
retain tendered Shares, and those Shares may not be withdrawn except to the
extent that the tendering Stockholder is entitled to exercise and duly exercises
withdrawal rights, as described in this Section 4, subject, however, to
Purchaser's obligation under Rule 14e-1(c) under the Exchange Act to pay for
Shares tendered or to return those Shares promptly after termination or
withdrawal of the Offer.
To be effective, a written notice of withdrawal must be timely received by
the Disbursing Agent (in accordance with the Offer) at one of its addresses set
forth on the back cover of this Offer to Purchase. Any notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Disbursing Agent, then, prior to the physical release of such
Share Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Disbursing Agent and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution, unless such Shares
have been tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3, any notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares. Withdrawals of Shares may not be rescinded. Any Shares properly
withdrawn will thereafter be deemed not to have been validly tendered for
purposes of the Offer. However, withdrawn Shares may be re-tendered at any time
on or prior to the Expiration Date or the expiration of any Subsequent Offering
Period, by following one of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
Parent, any of their affiliates or assigns, the Disbursing Agent, the
Information Agent or any other
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person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
SECTION 5. CERTAIN TAX CONSIDERATIONS.
The summary of U.S. federal income tax consequences set forth below is for
general information only. The tax consequences to each Stockholder will depend
in part upon such Stockholder's particular situation. This discussion is based
on current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), existing, proposed and temporary regulations promulgated thereunder,
and administrative and judicial interpretations thereof, all of which are
subject to change, possibly with retroactive effect. The following discussion
may not apply to Stockholders who acquired their Shares pursuant to the exercise
of employee stock options or other compensation arrangements with the Company or
who are subject to special tax treatment under the Code, such as non-U.S.
persons, life insurance companies, tax-exempt organizations and financial
institutions.
STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR
OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS.
Sales of Shares by Stockholders pursuant to the Offer generally will be
taxable transactions for U.S. federal income tax purposes under the Code and may
also be taxable transactions under applicable state, local and other tax laws.
In general, for U.S. federal income tax purposes, a Stockholder will recognize
gain or loss equal to the difference between the tax basis of such Stockholder's
Shares and the amount of cash received in exchange therefor. In general, such
gain or loss will be capital gain or loss if the Shares are capital assets in
the hands of the Stockholder and will be long-term gain or loss if the holding
period for the Shares is more than one year as of the date of the sale of such
Shares. In addition, a Stockholder's ability to use capital losses to offset
ordinary income is generally limited. Gain or loss will generally be calculated
separately for each block of Shares (i.e., Shares acquired at the same cost in a
single transaction) tendered and purchased pursuant to the Offer or converted
into cash in the Merger, as the case may be.
A Stockholder who tenders Shares may be subject to backup withholding
unless the Stockholder provides (1) his, her or its TIN and certifies that such
number is correct or (2) an exemption applies. A Stockholder who does not
furnish his, her or its TIN also may be subject to a penalty imposed by the IRS.
See Section 3.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS.
The Company Common Stock is traded on The Nasdaq National Market under the
symbol BTOB. The following table sets forth, for the periods indicated, the high
and low sale prices per Share as reported by The Nasdaq National Market.
HIGH LOW
---- ---
Year Ended December 31, 2001
First Quarter (through February 26, 2001)................. $ 5 5/8 $ 1 5/32
Year Ended December 31, 2000
Fourth Quarter............................................ $ 6 1/16 $ 1 3/8
Third Quarter............................................. 4 11/32 1 7/8
Second Quarter............................................ 14 3/8 2 15/16
First Quarter............................................. 23 15/16 12 15/16
Year Ended December 31, 1999
Fourth Quarter............................................ $24 1/4 $10 5/8
Third Quarter............................................. 26 8 15/16
Second Quarter............................................ 30 1/8 8 7/8
First Quarter............................................. 12 3/8 8 1/8
On February 13, 2001, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the reported closing
price per Share on The Nasdaq National Market was $4 1/16. On
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February 26, 2001, the last full day of trading prior to commencement of the
Offer, the reported closing price per Share on The Nasdaq National Market was
$5 19/32.
The Company did not declare or pay any cash dividends with respect to the
Shares during any of the periods indicated in the table.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. The Company is a Delaware corporation with its headquarters
located at 600 Travis Street, Suite 7050, Chase Tower, Houston, Texas 77002.
According to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 (the "Company 10-K"), the Company offers on-line end-to-end
business financing fulfillment solutions through an Internet-based technology
platform for specific equipment purchases and for general corporate purposes.
FINANCIAL INFORMATION. The following selected consolidated financial data
relating to the Company and its subsidiary have been taken or derived from (1)
the Company's unaudited financial statements for the fiscal year ended December
31, 2000 and (2) the audited financial statements contained in the Company 10-K
for the fiscal years ended December 31, 1999, December 31, 1998 and December 31,
1997. More comprehensive financial information is included in the Company 10-K
and the other documents filed by the Company with the SEC, and the financial
data set forth below are qualified in their entirety by reference to such
reports and other documents including the financial statements (and the notes
thereto) contained therein. The Company 10-K and such other documents may be
examined and copies may be obtained from the offices of the SEC in the manner
set forth below.
SIERRACITIES.COM INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED
------------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999 2000
------------ ------------ ------------ ------------
STATEMENTS OF CONSOLIDATED OPERATIONS
Total revenue........................... $51,599 $ 61,143 $ 102,350 $ 125,555
Net income (loss) before non-recurring
items(1).............................. -- -- -- (2,888)
Net income (loss)....................... 10,537 (5,902) 2,288 (26,149)
Diluted earnings (loss) per common share
before non-recurring items............ -- -- -- (0.15)
Earnings (loss) per common share,
diluted............................... 1.03 (0.43) 0.13 (1.37)
BALANCE SHEET DATA
Total assets............................ $92,958 $428,293 $1,014,352 $1,030,221
Total liabilities....................... 49,731 343,776 846,398 888,212
Stockholders' equity.................... 40,587 84,048 167,884 142,009
- ---------------
(1) Non-recurring items for the fiscal year ended December 31, 2000 include loss
on disposal and discontinuance of non-core businesses, restructuring changes
and terminated merger costs.
Except as otherwise set forth in this Offer to Purchase, the information
concerning the Company contained herein has been furnished by the Company or has
been taken from or is based upon reports and other documents on file with the
SEC or otherwise publicly available. Although neither Purchaser nor Parent has
any knowledge that would indicate that any statements contained herein based
upon such reports and documents are untrue, neither Purchaser nor Parent takes
any responsibility for the accuracy, validity or completeness of the information
contained in such reports and other documents or for any failure by the Company
to disclose events that may have occurred and may affect the significance or
accuracy of any such information but that are unknown to Purchaser or Parent.
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CERTAIN COMPANY PROJECTIONS. In connection with the Company's efforts to
negotiate a transaction with Parent, the Company provided Parent and Purchaser
with certain business and financial information that was not publicly available.
Such information included the following projections of total revenue, net income
and net income per share for the Company for fiscal years 2001, 2002 and 2003,
assuming that the Company was operating as a unit of Parent. These were not
projections of the Company's operations on a stand-alone basis.
2001 2002 2003
----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Total revenue.............................. $132,822 $161,795 $187,532
Net income................................. 9,007 18,820 28,632
Net income per share (1)................... 0.47 0.99 1.51
- ---------------
(1) Assumes 18,968,640 Shares outstanding.
THE FOREGOING PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC
DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE SEC OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING
PROJECTIONS AND ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE SUCH
INFORMATION WAS PROVIDED TO PARENT AND PURCHASER. THE PROJECTIONS WERE NOT
UPDATED AS OF THE DATE OF THIS OFFER TO PURCHASE. NONE OF PARENT, PURCHASER NOR
ANY OF THEIR REPRESENTATIVES ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OF THE
PROJECTIONS. WHILE PRESENTED WITH NUMERICAL SPECIFICITY, THE PROJECTIONS ARE
BASED UPON A VARIETY OF ASSUMPTIONS (NOT ALL OF WHICH WERE STATED THEREIN AND
NOT ALL OF WHICH WERE PROVIDED TO PARENT OR PURCHASER) RELATING TO THE BUSINESS
OF THE COMPANY AND THE COMPANY'S EXPECTATIONS REGARDING OPERATIONS AS A UNIT OF
PARENT, WHICH MAY NOT BE REALIZED AND ARE SUBJECT TO SIGNIFICANT FINANCIAL,
MARKET, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES WHICH ARE
DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY, MANY OF WHICH ARE BEYOND THE
CONTROL OF THE COMPANY AND PARENT. THERE CAN BE NO ASSURANCE THAT THE RESULTS IN
THE PROJECTIONS WILL BE REALIZED, AND ACTUAL RESULTS MAY VARY MATERIALLY FROM
THOSE SHOWN. THE INCLUSION OF THE FOREGOING PROJECTIONS SHOULD NOT BE REGARDED
AS A REPRESENTATION BY PARENT, PURCHASER OR ANY OF THEIR RESPECTIVE AFFILIATES
OR REPRESENTATIVES OR BY THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES
THAT THE PROJECTED RESULTS WILL BE ACHIEVED. THE PROJECTIONS SHOULD BE READ
TOGETHER WITH THE FINANCIAL STATEMENTS OF THE COMPANY REFERRED TO HEREIN.
AVAILABLE INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the information and reporting
requirements of the Exchange Act and is obligated to file periodic reports,
proxy statements and other information with the SEC relating to its business,
financial condition and other matters. Information as of particular dates
concerning the Company's directors and officers, their compensation, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in such proxy statements and distributed to the
Stockholders and filed with the SEC. These reports, proxy statements and other
information are available for inspection at the public reference facilities of
the SEC located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and for inspection and copying at prescribed rates at the regional
offices of the SEC located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New
York, New York 10048. The Company's SEC filings are also available to the public
on the SEC's Internet site (http://www.sec.gov). Copies of this material may
also be obtained by mail, upon payment of the SEC's customary fees, from the
SEC's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, such material is available for inspection at the offices of the
National Association of Securities Dealers, Inc. located at 1735 K Street, N.W.,
Washington, D.C. 20006.
SECTION 8. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT AND AMERICAN
EXPRESS.
Purchaser is a newly incorporated Delaware corporation and a wholly-owned
subsidiary of Parent. Purchaser was organized to acquire the Company and has not
carried on any activities to date other than in connection with the Offer and
the Merger Agreement. The principal executive office of Purchaser is located at
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AMTRS Corp., c/o American Express Travel Related Services Company, Inc., 200
Vesey Street, New York, New York 10285, and the telephone number at such office
is (212) 640-2000.
Parent is a New York corporation and is a wholly-owned subsidiary of
American Express Company ("American Express"), which is also a New York
corporation. Parent provides a variety of products and services, including,
among others, global card network, issuing and processing services, the American
Express(R) Card, the Optima(R) Card and other consumer and corporate lending and
banking products, stored value products, business expense management products
and tax preparation and business planning services, magazine publishing,
merchant transaction processing and point of sale and back office products and
services. Parent offers products and services in more than 200 countries. In
certain countries, partly owned affiliates and unaffiliated entities offer some
of these products and services under licenses from Parent. The principal
executive office of Parent is located at American Express Travel Related
Services Company, Inc., 200 Vesey Street, New York, New York 10285, and the
telephone number at such office is (212) 640-2000.
American Express is primarily engaged in the business of providing travel
related services, financial advisory services and international banking services
throughout the world. The principal executive office of American Express is
located at American Express Company, 200 Vesey Street, New York, New York 10285,
and the telephone number at such office is (212) 640-2000. American Express is
subject to the information and reporting requirements of the Exchange Act and in
accordance therewith is obligated to file certain periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. Information as of particular dates
concerning American Express' directors and officers, their compensation, stock
options granted to them, the principal holders of American Express' securities
and any material interest of such persons in transactions with American Express
is required to be disclosed in such proxy statements and distributed to American
Express' stockholders and filed with the SEC. These reports, proxy statements
and other information are available for inspection at the public reference
facilities of the SEC located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and for inspection and copying at prescribed rates at
the regional offices of the SEC located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite
1300, New York, New York 10048. American Express' SEC filings are also available
to the public on the SEC's Internet site (http://www.sec.gov). Copies of this
material may also be obtained by mail, upon payment of the SEC's customary fees,
from the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, such material is available for inspection at the offices of
the New York Stock Exchange located at 20 Broad Street, New York, New York
10005.
The name, present principal occupation or employment, five-year employment
history and citizenship of each of the directors and executive officers of
Purchaser, Parent and American Express, as well as the name, principal business
and address of the corporation or other organization in which such present
occupation or employment is carried on are set forth in Schedule I hereto.
Because the only consideration in the Offer and Merger is cash and the
Offer covers all outstanding Shares, and in view of the absence of a financing
condition, Purchaser believes the financial condition of Parent, Purchaser,
American Express and their affiliates is not material to a decision by a
Stockholder whether to sell, tender or hold Shares pursuant to the Offer.
However, consolidated financial statements (including notes thereto) of Parent
are contained in American Express' Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, and in other reports filed with the SEC. Such
reports and other documents may be examined and copies may be obtained from the
offices of the SEC in the manner set forth above.
Except as provided in Section 11 of this Offer to Purchase, none of
Purchaser, Parent, American Express or, to the best of their knowledge, any of
the persons listed on Schedule I or any associate or wholly-owned or
majority-owned subsidiary of Purchaser, Parent, American Express or any of the
persons so listed beneficially owns or has a right to acquire, directly or
indirectly, any Shares or any other equity securities of the Company. None of
Purchaser, Parent, American Express or, to the best of their knowledge, any of
the persons or entities referred to above, or any of the respective executive
officers, directors or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the past sixty days.
