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Exhibit (a)(1)
Offer To Purchase for Cash
All Outstanding Shares of Common Stock
of
EGREETINGS NETWORK, INC.
at
$0.85 Net Per Share
by
AMERICAN PIE ACQUISITION CORP.,
a wholly owned subsidiary of
AMERICANGREETINGS.COM, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, MARCH 12, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER (AS DEFINED HEREIN) IS CONDITIONED UPON, AMONG OTHER THINGS,
THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS
DEFINED HEREIN) THAT NUMBER OF SHARES OF COMMON STOCK OF EGREETINGS NETWORK,
INC. (THE "SHARES") THAT (TOGETHER WITH ANY SHARES THEN OWNED BY
AMERICANGREETINGS.COM, INC. OR ANY OF ITS SUBSIDIARIES) REPRESENTS AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS (ASSUMING THE
EXERCISE OF ALL OPTIONS (AS DEFINED HEREIN) THAT ARE VESTED OR WILL BECOME
VESTED UPON THE CONSUMMATION OF THE OFFER AND ALL OUTSTANDING WARRANTS (AS
DEFINED HEREIN)) ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE OFFER IS
ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE.
SEE THE INTRODUCTION AND SECTIONS 1, 13 AND 14 OF THIS OFFER TO PURCHASE.
THE BOARD OF DIRECTORS OF EGREETINGS NETWORK, INC. ("EGREETINGS") HAS
UNANIMOUSLY DETERMINED THAT EACH OF THE TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, INCLUDING THE OFFER AND THE MERGER (AS DEFINED HEREIN), IS FAIR TO
AND IN THE BEST INTERESTS OF EGREETINGS AND ITS STOCKHOLDERS, HAS APPROVED THE
OFFER AND ADOPTED THE MERGER AGREEMENT AND RECOMMENDS THAT STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
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Any stockholder desiring to tender all or a portion of its Shares should
either (1) complete and sign the appropriate Letter(s) of Transmittal (or a
manually signed facsimile thereof) in accordance with the instructions in such
Letter of Transmittal, mail or deliver such Letter(s) of Transmittal and any
other required documents to the Depositary and either deliver the certificates
for those Shares to the Depositary along with such Letter(s) of Transmittal or
tender those Shares pursuant to the procedures for book-entry transfer set forth
in Section 3 of this Offer To Purchase or (2) request its broker, dealer,
commercial bank, trust company or other nominee to effect the tender on its
behalf. Any stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact that
broker, dealer, commercial bank, trust company or other nominee if the
stockholder desires to tender such Shares.
Any stockholder who desires to tender Shares and whose certificate(s)
representing those Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis must tender those
Shares by following the procedures for guaranteed delivery set forth in Section
3 of this Offer To Purchase.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer To Purchase. Requests for additional copies of this Offer To Purchase, the
Letter of Transmittal and other related materials may be directed to the
Information Agent or to brokers, dealers, commercial banks or trust companies.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE TRANSACTION, PASSED UPON THE
MERITS OR FAIRNESS OF THE TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
February 12, 2001
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TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET........................................................ 1
INTRODUCTION.............................................................. 5
SPECIAL FACTORS........................................................... 7
THE OFFER
1. Terms of the Offer.......................................... 12
2. Acceptance for Payment and Payment for Shares............... 14
3. Procedure for Tendering Shares.............................. 16
4. Withdrawal Rights........................................... 18
5. Certain Federal Income Tax Consequences of the Offer and the
Merger...................................................... 19
6. Price Range of the Shares; Dividends on the Shares.......... 20
7. Effect of the Offer on the Market for Shares, Stock Exchange
Listing and Exchange Act Registration, and Margin
Securities.................................................. 21
8. Certain Information Concerning Egreetings................... 22
9. Certain Information Concerning American Pie and
AmericanGreetings.com....................................... 23
10. Source and Amount of Funds.................................. 24
11. The Merger Agreement; the Tender and Voting Agreement; Plans
for Egreetings; Other Matters............................... 24
12. Dividends and Distributions................................. 42
13. Certain Conditions of the Offer............................. 43
14. Certain Legal Matters and Regulatory Approvals.............. 45
15. Fees and Expenses........................................... 46
16. Miscellaneous............................................... 47
SCHEDULE I - DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN PIE ACQUISITION
CORP., AMERICANGREETINGS.COM, INC. AND AMERICAN GREETINGS
CORPORATION
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SUMMARY TERM SHEET
American Pie Acquisition Corp. is offering to purchase all of the
outstanding common stock of Egreetings Network, Inc. for $0.85 per share in
cash. The following are some of the questions you, as a stockholder of
Egreetings, may have and answers to those questions. We urge you to read
carefully the remainder of this Offer To Purchase and the Letter of Transmittal
because the information in this summary term sheet is not complete. Additional
important information is contained in the remainder of this Offer To Purchase
and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SHARES?
The offeror is American Pie Acquisition Corp. We are a Delaware corporation
formed for the purpose of making a cash tender offer for all of the outstanding
common stock of Egreetings Network, Inc. We are a wholly owned subsidiary of
AmericanGreetings.com, Inc., a Delaware corporation. As of the date of this
Offer To Purchase, we may be deemed to beneficially own the 6,841,074 shares of
Egreetings common stock (or approximately 21% of the outstanding Egreetings
shares) held by Gibson Greetings, Inc., an affiliate of ours. See the
"Introduction" and Section 9 -- "Certain Information Concerning American Pie and
AmericanGreetings.com" to this Offer To Purchase.
WHAT ARE THE CLASSES AND AMOUNTS OF SHARES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding common stock of
Egreetings. See the "Introduction" to this Offer To Purchase.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
We are offering to pay $0.85 per share, net to you, in cash.
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
If you are the record owner of your shares and you tender your shares to us
in the offer, you will not have to pay brokerage fees or similar expenses. If
you own your shares through a broker or other nominee, and your broker tenders
your shares on your behalf, your broker or nominee may charge you a fee for
doing so. You should consult your broker or nominee to determine whether any
charges will apply. See the "Introduction" to this Offer To Purchase.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
AmericanGreetings.com will provide us with approximately $28.4 million,
which we will use to purchase all shares validly tendered and not withdrawn in
the offer and to provide funding for the merger that is expected to follow,
assuming successful completion of the offer. AmericanGreetings.com anticipates
obtaining all of these funds from existing resources and internally generated
funds. In addition, American Greetings Corporation, the parent corporation of
AmericanGreetings.com, has established a $24 million line of credit for
AmericanGreetings.com to use in connection with the offer and the merger. Our
offer is not conditioned upon any financing arrangements. See Section
10 -- "Source and Amount of Funds" of this Offer To Purchase.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender shares and accept the offer because:
- the offer is being made for all outstanding shares;
- the offer is solely for cash;
- the offer is not subject to any financing condition; and
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- if we are successful with our offer, we will acquire all remaining shares
for the same cash price in our merger with and into Egreetings.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Monday,
March 12, 2001, to decide whether to tender your shares into the offer. If you
cannot deliver everything that is required in order to make a valid tender by
that time, you may be able to use a guaranteed delivery procedure, which is
described later in this Offer To Purchase. See Section 1 -- "Terms of the Offer"
and Section 3 "Procedure for Tendering Shares" of this Offer To Purchase.
CAN THE OFFER BE EXTENDED AND, IF IT IS EXTENDED, HOW WILL I BE NOTIFIED?
We may, at our discretion or at the request of Egreetings, extend the offer
at any time before 9:00 a.m., New York City time, on the next business day after
the previously scheduled expiration date up to an additional five business days
or such longer period as we and Egreetings may mutually agree. We may also elect
to provide a "subsequent offering period" for the offer. A subsequent offering
period, if we include one, will be an additional period of time beginning after
we have purchased shares tendered during the offer during which stockholders may
tender their shares and receive the offer consideration. If we decide to provide
a subsequent offering period we will make a public announcement of our decision
at least five business days in advance. We do not currently intend to include a
subsequent offering period, although we reserve the right to do so. If we extend
the offer, we will make a public announcement of the extension by issuing a
release to the Dow Jones News Service. See Section 1 -- "Terms of the Offer" of
this Offer To Purchase.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
Our obligation to accept for payment, purchase or pay for any shares
tendered depends upon a number of conditions, including:
- There must be validly tendered and not properly withdrawn prior to the
expiration of the Offer a number of common shares of Egreetings that,
together with any common shares then owned by AmericanGreetings.com or
any of its subsidiaries, represents at least a majority of the common
shares of Egreetings on a fully diluted basis (i.e., as though all
options (that are vested or will become vested upon consummation of the
offer) and outstanding warrants or other shares convertible or
exercisable or exchangeable for common shares had been so converted,
exercised or exchanged).
- Increases in certain liabilities of Egreetings, less any increase in its
net tangible assets, may not exceed $1 million.
The Offer is also subject to a number of other conditions. For a
description of those conditions and a full description of the conditions listed
above, see Section 13 -- "Certain Conditions of the Offer" of this Offer To
Purchase.
HOW DO I TENDER MY SHARES?
If you wish to accept our offer, this is what you must do:
- If you are a record holder and have your stock certificate, you must
complete and sign the enclosed Letter of Transmittal and send it with
your stock certificate to the depositary for the offer or follow the
procedures described in the offer for book-entry transfer. These
materials must reach the depositary before the offer expires. Detailed
instructions are contained in the Letter of Transmittal and Section 3 --
"Procedure for Tendering Shares" of this Offer To Purchase.
- If you are a record holder but your stock certificate is not available or
you cannot deliver it to the depositary before the offer expires, you may
be able to tender your shares using the enclosed Notice of Guaranteed
Delivery.
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- If you hold your shares through a broker or bank, you should contact your
broker or bank and give instructions that your shares be tendered.
See Section 3 -- "Procedure for Tendering Shares" of this Offer To Purchase.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not agreed to accept your shares for payment by April 12, 2001, you can
withdraw them at any time thereafter as long as we have not yet accepted shares
for payment. This right to withdraw will not apply to any subsequent offering
period discussed in Section 1, if one is included. See Section 4 -- "Withdrawal
Rights" of this Offer To Purchase.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. If you tendered your shares by
giving instructions to a broker or nominee, you must instruct your broker or
nominee to arrange for the withdrawal of your shares. See Section
4 -- "Withdrawal Rights" of this Offer To Purchase.
WHAT DOES THE EGREETINGS BOARD OF DIRECTORS THINK OF THE OFFER?
We are making the offer pursuant to an agreement and plan of merger among
us, AmericanGreetings.com and Egreetings. The board of directors of Egreetings
unanimously approved the merger agreement, our tender offer and our proposed
merger with and into Egreetings. Following the proposed merger, Egreetings will
be the surviving corporation and a direct wholly owned subsidiary of
AmericanGreetings.com. The board of directors of Egreetings has determined that
the terms of the offer and the merger are fair to, and in the best interests of,
the stockholders of Egreetings and recommends that you tender your shares in the
Offer. See the "Introduction" to this Offer To Purchase.
IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL
EGREETINGS CONTINUE AS A PUBLIC COMPANY?
No. If the merger takes place, Egreetings will no longer be publicly owned.
Even if the merger does not take place, if we purchase all of the tendered
shares, there may be so few remaining stockholders and publicly held shares
that:
- Egreetings common stock will no longer meet the published guidelines of
Nasdaq for continued listing and may be taken off Nasdaq;
- there may not be a public trading market for Egreetings common stock; and
- Egreetings may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with the
Securities and Exchange Commission's rules relating to publicly held
companies.
See Section 7 -- "Effect of the Offer on the Market for Shares; Stock
Exchange Listing and Exchange Act Registration, and Margin Securities" of this
Offer To Purchase.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL EGREETINGS SHARES ARE NOT
TENDERED IN THE OFFER?
If we accept for payment and pay for at least a majority of the outstanding
shares of Egreetings, we will be merged with and into Egreetings, and all
remaining stockholders of Egreetings, other than those who assert and perfect
appraisal rights under Delaware law, will receive $0.85 per share in cash. See
the "Introduction" to this Offer To Purchase.
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IF I DECIDE NOT TO TENDER BUT THE TENDER OFFER IS SUCCESSFUL, HOW WILL THE OFFER
AFFECT MY SHARES?
If the merger described above takes place, stockholders not tendering in
the offer will receive the same amount of cash per security that they would have
received had they tendered their shares in the offer (subject to their right to
pursue appraisal under Delaware law). Therefore, if the merger takes place, the
only difference to you between tendering your shares and not tendering your
shares is that you will be paid earlier if you tender your shares. However, if
the merger does not take place, the number of stockholders and shares of
Egreetings which are still in the hands of the public may be so small that there
no longer will be an active public trading market (or, possibly, there may not
be any public trading market) for Egreetings shares. Also, as described above,
Egreetings may cease making filings with the Securities and Exchange Commission
or otherwise being required to comply with the Securities and Exchange
Commission's rules relating to publicly held companies. See the "Introduction"
and Section 7 -- "Effect of the Offer on the Market for Shares, Stock Exchange
Listing and Exchange Act Registration, and Margin Securities" of this Offer To
Purchase.
WHAT IS THE MARKET VALUE OF MY EGREETINGS SHARES AS OF A RECENT DATE?
On February 5, 2001, the last trading day before we announced the tender
offer and the possible subsequent merger, the last sale price of Egreetings
common stock reported on the Nasdaq National Market was $0.63 per share. On
February 9, 2001, the last full trading day prior to the date of this Offer To
Purchase, the last reported closing sales price of the Shares was $0.84 per
share. We advise you to obtain a recent quotation for Egreetings common stock in
deciding whether to tender your shares. See Section 6 -- "Price Range of the
Shares; Dividends on the Shares" of this Offer To Purchase.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call:
- Corporate Investor Communications, Inc. at (888)-353-1712 (toll free)
Corporate Investor Communications, Inc. is acting as the information agent
for our tender offer. See the back cover of this Offer To Purchase.
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To the Holders of Common Stock of
Egreetings Network, Inc.
INTRODUCTION
American Pie Acquisition Corp. ("American Pie"), a Delaware corporation and
a wholly owned subsidiary of AmericanGreetings.com, a Delaware corporation
("AmericanGreetings.com"), hereby offers to purchase all outstanding shares of
common stock (the "Shares") of Egreetings Network, Inc. ("Egreetings") at a
purchase price of $0.85 per Share, net to the seller in cash, without interest
(the "Per Share Amount"), on the terms and subject to the conditions set forth
in this Offer To Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer").
Tendering stockholders who have Shares registered in their own name and who
tender directly to the Depositary will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 to the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Stockholders who hold their Shares through their broker or bank should consult
with such institution as to whether there are any fees applicable to a tender of
Shares. American Pie will pay all charges and expenses of Wells Fargo Shareowner
Services, as the depositary (the "Depositary"), and Corporate Investor
Communications, Inc. (the "Information Agent"), in connection with the Offer.
See Section 15.
THE BOARD OF DIRECTORS OF EGREETINGS (THE "EGREETINGS BOARD") HAS
UNANIMOUSLY DETERMINED THAT EACH OF THE TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, INCLUDING THE OFFER AND THE MERGER (AS SUCH TERMS ARE DEFINED
HEREIN), IS FAIR TO AND IN THE BEST INTERESTS OF EGREETINGS AND ITS
STOCKHOLDERS, HAS APPROVED THE OFFER AND ADOPTED THE MERGER AGREEMENT AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
In connection with the execution of the Merger Agreement,
AmericanGreetings.com, American Pie and certain stockholders of Egreetings, who
beneficially own approximately 27% of the outstanding Shares, entered into a
Tender and Voting Agreement ("Tender and Voting Agreement") pursuant to which
such stockholders have agreed, among other things, to tender their Shares into
the Offer. See Section 10.
Egreetings has advised AmericanGreetings.com that Credit Suisse First
Boston Corporation, Egreetings' financial advisor, on February 4, 2001, at a
meeting of the Egreetings Board to evaluate the Offer and the Merger, rendered
to the Egreetings Board an oral opinion, which was confirmed by delivery of a
written opinion dated February 5, 2001, to the effect that, as of such date and
based on and subject to certain matters stated in such opinion, the $0.85 per
Share cash consideration to be received in the Offer and the Merger by
stockholders (other than AmericanGreetings.com and its affiliates) is fair, from
a financial point of view, to such stockholders. A copy of Credit Suisse First
Boston Corporation's written opinion is appended to Egreetings' Solicitation/
Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") filed with the
Securities and Exchange Commission (the "Commission") in connection with the
Offer, a copy of which is being furnished to stockholders concurrently with this
Offer To Purchase. Stockholders are urged to carefully read the opinion in its
entirety for a description of the assumptions made, matters considered and
limitations of the review undertaken by Credit Suisse First Boston Corporation.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) A NUMBER OF SHARES THAT (TOGETHER WITH ANY SHARES THEN OWNED BY
AMERICANGREETINGS.COM OR ANY OF ITS SUBSIDIARIES) REPRESENTS AT LEAST A MAJORITY
OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS (ASSUMING THE EXERCISE OF
OPTIONS THAT ARE VESTED OR WILL BECOME VESTED UPON THE CONSUMMATION OF THE OFFER
AND ALL OUTSTANDING WARRANTS) ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION").
THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE SECTIONS 1, 13 AND 14.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 5, 2001, (the "Merger Agreement"), among AmericanGreetings.com,
American Pie and Egreetings. The Merger Agreement provides, among other things,
for the commencement of the Offer by American Pie and further provides that
after the purchase of Shares pursuant to the Offer, subject to the satisfaction
or waiver of certain conditions, and
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assuming the Minimum Condition has been met, American Pie will be merged with
and into Egreetings (the "Merger"), with Egreetings surviving the Merger as a
wholly owned subsidiary of AmericanGreetings.com (the "Surviving Corporation").
In the Merger, each Share (excluding Shares owned by stockholders who have
properly exercised their dissenters' rights under Delaware law, Shares held in
the treasury of Egreetings and Shares owned by AmericanGreetings.com and its
subsidiaries) issued and outstanding immediately prior to the effective time of
the Merger (the "Effective Time") will be converted at the Effective Time into
the right to receive the Per Share Amount (or any greater amount paid for Shares
pursuant to the Offer), in cash payable to the holder thereof, without interest,
prorated for fractional Shares and less any required withholding taxes and, in
certain circumstances, stock transfer taxes (the "Merger Consideration").
Egreetings has informed American Pie that, as of January 29, 2001, there
were 33,007,900 Shares issued and outstanding, and up to 2,817,720 Shares
reserved for issuance upon the exercise of outstanding stock options ("Options")
granted under Egreetings' equity plans (collectively, the "Stock Option Plans")
that have vested or will have vested upon completion of the Offer, and 444,304
Shares reserved for issuance upon exercise of currently outstanding warrants
("Warrants"). As a result, as of such date, the Minimum Condition would be
satisfied if at least 18,134,963 Shares are validly tendered and not properly
withdrawn prior to the Expiration Date (as hereinafter defined).
As of the date of this Offer To Purchase, American Pie may be deemed to
beneficially own the 6,841,074 Shares held by Gibson Greetings, Inc., a Delaware
corporation and an affiliate of American Pie ("Gibson"). Gibson has informed
American Pie that it intends to tender its Shares into the Offer. In addition,
pursuant to the Tender and Voting Agreement, Stewart Alsop, Brendon Kim, Peter
Nieh and Lee Rosenberg, all directors of Egreetings, and their affiliated
investment funds, Andrew Moely, a director and Chief Executive Officer and
President of Egreetings, and Frederick Campbell and Anthony Levitan have agreed
to tender a total of 9,064,971 Shares into the Offer. Consequently, the Minimum
Condition would be satisfied if another 2,228,917 Shares are validly tendered
and not properly withdrawn prior to the Expiration Date.
Egreetings has been advised, and has informed American Pie, that each of
its directors and executive officers intends to tender pursuant to the Offer all
Shares owned of record and beneficially by him or her, except to the extent that
such tender would require disgorgement of profits from any such tender to
Egreetings under Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act").
The completion of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required, the adoption of the Merger
Agreement by the requisite vote of Egreetings' stockholders. Egreetings'
Certificate of Incorporation and Delaware law require the affirmative vote of
holders of a majority of the outstanding Shares to adopt the Merger Agreement.
As a result, if the Minimum Condition and the other conditions to the Offer are
satisfied and the Offer is consummated, American Pie will own a sufficient
number of Shares to ensure that the Merger Agreement will be adopted. Under
Delaware law, if after consummation of the Offer, American Pie owns at least 90%
of the Shares then outstanding, American Pie will be able to cause the Merger to
occur without a vote of Egreetings' stockholders. If, however, after
consummation of the Offer, American Pie owns less than 90% of the then
outstanding Shares, a vote of Egreetings' stockholders will be required under
Delaware law to adopt the Merger Agreement, and a significantly longer period of
time will be required to effect the Merger. See Section 11.
