- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
SCHEDULE 14D-9
(Rule 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
-----------------
OFFICIAL PAYMENTS CORPORATION
(Name of Subject Company)
OFFICIAL PAYMENTS CORPORATION
(Name of Person(s) Filing Statement)
-----------------
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
-----------------
676235 10 4
(CUSIP Number of Class of Securities)
-----------------
Mitchell H. Gordon
Senior Vice President, General Counsel
Official Payments Corporation
Three Landmark Square
Stamford, CT 06901-2501
(203) 356-4200
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement).
-----------------
With a copy to:
Eric J. Friedman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036-6522
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
_
|_| Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
- ------------------------------------------------------------------------------
Official Payments Corporation, a Delaware corporation (the
"Company") hereby amends and supplements its Solicitation/Recommendation
Statement on Schedule 14D-9, originally filed with the Securities and
Exchange Commission (the "SEC") on June 11, 2002 (the "Schedule 14D-9"),
with respect to the tender offer (the "Offer") by Kingfish Acquisition
Corporation, a Delaware corporation ("Purchaser") and wholly owned
subsidiary of Tier Technologies, Inc., a Delaware corporation ("Parent'),
to purchase all of the outstanding shares of common stock, par value $.01
per share, of the Company ("Common Stock") at a price of $3.00 per share,
net to the selling stockholders in cash (the "Offer Price"), upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
June 11, 2002 and the related Letter of Transmittal. Capitalized terms used
but not otherwise defined herein shall have the respective meanings
ascribed to them in the Schedule 14D-9.
Item 2. Identity and Background of Filing Person.
Item 2 of the Schedule 14D-9 is hereby amended and supplemented by
deleting in its entirety the third paragraph under the section captioned
"Tender Offer" and replacing it with the following text:
"The information contained in this Schedule 14D-9 or incorporated
herein by reference concerning Purchaser and Parent and their
respective officers, directors, representatives or affiliates, or
actions or events with respect to them, has been furnished to the
Company by Purchaser and Parent. The Company is relying on
Purchaser and Parent to furnish accurate and complete information
for inclusion in the Schedule 14D-9 and the Company has not
independently verified the accuracy or completeness of such
information."
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
Item 3 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following text at the end of the section captioned "The Merger
Agreement-Additional Arrangements Regarding Executive Officers of the
Company":
"Pursuant to the terms of their respective employment agreements
and severance agreements, each of Mr. Evans, Edward J. DiMaria
(Chief Financial Officer), and Mitchell H. Gordon (Senior Vice
President, General Counsel) will be entitled to receive his
current base salary and benefits for one year following the
termination of his employment with the Company upon consummation
of the Merger. Under their respective employment agreements, each
of Messrs. Evans and Presto have already become entitled to
terminate his employment for "good reason" due to the change of
control in the Company as a result of the merger of Imperial
Bancorp (the then parent holding company of the Company's majority
stockholder) with and into a wholly owned subsidiary of Comerica
Incorporated in January 2001. Consummation of the Offer
constitutes a similar change of control event (resulting in the
respective officer's right to terminate employment for "good
reason") under the respective agreements for each of the four
executive officers. The aggregate value of such change of
control/severance payments is approximately $1,055,000, with the
following payments to each individual: Mr. Evans: $363,000; Mr.
Presto: $253,000; Edward J. DiMaria (Chief Financial Officer):
$233,000; and Mitchell H. Gordon (Senior Vice President, General
Counsel): $206,000.
In addition, under the terms of Mr. Evans' employment agreement,
Comerica Bank-California (as successor to Imperial Bank) has
guaranteed that the "value"-as defined in the agreement-of Mr.
Evans' vested options will be $10,000,000 on or before August 26,
2002, and Comerica Bank-California will pay Mr. Evans an amount
equal to the difference between $10,000,000 and the highest value
of the vested options calculated on certain specified dates during
such three year period. This guarantee is solely the obligation of
Comerica Bank-California and is not an obligation of the Company
and the guarantee payment is not contingent upon consummation of
the Offer or the Merger."