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Except as described in Section 11 of this Offer to Purchase, none of
Purchaser, Parent, American Express or, to the best of their knowledge, any of
the persons listed on Schedule I has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including but not limited to contracts, arrangements, understandings or
relationships concerning the transfer or voting of such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, except as
contemplated by the Merger Agreement.
Except as set forth in this Offer to Purchase, none of Purchaser, Parent,
American Express or, to the best of their knowledge, any of the persons listed
on Schedule I has had any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that are
required to be reported under the rules and regulations of the SEC applicable to
the Offer. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between any of Parent, Purchaser,
American Express or, to the best knowledge of Purchaser, Parent and American
Express, any of the persons listed on Schedule I, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, a tender offer or other acquisition of securities, an election
of directors or a sale or other transfer of a material amount of assets.
SECTION 9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser and Parent to consummate
the Offer and the Merger and to pay related fees and expenses is estimated to be
approximately $109.5 million.
The Offer is not conditioned upon any financing arrangements. Purchaser
will obtain all necessary funds required to consummate the transaction through
capital contributions or advances made by Parent. Parent plans to make these
contributions or advances from corporate funds on hand.
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In late 1999, an investment banking firm acting on behalf of the Company
contacted Parent about a possible transaction with the Company. Parent did not
respond to such contact.
In May, 2000, Parent was contacted by CSFB regarding Parent's interest in
pursuing certain strategic alternatives involving the Company. In June, 2000,
Parent executed a confidentiality agreement with the Company and received a
confidential information memorandum. In July, 2000, Parent submitted a
preliminary indication of interest to acquire the Company.
In August and early September, 2000, Parent commenced a due diligence
investigation of the Company. Parent did not make an offer to acquire the
Company at that time.
On November 7, 2000, the Company and VerticalNet, Inc. ("VerticalNet")
publicly announced that they had entered into a merger agreement. Under the
merger agreement, VerticalNet agreed to acquire the Company for $7.00 per share
in VerticalNet common stock, subject to adjustment based on the price of
VerticalNet shares. The Company had the right to terminate the merger agreement
if VerticalNet shares traded below $15.00 per share (which would result in the
Company stockholders receiving stock with a value below $5.00 per share). On
November 6, 2000, the closing price of the VerticalNet shares was $29.50 per
share. VerticalNet commenced its tender offer, pursuant to the merger agreement,
for the Shares on November 16, 2000.
On December 12, 2000, VerticalNet and Parent initiated discussions with the
Company regarding a possible transaction in which VerticalNet would acquire the
Company's technology and Parent would acquire the Company's other operations and
financial assets. On January 5, 2001, these same three parties met and
determined not to pursue a three-party acquisition alternative.
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On January 10, 2001, VerticalNet and the Company publicly announced that
they had mutually agreed to terminate their merger agreement and the tender
offer. On the date of termination, VerticalNet shares closed at $4.93 per share.
Following termination of the VerticalNet merger agreement, Parent contacted
the Company to discuss a possible transaction. On January 11, 2001, Parent
submitted a letter in which it proposed to acquire the Company for $5.00 per
Share and on January 12, 2001 the parties met to discuss a possible acquisition.
The Company responded that this price was inadequate, and discussions and
additional due diligence continued.
On January 30, 2001, Parent submitted a revised proposal to acquire the
Company at a price of $5.90 per Share, less the value of contingent liabilities
identified by Parent, which would result in a net price of not less than $5.45
per Share. After discussions with SierraCities regarding the price, Parent
submitted a revised bid of $5.60 per Share with no reduction for contingent
liabilities. The Company responded that this price was inadequate.
On February 1, 2001, following further discussions, the Company and Parent
signed a non-binding letter of intent for Parent's acquisition of the Company
for $5.70 per Share. In the letter of intent, the Company agreed not to discuss
a transaction involving the sale of the Company with any other party for 10
days. Following the execution of the letter of intent, Parent undertook an
updating due diligence investigation of the Company.
On February 6, 2001, Parent submitted a draft of the Merger Agreement to
the Company and the parties commenced negotiation of the Merger Agreement. On
February 12, 2001, as a result of concern over a possible payment obligation of
the Company, Parent said that it may reduce the purchase price by as much as
$0.10 per Share.
On February 13, 2001, the Company Board met to consider the Merger
Agreement and related agreements.
After further negotiations on February 13 and 14, 2001, the parties agreed
on a price of $5.68 per Share. The Company, Parent and Purchaser executed the
Merger Agreement and related agreements on February 14, 2001. The Company and
Parent issued a press release announcing execution of the Merger Agreement on
February 14, 2001.
On February 27, 2001, Purchaser commenced the Offer.
SECTION 11. PURPOSE OF THE OFFER AND MERGER; PLANS FOR THE COMPANY; MERGER
AGREEMENT; TENDER AGREEMENTS AND OTHER AGREEMENTS; OTHER MATTERS.
PURPOSE OF THE OFFER AND MERGER. The purpose of the Offer and the Merger
is to enable Parent to acquire control of, and the entire equity interest in,
the Company. The Offer is intended to increase the likelihood that the Merger
will be effected promptly. The purpose of the Merger is to acquire all
outstanding Shares not acquired pursuant to the Offer or otherwise.
As described below, Parent intends, as soon as possible after consummation
of the Offer and in accordance with the Merger Agreement, to obtain
representation on the Company Board proportionate to its Share ownership at such
time.
PLANS FOR THE COMPANY. Upon acquiring control of the Company, Parent
intends to continue its review and evaluation of the Company and its
subsidiaries and their respective assets, businesses, corporate structure,
capitalization, operations, properties, policies, management and personnel, with
a view towards determining how to optimally realize any potential benefits that
arise from the relationship of the operations of the Company with those of other
business units of Parent and American Express. Such evaluation and review is
ongoing and is not expected to be completed until after the consummation of the
Offer and the Merger. If, as and to the extent that Parent acquires control of
the Company, Parent will complete such evaluation and review of the Company and
will determine what, if any, changes would be desirable in light of the
circumstances which then exist. Such changes could include, among other things,
restructuring the Company
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through changes in the Company's business, corporate structure, headquarters,
certificate of incorporation, by-laws, capitalization or management or could
involve consolidating, reorganizing and streamlining certain operations. After
Parent concludes its review of the Company, it is possible that Parent might
modify some of its current plans. Except as described above or elsewhere in this
Offer to Purchase, Parent has no present plans or proposals that would relate to
or result in an extraordinary corporate transaction involving the Company or its
subsidiaries (such as a merger, reorganization, liquidation or sale or other
transfer of a material amount of assets), any material change in the Company's
capitalization or dividend policy or any other material change in the Company's
corporate structure or business.
MERGER AGREEMENT. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to the
Merger Agreement, which is incorporated herein by reference and a copy of which
has been filed with the SEC as an exhibit to the Schedule TO. The following
summary may not contain all of the information important to a Stockholder. The
Merger Agreement should be read in its entirety for a more complete description
of the matters summarized below. The Merger Agreement may be examined and copies
may be obtained at the place and in the manner set forth in Section 8 of this
Offer to Purchase. Capitalized terms used in the following summary and not
otherwise defined in this Offer to Purchase have the meanings set forth in the
Merger Agreement.
The Offer. The Merger Agreement states that provided that it shall not
have been terminated in accordance with certain of its sections pertaining to
termination, as promptly as practicable (but in any event not later than eight
business days after the public announcement of Purchaser's intention to commence
the Offer), Parent shall cause Purchaser to commence (within the meaning of Rule
14d-2 under the Exchange Act) the Offer whereby Purchaser shall offer to
purchase for cash all of the Shares at the Per Share Amount, net to the seller
in cash (subject to reduction for any stock transfer taxes payable by the seller
if payment is to be made to an individual or entity other than the Person, as
defined in the Merger Agreement, in whose name the certificate for such Shares
is registered or any applicable federal back-up withholding). For purposes of
the Merger Agreement, "Person" shall mean an individual, corporation, limited
liability company, partnership, limited partnership, limited liability
partnership, association, trust, unincorporated organization or other entity,
organization or group (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act), including a Governmental Entity (as defined in the Merger
Agreement). Notwithstanding the foregoing, if between the date of the Merger
Agreement and the Effective Time, the outstanding Shares shall have been changed
into a different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Per Share Amount shall be correspondingly adjusted on a
per-share basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. The obligation of
Parent to cause Purchaser to consummate the Offer and to accept for payment and
to pay for Shares validly tendered in the Offer and not withdrawn in accordance
therewith shall be subject to those conditions set forth in Annex I to the
Merger Agreement and described in this Section 11 and Section 14 of this Offer
to Purchase (the "Offer Conditions").
Pursuant to the Merger Agreement, without the prior written consent of the
Company, Purchaser will not, and Parent will cause Purchaser not to, (i)
decrease or change the form of the Per Share Amount, (ii) decrease the number of
Shares sought in the Offer, (iii) amend or waive the Minimum Condition or impose
conditions other than the Offer Conditions on the Offer, (iv) extend the
Expiration Date which shall initially be 20 business days following the
commencement of the Offer except (A) as required by law and (B) that, in the
event that the Offer Conditions are not satisfied or waived at the time that the
Expiration Date would otherwise occur, (1) Purchaser must extend the Expiration
Date for 10 additional business days to the extent necessary to permit the Offer
Conditions to be satisfied, (2) if the Offer Conditions are not satisfied or
waived following the extension described in the preceding clause (1), Purchaser
must extend the Expiration Date for 10 additional business days to the extent
necessary to permit the Offer Conditions to be satisfied and (3) if following
the extension described in the preceding clause (2) any Offer Condition other
than the Minimum Condition (and any Offer Condition that is not capable of being
satisfied) is then not satisfied or waived, Purchaser must extend the Expiration
Date for 10 additional business days to the extent necessary to permit the Offer
Conditions to be satisfied, or (v) amend any term of the Offer in any manner
adverse to the Stockholders (including to result in any extension that would be
inconsistent with the preceding provisions of
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the Merger Agreement summarized by this paragraph); provided, however, that (x)
subject to applicable legal requirements, Parent may cause Purchaser to waive
any Offer Condition, other than the Minimum Condition, in Parent's sole
discretion, and (y) the Offer may be extended (but not beyond May 31, 2001) in
connection with an increase in the consideration to be paid pursuant to the
Offer so as to comply with applicable rules and regulations of the SEC, with
Parent hereby expressly reserving the right, in its sole discretion, to effect
such an increase. Except as set forth in clauses (i) through (v) above and
subject to applicable legal requirements, Purchaser may amend the Offer or waive
any Offer Condition in its sole discretion.
Assuming the prior satisfaction or waiver of the Offer Conditions,
Purchaser will, and Parent will cause Purchaser to, accept for payment and pay
for, in accordance with the terms of the Offer, all Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after the Expiration
Date. Parent and Purchaser, at Parent's discretion, may elect to provide a
Subsequent Offering Period pursuant to Rule 14d-11 under the Exchange Act. If
the Merger Agreement is terminated according to its terms, Parent shall promptly
terminate the Offer in accordance with applicable legal requirements.
Company Action. The Merger Agreement states that
- the Company Board, at a meeting duly called and held, has by the
unanimous vote of all directors of the Company present (1) determined
that the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, are fair to and in the best interests
of the Company and the Stockholders, (2) approved the Merger Agreement
and the transactions contemplated thereby, including the Offer and the
Merger, and each Tender Agreement, each in accordance with the
requirements of the DGCL, (3) declared that the Merger Agreement is
advisable, and (4) resolved to recommend that the Stockholders of the
Company accept the Offer and tender their Shares pursuant to the Offer
and approve and adopt the Merger Agreement and the Merger;
- CSFB has delivered to the Company Board an opinion to the effect that the
consideration to be received by the Stockholders in the Offer and the
Merger is fair to such Stockholders from a financial point of view;
- the Company has been advised that all of its directors and executive
officers presently intend to tender their Shares pursuant to the Offer;
and
- Section 203 of the DGCL does not and will not prohibit the Company's
authorization, execution, delivery and performance of the Merger
Agreement and the transactions contemplated thereby, including the Offer
and the Merger.
The Company's Board of Directors. Pursuant to the Merger Agreement,
effective upon the acceptance for payment of any Shares pursuant to the Offer,
and from time to time thereafter, Parent shall be entitled to designate the
number of directors (the "Parent Designees"), rounded up to the next whole
number, on the Company Board that equals the product of (1) the total number of
directors on the Company Board (giving effect to any increase in the number of
directors pursuant to this paragraph) multiplied by (2) the percentage that the
number of Shares beneficially owned by Parent or Purchaser following the
acceptance for payment of Shares pursuant to the Offer bears to the total number
of Shares outstanding, and the Company shall promptly take all action necessary
to cause each of the Parent Designees to be elected or appointed to the Company
Board, including increasing the size of the Company Board and seeking, accepting
and securing resignations of incumbent directors. At such time, and from time to
time thereafter, to the extent requested by Parent, the Company shall use its
best efforts to cause individuals designated by Parent to constitute the number
of members, rounded up to the next whole number, on (A) each committee of the
Company Board and (B) each Board of Directors of each Company Subsidiary, and
each committee thereof, that represents the same percentage as the Parent
Designees represent on the Company Board. Notwithstanding the foregoing
provisions of this paragraph, the parties to the Merger Agreement shall use
their respective best efforts to ensure that at least two of the members of the
Company Board shall, at all times prior to the Effective Time, be directors of
the Company who were directors of the Company on the date of the Merger
Agreement (the "Continuing Directors"), provided that if there shall be in
office fewer than two Continuing Directors for any reason, the Company Board
shall cause a person designated by the remaining Continuing Director to fill
such
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vacancy who shall be deemed to be a Continuing Director for all purposes of the
Merger Agreement, or if no Continuing Directors then remain, the other directors
of the Company then in office shall designate two persons to fill such vacancies
who are not officers or employees or affiliates of the Company, Parent or
Purchaser or any of their respective affiliates and such persons shall be deemed
to be Continuing Directors for all purposes of the Merger Agreement.
