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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13E-4
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ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
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Building One Services Corporation
(Name of Issuer)
----------------
Building One Services Corporation
(Name of Person(s) Filing Statement)
----------------
COMMON STOCK
(Title of Class of Securities)
120114103
(CUSIP Number of Class of Securities)
----------------
Jonathan J. Ledecky
Chairman of the Board and Chief Executive Officer
Building One Services Corporation
800 Connecticut Avenue, N.W., Suite 1111
Washington, DC 20006
(202) 261-6000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing the Statement)
Copies to:
F. Traynor Beck, Esquire Linda Griggs, Esquire
Executive Vice President, General Morgan, Lewis & Bockius
Counsel LLP
and Secretary, Building One Services 1800 M Street. N.W.
Corporation
800 Connecticut Avenue, N.W., Suite Washington, DC 20036
1111
Washington, DC 20006 (202) 467-7000
(202) 261-6000
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February 19, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
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CALCULATION OF FILING FEE
Transaction Valuation* $580,938,150 Amount of Filing Fee $116,187.63
*Based upon the aggregate value of the securities proposed to be acquired.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement,
number, or the form or schedule and the date of its filing.
Amount previously paid: _____________ Filing party: _______________________
Form or registration no.: ___________ Date filed: _________________________
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INTRODUCTORY STATEMENT
This Schedule 13E-4 relates to an offer by Building One Services Corporation,
a Delaware corporation (the "Issuer"), to purchase 24,365,891 shares of common
stock of the Issuer (the "Shares") at a price of $25.00 per Share net to the
seller in cash or, in the case of Shares underlying stock options having
exercise prices below $25.00 per Share ("Option Shares"), $25.00 per share less
the exercise price per share, on the terms and subject to the conditions set
forth in the Offer to Purchase dated February 19, 1999 (the "Offer to
Purchase") and the related Letter of Transmittal (the "Letter of Transmittal").
Copies of the Offer to Purchase, the related Letter of Transmittal and certain
other relevant documents (together, the "Offer") are filed as exhibits hereto.
Item 1. Security and Issuer.
(a) The issuer of the securities to which the Schedule 13E-4 relates is
Building One Services Corporation, a Delaware corporation. The address of
Building One Services Corporation's principal executive office is 800
Connecticut Avenue, N.W., Suite 1111, Washington, DC 20006.
(b) The securities that are the subject of the Offer are the Issuer's Shares
of common stock, par value $.001 per share. As of February 10, 1999, there were
45,275,052 Shares issued and outstanding and options with exercise prices below
$25.00 per share for 3,456,730 Option Shares. The Issuer seeks to purchase
24,365,891 Shares for $25.00 per Share net to the seller in cash or, in the
case of Option Shares, $25.00 per share less the exercise price per share and
applicable withholding taxes. The Issuer expects that its directors and
executive officers will tender Shares, including Shares underlying stock
options, pursuant to the terms of the Offer.
(c) The information set forth in Section 7 of the Offer to Purchase, "Price
Range of Shares," is incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in Section 8 of the Offer to Purchase,
"Background and Purpose of the Offer; Certain Effects of the Offer," and
Section 10 of the Offer to Purchase,"Source and Amount of Funds," is
incorporated herein by reference. The Issuer expects to use its cash flow to
repay the indebtedness to be incurred to finance the tender offer pursuant to
the terms of such indebtedness.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
The Issuer does not intend to:
(a) acquire any additional securities of the Issuer or dispose of any of the
Shares or any other securities of the Issuer to any person (other than the
issuance of Shares and options for Shares to certain employees under the
Issuer's employee benefit plans and the issuance of Shares and options for
Shares in connection with the acquisition of businesses);
(b) engage in any extraordinary corporate transaction, such as a merger,
reorganization or liquidation other than the Offer described in the Offer to
Purchase;
(c) sell or transfer a material amount of assets of the Issuer or sell any of
its subsidiaries;
(d) change in any way the present Board of Directors or management of the
Issuer, except that the Issuer has previously announced its search for a new
chief executive officer or chief operating officer;
(e) make any material change in the Issuer's present dividend rate or policy,
or indebtedness or capitalization other than as a result of the tender offer;
(f) make any other material changes in the Issuer's corporate structure or
business;
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(g) change the Issuer's charter, bylaws or instruments corresponding thereto
or take other actions that might impede the acquisition of control of the
Issuer by any person;
(h) cause the class of equity security of the Issuer to be delisted from the
Nasdaq National Market or from any national securities exchange or to cease to
be authorized to be quoted in an inter-dealer quotation system of a registered
national securities association;
(i) cause a class of equity security of the Issuer to become eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or
(j) suspend the Issuer's obligations to file reports pursuant to Section
15(d) of the Exchange Act.