Item 3 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following text after the second sentence of the second paragraph
of the section captioned "The Merger Agreement-Treatment of Stock Options":
"In accordance with the formula described in the preceding
paragraph, the aggregate value to be received by the directors and
executive officers of the Company as a group as a result of the
cancellation of their Company Stock Options is $3,457,722."
Item 3 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following text at the end of the section captioned "Stockholders
Agreement":
"Comerica Bank, a wholly owned subsidiary of Comerica, is one of
the merchant banks the Company uses to process credit card
transactions and perform traditional merchant credit card
settlement services. The Company has an agreement (the "Comerica
Processing Agreement") with Comerica Bank in which the Company
agrees to use its best efforts to use Comerica Bank as its
provider of credit card settlement services. Under the Comerica
Processing Agreement (which was automatically renewed as of April
17, 2002 in accordance with its terms for an additional term
through July 16, 2003), Comerica Bank is paid from the Company's
sales revenues customary merchant discount fees usually charged
for similar processing services, on a product by product basis as
negotiated between the Company and Comerica Bank. During 2001, the
Company paid Comerica Bank approximately $8.2 million for
performing these processing and settlement services, which
represents 33% of the total merchant discount fees paid by the
Company in 2001. The Company expects to continue utilizing the
credit card processing services of Comerica Bank following
consummation of the Merger in accordance with the Company's past
practice and the terms of the Comerica Processing Agreement."
Item 4. The Solicitation or Recommendation
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by
deleting in its entirety the fourth paragraph under the section captioned
"Background" and replacing it with the following text:
"From November 2001 through April 2002, the Company's management
and/or CIBC World Markets contacted nineteen third parties
potentially interested in pursuing an acquisition of the Company
and provided information and/or made presentations to eighteen of
such parties."
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by
deleting in its entirety the last two sentences of the first paragraph
under the section captioned "Reasons for the Board's Recommendation;
Factors Considered-Financial Condition and Prospects of the Company" and
replacing it with the following text:
"The Company Board discussed the Company's historical losses,
decreasing cash position and strategic plan for achieving
profitability through increasing revenues and continuing to
achieve operating cost savings and efficiencies. The Board
recognized that the Company's prospects for revenue growth would
likely be driven primarily through increased consumer utilization
of the Company's services and an increase in the number of payment
services for existing and new government clients. The Company
Board also took note of the recent economic downturn and its
negative impact on the level of federal income taxes owed by
individuals in the April 2002 tax season, resulting in reduced
revenue to the Company because it processed a lower volume of
federal tax payments and federal tax dollars. The Company Board
compared the value of the Offer Price to stockholders with the
prospects for the Company remaining independent and achieving
profitability in the foreseeable future in light of certain
significant attendant risks, including the need for the Company to
expend significant amounts of the Company's cash to continue
operating in the future (estimated to be at least $10 million per
year), the substantial revenue growth required to achieve
profitability within the foreseeable future, the increasingly
competitive environment in which the Company operates, the
Company's limited ability on a standalone basis to obtain
significant further decreases in the merchant discount rates
charged by the credit card companies (which is the Company's
largest cost of revenue), and the Company's difficulty in
completing strategic acquisitions (which could contribute to
revenue expansion opportunities and/or the attainment of
operational efficiencies) because of its limited cash position and
low stock price."
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following text at the end of the section captioned "Reasons for
the Board's Recommendation; Factors Considered-Historical Stock Price
Performance":
"While the Company Board recognized that the shares of Common
Stock traded in a range of $1.50 to $6.00 in the 52 weeks prior to
the announcement of the Offer, the Company Board believed that a
return to a market price in excess of the Offer Price was not
foreseeable in the near future based upon the Company's recent
operational trends and results, the prospects for achieving
profitability, the inability of the Company to attract a strategic
investor and the lack of liquidity in the Common Stock."