Following the election or appointment of the Parent Designees pursuant to
the Merger Agreement and until the earlier of the termination of the Merger
Agreement or the Effective Time, the approval of a majority of the Continuing
Directors shall be required to authorize (and such authorization shall
constitute the authorization of the Company Board and no other action on the
part of the Company, including any action by any other director of the Company,
shall be required to authorize)
- any termination of the Merger Agreement by the Company,
- any amendment of the Merger Agreement requiring action by the Company
Board,
- any consent to extension of time for performance of any obligation or
action under the Merger Agreement by Parent or Purchaser,
- any waiver of compliance with any of the agreements or conditions
contained in the Merger Agreement for the benefit of the Company,
- any consent or action by the Company Board under the Merger Agreement and
- any other action of the Company under the Merger Agreement which
materially adversely affects the holders of Shares (other than Parent or
Purchaser).
The Company is today mailing to the Stockholders a copy of an Information
Statement prepared in accordance with Rule 14f-1 promulgated under the Exchange
Act relating to the possible designation by Parent, pursuant to the Merger
Agreement, of certain persons to be appointed to the Company Board otherwise
than at a meeting of the Stockholders.
The Merger. Subject to the terms and conditions of the Merger Agreement,
at the Effective Time, in accordance with the Merger Agreement and the DGCL,
Purchaser shall be merged with and into the Company. Following the Merger, the
separate existence of Purchaser shall cease and the Company shall continue as
the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"). At the Effective Time, the Surviving Corporation
shall succeed to and assume all of the rights and obligations of the Company and
Purchaser in accordance with the DGCL, and the Merger shall otherwise have the
effects set forth in the applicable provisions of the DGCL.
The Merger Agreement states that the Certificate of Incorporation of
Purchaser in effect at the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation (except that, by virtue of the Merger
and without any further action on the part of any holder of Shares or any shares
of the capital stock of Purchaser, Article I of such Certificate of
Incorporation shall be amended to provide that the name of the Surviving
Corporation shall be the name of the Company) until thereafter amended in
accordance with the provisions thereof and as provided by the DGCL. The By-Laws
of Purchaser in effect at the Effective Time shall be the By-Laws of the
Surviving Corporation until thereafter amended in accordance with the provisions
thereof, the Certificate of Incorporation of the Surviving Corporation and the
DGCL. The directors of Purchaser immediately prior to the Effective Time shall
be the directors of the Surviving Corporation, each to hold office until the
expiration of the term for which such director was elected and until his or her
successor is elected and has qualified or as otherwise provided in accordance
with the Certificate of Incorporation and By-Laws of the Surviving Corporation.
The officers of Purchaser immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, each to hold office until their
respective successors are elected or appointed and have qualified or as
otherwise provided in accordance with the Certificate of Incorporation and
By-Laws of the Surviving Corporation.
Effect on Capital Stock. The Merger Agreement provides that, as of the
Effective Time, each share of common stock of Purchaser that is outstanding
immediately prior to the Effective Time shall automatically be
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converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation, which shall constitute the only outstanding shares
of capital stock of the Surviving Corporation immediately after the Effective
Time.
As of the Effective Time, each Share that is owned of record by Parent or
Purchaser or held in the treasury of the Company or owned of record by any
direct or indirect wholly-owned subsidiary of Parent or the Company, but not
Shares held in any Company benefit plan (collectively, the "Excluded Shares")
shall automatically be canceled and retired and shall cease to exist, and no
cash or other consideration shall be delivered or deliverable in exchange
therefor.
Also as of the Effective Time, each Share that is issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares and
Excluded Shares) shall automatically be converted into and represent the right
to receive (pursuant to the Merger Agreement) the Merger Consideration. All such
Shares, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate formerly representing any such Share shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance with
the Merger Agreement. Any payment made pursuant to the Merger Agreement shall be
made net of applicable withholding taxes to the extent such withholding is
required by law. Notwithstanding the foregoing, if between the date of the
Merger Agreement and the Effective Time, the outstanding Shares shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of Shares, the Merger Consideration shall be
correspondingly adjusted on a per share basis to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares.
The Merger Agreement further provides that, at the Effective Time:
- all Shares issued and outstanding immediately prior to the Effective Time
shall be canceled and retired and cease to exist,
- each holder of a certificate or certificates that represented Shares
issued and outstanding immediately prior to the Effective Time shall
cease to have any rights as a stockholder of the Company with respect to
the Shares represented by such certificate or certificates, except for
the right to surrender such certificate or certificates in exchange for
the payment provided pursuant to the Merger Agreement or to preserve and
perfect such holder's right to receive payment for such holder's shares
pursuant to Section 262 of the DGCL and the Merger Agreement if such
holder has validly exercised and not withdrawn or lost such right and
- no transfer of Shares issued and outstanding immediately prior to the
Effective Time shall be made on the stock transfer books of the Surviving
Corporation.
Stock Options. Pursuant to the Merger Agreement, as of the Effective Time,
each outstanding option to purchase capital stock of the Company (each a
"Company Stock Option"), whether or not exercisable and whether or not vested,
under any plan or arrangement of the Company providing for the grant of options
to purchase Shares (collectively, the "Company Stock Plans"), shall be canceled
in exchange for a single lump sum cash payment (less any applicable tax
withholdings) payable by the Surviving Corporation, equal to the amount, if any,
by which the Merger Consideration exceeds the per share exercise price of such
Company Stock Option, multiplied by the number of Shares then subject to such
Company Stock Option.
Appraisal Rights. The Merger Agreement states that notwithstanding
anything in the Merger Agreement to the contrary, any Shares held by a Person (a
"Dissenting Stockholder") who does not vote to approve the Merger and complies
with all the provisions of the DGCL concerning the right of holders of Shares to
dissent from the Merger and demands an appraisal of such Person's Shares
("Dissenting Shares") shall not be converted as described above, but shall be
converted into the right to receive such consideration as may be determined to
be due to such Dissenting Stockholder pursuant to the DGCL. If, after the
Effective Time, such Dissenting Stockholder withdraws such Dissenting
Stockholder's demand or fails to perfect or otherwise loses such Dissenting
Stockholder's rights as a Dissenting Stockholder to payment of fair value, in
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any case pursuant to the DGCL, such Dissenting Stockholder's Shares shall be
deemed to be converted as of the Effective Time into the right to receive the
Merger Consideration. The Company is required to give Parent prompt notice of
any demands for appraisal of Shares received by the Company and the opportunity
to participate in and direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
Representations and Warranties of the Company. Pursuant to the Merger
Agreement, the Company has made representations and warranties to Parent and
Purchaser with respect to, among other things:
- the organization, powers and qualification to do business of the Company
and each Company Subsidiary;
- the due authorization, execution, delivery and performance of the Merger
Agreement;
- the enforceability of the Merger Agreement;
- the absence of conflicts of the Merger Agreement and the transactions
contemplated thereby with any provision of the Certificate of
Incorporation or By-Laws of the Company or the comparable charter or
organizational documents of any of the Company Subsidiaries or, subject
to certain specified exceptions, any mortgage, indenture, lease,
contract, agreement or other instrument, permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company, any Company Subsidiary or
any Trust (as defined in the Merger Agreement) or their respective
properties;
- the absence of certain required notices or consents;
- the capital structure of the Company and each Company Subsidiary;
- the accuracy of documents, and financial statements included in
documents, filed by the Company with the SEC;
- the accuracy of certain financial statements of the Company;
- the absence of certain undisclosed liabilities or obligations;
- the absence of certain adverse changes or events;
- the absence of certain required consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any
federal, state, local or foreign governmental or regulatory authority in
connection with the Merger Agreement;
- compliance with certain laws;
- litigation involving the Company and any Company Subsidiary;
- intellectual property rights;
- taxes;
- employee benefit plans and other employment-related matters;
- compliance with certain environmental laws;
- actions taken to render certain anti-takeover provisions of the DGCL
inapplicable to the Offer, the Merger, the Tender Agreements, the other
transactions contemplated in the Merger Agreement and any other
transaction with the Company or any Company Subsidiary by Parent,
Purchaser or any of Parent's other affiliates;
- actions taken to render the Rights Agreement inapplicable to the Merger
Agreement, the Offer, the Merger, the Tender Agreements and the other
transactions contemplated by the Merger Agreement;
- the receipt of an opinion from CSFB;
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- persons entitled to fees or commissions in connection with the Merger
Agreement and as a result of actions taken by or on behalf of the Company
or any Company Subsidiary;
- beneficial interests in Trusts;
- certain Leasing Contracts (as defined in the Merger Agreement);
- certain Warehouse Lines (as defined in the Merger Agreement);
- certain Securitization Transactions (as defined in the Merger Agreement);
- sufficiency and title to, and the right to use, certain assets of the
Company and the Company subsidiaries;
- real property;
- certain contractual obligations;
- certain transactions with Related Parties (as defined in the Merger
Agreement);
- the inapplicability of Section 2115 of the California Corporations Code
to the Company;
- the absence of certain business practices;
- insurance; and
- that neither the Company nor any Company Subsidiary is, or is required to
be, or has any application pending to be, chartered, registered, licensed
or qualified as a bank, bank holding company, trust company, insurance
company, public utility or public utility holding company under the laws
of the United States, any state or other subdivision thereof, any foreign
country or any other jurisdiction.
Representations and Warranties of Parent and Purchaser. Pursuant to the
Merger Agreement, Parent and Purchaser made representations and warranties to
the Company with respect to, among other things:
- the organization, powers and qualification to do business of Parent and
Purchaser;
- the due authorization, execution, delivery and performance of the Merger
Agreement;
- the enforceability of the Merger Agreement;
- the absence of conflicts of the Merger Agreement and the transactions
contemplated thereby with any provision of the Certificate of
Incorporation or By-Laws of Parent or the Certificate of Incorporation or
By-Laws of Purchaser or, subject to certain specified exceptions, any
mortgage, indenture, lease, contract, agreement or other instrument,
permit, concession, grant, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent, its
subsidiaries or their respective properties;
- the absence of certain required notices or consents;
- the purpose of the formation of Purchaser and its lack of activities,
other than those relating to the Merger Agreement;
- the absence of certain persons entitled to fees or commissions in
connection with the Merger Agreement and as a result of actions taken by
or on behalf of Parent or any of its subsidiaries, other than First Union
Securities, Inc.; and
- the availability of funds to consummate the transactions contemplated in
the Merger Agreement.
