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EXHIBIT (a)(1)(A)
INTELLIGENT SYSTEMS CORPORATION
OFFER TO PURCHASE FOR CASH
UP TO 1,000,000 SHARES OF ITS COMMON STOCK
AT $5.25 PER SHARE
THE TENDER OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 29, 2001, UNLESS THE TENDER OFFER
IS EXTENDED.
Intelligent Systems Corporation is offering to purchase, for a price of
$5.25 per share in cash, up to 1,000,000 shares of its Common Stock, under the
terms and conditions set forth in this document and the related Letter of
Transmittal (which together, as they may be amended and supplemented from time
to time, present the tender offer).
All shares properly tendered and not properly withdrawn will be
purchased for $5.25 per share, under the terms and conditions of the tender
offer, including the odd lot and proration provisions. We reserve the right, in
our sole discretion, to purchase more than 1,000,000 shares of our Common Stock
in the tender offer, subject to applicable law. Shares not purchased because of
proration provisions will not be purchased in the tender offer.
Shares not purchased in the tender offer will be returned to the
tendering shareholders at our expense as promptly as practicable after the
expiration of the tender offer. We reserve the right to purchase all shares duly
tendered by any shareholder who tenders all shares owned beneficially or of
record and who, as a result of proration, would then beneficially or of record
own an aggregate of fewer than 100 shares. If you own beneficially or of record
less than 100 shares, and you properly tender all of them before the tender
offer expires and complete the section entitled "Odd Lots" in the related Letter
of Transmittal, we will purchase all of your shares without subjecting them to
the proration procedure. See Section 2 - Proration.
THE TENDER OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER
OF SHARES BEING TENDERED. THE TENDER OFFER IS, HOWEVER, SUBJECT TO OTHER
CONDITIONS. SEE SECTION 7 - CONDITIONS OF THE TENDER OFFER.
OUR BOARD OF DIRECTORS HAS APPROVED THE TENDER OFFER. HOWEVER, NEITHER
WE NOR OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER YOU
SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES. YOU MUST MAKE YOUR OWN
DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO
TENDER. OUR DIRECTORS AND EXECUTIVE OFFICERS HAVE INFORMED US THAT THEY MAY
PARTICIPATE IN THE TENDER OFFER.
Our Common Stock is listed and traded on the American Stock Exchange
under the trading symbol "INS." On May 31, 2001, the last trading day before the
date of the public announcement of the tender offer, the last reported closing
price of the shares on the American Stock Exchange was $4.40. We urge you to
obtain current market quotations for the shares. See Section 8 - Price Range of
Shares.
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The date of this Offer to Purchase is June 1, 2001.
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IMPORTANT
If you wish to tender all or any part of your shares, you should
either:
(1) (a) complete and sign a Letter of Transmittal
according to the instructions in the enclosed Letter of Transmittal and mail or
deliver it, together with any required signature guarantee and any other
required documents, to American Stock Transfer and Trust Co., the Depositary for
the tender offer, and mail or deliver the certificates for your shares to the
Depositary together with any other documents required by the Letter of
Transmittal or (b) tender the shares according to the procedure for book-entry
transfer described in Section 4 - Procedures for Tendering Shares; or (2)
request a broker, dealer, commercial bank, trust company or other nominee to
tender your shares for you, if your shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee.
If you desire to tender your shares and
(1) your certificates for the shares are not immediately
available or cannot be delivered to the Depositary by the expiration of the
tender offer, or
(2) you cannot comply with the procedure for book-entry
transfer by the expiration of the tender offer, or
(3) your other required documents cannot be delivered to
the Depositary by the expiration of the tender offer,
you must tender your shares according to the guaranteed delivery procedure
described in Section 4 - Procedures for Tendering Shares.
Questions and requests for assistance may be directed to American Stock
Transfer and Trust Co., the Information Agent for the tender offer, at its
address and telephone numbers set forth on the back cover page of this document.
Requests for additional copies of this document, the related Letter of
Transmittal or the Notice of Guaranteed Delivery may be directed to the
Information Agent.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES IN
THE TENDER OFFER. WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE TENDER OFFER OTHER THAN THOSE
CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. YOU MUST NOT
RELY ON ANY RECOMMENDATION OR ANY INFORMATION OR REPRESENTATION GIVEN OR MADE BY
ANY OTHER PERSON.
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TABLE OF CONTENTS
SECTIONS PAGE
SUMMARY TERM SHEET...................................................................1
1. NUMBER OF SHARES............................................................5
2. PRORATION...................................................................5
3. PURPOSE OF THE TENDER OFFER; MATERIAL EFFECTS OF THE TENDER OFFER...........7
4. PROCEDURES FOR TENDERING SHARES.............................................9
5. WITHDRAWAL RIGHTS..........................................................13
6. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE...........................14
7. CONDITIONS OF THE TENDER OFFER.............................................15
8. PRICE RANGE OF SHARES......................................................17
9. SOURCE AND AMOUNT OF FUNDS.................................................18
10. CERTAIN INFORMATION CONCERNING US..........................................18
11. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES............................20
12. EFFECTS OF THE TENDER OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT........................................22
13. LEGAL MATTERS; REGULATORY APPROVALS........................................22
14. UNITED STATES FEDERAL INCOME TAX CONSEQUENCES..............................22
15. EXTENSION OF THE TENDER OFFER; TERMINATION; AMENDMENT......................26
16. FEES AND EXPENSES..........................................................27
17. MISCELLANEOUS..............................................................27
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FORWARD-LOOKING STATEMENTS
This Offer to Purchase, including the Summary Term Sheet, contains
statements that are not historical facts and constitute projections, forecasts
or forward-looking statements. These statements may be identified by the use of
forward-looking words or phrases such as "anticipate," "believe," "expect,"
"intend," "may," "planned," "potential," "should," "will" and "would." Such
forward-looking statements are inherently subject to known and unknown risks and
uncertainties. Our actual actions or results may differ materially from those
expected or anticipated in the forward-looking statements. Specific factors that
might cause such a difference, include, but are not limited to:
- delays in product development;
- undetected software errors;
- competitive pressures;
- technical difficulties;
- market acceptance;
- changes in financial markets; and
- performance and financial condition of affiliate companies.
In addition, please refer to our documents filed with the Securities
and Exchange Commission, including our most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q, for more information on these and other risk
factors. We undertake no obligation to make any revisions to the forward-looking
statements contained in this document or to update them to reflect events or
circumstances occurring after the date of this document.
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SUMMARY TERM SHEET
We are providing this summary term sheet for your convenience. It
highlights the most material information in this document, but you should
realize that it does not describe all of the details of the tender offer to the
same extent described in this document. We urge you to read the entire document
and the related Letter of Transmittal because they contain the full details of
the tender offer. We have included references to the Sections of this document
where you will find a more complete discussion.
WHO IS OFFERING TO PURCHASE MY SHARES?
Intelligent Systems Corporation is offering to purchase your shares of
Intelligent Systems Corporation Common Stock.
WHAT WILL THE PURCHASE PRICE FOR THE SHARES BE?
The purchase price will be $5.25 per share. We will pay this purchase
price in cash, without interest, for all the shares we purchase under the tender
offer. See Section 1 - Number of Shares.
HOW MANY SHARES WILL YOU PURCHASE IN ALL?
We will purchase up to 1,000,000 properly tendered shares in the tender
offer, or if less than 1,000,000 shares are properly tendered, all properly
tendered shares. In addition, we expressly reserve the right to purchase an
additional 2% of our outstanding shares of Common Stock and could decide to
purchase more shares subject to applicable legal requirements. See Section 1 -
Number of Shares. The tender offer is not conditioned on any minimum number of
shares being tendered; however, the tender offer is condition on other factors.
See Section 7 - Condition of the Tender Offer.
HOW WILL YOU DECIDE THE NUMBER OF SHARES PURCHASED FROM ME?
We will purchase all shares properly tendered and not properly
withdrawn before the expiration date in the following order of priority: first,
by any odd lot holders, meaning those persons who own beneficially or of record
an aggregate of fewer than 100 shares, then after the purchase of all of those
shares, we will purchase all other shares on a pro rata basis with appropriate
adjustments to avoid purchases of fractional shares. If more than 1,000,000
shares are tendered, unless you own less than 100 shares in total, we will not
be able to purchase all the shares you tender. Therefore, you should carefully
consider the number of shares you tender since the proration formula is based on
the number of shares you tender, not the number of shares you own. See Section 2
- - Proration.
HOW WILL YOU PAY FOR THE SHARES?
We plan to fund the tender offer from the proceeds of the sale of our
interest in our affiliate, PaySys International, Inc. See Section 9 - Source and
Amount of Funds.
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HOW LONG DO I HAVE TO TENDER MY SHARES?
You may tender your shares until Friday, June 29, 2001, at 12:00
midnight, New York City time, unless we extend the tender offer. See Section 1 -
Number of Shares. We may choose to extend the tender offer for any reason. See
Section 15 - Extension of Tender Offer; Termination; Amendment.
HOW WILL I BE NOTIFIED IF YOU EXTEND THE TENDER OFFER?