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by
deleting in their entirety the second, third and fourth sentences of the
section captioned "Reasons for the Board's Recommendation; Factors
Considered-CIBC World Markets Presentation" and replacing them with the
following text:
"Opinion of CIBC World Markets
The Company requested CIBC World Markets to evaluate the fairness,
from a financial point of view, to the holders of the Common Stock
of the consideration to be received in the Offer and the Merger.
On May 30, 2002, at a meeting of the Company Board held to
evaluate the Offer and the Merger, CIBC World Markets rendered to
the Company Board an oral opinion, which opinion was confirmed by
delivery of a written opinion dated May 30, 2002, to the effect
that, as of that date and based on and subject to the matters
described in the opinion, the consideration to be received by the
holders of Common Stock in the Offer and the Merger was fair, from
a financial point of view, to such holders.
The full text of CIBC World Markets' written opinion dated May 30,
2002, which describes the assumptions made, matters considered and
limitations on the review undertaken, is attached to this Schedule
14D-9 as Annex A and is incorporated herein by reference. CIBC
World Markets' opinion is addressed to the Company Board and
relates only to the fairness, from a financial point of view, of
the consideration to be paid in the Offer and the Merger. The
opinion does not address any other aspect of the Offer or the
Merger or any related transaction, and does not constitute a
recommendation to any stockholder as to whether such stockholder
should tender shares of Common Stock in the Offer or how such
stockholder should vote on the Merger or any related transaction.
The summary of CIBC World Markets' opinion described below is
qualified in its entirety by reference to the full text of its
opinion. Holders of Common Stock are urged to read the opinion
carefully in its entirety.
In arriving at its opinion, CIBC World Markets:
- reviewed the Merger Agreement and related documents, including
the Stockholders Agreement;
- reviewed audited financial statements of the Company for the
fiscal years ended December 31, 2000 and December 31, 2001;
- reviewed unaudited financial statements of the Company for the
fiscal quarter ended March 31, 2002;
- reviewed financial projections of the Company prepared by the
Company's management;
- reviewed historical market prices and trading volume for the
Common Stock;
- held discussions with the Company's senior management with
respect to the business and prospects for future growth of the
Company;
- reviewed public information concerning the Company; and
- performed such other analyses, reviewed such other information
and considered such other factors as CIBC World Markets deemed
appropriate.
In rendering its opinion, CIBC World Markets relied on and
assumed, without independent verification or investigation, the
accuracy and completeness of all of the financial and other
information provided to or discussed with it by the Company and
its employees, representatives and affiliates. With respect to
forecasts of the Company's future financial condition and
operating results and the liquidation analysis provided to or
discussed with CIBC World Markets, CIBC World Markets assumed,
without independent verification or investigation, that the
forecasts and analysis were reasonably prepared on bases
reflecting the best available information, estimates and judgments
of the Company's management.
CIBC World Markets did not make or obtain any independent
evaluations or appraisals of the assets or liabilities, contingent
or otherwise, of the Company. CIBC World Markets expressed no
opinion as to the Company's underlying valuation, future
performance or long-term viability, or the price at which the
Common Stock would trade after announcement of the transaction.
CIBC World Markets' opinion does not constitute a recommendation
of the Offer and the Merger over any other alternative transaction
available to the Company. CIBC World Markets' opinion was
necessarily based on the information available to CIBC World
Markets and general economic, financial and stock market
conditions and circumstances as they existed and could be
evaluated by CIBC World Markets as of the date of its opinion.
Although subsequent developments may affect its opinion, CIBC
World Markets does not have any obligation to update, revise or
reaffirm its opinion. The Company imposed no other instructions or
limitations on CIBC World Markets with respect to the
investigations made or the procedures followed by it in rendering
its opinion.