Conduct of the Company's Business. The Company agreed that from the date
of the Merger Agreement to the time that the Parent Designees constitute a
majority of the members of the Company Board, unless Parent shall otherwise
consent in advance in writing or to the extent described in the relevant
disclosure schedule to the Merger Agreement or as otherwise expressly
contemplated by the Merger Agreement:
- the business of the Company and each Company Subsidiary shall be
conducted only in, and the Company and each Company Subsidiary shall not
take any action except in, the ordinary course of
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business and consistent with past practice and each of the Company and
the Company Subsidiaries shall use its best efforts to maintain its
relationships with its suppliers, customers and employees and maintain
the goodwill of the Company and each Company Subsidiary;
- neither the Company nor any Company Subsidiary shall:
- except as contemplated in the Merger Agreement, amend its Certificate
of Incorporation or By-Laws (or similar organizational documents),
- issue, sell, pledge or dispose of any shares of, or securities
convertible or exchangeable for, or any options, warrants or rights of
any kind to acquire any shares of, its capital stock or any stock
appreciation rights, performance shares or phantom stock based upon
the value of any capital stock or designate any class or series of
preferred stock, provided that the Company may issue Shares upon the
exercise of currently outstanding Company Stock Options listed in the
relevant disclosure schedule to the Merger Agreement,
- split, combine or reclassify any outstanding shares of its capital
stock, or declare, set aside or pay any dividend payable in cash,
stock, property or otherwise with respect to such shares (except for
any dividends paid to the Company or to any wholly-owned subsidiary),
- redeem, purchase, acquire or offer to acquire any shares of, or
securities convertible into or exchangeable for, or any options,
warrants or rights of any kind to acquire any shares of, its capital
stock or any options, warrants or rights of any kind to acquire any
shares of its capital stock or
- amend or waive any of its rights under, or accelerate the vesting
under, any provision of any of the Company Stock Plans, any provision
of any agreement evidencing any outstanding stock option or any
restricted stock purchase agreement, or otherwise modify any of the
terms of any outstanding option, warrant or other security;
- neither the Company nor any Company Subsidiary shall:
- sell, pledge, dispose of or encumber any material assets of the
Company or any Company Subsidiary, except Leasing Contracts or
inventory in the ordinary course of business and consistent with past
practice,
- acquire (by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization
or division thereof or other business (except an existing wholly-owned
subsidiary),
- incur any indebtedness for borrowed money or issue any debt securities
(including capital leases), except for (1) indebtedness incurred to
extend, refinance or restructure current financing facilities with
existing warehouse lenders on terms substantially similar to the
existing terms of such facilities or (2) indebtedness resulting from
the origination and financing of lease contracts through existing
origination channels in the ordinary course of business and consistent
with past practice; provided, however, that any indebtedness incurred
to finance the acquisitions of lease portfolios shall be limited to
$2,000,000 (calculated by aggregate principal amount of the portfolios
purchased) for each individual lease portfolio purchase and
$10,000,000 (calculated by aggregate principal amount of the
portfolios purchased) for all lease portfolio purchases in the
aggregate,
- enter into, terminate, renew, amend or modify any material contract,
lease, agreement or commitment, except in the ordinary course of
business and consistent with past practice or, with respect to the
settlement of real property leases, that does not cause the Company to
incur any obligations other than the payment of monies of less than
$25,000 individually and $100,000 in the aggregate or
- terminate, modify, amend, assign, waive, release or relinquish any
material contract rights or amend any material rights or claims except
in the ordinary course of business and in a manner that does not have
a Material Adverse Effect (as defined in the Merger Agreement) on the
Company;
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- neither the Company nor any Company Subsidiary shall grant any increase
in the salary or other compensation of its employees or directors, or
grant any bonus to any employee or director or enter into any employment
agreement or make any loan to or enter into any material transaction of
any other nature with any employee or director of the Company or any
Company Subsidiary, except
- pursuant to applicable law or regulation,
- as required by the terms of an employment agreement in effect on the
date of the Merger Agreement and listed in the relevant disclosure
schedule to the Merger Agreement (each a "Listed Employment
Agreement"),
- if accrued for on the consolidated balance sheet of the Company as of
December 31, 2000, provided that such increase would not increase the
amount of, or eligibility for, any severance or termination payment,
payment related to a change in control of the Company or any Company
Subsidiary or similar payment that could be due to such person or
- in the case of employees who are not executive officers or directors
of the Company or any Company Subsidiary and who are not a party to a
Listed Employment Agreement and the payment of which would not
increase the amount of, or eligibility for, any severance or
termination payment, payment related to a change in control of the
Company or any Company Subsidiary or similar payment that could be due
to such person, in the ordinary course of business and consistent with
past practice;
- neither the Company nor any Company Subsidiary shall adopt or amend, in
any respect, any collective bargaining, bonus, profit sharing,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment or other employee benefit plan,
agreement, trust, fund, plan or arrangement for the benefit or welfare of
any directors, officers or employees (including any such plan or
arrangement relating to severance or termination pay) or enter into or
amend any employment agreement, except
- pursuant to applicable law or regulation,
- as required by the terms of a Listed Employment Agreement or
- in the case of employees who are not executive officers or directors
of the Company or any Company Subsidiary and who are not a party to a
Listed Employment Agreement and the payment of which would not
increase the amount of, or eligibility for, any severance or
termination payment, payment related to a change in control of the
Company or any Company Subsidiary or similar payment that could be due
to such person, in the ordinary course of business and consistent with
past practice;
- neither the Company nor any Company Subsidiary shall change any
accounting principles used by it except as required by GAAP (as defined
in the Merger Agreement);
- neither the Company nor any Company Subsidiary shall settle any
litigation or proceeding that causes the Company or any Company
Subsidiary to incur any obligation, other than certain payments of
monies;
- except as permitted under the third sub-bullet of the third bullet above,
neither the Company nor any Company Subsidiary shall incur any liability
or obligation (except of the Company to a Company Subsidiary or of a
Company Subsidiary to the Company or another Company Subsidiary), other
than in the ordinary course of business, or assume, guarantee, endorse
(other than endorsements of checks in the ordinary course of business) or
otherwise as an accommodation become responsible for the obligations of
any other Person (except of the Company with respect to obligations of
the Company or any Company Subsidiary with respect to the Company or any
Company Subsidiary), other than in the ordinary course of business,
provided that notwithstanding anything stated in the Merger Agreement, in
no event shall the Company or any Company Subsidiary make any loan or
advance to any Person (including those in the ordinary course of
business) in excess of $200,000 that is not committed by a
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responsible Person other than the Company or a Company Subsidiary to be
purchased or otherwise funded by such party on a non-recourse basis;
- neither the Company nor any Company Subsidiary shall make any capital
expenditures, which, together with all capital expenditures of the
Company and each Company Subsidiary, exceed $250,000 in the aggregate,
other than those required under any Scheduled Contract (as defined in the
Merger Agreement);
- neither the Company nor any Company Subsidiary shall enter into any
agreement or arrangement with any Related Party, other than the payment
of compensation at the same level as payment immediately prior to the
date of the Merger Agreement and the providing of advances and
reimbursement for reasonable expenses incurred by directors and employees
in such capacities in the ordinary course of business consistent with
past practices;
- neither the Company nor any Company Subsidiary shall make any tax
election or settle or compromise any material federal, state, and local
or foreign income tax liability;
- neither the Company nor any Company Subsidiary shall purchase or
otherwise acquire material tangible or intangible assets from any other
Person other than Leasing Contracts or in the ordinary course of
business;
- neither the Company nor any Company Subsidiary shall enter into any
Securitization Transaction; and
- neither the Company nor any Company Subsidiary shall commit to do any of
the foregoing or take any action that would make any representation or
warranty of the Company in the Merger Agreement inaccurate in any respect
at, or as of any time prior to, the Effective Time, or omit to take any
action necessary to prevent any such representation or warranty from
being inaccurate in any respect at any such time.
Access to Information. Pursuant to the Merger Agreement, the Company
shall, and shall cause the Company Subsidiaries and its and their respective
officers, directors, employees, counsel, representatives and agents to, afford,
from the date of the Merger Agreement to the Effective Time, the officers,
employees, counsel, representatives and agents of Parent reasonable access
during regular business hours to its officers, employees, counsel, agents,
properties, books, records and workpapers (including tax returns and insurance
policies) and shall promptly furnish to Parent all financial, operating and
other information and data as Parent, through its officers, employees, counsel,
representatives or agents, may reasonably request. The Company shall confer from
time to time with Parent at Parent's request to discuss the status of the
operations of the Company and the Company Subsidiaries. Except as required by
law, the Company and Parent shall hold, and will cause its respective officers,
employees, representatives and agents to hold, any confidential information of
the Company or any Company Subsidiaries in accordance with the Confidentiality
Agreement (as hereinafter defined) between the Company and Parent. The Company
shall (1) reasonably cooperate with and respond in writing within three business
days to any reasonable request by Parent (in writing or otherwise) for
information relating to Taxes (as defined in the Merger Agreement), and (2)
promptly inform Parent of any deficiency, claim, audit, suit, proceeding or
investigation, in each case relating to Taxes, that arises between the date of
the Merger Agreement and the Effective Time. No investigation pursuant to the
foregoing shall affect, add to or subtract from any representations or
warranties of the parties to the Merger Agreement or the conditions to the
obligations of the parties to the Merger Agreement to effect the Offer, the
Merger or the other transactions contemplated in the Merger Agreement.
Further Actions. Subject to the terms and conditions of the Merger
Agreement, each of the parties to the Merger Agreement agreed to use its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by the Merger Agreement as promptly as practicable, including
- cooperating in the preparation and filing of the Offer Documents (as
defined in the Merger Agreement) and the Schedule 14D-9, any filings that
may be required under the HSR Act or similar governmental legal
requirements, and any amendments to any of the foregoing,
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- obtaining consents of all third parties and Governmental Entities (as
defined in the Merger Agreement) necessary, proper or advisable for the
consummation of the transactions contemplated by the Merger Agreement,
- contesting any legal proceeding relating to the Offer or the Merger and
- executing any additional instruments necessary to consummate the
transactions contemplated in the Merger Agreement.
Subject to the terms and conditions of the Merger Agreement, Parent and the
Company each agreed to use its best efforts to cause the Effective Time to occur
as soon as practicable. In case at any time after the Effective Time any further
action is necessary to carry out the purposes of the Merger Agreement, the
proper officers and directors of each party to the Merger Agreement shall take
all such necessary action. Without limiting the foregoing, but in furtherance
thereof, the Company designated Thomas Depping (Chairman of the Board of
Directors, President and Chief Executive Officer of the Company), and Parent and
Purchaser designated Richard Tambor (a director and the President of Parent), to
serve as a contact person for the respective parties to the Merger Agreement for
the purpose of facilitating certain transitional matters related to the
acquisition of the Company, including with respect to employees of the Company
and the Company Subsidiaries. Parent also agreed to cause Purchaser to comply
with its obligations under the Merger Agreement.
Inquiries and Negotiations. The Company agreed that, from and after the
date of the Merger Agreement until the termination of the Merger Agreement and
except as expressly permitted by the provisions of the Merger Agreement
summarized below, the Company will not, and will not permit any Company
Subsidiary to, and will not authorize any officer, director or employee of or
any investment banker, attorney, accountant or other advisor or representative
of, the Company or any Company Subsidiary to (and will instruct such Persons not
to), directly or indirectly,
- solicit, initiate or encourage the submission of a proposal for any
Alternative Transaction (as defined in the Merger Agreement and as
summarized below) or
- participate in any discussions or negotiations regarding, or furnish to
any Person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) other than Parent or Purchaser (a "Third
Party") any information with respect to, or take any other action
knowingly to facilitate, any Alternative Transaction, any inquiries, any
access or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Alternative Transaction;
provided, however, that Company Board shall not be prohibited from furnishing
information to, or entering into discussions or negotiations with, any Third
Party that makes an unsolicited bona fide written proposal of an Alternative
Transaction if, and only to the extent that,
- the Company Board, after consultation with outside legal counsel,
determines in good faith that such action is necessary for the Company
Board to comply with its fiduciary duties to the Stockholders under
applicable law,
- the Company Board determines in good faith, after consultation with a
financial advisor of nationally recognized reputation, that such
Alternative Transaction would, if consummated, constitute or be
reasonably likely to constitute a Superior Proposal (as defined below)
and
- prior to taking such action, the Company
- provides reasonable notice to Parent to the effect that it is taking
such action (including the material terms and conditions of the
Alternative Transaction and the identity of the Person making it) as
promptly as practicable (but in no case later than 24 hours) after its
receipt thereof,
- provides Parent with a copy of any Alternative Transaction or
amendments or supplements thereto and
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- receives from such Third Party an executed confidentiality agreement
in reasonably customary form and in any event containing terms at
least as favorable to the Company as those between Parent and the
Company, provided that such confidentiality agreement need not contain
any "standstill" provisions.
Subsequent to furnishing information to, or entering into discussions or
negotiations with, any Third Party in accordance with the section of the Merger
Agreement summarized by this paragraph, the Company shall inform Parent on a
prompt basis of the status of any discussions or negotiations with such Third
Party and any material changes to the terms and conditions of such Alternative
Transaction. The Company agreed that promptly after the execution and delivery
of the Merger Agreement, the Company would, and would cause each Company
Subsidiary to, and would instruct their respective officers, directors,
employees, investment bankers, attorneys, accountants and other agents to, cease
and terminate any existing activities, discussions or negotiations with any
parties conducted before the date of the Merger Agreement with respect to any
possible Alternative Transaction. The Company shall not release any Third Party
from, or waive any provision of, and agrees to enforce each provision of, any
confidentiality agreement or any other confidentiality or standstill agreement
to which the Company is or becomes a party with any Third Party who has made, or
is reasonably expected to make, a proposal for an Alternative Transaction,
unless the Company Board determines in good faith, after consultation with its
outside legal counsel, that it is necessary to release the Third Party, waive
the provision or refrain from such enforcement to satisfy its fiduciary duties
as a matter of law.
The Company further agreed that, the Company Board shall not (1) withdraw,
or propose to withdraw, modify or amend, or propose to modify or amend, in a
manner adverse to Parent, its approval or recommendation of the Offer, the
Merger or the Merger Agreement or (2) approve, recommend or endorse, or propose
to approve, recommend or endorse, an Alternative Transaction unless the Company
Board, after consultation with outside legal counsel, determines in good faith
that such action is necessary for the Company Board to comply with its fiduciary
duties to the Stockholders under applicable law; provided, however, that the
Company Board may not take any action contemplated by clause (2) (and in
connection therewith, withdraw, modify or amend its approval or recommendation
of the Merger Agreement, the Merger or the Offer) unless
- such Alternative Transaction is proposed after the date of the Merger
Agreement and is a Superior Proposal,
- the Company Board shall have first consulted with outside legal counsel
and have determined that such action is necessary for the Company Board
to comply with its fiduciary duties to the Stockholders,
- the Company Board has provided written notice to Parent (a "Notice of
Superior Proposal") advising Parent that the Company Board has received a
Superior Proposal, specifying the material terms and conditions of such
Superior Proposal and identifying the Person making such Superior
Proposal and
- three business days have elapsed after Parent's receipt of the Notice of
Superior Proposal and, if Parent has proposed an amendment to the Merger
Agreement, the Company Board has determined in its good faith judgment
(after consultation with a financial adviser of nationally recognized
reputation and consultation with outside legal counsel) that the
Alternative Transaction remains a Superior Proposal, after taking into
account the amendment proposed by Parent.