Item 4. Interest in Securities of the Issuer.
The information set forth in Section 9 of the Offer to Purchase, "Interests
of Directors and Executive Officers; Transactions and Arrangements Concerning
the Shares," is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
to the Issuer's Securities.
The information set forth in "Information," Section 8 of the Offer to
Purchase, "Background and Purpose of the Offer; Certain Effects of the Offer,"
Section 9 of the Offer to Purchase, "Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares," and Section 10
of the Offer to Purchase,"Source and Amount of Funds," is incorporated herein
by reference. Except as set forth in the Offer to Purchase, neither the Issuer
nor any person controlling the Issuer nor, to the Issuer's knowledge, any of
its directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Issuer
(including, but not limited to, any contract, arrangement, understanding or
relationship 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).
Item 6. Persons Retained, Employed or to be Compensated.
The information set forth in Section 16 of the Offer to Purchase, "Fees and
Expenses," is incorporated herein by reference.
Item 7. Financial Information.
The information set forth in Section 11 of the Offer to Purchase, "Certain
Information About the Company," is incorporated herein by reference.
Item 8. Additional Information.
(a) Not applicable.
(b) The information set forth in Section 13 of the Offer to Purchase,
"Certain Legal Matters," is incorporated herein by reference.
(c) The information set forth in Section 12 of the Offer to Purchase, "Effect
of the Offer on the Market for Shares; Registration Under the Exchange Act," is
incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in Exhibits (a)(1) through (a)(11) are
incorporated herein by reference.
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Item 9. Material to be Filed as Exhibits.
(a)(1)Form of Offer to Purchase, dated February 19, 1999.
(a)(2)Form of Letter of Transmittal to Tender Shares of Common Stock, dated
February 19, 1999.
(a)(3)Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(4)Form of Notice of Guaranteed Delivery.
(a)(5)Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(6) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(7) Form of Letter to Stockholders of the Issuer dated February 19, 1999,
from Jonathan J. Ledecky, Chairman of the Board and Chief Executive
Officer.
(a)(8) Form of press release dated February 8, 1999.
(a)(9) (1) Form of Memorandum dated February 19, 1999 from Issuer to Holders
of Building One Services Corporation Options; (2) Instructions for
Tender of Options; and (3) Option Tender Enrollment Form.
(a)(10) (1) Form of Memorandum dated February 19, 1999 from Issuer to
Participants in the Employee Stock Purchase Plan; and (2) Form of
Tender Instruction Form for Shares in the Building One Services
Corporation Employee Stock Purchase Plan; and (3) Form of Notice to
Participants in the Building One Services Corporation Employee Stock
Purchase Plan from American Stock Transfer & Trust Company dated
February 19, 1999.
(a)(11) Form of Memorandum dated February 19, 1999 from the Issuer to
Stockholders who Received Shares in Connection with the Sale of a
Business.
(d) No written opinion has been prepared by legal counsel at the request of
the Issuer pertaining to the tax consequences of the tender offer.
(f) One or more of the officers of the Issuer may orally solicit security
holders on behalf of the Issuer, but no written instruction, form or
other material has been furnished to such persons for their use,
directly or indirectly, in connection with the tender offer.
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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.
BUILDING ONE SERVICES CORPORATION
/s/ Jonathan J. Ledecky
By:
------------------------------------
Name: Jonathan J. Ledecky
Title: Chairman of the Board and Chief
Executive Officer
Dated: February 19, 1999
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EXHIBIT INDEX
Exhibit Description
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<CAPTION>
<S> <C>
(a)(1) Form of Offer to Purchase, dated February 19, 1999.