No dissenters' rights are available in connection with the Offer.
Stockholders may exercise dissenters' rights, however, in connection with the
Merger regardless of whether the Merger is consummated with or without a vote of
the stockholders.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of Shares pursuant to the Offer and the
conversion of Shares into the Merger Consideration pursuant to the Merger are
described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
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SPECIAL FACTORS
BACKGROUND OF THE OFFER; CONTACTS WITH EGREETINGS
On November 3, 1999, American Greetings and Gibson publicly announced that
they had entered into an agreement for American Greetings to acquire Gibson,
which then had a beneficial ownership of approximately 27.8% of Egreetings. On
November 5, 1999, Morry Weiss, a director of AmericanGreetings.com and Chief
Executive Officer of American Greetings, contacted Gordon Tucker, then Chief
Executive Officer of Egreetings, to commence discussions regarding a possible
combination of the two companies.
On November 9, 1999, representatives of both parties met at the offices of
Egreetings to discuss combination possibilities. James C. Spira, a director of
AmericanGreetings.com, John M. Klipfell, then Chief Executive Officer of
AmericanGreetings.com and Josef A. Mandelbaum, then Senior Vice President Sales,
Business Development and Strategic Planning of AmericanGreetings.com represented
AmericanGreetings.com and Mr. Tucker, Andrew J. Moley, then Chief Financial
Officer of Egreetings, and three directors of Egreetings: Stewart Alsop, Charles
A. Holloway and Brendon S. Kim, represented Egreetings. AmericanGreetings.com
and Egreetings entered into a confidentiality agreement on November 16, 1999.
On November 26, 1999, following further discussions involving Merrill Lynch
as financial advisor to AmericanGreetings.com and Credit Suisse First Boston
Corporation as financial advisor to Egreetings, Merrill Lynch on behalf of
AmericanGreetings.com proposed a transaction whereby Egreetings stockholders
would receive shares of a class of AmericanGreetings.com common stock in
exchange for their then outstanding Egreetings common stock. Thereafter the
parties had further discussions on the terms of the proposed transaction,
including, among other things, the relative equity interests of the parties or
control of the combined company. Rather than pursue additional negotiations, on
November 29, 1999, Egreetings determined to proceed with its then pending
initial public offering. That offering was completed on December 16, 1999.
On January 12, 2000 Mr. Spira contacted Mr. Alsop to seek a resumption of
combination discussions. From January 12, 2000 through March 2000, executives
and financial advisors of the Egreetings and AmericanGreetings.com continued
discussions regarding possible transaction structures and engaged in discussions
with an online media company about its participation in such a transaction.
Through March 2000, the parties' respective financial advisors continued to be
in contact regarding possible transaction structures, financial due diligence
and possible involvement of the online media company.
On March 29, 2000, representatives of AmericanGreetings.com, including Mr.
Weiss, Mr. Spira, and Mr. Mandelbaum, then Chief Executive Officer of
AmericanGreetings.com, and Maureen M. Spooner, Chief Financial Officer of
AmericanGreetings.com, met with representatives of Egreetings, including Mr.
Alsop, Lee Rosenberg, a director of Egreetings, Mr. Tucker and Mr. Moley and a
representative of the online media company at Egreetings' offices in San
Francisco.
On April 3, 2000, representatives of AmericanGreetings.com, including
Messrs. Weiss and Spira, and representatives of Merrill Lynch, met with
representatives of Egreetings, including Messrs. Alsop and Rosenberg, and
representatives of Credit Suisse First Boston Corporation in Chicago to continue
the discussion regarding a potential transaction between AmericanGreetings.com
and Egreetings.
During the month of April and through May 3, 2000, Egreetings and
AmericanGreetings.com continued discussion of the terms of the proposed
transaction, terms of restrictions on American Greetings with respect to control
of the combined entity and due diligence. On May 4, 2000, AmericanGreetings.com
determined not to continue discussions on the basis of the terms then under
consideration.
On June 2, 2000, Mr. Mandelbaum contacted Mr. Moley to resume discussions
regarding a potential transaction between Egreetings and AmericanGreetings.com
and to discuss potential changes to the transaction structure and the previously
proposed control restrictions on American Greetings.
On July 17, 2000, Mr. Mandelbaum contacted Mr. Alsop while both were
attending an industry conference in the San Francisco area and reiterated
AmericanGreetings.com interest in a potential transaction.
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In August 2000, Egreetings met with representatives of its financial
advisor and requested that they continue a search for potential strategic
partners for Egreetings. During the period from August 2000 through October
2000, members of senior management held preliminary discussions and meetings
with potential strategic partners.
On October 24, 2000, at a meeting of the Board of Directors of Egreetings,
that Board confirmed its decision to continue to pursue a strategic transaction.
During November 2000 and early December 2000, members of senior management of
Egreetings began discussions with additional potential strategic partners and
received a proposed term sheet from one of them (the "Potential Acquiror"). In
addition, in early November and again in early December, Messrs. Mandelbaum and
Moley held additional discussions regarding potential transaction structures
between Egreetings and AmericanGreetings.com, including a potential cash
acquisition by AmericanGreetings.com.
On December 12, 2000, Mr. Spira and Mr. Rosenberg met to discuss a proposed
transaction based upon non-cash terms discussed by Messrs. Mandelbaum and Moley.
On December 14, 2000, Mr. Mandelbaum sent an e-mail to Messrs. Alsop, Kim, Neih
and Rosenberg, all directors of Egreetings, reiterating AmericanGreetings.com
current non-cash proposal.
On December 15, 2000, at a meeting of the Egreetings Board, the Egreetings
Board considered four potential transactions, including the most current
proposal from AmericanGreetings.com. The Egreetings Board authorized management
to proceed with further negotiations based upon the term sheet from the
Potential Acquiror.
Through early January, Egreetings and the Potential Acquiror held numerous
meetings to discuss the transaction and to conduct due diligence. In early
January, the Potential Acquiror terminated discussions with Egreetings.
In early January, 2001, Mr. Alsop had a phone conversation with Mark McNay
from William Blair & Company, AmericanGreetings.com's financial advisor,
regarding a potential transaction structure that would be acceptable to
Egreetings. On January 22, 2001, Mr. Moley, then Chief Executive Officer and
President of Egreetings, had a further conversation with Mr. McNay during which
they agreed to continue further discussions. Mr. McNay conveyed to Mr.
Mandelbaum that Egreetings was interested in pursuing further negotiations of a
combination.
On January 24, 2001, representatives of AmericanGreetings.com, including
Mr. Mandelbaum, Michael Waxman-Lenz, Vice President of Business Development, and
Tammy Martin, General Counsel, met with Mr. Moley and Scott Neamand, Chief
Financial Officer of Egreetings at the San Francisco office of William Blair &
Company to discuss the potential combination of the companies. Ms. Spooner
participated telephonically. Representatives of William Blair & Company were
also present at the meeting. The representatives of Egreetings provided certain
due diligence materials to representatives of AmericanGreetings.com.
In the next few days, Messrs. Mandelbaum and Moley had a telephone
conversation in which they agreed to the basic terms of the deal, subject to
continuing due diligence and the negotiation of mutually acceptable definitive
agreements.
Negotiation of the Merger Agreement commenced on January 27, 2001, when
AmericanGreetings.com's counsel furnished Egreetings and its counsel with a
draft merger agreement and a draft tender and voting agreement. Between January
27 and February 5, 2001, representatives of AmericanGreetings.com and its
outside legal counsel negotiated the final terms of the Merger Agreement and the
Tender and Voting Agreement with representatives of Egreetings and its outside
legal counsel.
On January 30, 2001, at a telephonic special meeting of the Egreetings
Board, the Egreetings Board reviewed the status of the proposed transaction with
AmericanGreetings.com and the proposed deal terms and the Egreetings Board
authorized management to continue negotiations.
At a meeting held on February 2, 2001, the Board of Directors of
AmericanGreetings.com, unanimously approved the Merger Agreement, contingent
upon final negotiation and execution of definitive documentation.
In special meetings on February 2 and 4, 2001, the Egreetings Board,
reviewed the status of negotiations with AmericanGreetings.com and the terms of
the transaction and consulted with financial and legal advisors. At the February
4 meeting, Credit Suisse First Boston Corporation rendered to the Egreetings
Board its oral opinion
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(subsequently confirmed by delivery of a written opinion dated February 5, 2001)
to the effect that, as of the date of such opinion and based on and subject to
certain matters stated in its opinion, the $0.85 per Share cash consideration to
be received in the Offer and the Merger by the holders of Shares was fair, from
a financial point of view, to such holders (other than AmericanGreetings.com and
its affiliates). The Egreetings Board unanimously approved the Merger Agreement
and determined to recommend to Egreetings' stockholders that they accept the
Offer, tender their Shares in the Offer and, if required by Delaware law or
Egreetings' Certificate of Incorporation or Bylaws, vote to adopt the Merger
Agreement.
The parties concluded negotiations on February 5, 2001, and the Merger
Agreement was executed after the close of business on that day. The parties
publicly announced the transaction shortly thereafter on February 5, 2001.
The Offer was formally commenced on the date of this Offer To Purchase.
FAIRNESS OF THE OFFER AND THE MERGER
AmericanGreetings.com and American Pie have concluded that the
consideration to be received by the unaffiliated holders of Shares pursuant to
the Offer and the Merger is fair to such holders. In reaching their decision,
AmericanGreetings.com and American Pie consulted with AmericanGreetings.com's
management, financial advisors and legal counsel. Set forth below are the
material factors that AmericanGreetings.com and American Pie considered in
reaching their determination:
- the factors considered by, the analysis and conclusions of, and the
unanimous approval by, the Board of Directors of Egreetings set forth in
the Schedule 14D-9, including the opinion rendered by Credit Suisse First
Boston Corporation, which factors, analyses and conclusions, as set forth
therein, are incorporated by reference herein;
- that the Per Share Amount represents a 35% premium to the per Share
closing price on February 5, 2001, the last trading day before public
announcement of the Offer, and a 70% premium to the per Share closing
price on February 2, 2001, the last trading day prior to
AmericanGreetings.com's and American Pie's respective board meetings at
which the boards approved the Merger Agreement;
- that the Per Share Amount represents a 94% premium to the highest per
Share closing price for January 2001 and a 202% premium to the highest
per Share closing price for the period from November 13, 2000 to December
31, 2000;
- that the Shares have been trading significantly below the Per Share
Amount for several months prior to announcement of the Offer;
- that the National Association of Securities Dealers, Inc. had threatened
to delist the Shares from the Nasdaq National Market;
- that AmericanGreetings.com and American Pie believe that the Per Share
Amount is greater than the liquidation value of Egreetings;
- that the consideration to be received by Egreetings, stockholders in the
Offer and the Merger will consist entirely of cash;
- that Delaware law entitles the holders of Shares that do not tender their
Shares into the Offer to appraisal rights if the Merger is completed;
- that Egreetings had been involved in discussions with several third
parties concerning an acquisition of Egreetings or its assets (although
AmericanGreetings.com and American Pie are not aware that any firm offers
were made), but that Egreetings had not been able to arrive at an
agreement with such parties;
- that the financial and other terms of the Offer and the Merger, including
without limitation, the terms of the Merger Agreement, should not unduly
discourage third parties from making bona fide proposals subsequent to
the signing of the Merger Agreement and, if any of these proposals were
made, the Egreetings Board, in the exercise of its fiduciary duties and
in accordance with the Merger Agreement,
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could authorize Egreetings to furnish information and negotiate with, and
subject to payment of a break-up fee, enter into a transaction with
another party (as described in Section 11);
- that the terms of the Merger Agreement were the result of arm's-length
negotiations between Egreetings and its advisors and
AmericanGreetings.com and its advisors; and
- that during the negotiation of the Merger Agreement, the interests of the
unaffiliated stockholders of Egreetings were represented by the
Egreetings Board and Egreetings' independent legal and financial advisors
and the interests of AmericanGreetings.com and American Pie were
represented by their legal and financial advisors and such parties had
different economic interests.
AmericanGreetings.com and American Pie did not consider the going concern
value of Egreetings because AmericanGreetings.com and American Pie believed that
Egreetings would liquidate if an agreement between the parties could not be
reached. AmericanGreetings.com and American Pie also did not consider the net
book value of Egreetings because they believed the assets could not be sold for
their net book value in a liquidation.
In reaching their conclusion, AmericanGreetings.com and American Pie have
adopted the analysis of the factors referred to in the Schedule 14D-9 as having
been taken into account by the Board of Directors of Egreetings.
AmericanGreetings.com and American Pie did not find it practicable to, and did
not, quantify or otherwise attach relative weights to the foregoing factors or
determine that any factor was of particular importance independent of the
analysis by the Egreetings Board in reaching its conclusion as to fairness.
Rather AmericanGreetings.com and American Pie viewed its position as being based
on the totality of the information presented to and considered by it. On
balance, however, AmericanGreetings.com and American Pie viewed the factors in
bullets one through four, six and nine through twelve as favorable to its
decision, the matters set forth in bullets five, seven and eight as influential,
and none of the factors as unfavorable.
The Offer is conditioned upon, among other things, there being validly
tendered prior to the Expiration Date and not properly withdrawn a number of
Shares that (together with any Shares then owned by AmericanGreetings.com or any
of its subsidiaries) represents at least a majority of Shares outstanding on a
fully diluted basis (assuming the exercise of all Options that are vested or
will become vested upon the consummation of the Offer and all outstanding
Warrants). Pursuant to the Tender and Voting Agreement, certain stockholders
have agreed to tender all of the Shares they beneficially own (approximately 27%
of the outstanding Shares in the aggregate) into the Offer within 15 business
days of the date hereof. If the Minimum Condition is satisfied, American Pie
will own enough Shares to approve the Merger without the vote of any other
stockholder of Egreetings. Thus, the transactions contemplated by the Merger
Agreement, including the Offer and the Merger, are not structured to require the
approval of a least a majority of the unaffiliated stockholders of Egreetings.
AmericanGreetings.com and American Pie have been informed by Egreetings
that (i) the Board of Directors of Egreetings did not consider it necessary to
retain an unaffiliated representative to act solely on behalf of the
unaffiliated stockholders of Egreetings for the purpose of negotiating the terms
of the Merger Agreement and (ii) the Offer and the Merger were approved by all
of the directors of Egreetings who were not employees of Egreetings.
AmericanGreetings.com and American Pie have not received, nor sought to
obtain, any report, opinion or appraisal from an outside party, including
without limitation, an investment banker's opinion, relating to the
consideration or fairness of the consideration offered to the unaffiliated
stockholders of Egreetings in the Offer and the Merger or the fairness of the
Offer and the Merger to Egreetings, AmericanGreetings.com, American Pie or any
unaffiliated stockholders of Egreetings.
PURPOSE AND STRUCTURE OF THE TRANSACTION; EFFECTS OF THE TRANSACTION
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, Egreetings. Following completion of the Offer,
AmericanGreetings.com intends to acquire any remaining equity interest in
Egreetings not then owned by AmericanGreetings.com or American Pie by
consummating the Merger. If American Pie acquires at least 90% of the
outstanding Shares through the Offer, AmericanGreetings.com intends to cause
American Pie to consummate the Merger through a short-form merger under Delaware
law without the vote of any other stockholder. In any event, American Pie
intends, should it purchase Shares pursuant to the
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Offer, to cause the Merger to occur (subject to satisfaction or waiver of the
conditions contained in the Merger Agreement).
The acquisition of the entire equity interest in Egreetings has been
structured as a cash tender offer followed by a cash merger in order to provide
a prompt and orderly transfer of ownership of Egreetings from the public
stockholders to AmericanGreetings.com and to provide cash to the holders of
Shares. Following the Merger, the interest of AmericanGreetings.com in
Egreetings' net book value and net income will be 100%. AmericanGreetings.com,
as the sole stockholder of Egreetings, will thereafter benefit from any
increases in the value of Egreetings and also bear the risk of any decreases in
the value of Egreetings' operations. Conversely, following the Offer and the
Merger, persons who were stockholders of Egreetings immediately prior to the
Offer and the Merger will no longer have the opportunity to continue their
interests in Egreetings as an ongoing corporation and therefore will not share
in its future earnings and potential growth.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of holders of Shares
could adversely affect the liquidity and market value of the remaining Shares
held by the public and have other consequences with respect to Nasdaq quotation,
registration under the Exchange Act and availability of margin credit. See
Section 7. For a discussion of certain tax consequences related to the Offer,
see Section 5.
INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION
Certain members of the Egreetings Board and Egreetings' management may be
deemed to have certain interests in the Merger that are in addition to their
interests as stockholders of Egreetings generally. Egreetings has informed
AmericanGreetings.com that the Egreetings Board was aware of and discussed these
interests in connection with its consideration and approval of the Merger
Agreement. In considering the recommendation of the Egreetings Board with
respect to the Offer and the Merger, the stockholders of Egreetings should be
aware of these interests which may present actual or potential conflicts of
interest.
Pursuant to the Merger Agreement, Egreetings has agreed to take all
actions necessary to provide that immediately prior to the Effective Time each
of the following options or rights shall be exercisable by such option holder or
right holder:
- each vested stock option that is then outstanding under Egreetings'
1996 Stock Option Plan;
- each vested or unvested option that is then outstanding under
Egreetings' 1999 Equity Incentive Plan and 1999 Non-Employee
Directors' Stock Option Plan and that is held by an option holder
whose continuous service with Egreetings has not been terminated;
and
- each right to purchase Shares that is then outstanding under
Egreetings' 1999 Employee Stock Purchase Plan.
Egreetings has also agreed to use its reasonable best efforts to provide
that, immediately prior to the Effective Time, each then outstanding warrant to
purchase Shares (the "Warrants") shall be acquired by Egreetings for
cancellation for consideration equal to the product of the excess, if any, of
the Per Share Amount over the exercise price and the number of Shares subject to
the Warrants. See Section 11.
Other than Lee Rosenberg, no director or officer of Egreetings will receive
any payments as a result of these actions because the exercise price of the
Options and Warrants held by such director or officer exceeds the Per Share
Amount. Lee Rosenberg, an outside director of Egreetings, has vested options to
purchase a total of 18,000 Shares at an exercise price of $0.62 per Share.
Pursuant to agreements in place between Egreetings and its officers, as a
result of the Offer and the Merger, the 12 officers of Egreetings will receive
aggregate payments of up to $1,195,831, which includes an aggregate maximum
payment of $250,000 to Andrew Moley, $185,000 to Scott Neamand, $200,000 to
Sarah Anderson and $185,000 to Nancy Levin, the executive officers of
Egreetings. The description of these payments contained in the Schedule 14D-9
under the heading "Agreements with Executive Officers," is incorporated herein
by reference.
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Pursuant to the Merger Agreement, AmericanGreetings.com has agreed to cause
the Surviving Corporation to indemnify each director, officer, employee,
fiduciary or agent of Egreetings against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement arising out of any matter existing or
occurring at or prior to the Effective Time to the fullest extent permitted by
applicable law. AmericanGreetings.com has also agreed to cause the Surviving
Corporation to maintain policies of directors' and officers' liability insurance
equivalent to the current policies of Egreetings, subject to certain
limitations, for six years after the Effective Time.
THE OFFER
1. TERMS OF THE OFFER
On the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), American Pie will accept for payment (and thereby purchase) all
Shares that are validly tendered and not withdrawn in accordance with Section 4
prior to the Expiration Date. As used in the Offer, the term "Expiration Date"
means 12:00 midnight, New York City time, on Monday, March 12, 2001, unless and
until, in accordance with the terms of the Offer and the Merger Agreement, the
period of time during which the Offer is open is extended, in which event the
term "Expiration Date" means the latest time and date on which the Offer, as so
extended, expires.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition. See Section 13. Subject to the terms of the Merger Agreement,
without the prior written consent of Egreetings, American Pie will not, and
AmericanGreetings.com will cause American Pie not to:
- Decrease or change the form of the Per Share Amount;
- Decrease the number of Shares sought in the Offer;
- Amend or waive the Minimum Condition or impose conditions other than the
Offer Conditions set forth in Section 14 (the "Offer Conditions");
- Extend the Expiration Date of the Offer (which will initially be 20
business days following the commencement of the Offer) except (a) as
required by law and (b) that, in the event that any condition to the
Offer is not satisfied or waived at the time that the Expiration Date
would otherwise occur, (1) American Pie may, in its discretion, or shall,
at the request of Egreetings, extend the Expiration Date for an aggregate
of five additional business days (or such longer time as agreed to by
Egreetings and AmericanGreetings.com) to the extent necessary to permit
such condition to be satisfied and (2) American Pie may, with the consent
of Egreetings, extend the Expiration Date for such additional period as
they may determine to be appropriate to permit such condition to be
satisfied; or
- Amend any term of the Offer in any manner materially adverse to holders
of Shares (including without limitation to result in any extension which
would be inconsistent with the preceding provisions of this sentence).