We will issue a press release by 9:00 a.m., New York City time, on the
business day after the previously scheduled expiration date if we decide to
extend the tender offer. See Section 15 - Extension of Tender Offer;
Termination; Amendment.
ARE THERE ANY CONDITIONS TO THE TENDER OFFER?
Yes. The tender offer is subject to conditions such as the absence of
court and governmental action prohibiting the tender offer and changes in
general market conditions or our business that, in our judgment, are or may be
materially adverse to us. See Section 7 - Conditions of the Tender Offer.
HOW DO I TENDER MY SHARES?
To tender your shares, prior to 12:00 midnight, New York City time, on
Friday, June 29, 2001, unless we extend the tender offer:
- you must deliver your share certificate(s) and a properly
completed and duly executed Letter of Transmittal to the
Depositary at the address appearing on the back cover page of
this document; or
- the Depositary must receive a confirmation of receipt of your
shares by book-entry transfer and a properly completed and
duly executed Letter of Transmittal; or
- you must comply with the guaranteed delivery procedure.
You may also contact the Information Agent for assistance. See Section
4 - Procedures for Tendering Shares and the instructions to the Letter of
Transmittal.
ONCE I HAVE TENDERED SHARES IN THE TENDER OFFER, CAN I WITHDRAW MY TENDER?
You may withdraw any shares you have tendered at any time before 12:00
midnight, New York City time, on Friday, June 29, 2001, unless we extend the
tender offer. If we have not accepted for payment the shares you have tendered
to us, you may also withdraw your shares after 12:00 midnight, New York City
time, on Friday, July 27, 2001. See Section 5 - Withdrawal Rights.
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HOW DO I WITHDRAW SHARES I PREVIOUSLY TENDERED?
You must deliver on a timely basis a written or facsimile notice
(confirmed by telephone) of your withdrawal to the Depositary at the address
appearing on the back cover page of this document. Your notice of withdrawal
must specify your name, the number of shares to be withdrawn and the name of the
registered holder of such shares. Some additional requirements apply if the
certificates for shares to be withdrawn have been delivered to the Depositary or
if your shares have been tendered under the procedure for book-entry transfer
set forth in Section 4 - Procedures for Tendering Shares. See Section 5 -
Withdrawal Rights.
ARE YOU OR IS YOUR BOARD OF DIRECTORS RECOMMENDING THAT I PARTICIPATE IN THE
TENDER OFFER?
Our Board of Directors has approved the tender offer. However, neither
we nor our Board of Directors makes any recommendation to you as to whether you
should tender or refrain from tendering your shares. You must make your own
decision as to whether to tender your shares and, if so, how many shares to
tender and the price or prices at which your shares should be tendered. See
Section 11 - Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning Shares.
WHY IS THE COMPANY INITIATING THIS TENDER OFFER?
We are making the tender offer for a variety of reasons which we
believe are prudent and reasonable and in the interests of shareholders.
However, you must evaluate for yourself the potential benefits and drawbacks of
the tender offer for your particular situation. See Section 3 - Purpose of the
Tender Offer; Material Effects of the Tender Offer.
ARE THE OFFICERS OR DIRECTORS OF THE COMPANY PARTICIPATING IN THE TENDER OFFER?
Our officers and directors are entitled to participate in the tender
offer on the same basis as all other shareholders. Our executive officers have
informed us that they intend to tender a minimum of fifty percent of their
holdings. None of the officers has sold shares in the public market in the past
several years. Depending upon the number of shares tendered by other
shareholders and the proration percentage, our officers' percentage ownership
may change, but it is not possible to determine the post-tender ownership
percentages at the present time. See Section 11 - Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning Shares.
IF I OWN LESS THAN 100 SHARES, AND I TENDER ALL OF MY SHARES, WILL I BE SUBJECT
TO PRORATION?
If you own beneficially or of record less than 100 shares and you
tender all of them before the tender offer expires and complete the section
entitled "Odd Lots" in the Letter of Transmittal, we will purchase all of your
shares without subjecting them to the proration procedure. See Section 2 -
Proration.
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WHEN WILL YOU PAY FOR THE SHARES I TENDER?
We will pay the purchase price, net in cash, without interest, for the
shares we purchase promptly after the expiration of the tender offer and our
acceptance of the shares for payment. See Section 6 - Purchase of Shares and
Payment of Purchase Price.
WILL I HAVE TO PAY BROKERAGE COMMISSIONS IF I TENDER MY SHARES?
If you are a registered shareholder and you tender your shares directly
to the Depositary, you will not incur any brokerage commissions. If you hold
shares through a broker or bank, we urge you to consult your broker or bank to
determine whether transaction costs are applicable. See Section 3 - Purpose of
the Tender Offer; Material Effects of the Tender Offer.
WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IF I TENDER MY
SHARES?
Your receipt of cash for your tendered shares will be treated either as
(1) a sale or exchange of the tendered shares, in which case you will recognize
long-term or short-term capital gain or loss with respect to the tendered shares
or (2) a distribution treated as a dividend, taxable as ordinary income, to the
extent of your share of any of our current or accumulated earnings and profits,
and with respect to any excess of the distribution over your share of any of our
earnings and profits, then as a return of capital to the extent of your tax
basis in your shares, and then as capital gain to the extent of any balance of
the distribution. See Section 14 - United States Federal Income Tax
Consequences.
WILL I HAVE TO PAY STOCK TRANSFER TAX IF I TENDER MY SHARES?
If you instruct the Depositary in the Letter of Transmittal to make the
payment for the shares to the registered holder, you will not incur any stock
transfer tax. See Section 6 - Purchase of Shares and Payment of Purchase Price.
WHO CAN I TALK TO IF I HAVE QUESTIONS?
The Information Agent can help answer your questions. The Information
Agent is American Stock Transfer and Trust Co. Their address and telephone
number are set forth on the back cover page of this document.
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THE TENDER OFFER
1. NUMBER OF SHARES.
Under the terms and conditions of the tender offer, we will purchase
1,000,000 shares of our Common Stock, or if less than 1,000,000 shares are
properly tendered and not properly withdrawn before the scheduled expiration
date of the tender offer, all shares that are properly tendered and not properly
withdrawn, at a single purchase price of $5.25 per share, net to the seller in
cash, without interest.
The term "expiration date" means 12:00 midnight, New York City time, on
Friday, June 29, 2001, unless and until we, in our sole discretion, extend the
period of time during which the tender offer will remain open, in which event
the term "expiration date" refers to the latest time and date at which the
tender offer, as so extended by us, will expire. See Section 15 - Extension of
the Tender Offer; Termination; Amendment for a description of our right to
extend, delay, terminate or amend the tender offer. In accordance with the rules
of the Securities and Exchange Commission, we may, and we expressly reserve the
right to, purchase under the tender offer an additional amount of shares not to
exceed 2% of our outstanding shares of Common Stock without amending or
extending the tender offer. See Section 15 - Extension of the Tender Offer;
Termination; Amendment. In the event of an over-subscription of the tender offer
as described below, shares tendered will be subject to proration, except for odd
lots. The proration period and withdrawal rights expire on the expiration date.
If (1)(a) we increase or decrease the price to be paid for shares, (b)
we increase the number of shares being sought in the tender offer and that
increase in the number of shares being sought exceeds 2% of our outstanding
shares of Common Stock, or (c) we decrease the number of shares being sought and
(2) the tender offer is scheduled to expire at any time earlier than the tenth
business day after the date that notice of any such increase or decrease is
first published, sent or given in the manner specified in Section 15, the tender
offer will be extended for a period of ten business days. Any period measured in
business days includes the first day of the period. For the purposes of the
tender offer, a "business day" means any day other than a Saturday, Sunday or
United States federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
The tender offer is not conditioned on the tender of any minimum number
of shares being tendered. The tender offer is, however, subject to other
conditions. See Section 7 - Conditions of the Tender Offer.
2. PRORATION.
If the number of shares properly tendered and not properly withdrawn
prior to the expiration date is less than or equal to 1,000,000 shares, or a
greater number of shares as we may elect to purchase, subject to applicable law,
we will, upon the terms and subject to the conditions of the tender offer,
purchase all shares so tendered at the purchase price.
Priority of Purchases. Under the terms and conditions of the tender
offer, if more than 1,000,000 shares, or a greater number of shares as we may
elect to purchase, subject to
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applicable law, have been properly tendered and not properly withdrawn before
the expiration date, we will purchase properly tendered shares on the basis set
forth below:
(1) We will purchase all shares properly tendered and not
properly withdrawn before the expiration date by any odd lot holder (as
defined below) who:
(a) tenders all shares owned beneficially or of record by
that shareholder (tenders of less than all the shares
owned by an odd lot holder will not qualify for
preference); and
(b) completes the section entitled "Odd Lots" in the
Letter of Transmittal and, if applicable, in the
Notice of Guaranteed Delivery; and
(2) after the purchase of all of those shares, we will
purchase all other shares properly tendered and not properly withdrawn
before the expiration date, on a pro rata basis with appropriate
adjustments to avoid purchases of fractional shares, as described
below.