If Parent proposes an amendment as contemplated above, upon the Company's
request, Parent shall execute an amendment to the Merger Agreement to implement
the terms contemplated by such proposal. The Company shall not be entitled to
enter into any agreement (other than a confidentiality agreement) with respect
to an Alternative Transaction unless and until the Merger Agreement is
terminated by its terms pursuant to the section of the Merger Agreement
summarized in the third bullet in the section below entitled "Termination and
Abandonment" and the Company has paid all amounts due to Parent pursuant to the
section of the Merger Agreement summarized in the section below entitled
"Expenses". Nothing in the Merger Agreement prohibits the Company from taking
and disclosing to the Stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Stockholders which, in the good faith reasonable judgment of the Company Board,
based on the advice of outside legal counsel, is required under applicable law;
provided, however, that except as otherwise permitted
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by the section of the Merger Agreement summarized in this paragraph, the Company
shall not withdraw, or propose to withdraw, modify or amend, or propose to
modify or amend, its position with respect to the Offer, the Merger or the
Merger Agreement or approve, recommend or endorse, or propose to approve,
recommend or endorse, an Alternative Transaction. The Merger Agreement states
that notwithstanding anything contained in the Merger Agreement to the contrary,
any action by the Company Board permitted by, and taken in accordance with, the
section of the Merger Agreement summarized in this paragraph shall not
constitute a breach of the Merger Agreement by the Company. The Merger Agreement
states that notwithstanding anything in the Merger Agreement to the contrary,
nothing in the Merger Agreement shall (1) limit the Company Board's ability to
make any disclosure to the Stockholders that the Company Board determines in
good faith (after consultation with outside legal counsel) is required to be
made to satisfy its fiduciary duties under applicable law or (2) limit the
Company's ability to make any disclosure required by applicable law, and such
actions shall not be considered a breach of the Merger Agreement, provided that
the Company shall use its best efforts to give Parent an opportunity to review
and discuss the proposed disclosure before making such disclosure public. For
all purposes of the Merger Agreement, "Alternative Transaction" means the
occurrence of any of the following events:
- the acquisition of the Company by merger or otherwise by any Third Party;
- the acquisition by a Third Party of 20% or more of the assets of the
Company and the Company Subsidiaries taken as a whole;
- the acquisition by a Third Party of 20% or more of the outstanding Shares
or the issuance by the Company of capital stock containing terms which
are inconsistent with the consummation of the transactions contemplated
by the Merger Agreement;
- the adoption by the Company of a plan of liquidation or the declaration
or payment of an extraordinary dividend representing 20% or more of the
value of the Company and the Company Subsidiaries taken as a whole;
- the repurchase by the Company or any of the Company Subsidiaries of more
than 20% of the outstanding Shares; or
- any other merger, consolidation, recapitalization, tender or exchange
offer or similar transaction involving the Company.
For all purposes of the Merger Agreement, a "Superior Proposal" means any
bona fide written unsolicited proposal of an Alternative Transaction (except
that, for purposes of the definition of Superior Proposal, 50% shall be
substituted for 20% wherever it appears in the definition of Alternative
Transaction) that the Company Board determines in its good faith judgment (after
consultation with a financial advisor of nationally recognized reputation and
consultation with outside legal counsel)
- would result in a transaction, if consummated, that would be superior to
the Stockholders from a financial point of view as compared to the
transactions contemplated by the Merger Agreement and any alternative
offer or amendment proposed by Parent or Purchaser in accordance with the
section of the Merger Agreement summarized by this paragraph and
- to be reasonably capable of being consummated in accordance with its
terms (including that any financing required to consummate the
transaction contemplated by such proposal is capable of being, and is
reasonably likely to be, obtained), in each case taking into account all
factors the Company Board considers relevant, including all legal,
financial, regulatory and other aspects of the proposal and the Third
Party.
Indemnification. The Merger Agreement provides that Parent shall provide,
or cause the Company to provide, until the sixth anniversary of the Closing Date
(as defined in the Merger Agreement), the directors and officers of the Company
who on the date of the Merger Agreement were covered by the Company's
then-existing insurance and indemnification policy an insurance and
indemnification policy that provides coverage for events occurring prior to the
Effective Time (the "D&O Insurance") that is no less favorable than the
Company's policy in existence on the date of the Merger Agreement or, if
substantially equivalent
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coverage is unavailable, the best available coverage, provided, that Parent or
the Company may, in lieu of such policy, purchase a six-year extended reporting
period endorsement (i.e., "tail" coverage) under the Company's insurance and
indemnification policy in existence on the date of the Merger Agreement for such
individuals, and provided further that neither the Company nor Parent shall be
required to pay an annual premium for the D&O Insurance in excess of 150% of the
last annual premium paid by the Company prior to the date of the Merger
Agreement, but in such case shall purchase as much coverage as possible for such
amount. All rights to indemnification existing in favor of those individuals who
are or prior to the date of the Merger Agreement were directors and officers of
the Company or any Company Subsidiary (the "Indemnified Persons") for their acts
and omissions occurring prior to the Effective Time, as provided in the
Company's Certificate of Incorporation or By-Laws (or similar organizational
documents of the relevant Company Subsidiary) (as in effect as of the date of
the Merger Agreement) and as provided in the indemnification agreements between
the Company and said Indemnified Persons (as in effect as of the date of the
Merger Agreement) in the forms disclosed by the Company to Parent prior to the
date of the Merger Agreement, shall survive the Merger and shall be observed by
the Surviving Corporation to the fullest extent available under Delaware law for
a period of six years from the Effective Time (or, if any claims are pending on
such date, until the resolution thereof). From and after the Effective Time,
Parent shall cause the Surviving Corporation to comply with its obligations
under the section of the Merger Agreement summarized by this paragraph. The
section of the Merger Agreement summarized by this paragraph shall survive the
consummation of the Merger, is intended to benefit the Indemnified Persons and
their heirs and representatives, and shall be binding on the successors and
assigns of Parent and the Surviving Corporation.
Employee Benefits. Pursuant to the Merger Agreement, until the first
anniversary of the Effective Time, Parent shall cause the Surviving Corporation
to provide health and welfare benefits that are no less favorable, in the
aggregate, than those that are available on the date of the Merger Agreement to
similarly situated employees of Parent under health and welfare benefit plans
maintained by Parent, provided that nothing in the Merger Agreement shall
prevent the Surviving Corporation or any of its subsidiaries from making any
change in benefits required by applicable law. To the extent permitted under
applicable law, each employee of the Company or any Company Subsidiary shall be
given credit for all service with the Company or any Company Subsidiary (or
service credited by the Company or any Company Subsidiary for purposes of the
Company Plans (as defined in the Merger Agreement)) under all employee benefit
plans, programs, policies and arrangements maintained by Parent or the Surviving
Corporation in which they participate or in which they become participants for
purposes of eligibility and vesting, but not for benefit accrual, including for
purposes of determining eligibility and vesting for
- short-term and long-term disability benefits,
- severance benefits,
- vacation benefits and
- benefits under any defined contribution retirement plan.
The Company agreed to cause all Company Plans that are intended to be
"qualified" within the meaning of Section 401(a) of the Code to terminate before
the Effective Time. The Company shall, effective at or immediately prior to the
Effective Time, cause any Company Plans that it may have to be amended, to the
extent, if any, reasonably requested by Parent, for the purpose of permitting
the Company Plans to continue to operate in conformity with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") subsequent to the
Merger.
Certain Conditions to the Obligations of the Parties Regarding the
Merger. The Merger Agreement provides that the respective obligations of the
parties to consummate the Merger are subject to the fulfillment at or prior to
the Effective Time of the following conditions:
- if required by applicable law, the Merger Agreement shall have been duly
approved and adopted by the holders of at least two-thirds of the
outstanding Shares, in accordance with applicable law and the Certificate
of Incorporation and By-Laws of the Company;
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- no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by
any United States court or United States governmental authority that
prohibits, restrains or enjoins the consummation of the Merger; and
- Purchaser shall have accepted for payment and paid for Shares pursuant to
the Offer, provided that Parent and Purchaser may not assert this
condition if the failure to accept Shares for payment resulted from a
breach by Parent or Purchaser.
Termination and Abandonment. The Merger Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval by the Stockholders:
- by mutual action of the Boards of Directors of Parent and the Company;
- by either the Company or Parent if (1) any statute, rule, regulation,
executive order, decree, ruling or permanent injunction of or by any
Governmental Entity of competent jurisdiction that makes the consummation
of the Merger illegal shall be in effect and shall have become final and
nonappealable, (2) the Offer shall have expired without the prompt
acceptance for payment of Shares thereunder or (3) the acceptance for
payment of Shares pursuant to the Offer shall not have occurred on or
prior to the close of business on May 31, 2001, unless, in any case set
forth in such clause (2) or (3), such event has been caused by the breach
of the Merger Agreement by the party seeking such termination;
- by the Company, prior to acceptance for payment of Shares in the Offer,
to enter into a definitive written agreement with respect to an
Alternative Transaction with a Third Party, provided that, prior to
entering into such definitive agreement, the Company shall have given
Parent the Notice of Superior Proposal as required by the Merger
Agreement, abided in all material respects by all applicable provisions
of the section of the Merger Agreement summarized above in the paragraph
entitled "Inquiries and Negotiations", paid all amounts owed to Parent
pursuant the applicable sections of the Merger Agreement summarized below
in the paragraph entitled "Expenses";
- by Parent, if, prior to the acceptance for payment of Shares in the
Offer, the Company Board shall have publicly withdrawn, or proposed to
withdraw, or modified or amended, or proposed to modify or amend, in a
manner adverse to Purchaser its approval or recommendation of the Merger,
the Offer or the Merger Agreement (or shall have failed to make such
favorable recommendation) or publicly approved, recommended or endorsed
any proposal for, or authorized the Company to enter into, an Alternative
Transaction;
- by the Company if, prior to the acceptance for payment of Shares in the
Offer, Parent shall have failed to perform in all material respects its
covenants and obligations contained in the Merger Agreement, which
failure to perform has not been cured within 15 business days after the
giving of notice to Parent;
- by Parent if, prior to the acceptance for payment of Shares in the Offer,
the Company shall have failed to perform in all material respects its
covenants and obligations contained in the Merger Agreement, which
failure to perform has not been cured within 15 business days after the
giving of notice to the Company; or
- by Parent, if any Person other than Parent or an affiliate of Parent
acquires 20% or more of the Shares.
Any party desiring to terminate the Merger Agreement must give notice to
the other party in accordance with the applicable notice section of the Merger
Agreement.
Except as provided in the Merger Agreement, in the event of the termination
of the Merger Agreement and the abandonment of the Merger in accordance with the
terms of the Merger Agreement, the Merger Agreement shall thereafter become void
and have no effect, and no party to the Merger Agreement shall have any
liability to any other party to the Merger Agreement or its stockholders or
directors or officers in respect thereof, except that nothing in the Merger
Agreement shall relieve any party from liability for any breach thereof.
Expenses. Except as set forth in the Merger Agreement and as summarized
below, if the transactions contemplated by the Merger Agreement are not
consummated, neither the Company, on the one hand, nor
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Parent or Purchaser, on the other hand, shall have any obligation to pay any of
the fees and expenses of the other incident to the negotiation, preparation and
execution of the Merger Agreement, including the fees and expenses of counsel,
accountants, investment bankers and other experts; provided, however, that if
the Merger Agreement is terminated as a result of the willful and material
misrepresentations by a party or the willful and material breach by a party of
any of its covenants and agreements contained in the Merger Agreement, such
party shall pay the costs and expenses incurred by the other parties in
connection with the Merger Agreement. Parent and the Company shall share equally
all fees and expenses, other than attorneys' fees, incurred in connection with
the filing, printing and mailing of the Offer Documents and the Schedule 14D-9
and any amendments or supplements thereto and the filing by the parties to the
Merger Agreement of the premerger notification and report forms relating to the
Merger under the HSR Act. Notwithstanding the foregoing, no such fees and
expenses shall be payable by the Company upon a Payment Event if the Company has
paid Parent the fee required upon the occurrence of a Payment Event, as
discussed below. Furthermore, if any expenses have been previously paid by the
Company to the Parent (the "Expense Payment"), any amount subsequently paid by
the Company upon a Payment Event shall be decreased by the Expense Payment.
Pursuant to the Merger Agreement, if a Payment Event (as defined in the
Merger Agreement and as discussed below) occurs, the Company shall pay to Parent
at the time of such Payment Event a fee of $4.3 million in cash. For purposes of
the Merger Agreement, the term "Payment Event" shall mean
- the termination of the Merger Agreement by the Company pursuant to the
section of the Merger Agreement summarized by the third bullet of the
paragraph above entitled "Termination and Abandonment,"
- the termination of the Merger Agreement by Parent pursuant to the section
of the Merger Agreement summarized by the fourth bullet of the paragraph
above entitled "Termination and Abandonment" or
- a termination of the Merger Agreement pursuant to the section of the
Merger Agreement summarized by clause (2) of the second bullet of the
paragraph above entitled "Termination and Abandonment" (except where the
expiration of the Offer is due to a breach by Parent), the section of the
Merger Agreement summarized by clause (3) of the second bullet of the
paragraph above entitled "Termination and Abandonment" (except where the
failure to accept for payment of Shares by the close of business on May
31, 2001 is due to a breach by Parent), the section of the Merger
Agreement summarized by the sixth bullet of the paragraph above entitled
"Termination and Abandonment" or the section of the Merger Agreement
summarized by the seventh bullet of the paragraph above entitled
"Termination and Abandonment," if
- prior to such termination (and after the date of the Merger Agreement)
(x) any Third Party shall have informed the Company (or the Company
Board or any officer or director of the Company) that such Person
proposes, intends to propose, or will, if the Offer, Merger or any
transaction contemplated in the Merger Agreement is delayed, abandoned
or not approved by the Stockholders or if any other condition occurs,
propose, an Alternative Transaction, or (y) any Third Party or the
Company publicly announces (including any filing with any Governmental
Entity) that such Person has proposed, intends to propose, or will or
may, if the Offer, Merger or any transaction contemplated in the
Merger Agreement is delayed, abandoned or not approved by the
Stockholders or if any other condition occurs, propose, an Alternative
Transaction and
- within one year after such termination the Company enters into an
agreement for, or consummates, an Alternative Transaction
(substituting 50% for 20% in the definition thereof) with any Third
Party.
If a Payment Event occurs pursuant to the section of the Merger Agreement
summarized by the third bullet above, then notwithstanding the foregoing, the
payment required by the foregoing shall be made at the time of the first to
occur of the execution of the agreement for, or consummation of, such
Alternative Transaction. In no event shall more than one fee be payable under
the foregoing.