Notwithstanding the foregoing, subject to applicable legal requirements,
AmericanGreetings.com may cause American Pie to waive any Offer Condition, other
than the Minimum Condition, in AmericanGreetings.com's sole discretion and the
Offer may be extended in connection with an increase in the consideration to be
paid pursuant to the Offer so as to comply with applicable rules and regulations
of the Commission. Except as set forth above and subject to applicable legal
requirements, American Pie may amend the Offer or waive any Offer Conditions in
its sole discretion. Assuming the prior satisfaction or waiver of the Offer
Conditions, AmericanGreetings.com will cause American Pie to accept for payment,
and pay for, in accordance with the terms of the Offer, all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
the Expiration Date.
Subject to the terms of the Merger Agreement and the rights of tendering
stockholders to withdraw their Shares, American Pie will retain all tendered
Shares until the Expiration Date.
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Subject to the applicable regulations of the Commission and the terms of
the Merger Agreement as described in the second preceding paragraph, American
Pie also expressly reserves the right, in its sole discretion, at any time or
from time to time, to:
- Delay acceptance for payment of, or regardless of whether such Shares
were theretofore accepted for payment, payment for, such Shares pending
receipt of any regulatory or governmental approvals specified in Section
14;
- Terminate the Offer (whether or not any Shares have theretofore been
accepted for payment) if any condition referred to in Section 13 has not
been satisfied prior to the Expiration Date or upon the occurrence of any
event specified in Section 13;
- Waive any condition (except, without the prior written consent of
Egreetings, the Minimum Condition); or
- Except as set forth in the Merger Agreement, otherwise amend the Offer in
any respect, in each case, by giving oral or written notice of such
termination, waiver or amendment to the Depositary.
The rights reserved by American Pie in the immediately preceding paragraph
are in addition to American Pie's rights described in Section 13. Any extension,
termination or amendment of the Offer will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which American Pie may choose to make any public
announcement, subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Exchange Act, which require that material changes be promptly
disseminated to holders of Shares), American Pie will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to the Dow Jones News Service.
If American Pie makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, American Pie will extend the Offer and
disseminate additional tender offer materials to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the materiality
of the changes. In the Commission's view, an offer should remain open for a
minimum of five business days from the date the material change is first
published, sent or given to stockholders, and, if material changes are made with
respect to information that approaches the significance of price and the
percentage of securities sought, a minimum of ten business days may be required
to allow for adequate dissemination and investor response. The requirement to
extend the Offer will not apply to the extent that the number of business days
remaining between the occurrence of the change and the then-scheduled Expiration
Date equals or exceeds the minimum extension period that would be required
because of such amendment. For purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
If American Pie extends the Offer, is delayed in its purchase of or payment
for Shares (whether before or after its acceptance for payment of Shares) or is
unable to purchase or pay for Shares for any reason, then, without prejudice to
the rights of American Pie under the Offer, the Depositary may retain tendered
Shares on behalf of American Pie and such Shares may not be withdrawn, except to
the extent that tendering stockholders are entitled to withdrawal rights as set
forth in Section 4 of this Offer To Purchase. The ability of American Pie to
delay the payment for Shares that American Pie has accepted for payment is
limited, however, by Rule 14e-1(c) under the Exchange Act, which requires that a
bidder pay the consideration offered or return the Shares deposited by or on
behalf of stockholders promptly after the termination or withdrawal of such
bidder's offer, unless the bidder elects to offer a subsequent offering period
(a "Subsequent Offering Period") under Rule 14d-11 under the Exchange Act and
pays for Shares tendered during the Subsequent Offering Period in accordance
with that rule.
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Pursuant to Rule 14d-11 under the Exchange Act, American Pie may, subject
to certain conditions, include a Subsequent Offering Period following the
expiration of the Offer on the Expiration Date. Rule 14d-11 provides that
American Pie may include a Subsequent Offering Period so long as, among other
things:
- the Offer was open for at least twenty business days and has expired,
- the Offer is for all outstanding shares of the class that is the subject
of the Offer,
- American Pie accepts and promptly pays for all shares tendered during the
Offer,
- American Pie announces the results of the Offer, including the
approximate number and percentage of shares deposited no later than 9:00
a.m. New York City time on the next business day after the Expiration
Date and immediately begins the Subsequent Offering Period,
- American Pie immediately accepts and promptly pays for shares as they are
tendered during the Subsequent Offering Period, and
- American Pie pays the same form and amount of consideration for all
shares tendered during the Subsequent Offering Period.
American Pie will be able to include a Subsequent Offering Period if it
satisfies the conditions above. In a public release, the Commission expressed
the view that the inclusion of a Subsequent Offering Period would constitute a
material change to the terms of the Offer requiring American Pie to disseminate
new information to stockholders in a manner reasonably calculated to inform them
of such change sufficiently in advance of the Expiration Date (generally five
business days). In the event American Pie elects to include a Subsequent
Offering Period, it will notify stockholders consistent with the requirements of
the Commission.
A Subsequent Offering Period, if one is included, is not an extension of
the Offer. A Subsequent Offering Period would be an additional period of time,
following the expiration of the Offer, in which stockholders may tender Shares
not tendered during the Offer. American Pie does not currently intend to include
a Subsequent Offering Period in the Offer, although it reserves the right to do
so in its sole discretion.
Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights will
apply to Shares tendered into a Subsequent Offering Period and no withdrawal
rights apply during the Subsequent Offering Period with respect to Shares
tendered in the Offer and accepted for payment. The same consideration, the
applicable Per Share Amount, will be paid to stockholders tendering Shares in
the Offer or in a Subsequent Offering Period, if one is included.
Egreetings has provided American Pie with its stockholder list and security
position listings for the purpose of disseminating the Offer to the
stockholders. This Offer To Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on Egreetings'
stockholder 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.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), American Pie will accept for payment (and thereby purchase) and
pay for Shares that are validly tendered and not properly withdrawn prior to the
Expiration Date, as soon as practicable after the Expiration Date. Subject to
the applicable rules of the Commission and the terms of the Merger Agreement,
American Pie expressly reserves the right to delay acceptance for payment of, or
payment for, Shares in order to comply, in whole or in part, with any other
applicable law, government regulation or condition contained therein. See
Sections 1, 13 and 14.
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In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of:
- Certificates for the Shares (or a timely Book-Entry Confirmation (as
defined in Section 3) with respect to the Shares);
- The Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed with any required signature
guarantees (or, in the case of a book-entry transfer of Shares, an
Agent's Message); and
- All other documents required by the Letter of Transmittal. See Section 3.
The term "Agent's Message" means a message, transmitted by The Depository
Trust Company (the "Book-Entry Transfer Facility") to and received by the
Depositary and forming part of a Book-Entry Confirmation, which states that:
- The Book-Entry Transfer Facility has received an express acknowledgment
from the participant in the Book-Entry Transfer Facility tendering the
Shares that are the subject of such Book-Entry Confirmation;
- Such participant has received and agrees to be bound by the terms of the
applicable Letter of Transmittal; and
- American Pie may enforce such agreement against such participant.
For purposes of the Offer, American Pie will be deemed to have accepted for
payment (and thereby purchased) tendered Shares if, as and when American Pie
gives oral or written notice to the Depositary of American Pie's acceptance of
such Shares for payment. In all cases, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for the tendering stockholders for the purpose of
receiving payment from American Pie and transmitting payment to the tendering
stockholders whose Shares have been accepted for payment. If, for any reason,
acceptance for payment of any Shares tendered pursuant to the Offer is delayed,
or American Pie is unable to accept for payment Shares tendered pursuant to the
Offer, then, without prejudice to American Pie's rights described in Section 13,
the Depositary may, nevertheless, on behalf of American Pie, retain the tendered
Shares, and such Shares may not be withdrawn, except to the extent that the
tendering stockholders are entitled to withdrawal rights as described in Section
4 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
UNDER NO CIRCUMSTANCES WILL INTEREST ACCRUE ON THE CONSIDERATION TO BE PAID
FOR THE SHARES BY AMERICAN PIE, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not purchased for any reason or if certificates
are submitted for more Shares than are tendered, certificates for the Shares not
purchased or tendered will be returned pursuant to the instructions of the
tendering stockholder without expense to the tendering stockholder (or, in the
case of Shares delivered by book-entry transfer into the Depositary's account at
a Book-Entry Transfer Facility pursuant to the procedures set forth in Section
3, the Shares will be credited to an account maintained at the appropriate
Book-Entry Transfer Facility) as promptly as practicable following the
expiration, termination or withdrawal of the Offer.
American Pie reserves the right, subject to the provisions of the Merger
Agreement, to assign, in whole or from time to time in part, to one or more of
AmericanGreetings.com's other subsidiaries or affiliates the right to purchase
all or any portion of the Shares tendered pursuant to the Offer, but no such
assignment will relieve AmericanGreetings.com or American Pie of its obligations
under the Offer or prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
IF, PRIOR TO THE EXPIRATION DATE, AMERICAN PIE INCREASES THE CONSIDERATION
TO BE PAID PER SHARE PURSUANT TO THE OFFER, AMERICAN PIE WILL PAY THE INCREASED
CONSIDERATION FOR ALL SHARES PURCHASED PURSUANT TO THE OFFER, WHETHER OR NOT THE
SHARES WERE TENDERED PRIOR TO THE INCREASE IN CONSIDERATION.
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3. PROCEDURE FOR TENDERING SHARES
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer,
either:
- The appropriate Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer of Shares,
an Agent's Message), and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses
set forth on the back cover of this Offer To Purchase prior to the
Expiration Date and either (a) certificates representing tendered Shares
must be received by the Depositary at any one of those addresses prior to
the Expiration Date or (b) the Shares must be delivered pursuant to the
procedures for book-entry transfer set forth below and a Book-Entry
Confirmation must be received by the Depositary prior to the Expiration
Date; or
- The tendering stockholder must comply with the guaranteed delivery
procedures set forth below.
If certificates for Shares are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery. No alternative, conditional or
contingent tenders will be accepted.
THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES, THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF
THE TENDERING STOCKHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer To Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility system may
make book-entry delivery of Shares by causing the Book-Entry Transfer Facility
to transfer the Shares into the Depositary's account at the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. Although delivery of the Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed 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 one of its addresses set
forth on the back cover of this Offer To Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to as a "Book-Entry Confirmation."
DELIVERY OF THE LETTER OF TRANSMITTAL OR OTHER DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY OF THE LETTER OF TRANSMITTAL OR
SUCH OTHER DOCUMENTS TO THE DEPOSITARY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal:
- If the Letter of Transmittal is signed by the registered stockholder of
Shares tendered therewith (which term, for purposes of this section,
includes any participant in the Book-Entry Transfer Facility system whose
name appears on a security position listing as the owner of the Shares)
and such registered stockholder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or
- If such Shares are tendered for the account of a financial institution
(including most commercial banks, savings and loans associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program (an "Eligible
Institution").
In all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of
Transmittal.
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If the certificates representing Shares are registered in the name of a
person other than the signer of the Letter of Transmittal or if payment is to be
made or if certificates for Shares not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the certificates
surrendered, then the tendered certificates representing Shares must be endorsed
or accompanied by appropriate stock powers, in each case signed exactly as the
name or names of the registered stockholder or owners appears on the
certificates, with the signatures on the certificates or stock powers guaranteed
by an Eligible Institution as described above and as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder wishes to tender Shares pursuant to
the Offer and the Shareholder's certificates are not immediately available or
the procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to be received by the Depositary
prior to the Expiration Date, the Shares may nevertheless be tendered if all the
following guaranteed delivery procedures are complied with:
- The tender is made by or through an Eligible Institution;
- A properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by American Pie with this Offer To
Purchase, is received by the Depositary as provided below prior to the
Expiration Date; and
- The certificates for all tendered Shares in proper form for transfer or a
Book-Entry Confirmation with respect to all tendered Shares, together
with a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any required signature guarantees
(or, in the case of a book-entry transfer of Shares, an Agent's Message)
in connection with a book-entry transfer of Shares, and any other
documents required by the Letter of Transmittal, are received by the
Depositary within three Nasdaq National Market trading days after the
date of execution of the Notice of Guaranteed Delivery. A "Nasdaq trading
day" is any day on which The Nasdaq Stock Market, Inc.'s ("Nasdaq")
Nasdaq National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mailed to the Depositary and must include
an endorsement by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision of this Offer To Purchase, payment for
Shares accepted for payment pursuant to the Offer in all cases will be made only
after timely receipt by the Depositary of certificates for (or Book-Entry
Confirmation with respect to) the Shares, a Letter of Transmittal (or a manually
signed facsimile thereof), properly completed and duly executed with all
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and all other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the same
time, and will depend upon when Share certificates are received by the
Depositary or Book-Entry Confirmations of such Shares are received into the
Depositary's account at the Book-Entry Transfer Facility.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE PAYMENTS MADE TO STOCKHOLDERS WITH RESPECT TO THE
PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER OR THE MERGER, A
STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH ITS CORRECT TAXPAYER IDENTIFICATION
NUMBER AND CERTIFY THAT IT IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL. SEE SECTION 5 BELOW AND INSTRUCTION 10 OF THE LETTER OF
TRANSMITTAL.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares pursuant to any of the procedures described above will
be determined by American Pie in its sole discretion, which determination will
be final and binding on all parties. American Pie reserves the absolute right to
reject any or all tenders of Shares determined not to be in proper form or the
acceptance of or payment for which may, in the opinion of counsel, be unlawful
and reserves the absolute right to waive any defect or irregularity in any
tender of Shares. Subject to the terms of the Merger
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Agreement, American Pie also reserves the absolute right to waive or amend any
or all of the Offer Conditions, other than the Minimum Condition, which cannot
be waived without the prior written consent of Egreetings.
American Pie's interpretation of the terms and conditions of the Offer
(including the Letter(s) of Transmittal and the instructions thereto) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of American Pie, AmericanGreetings.com, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of American Pie as its
attorneys-in-fact and proxies, with full power of substitution and
resubstitution, in the manner set forth in the Letter of Transmittal, to the
full extent of the stockholder's rights with respect to the Shares tendered by
the stockholder and purchased by American Pie and with respect to any and all
other Shares or other securities issued or issuable in respect of those Shares,
on or after the date of the Offer. All such powers of attorney and proxies will
be considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, American Pie accepts the
Shares for payment. Upon acceptance for payment, all prior powers of attorney
and proxies given by the stockholder with respect to the Shares (and any other
Shares or other securities so issued in respect of such purchased Shares) will
be revoked, without further action, and no subsequent powers of attorney and
proxies may be given (and, if given, will not be deemed effective) by the
stockholder. The designees of American Pie will be empowered to exercise all
voting and other rights of the stockholder with respect to such Shares (and any
other Shares or securities so issued in respect of such purchased Shares) as
they in their sole discretion may deem proper, including without limitation in
respect of any annual or special meeting of the stockholders, or any adjournment
or postponement of any such meeting.
American Pie reserves the absolute right to require that, in order for
Shares to be validly tendered, immediately upon American Pie's acceptance for
payment of the Shares, American Pie must be able to exercise full voting and
other rights with respect to the Shares, including voting at any meeting of
stockholders then scheduled.
American Pie's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and American Pie upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 4. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by American Pie as provided in this Offer To Purchase, may
also be withdrawn at any time after April 12, 2001 (or such later date as may be
applicable if the Offer is extended).
If American Pie extends the Offer, is delayed in its purchase of or payment
for Shares (whether before or after its acceptance for payment of Shares), or is
unable to purchase or pay for Shares for any reason, then, without prejudice to
the rights of American Pie under the Offer, the Depositary may retain tendered
Shares on behalf of American Pie and such Shares may not be withdrawn, except to
the extent that tendering stockholders are entitled to withdrawal rights as set
forth in this Section 4.
The ability of American Pie to delay the payment for Shares that American
Pie has accepted for payment is subject to the terms of the Merger Agreement and
provisions of Rule 14e-1(c) under the Exchange Act, which requires that American
Pie pay the consideration offered or return the Shares deposited by or on behalf
of stockholders promptly after the termination or withdrawal of the Offer,
unless American Pie elects to offer a Subsequent Offering Period under Rule
14d-11 under the Exchange Act and pays for Shares tendered during the Subsequent
Offering Period in accordance with that rule. See Section 1.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer To Purchase.
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Any such notice of withdrawal must specify the name of the persons who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered stockholder, if different from that of the person who tendered
the Shares. If certificates evidencing Shares have been delivered or otherwise
identified to the Depositary then, prior to the release of the certificates, the
tendering stockholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares to be withdrawn, and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution
(except in the case of Shares tendered for the account of an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by American Pie, in its sole
discretion, which determination will be final and binding on all parties. No
withdrawal of Shares will be deemed to have been made properly until all defects
and irregularities have been cured or waived. None of AmericanGreetings.com,
American Pie, the Depositary, the Information Agent or 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 failing to give such
notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3 above.
No withdrawal rights will apply to Shares tendered into a Subsequent
Offering Period and no withdrawal rights apply during the Subsequent Offering
Period with respect to Shares tendered in the Offer and accepted for payment.
See Section 1.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER
The following is a summary of the material federal income tax consequences
of the Offer and the Merger to stockholders whose Shares are purchased pursuant
to the Offer or whose Shares are converted into the right to receive the Merger
Consideration in the Merger (including any cash amounts received by dissenting
stockholders pursuant to the exercise of dissenters' rights). This discussion is
based upon the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the applicable Treasury Regulations promulgated and proposed
thereunder, and published judicial authority and administrative rulings and
practice. Legislative, judicial or administrative authorities or interpretations
are subject to change, possibly on a retroactive basis, at any time and a change
could alter or modify the statements and conclusions set forth below. It is
assumed for purposes of this discussion that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code. This discussion does not
address all aspects of federal income taxation that may be relevant to a
particular stockholder in light of such stockholder's personal investment
circumstances, or those stockholders subject to special treatment under the
Federal income tax laws (for example, life insurance companies, tax-exempt
organizations, foreign corporations and nonresident alien individuals) or to
stockholders who acquired their Shares through the exercise of employee stock
options, pursuant to an employee stock purchase plan, exercise of Warrants, or
other compensation arrangements. In addition, the discussion does not address
any aspect of foreign, state or local income taxation or any other form of
taxation that may be applicable to a stockholder.
Consequences of the Offer and the Merger to Stockholders
The receipt of the Per Share Amount and the Merger Consideration (and any
cash amounts received by dissenting stockholders pursuant to the exercise of
dissenters' rights) will be a taxable transaction for federal income tax
purposes (and also may be a taxable transaction under applicable state, local
and other income tax laws). In general, for federal income tax purposes, a
stockholder will recognize gain or loss equal to the difference between its
adjusted tax basis in the Shares sold pursuant to the Offer or converted to cash
in the Merger or pursuant to the exercise of dissenters' rights and the amount
of cash received therefor. Such gain or loss will be capital gain or loss and
will be long-term gain or loss, if, on the date of sale (or, if applicable, the
date of the Merger), the Shares were held for more than one year.
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Backup Tax Withholding
Under the Code, a stockholder may be subject, under certain circumstances,
to "backup withholding" at a 31% rate with respect to payments made in
connection with the Offer or the Merger. Backup withholding generally applies if
the stockholder:
- Fails to furnish his or her social security number or other taxpayer
identification number ("TIN");
- Furnishes an incorrect TIN;
- Fails properly to report interest or dividends; or
- Under certain circumstances, fails to provide a certified statement,
signed under penalties of perjury, that the TIN provided is his or her
correct number and that he or she is not subject to backup withholding.
Backup withholding is not an additional tax but merely an advance
payment, which may be refunded to the extent it results in an overpayment
of tax. Certain persons generally are exempt from backup withholding,
including corporations and financial institutions.
Certain penalties apply for failure to furnish correct information and for
failure to include the reportable payments in income. Each stockholder should
consult with its own tax advisor as to its qualifications for exemption from
withholding and the procedure for obtaining such exemption.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE OFFER
AND THE MERGER TO THEM IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
According to Egreetings' Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, (the "Egreetings Form 10-K"), the Shares are traded on
the Nasdaq National Market under the symbol "EGRT." The Shares began trading on
December 17, 1999. The following table sets forth, for the periods indicated,
the reported high and low closing prices for the Shares on the Nasdaq National
Market as reported in the Egreetings Form 10-K with respect to calendar year
1999, and as reported thereafter by published financial sources with respect to
calendar years 2000 and 2001.