Odd Lots. For purposes of the tender offer, the term "odd lots" shall
mean all shares properly tendered prior to the expiration date and not properly
withdrawn by any person, referred to as an "odd lot holder," who owns
beneficially or of record an aggregate of fewer than 100 shares and so certifies
in the appropriate place on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery. To qualify for this preference, an odd lot holder
must tender all shares owned beneficially or of record by the odd lot holder in
accordance with the procedures described in Section 4 - Procedures for Tendering
Shares. As set forth above, odd lots will be accepted for payment before
proration, if any, of the purchase of other tendered shares. This preference is
not available to partial tenders or to beneficial or record holders of an
aggregate of 100 or more shares, even if these holders have separate accounts or
certificates representing fewer than 100 shares. Any odd lot holder wishing to
tender all of its shares of our Common Stock pursuant to the tender offer should
complete the section entitled "Odd Lots" in the Letter of Transmittal and, if
applicable, in the Notice of Guaranteed Delivery.
We also reserve the right, but will not be obligated, to purchase all
shares duly tendered by any shareholder who tenders all shares beneficially or
of record owned and who, as a result of proration, would then beneficially or of
record own an aggregate of fewer than 100 shares. If we exercise this right, we
will increase the number of shares that we are offering to purchase in the
tender offer by the number of shares purchased through the exercise of such
right, subject to applicable law.
Proration. If proration of tendered shares is required, we will
determine the proration factor as soon as practicable following the expiration
date. Proration for each shareholder tendering shares, other than odd lot
holders, shall be based on the ratio of the number of shares properly tendered
and not properly withdrawn by a particular shareholder to the total number of
shares properly tendered and not properly withdrawn by all shareholders, other
than odd lot holders. Because of the difficulty in determining the number of
shares properly tendered, including shares tendered by guaranteed delivery
procedures, as described in Section 4 - Procedures for Tendering Shares, and not
properly withdrawn, and because of the odd lot
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procedure, we do not expect that we will be able to announce the final proration
factor or commence payment for any shares purchased under the tender offer until
seven to ten business days after the expiration date. The preliminary results of
any proration will be announced by press release as promptly as practicable
after the expiration date. You may obtain preliminary proration information from
the Information Agent as well as from your broker.
As described in Section 14 - United States Federal Income Tax
Consequences, the number of shares that we will purchase from you under the
tender offer may affect the United States federal income tax consequences to you
and, therefore, may be relevant to your decision whether or not to tender
shares. The Letter of Transmittal affords you the opportunity to designate the
order of priority in which tendered shares are to be purchased if we have to
prorate the number of shares purchased from you.
This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of shares and will be furnished to brokers, dealers,
commercial banks and trust companies whose names, or the names of whose
nominees, appear on our shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of shares.
3. PURPOSE OF THE TENDER OFFER; MATERIAL EFFECTS OF THE TENDER OFFER.
Purpose of the Tender Offer. We are making the tender offer for various
reasons, including our Board of Directors' desire to provide a way for
shareholders to sell some of their shares in a more attractive way than is
otherwise available to them, given the generally low volume of trading in our
common stock. We believe that the tender offer is a prudent use of our financial
resources given our business, assets and current market price, and that
investing in our own shares is an attractive use of capital and an efficient
means to provide value to our ongoing shareholders while at the same time
providing a measure of liquidity to those who want to sell.
After the completion of the tender offer, we expect to have sufficient
cash and short-term investments to meet our cash needs for normal operations and
anticipated capital expenditures. Therefore, in order to achieve the potential
benefits described below, we have commenced the tender offer.
Potential Benefits of the Tender Offer. We believe the tender offer may
provide several benefits to us and our shareholders, including:
- The tender offer represents the opportunity for our
shareholders to sell some or all of their shares on
potentially more favorable terms than would otherwise be
available. Shareholders who sell all or a portion of their
Common Stock have the opportunity to receive a premium of
19.0% to the $4.40 closing price per share of our Common Stock
on May 31, 2001, the last trading day prior to the
announcement of the tender offer. In addition, if you are the
registered owner of shares of our Common Stock that you tender
directly to the Depositary, the sale of those shares in the
tender offer will permit you to avoid the usual transaction
costs associated with open market sales.
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- Shareholders who sell only a portion of their shares or who
determine not to participate in the tender offer will realize
a proportionate increase in their relative equity interest in
our company.
Accordingly, our Board of Directors believes that the tender offer is
consistent with our long-term corporate goal of increasing shareholder value.
Potential Risks and Disadvantages of the Tender Offer. The tender offer
also presents some potential risks and disadvantages to us and our continuing
shareholders, including:
- The tender offer may reduce our "public float" (the number of
shares owned by non-affiliate shareholders and available for
trading in the securities markets). This reduction in public
float may result in lower stock prices or reduced liquidity in
the trading market for our Common Stock following the
completion of the tender offer.
- Completion of the tender offer will reduce the amount of our
cash reserves which may limit our ability to make significant
acquisitions or the amount of investments we can make in the
immediate future.
NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
ONE AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY SHARES. IN ADDITION,
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION TO YOU. YOU SHOULD
CAREFULLY EVALUATE ALL INFORMATION CONCERNING THE TENDER OFFER, SHOULD CONSULT
YOUR OWN INVESTMENT AND TAX ADVISORS, AND SHOULD MAKE YOUR OWN DECISIONS ABOUT
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. OUR DIRECTORS
AND EXECUTIVE OFFICERS HAVE INFORMED US THAT THEY MAY PARTICIPATE IN THE TENDER
OFFER.
We may in the future purchase additional shares of Common Stock on the
open market, in private transactions, through tender offers or otherwise. Any
additional purchases may be on the same terms or on terms that are more or less
favorable to shareholders than the terms of the tender offer. However, we and
our affiliates are prohibited from purchasing any shares, other than pursuant to
the tender offer, until at least ten business days after the expiration date of
the tender offer, except pursuant to certain limited exceptions provided in Rule
14e-5 of the SEC.
Shareholders may be able to sell non-tendered shares in the future on
the American Stock Exchange or otherwise at a net price higher than the purchase
price. We can give no assurance, however, as to the price at which a shareholder
may be able to sell shares of Common Stock in the future.
We will cancel and return to the status of authorized but unissued
stock the shares purchased in the tender offer. These shares will be available
for us to issue without further shareholder action (except as required by
applicable law or the rules of the American Stock Exchange or any other
securities exchange on which the shares are listed or traded) for purposes
including, without limitation, acquisitions, raising additional capital and the
satisfaction of
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obligations under existing or future employee benefit or compensation programs
or stock plans or compensation programs for directors.
Except as disclosed in this Offer to Purchase, we currently have no
plans, proposals or negotiations that relate to or would result in (a) any
extraordinary transaction, such as a merger, reorganization or liquidation,
involving our company or any of our subsidiaries; (b) any purchase, sale or
transfer of a material amount of our or any of our subsidiaries' assets; (c) any
material change in our present dividend rate or policy, or indebtedness or
capitalization other than our previously announced proposal to effect a reverse
stock split of our Common Stock (which proposal has been approved by
Shareholders but as to which the effective date and split ratio has not yet been
determined by our Board of Directors); (d) any change in our present Board of
Directors or management including, but not limited to, any plans or proposals to
change the number or the term of directors or to fill any existing vacancies on
our Board of Directors or to change any material term of the employment contract
of any executive officer; (e) any other material change in our corporate
structure or business; (f) any class of our equity securities being delisted
from a national securities exchange or ceasing to be authorized for quotation in
an automated quotations system operated by a national securities association;
(g) any class of our equity securities becoming eligible for termination of
registration under Section 12(g)(4) of the Securities Exchange Act of 1934; (h)
the suspension of our obligation to file reports under Section 15(d) of the
Exchange Act; (i) the acquisition by any person of additional securities of our
company or the disposition of securities of our company; or (j) any change in
our articles of incorporation, bylaws or other governing instruments or other
actions which could impede the acquisition of control of our company.
4. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For shares to be tendered properly under the
tender offer, (1) the certificates for those shares (or confirmation of receipt
of such shares under the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
including any required signature guarantees, or an "agent's message" (as defined
below), and any other documents required by the Letter of Transmittal, must be
received before 12:00 midnight, New York City time, on the expiration date by
the Depositary at its address set forth on the back cover page of this document
or (2) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below. In addition, odd lot holders who tender all shares
must complete the section captioned "Odd Lots" in the Letter of Transmittal and,
if applicable, in the Notice of Guaranteed Delivery, to qualify for the
preferential treatment available to odd lot holders as set forth in Section 2 -
Proration.
Shareholders who hold shares through brokers or banks are urged to
consult the brokers or banks to determine whether transaction costs are
applicable if shareholders tender shares through the brokers or banks and not
directly to the Depositary.