(a)(2) Form of Letter of Transmittal to Tender Shares of Common Stock, dated February 19, 1999.
(a)(3) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(4) Form of Notice of Guaranteed Delivery.
(a)(5) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(7) Form of Letter to Stockholders of the Issuer dated February 19, 1999, from Jonathan J. Ledecky,
Chairman of the Board and Chief Executive Officer.
(a)(8) Form of press release dated February 8, 1999.
(a)(9) (1) Form of Memorandum dated February 19, 1999 from Issuer to Holders of Building One
Services Corporation Options; (2) Instructions for Tender of Options; and (3) Option Tender
Enrollment Form.
(a)(10) (1) Form of Memorandum dated February 19, 1999 from Issuer to Participants in the Employee
Stock Purchase Plan; and (2) Form of Tender Instruction Form for Shares in the Building One
Services Corporation Employee Stock Purchase Plan; and (3) Form of Notice to Participants in the
Building One Services Corporation Employee Stock Purchase Plan from American Stock Transfer &
Trust Company dated February 19, 1999.
(a)(11) Form of Memorandum dated February 19, 1999 from the Issuer to Stockholders who Received
Shares in Connection with the Sale of a Business.
</TABLE>
<PAGE>
Exhibit 99.1
OFFER TO PURCHASE FOR CASH
24,365,891 SHARES
OF COMMON STOCK
AT A PURCHASE
PRICE OF $25.00 PER SHARE
The offer, proration period and withdrawal rights expire at 5:00 p.m., New
York City time, on March 24, 1999, unless the offer is extended.
Building One Services Corporation, a Delaware corporation (the "Compa-
ny"), invites its stockholders to tender shares of their common stock, par
value $.001 per share ("Shares"), to the Company at a price of $25.00 per
Share in cash, upon the terms and subject to the conditions set forth in this
Offer to Purchase, the related Letter of Transmittal and certain other rele-
vant documents (which together constitute the "Offer"). As part of the Offer,
the Company is permitting tenders of (a) Shares in connection with the condi-
tional exercise by employees of stock options ("Options") having exercise
prices below $25.00 per Share ("Option Shares"), (b) Shares that were acquired
through the Company's 1997 Employee Stock Purchase Plan ("ESPP Shares"), and
(c) Shares that were acquired in connection with the sale of a business to the
Company, including Shares acquired under agreements with the Company that re-
strict (or restricted previously) their transfer ("Restricted Shares") and
Shares that are pledged to the Company to secure potential future obligations
("Pledged Shares"). The Company will pay $25.00 per Share, net to the seller
in cash or, in the case of Option Shares, $25.00 per Share less the exercise
price per Share and applicable withholding taxes, for 24,365,891 Shares val-
idly tendered and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the proration terms hereof. The Company reserves the
right, in its sole discretion and subject to certain restrictions, to purchase
more than 24,365,891 Shares pursuant to the Offer.
This Offer is not conditioned on any minimum number of Shares being tendered.
The Offer is subject, however, to the receipt of financing on
acceptable terms and certain other conditions.
As of February 10, 1999, the Company had outstanding 45,275,052 Shares
and Options with exercise prices below $25.00 per share for 3,456,730 Option
Shares. The 24,365,891 Shares that the Company is offering to purchase repre-
sent 50% of the outstanding Shares and Option Shares.
The Shares are quoted on the Nasdaq Stock Market ("Nasdaq") under the
symbol "BOSS." On February 5, 1999, the last full trading day on Nasdaq prior
to the announcement by the Company of its intention to make this Offer, the
closing sales price per Share was $20 1/8 . Stockholders are urged to obtain
current market quotations for the Shares. See Section 7.
<PAGE>
The Board of Directors of the Company has approved the Offer. However,
stockholders must make their own decisions whether to tender Shares and, if so,
how many Shares to tender. Neither the Company nor its Board of Directors makes
any recommendation as to whether to tender or refrain from tendering Shares.
This transaction has not been approved or disapproved by the Securities
and Exchange Commission, nor has the Commission passed upon the fairness or
merits of this transaction or upon the accuracy or adequacy of the information
contained in this document. Any representation to the contrary is unlawful.