This summary is not a complete description of CIBC World Markets'
opinion to the Company Board or the financial analyses performed
and factors considered by CIBC World Markets in connection with
its opinion. The preparation of a fairness opinion is a complex
analytical process involving various determinations as to the most
appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances and,
therefore, a fairness opinion is not readily susceptible to
summary description. CIBC World Markets believes that its analyses
and this summary must be considered as a whole and that selecting
portions of its analyses and factors or focusing on information
presented in tabular format, without considering all analyses and
factors or the narrative description of the analyses, could create
a misleading or incomplete view of the processes underlying CIBC
World Markets' analyses and opinion.
In performing its analyses, CIBC World Markets considered industry
performance, general business, economic, market and financial
conditions and other matters existing as of the date of its
opinion, many of which are beyond the Company's control. No
company, transaction or business used in the analyses as a
comparison is identical to the Company or the Offer and the
Merger, and an evaluation of the results of those analyses is not
entirely mathematical. Rather, the analyses involve complex
considerations and judgments concerning financial and operating
characteristics and other factors that could affect the
acquisition, public trading or other values of the companies,
business segments or transactions analyzed.
The estimates contained in CIBC World Markets' analyses and the
ranges of valuations resulting from any particular analysis are
not necessarily indicative of actual values or future results,
which may be significantly more or less favorable than those
suggested by its analyses. In addition, analyses relating to the
value of businesses or securities do not purport to be appraisals
or to reflect the prices at which businesses or securities
actually may be sold. Accordingly, CIBC World Markets' analyses
and estimates are inherently subject to substantial uncertainty.
The type and amount of consideration payable in the Offer and the
Merger was determined through negotiation between the Company and
the Purchaser and the decision to enter into the Merger Agreement
was solely that of the Company Board. CIBC World Markets' opinion
and financial analyses were only one of many factors considered by
the Company Board in its evaluation of the Merger Agreement and
the transactions contemplated thereby and should not be viewed as
determinative of the views of the Company Board or management with
respect to the Merger Agreement and the transactions contemplated
thereby.
Discounted Cash Flow Analysis. CIBC World Markets performed a
discounted cash flow analysis of the Company to calculate the
estimated present value of the unlevered, after-tax free cash
flows that the Company could generate for calendar years 2002
through 2006, based on internal estimates of the Company's
management. CIBC World Markets calculated a range of estimated
terminal values by applying EBITDA terminal value multiples
ranging from 10.0x to 20.0x to the Company's projected calendar
year 2006 EBITDA. The present value of the cash flows and terminal
values were calculated using discount rates ranging from 35% to
55%. This analysis indicated the following approximate per share
equity reference range for the outstanding shares of Common Stock,
as compared to the value of the consideration in the Offer and the
Merger:
Per Share Equity Reference
Range for the Company Value of Consideration
----------------------------------- -------------------------------
$2.47 to $3.96 per share $3.00 per share
Premiums Paid Analysis. CIBC World Markets performed an analysis
of announced 100% cash transactions for the period from January 1,
2001 to May 28, 2002, with transaction values ranging from $50
million to $250 million. Premiums paid were measured in relation
to the share price of the target as of one day, one week and four
weeks prior to the announcement of the transaction. CIBC World
Markets applied average premiums of 11.5% to 52.9% to the average
of the Common Stock prices one day, one week and four weeks prior
to announcement. This analysis indicated the following approximate
per share equity reference range for the outstanding shares of
Common Stock, as compared to the value of the consideration in the
Offer and the Merger:
Per Share Equity Reference
Range for the Company Value of Consideration
------------------------------------- -----------------------------
$2.52 to $3.46 per share $3.00 per share
Liquidation Analysis. CIBC World Markets performed a liquidation
analysis of the Company's assets to calculate the potential range
of net proceeds available for distribution upon an orderly
liquidation of the Company, based on internal estimates of the
Company's management as to the potential market value of the
Company's assets, the amount of the Company's current liabilities
and the potential amount of expenses associated with a
liquidation. The potential range of net proceeds that would be
available for distribution from an orderly liquidation of the
Company was derived by applying a range of assumed liquidation
percentages to the Company's estimated net asset value as of March
31, 2002. This analysis resulted in an implied equity reference
range for the Common Stock of approximately $1.37 to $1.49 per
share.