HIGH LOW
------ -----
1999
Fourth Quarter.............................................. $10.56 $8.50
2000
First Quarter............................................... $12.38 $4.94
Second Quarter.............................................. $ 5.00 $1.25
Third Quarter............................................... $ 2.00 $1.00
Fourth Quarter.............................................. $ 1.00 $0.22
2001
First Quarter (through February 9, 2001).................... $ 0.84 $0.28
On February 5, 2001, the last full trading day before the public
announcement of the Merger Agreement, the last reported sale price on the Nasdaq
National Market was $0.63 per Share. On February 9, 2001, the last full trading
day before the commencement of the Offer, the last reported sale price on the
Nasdaq National Market was $0.84 per Share. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR SHARES.
Egreetings has not paid any dividends on the Shares since it became
publicly traded and has agreed in the Merger Agreement that it will not pay any
dividend or other distribution payable in cash, stock or property with respect
to the Shares pending completion of the Offer and the Merger.
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7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, STOCK EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION, AND MARGIN SECURITIES
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of holders
of Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by stockholders other than American Pie. American Pie
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Per Share Amount.
NASDAQ QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for quotation if, among other things, the number of
publicly held Shares falls below 500,000, the number of holders of Shares falls
below 400 or the aggregate market value of such publicly held Shares falls below
$3,000,000. If these standards are not met, the Shares might continue to be
quoted on The Nasdaq SmallCap Market, Inc., but if the number of holders of the
Shares falls below 300, or if the number of publicly held Shares falls below
100,000, or if the aggregate market value of such publicly held Shares falls
below $200,000 or there are not at least two registered and active market makers
(one of which may be a market maker entering a stability bid), Nasdaq rules
provide that the securities would no longer qualify for inclusion in Nasdaq and
Nasdaq would cease to provide any quotations. Shares held directly or indirectly
by an officer or director of Egreetings or by a beneficial owner of more than
10% of the Shares will ordinarily not be considered as being publicly held for
purposes of these standards. In the event the Shares are no longer eligible for
Nasdaq quotation, quotations might still be available from other sources. The
extent of the public market for the Shares and the availability of such
quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in such Shares on
the part of securities firms, the possible termination of registration of such
Shares under the Exchange Act as described below and other factors.
American Pie has been advised by Egreetings that as of February 6, 2001,
there were approximately 146 holders of record of the Shares. Egreetings has
advised American Pie that it believes that the number of beneficial owners of
the Shares as of February 6, 2001, is in excess of 5,350.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of Egreetings
to the Commission if the Shares are not listed on a national securities exchange
and there are fewer than 300 record holders of the Shares. The termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by Egreetings to holders of Shares and to
the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), and the requirement
of furnishing a proxy statement in connection with stockholders' meetings
pursuant to Section 14(a), no longer applicable to the Shares. Furthermore, if
the Shares are no longer registered under the Exchange Act, the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions
would no longer be applicable to Egreetings. In addition, "affiliates" of
Egreetings and persons holding "restricted securities" of Egreetings may be
deprived of the ability to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended. American Pie believes
that the purchase of the Shares pursuant to the Offer may result in the Shares
becoming eligible for termination of registration under the Exchange Act, and it
is the intention of American Pie to cause Egreetings to make an application for
termination of registration of the Shares as soon as possible after successful
completion of the Offer if the Shares are then eligible for such termination.
If registration of the Shares is not terminated prior to the Merger, then
following the consummation of the Merger, the Shares will no longer be eligible
for Nasdaq quotation and the registration of the Shares under the Exchange Act
will be terminated.
MARGIN REGULATIONS. The Shares are not currently "margin securities," as
such term is defined under the rules of the Board of Governors of the Federal
Reserve System, which means the Shares can not be used as collateral for loans
made by brokers.
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8. CERTAIN INFORMATION CONCERNING EGREETINGS
GENERAL INFORMATION. Egreetings is a Delaware corporation with its
principal executive offices located at 149 New Montgomery Street, San Francisco,
California 94105 and its telephone number (415) 375-4100. Egreetings is a
provider of online cards, offering consumers and businesses an integrated
approach to communications and gift giving. Its Web site allows users to send
personalized, content-rich online cards and gifts. Egreetings also provides
advertisers and e-commerce partners with access to a targeted group of
consumers. The foregoing description of Egreetings' business has been derived in
part from Egreetings Form 10-K and is qualified in its entirety by reference to
the Egreetings Form 10-K and the risk factors set forth therein.
The selected financial information of Egreetings set forth below has been
excerpted and derived from the Egreetings Form 10-K and Egreetings' Quarterly
Report on Form 10-Q for the period ended September 30, 2000. More comprehensive
financial and other information is included in such reports (including
management's discussion and analysis of financial condition and results of
operations) and in other reports and documents filed by Egreetings with the
Commission. The financial information set forth below is qualified in its
entirety by reference to such reports and documents filed with the Commission
and the financial statements and related notes contained therein. These reports
and other documents may be examined and copies may be obtained in the manner set
forth below.
EGREETINGS NETWORK, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE NINE MONTHS ENDED
(UNAUDITED) FISCAL YEAR ENDED DECEMBER 31
------------------------------- ------------------------------
SEPT. 30, 2000 SEPT. 30, 1999 1999 1998 1997
-------------- -------------- -------- ------- -------
STATEMENT OF OPERATIONS DATA:
Revenues............................ $ 8,163 $ 1,527 $ 3,160 $ 317 $ 505
Cost and expenses................... 41,751 23,462 39,739 8,115 3,530
-------- -------- -------- ------- -------
Loss from operations................ (33,588) (21,935) (36,579) (7,798) (3,025)
Interest income (expense), net...... 2,531 (92) (63) (23) (68)
Other income (expense), net......... (129) -- -- -- --
-------- -------- -------- ------- -------
Net loss............................ (31,186) (22,027) (36,642) (7,821) (3,093)
-------- -------- -------- ------- -------
Loss from operations per share
Basic and diluted.............. (1.01) (6.10) (8.01) (2.25) (0.98)
Net loss per share
Basic and diluted.............. (0.94) (6.12) (8.02) (2.26) (1.00)
Shares used in calculation of loss
from operations and net loss per
share
Basic and diluted.............. 33,326 3,598 4,569 3,464 3,100
FOR THE NINE
MONTHS ENDED FISCAL YEAR ENDED DECEMBER 31
SEPT. 30, 2000 ------------------------------
(UNAUDITED) 1999 1998 1997
-------------- -------- ------- -------
BALANCE SHEET DATA:
Cash and cash equivalents...................... $ 6,600 $ 81,774 $ 268 $ 3,524
Working capital (deficit)...................... 37,378 77,672 (2,838) 2,735
Total assets................................... 87,588 120,123 2,968 5,203
Long-term liabilities.......................... 2,377 3,718 1,100 197
Total stockholders' equity (deficit)........... 76,539 101,831 (1,489) 4,185
Book value per share........................... 2.30 22.29 (0.43) 1.35
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AVAILABLE INFORMATION. Egreetings is subject to the informational filing
requirements of the Exchange Act. In accordance with the Exchange Act,
Egreetings files periodic reports, proxy statements and other information with
the Commission relating to its business, financial condition and other matters.
Egreetings is required to disclose in its proxy statements certain information,
as of particular dates, concerning Egreetings' directors and officers, their
remuneration, stock options granted to them, the principal holders of
Egreetings' securities and any material interest of those persons in
transactions with Egreetings. These reports, proxy statements and other
information may be inspected at the Commission's office at 450 Fifth Street,
N.W., Washington, D.C. 20549, and also should be available for inspection and
copying at the regional offices of the Commission located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies may be obtained upon
payment of the Commission's prescribed fees by writing to its principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549, or through the Commission's
website (http://www.sec.gov)
Although neither AmericanGreetings.com nor American Pie believes as of the
date of the Offer To Purchase that statements contained herein based upon such
documents are untrue in any material respect, none of AmericanGreetings.com,
American Pie or Information Agent assumes any responsibility for the accuracy or
completeness of the information concerning Egreetings, furnished by Egreetings
for inclusion in this Offer To Purchase, or contained in the documents and
records referred to herein or for any failure by Egreetings to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to AmericanGreetings.com and American Pie.
9. CERTAIN INFORMATION CONCERNING AMERICAN PIE AND AmericanGreetings.com
GENERAL INFORMATION. American Pie, a Delaware corporation, was organized to
acquire all of the Shares pursuant to the Offer and the Merger and has not
conducted any unrelated activities since its organization. All of the
outstanding capital stock of American Pie is owned directly by
AmericanGreetings.com. The principal executive offices of American Pie are
located at Three American Road, Cleveland, Ohio 44144 and its telephone number
is (216) 889-5000.
AmericanGreetings.com is a Delaware corporation and the parent corporation
of American Pie, with its principal executive offices located at Three American
Road, Cleveland, Ohio 44144 and its telephone number is (216) 889-5000.
AmericanGreetings.com is a Web-based provider of electronic greetings and other
social communication content aimed at expanding individuals' ability to
communicate and express themselves online.
AGC Investments, a Delaware corporation and the parent corporation of
AmericanGreetings.com, was organized, among other things, to administer American
Greetings' investing activities, including holding the capital stock of certain
American Greetings' subsidiaries. The principal executive offices of AGC
Investments are located at One American Road, Cleveland, Ohio 44144 and its
telephone number is (216) 252-7300.
American Greetings is an Ohio corporation and the parent corporation of AGC
Investments, with its principal executive offices located at One American Road,
Cleveland, Ohio 44144 and its telephone number is (216) 252-7300. American
Greetings and its subsidiaries operate predominantly in a single industry -- the
design, manufacture and sale of everyday and seasonal greeting cards and other
social expression products.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the executive officers and
directors of American Greetings, AmericanGreetings.com and American Pie are set
forth on Schedule I.
Except as set forth elsewhere in this Offer To Purchase, Schedule I hereto
or any Schedule 13D, or amendment thereto filed by the following persons with
respect to Egreetings, which are incorporated herein by reference:
- None of American Greetings, AGC Investments, AmericanGreetings.com or
American Pie nor, to the knowledge of American Greetings, AGC
Investments, AmericanGreetings.com or American Pie, any of the persons
listed in Schedule I hereto or any affiliate of AmericanGreetings.com or
American Pie or any of the persons so listed:
- beneficially owns or has a right to acquire any Shares or any other
equity securities of Egreetings,
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- has effected any transaction in the Shares or any other equity
securities of Egreetings during the past 60 days, or
- has any agreement, arrangement, or understanding with any other
person with respect to any securities of Egreetings (including any
agreement, arrangement, or understanding concerning the transfer or
the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against
loss or the giving or withholding of proxies, consents or
authorizations).
- There have been no transactions that would require reporting under the
rules and regulations of the Commission between AmericanGreetings.com or
American Pie or any of their respective subsidiaries or, to the knowledge
of AmericanGreetings.com or American Pie, any of the persons listed in
Schedule I hereto, on the one hand, and Egreetings or any of its
executive officers, directors or affiliates, on the other hand.
- There have been no material contacts, negotiations or transactions
between AmericanGreetings.com or American Pie or any of their respective
subsidiaries or, to the knowledge of AmericanGreetings.com or American
Pie, any of the persons listed in Schedule I hereto, on the one hand, and
Egreetings or its subsidiaries or affiliates, on the other hand,
concerning a merger, consolidation, acquisition, a tender offer or other
acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by American Pie to pay the aggregate
purchase price to be paid pursuant to the Offer and the Merger, to cash out the
Options and Warrants and to pay the fees and expenses related to the Offer and
the Merger is estimated to be approximately $30 million. These funds are
expected to be provided to American Pie in the form of capital contributions or
advances made by AmericanGreetings.com. AmericanGreetings.com plans to obtain
the funds for such capital contributions or advances from cash on hand. In
addition, American Greetings has established a $24 million line of credit for
AmericanGreetings.com to use in connection with the Offer and the Merger. The
Offer is not conditioned upon any financing arrangements.
11. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; PLANS FOR
EGREETINGS; OTHER MATTERS
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement
and is qualified in its entirety by reference to the complete text of the Merger
Agreement, a copy of which is filed with the Commission as an exhibit to the
Schedule TO and is incorporated herein by reference. The Merger Agreement should
be read in its entirety for a more complete description of the matters
summarized below. The Merger Agreement may be examined, and copies obtained from
the offices of the Commission in the same manner as set forth in Section 8
above. Defined terms used below and not defined in this Offer To Purchase have
the respective meanings assigned to those terms in the Merger Agreement.
THE OFFER. The Merger Agreement contemplates the commencement of the Offer
and prescribes conditions to consummation of the Offer. The Merger Agreement
provides that, without the prior written consent of Egreetings, American Pie may
not:
- decrease the Per Share Amount or change the form of consideration payable
in the Offer;
- decrease the number of Shares sought pursuant to the Offer;
- amend or waive the Minimum Condition;
- impose additional conditions to the Offer; or
- amend any other term of the Offer in any manner adverse to the holders of
Shares.
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If on the initial Expiration Date, all conditions to the Offer shall not
have been satisfied or waived, American Pie may, in its discretion, or shall, to
the extent requested by Egreetings, extend the Expiration Date up to an
additional five business days or such longer time as American Pie and Egreetings
may mutually agree to the extent necessary to permit such condition to be
satisfied. American Pie may also extend the Offer if and to the extent required
by the Commission or, after the acceptance of Shares under the Offer, for a
further period of time by means of a subsequent offering period under Rule
14d-11, of not more than twenty business days to meet the objective (which is
not a condition to the Offer) that there be validly tendered, in accordance with
the terms of the Offer, prior to the Expiration Date and not withdrawn a number
of Shares, which together with Shares then owned by AmericanGreetings.com,
American Pie or any other subsidiary of AmericanGreetings.com, represents at
least 90% of the number of Shares outstanding on a fully diluted basis (assuming
the exercise of all outstanding Options that are vested or will become vested
upon consummation of the Offer and all outstanding Warrants). American Pie will,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and purchase, as soon as permitted under the
terms of the Offer, all Shares validly tendered and not withdrawn prior to the
expiration of the Offer.
Egreetings made representations and warranties to AmericanGreetings.com and
American Pie in the Merger Agreement that:
- The Egreetings Board, at a meeting duly called and held:
- unanimously and duly approved and declared advisable the Merger
Agreement and the transactions contemplated thereby, including the
Offer and the Merger;
- recommended that the stockholders of Egreetings accept the Offer,
tender their Shares pursuant to the Offer and adopt the Merger
Agreement;
- determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are fair
to and in the best interests of the stockholders of Egreetings; and
- Credit Suisse First Boston Corporation, Egreetings' financial advisor,
rendered its opinion to the Egreetings Board, dated the date of the
Merger Agreement, to the effect that, as of that date, the Per Share
Amount to be received by the holders of Shares of Egreetings is fair from
a financial point of view to such holders (other than
AmericanGreetings.com and its affiliates).
The Merger Agreement provides that promptly upon the purchase by American
Pie for Shares pursuant to the Offer, if the Minimum Condition has been met, and
from time to time thereafter, as Shares are acquired by American Pie, American
Pie is entitled to designate such number of directors, rounded up to the next
whole number, on the Egreetings Board that will give American Pie representation
on the Egreetings Board equal to at least that number of directors which equals
the product of the total number of directors on the Egreetings Board (giving
effect to the directors appointed or elected pursuant to such provision and
including current directors serving as officers of Egreetings) multiplied by the
percentage that the aggregate number of Shares beneficially owned by American
Pie or its affiliates (including Shares as they are accepted for payment but
excluding Shares held by Egreetings) bears to the number of Shares outstanding.
At such times, if requested by American Pie, Egreetings will also cause each
committee of the Egreetings Board to include persons designated by American Pie
constituting the same percentage of each such committee as American Pie's
designees are of the Egreetings Board. Egreetings shall, upon request by
American Pie, use its reasonable efforts to increase the size of the Egreetings
Board or secure the resignations of such number of directors as is necessary to
enable American Pie designees to be elected to the Egreetings Board and shall
cause American Pie's designees to be so elected; provided, however, that, in the
event that American Pie's designees are appointed or elected to the Egreetings
Board, until the Effective Time the Egreetings Board shall have at least one
director who is a director on the date of the execution of the Merger Agreement
and who is not a designee, stockholder, affiliate or associate (within the
meaning of the federal securities laws) of American Pie (one or more of such
directors, the "Independent Directors"); provided further, that if no
Independent Directors remain, the other directors shall designate one person to
fill one of the vacancies who shall not be a designee, stockholder, affiliate or
associate of American Pie, and such person shall be deemed to be an Independent
Director for purposes of the Merger Agreement.
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THE MERGER. The Merger Agreement provides that, at the Effective Time,
subject to the terms and conditions of the Merger Agreement and the GCL,
American Pie will be merged with and into Egreetings. Following the Merger, the
separate corporate existence of American Pie will cease and Egreetings will
continue as the Surviving Corporation.
The Certificate of Incorporation of Egreetings, in effect immediately
before the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation and shall be amended to read in its entirety as set forth
on Exhibit A to the Merger Agreement, until thereafter amended as provided by
law and such Certificate of Incorporation. The By-Laws of American Pie in effect
immediately before the Effective Time and in the form provided to Egreetings
shall be the By-Laws of the Surviving Corporation until amended, as provided by
law, the Certificate of Incorporation of the Surviving Corporation and such
By-Laws.
The directors of American Pie immediately before the Effective Time will be
the initial directors of the Surviving Corporation, and the officers of American
Pie immediately before the Effective Time will be the initial officers of the
Surviving Corporation, in each case until their successors are elected appointed
and qualified. If, at the Effective Time, a vacancy exists on the board of
directors of the Surviving Corporation or in any office of the Surviving
Corporation, that vacancy may be filled in the manner provided by law.
At the Effective Time, by virtue of the Merger and without any action on
the part of American Pie, Egreetings or the holder of any capital stock of
Egreetings or American Pie:
- each Share issued and outstanding immediately before the Effective Time
(other than any Shares to be cancelled pursuant to the following
paragraph and any Dissenting Shares) shall be converted into the right to
receive the Merger Consideration, upon surrender of the certificate which
immediately prior to the Effective Time represented such Share;
- each Share issued and outstanding immediately before the Effective Time
and held in the treasury of Egreetings or owned by AmericanGreetings.com,
American Pie or any other subsidiary of AmericanGreetings.com shall be
automatically canceled and will cease to exist and no payment or other
consideration shall be made with respect thereto; and
- each share of common stock of American Pie, par value $.01 per share,
outstanding immediately before the Effective Time will thereafter
represent one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
The Merger Agreement provides that Egreetings shall take all actions
necessary (which shall include, but are not limited to, satisfying the
requirements of Rule 16b-3(e) which is promulgated under Section 16 of the
Exchange Act, without incurring any liability in connection therewith) to
provide that immediately prior to the Effective Time:
- each vested stock option that is then outstanding under Egreetings' 1996
Stock Option Plan (a "1996 Option"), shall be exercisable by the option
holder in accordance with the terms (as in effect as of the date of the
Merger Agreement) of Egreetings' 1996 Stock Option Plan and the stock
option agreement by which such 1996 Option is evidenced; and any 1996
Option not exercised prior to the Effective Time and all unvested stock
options outstanding under the 1996 Stock Option Plan shall be cancelled;
- each stock option, whether vested or unvested, that is then outstanding
under Egreetings' 1999 Equity Incentive Plan or under the 1999
Non-Employee Directors' Stock Option Plan (collectively, the "1999
Plans") and that is held by an option holder whose Continuous Service (as
defined in the 1999 Plans) with Egreetings has not been terminated (a
"1999 Option"), shall be exercisable by the option holder in accordance
with the terms (as in effect as of the date of the Merger Agreement) of
the 1999 Plans and the stock option agreement by which such 1999 Option
is evidenced, and any 1999 Option and any other stock options outstanding
under the 1999 Plans (including, without limitation, options held by
persons whose Continuous Service with Egreetings has terminated) not
exercised prior to the Effective Time will terminate unexercised in
accordance with its terms;
- each right to purchase Shares that is then outstanding under Egreetings'
1999 employee Stock Purchase Plan (a "Right") shall be exercisable by the
holder of such Right and each holder's accumulated payroll
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deductions (exclusive of any accumulated interest which cannot be applied
toward the purchase of Shares under the terms of the offering) shall be
used to exercise the Right in accordance with the terms (as in effect as
of the date of the Merger Agreement) of the 1999 Employee Stock Purchase
Plan and the offering under which the Right was granted, and immediately
after such Rights are exercised, any ongoing offering under the 1999
Employee Stock Purchase Plan shall terminate, and any Right not exercised
prior to the Effective time and all unvested Rights outstanding under the
1999 Employee Stock Purchase Plan shall be cancelled; and
The Merger Agreement also provides that Egreetings shall use its reasonable
best efforts (which shall include, but is not limited to, satisfying the
requirements of Rule 16b-3(e) without incurring any liability in connection
therewith) to provide that immediately prior to the Effective Time, each then
outstanding Warrant to purchase Shares granted under any of the warrant
agreements disclosed by Egreetings to AmericanGreetings.com or American Pie
under the Merger Agreement (collectively, the "Warrant Agreements"), whether or
not then exercisable or vested, shall be acquired by Egreetings for cancellation
in consideration of payment to the holders of such Warrants of an amount in
respect thereof equal to the product of (i) the excess, if any, of the Per Share
Amount over the per share exercise price of the Warrant and (ii) the number of
Shares subject to the Warrant (such payment to be net of applicable withholding
taxes), and Egreetings shall use its reasonable best efforts to obtain any
consents required of holders of Warrants to effect the foregoing.