The Date of this Offer to Purchase is February 19, 1999.
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IMPORTANT
General
The information agent for the Offer is MacKenzie Partners, Inc. ("MacKen-
zie Partners"), 156 Fifth Avenue, New York, NY 10010 (telephone number 800/322-
2885). Except as discussed below, any stockholders desiring to tender all or
any portion of their Shares should either:
(i)complete and sign the Letter of Transmittal or a facsimile thereof in
accordance with the instructions in the Letter of Transmittal, mail or
deliver it with any required signature guarantee, or an agent's message
(in the case of book-entry transfer), and any other required documents
to Harris Trust Company of New York ("Harris Trust"), and either mail or
deliver the stock certificates for such Shares to Harris Trust (with all
such other documents) or follow the procedure for book-entry delivery
set forth in Section 3; or
(ii)request a broker, dealer, commercial bank, trust company or other nomi-
nee to effect the transaction for such stockholder.
A stockholder having Shares registered in the name of a broker, dealer, commer-
cial bank, trust company or other nominee must contact that broker, dealer,
commercial bank, trust company or other nominee if such stockholder desires to
tender such Shares.
Stockholders who desire to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedure
for book-entry transfer on a timely basis or whose other required documentation
cannot be delivered to Harris Trust, in any case, by the expiration of the Of-
fer should tender such Shares by following the procedures for guaranteed deliv-
ery set forth in Section 3. To effect a valid tender of Shares, stockholders
must validly complete the Letter of Transmittal.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Deliv-
ery may be directed to MacKenzie Partners.
Special Instructions for Holders of Certain Types of Shares
Holders of Options, ESPP Shares, Restricted Shares or Pledged Shares who
wish to participate in the Offer must follow the instructions and procedures
set forth in the separate documents described below. These separate documents
are also part of the terms of the Offer.
. Holders of Options, ESPP Shares, Restricted Shares or Pledged
Shares should read this Offer to Purchase and the related Letter
of Transmittal, as they contain the terms of the Offer. The
special instructions in the documents referred to below supplement
the information contained in this Offer to Purchase and the
related Letter of Transmittal. Holders of Options or ESPP Shares
should also see "Certain United States Federal Income Tax
Consequences--Tax Considerations for Holders of Options or ESPP
Shares" in Section 14 for information about tax considerations and
Section 5 for special payment procedures that apply to such
holders if they participate in the Offer.
. Holders of Options who wish to tender Option Shares in the Offer
should review the information and must follow the instructions
contained in the materials printed on green paper.
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. Holders of ESPP Shares who wish to tender ESPP Shares in the Offer
should review the information and must follow the instructions
contained in the materials printed on blue paper.
. Holders of Restricted Shares or Pledged Shares who wish to tender
Shares in the Offer should review the information and must follow
the instructions contained in the materials printed on purple
paper.
Additional copies of the special instructions may be obtained from Mac-
Kenzie Partners.
* * *
The Offer is not being made to (nor will any tender of shares be ac-
cepted from or on behalf of) holders in any jurisdiction in which the making
of the offer or the acceptance of any tender of shares therein would not be in
compliance with the laws of such jurisdiction. However, the Company may, at
its discretion, take such action as it may deem necessary for the Company to
make the Offer in any such jurisdiction and extend the offer to holders in
such jurisdiction.
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TABLE OF CONTENTS
<TABLE>
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Section Page
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Summary................................................................. 6
Introduction............................................................ 8
The Offer............................................................... 9
1. Number of Shares; Proration.................................. 9
2. Tenders by Owners of Fewer than 100 Shares................... 11
3. Procedure for Tendering Shares............................... 12
4. Withdrawal Rights............................................ 17
5. Purchase of Shares and Payment of Purchase Price............. 18
6. Certain Conditions of the Offer.............................. 20
7. Price Range of Shares........................................ 22
Background and Purpose of the Offer; Certain Effects of the
8. Offer........................................................ 22
9. Interests of Directors and Executive Officers; Transactions
and Arrangements Concerning the Shares....................... 24
10. Source and Amount of Funds................................... 25
11. Certain Information about the Company........................ 25
Effect of the Offer on the Market for Shares; Registration
12. under the Exchange Act....................................... 30
13. Certain Legal Matters........................................ 30
14. Certain United States Federal Income Tax Consequences........ 30
15. Extension of the Offer; Termination; Amendment............... 35
16. Fees and Expenses............................................ 36
17. Miscellaneous................................................ 36
</TABLE>
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SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase.