Signature Guarantees and Method of Delivery. No signature guarantee is
required: (1) if the Letter of Transmittal is signed by the registered holder of
the shares (which term, for purposes of this Section 4, shall include any
participant in The Depository Trust Company, or DTC, whose name appears on a
security position listing as the owner of the shares) tendered therewith and
such holder has not completed either the box captioned "Special Delivery
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Instructions" or the box captioned "Special Payment Instructions" on the Letter
of Transmittal; or (2) if shares are tendered for the account of a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents Medallion Program or a bank,
broker, dealer, credit union, savings association or other entity which is an
"eligible guarantor institution," as such term is defined in Rule 17Ad-15 of the
Exchange Act. See Instruction 1 of the Letter of Transmittal. If a certificate
for shares is registered in the name of a person other than the person executing
a Letter of Transmittal, or if payment is to be made to a person other than the
registered holder, then the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name of the
registered holder appears on the certificate, with the signature guaranteed by
an eligible guarantor institution.
Payment for shares tendered and accepted for payment under the tender
offer will be made only after timely receipt by the Depositary of certificates
for such shares or a timely confirmation of the book-entry transfer of such
shares into the Depositary's account at DTC as described above, a properly
completed and duly executed Letter of Transmittal, or an agent's message in the
case of a book-entry transfer, and any other documents required by the Letter of
Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR
SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE
ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with
respect to the shares for purposes of the tender offer at DTC within two
business days after the date of this document, and any financial institution
that is a participant in DTC's system may make book-entry delivery of the shares
by causing DTC to transfer shares into the Depositary's account in accordance
with DTC's procedures for transfer. Although delivery of shares may be effected
through a book-entry transfer into the Depositary's account at DTC, either (1) a
properly completed and duly executed Letter of Transmittal with any required
signature guarantees, or an agent's message, and any other required documents
must, in any case, be transmitted to and received by the Depositary at its
address set forth on the back cover page of this document before the expiration
date or (2) the guaranteed delivery procedure described below must be followed.
Delivery of the Letter of Transmittal and any other required documents to DTC
does not constitute delivery to the Depositary.
The term "agent's message" means a message transmitted by DTC to, and
received by, the Depositary, which states that DTC has received an express
acknowledgment from the participant in DTC tendering the shares that the
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that we may enforce that agreement against the participant.
Federal Backup Withholding Tax. Under the United States federal backup
withholding tax rules, 31% of the gross proceeds payable to a shareholder or
other payee under the tender offer must be withheld and remitted to the United
States Treasury, unless the shareholder or
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other payee provides a taxpayer identification number (employer identification
number or social security number) to the Depositary and certifies under
penalties of perjury that the provided number is correct or otherwise
establishes an exemption. If the Depositary is not provided with the correct
taxpayer identification number or another adequate basis for exemption, the
holder may be subject to certain penalties imposed by the Internal Revenue
Service. Therefore, you should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal in order to provide the
information and certification necessary to avoid backup withholding, unless you
otherwise establish to the satisfaction of the Depositary that you are not
subject to backup withholding. Specified shareholders (including, among others,
all corporations and some foreign shareholders (in addition to foreign
corporations)) are not subject to these backup withholding and reporting
requirements rules. In order for a foreign shareholder (including a foreign
corporation) to establish that it is an exempt recipient, that shareholder must
submit an IRS Form W-8BEN or W-8ECI or a Substitute Form W-8, signed under
penalties of perjury, attesting to that shareholder's exempt status. The
applicable form can be obtained from the Information Agent. See Instructions 13
and 14 of the Letter of Transmittal. For a discussion of United States federal
income tax consequences to tendering shareholders, see Section 14 - United
States Federal Income Tax Consequences.
Federal Income Tax Withholding on Payments to Foreign Shareholders.
Even if a foreign shareholder has provided the required certification as
described in the preceding paragraphs to avoid backup withholding, the
Depositary will withhold United States federal income taxes at a rate of 30% of
the gross payment payable to a foreign shareholder or his, her or its agent
unless the Depositary determines that an exemption from, or a reduced rate of,
withholding tax is available under a tax treaty or that an exemption from
withholding is applicable because the gross proceeds are effectively connected
with the conduct of a trade or business of the foreign shareholder within the
United States. For this purpose, a foreign shareholder is any shareholder that
is not a "United States holder" (as defined in Section 14). In order to obtain a
reduced rate of withholding under a tax treaty, a foreign shareholder must
deliver to the Depositary before the payment a properly completed and executed
IRS Form W-8BEN. In order to obtain an exemption from withholding on the grounds
that the gross proceeds paid under the tender offer are effectively connected
with the conduct of a trade or business within the United States, a foreign
shareholder must deliver to the Depositary a properly completed and executed IRS
Form W-8ECI. A foreign shareholder may be eligible to obtain a refund of all or
a portion of any tax withheld if it satisfies one of the "Section 302 tests" for
capital gain treatment described in Section 14 or is otherwise able to establish
that no withholding or a reduced amount of withholding is due. Federal backup
withholding generally will not apply to amounts subject to the 30% or a
treaty-reduced rate of federal income tax withholding.
Foreign shareholders are urged to consult their tax advisors regarding
the application of United States federal income tax withholding, including
eligibility for a reduction of, or an exemption from, withholding tax, and the
refund procedure. See Instructions 13 and 14 of the Letter of Transmittal.
Guaranteed Delivery. If you desire to tender shares under the tender
offer and your stock certificates are not immediately available or cannot be
delivered to the Depositary before the expiration date, or the procedure for
book-entry transfer cannot be completed on a timely basis,
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or if time will not permit all required documents to reach the Depositary before
the expiration date, you may nevertheless tender your shares if all of the
following conditions are satisfied:
- the tender is made by or through an eligible
guarantor institution;
- the Depositary receives by hand, mail, overnight
courier, telegram or facsimile transmission, before the expiration
date, a properly completed and duly executed Notice of Guaranteed
Delivery in the form we have provided with this document, including
(where required) a signature guarantee by an eligible guarantor
institution in the form set forth in the Notice of Guaranteed Delivery;
and
- the certificates for all tendered shares, in proper
form for transfer, or confirmation of book-entry transfer of your
shares into the Depositary's account at DTC, together with a properly
completed and duly executed Letter of Transmittal and any required
signature guarantees, or an agent's message, or other documents
required by the Letter of Transmittal, are received by the Depositary
within three American Stock Exchange trading days after the expiration
date of the tender offer.
Return of Unpurchased Shares. If any tendered shares are not purchased
under the tender offer or are properly withdrawn before the expiration date, or
if less than all shares evidenced by your certificates are tendered, we will
return certificates for unpurchased shares as promptly as practicable after the
expiration or termination of the tender offer or the proper withdrawal of the
shares, as applicable, or, in the case of shares tendered by book-entry transfer
at DTC, the shares will be credited to the appropriate account maintained by the
tendering shareholder at DTC, in each case without expense to the shareholder.
Stock Options. We are not offering, as part of the tender offer, to
purchase any outstanding options and tenders of options will not be accepted.
Holders of outstanding options who wish to participate in the tender offer must
exercise their options, and purchase shares of our Common Stock and then tender
the shares pursuant to the tender offer, provided that the exercise of those
options and the tender of shares is in accordance with the terms of the
applicable option documents. In no event are any options to be delivered to the
Depositary in connection with a tender of shares hereunder. An exercise of an
option cannot be revoked even if shares received upon the exercise and tendered
in the tender offer are not purchased in the tender offer for any reason.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of shares
to be accepted and the validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of shares will be determined by us, in
our sole discretion, and our determination will be final and binding on all
parties. We reserve the absolute right to reject any or all tenders of any
shares that we determine are not in proper form or the acceptance for payment of
or payment for which we determine may be unlawful. We also reserve the absolute
right to waive any of the conditions of the tender offer or any defect or
irregularity in any tender with respect to any particular shares or any
particular shareholder and our interpretation of the terms of the tender offer
will be final and binding on all parties. No tender of shares will be deemed to
have been properly made until all defects or irregularities have been cured by
the tendering shareholder or waived by us. Neither
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we nor any of the Depositary, the Information Agent, or any other person will be
under any duty to give notification of any defects or irregularities in any
tender or incur any liability for failure to give any such notification.
Tendering Shareholder's Representation and Warranty; Our Acceptance
Constitutes an Agreement. A proper tender of shares under any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the tender offer, as well as the tendering shareholder's
representation and warranty to us that (1) the shareholder has a net long
position in the shares or equivalent securities at least equal to the shares
tendered within the meaning of Rule 14e-4 of the Exchange Act and (2) the tender
of shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a
person, directly or indirectly, to tender shares for that person's own account
unless, at the time of tender and at the end of the proration period or period
during which shares are accepted by lot (including any extensions), the person
so tendering (1) has a net long position equal to or greater than the amount
tendered in (x) the subject securities or (y) securities immediately convertible
into, or exchangeable or exercisable for, the subject securities and (2) will
deliver or cause to be delivered the shares in accordance with the terms of the
tender offer. Rule 14e-4 provides a similar restriction applicable to the tender
or guarantee of a tender on behalf of another person. Our acceptance for payment
of shares tendered under the tender offer will constitute a binding agreement
between the tendering shareholder and us upon the terms and conditions of the
tender offer.