Except as provided in the Merger Agreement or as otherwise agreed to by the
parties:
- Egreetings shall cause Egreetings' 1996 Stock Option Plan, the 1999 Plans
and Egreetings' 1999 employee Stock Purchase Plan (collectively, the
"Option Plans") and the Warrant Agreements to terminate as of the
Effective Time, and
- Egreetings shall ensure that following the Effective Time no person,
including any holder of a 1996 Option, a 1999 Option or a Right
(collectively, the "Options") or a Warrant or any participant in the
Option Plans, shall have any right to acquire any equity securities of
Egreetings, the Surviving Corporation or any subsidiary thereof.
Egreetings has agreed pursuant to the Merger Agreement that if (i) required
by applicable law in order to consummate the Merger, as promptly as practicable
after the purchase of and payment for Shares by American Pie pursuant to the
Offer or (ii) any of the conditions set forth in paragraph (a) of Section 13 of
this Offer To Purchase exists or there shall be instituted or pending any action
or proceeding before any governmental, regulatory or administrative agency or
commission of competent jurisdiction seeking any injunction, order, decree,
judgment or ruling having any of the effects set forth in paragraph (a) of
Section 13 of this Offer To Purchase, and such condition or such injunction,
order, decree, judgment or ruling is reasonably likely to be avoided by
obtaining a vote of Egreetings' stockholders to authorize the Merger without
first completing the Offer, as promptly as practicable after the request of
AmericanGreetings.com or American Pie, or the determination of Egreetings, to do
so, Egreetings will promptly take all action necessary in accordance with
Delaware law and its Certificate of Incorporation and By-Laws to convene a
meeting of its stockholders. Subject to the terms of the Merger Agreement,
Egreetings shall use its reasonable best efforts to solicit from stockholders of
Egreetings proxies in favor of adoption of the Merger Agreement and secure any
vote or consent of stockholders required by Delaware law to effect the Merger.
AmericanGreetings.com has agreed in the Merger Agreement that it will vote, or
cause to be voted, in favor of the adoption of the Merger Agreement all Shares
directly or indirectly owned of record or beneficially owned by it or American
Pie.
If Egreetings convenes a stockholders meeting as a result of the conditions
set forth in (ii) above:
- American Pie shall terminate the Offer;
- any obligation of the parties to the Merger Agreement set forth in the
provisions of the Merger Agreement governing the Offer shall cease;
- in addition to the conditions of the Merger set forth in the Merger
Agreement (other than the condition relating to the Offer contained
therein, which shall no longer be applicable), the conditions to the
Offer set
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forth in Section 13 of this Offer To Purchase, other than the Minimum
Condition and paragraph (d) thereto, shall become conditions to the
Merger; and
- any right or obligation of any party to the Merger Agreement that is
governed by reference to the time prior to the purchase of and payment
for the Shares pursuant to the Offer shall instead be governed by
reference to the time prior to the Effective Time, except for those
rights and obligations set forth in the "no-shop" provisions to the
Merger Agreement, which shall be governed by reference to the time prior
to adoption of the Merger Agreement by the stockholders of Egreetings.
The Merger Agreement further provides that, notwithstanding the foregoing
or any provision of the Merger Agreement, in the event that
AmericanGreetings.com or American Pie owns at least 90% of the outstanding
Shares following the expiration of the Offer, Egreetings shall not be required
to convene a stockholders meeting or mail proxy statements related thereto, and
the parties to the Merger Agreement will, at the request of
AmericanGreetings.com or American Pie and subject to the condition of the Merger
as set forth in the Merger Agreement, take all necessary and appropriate action
to cause the Merger to become effective in accordance with Section 253 of the
GCL without a meeting of stockholders of Egreetings as soon as practicable after
the acceptance for payment and purchase of Shares by American Pie pursuant to
the Offer.
REPRESENTATIONS AND WARRANTIES OF EGREETINGS. Pursuant to the Merger
Agreement, Egreetings has made representations and warranties with respect to,
among other things:
- organization, corporate powers and foreign qualifications of Egreetings
and each of its significant subsidiaries;
- capitalization of Egreetings and its significant subsidiaries;
- corporate power and authority to enter into the Merger Agreement and,
subject to any necessary stockholder adoption of the Merger Agreement and
the filing of the Certificate of Merger as required by Delaware law, to
carry out its obligations under the Merger Agreement and due
authorization, execution and delivery of the Merger Agreement by
Egreetings and the consummation by Egreetings of the transactions
contemplated thereby, subject to the adoption of the Merger by
Egreetings' stockholders, if required, and filing of a Certificate of
Merger in accordance with Delaware law;
- the absence of any conflicts from the execution of the Merger Agreement
by Egreetings and the consummation by Egreetings of the transactions
contemplated thereby with any law, regulation, court order, judgment,
decree, Egreetings' Certificate of Incorporation or By-laws, permit or
license, agreements, contracts or other instruments and obligations and
the absence of certain required waivers, consents or approvals;
- the material accuracy of the documents filed with the Commission and
Egreetings' unaudited and audited financial statements and condition;
- Egreetings' compliance with the liquidation plan delivered to
AmericanGreetings.com and American Pie;
- the absence of certain litigation;
- employee benefit plans;
- the compliance with the requirements of the Commission and the absence of
untrue statements in any proxy statement required to be mailed to
stockholders of Egreetings in connection with the Offer and Merger, the
compliance with the requirements of the Commission of the Schedule 14D-9
filed by Egreetings in connection with the Offer and the Merger and the
accuracy and completeness of certain information supplied by Egreetings,
if required, in connection with the Offer and the Merger;
- the absence of brokerage or finders fees or commissions payable in
connection with the Merger Agreement and the transactions contemplated
thereby (other than with respect to fees payable to Credit Suisse First
Boston Corporation);
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- compliance by Egreetings with its charter documents, material contracts
and applicable law and required permits, licenses, variances, exemptions,
orders, regulations and approvals of governmental authorities for the
conduct of business by Egreetings and its subsidiaries;
- required payment of taxes and filing of tax returns;
- patents, trademarks, web site domain names, and other intellectual
property;
- the full force and effect of certain contracts;
- the compliance of Egreetings and its subsidiaries with all laws,
including those relating to the protection of the environment;
- the vote required by the stockholders of Egreetings to approve the
Merger, if such vote is required under Delaware law;
- receipt of an opinion from Credit Suisse First Boston as to the fairness
of the amount to be received by Egreetings' stockholders for Shares; and
- the absence of certain contractual obligations that would be required to
be reported by Egreetings to the Commission.
REPRESENTATIONS AND WARRANTIES OF AmericanGreetings.com AND AMERICAN PIE.
Pursuant to the Merger Agreement, AmericanGreetings.com and American Pie have
made representations and warranties with respect to, among other things:
- corporate organization;
- corporate power and authority to enter into the Merger Agreement and
subject to the filing of the Certificate of Merger as required by
Delaware law, to carry out their obligations under the Merger Agreement
and due authorization, execution and delivery of the Merger Agreement by
AmericanGreetings.com and American Pie and the consummation of the Offer
and the Merger;
- the absence of any conflicts from the execution of the Merger Agreement
by AmericanGreetings.com and American Pie and the consummation by
AmericanGreetings.com and American Pie of the transactions contemplated
thereby with any law, regulation, court order, judgment, decree,
AmericanGreetings.com or American Pies charter documents, permit or
license, agreements, contracts or other instruments and obligations and
the absence of certain required waivers, consents or approvals;
- American Pie's ability to pay for the Shares purchased in the Offer and
the Merger;
- the absence of certain obligations or liabilities of American Pie;
- the absence of brokerage or finders fees or commissions payable in
connection with the Merger Agreement and the transactions contemplated
thereby (other than with respect to the fees payable to William Blair &
Company); and
- the accuracy and completeness of certain information supplied by
AmericanGreetings.com and American Pie, if required, in connection with
the Offer and the Merger.
COVENANTS. Under the terms of the Merger Agreement, the ability of
Egreetings to conduct its operations is restricted. Egreetings has agreed that,
between the date of the Merger Agreement and the Effective Time or earlier
termination of the Merger Agreement, except as disclosed to
AmericanGreetings.com and American Pie pursuant to the terms of the Merger
Agreement or as specifically contemplated by the Merger Agreement or unless
AmericanGreetings.com shall otherwise consent in writing:
- Egreetings will use its reasonable efforts to preserve substantially
intact and continue operating the "egreetings.com" Website; and in all
material respects the business of Egreetings shall be conducted in, and
Egreetings shall not take any action except in, accordance with the
liquidation plan for Egreetings presented to AmericanGreetings.com;
- Egreetings will not amend its Certificate of Incorporation or By-Laws;
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- Egreetings will not declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its
capital stock; and neither Egreetings nor any of its subsidiaries will:
- issue, sell, transfer, pledge, dispose of or encumber any additional
shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or right of any kind to
acquire, any shares of capital stock of any class of Egreetings or
any of its subsidiaries, other than issuances of Shares pursuant to
securities, options, warrants, calls, commitments or rights existing
at the date of the Merger Agreement and previously disclosed to
AmericanGreetings.com or American Pie in writing (including as
disclosed in documents filed with the Commission);
- incur any long-term indebtedness (whether evidences by a note or
other instrument, pursuant to a financing lease, sale-leaseback
transaction, or otherwise) or incur short-term indebtedness;
- redeem, purchase or otherwise acquire directly or indirectly any of
its capital stock or other securities, or
- enter into, amend, terminate, cancel, renew or fail to use
reasonable efforts to renew in any material respect any material
contract, including, without limitation, any insurance policies.
- neither Egreetings nor any of its subsidiaries will
- grant any increase in the compensation or benefits payable or to
become payable by Egreetings or any of its subsidiaries or any
employee;
- adopt, enter into, amend or otherwise increase, or accelerate the
payment or vesting of the amounts, benefits or rights payable or
accrued or to become payable or accrued under any bonus, incentive
compensation, deferred compensation, severance, termination, change
in control, retention, hospitalization, or other medical, life,
disability, insurance or other welfare, profit sharing, stock
option, stock appreciation right, restricted stock or other equity
based, pension, retirement or other employee compensation or benefit
plan, program, agreement or arrangement, or
- enter into or amend in any material respect any employment or
collective bargaining agreement or, except in accordance with the
existing written policies of Egreetings or existing contracts or
agreements, grant any severance or termination pay to any officer,
director or employee of Egreetings or any of its subsidiaries.
- neither Egreetings nor its subsidiaries will change the accounting
principles used by it unless required by GAAP (or, if applicable with
respect to subsidiaries, foreign generally accepted accounting
principles);
- neither Egreetings nor any of its subsidiaries shall acquire by merging
or consolidating with, by purchasing an equity interest in or portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire any assets of any other person or entity;
- neither Egreetings nor any of its subsidiaries shall sell, lease,
exchange, transfer or otherwise dispose of, or agree to sell, lease,
exchange, transfer or otherwise dispose of, any of its assets listed on
Egreetings' fixed asset ledger;
- neither Egreetings nor any of its subsidiaries shall release any third
party from its obligations under any existing standstill agreement or
arrangement relating to a proposed Acquisition Transaction, unless the
Board determines in good faith, after consultation with its outside legal
counsel, that the failure to do so would create a reasonable possibility
of a breach of the fiduciary duties of the Egreetings Board under
applicable law, or otherwise under any confidentiality or similar
agreement;
- Egreetings and its subsidiaries shall not mortgage, pledge, hypothecate,
grant any security interest in, or otherwise subject to any other lien on
any of its properties or assets;
- neither Egreetings nor its subsidiaries shall compromise, settle, grant
any waiver or release relating to or otherwise adjust any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), including any litigation, other
than those claims, liabilities or obligations
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consented to by, and set forth on a schedule delivered to,
AmericanGreetings.com or American Pie by the fifth business day after the
date of the Merger Agreement; and
- neither Egreetings nor any of its subsidiaries will enter into an
agreement, contract, commitment or arrangement to do any of the
foregoing.
ACCESS TO INFORMATION. The Merger Agreement provides that subject to
applicable antitrust laws and regulations relating to the exchange of
information, from the date of the Merger Agreement until the Effective Time,
Egreetings will, and will cause each of its subsidiaries, its officers,
directors, employees, auditors and agents to, afford AmericanGreetings.com and
American Pie and their representatives reasonable access, at all reasonable
times, to its officers, employees, agents, properties, offices and other
facilities and to the books and records, and shall furnish AmericanGreetings.com
and American Pie with all financial, operating and other data and information as
AmericanGreetings.com and American Pie, through their representatives, may
reasonably request.
ADDITIONAL AGREEMENTS. The Merger Agreement provides that except as
mutually agreed by AmericanGreetings.com and Egreetings, Egreetings,
AmericanGreetings.com and American Pie will each comply in all material respects
with all applicable laws and with all applicable rules and regulations of any
governmental authority in connection with its execution, delivery and
performance of the Merger Agreement and the transactions contemplated thereby.
Each of the parties to the Merger Agreement agreed to use all reasonable efforts
to obtain in a timely manner all necessary waivers, consents and approvals and
to effect all necessary registrations and filings, and to use all reasonable
efforts to take, or cause to be taken, all other actions and to do, or cause to
be done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by the Merger
Agreement. The parties will cooperate in responding to inquiries from and making
presentations to, regulatory authorities.
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Egreetings and
AmericanGreetings.com will obtain the prior approval of each other prior to
issuing any press release or otherwise making any public statement with respect
to the Offer or the Merger and will not issue any press release or make any
public statement prior to such approval, unless required by applicable fiduciary
duties, law or applicable stock exchange rules and after consultation with the
other party if reasonably possible.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. The Merger Agreement
provides that the Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation from liability set forth in Egreetings' Certificate of Incorporation
and By-Laws and shall not be amended, repealed or otherwise modified for a
period of six years after the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who as of the date of the Merger
Agreement were directors, officers, employees, fiduciary, agents of Egreetings
or otherwise entitled to indemnification under the Certificate of Incorporation,
By-Laws or indemnification agreements (the "Indemnified Parties"). American Pie
has agreed that from and after the date American Pie purchases Shares pursuant
to the Offer, American Pie will cause Egreetings or the Surviving Corporation to
- fulfill and honor in all respects the obligations of Egreetings pursuant
to any indemnification agreements and any indemnification provision and
any exculpation provision set forth in Egreetings' Certificate of
Incorporation and By-Laws, and
- to the fullest extent permitted under Delaware law, indemnify, defend and
hold harmless, each Indemnified Party against any costs or expenses
(including reasonable attorneys' fees), judgment, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with
any claim, action, suite proceeding or investigation, including without
limitation liabilities arising out of the transactions contemplated by
the Merger Agreement, to the extent that it was based on the fact that
such Indemnified Party is or was a director, officer or employee of
Egreetings (regardless of whether such liabilities arise out of actions
or omissions or alleged actions or omissions occurring at or prior to the
Effective Time).
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In the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time):
- Egreetings or the Surviving Corporation, as applicable shall pay the
reasonable fees and expenses of counsel selected by the Indemnified
Parties, which counsel shall be reasonably satisfactory to Egreetings or
the Surviving Corporation, promptly as statements therefore are received,
and
- Egreetings and the Surviving Corporation will cooperate in the defense of
any such matter; provided, however, that neither Egreetings nor the
Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld);
and further, provided, that neither Egreetings nor the Surviving
Corporation shall be obliged to pay the fees and disbursements of more
than one counsel for all Indemnified Parties in any single action except
to the extent that, in the opinion of counsel for the Indemnified
Parties, two or more of such Indemnified Parties have conflicting
interests in the outcome of the action.
The Merger Agreement provides further that for six years after the
Effective Time, the Surviving Corporation shall be required to maintain or
obtain officers' and directors' liability insurance covering the Indemnified
Parties who are currently covered by Egreetings' officers and directors
liability insurance policy on terms not less favorable than those in effect on
the date of the Merger Agreement in terms of coverage and amounts; provided,
however, that the Surviving Corporation will not be required to expend in any
year an amount in excess of 200% of the annual aggregate premiums currently paid
by Egreetings for such insurance; and provided, further, that if the annual
premiums of such insurance coverage exceed such amount, the Surviving
Corporation will be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of its Board of Directors, for a cost not
exceeding such amount.
American Pie has agreed to cause the Surviving Corporation to reimburse all
expenses, including reasonable attorney's fees and expenses, incurred by any
person to enforce the foregoing obligations of American Pie and the Surviving
Corporation.
Notwithstanding anything in the Merger Agreement to the contrary, the
foregoing provisions are intended to be for the benefit of and to grant third
party rights to Indemnified Parties whether or not parties to the Merger
Agreement, and each of the Indemnified Parties shall be entitled to enforce the
covenants contained in the foregoing.
The Merger Agreement provides that if the Surviving Corporation or any of
its successors or assigns consolidates with or merges into any other entity and
shall not be the continuing or surviving entity of such consolidation or merger
or transfers all or substantially all of its properties and assets to any person
or entity, then and in each such case, proper provision shall be made so that
the successors and assigns of the Surviving Corporation assume the obligations
set forth in this section.
NOTIFICATION OF CERTAIN MATTERS. AmericanGreetings.com and American Pie and
Egreetings have agreed to promptly notify each other of:
- the occurrence or non-occurrence of any event whose occurrence or
non-occurrence would be likely to cause either:
- any representation or warranty contained in the Merger Agreement to
be untrue or inaccurate in any material respect at any time from the
date of the Merger Agreement to the Effective Time, or
- any condition described in Section 13 of this Offer To Purchase to
be unsatisfied in any material respect at any time from the date of
the Merger Agreement to the date American Pie purchases Shares
pursuant to the Offer
- any material failure of Egreetings, AmericanGreetings.com or American
Pie, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it under the Merger Agreement.
The delivery of any notice pursuant to the foregoing provisions shall not
limit or otherwise affect the remedies available under the Merger Agreement to
the party receiving such notice.
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FINANCIAL STATEMENTS; FINANCING. The Merger Agreement provides that, as
promptly as practicable after the date of the Merger Agreement, Egreetings will
provide to AmericanGreetings.com, the audited financial statements (including
accompanying notes) for Egreetings' fiscal year ended December 31, 2000.
NO SOLICITATION. The Merger Agreement provides that Egreetings will not,
directly or indirectly, and it will use its reasonable best efforts to cause
every officer, director, agent, financial adviser, attorney, accountant or other
representative not to solicit, initiate or knowingly encourage submission of
proposals or offers from any Person relating to, or that could reasonably be
expected to lead to an Acquisition Transaction (as defined below) or participate
in any negotiations or discussions regarding, or furnish to any other Person any
information with respect to, or otherwise knowingly cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person to do or seek an Acquisition Transaction; provided, however, that, prior
to the purchase of and payment for Shares by American Pie pursuant to the Offer,
Egreetings may, in response to an unsolicited written proposal with respect to
an Acquisition Transaction from a third party, make such inquiry of the party
making such proposal as may be necessary to inform itself of the proposed terms
and details of the proposal, and if the Egreetings Board determines, in its good
faith, reasonable judgment, after consultation with its financial advisor that
such proposal is a Superior Proposal, furnish information to, and negotiate,
explore or otherwise engage in substantive discussions with such third party,
but only if the Board of Directors determines, in good faith, reasonable
judgment after consultation with its outside legal counsel, that failing to take
such action would create a reasonable possibility of a breach of the fiduciary
duties of the Board of Directors under applicable law.
The Merger Agreement provides that neither the Egreetings Board nor any
committee thereof may:
- withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to AmericanGreetings.com or American Pie, the approval or
recommendation by the Egreetings Board or such committee of the Offer,
the Merger or the Merger Agreement;
- approve or recommend, or propose publicly to approve or recommend, any
Acquisition Transaction; or
- cause Egreetings to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement related to
any Acquisition Transaction (each, an "Acquisition Agreement").