The Company acknowledged that the agreements contained in the sections of
the Merger Agreement summarized in this section entitled "Expenses" are an
integral part of the transactions contemplated by the
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Merger Agreement, and that, without these agreements, Parent would not have
entered into the Merger Agreement, accordingly, if the Company fails to promptly
pay any amount due pursuant to such sections, and, in order to obtain such
payment, Parent commences a suit that results in a judgment against the Company
for any amount set forth in such sections, the Company shall also pay to Parent
its reasonable costs and expenses incurred in connection with such litigation.
If Parent commences such a suit and it does not result in such a judgment,
Parent shall pay to the Company its reasonable costs and expenses incurred in
connection with such litigation.
Assignability. Neither the Merger Agreement nor any of the parties' rights
thereunder shall be assignable by any party thereto without the prior written
consent of each other party thereto, and any attempted assignment without such
consent shall be void.
Amendments. The Merger Agreement may be amended or supplemented at any
time before or after its approval and adoption by the Stockholders by action of
Parent, Purchaser and the Company, without action by the stockholders thereof,
provided that, after approval and adoption of the Merger Agreement by the
Stockholders, no such amendment or supplement shall, without the required
affirmative vote of the Stockholders, reduce the amount or alter the form of the
consideration that the holders of the capital stock of the Company shall be
entitled to receive upon the Effective Time pursuant to the applicable sections
of the Merger Agreement. Without limiting the generality of the foregoing, the
Merger Agreement provides that it may only be amended or supplemented by an
instrument in writing signed by the parties thereto.
TENDER AGREEMENTS AND OTHER AGREEMENTS.
Tender Agreements. Pursuant to the Tender Agreements, each Identified
Stockholder (i.e., Depping 1999 Investment Limited Partnership, Thomas J.
Depping, Sandy B. Ho, Redstone Group, Ltd., David C. Shindeldecker and David L.
Solomon) agreed to tender, pursuant to the Offer, as promptly as practicable
(but no later than five business days) after commencement of the Offer, all
Shares then held of record by such Identified Stockholder, or with respect to
which such Identified Stockholder is the Beneficial Owner (as defined in each
Tender Agreement), as of the date of the commencement of the Offer, and any
Shares thereafter acquired by such Identified Stockholder prior to the
expiration of the Offer. Each Identified Shareholder also granted an irrevocable
proxy to Parent and certain officers of Parent to vote those Shares at any time
until (and including) the termination of the Tender Agreement at any meeting of
the Stockholders, however called, or in connection with any solicitation of
written consents from the Stockholders,
- in favor of the approval and adoption of the Merger Agreement and the
approval of the Merger, and in favor of each of the other actions
contemplated by the Merger Agreement,
- against any proposal for any recapitalization, merger, sale of assets or
other business combination between the Company and any person or entity
(other than the Merger) and
- against any action or agreement that would result in a breach of any
covenant, representation or warranty or would result in any obligation or
agreement of the Company under the Merger Agreement not being fulfilled
or would result in the Company being required to pay to Parent or
Purchaser the fee contemplated in Section 8.2 of the Merger Agreement.
Each Identified Stockholder also agreed that, subject to the fiduciary duty
under applicable law of such Identified Stockholder as a director of the Company
(if such Identified Stockholder is such a director) as further provided in the
Merger Agreement, such Identified Stockholder shall not take any action which in
any manner delays, deters or impedes the successful completion of the Offer and
the Merger in an expeditious manner. Each Tender Agreement terminates upon the
earliest of:
- the date upon which the Merger Agreement is terminated;
- the date upon which the Merger is effected;
- the date upon which all of the Shares owned or later-acquired by such
Identified Stockholder are purchased by Parent or Purchaser pursuant to
the Offer; and
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- if the following occurs, the date on which the Offer terminates without
the prompt purchase of Shares thereunder.
Each Agreement is filed as an exhibit to the Schedule TO and each is
incorporated herein by reference. The foregoing summary of the Tender Agreements
is qualified in its entirety by reference to the Tender Agreements.
Letter Agreement Regarding Confidentiality. Pursuant to a Letter
Agreement, dated June 9, 2000, between Parent and the Company (the
"Confidentiality Agreement"), Parent agreed to keep confidential certain
information made available to Parent for purposes of Parent's consideration of a
possible negotiated transaction between Parent and the Company. Parent agreed to
keep such information confidential for a period of two years from the date of
the Confidentiality Agreement and subject to certain conditions. Pursuant to the
Confidentiality Agreement, Parent also agreed that it would inform any of its
representatives of the requirements of the Confidentiality Agreement. Parent
also agreed not to use the information provided for any purpose other than
determining whether to enter into a transaction involving the Company. The
Confidentiality Agreement is filed as an exhibit to the Schedule TO and is
incorporated herein by reference. The foregoing summary is qualified in its
entirety by reference to the Confidentiality Agreement.
OTHER MATTERS.
Effects of Inability to Consummate the Merger. Pursuant to the Merger
Agreement, following the consummation of the Offer and subject to certain other
conditions, Purchaser will be merged with and into the Company. If, following
the Offer, approval of the Stockholders is required by applicable law in order
to consummate the Merger, the Company will submit the Merger to the Stockholders
for approval. If the Merger is submitted to the Stockholders for approval, the
Merger will require the approval of the holders of not less than two-thirds of
the shares of the Company then entitled to be voted in an election of directors,
voting together as a single class, including the Shares owned by Purchaser. If
the Offer is consummated, and the Minimum Condition is satisfied without being
reduced or waived, Purchaser will be able to approve the Merger without the vote
of any other Stockholder.
If the Merger is consummated, Stockholders who elected not to tender their
Shares in the Offer will receive the same amount of consideration in exchange
for each Share as they would have received in the Offer, subject to their rights
to exercise appraisal rights.
If, following the consummation of the Offer, the Merger is not consummated,
Parent will indirectly control the number of Shares acquired by Purchaser
pursuant to the Offer. Under the Merger Agreement, effective upon the acceptance
for payment of any Shares pursuant to the Offer, and from time to time
thereafter, Parent shall be entitled to designate the number of directors
rounded up to the next whole number, on the Company Board that equals the
product of (1) the total number of directors on the Company Board (giving effect
to any increase in the number of directors pursuant to this requirement)
multiplied by (2) the percentage that the number of Shares beneficially owned by
Parent or Purchaser following the acceptance for payment of Shares pursuant to
the Offer bears to the total number of Shares outstanding, and the Company shall
promptly take all action necessary to cause each of such designees of Parent to
be elected or appointed to the Company Board, including increasing the size of
the Company Board and seeking, accepting and securing resignations of incumbent
directors. At such time, and from time to time thereafter, to the extent
requested by Parent, the Company shall use its best efforts to cause individuals
designated by Parent to constitute the number of members, rounded up to the next
whole number, on each committee of the Company Board that represents the same
percentage as the designee's of Parent (as described in the preceding sentence)
represent on the Company Board. As a result of its ownership of such Shares and
right to designate nominees for election to the Company Board and for
appointment to its committees, Parent indirectly will be able to influence
decisions of the Company Board, its committees and the decisions of Purchaser as
a stockholder of the Company. This concentration of influence in one stockholder
may adversely affect the market value of the Shares.
If Parent controls more than 50% of the outstanding Shares following the
consummation of the Offer (including through Purchaser), but the Merger is not
consummated, stockholders of the Company, other than
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those affiliated with Parent, will lack sufficient voting power to elect
directors or to cause other actions to be taken which require majority approval.
Statutory Requirements. Under the DGCL and the Company's Certificate of
Incorporation, the approval of the Company Board and, unless Parent shall
directly or indirectly acquire 90% or more of the outstanding Shares, the
affirmative vote of the holders of two-thirds of the outstanding Shares,
including the Shares held by Purchaser and its affiliates, is required to
approve the Merger Agreement and the transactions contemplated thereby,
including the Merger.
The Company Board acting by unanimous vote of all directors present has
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and each Tender Agreement, each in
accordance with the requirements of the DGCL. Unless the Merger is consummated
pursuant to the short-form merger provisions under the DGCL described below (in
which case no further action by the Stockholders will be required to complete
the Merger), the only remaining required corporate action of the Company to
effect the Merger will be the approval of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of
two-thirds of the outstanding Shares.
Under Section 253 of the DGCL, if Purchaser acquires at least 90% of the
outstanding Shares, Purchaser will be able to approve the Merger without a vote
of the Stockholders. In such event, Purchaser anticipates that it will take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after such acquisition without a meeting of the
Stockholders. If Purchaser does not acquire at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, a significantly longer period of time
may be required to effect the Merger, because a vote of the Stockholders would
be required under the DGCL.
Pursuant to the Merger Agreement, the Company shall call a Stockholders'
Meeting to be held as promptly as practicable upon the purchase of Shares by
Purchaser pursuant to the Offer (provided the Minimum Condition has been
satisfied) for the purpose of voting upon the approval of this Agreement and the
Merger. However, in the event that Parent, Purchaser or any other subsidiary of
Parent acquires, directly or indirectly, at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, the parties hereto will take all necessary
and appropriate action to cause the Merger to become effective in accordance
with Section 253 of the DGCL without a meeting of the Stockholders as soon as
practicable after the acceptance for payment and purchase of the Shares by
Parent and Purchaser pursuant to the Offer.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, in connection with the Merger, Stockholders would have certain
rights to dissent and demand an appraisal of their Shares under Section 262 of
the DGCL. Dissenting Stockholders who comply with the requisite statutory
procedures under the DGCL would be entitled to a judicial determination of the
fair value of their Shares. Any judicial determination of the fair value of
Shares could be based upon considerations other than or in addition to the Per
Share Amount and the market value of the Shares, including asset values and the
investment value of the Shares. The value as so determined could be more or less
than the Per Share Amount. Failure to precisely follow the steps required by
Section 262 of the DGCL for the perfection of appraisal rights may result in the
loss of those rights.
If a Stockholder who demands appraisal under Section 262 of the DGCL fails
to perfect, or effectively withdraws or loses, such Stockholder's right to
appraisal as provided in the DGCL, the Shares of that Stockholder will be
converted into the right to receive the Merger Consideration in accordance with
the Merger Agreement. A Stockholder may withdraw such Stockholder's demand for
appraisal by delivering to the Company a written withdrawal of such demand for
appraisal and acceptance of the Merger as required by the DGCL.
The foregoing summary of the rights of Dissenting Stockholders does not
purport to be a complete statement of the procedures to be followed by
Stockholders desiring to exercise any available appraisal rights.
THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE
TO THE APPLICABLE PROVISIONS OF THE DGCL.
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Going Private Transactions. Rule 13e-3 under the Exchange Act is
applicable to certain "going-private" transactions. Purchaser does not believe
that Rule 13e-3 will be applicable to the Merger, unless, among other things,
the Merger is completed more than one year after termination of the Offer. If
applicable, Rule 13e-3 would require, among other things, that certain financial
information regarding the Company and certain information regarding the fairness
of the Merger and the consideration offered to minority Stockholders be filed
with the SEC and disclosed to minority Stockholders prior to consummation of the
Merger.
SECTION 12. DIVIDENDS AND DISTRIBUTIONS.
As described in Section 11, the Company agreed that from the date of the
Merger Agreement to the time that the Parent Designees constitute a majority of
the members of the Company Board, unless Parent shall otherwise consent in
advance in writing or to the extent described in the relevant disclosure
schedule to the Merger Agreement or as otherwise expressly contemplated by the
Merger Agreement, neither the Company nor any Company Subsidiary shall:
- amend its Certificate of Incorporation or By-Laws;
- issue, sell, pledge or dispose of any shares of, or securities
convertible or exchangeable for, or any options, warrants or rights of
any kind to acquire any shares of, its capital stock or any stock
appreciation rights, performance shares or phantom stock based upon the
value of any capital stock or designate any class or series of preferred
stock, provided that the Company may issue Shares upon the exercise of
outstanding (as of the date of the Merger Agreement) Company Stock
Options listed in the relevant disclosure schedule to the Merger
Agreement;
- split, combine or reclassify any outstanding shares of its capital stock,
or declare, set aside or pay any dividend payable in cash, stock,
property or otherwise with respect to such shares (except for any
dividends paid to the Company or to any wholly-owned subsidiary);
- redeem, purchase, acquire or offer to acquire any shares of, or
securities convertible into or exchangeable for, or any options, warrants
or rights of any kind to acquire any shares of, its capital stock or any
options, warrants or rights of any kind to acquire any shares of its
capital stock; or
- amend or waive any of its rights under, or accelerate the vesting under,
any provision of any of the Company Stock Plans, any provision of any
agreement evidencing any outstanding stock option or any restricted stock
purchase agreement, or otherwise modify any of the terms of any
outstanding option, warrant or other security.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, THE NASDAQ
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and will reduce
the number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public. Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly will have an adverse or beneficial effect on the market price for, or
marketability of, the Shares or whether such reduction will cause future market
prices to be greater or less than the Per Share Amount.
The Nasdaq National Market Listing. The Shares are listed on The Nasdaq
National Market. According to the published guidelines of The Nasdaq National
Market, the Shares might no longer be eligible for listing on The Nasdaq
National Market if, among other things, either
- the number of Shares publicly held is less than 750,000, there are fewer
than 400 holders of round lots, the aggregate market value of publicly
held Shares is less than $5,000,000, the net tangible assets of the
Company are less than $4,000,000 and there are fewer than two registered
and active marketmakers for the Shares or
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- the number of Shares publicly held is less than 1,100,000, there are
fewer than 400 holders of round lots, the aggregate market value of
publicly held Shares is less than $15,000,000, there are fewer than four
registered and active marketmakers and either
- the Company's market capitalization is less than $50,000,000 or
- the total assets and total revenue of the Company for the most
recently completed fiscal year or two of the three most recently
completed fiscal years are less than $50,000,000.
Shares held directly or indirectly by directors or officers of the Company
or beneficial owners of more than 10% of the Shares are not considered as being
publicly held for purposes of determining compliance with these criteria.