Other Factors. In rendering its opinion, CIBC World Markets also
reviewed and considered other factors, including:
Historical trading prices of the Common Stock ranging from a low
of $1.50 to a high of $6.00 per share for the 52-week period ended
May 29, 2002.
For purposes of rendering its opinion, CIBC World Markets reviewed
the publicly available data on comparable companies and
transactions focusing specifically on companies in the transaction
processing sector. However, because the Company had not
historically generated positive cash flow or earnings, which in
CIBC World Market's judgment are the primary metrics used by the
market to value companies of this type, CIBC World Markets
concluded that comparable company or precedent transaction
analyses would not provide relevant benchmarks for evaluating the
fairness of the consideration to be paid in the Offer and the
Merger.
Miscellaneous. The Company selected CIBC World Markets based on
CIBC World Markets' reputation and expertise. CIBC World Markets
is an internationally recognized investment banking firm and, as a
customary part of its investment banking business, is regularly
engaged in valuations of businesses and securities in connection
with acquisitions and mergers, underwritings, secondary
distributions of securities, private placements and valuations for
other purposes. In the ordinary course of business, CIBC World
Markets and its affiliates may actively trade securities of the
Company, Parent and their affiliates for their own account and for
the accounts of customers and, accordingly, may at any time hold a
long or short position in those securities."
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by
deleting in its entirety the second sentence of the first paragraph under
the section captioned "Reasons for the Board's Recommendation; Factors
Considered-Other Potential Transactions" and replacing it with the
following text:
"The Company Board noted that those discussions had resulted in
preliminary proposals to acquire the Company for cash from three
other parties, each of which represented lower aggregate
consideration to the Company's stockholders compared to the
aggregate consideration to be paid by Parent and Purchaser in the
Offer and the Merger and two of which proposals contained
significant additional conditions to consummation compared to the
Offer and the Merger, thereby increasing the risk and difficulty
in completing the proposed transaction."
Item 8. Additional Information
Item 8 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following text:
"Stockholder Litigation
A purported class action complaint was filed in the Court of
Chancery of the State of Delaware (the "Complaint") on June 19,
2002, captioned as Roti v. Official Payments Corporation, et al.,
Del. Ch., C.A. No. 19707. The Complaint, which challenges the
proposed acquisition of the Company by Purchaser, names as
defendants the Company, individual members of the Company's board
of directors, Purchaser and Parent.
Specifically, the Complaint alleged, among other things, that (i)
the individual defendants breached their fiduciary duty of
disclosure by omitting to disclose certain allegedly material
information in publicly filed documents and (ii) Parent and
Purchaser violated Section 203 of the Delaware General
Corporations Law by purportedly failing to obtain the approval of
the Company's board of directors before becoming an "interested
stockholder" (as that term is defined under Section 203) in the
Company. Plaintiff sought, among other things, (1) certification
of this action as a class action, plaintiff as the class
representative and her attorneys as class counsel; (2) injunctive
relief; (3) rescissory and/or monetary damages; and (4) such other
and further relief as the Court may deem just and proper.
On June 26, 2002, the parties to the Complaint entered into a
Memorandum of Understanding with respect to a proposed settlement
of the purported stockholder class action stockholder. The
Memorandum of Understanding provides for certain additional
disclosure set forth in this Amendment No. 1 to the Schedule 14D-9
and for full releases of the defendants and certain related or
affiliated persons and extinguishes all claims that have been,
could have been or could be asserted by or on behalf of any member
of the class against the defendants and/or any related or
affiliated persons which in any manner relate to the allegations,
facts or other matters raised in the lawsuits or which otherwise
relate to the transactions contemplated by the Merger Agreement,
including the Offer and the Merger. The Memorandum of
Understanding provides for the payment of up to $175,000 of fees
and expenses for the plaintiff's counsel upon final approval of
the settlement of the actions. The final settlement of the
Complaint, including the amount of attorneys' fees to be paid, is
subject to court approval and there can be no assurance that such
approval will be obtained.