Notwithstanding anything to the contrary contained in the Merger Agreement,
if, prior to the earlier of (x) if AmericanGreetings.com shall have requested
Egreetings to cause AmericanGreetings.com's nominees to constitute a majority of
the Egreetings Board, (y) the purchase of and payment for Shares by American Pie
pursuant to the Offer and or (z) the Effective Time (the earliest of such events
the "Board Representation Date"), the Egreetings Board determines, in its good
faith, reasonable judgment, after consultation with outside counsel, that
failure to do any of the actions set forth in this paragraph would create a
reasonable possibility of a breach of the fiduciary duties of the Egreetings
Board under applicable law, the Egreetings Board may withdraw or modify its
approval or recommendation of the Offer, the Merger or the Merger Agreement, or,
in response to an unsolicited Acquisition Transaction proposal, if the
Egreetings Board also determines in its good faith, reasonable judgment, after
consultation with its financial advisor, that such proposal is a Superior
Proposal, (1) approve or recommend an Acquisition Transaction, and/or (2)
subject to Egreetings having terminated the Merger Agreement pursuant to the
second to last bullet point under the section titled "Termination" in this
summary, and having paid to American Pie the fees described in the section
titled "Termination" Fee in this summary, enter into an Acquisition Agreement;
provided, however, that prior to terminating the Merger Agreement and entering
into such Acquisition Agreement, Egreetings shall give American Pie at least
five business day's notice of its intention to do so and, if American Pie agrees
to match the terms of such proposal for an Acquisition Transaction,
notwithstanding the foregoing provisions of this section, Egreetings may not
terminate the Merger Agreement pursuant to the second to last bullet point under
the section titled "Termination" in this summary and may not enter into such
Acquisition Agreement.
The Merger Agreement requires Egreetings to:
- immediately (and in any event, no later than one business day after
receipt) advise AmericanGreetings.com in writing of the receipt of a
request for information or any inquiries or proposals relating to an
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Acquisition Transaction and any actions taken pursuant to the first
paragraph of this section, specifying the material terms and conditions
of such proposed Acquisition Transaction; and
- keep AmericanGreetings.com informed of the status of any such request or
proposed Acquisition Transaction. If any such inquiry or proposal is in
writing, Egreetings shall promptly deliver to AmericanGreetings.com a
copy of such inquiry or proposal.
For purposes of the Merger Agreement:
- "Acquisition Transaction" means (other than the transactions contemplated
by the Merger Agreement)
- a merger, consolidation or other business combination, share
exchange, sale of shares of capital stock, tender offer or exchange
offer or similar transaction involving Egreetings, in which holders
of a majority of Egreetings' voting securities prior to such
transaction own less than a majority of the voting securities of the
surviving entity after such transaction;
- acquisition in any manner, directly or indirectly, of at least a
majority of the voting securities of Egreetings, including any
single or multi-step transaction or series of related transactions
which is structured to permit a third party to acquire beneficial
ownership of at least a majority of the voting securities of
Egreetings; or
- the acquisition in any manner, directly or indirectly, of any
material portion of the business or assets of Egreetings.
- "Superior Proposal" means a proposed Acquisition Transaction involving at
least two-thirds of the shares of capital stock of Egreetings or
substantially all of the assets of Egreetings that the Egreetings Board
determines, after consulting with Egreetings' financial advisors, to be
more favorable to Egreetings' stockholders than the Merger; provided,
however, that a proposed Acquisition Transaction will not be deemed to be
a Superior Proposal unless it involves consideration per Share that
exceeds the Per Share Amount.
Nothing contained in the Merger Agreement prohibits Egreetings or the
Egreetings Board from complying with Rule 14d-9 or 14e-2 under the Exchange Act
or from furnishing a copy or excerpts of the Merger Agreement to any third party
that makes a proposal for an Acquisition Transaction or any inquiry that could
lead to a proposal for an Acquisition Transaction.
CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement,
the respective obligations of each party to effect the Merger are subject, on or
prior to the Closing Date, to each of the following conditions (any or all of
which may be waived by the parties to the Merger Agreement in writing, in whole
or in part, to the extent permitted by applicable law):
- AmericanGreetings.com shall have made, or caused to be made, the Offer
and shall have purchased, or caused to be purchased, the Shares pursuant
to the Offer; provided, however, that this condition shall be deemed to
have been satisfied with respect to the obligation of
AmericanGreetings.com and American Pie to effect the Merger if American
Pie fails to accept for payment or pay for the Shares pursuant to the
Offer in violation of the terms of the Offer or of the Merger Agreement;
- the Merger Agreement shall have been adopted by the requisite vote of the
stockholders of Egreetings, if required by the Delaware law; and
- no statute, rule, regulation, judgment, writ, decree, order or injunction
(whether temporary, preliminary or permanent) shall have been
promulgated, enacted, entered or enforced, and no other action shall have
been taken, by any government or governmental, administrative or
regulatory authority or by any court of competent jurisdiction, that in
any of the foregoing cases has the effect of making illegal or directly
or indirectly restraining, prohibiting or restricting the consummation of
the Merger.
The obligations of AmericanGreetings.com and American Pie to effect the
Merger are further subject to the satisfaction or waiver of the condition that
prior to such time as AmericanGreetings.com's nominees constitute a majority of
the Board of Directors, Egreetings shall have performed in all material respects
all obligations and
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complied in all material respects with all agreements and covenants of
Egreetings required to be performed or complied with by it under the Merger
Agreement.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after the adoption of the Merger Agreement
by the stockholders of Egreetings:
- by mutual written consent of AmericanGreetings.com and Egreetings by
action of their respective Board of Directors (subject to the last
paragraph under the section titled "The Offer" in this summary);
- by either AmericanGreetings.com or Egreetings if a court of competent
jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a final and nonapplicable order, decree or
ruling or taken any other action (which order, decree or ruling the
parties thereto shall use their best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by the Merger Agreement (unless such order,
decree or ruling can be complied with by convening a meeting at
Egreetings stockholders and seeking adoption of the Merger Agreement);
- by either AmericanGreetings.com or Egreetings if the Offer has not been
consummated within 60 days of the date of the Merger Agreement (the
"Offer Drop Dead Date"); provided, however, that no party may terminate
the Merger Agreement if such party's failure to fulfill any of its
obligations under the Merger Agreement is the reason that the
consummation of the Offer has not occurred on or before said date;
provided, further, that if Egreetings is required to file with the
Commission and mail to its stockholders a proxy statement in connection
with holding a meeting of its stockholders, AmericanGreetings.com or
Egreetings may terminate the Merger Agreement pursuant to this paragraph
only if the Effective Time shall not have occurred on or before the day
that is 120 days from the date of the Merger Agreement (the "Merger Drop
Dead Date") (unless otherwise extended by the mutual agreement of
AmericanGreetings.com and Egreetings; provided, further, that if, at the
Merger Drop Dead Date, either party does not agree to extend the Merger
Drop Dead Date upon the written request of the other party to do so, the
party not agreeing to the extension shall pay to the party requesting the
extension a termination fee as described in the last paragraph under the
section titled "Termination Fee" in this summary if the party requesting
the extension is actively attempting to clear the proxy statement with
the Commission for mailing to stockholders of Egreetings or the proxy
statement has been mailed and such requesting party's failure to fulfill
any of its obligations under the Merger Agreement shall not have been the
reason that the Effective Time shall not have occurred on or before the
Merger Drop Dead Date and the termination described in this proviso shall
not be effective unless and until the terminating party shall have paid
to the requesting party the fee described in the last paragraph of the
section titled "Termination Fee" as described below in this summary;
- by Egreetings, at any time prior to the purchase of and payment for
Shares by American Pie pursuant to the Offer if it shall not be in
material breach of its covenants or agreements thereunder, if (i) there
shall be a material breach of any of AmericanGreetings.com's or American
Pie's representations, warranties or covenants thereunder, which breach
shall not have been cured within ten days of the receipt of written
notice thereof by AmericanGreetings.com from Egreetings or (ii) there
shall have been a material breach on the part of AmericanGreetings.com or
American Pie of any of their respective covenants or agreements
thereunder, which breach shall not have been cured within ten days of the
receipt of written notice thereof by AmericanGreetings.com from
Egreetings;
- by AmericanGreetings.com, at any time prior to the purchase of and
payment for Shares by American Pie pursuant to the Offer and if it shall
not be in material breach of its covenants or agreements thereunder, if
(i) there shall be a material breach of any of Egreetings'
representations, warranties or covenants thereunder, which breach shall
not have been cured within ten days of the receipt of written notice
thereof by Egreetings from AmericanGreetings.com or (ii) there shall have
been a material breach on the part of Egreetings of any of its covenants
or agreements thereunder, which breach shall not have been cured within
ten days of the receipt of written notice thereof by Egreetings from
AmericanGreetings.com;
- by AmericanGreetings.com, at any time prior to the Board Representation
Date if (i) the Egreetings Board shall have withdrawn, modified or
changed its recommendation or approval in respect of the Merger
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Agreement, the Offer or the Merger, (ii) the Egreetings Board shall have
recommended any proposal other than by AmericanGreetings.com in respect
of an Acquisition Transaction or (iii) Egreetings shall have entered into
an Acquisition Agreement in response to an unsolicited Superior Proposal
pursuant to, and in compliance with the terms under the section titled
"No Solicitation" in this summary;
- by either AmericanGreetings.com or Egreetings if the Offer (as it may
have been extended) expires or is terminated or withdrawn pursuant to its
terms without any Shares being purchased thereunder by
AmericanGreetings.com as a result of the occurrence of any of the events
set forth in Section 13 of this Offer To Purchase; provided, however,
that the right to terminate the Merger Agreement pursuant to this
paragraph shall not be available (i) to either AmericanGreetings.com or
Egreetings if Egreetings shall have convened a stockholders meeting
because any party to this Agreement shall have exercised its right to
cause Egreetings to call a stockholders meeting in order to comply with
any order, decree or ruling that restrains, enjoins or otherwise
prohibits the transactions contemplated by the Merger Agreement or (ii)
to AmericanGreetings.com if AmericanGreetings.com's failure to fulfill
any obligation under the Merger Agreement has resulted in the occurrence
of any of the events set forth in Section 13 of this Offer To Purchase or
if AmericanGreetings.com's termination or withdrawal of the Offer
constitutes a breach of the Merger Agreement; provided, further, that the
termination described in this section shall not be effective unless and
until Egreetings shall have paid to AmericanGreetings.com the fee
described in the section titled "Termination Fee" in this summary, if
payable pursuant to such section;
- by Egreetings, in order to enter into an Acquisition Agreement pursuant
to the section titled "No Solicitation" in this summary; and
- by Egreetings if neither AmericanGreetings.com nor American Pie shall
have commenced the Offer within ten business days after the date of the
Merger Agreement.
In the event of the termination of the Merger Agreement as provided above,
the Merger Agreement will become void and subject to certain exceptions there
shall be no liability on the part of AmericanGreetings.com, American Pie or
Egreetings.
TERMINATION FEE. If the Merger Agreement is terminated at such time as the
Merger Agreement is terminable pursuant to the fifth bullet of the immediately
preceding the section titled "Termination" in this summary, then:
- Egreetings shall promptly (but not later than two business days after
receipt of notice from AmericanGreetings.com) pay to
AmericanGreetings.com an amount equal to AmericanGreetings.com's actual
and reasonably documented expenses, not to exceed $1,120,000 in cash;
provided, however, that if the Merger Agreement is terminated by
AmericanGreetings.com as a result of a willful breach by Egreetings,
AmericanGreetings.com may pursue any remedies available to it at law or
in equity and shall, in addition to its expenses, be entitled to recover
such additional amounts as AmericanGreetings.com may be entitled to
receive at law or in equity; and
- if, (i) at the time of Egreetings' willful breach of the Merger
Agreement, there shall have been a third-party offer or proposal with
respect to an Acquisition Transaction which at the time of such
termination shall not have been rejected by Egreetings and the Egreetings
Board or withdrawn by the third party, and (ii) within one year of any
termination by AmericanGreetings.com, Egreetings becomes a subsidiary of
such offeror or a subsidiary of an affiliate of such offeror or accepts a
written offer to consummate or consummates an Acquisition Transaction
with such offeror or an affiliate thereof, then Egreetings, upon the
signing of a definitive agreement relating to such an Acquisition
Transaction, or, if no such agreement is signed then at the closing (and
as a condition to the closing) of Egreetings becoming such a subsidiary
or of such Acquisition Transaction, will pay to AmericanGreetings.com a
termination fee equal to $1,120,000 in cash, less any amount paid above;
provided, however, that in no event shall the termination fee referred to
in the following paragraph be payable if the termination fee referred to
in this paragraph has been paid.
If AmericanGreetings.com shall have terminated the Merger Agreement
pursuant to the sixth bullet of the immediately preceding section titled
"Termination" in this summary, or Egreetings shall have terminated the
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Merger Agreement in response to a Superior Proposal, then in any such case
Egreetings shall promptly, but in no event later than two business days after
the date of such termination or event, pay AmericanGreetings.com a termination
fee of $1,120,000 in cash which amount shall be payable by wire transfer to such
account as AmericanGreetings.com may designate in writing to Egreetings.
The Merger Agreement provides that the termination fee provisions will
survive any termination of the Merger Agreement. The term "Expenses" means all
out-of-pocket fees, costs and other expenses actually incurred or assumed by
AmericanGreetings.com or American Pie or incurred on their behalf in connection
with the Merger Agreement or any of the transactions contemplated thereby,
including but not limited to in connection with the negotiation, preparation,
execution and performance of the Merger Agreement, the structuring and financing
of the Merger and the other transactions contemplated thereby; and all fees and
expenses of counsel, accountants and experts to AmericanGreetings.com or
American Pie. No fee or expense reimbursement shall be paid pursuant to this
section if AmericanGreetings.com shall be in material breach of its obligations
under the Merger Agreement.
If the Merger Agreement is terminated by Egreetings pursuant to the fourth
bullet point in the immediately preceding section above titled "Termination" in
this summary, then AmericanGreetings.com shall promptly (but not later than two
business days after receipt of notice from Egreetings) pay to Egreetings an
amount equal to Egreetings' actual and reasonably documented Expenses not to
exceed $1,120,000 in cash; provided, however, that, if the Merger Agreement is
terminated by Egreetings as a result of a willful breach by
AmericanGreetings.com or American Pie, Egreetings may pursue any remedies
available to it at law or in equity and shall, in addition to its Expenses, be
entitled to recover such additional amounts as Egreetings may be entitled to
receive at law or in equity. No expense reimbursement shall be paid pursuant to
this section if Egreetings shall be in material breach of its obligations under
the Merger Agreement. This section will survive any termination of the Merger
Agreement.
If the Merger Agreement is terminated by either party pursuant to the third
bullet point in the immediately preceding section above titled "Termination" in
this summary and the terminating party has refused to extend the Merger Drop
Dead Date despite the written request of the other party to do so, then the
terminating party shall, as a condition to terminating the Merger Agreement
pursuant to the third bullet point in the section above, pay to the other party
a termination fee of $1,120,000 in cash if the party requesting the extension is
actively attempting to clear the Proxy Statement with the SEC for mailing to the
stockholders of Egreetings or the Proxy Statement has been mailed and such
requesting party's failure to fulfill any of its obligations under the Merger
Agreement shall not have been the reason that the Effective Time shall not have
occurred on or before the Merger Drop Dead Date. This remedy will survive any
termination of the Merger Agreement.
AMENDMENT. The Merger Agreement may be amended by the parties thereto, by
action taken by AmericanGreetings.com and by action taken by the Egreetings
Board and American Pie's Board of Directors at any time before the Effective
Time notwithstanding the adoption of the Merger Agreement by the stockholders of
Egreetings; provided, however, that, after the adoption of the Merger Agreement
by the stockholders of Egreetings, no amendment may be made that would reduce
the amount or change the type of consideration into which each Share will be
converted upon consummation of the Merger or alter or change any of the terms or
conditions of the Merger Agreement if such alteration or change would adversely
affect the holders of Shares. The Merger Agreement may not be amended except by
an instrument in writing signed by the parties to such agreement.
WAIVER. At any time before the Effective Time, any party may:
- extend the time for the performance of any of the obligations or other
acts of the other parties,
- waive any inaccuracies in the representations and warranties contained in
the Merger Agreement or in any document delivered pursuant to the Merger
Agreement, and
- waive compliance with any of the agreements or conditions contained in
the Merger Agreement.
Any agreement on the part of a party thereto to any extension or waiver
shall be valid only as against such party and only if set forth in an instrument
in writing signed by such party. Any such waiver shall constitute a
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waiver only with respect to the specific matter described in such writing and
shall in no way impair the rights of the party granting such waiver in any other
respect or at any other time. Neither the waiver by any of the parties to the
Merger Agreement of a breach of or a default under any of the provisions of the
Merger Agreement, nor the failure by any of the parties, on one or more
occasions, to enforce any of the provisions of the Merger Agreement or to
exercise any right or privilege under the Merger Agreement, shall be construed
as a waiver of any other breach of default of a similar nature, or as a waiver
of any of such provisions, rights or privileges under the Merger Agreement. The
rights and remedies provided in the Merger Agreement are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
THE TENDER AND VOTING AGREEMENT
The following is a summary of the material terms of the Tender and Voting
Agreement and is qualified in its entirety by reference to the complete text of
the Tender and Voting Agreement, a copy of which is filed with the Commission as
an exhibit to the Schedule TO and is incorporated herein by reference. The
Tender and Voting Agreement should be read in its entirety for a more complete
description of the matters summarized below. The Tender and Voting Agreement may
be examined, and copies obtained from the offices of the Commission in the same
manner as set forth in Section 8 above. Defined terms used below and not defined
in this Offer To Purchase have the respective meanings assigned to those terms
in the Tender and Voting Agreement.
In connection with the execution of the Merger Agreement, each stockholder
set forth on Schedule A to the Tender and Voting Agreement (the "Stockholders")
has entered into the Tender and Voting Agreement with AmericanGreetings.com and
American Pie.
TENDER OF SHARES. Each Stockholder has agreed to validly tender (or cause
the record owner of such shares to validly tender) and sell (and not withdraw)
pursuant to and in accordance with the terms of the Offer not later than the
fifteenth business day after commencement of the Offer its Subject Shares (as
used herein, "Subject Shares" shall mean all Shares as set forth opposite such
Stockholder's name on Schedule A to the Tender and Voting Agreement and any
other Shares the record or beneficial ownership of which is directly acquired by
such Stockholder during the period from and including the date of the Tender and
Voting Agreement through and including the date on which the Tender and Voting
Agreement is terminated).
TRANSFER OF SHARES. Each Stockholder has agreed that during the term of the
Tender and Voting Agreement, he or she will not, except as provided in the
agreement:
- tender into any tender or exchange offer or otherwise sell, transfer,
pledge, assign, hypothecate or otherwise dispose of, or encumber with any
lien, any of its Subject Shares, other than any sale, transfer or
assignment to members of such Stockholder's family (including upon the
death of Stockholder), a trust or trustees of a trust for the benefit of
such Stockholder or a charitable trust, or other transfers for estate
planning purposes, provided that any such transferee shall agree in
writing to be bound by the terms of the Tender and Voting Agreement;
- acquire any Shares or other securities of Egreetings (otherwise than as
provided in the Tender and Voting Agreement);
- deposit its Subject Shares into a voting trust (other than pursuant to a
trust arrangement of the type described in the first bullet above), enter
into a voting agreement or arrangement with respect to its Subject Shares
or grant any proxy or power of attorney with respect to its Subject
Shares; or
- enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect acquisition of any Shares (other than
as set forth in the second bullet above), or sale, transfer, pledge,
assignment, hypothecation or other disposition of any interest in or the
voting of any Shares or any other securities of Egreetings.