If the Shares cease to be listed on The Nasdaq National Market, the market
for the Shares could be adversely affected. It is possible that the Shares would
be traded on other securities exchanges (with trades published by such
exchanges), The Nasdaq SmallCap Market, the OTC Bulletin Board or in a local or
regional over-the-counter market. The extent of the public market for the Shares
and the availability of such quotations would, however, depend upon the number
of holders of Shares and aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act, as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration of the Shares may be terminated upon application
of the Company to the SEC if the Shares are not listed on a national securities
exchange, The Nasdaq Stock Market or the OTC Bulletin Board and there are fewer
than 300 holders of record of the Shares. Termination of registration of the
Shares under the Exchange Act would reduce substantially the information
required to be furnished by the Company to the Stockholders and to the SEC and
would render inapplicable certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
Section 14(a) that the Company furnish to the Stockholders proxy materials in
connection with Stockholders' meetings and the related requirement to furnish an
annual report to holders of Shares. Further, the ability of affiliates of the
Company and persons holding restricted securities of the Company to dispose of
such securities pursuant to Rule 144 under the Securities Act of 1933 may be
impaired or eliminated. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be eligible for listing on The
Nasdaq Stock Market or the OTC Bulletin Board. It is the current intention of
Parent to cause the Company to apply for termination of registration of the
Shares after the consummation of the Offer if the requirements for termination
of registration are met.
Margin Regulations. The Shares currently are "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is possible
that following the Offer, the Shares would cease to constitute "margin
securities" for the purpose of the Federal Reserve Board's margin regulations
and, therefore, could no longer be used as collateral for margin loans made by
brokers.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer or the Merger Agreement,
and in addition to (and not in limitation of) Purchaser's rights to extend and
amend the Offer (subject to the provisions of the Merger Agreement), and subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
relating to Purchaser's obligation to pay for or return tendered shares after
termination of the Offer, Purchaser shall not be required to accept for payment
or pay for any Shares tendered pursuant to the Offer and may postpone the
acceptance for payment or payment for any Shares tendered, and may amend or
terminate (if, when and as permitted by the Merger Agreement) the Offer, if (1)
the Minimum Condition has not been satisfied, (2) any applicable waiting period
under the HSR Act has not expired or been terminated before the
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Expiration Date or (3) at any time after the date of the Merger Agreement, and
before acceptance for payment of any Shares, any of the following events shall
occur and be continuing:
- there shall have been any action taken, or any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted,
issued or deemed applicable to the Offer or the Merger by any domestic or
foreign court or other Governmental Entity which directly or indirectly
- prohibits, or makes illegal, the acceptance for payment of or payment
for Shares or the consummation of the Offer or the Merger,
- renders Purchaser unable to accept for payment or pay for some or all
of the Shares,
- imposes material limitations on the ability of Parent or Purchaser
effectively to exercise full rights of ownership of the Shares,
including the right to vote the Shares purchased by it on all matters
properly presented to the Stockholders,
- prohibits or imposes any material limitations on Parent's direct or
indirect ownership or operation (or that of any of its affiliates) of
all or a material portion of their or the Company's businesses or
assets,
- compels Parent or its affiliates to dispose of or hold separate any
portion of the business or assets of the Company or Parent and their
respective subsidiaries which would be material in the context of the
Company and the Company Subsidiaries taken as a whole,
- obliges the Company, Parent or any of their respective subsidiaries to
pay material damages in connection with the transactions contemplated
by the Merger Agreement or
- otherwise constitutes a Material Adverse Effect on the Company or, as
a result of the transactions contemplated by the Merger Agreement,
Parent;
- there shall be instituted by any Governmental Entity and pending any
action or proceeding before any United States or foreign court or
governmental entity or authority of competent jurisdiction seeking any
order, decree or injunction having any effect set forth in the preceding
bullet point (including its sub-bullet points);
- the
- representations and warranties of the Company contained in Section 3.5
of the Merger Agreement (relating to the capitalization of the
Company) shall not be true and correct in all material respects either
when made or on and as of the Expiration Date with the same effect as
though such representations and warranties had been made on and as of
such date (except for representations and warranties expressly made as
of an earlier date, in which case as of such date),
- representations and warranties of the Company in the Merger Agreement
(other than those described in the preceding sub-bullet) shall not be
true and correct either when made or on and as of the Expiration Date
with the same effect as though such representations and warranties had
been made on and as of such date (except for representations and
warranties expressly made as of an earlier date, in which case as of
such date), except for such failures to be true and correct (without
giving effect to any materiality qualifiers) which, individually or in
the aggregate, would not constitute a Material Adverse Effect on the
Company or
- Company shall have failed to perform in any material respects its
covenants and obligations contained in the Merger Agreement, which
failure to perform has not been cured within ten business days after
the giving of written notice to the Company;
- except as disclosed in the Company SEC Filings (as defined in the Merger
Agreement) or the relevant disclosure schedule to the Merger Agreement
(relating to the absence of certain charges or events) supplied on the
date of the Merger Agreement, there shall have occurred since December
31, 2000 one or more events, occurrences, states or actions that,
individually or in the aggregate, have had or are reasonably likely to
have a Material Adverse Effect on the Company;
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45
- the Company Board shall have publicly withdrawn, or modified or changed
in a manner adverse to Parent and Purchaser (including by amendment of
the Schedule 14D-9), its approval or recommendation of the Offer, the
Merger or the Merger Agreement, or shall have failed to make such
favorable recommendation, or accepted, approved or recommended an
Alternative Transaction, or the Company Board shall have resolved to do
any of the foregoing, or publicly announced an intention to do any of the
foregoing;
- any Person or "group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Parent or its affiliates or any group of which any of
them is a member, shall have acquired or announced its intention to
acquire beneficial ownership (as determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the Shares; or
- the Merger Agreement shall have terminated in accordance with its terms;
which in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances (including any action or inaction by Parent or Purchaser)
giving rise to such condition makes it inadvisable to proceed with the Offer or
the acceptance for payment of or payment for the Shares.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be waived by Parent and Purchaser, in whole or in part at any time and
from time to time, in the sole discretion of Parent and Purchaser. The failure
by Parent and Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Except as otherwise set forth in the Merger Agreement and this
Offer to Purchase, based upon an examination of publicly available information
filed by the Company with the SEC, neither Purchaser nor Parent is aware of (1)
any license or other regulatory permit that appears to be material to the
business of the Company or any of its subsidiaries, taken as a whole, that might
be adversely affected by Purchaser's acquisition of the Shares (and the indirect
acquisition of the shares of the Company's subsidiaries) pursuant to the Offer
or the Merger or (2) any filings, approvals or other actions by or with any
domestic (federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of the Shares (or the indirect acquisition of the shares of the
Company's Subsidiaries) by Purchaser as contemplated herein. Should any such
approval or other action be required, it is Purchaser's present intention to
seek such approval or action. However, except as otherwise set forth in the
Merger Agreement or this Offer to Purchase, Purchaser does not presently intend
to delay the purchase of Shares tendered pursuant to the Offer pending the
receipt of any such approval or the taking of any such action (subject to
Purchaser's right to delay or decline to purchase Shares if any of the
conditions described in Section 14 shall not have been satisfied). There can be
no assurance that any such approval or other action, if needed, could be
obtained, or could be obtained without substantial conditions, or that adverse
consequences might not result to the business of the Company, Parent or
Purchaser or that certain parts of the businesses of the Company, Parent or
Purchaser might not have to be disposed of or held separately or other
substantial conditions complied with in order to obtain such approval or other
action, certain of which could cause Purchaser to elect to terminate the Offer
without the purchase of the Shares thereunder. Purchaser's obligation under the
Offer to accept for payment and pay for Shares is subject to certain conditions
discussed in Section 14, including conditions relating to the legal matters
discussed in this Section 15.
STATE TAKEOVER STATUTES. A number of states throughout the United States
have enacted takeover statutes that purport, in varying degrees, to be
applicable to attempts to acquire securities of corporations that are
incorporated or have assets, stockholders, executive offices or places of
business in those states. To the extent that certain provisions of certain of
these state takeover statutes purport to apply to the Offer or the Merger,
Parent and Purchaser reserve the right to assert that such laws conflict with
federal law and constitute an unconstitutional burden on interstate commerce.
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Section 203 of the DGCL prohibits a Delaware corporation such as the
Company from engaging in a "business combination" (which term includes a variety
of transactions, including mergers) with an "interested stockholder" (which term
includes a person that is the beneficial owner of 15% or more of the subject
corporation's outstanding voting stock) for a period of three years following
the time that such person became an interested stockholder unless, among other
things, prior to the time that such person became an interested stockholder, the
board of directors of the corporation approved either the business combination
or the transaction that resulted in the stockholder becoming an interested
stockholder. The provisions of Section 203 of the DGCL are not applicable to the
Merger Agreement, the Offer, the Merger, the Tender Agreements and the other
transactions contemplated in the Merger Agreement because the Merger Agreement,
the Offer, the Merger, the Tender Agreements and the other transactions
contemplated in the Merger Agreement were approved by the Company Board prior to
the execution of the Merger Agreement and the Tender Agreements.
Based on information supplied by the Company and the Company's
representations in the Merger Agreement, neither Purchaser nor Parent believes
that any other state takeover statutes or regulations apply to the Merger
Agreement, the Offer, the Merger, the Tender Agreements and the other
transactions contemplated in the Merger Agreement. Purchaser reserves the right
to challenge the applicability or validity of any state law purportedly
applicable to the Merger Agreement, the Offer, the Merger, the Tender Agreements
or the other transactions contemplated in the Merger Agreement and nothing in
this Offer to Purchase or any action taken in connection with the Merger
Agreement, the Offer, the Merger, the Tender Agreements or the other
transactions contemplated in the Merger Agreement is intended as a waiver of
that right. If it is asserted that any state takeover statute is applicable to
the Merger Agreement, the Offer, the Merger, the Tender Agreements or the other
transactions contemplated in the Merger Agreement and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Merger
Agreement, the Offer, the Merger, the Tender Agreements and the other
transactions contemplated in the Merger Agreement, Purchaser might be required
to file certain information with, or to receive approvals from, the relevant
state authorities, and Purchaser might be unable to accept for payment or pay
for Shares tendered pursuant to the Offer, or delayed in consummating the Offer
or the Merger. In such case, Purchaser may not be obligated to accept for
payment or pay for any Shares tendered pursuant to the Offer.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the FTC and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and certain waiting period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to the HSR Act requirements. See Section 2 and Section 14.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be made until the expiration of a
15-calendar day waiting period following the required filing of a Notification
and Report Form with respect to the Offer, which Parent submitted on February
22, 2001. The waiting period under the HSR Act will expire at 11:59 p.m., New
York City time, 15 days after that filing date, unless early termination of the
waiting period were granted or Parent received a request from the Antitrust
Division or the FTC for additional information or documentary material prior
thereto. If such a request is made, the waiting period applicable to the Offer
will be extended until 11:59 p.m., New York City time, on the tenth day after
substantial compliance by Parent with such request. Thereafter, the waiting
period may be extended by court order or by consent of Parent. A request is
being made pursuant to the HSR Act for early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the
15-calendar day HSR Act waiting period will be terminated early.
Although the Company is required to file certain information and
documentary material with the Antitrust Division and the FTC in connection with
the Offer, neither the Company's failure to make such filings nor a request to
the Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the waiting period under the HSR Act.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. See Section 2 and Section 14. Subject to
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Section 4 of this Offer to Purchase, any extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. If Purchaser's acquisition of Shares is delayed due to a request by the
Antitrust Division or the FTC for additional information or documentary material
pursuant to the HSR Act, the Offer will be extended in certain circumstances.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase by
Purchaser of Shares pursuant to the Offer, either the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by Purchaser or the divestiture of substantial assets of Parent, the Company or
any of their respective subsidiaries. Private parties and state attorneys
general may also bring legal action under federal or state antitrust laws under
certain circumstances. Although Purchaser believes that the acquisition of
Shares pursuant to the Offer would not violate the antitrust laws, there can be
no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if a challenge is made, what the outcome will be.
SECTION 16. FEES AND EXPENSES.
Except as set forth below, neither Parent nor Purchaser will pay any fees
or commissions to any broker, dealer or other person in connection with the
solicitation of tenders of Shares pursuant to the Offer. In connection with the
Offer, Purchaser has retained
- Morrow & Co., Inc. to act as the Information Agent,
- EquiServe Trust Company, N.A. to act as the Disbursing Agent and
- First Union Securities, Inc. to act as Dealer Manager.
The Information Agent and the Dealer Manager may contact Stockholders by
mail, telephone, telegraph and personal interview and may request brokers,
dealers and other nominee Stockholders to forward the Offer materials to
beneficial owners. The Information Agent, the Disbursing Agent and the Dealer
Manager will receive reasonable and customary compensation for their services
relating to the Offer and will be reimbursed for certain out-of-pocket expenses,
including the fees and expenses of legal counsel. Purchaser and Parent have also
agreed to indemnify the Information Agent, the Disbursing Agent and the Dealer
Manager against certain liabilities and expenses in connection with the Offer,
including certain liabilities under the federal securities laws.
Brokers, dealers, commercial banks and trust companies will, upon request,
be reimbursed by Purchaser for customary mailing and handling expenses incurred
by them in forwarding the Offer materials to their customers.