Lost or Destroyed Certificates. Shareholders whose certificate for part
or all of their shares have been lost, stolen, misplaced or destroyed may
contact American Stock Transfer and Trust Co. at the address and telephone
number set forth on the back cover page of this document for instructions as to
obtaining a replacement certificate. That certificate will then be required to
be submitted together with the Letter of Transmittal in order to receive payment
for shares that are tendered and accepted for payment. A bond may be required to
be posted by the shareholder to secure against the risk that the certificates
may be subsequently recirculated. Shareholders are urged to contact American
Stock Transfer and Trust Co. immediately in order to permit timely processing of
this documentation and to determine if the posting of a bond is required.
Certificates for shares, together with a properly completed and duly
executed Letter of Transmittal or an agent's message, and any other documents
required by the Letter of Transmittal, must be delivered to the Depositary and
NOT to us. Any documents delivered to us will NOT be forwarded to the Depositary
and therefore will not be deemed to be properly tendered.
5. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 5, tenders of shares under
the tender offer are irrevocable. Shares tendered under the tender offer may be
withdrawn at any time before the expiration date and, unless previously accepted
for payment by us under the tender offer, may also be withdrawn at any time
after 12:00 midnight, New York City time, on Friday, July 27, 2001.
For a withdrawal to be effective, a written or facsimile transmission
(confirmed by telephone) notice of withdrawal must be timely received by the
Depositary at its address set forth
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on the back cover page of this document. Any such notice of withdrawal must
specify the name of the tendering shareholder, the number of shares to be
withdrawn and the name of the registered holder of such shares. If the
certificates for shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, before the release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and the signature(s) on the notice of withdrawal must be guaranteed by an
eligible guarantor institution, unless such shares have been tendered for the
account of an eligible guarantor institution.
If shares have been tendered under the procedure for book-entry
transfer set forth in Section 4 - Procedures for Tendering Shares, any notice of
withdrawal also must specify the name and the number of the account at DTC to be
credited with the withdrawn shares and must otherwise comply with DTC's
procedures. All questions as to the form and validity (including the time of
receipt) of any notice of withdrawal will be determined by us, in our sole
discretion, whose determination will be final and binding. Neither we nor any
other 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.
Withdrawals may not be rescinded and any shares properly withdrawn will
thereafter be deemed not properly tendered for purposes of the tender offer
unless the withdrawn shares are properly re-tendered before the expiration date
by following one of the procedures described in Section 4 - Procedures for
Tendering Shares.
If we extend the tender offer, we are delayed in our purchase of shares
or if we are unable to purchase shares under the tender offer for any reason,
then, without prejudice to our rights under the tender offer, the Depositary
may, subject to applicable law, retain tendered shares on our behalf, and such
shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 5.
6. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Under the terms and conditions of the tender offer, as promptly as
practicable following the expiration date, we will accept for payment and pay
for, and thereby purchase, shares properly tendered and not properly withdrawn
before the expiration date. For purposes of the tender offer, we will be deemed
to have accepted for payment and therefore purchased shares that are properly
tendered and not properly withdrawn, subject to the odd lot and proration
provisions of the tender offer, only when, as and if we give oral or written
notice to the Depositary of our acceptance of the shares for payment under the
tender offer.
Under the terms and conditions of the tender offer, as promptly as
practicable after the expiration date, we will accept for payment and pay a
purchase price of $5.25 per share for 1,000,000 shares of our Common Stock,
subject to increase or decrease as provided in Section 15 - Extension of the
Tender Offer; Termination; Amendment, if properly tendered and not properly
withdrawn, or if less than 1,000,000 shares are properly tendered and not
withdrawn, all shares that are properly tendered and not properly withdrawn.
We will pay for shares purchased under the tender offer by depositing
the aggregate purchase price for such shares with the Depositary, which will act
as agent for tendering
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shareholders for the purpose of receiving payment from us and transmitting
payment to the tendering shareholders.
In the event of proration, we will determine the proration factor and
pay for those tendered shares accepted for payment as soon as practicable after
the expiration date; however, we do not expect to be able to announce the final
results of any proration and commence payment for shares purchased until
approximately seven to ten business days after the expiration date. Certificates
for all shares tendered and not purchased, including all shares tendered and not
purchased due to proration, will be returned to the tendering shareholder or, in
the case of shares tendered by book-entry transfer, will be credited to the
account maintained with DTC by the participant who delivered the shares, at our
expense as promptly as practicable after the expiration date or termination of
the tender offer without expense to the tendering shareholders. Under no
circumstances will we pay interest on the purchase price to be paid regardless
of any delay in making such payment. In addition, there are other conditions to
our obligation to purchase shares under the tender offer. See Section 7 -
Conditions of the Tender Offer.
We will pay all stock transfer taxes, if any, payable on the transfer
to us of shares purchased under the tender offer. If, however, payment of the
purchase price is to be made to any person other than the registered holder, or
if tendered certificates are registered in the name of any person other than the
person signing the Letter of Transmittal, the amount of all stock transfer
taxes, if any (whether imposed on the registered holder or the other person),
payable on account of the transfer to the person will be deducted from the
purchase price unless satisfactory evidence of the payment of the stock transfer
taxes, or exemption therefrom, is submitted. See Instruction 7 of the Letter of
Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY,
SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE
LETTER OF TRANSMITTAL MAY BE SUBJECT TO FEDERAL BACKUP WITHHOLDING TAX OF 31% OF
THE GROSS PROCEEDS PAID TO THE SHAREHOLDER OR OTHER PAYEE UNDER THE TENDER
OFFER. SEE SECTION 4 - PROCEDURES FOR TENDERING SHARES. ALSO SEE SECTION 14
REGARDING UNITED STATES FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN
SHAREHOLDERS.
7. CONDITIONS OF THE TENDER OFFER.
Notwithstanding any other provision of the tender offer, we will not be
required to accept for payment, purchase or pay for any shares tendered, and may
terminate or amend the tender offer or may postpone the acceptance for payment
of, or the purchase of and the payment for shares tendered, subject to Rule
13e-4(f) of the Securities Exchange Act of 1934, if at any time on or after the
date of this Offer to Purchase and before the expiration date any of the
following events shall have occurred (or shall have been determined, in good
faith, by us to have occurred) that, in our judgment and regardless of the
circumstances giving rise to the event or events (including any action or
omission to act by us), makes it inadvisable to proceed with the tender offer or
with acceptance for payment:
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- there shall have been threatened, instituted or
pending any action or proceeding by any government or governmental,
regulatory or administrative agency, authority or tribunal or any other
person, domestic or foreign, before any court, authority, agency or
tribunal that directly or indirectly (i) challenges the making of the
tender offer, the acquisition of some or all of the shares under the
tender offer or otherwise relates in any manner to the tender offer or
(ii) in our judgment, could materially and adversely affect our, our
subsidiaries' or our affiliates' (taken as a whole) business, condition
(financial or other), income, operations or prospects, or otherwise
materially impairs in any way the contemplated future conduct of our,
our subsidiaries' or our affiliates' (taken as a whole) business or
materially impairs the contemplated benefits of the tender offer to us;
- there shall have been any action threatened, pending
or taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the tender offer or us, any of our subsidiaries' or any
of our affiliates, by any court or any authority, agency or tribunal
that, in our judgment, would or might directly or indirectly (i) make
the acceptance for payment of, or payment for, some or all of the
shares illegal or otherwise restrict or prohibit completion of the
tender offer, (ii) delay or restrict our ability, or render us unable,
to accept for payment or pay for some or all of the shares, (iii)
materially impair the contemplated benefits of the tender offer to us
or (iv) materially and adversely affect our, our subsidiaries' or our
affiliates' (taken as a whole) business, condition (financial or
other), income, operations or prospects, or otherwise materially impair
in any way the contemplated future conduct of our, our subsidiaries' or
our affiliates' (taken as a whole) business;
- there shall have occurred (i) any general suspension
of trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) the declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States or
any of its territories, (iv) any significant decrease in the market
price of the shares or any change in the general political, market,
economic or financial conditions in the United States or abroad that
could, in our judgment, have a material adverse effect on our business,
operations or prospects or the trading in shares of our Common Stock,
(v) in the case of any of the foregoing existing at the time of the
commencement of the tender offer, a material acceleration or worsening
thereof or (vi) any decline in either the Dow Jones Industrial Average,
the NASDAQ Composite Index or the Standard and Poor's Index of 500
Industrial Companies by a material amount (including, without
limitation, an amount in excess of 10%) from the close of business on
the date of this Offer to Purchase;
- a tender offer or exchange offer (other than this
tender offer) for any or all of our shares of Common Stock, or any
merger, business combination or other similar transaction with or
involving us or any of our subsidiaries, shall have been proposed,
announced or made by any person;
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- any entity, "group" (as that term is used in Section
13(d)(3) of the Exchange Act) or person shall have acquired or proposed
to acquire beneficial ownership of more than 5% of the outstanding
shares (other than any such person, entity or group who has filed a
Schedule 13D or Schedule 13G with the SEC with respect to our Common
Stock on or before the date of this Offer to Purchase), (ii) any
entity, group or person who has filed a Schedule 13D or Schedule 13G
with the SEC on or before the date of this Offer to Purchase shall have
acquired or proposed to acquire beneficial ownership of an additional
2% or more of the outstanding shares of our Common Stock or (iii) any
person, entity or group shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or made a public announcement reflecting an intent to acquire
us or any of our subsidiaries or any of their respective assets or
securities other than in connection with a transaction authorized by
our Board of Directors;
- any change or changes shall have occurred in our, our
subsidiaries' or any of our affiliates' business, financial condition,
assets, income, operations, prospects or stock ownership that, in our
judgment, is or may be material and adverse to us, our subsidiaries' or
our affiliates; or
- we determine that the completion of the tender offer
and the purchase of the shares will cause our shares of Common Stock to
be delisted from the American Stock Exchange or to be eligible for
deregistration under the Exchange Act.