VOTING AGREEMENT. Each Stockholder has agreed that until such time as the
Merger may be consummated or the Merger Agreement may be terminated pursuant to
the terms of the Tender and Voting Agreement, that they have constituted and
appointed AmericanGreetings.com and American Pie, or any nominee thereof, with
full power of substitution, during and for the term of the Tender and Voting
Agreement, as his or her true and lawful
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attorney and proxy for and in his or her name, place and stead, to vote all the
Shares such Stockholder beneficially owns at the time of such vote, at any
annual, special or adjourned meeting of the stockholders of Egreetings (and this
appointment will include the right to sign its name (as stockholder) to any
certificate or other document relating to Egreetings that laws of the State of
Delaware may require or permit):
- in favor of approval and adoption of the Merger Agreement and approval of
the Merger and any transactions contemplated by the Merger Agreement;
- against any Acquisition Transaction, any action or agreement that would
result in a breach in any respect of any covenant, agreement,
representation or warranty of Egreetings under the Merger Agreement and
the following actions (other than the Merger and the other transactions
contemplated by the Merger Agreement):
- any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving Egreetings;
- a sale, lease or transfer of a material amount of assets of
Egreetings, or a reorganization, recapitalization, dissolution or
liquidation of Egreetings; and
- any change in a majority of the persons who constitute the board of
directors of Egreetings as of the date of the Voting and Tender
Agreement, any change in the present capitalization of Egreetings or
any amendment of Egreetings' certificate of incorporation or bylaws,
as amended to the date of the Voting and Tender Agreement, any other
material change in Egreetings' corporate structure or business; or
any other action that, in the case of each of the matters referred
to in this paragraph, is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or adversely affect the
Merger and the other transactions contemplated by the Tender and
Voting Agreement and the Merger Agreement
Under the Tender and Voting agreement, the proxy and power of attorney is a
proxy and power coupled with an interest, and each Stockholder has agreed that
it is irrevocable with respect to Subject Shares held of record by such
Stockholder, until such time as the Tender and Voting Agreement may terminate.
Each Stockholder has agreed to revoke all and any other proxies with respect to
the Shares that he or she may have made or granted. For Shares as to which such
Stockholder is the beneficial but not the record owner, the Stockholder has
agreed to use his or her best efforts to cause any record owner of such Shares
to grant to AmericanGreetings.com a proxy to the same effect as contained in
this section.
NO SOLICITATION. Under the terms of the Tender and Voting Agreement, each
Stockholder has agreed not to, directly or indirectly, through any agent,
financial advisor, attorney, accountant or other representative or otherwise,
(i) solicit, initiate or encourage submission of proposals or offers from any
person or entity relating to, or that could reasonably be expected to lead to,
an Acquisition Transaction or (ii) participate in any negotiations or
discussions regarding, or furnish to any other person or entity any information
with respect to, or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person or entity to do or seek an Acquisition Transaction.
TERMINATION. Each Stockholder has agreed that the Tender and Voting
Agreement will terminate (i) upon the purchase of all the Shares pursuant to the
Offer, (ii) on the earlier to occur of the Effective Time or the date the Merger
Agreement is terminated in accordance with its terms, or (iii) by the mutual
consent of the Stockholders and the Board of Directors of AmericanGreetings.com.
FURTHER ASSURANCES. Each party to the Tender and Voting Agreement has
agreed to execute and deliver all such further documents and instruments and
take all such further action as may be necessary in order to consummate the
transactions contemplated by such agreement.
PUBLICITY. Neither AmericanGreetings.com nor the Stockholders will issue
any press release or otherwise make any public statements with respect to the
Tender and Voting Agreement or the Merger Agreement or the other transactions
contemplated by such agreements without the other party's prior consent (which
consent shall not be unreasonably withheld) except as may be required by law or
applicable stock exchange rules, and after consultation with the other party, if
reasonably possible.
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PLANS FOR EGREETINGS
Following consummation of the Merger, AmericanGreetings.com presently
intends to operate the company as a subsidiary under the name of Egreetings.
However, AmericanGreetings.com will conduct a further review of Egreetings and
its subsidiaries and their respective assets, businesses, corporate structure,
capitalization, operations, properties, policies, management and personnel.
After such review, AmericanGreetings.com will determine what actions or changes,
if any, would be desirable in light of the circumstances which then exist, and
reserves the right to effect such actions or changes. AmericanGreetings.com's
decisions could be affected by information hereafter obtained, changes in
general economic or market conditions or in the business of Egreetings or its
subsidiaries, actions by Egreetings or its subsidiaries and other factors.
Except as otherwise provided in this Offer To Purchase, and for possible
transactions between Egreetings and other subsidiaries of AmericanGreetings.com
in connection with the integration of business conducted by Egreetings with the
other businesses of AmericanGreetings.com and its subsidiaries, American Pie,
AmericanGreetings.com and the directors and officers of American Pie and
AmericanGreetings.com listed on Schedule I have no current plans or proposals
that would result in:
- An extraordinary corporate transaction, such as a merger, reorganization
or liquidation involving Egreetings or any of its subsidiaries;
- A purchase, sale, or transfer of a material amount of the assets of
Egreetings or any of its Subsidiaries;
- Any material change in the present dividend rate or policy, or
indebtedness or capitalization of Egreetings;
- Any change in the present structure of the Egreetings Board or management
of Egreetings, 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 the board or to change any material term of the employment
contract of any executive officer;
- Any other material change in Egreetings' corporate structure or business;
- A class of equity securities of Egreetings to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
interdealer quotation system of a registered national securities
association;
- A class of equity securities of Egreetings becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act; or
- The suspension of Egreetings' obligation to file reports under Section
15(d) of the Exchange Act.
OTHER MATTERS
EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. Pursuant to the Merger
Agreement, following the consummation of the Offer and subject to certain other
conditions, American Pie will be merged with and into Egreetings. If, following
the Offer, approval of Egreetings' stockholders is required by applicable law in
order to consummate the Merger of American Pie with Egreetings, Egreetings will
submit the Merger Agreement to Egreetings' stockholders for adoption. If the
Merger Agreement is submitted to Egreetings' stockholders for adoption, the
Merger Agreement will require the affirmative vote of the holders of a majority
of the outstanding Shares, including the Shares owned by American Pie, to be
adopted. If the Offer is consummated, and the Minimum Condition is satisfied
without being reduced or waived, American Pie will be able to approve the Merger
without the vote of any other stockholder.
If the Merger is consummated, stockholders of Egreetings who elected not to
tender their Shares in the Offer will receive the same amount of consideration
in exchange for each Share as they would have received in the Offer, subject to
their rights to exercise dissenters' rights.
If, following the consummation of the Offer, the Merger is not consummated,
AmericanGreetings.com, which owns 100% of the Common Stock of American Pie,
indirectly will control the number of Shares acquired by American Pie pursuant
to the Offer. Under the Merger Agreement, promptly following payment by American
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Pie for Shares purchased pursuant to the Offer, and from time to time
thereafter, subject to applicable law, Egreetings has agreed to take all actions
necessary to cause a majority of the directors of Egreetings to consist of
persons designated by AmericanGreetings.com (whether, by election or by the
resignation of existing directors and causing AmericanGreetings.com designees to
be elected). See Section 16. As a result of its ownership of such Shares and
right to designate nominees for election to the Egreetings Board,
AmericanGreetings.com indirectly will be able to influence decisions of the
Egreetings Board and the decisions of American Pie as a stockholder of
Egreetings. This concentration of influence in one stockholder may adversely
affect the market value of the Shares.
If AmericanGreetings.com controls more than 50% of the outstanding Shares
following the consummation of the Offer but the Merger is not consummated,
stockholders of Egreetings, other than those affiliated with
AmericanGreetings.com, will lack sufficient voting power to elect directors or
to cause other actions to be taken which require majority approval. If for any
reason following completion of the Offer, the Merger is not consummated,
AmericanGreetings.com and American Pie reserve the right, subject to its
confidentiality agreement with Egreetings (as amended by the Merger Agreement)
and to any applicable legal restrictions, to acquire additional Shares through
private purchases, market transactions, tender or exchange offers or otherwise
on terms and at prices that may be more or less favorable than those of the
Offer or, subject to any applicable legal restrictions, to dispose of any or all
Shares acquired by AmericanGreetings.com and American Pie.
STATUTORY REQUIREMENTS. In general, under the Delaware General Corporation
Law (the "GCL"), a merger of two Delaware corporations requires the adoption of
a resolution by the Board of Directors of each of the corporations desiring to
merge approving an Agreement of Merger containing provisions with respect to
certain statutorily specified matters and the adoption of such Agreement of
Merger by the stockholders of each corporation by the affirmative vote of the
holders of a majority of all the outstanding shares of stock entitled to vote on
such merger. According to Egreetings' Certificate of Incorporation, the Shares
are the only securities of Egreetings which entitle the holders thereof to
voting rights.
The GCL also provides that if a company owns at least 90% of each class of
stock of a subsidiary, such company can effect a short-form merger with that
subsidiary without the action of the other stockholders of the subsidiary.
Accordingly, if as a result of the Offer or otherwise American Pie acquires or
controls the voting power of at least 90% of the Shares, American Pie could, and
intends to, effect the Merger without prior notice to, or any action by, any
other stockholder of Egreetings.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. If the Merger is consummated, however, stockholders of Egreetings who
have not tendered their Shares will have certain rights under the GCL to dissent
and demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Stockholders who perfect such rights by complying with the
procedures set forth in Section 262 of the GCL ("Section 262") will have the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
from the Surviving Corporation. In addition, such dissenting stockholders would
be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value
by any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered in
an appraisal proceeding. The Weinberger court also noted that under Section 262,
fair value is to be determined "exclusive of any element of value arising from
the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,
Inc., however, the Delaware Supreme Court stated that, in the context of a
two-step cash merger, "to the extent that value has been added following a
change in majority control before cash-out, it is still value attributable to
the going concern," to be included in the appraisal process. As a consequence of
the foregoing, the fair value determined in any appraisal proceeding could be
the same as or more or less than $0.85 per Share.
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AmericanGreetings.com does not intend to object, assuming the proper
procedures are followed, to the exercise of appraisal rights by any stockholder
and the demand for appraisal of, and payment in cash for the fair value of, the
Shares. AmericanGreetings.com intends, however, to cause the Surviving
Corporation to argue in an appraisal proceeding that, for purposes of such
proceeding, the fair value of each Share is less than the price paid in the
Merger. In this regard, stockholders should be aware that opinions of investment
banking firms as to the fairness from a financial point of view are not
necessarily opinions as to "fair value" under Section 262. In addition,
AmericanGreetings.com and American Pie have not made any provision in connection
with the Offer and the Merger to grant unaffiliated security holders of
Egreetings access to their corporate files or to obtain counsel or appraisal
services at the expense of the AmericanGreetings.com or American Pie.
Several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders that requires that the merger be "entirely
fair" to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and in Rabkin v. Philip A. Hunt Chemical Corp. that although the
remedy ordinarily available to minority stockholders in a cash-out merger that
is found to be not fair to the minority stockholders is the right to appraisal
described above, monetary damages, injunctive relief or such other relief as the
court may fashion may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE
GCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED
BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE UNDER THE
GCL.
THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE
TO THE APPLICABLE PROVISIONS OF THE GCL.
GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which American Pie seeks to acquire the remaining Shares not held by it. If
applicable, Rule 13e-3 would require, among other things, that certain financial
information regarding Egreetings and certain information regarding the fairness
of the Merger and the consideration offered to minority stockholders be filed
with the Commission and disclosed to minority stockholders prior to consummation
of the Merger.
AmericanGreetings.com and American Pie believe that Rule 13e-3 is
inapplicable to the Offer because neither they nor any of their affiliates
exercises control over Egreetings and, therefore, none of them is an affiliate
of Egreetings. In addition, Rule 13e-3 should be inapplicable to the Merger
because it is anticipated that (i) the Shares will be deregistered under the
Exchange Act prior to the Merger or other business combination or (ii) the
Merger or other business combination will be consummated within one year after
the purchase of the Shares pursuant to the Offer and the amount paid per Share
in the Merger or other business combination is at least equal to the amount paid
per Share in the Offer. Nevertheless, American Pie has provided the additional
disclosure required by Rule 13e-3 in the Section entitled "Special Factors."
12. DIVIDENDS AND DISTRIBUTIONS
If on or after the date of the Merger Agreement Egreetings:
- Splits, combines or otherwise changes the Shares or its capitalization,
- Acquires Shares or otherwise causes a reduction in the number of Shares,
- Issues or sells additional Shares (other than the issuance of Shares
reserved for issuance as of the date of the Merger Agreement under option
and employee stock purchase plans in accordance with their terms as
publicly disclosed as of the date of the Merger Agreement) or any shares
of any other class of capital
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stock, other voting securities or any securities convertible into or
exchangeable for, or rights, warrants or options, conditional or
otherwise, to acquire, any of the foregoing, or
- Discloses that it has taken such action,
then, without prejudice to American Pie's rights under Section 13, American Pie,
in its sole discretion, may make such adjustments in the Per Share Amount and
other terms of the Offer as it deems appropriate to reflect such split,
combination or other change or action, including, without limitation, the
Minimum Condition or the number or type of securities offered to be purchased.
The Merger Agreement provides that, Egreetings will not declare, set aside
or pay any dividend or other distribution payable in cash, stock or property
with respect to its capital stock and Egreetings will not, and will not permit
any of its subsidiaries to, without the consent of AmericanGreetings.com or
American Pie:
- Issue, sell, transfer, pledge, dispose of or encumber any additional
shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire,
any shares of capital stock of any class of Egreetings or any of its
subsidiaries, other than issuances of Shares pursuant to securities,
options, warrants, calls, commitments or rights existing at the date of
the execution of the Merger Agreement and previously disclosed to
American Pie in writing; or
- Redeem, purchase or otherwise acquire directly or indirectly any of its
capital stock or other securities.
If on or after the date of the Merger Agreement Egreetings declares or pays
any dividend on the Shares or any distribution (including, without limitation,
the issuance of additional Shares pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer into the name of American
Pie or its nominees or transferees on Egreetings' stock transfer records of the
Shares purchased pursuant to the Offer, and if Shares are purchased in the
Offer, then, without prejudice to American Pie's rights under Section 13 of this
Offer To Purchase:
- The Per Share Amount shall be reduced by the amount of any such cash
dividend or cash distribution, and
- Any such non-cash dividend, distribution, issuance, proceeds or rights to
be received by the tendering stockholders shall:
- Be received and held by the tendering stockholders for the account
of American Pie and will be required to be promptly remitted and
transferred by each tendering stockholder to the Depositary for the
account of American Pie, accompanied by appropriate documentation of
transfer, or
- At the direction of American Pie, be exercised for the benefit of
American Pie, in which case the proceeds of such exercise will
promptly be remitted to American Pie. Pending such remittance and
subject to applicable law, American Pie will be entitled to all
rights and privileges as owner of any such non-cash dividend,
distribution, issuance, proceeds or rights and may withhold the
entire purchase price or deduct from the purchase price the amount
of value thereof, as determined by American Pie in its sole
discretion.
13. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, American Pie shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to American Pie's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and (subject to any such rules or regulations and the terms hereof) may delay
the acceptance for payment of any tendered Shares and (except as provided in the
Merger Agreement) amend or terminate the Offer as to any Shares not then paid
for (A) unless the following conditions shall have been satisfied: (i) there
shall be validly tendered and not withdrawn prior to the expiration of the Offer
a number of Shares which, together with Shares then owned by American Pie,
American Pie, or any other subsidiary of American Pie represents at least a
majority of the number of Shares outstanding on a fully diluted basis (assuming
the exercise of all outstanding Options that are vested or will become vested
upon consummation
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of the Offer and all outstanding Warrants) (the "Minimum Condition") and (ii)
any applicable waiting period under any applicable antitrust law shall have
expired or been terminated prior to the expiration of the Offer or (B) if at any
time after the date of this Agreement and before the acceptance of the Shares
for payment, any of the following conditions exists and is continuing and has
not resulted directly or indirectly from the breach by American Pie or American
Pie of any of its obligations under the Merger Agreement:
(a) there shall be in effect an injunction or other order, decree, judgment
or ruling by a court of competent jurisdiction or by a governmental, regulatory
or administrative agency or commission of competent jurisdiction or a statute,
rule, regulation, executive order or other action shall have been promulgated,
enacted, taken or threatened by a governmental authority or a governmental,
regulatory or administrative agency or commission of competent jurisdiction
which in any such case (i) restrains or prohibits the making or consummation of
the Offer or the consummation of the Merger, (ii) prohibits or restricts the
ownership or operation by American Pie (or any of its affiliates or
subsidiaries) of any material portion of its or Egreetings' business or assets,
or compels American Pie (or any of its affiliates or subsidiaries) to dispose of
or hold separate any material portion of its or Egreetings' business or assets,
(iii) imposes material limitations on the ability of American Pie effectively to
acquire or to hold or to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by
American Pie on all matters properly presented to the stockholders of
Egreetings, (iv) imposes any material limitations on the ability of American Pie
or any of its affiliates or subsidiaries effectively to control in any material
respect the business and operations of Egreetings or (v) which otherwise would
have a Egreetings Material Adverse Effect;
(b) the Merger Agreement shall have been terminated by Egreetings or
American Pie in accordance with its terms;
(c) (i) any representation or warranty made by Egreetings in the Merger
Agreement shall not have been true and correct in all material respects when
made, or any representation or warranty made by Egreetings in the Merger
Agreement (other than those contained in Sections 4.5 and 4.17 thereof) shall
have ceased to be true and correct in all material respects as of the Expiration
Date as if made as of such date and the breach shall not have been cured in all
material respects, (ii) as of the Expiration Date Egreetings shall not in all
material respects have performed any obligation or agreement and complied with
its material covenants to be performed and complied with by it under the Merger
Agreement and the breach shall not have been cured in all material respects, or
(iii) the Increased Liabilities of Egreetings, less any increase in net tangible
assets (excluding increases in accumulated depreciation) of Egreetings since
December 31, 2000 (as reflected in unaudited financials of Egreetings as of such
date) not reflected in the plan of liquidation of Egreetings as modified by
AmericanGreetings.com, exceed $1 million, where the term "Increased Liabilities"
means the sum of (x) the excess, if any, of the liabilities of Egreetings set
forth on the audited financials of Egreetings for the year ended December 31,
2000 over the liabilities of Egreetings set forth on the unaudited financials,
(y) additional liabilities incurred by Egreetings since December 31, 2000, that
should have been but were not recorded on the December 31, 2000 balance sheet of
Egreetings prepared in accordance with GAAP, and (z) liabilities not reflected
in the plan of liquidation of Egreetings as modified by AmericanGreetings.com
and in accordance with the terms of this Agreement; provided however, that
Increased Liabilities shall specifically not include for the period after
December 31, 2000: (1) liabilities incurred in connection with the transactions
contemplated by the Merger Agreement (other than out of pocket expenses to be
reimbursed to Credit Suisse First Boston that were not incurred in connection
with transactions contemplated by this Agreement, and other than additional
liabilities arising in connection with Egreetings' compliance with Worker
Adjustment and Retraining Act but not reflected in the liquidation plan of
Egreetings as modified by AmericanGreetings.com), (2) liabilities paid or
accrued in connection with the preparation of the audited financials of
Egreetings for the year ended December 31, 2000, (3) liabilities incurred in
connection with the termination of real estate leases, (4) the first $500,000 of
liabilities incurred in connection with the termination of any contract of
Egreetings other than real estate leases, and (5) liabilities incurred with
prior written approval of AmericanGreetings.com); or
(d) there shall have occurred (i) any suspension or limitation of trading
in securities generally on the New York Stock Exchange (not including any
suspension or limitation of trading in any particular security as a result of
computerized trading limits or any intraday suspension due to "circuit
breakers") or (ii) any banking
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moratorium declared by the U.S. Federal or New York authorities or any
suspension of payments in respect of banks in the United States.
The foregoing conditions are for the sole benefit of American Pie and may
be asserted by American Pie and may be waived by American Pie in whole or in
part at any time and from time to time, in each case, in the exercise of the
good faith judgment of American Pie and subject to the terms of the Merger
Agreement. The failure by American Pie at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by AmericanGreetings.com or American Pie
concerning any event described in this Section 13 shall be final and binding
upon all parties.
A public announcement may be made of a material change in, or waiver of,
such conditions, to the extent required by Rules 14d-4(c) and 14d-6, and the
Offer may, in certain circumstances, be extended in connection with any such
change or waiver.
American Pie acknowledges that the Commission believes that:
- If American Pie is delayed in accepting the Shares it must either extend
the Offer or terminate the Offer and promptly return the Shares, and
- The circumstances in which a delay in payment is permitted are limited
and do not include unsatisfied conditions of the Offer, except with
respect to most required regulatory approvals.
14. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
Except as described in this Offer To Purchase, based on a review of
publicly available filings made by Egreetings with the Commission and other
publicly available information concerning Egreetings, but without any
independent investigation, neither American Pie nor AmericanGreetings.com is
aware of any license or regulatory permit that appears to be material to the
business of Egreetings and its subsidiaries, taken as a whole, that might be
adversely affected by American Pie's acquisition of Shares as contemplated in
this Offer To Purchase or of any approval or other action by any governmental
authority that would be required for the acquisition or ownership of Shares by
American Pie as contemplated in this Offer To Purchase. Should any such approval
or other action be required, American Pie and AmericanGreetings.com presently
contemplate that such approval or other action will be sought, except as
described below under "State Takeover Laws." There can be no assurance, however,
that any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to Egreetings'
business or that certain parts of Egreetings' business might not have to be
disposed of if such approvals were not obtained or other actions were not taken
or in order to obtain any such approval or other action. If certain types of
adverse action are taken with respect to the matters discussed below, American
Pie could decline to accept for payment or pay for any Shares tendered. See
Section 13 above for certain conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States
(including Delaware where Egreetings is incorporated) have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
stockholders, executive offices or places of business in those states. To the
extent that certain provisions of certain of these state takeover statutes
purport to apply to the Offer or the Merger, AmericanGreetings.com and American
Pie believe that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In Edgar v. MITE Corp., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover Act, which, as a matter of state securities law, made
certain corporate acquisitions more difficult. In CTS Corp. v. Dynamics Corp. of
America, however, the Supreme Court of the United States held that a state may,
as a matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
stockholders, provided that the laws were applicable only under certain
conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal
district court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject
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such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc.
v. McReynolds, a Federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit. In December 1988, a Federal district court in
Florida held, in Grand Metropolitan PLC v. Butterworth, that the provisions of
the Florida Affiliated Transactions Act and Florida Control Share Acquisition
Act were unconstitutional as applied to corporations incorporated outside of
Florida.
American Pie has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger because American Pie does not believe
that any are applicable to the Offer or the Merger. In particular, American Pie
believes that Section 203 of the GCL does not apply to the Offer and the Merger
because American Greetings and Gibson owned (as defined in the GCL) their Shares
prior to the authorization for quotation of the Shares on the Nasdaq National
Market. American Pie reserves the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer or the Merger,
and nothing in this Offer To Purchase nor any action taken in connection
herewith is intended as a waiver of that right. In the event that it is asserted
that one or more state takeover statutes apply to the Offer or the Merger, and
it is not determined by an appropriate court that such statute or statutes do
not apply or are invalid as applied to the Offer or the Merger, as applicable,
American Pie may be required to file certain documents with, or receive
approvals from, the relevant state authorities, and American Pie might be unable
to accept for payment or purchase Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, American Pie may
not be obligated to accept for purchase, or pay for, any Shares tendered. See
Section 13.
ANTITRUST. The acquisition by American Pie of the Shares is exempt from the
reporting requirements contained in the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations thereunder. Nevertheless, there can
be no assurance that a challenge to the Offer and the Merger on antitrust
grounds will not be made, or, if such challenge is made, what the result will
be. Private parties may also bring legal action under the antitrust laws under
certain circumstances.
15. FEES AND EXPENSES
William Blair & Company is acting as financial advisor to
AmericanGreetings.com in connection with AmericanGreetings.com's proposed
acquisition of Egreetings, for which services William Blair & Company will
receive customary compensation. In addition, AmericanGreetings.com has agreed to
reimburse William Blair & Company for its reasonable expenses incurred in
rendering its services (including reasonable legal expenses) under its
engagement agreement with AmericanGreetings.com and has agreed to indemnify
William Blair & Company against certain liabilities and expenses in connection
with the Offer and the Merger, including certain liabilities under the federal
securities laws. William Blair & Company from time to time renders various
investment banking services to AmericanGreetings.com and its affiliates for
which it is paid customary fees.
In the ordinary course of its business, William Blair & Company engages in
securities trading, market-making and brokerage activities and may, at any time,
hold long or short positions and may trade or otherwise effect transactions in
securities of Egreetings and AmericanGreetings.com.
Corporate Investor Communications, Inc. has been retained by American Pie
as Information Agent in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interview and may request brokers, dealers and other nominee stockholders to
forward material relating to the Offer to beneficial owners of Shares.
AmericanGreetings.com will pay the Information Agent reasonable and customary
compensation for all such services in addition to reimbursing the Information
Agent for reasonable out-of-pocket expenses in connection therewith.
In addition, Wells Fargo Shareowner Services has been retained as the
Depositary. American Pie will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under the federal securities
laws.
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It is estimated that the expenses incurred in connection with the
transactions contemplated in this Offer To Purchase will be approximately as set
forth below:
Filing fees................................................. $ 6,166
Printing and mailing fees................................... 100,000
Accounting fees............................................. 125,000
Legal fees.................................................. 200,000
Depository fees............................................. 20,000
Information Agent fees...................................... 10,000
Miscellaneous............................................... 38,834
Total....................................................... 500,000
None of the foregoing fees will be paid by Egreetings.
Except as set forth above, neither AmericanGreetings.com nor American Pie
will pay any fees or commissions to any broker dealer or other person for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies and other nominees will, upon request, be reimbursed
by AmericanGreetings.com or American Pie for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their customers.
16. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) stockholders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of the jurisdiction. However, American Pie may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to stockholders in that jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed to be made on
behalf of American Pie by one or more registered brokers or dealers that are
licensed under the laws of the jurisdiction.
AmericanGreetings.com and American Pie have filed with the Commission the
Schedule TO pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3
thereunder, containing certain additional information with respect to the Offer.
The Schedule TO and any amendments to the Schedule TO, including exhibits, may
be examined and copies may be obtained from the principal office of the
Commission in the manner set forth in Section 8 above (except that they will not
be available at the regional offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF AMERICAN PIE NOT CONTAINED IN THIS OFFER TO PURCHASE
OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THE INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of this Offer To Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of AmericanGreetings.com, American Pie, Egreetings
or any of their respective subsidiaries, as the case may be, since the date as
of which information is furnished or the date of this Offer To Purchase.
American Pie Acquisition Corp.
February 12, 2001
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER, MERGER SUB AND PARENT
A. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICANGREETINGS.COM
The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employment for the
past five years of each director and executive officer of AmericanGreetings.com.
Unless otherwise indicated below:
- - Each individual has held his or her positions for more than the past five
years,
- - The business address of each person is Three American Road, Cleveland, Ohio
44144, and
- - All directors and officers listed below are citizens of the United States.
Directors are identified with a single asterisk.
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
*Herb Jacobs Herbert H. Jacobs has served as a director since the
incorporation of AmericanGreetings.com, Inc. in June 1999.
From 1983 to June 1999, Dr. Jacobs served as a director of
American Greetings, our parent company. Dr. Jacobs'
principal occupation is the management of his private
investments. He is also the inventor of a number of patents
relevant to our business operation that are owned by
AmericanGreetings.com. Since June 1994, he has owned and
operated a private real estate development company and a
private software consulting firm.
*Josef A. Mandelbaum Josef A. Mandelbaum has served as Chief Executive Officer
since January 2000 and as a director since September 1999.
Prior to that, he served as our Senior Vice President of
Sales, Business Development and Strategic Planning since the
incorporation of AmericanGreetings.com, Inc. in June 1999.
From January 1995 to June 1999, Mr. Mandelbaum served in
various capacities for the Electronic Marketing Division of
American Greetings, including Vice President of Interactive
Marketing, Director of Electronic Marketing and Technology
Management and as Business Development Manager. From 1993 to
1994, Mr. Mandelbaum was a partner in IMG, an interactive
direct response consulting and venture capital company
specializing in infomercials and interactive projects. Mr.
Mandelbaum is a founding member and current Chairman of the
Business Practices Committee of Shop.org, an alliance of
premier Internet retailers.
*James C. Spira James C. Spira has served as Chairman of our board of
directors since the incorporation of AmericanGreetings.com,
Inc. in June 1999. Mr. Spira's principal occupation since
July 1999 has been active part-time Advisory Partner of
Diamond Technology Partners, Inc., a publicly held
technology management consulting firm, where he manages
specific client relationships and participates in client
development efforts. Previously, Mr. Spira served Diamond
Technology Partners as Senior Vice President from November
1995 to June 1999, and as a director from February 1996 to
June 1999. Before joining Diamond Technology Partners, Mr.
Spira was a group Vice President of the Tranzonic Companies,
Inc., a manufacturer of personal care products, from 1991 to
November 1995. Prior to his employment with the Tranzonic
Companies, Mr. Spira co-founded Cleveland Consulting
Associates, serving as President and Chief Executive Officer
from 1974 until 1989. Mr. Spira serves as a director of
American Greetings Corporation, our parent company, New
Media, Inc., an information technology consulting company,
Copernicus, a marketing investment group, and is a member of
the advisory board of Progressive Insurance Company's
National Accounts Division, a specialty property-casualty
insurer.
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PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
*Morry Weiss Morry Weiss has served as a director since the incorporation
of AmericanGreetings.com, Inc. in June 1999. Since 1992, Mr.
Weiss' principal occupation is Chairman and Chief Executive
Officer of American Greetings. He also serves as a director
of Barnett Inc., a manufacturer of plumbing and electrical
supplies, National City Bank, Cleveland, a bank/financial
institution, National City Corporation, a holding company of
National City Bank, Cleveland and other banks, and is a
member of the advisory board of Prime Venture Partners, an
equity investor in companies requiring growth capital.
*John Backus John Backus has served as a director since September 2000.
Mr. Backus is the Managing Partner of Draper Atlantic, which
he founded in March 1999. Mr. Backus was a founding investor
of InteliData Technologies, Inc. and from 1990 through 1999
served as its President and Chief Executive Officer. Mr.
Backus currently serves on the Board of Directors various
companies including Amazing Media, Singleshop.com, Return
Buy, QB, Inc., WFSDirect.com, and Trancentrix. He is also
actively involved in Northern Virginia Technology Council as
the Chairman of its Board of Directors.
Maureen M. Spooner Maureen M. Spooner has served as our Senior Vice President
Finance and Operations, Chief Financial Officer since
January 2001 and as Chief Financial Officer since the
incorporation of AmericanGreetings.com, Inc. in June 1999.
Prior to incorporation of AmericanGreetings.com she served
as Vice President of Finance and Administration for the
Electronic Marketing Division of American Greetings. From
September 1990 to June 1999, Ms. Spooner served in various
financial management and administrative positions with
American Greetings, including Financial Accounting Manager,
Director of Corporate Financial Planning, and Director of
Tax Administration. Prior to her employment with American
Greetings, Ms. Spooner held various positions with Arthur
Andersen & Company and Andersen Consulting.
Charles Fink Charles Fink has served as President and Senior Vice
President of Creative since August 2000. In 1999 he founded
eAgents, Inc., and acted as its President and Chief
Executive Officer until its acquisition by
AmericanGreetings.com, Inc. in September 2000. From 1996 to
1999, Mr. Fink served in various capacities for America
Online, Inc. including Vice President and Executive
Director, AOL Channel Programming and Senior Vice President
and Chief Creative Officer, AOL Greenhouse.
Bruce Petro Bruce Petro has served as our Chief Information Officer
since August 2000. Prior to that, he served as our Executive
Director/Vice President of Technology since the
incorporation of AmericanGreetings.com, Inc. in June 1999.
From October 1994 to June 1999, Mr. Petro served in the
position of Director of Information Technology for the
Electronic Marketing Division of American Greetings.
William Weil William Weil has served as our Senior Vice President of
Consumer Experience since September 2000. From May of 2000
to September 2000, he served as Chief Operating Officer of
eAgents, Inc., at which time as it was acquired by
AmericanGreetings.com, Inc. Prior to his employment with
eAgents, Inc., Mr. Weil spent five years at Nickelodeon, a
Viacom/MTV Networks Company, where he served as both as a
member and Vice President of the strategy group, as well as
the Acting Chief Operating Officer of RedRocket.com.
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PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Todd Anderman Todd Anderman has served as our Senior Vice President of
Sales since January 2000. From February 2000 to December
2000, Mr. Anderman served as Senior Vice President of Sales
at Rollingstone.com, a division of Emusic.com. From April
1999 to February 2000, Mr. Anderman served as Vice President
of Sales for Tunes.com until its acquisition by Emusic.com.
Prior to his employment with Rollingstone.com, Mr. Anderman
spent nine years at Ziff Davis in various sales and
marketing positions.
Tammy L. Martin Tammy Martin has served as our General Counsel since
December 2000. From March 2000 through June 2000 she served
as Chief Financial Officer and General Counsel of
Portalvision, Inc., a software development company. From
1993 to 2000 she served in various capacities with PhoneTel
Technologies, Inc., a telecommunications company, including
Chief Administrative Officer and General Counsel.
B. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN PIE
The directors of American Pie are Josef A. Mandelbaum and Maureen Spooner
and the executive officers of American Pie are Josef A. Mandelbaum, Maureen
Spooner and Bruce Petro. Each of these persons are also executive officers of
AmericanGreetings.com and information concerning the present principal
occupation or employment and material occupation, positions, offices or
employment for the past five years of each of them is set forth in the table of
the directors and executive officers of AmericanGreetings.com. The business
address of each is Three American Road, Cleveland, Ohio 44144. All directors and
officers of American Pie are citizens of the United States.
C. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN GREETINGS
The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employment for the
past five years of each director and executive officer of American Greetings.
Unless otherwise indicated below:
- - Each individual has held his or her positions for more than the past five
years,
- - The business address of each person is One American Road, Cleveland, Ohio
44144, and
- - All directors and officers listed below are citizens of the United States.
Directors are identified with a single asterisk.
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PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
*Scott S. Cowen Dr. Cowen's principal occupation is President and Seymour S.
Goodman, Professor of Management, Tulane University. Prior
to that Dr. Cowen served as Dean and Albert J. Weatherhead,
III Professor of Management, Weatherhead School of
Management at Case Western Reserve University. Dr. Cowen
serves as a director of JoAnn Stores, Inc. (specialty store
retailer), Forest City Enterprises, Inc. (conglomerate
corporation engaged in real estate development, sales,
investment, construction and lumber wholesale) and
Newell-Rubbermaid Incorporated (consumer home products).
*Stephen R. Hardis Mr. Hardis' principal occupation is Chairman and Chief
Executive Officer of Eaton Corporation, (manufacturer of
highly engineered products that serve industrial, vehicle,
construction, commercial and semiconductor markets). Before
joining Easton in 1979, Mr. Hardis served as Executive Vice
president of Finance and Planning for Sybron Corporation
(health equipment supplies and services) and prior to that
he was associated with General Dynamics Corporation
(industrial) aerospace manufacturer). Mr. Hardis is a member
of the boards of KeyCorp (holding company for Key Bank),
Lexmark International Corporation (a spin-off of IBM's
printer business), Nordson Corporation (industrial painting
system manufacturer) and Progressive Corporation (holding
company of Progressive Insurance Company, and other
companies). He also serves as a director of the Cleveland
Clinic Foundation (hospital) and is a trustee of the Musical
Arts Association (Cleveland Orchestra), Leadership
Cleveland, Playhouse Square, Foundation, Greater Cleveland
Roundtable and Cleveland Tomorrow (non-profit
organizations).
*Harriet Mouchly-Weiss Mrs. Mouchly-Weiss is founder and managing partner of
Strategy XXI (corporate communications). Before founding
Strategy XXI, she was President of the GCI Group
International, an international public relations and
marketing agency. She also served as Chairman of Ruder Finn
& Rotman International Partners, an independent public
relations firm. She is a director of Viisage Technology,
Inc. (developer of personal security and identification
systems), a division of LAU Technologies, Foundation of the
Committee of 200, Friends of the United Nations, American
Academy of Rome, Chinese Foundation of Culture and Arts for
Children, Abraham Fund and Israel Policy Forum
(professional, educational and charitable organizations.
*Charles Ratner Mr. Ratner's principal occupation is Co-Chairman of the
Board and President of Forest City Enterprises, Inc.
(conglomerate corporation engaged in real estate
development, sales, investment, construction and lumber
wholesale) and an officer of its various subsidiary
companies. Mr. Ratner serves as a director of Cole National
Corporation (retail) and Cole National Group, Inc. (retail).
*James C. Spira Mr. Spira's principal occupation is Vice Chairman of
American Greetings, a position he has held for seven months.
Prior to that time, he served as managing partner and
director of Diamond Technology Partners, Inc., (technology
management consulting firm). Before joining Diamond
Technology Partners, he co-founded Cleveland Consulting
Associates, serving as President and Chief Executive Officer
from 1974 until 1989. Mr. Spira also serves as Vice Chairman
of the Board of American Greetings. Mr. Spira serves as a
director of New Media, Inc. (information technology
consulting) and is a member of the advisory board of
Progressive Insurance Company's National Accounts Division
(specialty property-casualty insurer).
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PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
*Harry H. Stone Mr. Stone's principal occupation is President of The
Courtland Group, Inc. (investments, property and business
development and management) and a general partner in
partnerships that own and manage The Residence Inn by
Marriott Cleveland at Beachwood, downtown Cleveland
Middleburg Heights, Rockside and Westlake, Ohio locations.
He is a trustee of the Cleveland Rotary Foundation and is
Trustee Emeritus of Educational Television Association of
Metropolitan Cleveland, Jewish Community Federation of
Cleveland and Brandeis University (non-profit
organizations).
*Dr. Jerry Sue Thornton Dr. Thornton's principal occupation is President of Cuyahoga
Community College. Dr. Thornton is also a Director of
National City Bank -- Cleveland (bank-financial institution)
and Applied Industrial Technologies, Inc. (technology
consulting). Ms. Thornton is also a board member of
Playhouse Square Foundation, Cleveland Municipal School
District, City of Cleveland Empowerment Zone, Citizens'
Advisory Council, Greater Cleveland Roundtable, United Way
of Cleveland, The Cleveland Foundation, Convention and
Visitors Bureau of Greater Cleveland, St. Vincent Quadrangle
and the Rock and Roll Hall of Fame and Museum -- Cleveland
and New York.
*Morry Weiss Mr. Weiss' principal occupation is Chairman and Chief
Executive Officer of American Greetings, a position he has
held for more than five years. He also serves as a director
of National City Bank (bank-financial institution), National
City Corporation (holding company of National City
Bank -- Cleveland and other banks) and is a member of the
advisory board of Primus Venture Partners (equity investor
in companies requiring growth capital).
Michael B. Birkholm Vice President, Manufacturing from 1994 until becoming
Senior Vice President in 1998.
Dale A. Cable Vice President and Treasurer.
Mary Ann Corrigan-Davis President of Carlton Cards Retail, Inc. from 1992 until
1996, and Group Managing Director of the John Sands Group
from 1996 until becoming Senior Vice President in 1997.
Jon Groetzinger, Jr Senior Vice President, General Counsel and Secretary.
William R. Mason Senior Vice President.
William S. Meyer Senior Vice President and Chief Financial Officer.
Patricia A. Papesh Vice President, Creative of the U.S. Greeting Card Division
from 1992 until becoming Senior Vice President in 1995.
Patricia L. Ripple Executive Director, Tax and Financial Reporting from 1993
until becoming Vice President and Corporate Controller in
1996.
Erwin Weiss Senior Vice President.
Jeffrey M. Weiss Vice President, Materials Management of American Greetings's
U.S. Greeting Card Division from 1996 until 1997; Vice
President, Product Management of American Greetings's U.S.
Greeting Card Division from 1997 until 1998; and Senior Vice
President from 1998 until becoming Executive Vice President
in 2000.
George A. Wenz Vice President, National Accounts from 1984 before becoming
Senior Vice President in 1997.
Thomas T. Zinn, Sr. Principal with Ernst & Young LLP before joining American
Greetings in 1995 as Vice President, Information Services.
He became Senior Vice President in 1998.
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Manually signed facsimile copies of the Letter of Transmittal, properly
completed and duly signed, will be accepted. The Letter of Transmittal,
certificates for Shares and any other required documents should be sent or
delivered by each stockholder of Egreetings or his broker dealer, commercial
bank, trust company or other nominee to the Depositary, at one of the addresses
set forth below:
THE DEPOSITARY FOR THE OFFER IS:
WELLS FARGO SHAREOWNER SERVICES
BY MAIL: BY HAND: BY OVERNIGHT DELIVERY:
Wells Fargo Shareowner Services Wells Fargo Shareowner Services Wells Fargo Shareowner Services
P.O. Box 64858 161 North Concord Exchange Attn: Reorganization Department
St. Paul, Minnesota 55164-0858 South St. Paul, Minnesota 55075 161 North Concord Exchange
South St. Paul, Minnesota 55075
By Facsimile Transmission: (651) 450-4163 (For Eligible Institutions Only)
Confirmation Receipt of Facsimile by Telephone Only: (800) 468-9716
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number listed below. Additional copies of
this Offer To Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at American Pie's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
A GEORGESON SHAREHOLDER COMMUNICATIONS COMPANY
111 Commerce Road - Carlstadt, New Jersey 07072-2586
Banks and Brokers call: (800) 346-7885
All Others Call Toll Free: (888) 353-1712
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