Number of Shares to be Purchased 24,365,891 Shares, including Option
Shares, ESPP Shares, Restricted Shares
and Pledged Shares.
Purchase Price $25.00 per Share, net to the seller in
cash, or, in the case of Option Shares,
$25.00 per Share less the exercise
price per Share and the applicable tax
withholding amount.
How to Tender Shares
See Section 3. Call the Information
Agent, MacKenzie Partners, at 800/322-
2885 or consult your broker for assis-
tance.
Brokerage Commissions None.
Stock Transfer Tax None, if the Company pays the regis-
tered holder.
Expiration Date
March 24, 1999, at 5:00 p.m., New York
City time, unless extended by the Com-
pany.
Payment Date As soon as practicable after the Expi-
ration Date.
Position of the Company Neither the Company nor its Board of
Directors makes any recommendation to
any stockholder as to whether to tender
or refrain from tendering Shares.
Withdrawal Rights
Tendered Shares may be withdrawn at any
time until 5:00 p.m., New York City
time, on March 24, 1999 (unless the Of-
fer is extended by the Company) and,
unless the Company has accepted the
Shares for payment, at any time after
12:00 midnight, New York City time, on
April 16, 1999. See Section 4.
Proration If all of the eligible Shares are val-
idly tendered by stockholders in the
Offer, the proration percentage (that
is, the percentage of validly tendered
Shares that would be purchased in the
Offer) would be approximately 50%. If
more than 24,365,891 shares are validly
tendered, the Company will buy:
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(i)
first, all Shares uncondition-
ally tendered by holders of fewer than
100 Shares (including Restricted
Shares) who check the "Odd Lots" box
in the appropriate documents;
(ii)
second, on a pro rata basis, all
other Shares unconditionally tendered
and all Shares conditionally tendered
for which the condition can be satis-
fied; and
(iii)
finally, if the number of Shares
acquired under (i) and (ii) is less
than 24,365,891, such additional
Shares to total 24,365,891, by lot
from such other stockholders who con-
ditionally tendered their Shares for
which the condition could not be met
and in the respective amounts that
each such stockholder indicated as the
minimum number of Shares to be pur-
chased by the Company.
The Company will return all of the
Shares that it does not purchase
(other than Pledged Shares), including
Shares not purchased because of prora-
tion or conditional tenders and will
return all Options not exercised be-
cause of proration.
Questions
Call MacKenzie Partners at 800/322-
2885 or consult your broker.
The Company has not authorized any person to make any recommendation on
behalf of the Company as to whether stockholders should tender or refrain from
tendering Shares pursuant to the Offer. The Company has not authorized any
person to give any information or to make any representation in connection
with the Offer on behalf of the Company other than those contained in this Of-
fer to Purchase, the Letter of Transmittal or the other documents sent to you
in connection with the Offer. Do not rely on any such recommendation or any
such information or representations, if given or made, as having been autho-
rized by the Company.
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To the holders of shares of common stock of Building One Services Corporation:
INTRODUCTION
The Company invites its stockholders to tender 24,365,891 Shares to the
Company at a price of $25.00 per Share net to the seller in cash, or, in the
case of Option Shares, $25.00 per Share less the exercise price per Share and
applicable withholding taxes, upon the terms and subject to the conditions set
forth in this Offer. As part of the Offer, the Company invites tenders of (a)
Option Shares in connection with the conditional exercise by employees of Op-
tions granted under the Company's 1997 Long-Term Incentive Plan or 1998 Long-
Term Incentive Plan or assumed in acquisitions and having exercise prices below
$25.00 per Share; (b) ESPP Shares that were acquired through the Company's 1997
Employee Stock Purchase Plan (the "Purchase Plan"); and (c) Restricted Shares
that were acquired in connection with the sale of a business, including Shares
acquired under agreements with the Company that restrict (or have restricted)
their transfer, and Pledged Shares that are pledged to the Company to secure
potential future obligations.