The defendants to the lawsuits have denied that they have engaged
in any wrongdoing whatsoever, and have agreed to the Memorandum of
Understanding to eliminate the burden and expense of further
litigation and to permit the Offer and Merger to proceed as
scheduled.
The foregoing summary of the Complaint is qualified in its
entirety by reference to the Complaint, a copy of which is filed
as Exhibit (a)(6) hereto and is incorporated herein by reference.
The forgoing summary of the Memorandum of Understanding is
qualified in its entirety by reference to the Memorandum of
Understanding, a copy of which has been filed as Exhibit (a)(7)
hereto and is incorporated herein by reference.
Selected Financial Information
The information below sets forth selected historical financial
data relating to the Company. The results of operations for
interim periods are not necessarily indicative of the results for
a full year. The selected financial data set forth below for each
of the years in the five-year period ended December 31, 2001 have
been derived from audited financial statements and should be read
in conjunction with the financial statements, the notes to such
financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.
Quarters Ended
March 31, Years Ended December 31,
------------------ -------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
-------- -------- -------- -------- -------- ------- -------
(In thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
Net revenues.................................... $ 4,346 $ 3,502 $ 31,445 $ 26,084 $ 8,841 $ 2,369 $1,202
Cost and Expenses:
Cost of revenues........................... 3,128 2,805 26,364 20,907 6,345 1,028 669
Sales and marketing........................ 1,039 2,380 6,568 9,212 1,301 356 330
Development costs.......................... 876 1,039 4,344 2,953 1,032 608 206
General and administrative................. 1,557 2,105 8,811 10,042 2,692 590 463
Depreciation expenses...................... 927 454 3,368 1,716 288 57 30
Restructuring and asset abandonment........ -- -- 6,045 -- -- -- --
Amortization of deferred stock-based
compensation........................... -- 19,803 19,803 15,728 7,940 -- --
-------- -------- ------- -------- -------- -------- -------
Total operating expenses.............. 7,527 28,586 75,303 60,558 19,598 2,639 1,698
-------- -------- ------- -------- -------- -------- -------
Loss from operations............................ (3,181) (25,084) (43,858) (34,474) (10,757) (270) (496)
Other income (expense), net..................... 221 949 2,537 4,436 357 (55) (6)
-------- -------- -------- -------- -------- -------- -------
Net loss........................................ $ (2,960) $(24,135) $(41,321) $ (30,038) $(10,400) $ (325) $ (502)
======== ======== ======== ========= ======== ======== =======
Basic and diluted net loss per share............ $ (0.13) $ (1.10) $ (1.88) $ (1.40) $ (0.66) $ (0.02) $ (0.03)
======== ======== ======= ========= ======== ======== =======
Weighted-average shares used in computing basic
and diluted net loss per share.................. 22,027 21,846 21,948 21,421 15,677 15,000 15,000
========= ========= ======= ========= ======== ======== =======
BALANCE SHEET DATA:
Cash and short-term investments............ $ 45,311 $ 66,348 $ 49,130 $ 65,898 $ 80,825 $ 631 $ 182
Working capital (deficit).................. 40,938 56,874 42,842 61,502 80,150 392 (221)
Total assets............................... 57,986 76,636 59,847 76,263 84,300 1,747 764
Total debt including current portion....... 584 1,058 708 1,184 597 810 389
Stockholders' equity (deficit)............. 44,956 64,763 47,594 68,453 81,561 184 (91)
The selected financial data of the Company set forth above as of and for
the three-month periods ended March 31, 2021 and 2001, respectively, have
been derived from unaudited financial statements and should be read in
conjunction with the financial statements, the notes to such financial
statements and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in the Company's Quarterly Report on
Form 10-Q for the three-month period ended March 31, 2002."
Item 9. Exhibits.