These conditions are for our sole benefit and may be asserted by us
regardless of the circumstances (including any action or inaction by us) giving
rise to any such condition, and may be waived by us, in whole or in part, at any
time and from time to time in our sole discretion. Our failure at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any right,
and each right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination or judgment by us concerning the
events described above will be final and binding on all parties.
8. PRICE RANGE OF SHARES.
Our Common Stock is listed and traded on the American Stock Exchange
under the trading symbol "INS." The following table sets forth, for the fiscal
quarters indicated, the high and low closing prices per share on the American
Stock Exchange, as applicable.
HIGH LOW
---- ---
Fiscal 1999:
First Quarter....................................... 2 5/8 1 9/16
Second Quarter...................................... 3 5/8 2
Third Quarter....................................... 3 5/8 2 3/8
Fourth Quarter...................................... 4 1/4 2 1/16
Fiscal 2000:
First Quarter....................................... 14 1/2 3 5/8
Second Quarter...................................... 10 1/4 3 1/2
Third Quarter....................................... 6 1/4 3 3/4
Fourth Quarter...................................... 6 2 7/8
Fiscal 2001:
First Quarter....................................... 4.00 3.15
Second Quarter (through May 31, 2001)............... 4.50 3.30
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On May 31, 2001, the last trading day before the date of announcement
of the tender offer, the last reported sale price of the shares on the American
Stock Exchange was $4.40.
WE URGE SHAREHOLDERS TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
9. SOURCE AND AMOUNT OF FUNDS.
Assuming that the maximum 1,000,000 shares are tendered in the offer at
$5.25 per share, the aggregate purchase price will be $5,250,000. We expect that
our fees and expenses for the offer will be approximately $100,000.
We anticipate that we will fund the tender offer and payment of related
fees and expenses from the proceeds of the sale of our interest in our
affiliate, PaySys International, Inc. The tender offer is therefore not subject
to our receipt of financing.
10. CERTAIN INFORMATION CONCERNING US.
Summary. Intelligent Systems Corporation, a Georgia corporation, has
operated either in corporate or partnership form since 1973 and its securities
have been publicly traded since 1981. We operated as a master limited
partnership from 1986 to 1991, when we merged into the present corporation.
Since the early 1980's, we have conducted our operations principally
through majority owned subsidiaries or minority owned affiliates to which we
devote extensive management resources. Our main focus is to help entrepreneurs
build valuable companies by providing operational and strategic management,
practical business advice, early stage equity capital, a network of business
contacts and, in some cases, a proven incubator program. Depending upon the
needs of the partner company, we will undertake a variety of roles which often
include day-to-day management of operations, board of director participation,
financing, market planning, strategic contract negotiations, personnel and
administrative functions, etc. Most of our partner companies are involved in the
information technology industry (business to business, e-commerce, software)
although we are involved in other promising industries as well (biotechnology,
wireless, etc.).
Our executive offices are located at 4355 Shackleford Road, Norcross,
Georgia 30093 and our telephone number is (770) 381-2900.
Summary Historical and Pro Forma Condensed Financial Data. The summary
of our historical and pro forma financial data, set forth below, are derived
from and should be read in conjunction with our audited financial statements
included in our Annual Report on Form 10-K
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for the year ended December 31, 2000 and in connection with the unaudited
condensed financial statements included in our Quarterly Report on Form 10-Q for
the three months ended March 31, 2001, which are both incorporated herein by
reference.
SUMMARY HISTORICAL FINANCIAL INFORMATION
THREE
MONTHS
ENDED FOR THE YEAR ENDED DECEMBER 31
MARCH 31, ---------------------------------------------------------
2001 2000 1999 1998
------------ ------------ ------------ ------------
(IN THOUSANDS, EXCEPT SHARE DATA)
Net Sales .............................. $ 1,694 $ 7,027 $ 8,479 $ 18,253
Net Income (Loss) ...................... 749(a) 8,215(b) 249(c) (1,548)(d)
Net Income (Loss) Per Share Basic ...... 0.13 1.47 0.05 (.30)
Total Assets ........................... 19,316 18,057 13,658 17,099
Working Capital ........................ 3,725 3,294 (48) (1,827)
Long-term Debt ......................... -- -- 363 900
Shareholders' Equity ................... 15,843 14,674 10,209 9,641
Cash Dividends Paid Per Common Share ... -- 0.52 -- --
Shares Outstanding at Period End ....... 5,623,784 5,623,784 5,114,467 5,104,467
(a.) Includes net investment gains of $845,000 and $306,000 in net
losses in equity of affiliates.
(b.) Includes investment gains of $9.6 million and $771,000 in net
losses in equity of affiliates.
(c.) Includes investment gains of $2.2 million and $948,000 in net
losses in equity of affiliates.
(d.) Includes $944,000 charge for purchased in-process R&D,
$955,000 charge to discontinue product lines, $5.2 million
gain on investments and $593,000 income in equity of
investments.
Where You Can Find More Information. We are subject to the information
requirements of the Exchange Act, and file with the SEC periodic reports, proxy
statements and other information relating to our business, financial condition
and other matters. We are required to disclose in such proxy statements specific
information, as of particular dates, concerning our directors and executive
officers, their compensation, stock options granted to them, the principal
holders of our securities and any material interest of these persons in
transactions with us. Pursuant to Rule 13e-4(c)(2) under the Exchange Act, we
have filed an Issuer Tender Offer Statement on Schedule TO which includes
additional information with respect to the tender offer. These materials and
other information may be inspected at the public reference facilities maintained
by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
also should be available for inspection and copying at the following regional
offices of the SEC: 7 World Trade Center, Suite 1300, New York, New York 10048,
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of this material can also be obtained by mail, upon payment of the
SEC's customary charges, by writing to the Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549. The SEC also maintains a web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. This material should also be available for inspection at the
offices of the American Stock Exchange at 86 Trinity Place, New York, New York,
10006.
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Incorporation by Reference. The SEC allows us to "incorporate by
reference" information to this Offer to Purchase. This means that we can
disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is considered
to be part of this Offer to Purchase, except for any information that is
superseded by information that is included directly in this document.
This Offer to Purchase incorporates by reference the documents listed
below that we have previously filed with the SEC. The documents contain
important information about us.
OUR FILINGS WITH THE SEC PERIOD
- ------------------------ ------
Annual Report on Form 10-K......................................... Fiscal year ended December 31, 2000
Definitive Proxy Statement......................................... Dated April 17, 2001
Quarterly Report on Form 10-Q...................................... Quarter ended March 31, 2001
Current Report on Form 8-K......................................... Dated March 19, 2001
We incorporate by reference additional documents that we may file with
the SEC between the date of this Offer to Purchase and the date the offer
proration period and withdrawal rights expire. Those documents include periodic
reports, such as Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us or from the Securities and Exchange Commission's website at
the address described above. Documents incorporated by reference are available
from us without charge, excluding any exhibits to those documents unless the
exhibit is specifically incorporated by reference as an exhibit in this Offer to
Purchase. You can obtain documents incorporated by reference in this Offer to
Purchase by requesting them in writing or by telephone from Intelligent Systems
Corporation, 4355 Shackleford Road, Norcross, Georgia 30093, telephone (770)
381-2900. Please be sure to include your complete name and address with your
request. If you request any incorporated documents, we will mail them to you by
first class mail, or another equally prompt means, within one (1) business day
after receiving your request.
11. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING SHARES.
As of May 25, 2001, we had 5,623,784 issued and outstanding shares of
Common Stock. The 1,000,000 shares of Common Stock we are offering to purchase
under the tender offer represent approximately 17.8% of our outstanding shares
of Common Stock as of May 25, 2001.
As of May 25, 2001, our directors and executive officers as a group (8
persons) beneficially owned an aggregate of 1,702,840 shares of our Common
Stock, representing approximately 30.3% of our outstanding shares, assuming the
exercise of vested options by directors and officers. Our directors and
executive officers are entitled to participate in the tender offer on the same
basis as all other shareholders and they have informed us that they may
participate in the tender offer.