SECTION 17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither Parent nor Purchaser is aware of any jurisdiction where
the making of the Offer or the acceptance thereof would be in violation of the
laws of such jurisdiction. Subject to the terms of the Merger Agreement, if
Parent or Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to
holders of Shares prior to the expiration of the Offer. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR
IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser and Parent have filed with the SEC the Schedule TO (including
exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer. In addition, the Company has
filed the Schedule 14D-9, together with all exhibits thereto, pursuant to Rule
14d-9 of the Exchange Act setting forth its recommendation with respect to the
Offer and the reasons for such recommendations and furnishing certain additional
related information. The Schedule TO, the Schedule 14D-9 and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the offices of the SEC (except that they will not be available at the regional
offices of the SEC) in the manner set forth in Section 8 of this Offer to
Purchase.
AMTRS CORP.
FEBRUARY 27, 2001
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT, PURCHASER
AND AMERICAN EXPRESS
1. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN EXPRESS COMPANY. The
following table sets forth the name, business address, present principal
occupation or employment and five-year employment history of the directors and
executive officers of American Express. The business address of each director
and executive officer is 200 Vesey Street, New York, New York 10285, unless
otherwise set forth below. All directors and officers listed below are citizens
of the United States, unless otherwise set forth below.
PRESENT PRINCIPAL OCCUPATION AND EMPLOYMENT, BUSINESS ADDRESS
NAME AND AGE AND MATERIAL POSITIONS DURING THE LAST FIVE YEARS
- ------------ -------------------------------------------------------------
Daniel F. Akerson (52) Director, 1995 to present. Chairman and Chief Executive
Officer, XO Communications, Inc., a company that provides
high quality broadband communications services to businesses
over fiber optic facilities, located at 11111 Sunset Hills
Road, 5th Floor, Reston, VA 20190, 1999 to present. Chairman,
Nextel Communications, Inc., a domestic and international
digital wireless communications company, located at 2001
Edmund Halley Drive, Reston, VA 20191, 1996 to present, and
Chief Executive Officer, Nextel Communications, Inc., 1996 to
1999.
Edwin L. Artzt (70) Director, 1995 to present. Retired Chairman of the Board and
Chief Executive Officer, The Procter & Gamble Company, a
worldwide consumer products company, located at One Procter &
Gamble Plaza, Cincinnati, OH 45202-3315. Chairman of the
Executive Committee, 1995 to 1999, Chairman of the Board and
Chief Executive Officer, 1990 to 1995.
William G. Bowen (67) Director, 1988 to present. President, The Andrew W. Mellon
Foundation, a not-for-profit corporation engaged in
philanthropy, located at 140 East 62nd Street, New York, NY
10021, 1988 to present.
Anne M. Busquet (51) President, Interactive Services and New Businesses, of
Parent, 2000 to present. President, American Express
Relationship Services, of Parent, 1995 to 2000.
Kenneth I. Chenault (49) Director, 1997 to present. Chief Executive Officer, 2001 to
present. President and Chief Operating Officer, 1997 to 2001.
President and Chief Executive Officer, of Parent, 1997 to
present. Vice Chairman, 1995 to 1997.
James M. Cracchiolo (42) Group President, Global Financial Services, of Parent, 2000
to present. President, International, of Parent, 1998 to
2000. President, Global Network Services, of Parent, 1996 to
1998.
Robert L. Crandall (65) Director, 1999 to present. Former Chairman and Chief
Executive Officer, AMR Corp. and American Airlines, Inc., a
company engaged in air transportation, information systems
and diversified services, located at The Tower at Williams
Square, 5215 N. O'Connor Boulevard, Irving, TX 75039, 1985 to
1998, Chairman and Chief Executive Officer, 1985 to 1998.
Gary L. Crittenden (47) Executive Vice President and Chief Financial Officer, 2000 to
present. Senior Vice President and Chief Financial Officer of
Monsanto, a life sciences and agricultural company, located
at 800 North Lindbergh Blvd., St. Louis, MO 63167, 1998 to
2000. Chief Financial Officer of Sears Roebuck & Co., a
multi-line retailer, located at 3333 Beverly Road, Hoffman
Estates, IL 60179, 1995 to 1998.
I-1
50
PRESENT PRINCIPAL OCCUPATION AND EMPLOYMENT, BUSINESS ADDRESS
NAME AND AGE AND MATERIAL POSITIONS DURING THE LAST FIVE YEARS
- ------------ -------------------------------------------------------------
Ursula F. Fairbairn (58) Executive Vice President, Human Resources and Quality, 1996
to present. Senior Vice President, Human Resources, Union
Pacific Corporation, a rail transportation and trucking
company, located at 1416 Dodge Street, Omaha, NE 68179, 1990
to 1996.
Edward P. Gilligan (41) Group President, Global Corporate Services, of Parent, 2000
to present. President, Corporate Services, of Parent, 1996 to
2000.
Harvey Golub (62) Director, 1990 to present. Chairman, 1993 to present, Chief
Executive Officer, 1993 to 2000. Chairman, of Parent, 1991 to
present.
Beverly Sills Grennough (71) Director, 1990 to present. Chairman, Lincoln Center for the
Performing Arts, a major center for performing arts, located
at 165 West 65th Street, 9th Floor, New York, NY 10023, 1994
to present.
John D. Hayes (46) Executive Vice President, Global Advertising and Brand
Management, 1995 to present.
David C. House (51) Group President, Global Establishment Services and Travelers
Cheque Group, of Parent, 2000 to present. President,
Establishment Services Worldwide, of Parent, 1995 to 2000.
F. Ross Johnson (69) Director, 1986 to present. Chairman and Chief Executive
Officer, RJM Group, a management advisory and investment
firm, located at 200 Galleria Parkway, N.W., Suite 970,
Atlanta, GA 30339, 1989 to present.
Vernon E. Jordan, Jr. (65) Director, 1977 to present. Senior Managing Director, Lazard
Inc., an investment banking firm, located at 30 Rockefeller
Plaza, New York, NY 10020, 2000 to present. Of counsel, Akin,
Gump, Strauss, Hauer & Feld, L.L.P., a law firm, located at
1333 New Hampshire Ave., N.W., Washington, D.C., 2000 to
present, and Senior Partner, 1982 to 1999.
Alfred F. Kelly, Jr. (42) Group President, U.S. Consumer and Small Business Services,
of Parent, 2000 to present. President, Consumer Card Services
Group, of Parent, 1998 to 2000. Executive Vice President and
General Manager of Consumer Marketing, of Parent, 1997 to
1998. Executive Vice President of Customer Loyalty, of
Parent, 1995 to 1997.
Jan Leschly (60) Director, 1997 to present. Chairman and Chief Executive
Officer, Care Capital LLC, a private equity firm, located at
Princeton Overlook I, 100 Overlook Center and Route 1,
Princeton, NJ 08540, 2000 to present. Chief Executive and
Director, SmithKline Beecham, a company that develops and
markets pharmaceuticals and over-the-counter medicines,
located at One New Horizon Court, Brentford, Middlesex,
England, TW8 9EP, 1994 to 2000. Mr. Leschly is a citizen of
Denmark.
Jonathan S. Linen (57) Vice Chairman, 1993 to present.
Richard A. McGinn (54) Director, 1998 to present. Former Chairman and Chief
Executive Officer, Lucent Technologies, Inc., a company that
develops and manufactures communications systems and
software, located at 600 Mountain Avenue, Murray Hill, NJ
07974, Chairman and Chief Executive Officer, 1996 to 2000.
Executive Vice President, AT&T Corp. and Chief Executive
Officer of AT&T Network Systems Group, a telecommunications
provider, located at 32 Avenue of the Americas, New York, NY
10013, 1994 to 1996.
Louise M. Parent (50) Executive Vice President and General Counsel, 1993 to
present.
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PRESENT PRINCIPAL OCCUPATION AND EMPLOYMENT, BUSINESS ADDRESS
NAME AND AGE AND MATERIAL POSITIONS DURING THE LAST FIVE YEARS
- ------------ -------------------------------------------------------------
Frank P. Popoff (65) Director, 1990 to present. Former Chairman and Chief
Executive Officer, The Dow Chemical Company, a company that
produces chemicals and chemical products, Chairman of the
Board, located at 2030 Dow Chemical Center, Midland, MI
48674, 1995 to 2000, and Chief Executive Officer, 1987 to
1995.
Glen Salow (45) Executive Vice President and Chief Information Officer, 2000
to present. Senior Vice President, E-Commerce, United States
Card and Travel Services, of Parent, December 1999 to 2000.
Senior Vice President, Information Technology Strategy and
Global Platform Development, of Parent, April 1999 to
December 1999. Senior Vice President, Operations, of Parent,
1997 to 1999. Chief Information Officer, Aetna Retirement
Services, Aetna Life and Casualty, a health benefits company,
located at 151 Farmington Ave., Hartford, CT 06156, 1995 to
1997.
Thomas Schick (54) Executive Vice President, Corporate Affairs and
Communications, 1993 to present.
2. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC. The following table sets forth the name, business
address, present principal occupation or employment and five-year employment
history of the directors and executive officers of Parent. The business address
of each director and executive officer is 200 Vesey Street, New York, New York
10285, unless otherwise set forth below. All directors and officers listed below
are citizens of the United States.
PRESENT PRINCIPAL OCCUPATION AND EMPLOYMENT, BUSINESS ADDRESS
NAME AND AGE AND MATERIAL POSITIONS DURING THE LAST FIVE YEARS
- ------------ -------------------------------------------------------------
Anne M. Busquet (51) President, Interactive Services and New Businesses, 2000 to
present. President, American Express Relationship Services,
1995 to 2000.
Kenneth I. Chenault (49) Director, 1995 to present. Chief Executive Officer, of
American Express, 2001 to present. President and Chief
Operating Officer, of American Express, 1997 to 2001.
President and Chief Executive Officer, 1997 to present. Vice
Chairman, of American Express, 1995 to 1997.
James M. Cracchiolo (42) Group President, Global Financial Services, 2000 to present.
President, International, 1998 to 2000. President, Global
Network Services, 1996 to 1998.
Edward P. Gilligan (41) Group President, Global Corporate Services, 2000 to present.
President, Corporate Services, 1996 to 2000.
Harvey Golub (62) Director, 1988 to present. Chairman, of American Express,
1993 to present. Chairman, 1991 to present. Chief Executive
Officer, of American Express, 1993 to 2000.
David C. House (51) Group President, Global Establishment Services and Travelers
Cheque Group, 2000 to present. President, Establishment
Services Worldwide, 1995 to 2000.
Alfred F. Kelly, Jr. (42) Group President, U.S. Consumer and Small Business Services,
2000 to present. President, Consumer Card Services Group,
1998 to 2000. Executive Vice President and General Manager of
Consumer Marketing, 1997 to 1998. Executive Vice President of
Customer Loyalty, 1995 to 1997.
Louise M. Parent (50) Director, 1993 to present. General Counsel, 1995 to present.
Jay Stevelman (54) Senior Vice President and Treasurer, 1992 to present.
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3. DIRECTORS AND EXECUTIVE OFFICERS OF AMTRS CORP. The following table
sets forth the name, business address, present principal occupation or
employment and five-year employment history of the directors and executive
officers of Purchaser. The business address of each director and executive
officer is 200 Vesey Street, New York, New York 10285, unless otherwise set
forth below. All directors and officers listed below are citizens of the United
States.
PRESENT PRINCIPAL OCCUPATION AND EMPLOYMENT, BUSINESS ADDRESS
NAME AND AGE AND MATERIAL POSITIONS DURING THE LAST FIVE YEARS
- ------------ -------------------------------------------------------------
Bradley Alexander (33) Director, 2001 to present. Vice President and Treasurer, 2001
to present. Vice President, Finance, Small Business Services,
of Parent, 1999 to present. Vice President, Finance, Small
Business Banking Division, First Union National Bank, a
provider of commercial and retail banking and trust services
through full-service banking offices, located at Two First
Union Center, Charlotte, NC 28288, 1996 to 1999. Assistant
Vice President, Finance, Corporate Development, First Union
Corporation, in the same business described above, at the
address listed above, 1994 to 1996.
Stephen P. Norman (58) Director, 2001 to present. Vice President and Secretary, 2001
to present. Secretary, of American Express, 1982 to present.
Richard Tambor (39) Director, 2001 to present. President, 2001 to present. Senior
Vice President and General Manager, Small Business Services
Financial Services, of Parent, 2001 to present. General
Manager, Credit Card and Lending, of Parent, 1999 to 2001.
Senior Vice President and Chief Credit Officer, Small
Business Services Risk Management, of Parent, 1997 to 2001.
Vice President Customer Management and General Manager
Institutional Risk Management, of Parent, 1996 to 1997.
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The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each Stockholder or his, her or its
broker, dealer, commercial bank, trust company or other nominee to the
Disbursing Agent at one of its addresses set forth below.
The Disbursing Agent (and Depositary) for the Offer is:
EQUISERVE TRUST COMPANY, N.A.
By Mail: By Overnight Courier: By Hand:
EquiServe Trust Company, N.A. EquiServe Trust Company, N.A. EquiServe Trust Company, N.A.
Corporate Actions Corporate Actions c/o Securities Transfer & Reporting
P.O. Box 2527 Suite 4660 Services, Inc.
Jersey City, NJ 07303-2527 525 Washington Blvd. 100 William Street -- Galleria
Re: SierraCities.com Inc. Jersey City, NJ 07310 New York, NY 10038
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DISBURSING AGENT.
Any questions and requests for assistance or additional copies of this
Offer to Purchase, the Letter of Transmittal and related materials may be
directed to the Information Agent at its address and telephone number set forth
below. Stockholders may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
[MORROW & CO., INC. LOGO]
445 Park Avenue, 5th Floor
New York, New York 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms Call: (800) 654-2468
Stockholders Please Call: (800) 607-0088
E-mail: sierra.info@morrowco.com
The Dealer Manager for the Offer is:
[FIRST UNION LOGO]
301 South College Street, 4th Floor
Charlotte, NC 28288
(704) 715-6000