Exhibit
No. Description
(a)(4) Opinion of CIBC World Markets Corp., dated May 30, 2002
(included as Annex A to this Amendment No. 1 to the
Schedule 14D-9 and previously filed as an exhibit and
included as Annex A to the Schedule 14D-9 dated June 11,
2002).
(a)(6) Complaint of Annette Roti, on behalf of herself and all
others similarly situated, against the Company, Andrew
Cohan, Thomas R. Evans, John R. Haggerty, John D. Lewis,
Lee E. Mikles, Bruce S. Nelson, Parent and Purchaser,
filed in the Court of Chancery of the State of Delaware
on June 19, 2002.
(a)(7) Memorandum of Understanding, dated June 26, 2002, between
the class action plaintiff and the named defendants.
Information Statement Pursuant to Section 14F
The fifth paragraph of the "INFORMATION STATEMENT PURSUANT TO
SECTION 14F OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14F-1
THEREUNDER" set forth in Annex B to the Schedule 14D-9 is amended and
supplemented by deleting it in its entirety and replacing it with the
following text:
"The information contained in this Information Statement
concerning Purchaser and Parent and their respective officers,
directors, representatives or affiliates has been furnished to the
Company by Purchaser and Parent. The Company is relying on
Purchaser and Parent to furnish accurate and complete information
for inclusion in the Information Statement and has not
independently verified the accuracy or completeness of such
information."
The first paragraph of the section captioned "Certain
Relationships and Related Transactions" in the "INFORMATION STATEMENT
PURSUANT TO SECTION 14F OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE
14F-1 THEREUNDER" set forth in Annex B to the Schedule 14D-9 is amended and
supplemented by adding the following text at the end of such paragraph:
"The Company expects to continue utilizing the credit card
processing services of Comerica Bank following consummation of the
Merger in accordance with the Company's past practice and the
terms of the aforementioned agreement with Comerica (which was
automatically renewed as of April 17, 2002 in accordance with its
terms for an additional term through July 16, 2003)."
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
By: /s/ Thomas R. Evans
---------------------
Name: Thomas R. Evans
Title: Chairman and Chief Executive
Officer
Dated: June 26, 2002
[LOGO OF CIBC WORLD MARKETS] ANNEX A
CIBC World Markets Corp.
425 Lexington Avenue
New York, NY 10017
Tel: 212-856-4000
May 30, 2002
Personal and Confidential
The Board of Directors
Official Payments Corporation
3 Landmark Square
Stamford, CT 06901
Members of the Board:
You have asked CIBC World Markets Corp. ("CIBC World Markets") to render a
written opinion ("Opinion") to the Board of Directors as to the fairness,
from a financial point of view, to the holders of the common stock of
Official Payments Corporation ("OPAY" or the "Company") of the
consideration to be received pursuant to the Agreement and Plan of Merger,
dated as of May 30, 2002 (the "Merger Agreement"), by and among Tier
Technologies, Inc. ("Tier"), Kingfish Acquisition Corporation, a wholly
owned subsidiary of Tier ("Sub"), and OPAY. The Merger Agreement provides
for, among other things, (i) the commencement by Sub of a tender offer to
purchase all outstanding shares of the common stock, par value $0.01 per
share, of OPAY (the "OPAY Common Stock", and such tender offer, the "Tender
Offer") at a purchase price of $3.00 per share, net to the seller in cash
(the "Cash Consideration") and (ii) subsequent to the Tender Offer, the
merger of Sub with and into OPAY (the "Merger" and, together with the
Tender Offer, the "Transaction") pursuant to which each outstanding share
of OPAY Common Stock not previously tendered will be converted into the
right to receive the Cash Consideration.
In arriving at our Opinion, we:
(a) reviewed the draft Merger Agreement dated May 30, 2002 and
certain related documents, including the stockholders'
agreement referred to therein;
(b) reviewed OPAY's audited financial statements for the fiscal
years ended December 31, 1999, December 31, 2000 and
December 31, 2001;
(c) reviewed OPAY's unaudited financial statements for the
fiscal quarter ended March 31, 2002;
(d) reviewed financial projections of OPAY prepared by the
management of OPAY;
(e) reviewed the historical market prices and trading volume for
OPAY Common Stock;
(f) held discussions with the senior management of OPAY with
respect to the business and prospects for future growth of
OPAY;
(g) reviewed public information concerning OPAY; and
(h) performed such other analyses, reviewed such other
information and considered such other factors as we deemed
appropriate.