As of May 25, 2001, the aggregate number and percentage of our
securities that were beneficially owned by our directors and executive officers
were as appears in columns two and
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three of the table below. Assuming we purchase 1,000,000 shares of Common Stock
and that we do not purchase any shares from our directors or executive officers
under the tender offer, then after the purchase of shares under the tender
offer, our directors and executive officers as a group would beneficially own
approximately 36.8% of our outstanding shares. The percentage beneficial
ownership of each director and officer would be approximately as appears in
column four of the table below if we do not purchase any shares from our
directors or executive officers pursuant to the tender offer.
Security Ownership of Certain Beneficial Owners and Management. The
following table sets forth certain information regarding the beneficial
ownership of our Common Stock (our only class of voting securities) as of May
25, 2001 of (a) each person who we know to be the beneficial owner of more than
5% of the outstanding Common Stock, (b) each director of our company, (c) the
named executive officers and (d) all executive officers and directors of our
company as a group. The information shown assumes the exercise by each person
(and all directors and executive officers as a group) of the stock options owned
by such person that are currently exercisable or exercisable within 60 days of
May 25, 2001. Unless otherwise indicated, the address of each person named below
is the company address at 4355 Shackleford Road, Norcross, Georgia 30093.
The table assumes that we do not purchase any shares from the persons
shown in the following table. However, our directors and executive officers have
advised us they may participate in the tender offer. We expect that our
executive officers will tender at a minimum 50% of their respective holdings of
Common Stock in the tender offer. Depending upon the number of shares tendered
by other shareholders and the proration percentage, each director's and
executive officer's percentage ownership may change, but it is not possible to
accurately determine the post-tender ownership percentages at the present time.
PERCENTAGE OF
COMMON STOCK
--------------------------------------
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY BEFORE TENDER AFTER TENDER
OF BENEFICIAL OWNER OWNED OFFER OFFER
- ------------------- ---------------- ------------- ------------
J. Leland Strange 1,218,203 21.7% 26.3%
Donald A. McMahon 1,500 0% 0%
James V. Napier 11,100 .2% .2%
John B. Peatman 1,280 0% 0%
Parker H. Petit 14,200 .3% .3%
Francis A. Marks 175,000 3.1% 3.8%
Bonnie L. Herron 149,557 2.7% 3.2%
All directors and officers as a 1,702,840 30.3% 36.8%
group (8 persons)
Wallace R. Weitz & Company 548,000 9.7% 11.9%
1125 South 103rd Street, #600
Omaha, NE 68124
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12. EFFECTS OF THE TENDER OFFER ON THE MARKET FOR SHARES; REGISTRATION
UNDER THE EXCHANGE ACT.
Our purchase of shares under the tender offer will reduce the number of
shares that might otherwise be traded publicly and may reduce the number of our
shareholders. Nonetheless, we anticipate that there will be a sufficient number
of shares outstanding and publicly traded following completion of the tender
offer to ensure a continued trading market for the shares. Based upon published
guidelines of the American Stock Exchange, we do not believe that our purchase
of shares of Common Stock under the tender offer will cause our remaining Common
Stock to be delisted from the American Stock Exchange.
The shares are registered under the Exchange Act, which requires, among
other things, that we furnish information to our shareholders and the SEC and
comply with the SEC's proxy rules in connection with meetings of our
shareholders. We believe that our purchase of the shares under the tender offer
will not result in the shares becoming eligible for deregistration under the
Exchange Act.
13. LEGAL MATTERS; REGULATORY APPROVALS.
Except as described above, we are not aware of any license or
regulatory permit that appears material to our business that might be adversely
affected by our acquisition of shares as contemplated by the tender offer or of
any approval or other action by any government or governmental, administrative
or regulatory authority or agency, domestic, foreign or supranational, that
would be required for the acquisition or ownership of shares by us as
contemplated by the tender offer. Should any approval or other action be
required, we presently contemplate that we will seek that approval or other
action. We are unable to predict whether we will be required to delay the
acceptance for payment of or payment for shares tendered under the tender offer
until the outcome of that process is known. We cannot assure you that any
approval or other action, if needed, would be obtained or would be obtained
without substantial cost or conditions or that the failure to obtain the
approval or other action might not result in adverse consequences to our
business and financial condition. Our obligation under the tender offer to
accept for payment and pay for shares is subject to certain conditions. See
Section 7 - Conditions of the Tender Offer.
14. UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
In General. The following summary describes the material United States
federal income tax consequences relating to the tender offer. This summary is
based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, administrative pronouncements and judicial decisions, all as in
effect as of the date of this document and all of which are subject to change,
possibly with retroactive effect. This summary addresses only shares that are
held as capital assets within the meaning of Section 1221 of the Code and does
not address all of the tax consequences that may be relevant to shareholders in
light of their particular circumstances or to certain types of shareholders
subject to special treatment under the Code, including, without limitation,
certain financial institutions, dealers in securities or commodities, traders in
securities who elect to apply a mark-to-market method of accounting, insurance
companies, tax-exempt organizations, persons who hold shares as a position in a
"straddle" or as a part of a "hedging,"
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"conversion" or "constructive sale" transaction for United States federal income
tax purposes or persons who received their shares through the exercise of
employee stock options or otherwise as compensation. In addition, except as
otherwise specifically noted, this discussion applies only to "United States
holders" (as defined below). This summary also does not address the state, local
or foreign tax consequences of participating in the tender offer. For purposes
of this discussion, a "United States holder" means:
- a citizen or resident of the United States;
- a corporation or other entity taxable as a corporation created
or organized in the United States or under the laws of the
United States or of any political subdivision of the United
States;
- an estate, the income of which is includible in gross income
for United States federal income tax purposes regardless of
its source; or
- a trust whose administration is subject to the primary
supervision of a United States court and which has one or more
United States persons who have the authority to control all of
its substantial decisions.
Holders of shares who are not United States holders should consult
their tax advisors regarding the United States federal income tax consequences
and any applicable foreign tax consequences of the tender offer and should also
see Section 4 - Procedures for Tendering Shares for a discussion of the
applicable United States withholding rules and the potential for obtaining a
refund of all or a portion of any tax withheld.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR TO DETERMINE YOUR PARTICULAR
TAX CONSEQUENCES OF PARTICIPATING OR NOT PARTICIPATING IN THE TENDER OFFER.
Characterization of the Purchase. A United States holder will,
depending on the United States holder's particular circumstances, be treated for
federal income tax purposes either as having sold the United States holder's
shares or as having received a distribution with respect to stock from us.
Under Section 302 of the Code, a United States holder whose shares are
purchased by us under the tender offer will be treated as having sold its
shares, and thus will recognize capital gain or loss upon the transaction if the
purchase:
- results in a "complete termination" of the United States
holder's equity interest in us;
- results in a "substantially disproportionate" redemption with
respect to the United States holder; or
- is "not essentially equivalent to a dividend" with respect to
the United States holder.
Each of these tests, referred to as the "Section 302 tests," is explained in
more detail below.
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If a United States holder satisfies any of the Section 302 tests, the
United States holder will be treated as if it sold its shares to us and will
recognize capital gain or loss equal to the difference between the amount of
cash received under the tender offer and the United States holder's adjusted tax
basis in the shares surrendered in exchange therefor. This gain or loss will be
long-term capital gain or loss if the United States holder's holding period for
the shares that were sold exceeds one year as of the date of purchase under the
tender offer. Specific limitations apply to the deductibility of capital losses
by United States holders. Gain or loss must be determined separately for each
block of shares (shares acquired at the same cost in a single transaction) that
is purchased from a United States holder under the tender offer. A United States
holder may be able to designate which blocks of shares it wishes to tender under
the tender offer if less than all of its shares are tendered under the tender
offer, and the order in which different blocks will be purchased in the event of
proration under the tender offer. United States holders should consult their tax
advisors concerning the mechanics and desirability of that designation.
If a United States holder does not satisfy any of the Section 302
tests, the purchase of a United States holder's shares under the tender offer
will not be treated as a sale or exchange under Section 302 of the Code with
respect to the United States holder. Instead, the amount received by a United
States holder with respect to the purchase of its shares under the tender offer
will be treated as a distribution by us with respect to the United States
holder's shares. Such distribution will be treated as a dividend distribution to
the United States holder under Section 301 of the Code, taxable at ordinary
income tax rates, to the extent of the United States holder's share of our
current or accumulated earnings and profits (as determined under applicable
provisions of the Code and Treasury Regulations), if any. To the extent the
amount exceeds the United States holder's share of our current or accumulated
earnings and profits, the excess first will be treated as a tax-free return of
capital to the extent of the United States holder's adjusted tax basis in its
shares and any remainder will be treated as capital gain (which may be long-term
capital gain as described above). To the extent that a purchase of a United
States holder's shares under the tender offer is treated as the receipt by the
United States holder of a dividend, the United States holder's adjusted tax
basis in the purchased shares will be added to any shares retained by the United
States holder.
Constructive Ownership of Stock and Other Issues. In applying each of
the Section 302 tests, United States holders must take into account not only
shares that they actually own but also shares they are treated as owning under
the constructive ownership rules of Section 318 of the Code. Under the
constructive ownership rules, a United States holder is treated as owning any
shares that are owned (actually and in some cases constructively) by related
individuals and entities as well as shares that the United States holder has the
right to acquire by exercise of an option or by conversion or exchange of a
security. Due to the factual nature of the Section 302 tests explained below,
United States holders should consult their tax advisors to determine whether the
purchase of their shares under the tender offer qualifies for sale treatment in
their particular circumstances.
We cannot predict whether or the extent to which the tender offer will
be oversubscribed. If the tender offer is oversubscribed, proration of tenders
under the tender offer will cause us to accept fewer shares than are tendered.
Therefore, no assurance can be given that we will purchase a sufficient number
of a United States holder's shares under the tender offer to ensure
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that the United States holder receives sale treatment, rather than distribution
treatment, for United States federal income tax purposes under the rules
discussed below.
Section 302 Tests. One of the following Section 302 tests must be
satisfied in order for the purchase of shares under the tender offer to be
treated as a sale or exchange (as opposed to a distribution) for federal income
tax purposes:
- Complete Termination Test. The purchase of a United States
holder's shares under the tender offer will generally result
in a "complete termination" of the United States holder's
equity interest in us only if all of the shares that are
actually or constructively owned by the United States holder
are sold under the tender offer. United States holders should
consult their tax advisors with regard to the complete
termination test, the applicability of the constructive
ownership rules and certain rules regarding the waiver of the
constructive ownership rules applicable in certain situations.
- Substantially Disproportionate Test. The purchase of a United
States holder's shares under the tender offer will result in a
"substantially disproportionate" redemption with respect to
the United States holder if, among other things, the
percentage of the then outstanding shares actually and
constructively owned by the United States holder immediately
after the purchase is less than 80% of the percentage of the
shares actually and constructively owned by the United States
holder immediately before the purchase.
- Not Essentially Equivalent to a Dividend Test. The purchase of
a United States holder's shares under the tender offer will be
treated as "not essentially equivalent to a dividend" if the
reduction in the United States holder's proportionate interest
in us as a result of the purchase constitutes a "meaningful
reduction" of the United States holder's interest in us given
the United States holder's particular circumstances. Whether
the receipt of cash by a shareholder who sells shares under
the tender offer will be "not essentially equivalent to a
dividend" will depend upon the shareholder's particular facts
and circumstances. The IRS has indicated in a published
revenue ruling that even a small reduction in the percentage
interest of a shareholder whose relative stock interest in a
publicly held corporation is minimal and who exercises no
control over corporate affairs may constitute a "meaningful
reduction." United States holders should consult their tax
advisors as to the application of this test in their
particular circumstances.
Corporate Shareholder Dividend Treatment. In the case of a corporate
United States holder, to the extent that any amounts received under the tender
offer are treated as a dividend, such holder may be eligible for the
dividends-received deduction. The dividends-received deduction is subject to
limitations. In addition, any amount received by a corporate United States
holder pursuant to the tender offer that is treated as a dividend may constitute
an "extraordinary dividend" under Section 1059 of the Code. Corporate United
States holders should consult their own tax advisors as to the application of
Section 1059 of the Code to the tender offer, and to the tax consequences of
dividend treatment in their particular circumstances.
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Shareholders Whose Shares are not Purchased Under the Tender Offer.
Shareholders whose shares are not purchased under the tender offer will not
incur any tax liability as a result of the completion of the tender offer.
Backup Withholding. See Section 4 - Procedures for Tendering Shares
with respect to the application of United States federal backup withholding tax.
THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO YOU OF THE TENDER OFFER, INCLUDING THE APPLICABILITY AND EFFECT
OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE TENDER OFFER; TERMINATION; AMENDMENT.
We expressly reserve the right, in our sole discretion, at any time and
from time to time, and regardless of whether or not any of the events set forth
in Section 7 shall have occurred or shall be deemed by us to have occurred, to
extend the period of time during which the tender offer is open and thereby
delay acceptance for payment of, and payment for, any shares by giving oral or
written notice of such extension to the Depositary and making a public
announcement of such extension. We also expressly reserve the right, in our sole
discretion, to terminate the tender offer and not accept for payment or pay for
any shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for shares upon the occurrence of any of the
conditions specified in Section 7 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement of that termination or postponement. Our reservation of the right
to delay payment for shares which we have accepted for payment is limited by
Rule 13e-4(f)(5) under the Exchange Act, which requires that we must pay the
consideration offered or return the shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, we
further reserve the right, in our sole discretion, and regardless of whether any
of the events set forth in Section 7 shall have occurred or shall be deemed by
us to have occurred, to amend the tender offer in any respect, including,
without limitation, by decreasing or increasing the consideration offered in the
tender offer to holders of shares or by decreasing or increasing the number of
shares being sought in the tender offer. Amendments to the tender offer may be
made at any time and from time to time effected by public announcement, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the last previously scheduled
expiration date.
Any public announcement made under the tender offer will be
disseminated promptly to shareholders in a manner reasonably designed to inform
shareholders of such change. Without limiting the manner in which we may choose
to make a public announcement, except as required by applicable law, we have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release through PR Newswire.
If we materially change the terms of the tender offer or the
information concerning the tender offer, we will extend the tender offer to the
extent required by Rules 13e-4(d)(2), 13e-4(e)(3) and 13e-4(f)(1) under the
Exchange Act. These rules and related releases and
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interpretations of the SEC provide that the minimum period during which a tender
offer must remain open following material changes in the terms of the tender
offer or information concerning the tender offer (other than a change in price
or a change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information.
If (1) we increase or decrease the price to be paid for shares or increase or
decrease the number of shares being sought in the tender offer and, if an
increase in the number of shares being sought, that increase exceeds 2% of the
outstanding shares of our Common Stock and (2) the tender offer is scheduled to
expire at any time earlier than the tenth business day following the first
publication of notice of an increase or decrease in the manner specified in this
Section 15, the tender offer will be extended until the expiration of a ten
business day period.
16. FEES AND EXPENSES.
We have retained American Stock Transfer and Trust Co. to act as
Information Agent and to act as Depositary in connection with the tender offer.
The Information Agent may contact holders of shares by mail, telephone,
telegraph and in person and may request brokers, dealers, commercial banks,
trust companies and other nominee shareholders to forward materials relating to
the tender offer to beneficial owners. The American Stock Transfer and Trust Co.
will receive reasonable and customary compensation for its services as the
Depositary and as the Information Agent, will be reimbursed by us for specified
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the tender offer, including certain liabilities
under the federal securities laws.
No fees or commissions will be payable by us to brokers, dealers,
commercial banks or trust companies (other than fees to the Depositary and
Information Agent as described above) for soliciting tenders of shares under the
tender offer. Shareholders holding shares through brokers or banks are urged to
consult the brokers or banks to determine whether transaction costs are
applicable if shareholders tender shares through such brokers or banks and not
directly to the Depositary. We, however, upon request, will reimburse brokers,
dealers, commercial banks and trust companies for customary mailing and handling
expenses incurred by them in forwarding the tender offer and related materials
to the beneficial owners of shares held by them as a nominee or in a fiduciary
capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as our agent or the agent of the Information Agent or
Depositary for purposes of the tender offer. We will pay or cause to be paid all
stock transfer taxes, if any, on our purchase of shares except as otherwise
provided in this document and Instruction 7 in the related Letter of
Transmittal.
17. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the tender
offer is not in compliance with applicable law. If we become aware of any
jurisdiction where the making of the tender offer or the acceptance of shares is
not in compliance with applicable law, we will make a good faith effort to
comply with the applicable law. If, after such good faith effort, we cannot
comply with the applicable law, the tender offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of shares in that
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the tender offer to be made by a licensed broker or
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dealer, the tender offer shall be deemed to be made on behalf of us by one or
more registered brokers or dealers licensed under the laws of that jurisdiction.
June 1, 2001
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The Letter of Transmittal and certificates for shares and any other
required documents should be sent or delivered by each shareholder or such
shareholder's broker, dealer, commercial bank, trust company or nominee to the
Depositary at its address set forth below.
The Depositary for the tender offer is:
AMERICAN STOCK TRANSFER AND TRUST CO.
By Hand Delivery, Overnight Delivery or by Mail:
American Stock Transfer and Trust Co.
59 Maiden Lane
Plaza Level
New York, New York 10038
Facsimile Transmission: (718) 234-5001
(for eligible institutions only)
Confirm Receipt of Facsimile by Telephone Only:
(718) 921-8200 or 1-877-777-0800 (toll free)
Any questions or requests for assistance may be directed to the
Information Agent at its telephone number and address set forth below. Requests
for additional copies of this Offer to Purchase, the related Letter of
Transmittal or the Notice of Guaranteed Delivery may be directed to the
Information Agent at the telephone number and address set forth below. You may
also contact your broker, dealer, commercial bank, trust company or nominee for
assistance concerning the tender offer. To confirm delivery of shares, you are
directed to contact the Depositary.
The Information Agent for the Offer is:
AMERICAN STOCK TRANSFER AND TRUST CO.
59 Maiden Lane
Plaza Level
New York, New York 10038
CALL TOLL FREE 1-877-777-0800
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