In rendering our Opinion, we relied upon and assumed, without independent
verification or investigation, the accuracy and completeness of all of the
financial and other information provided to or discussed with us by OPAY
and its employees, representatives and affiliates. With respect to
forecasts of the future financial condition and operating results of OPAY
and the liquidation analysis provided to or discussed with us, we assumed,
without independent verification or investigation, that such forecasts and
analysis were reasonably prepared on bases reflecting the best available
information, estimates and judgments of the management of OPAY. At the
direction of representatives of OPAY, we also assumed that the final terms
of the Merger Agreement will not vary materially from those set forth in
the draft reviewed by us. We have neither made nor obtained any independent
evaluations or appraisals of the assets or the liabilities (contingent or
otherwise) of OPAY. The Opinion rendered herein does not constitute a
recommendation of the Transaction over any other alternative transaction
which may be available to the Company. We are not expressing any opinion as
to the underlying valuation, future performance or long-term viability of
OPAY, or the price at which OPAY Common Stock will trade subsequent to
announcement of the Transaction. Our Opinion is necessarily based on the
information available to us and general economic, financial and stock
market conditions and circumstances as they exist and can be evaluated by
us on the date hereof. It should be understood that, although subsequent
developments may affect this Opinion, we do not have any obligation to
update, revise or reaffirm the Opinion.
As part of our investment banking business, we are regularly engaged in
valuations of businesses and securities in connection with acquisitions and
mergers, underwritings, secondary distributions of securities, private
placements and valuations for other purposes.
We have acted as financial advisor to OPAY in connection with the
Transaction and to the Board of Directors of OPAY in rendering this Opinion
and will receive a fee for our services, a significant portion of which is
contingent upon consummation of the Transaction. We have in the past
provided financial services to OPAY unrelated to the proposed Transaction,
for which services we have received compensation. In the ordinary course of
business, CIBC World Markets and its affiliates may actively trade
securities of OPAY, Tier and their affiliates for their own account and for
the accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Cash Consideration to be received by the holders of OPAY
Common Stock in the Transaction is fair from a financial point of view to
such holders. This Opinion is for the use of the Board of Directors of
OPAY, and does not constitute a recommendation to any stockholder as to
whether such stockholder should tender shares of OPAY Common Stock in the
Tender Offer or how such stockholder should vote on any matters relating to
the proposed Transaction. Neither this Opinion nor the services provided by
CIBC World Markets in connection herewith may be publicly disclosed or
referred to in any manner by OPAY without the prior written approval by
CIBC World Markets. CIBC World Markets consents to the inclusion of this
Opinion in its entirety and any reference to this opinion in any
prospectus, proxy statement or solicitation/recommendation statement, as
the case may be required to be distributed to the Company's shareholders in
connection with the Transaction.
Very truly yours,
CIBC World Markets Corp.
EXHIBIT INDEX
Exhibit No. Description
(a)(4) Opinion of CIBC World Markets Corp., dated May 30, 2002
(included as Annex A to this Amendment No. 1 to the
Schedule 14D-9 and previously filed as an exhibit and
included as Annex A to the Schedule 14D-9 dated June 11,
2002).
(a)(6) Complaint of Annette Roti, on behalf of herself and all
others similarly situated, against the Company, Andrew
Cohan, Thomas R. Evans, John R. Haggerty, John D. Lewis,
Lee E. Mikles, Bruce S. Nelson, Parent and Purchaser,
filed in the Court of Chancery of the State of Delaware
on June 19, 2002.
(a)(7) Memorandum of Understanding, dated June 26, 2002, between
the class action plaintiff and the defendants.