The Company will pay $25.00 per Share, net to the seller in cash, or, in
the case of Option Shares, $25.00 per Share less the exercise price per Share
and applicable withholding taxes for all Shares validly tendered prior to the
Expiration Date (as defined in Section 1) and not withdrawn, upon the terms and
subject to the conditions of the Offer, including the proration terms described
below. The Company reserves the right, in its sole discretion, to purchase more
than 24,365,891 Shares.
The Offer is not conditioned on any minimum number of Shares being ten-
dered. The Offer is, however, subject to the receipt of financing on acceptable
terms and certain other conditions. See Section 6.
If, before the Expiration Date, more than 24,365,891 Shares (or such
greater number of Shares as the Company may elect to purchase) are validly ten-
dered and not withdrawn, the Company will, upon the terms and subject to the
conditions of the Offer, purchase Shares subject to the priorities and prora-
tion terms described in this Offer to Purchase.
The $25.00 per Share purchase price will be paid net to the tendering
stockholder in cash for all Shares purchased, except that holders of Options
will be permitted to tender in connection with the conditional "cashless" exer-
cises of such Options and receive the difference between $25.00 and the exer-
cise price, less applicable withholding taxes, for each Option Share purchased
by the Company. Tendering stockholders will not be obligated to pay brokerage
commissions, solicitation fees or, subject to Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant
to the Offer. However, any tendering stockholder who fails to complete, sign
and return to Harris Trust the Substitute Form W-9 that is included with the
Letter of Transmittal may be subject to required backup federal income tax
withholding of 31% of the gross proceeds payable to such stockholder pursuant
to the Offer. See Section 3.
The Board of Directors of the Company has approved the Offer. However,
stockholders must make their own decisions whether to tender Shares and, if so,
how many Shares to tender.
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Neither the Company nor its Board of Directors makes any recommendation to any
stockholder as to whether to tender or refrain from tendering Shares.
On February 8, 1999, the Company announced its intention to make this Of-
fer. The Company is making the Offer because it believes the purchase will (i)
provide value to its stockholders; (ii) reconfigure the Company's balance sheet
to provide a higher return on equity; and (iii) afford to those stockholders
who desire liquidity an opportunity to sell their Shares (subject to proration)
at a premium to recent market prices and without the usual transaction costs
associated with open market sales. After the Offer is completed, the Company
expects to have sufficient cash flow and access to other sources of capital to
continue to implement its business plan, fund its operations and make acquisi-
tions.
Stockholders who are participants in the Purchase Plan and own ESPP
Shares may instruct American Stock Transfer & Trust Company (the "ESPP Agent"),
as administrator of the Purchase Plan, to tender part or all of the Shares
credited to their accounts in the Purchase Plan by following the instructions
set forth in "Procedure for Tendering Shares -- Tenders by Holders of Options,
ESPP Shares, Restricted Shares and Pledged Shares" in Section 3.
As of February 10, 1999, the Company had outstanding 45,275,052 Shares
and Options with exercise prices below $25.00 per share for 3,456,730 Option
Shares. The 24,365,891 Shares that the Company is offering to purchase repre-
sent 50% of the sum of the Shares (including ESPP Shares, Restricted Shares and
Pledged Shares) that were outstanding on February 10, 1999 and the Option
Shares underlying Options that were outstanding on February 10, 1999 and that
had exercise prices below $25.00 per share.
The Shares are quoted on the Nasdaq Stock Market ("Nasdaq") under the
symbol "BOSS." On February 5, 1999, the last full trading day on Nasdaq prior
to the announcement by the Company of its intention to make this Offer, the
closing sales price per Share was $20 1/8. The Company urges stockholders to
obtain current quotations of the market price of the Shares.
THE OFFER
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment (and thereby purchase) 24,365,891 Shares or such lesser
number of Shares as are validly tendered before the Expiration Date (and not
withdrawn in accordance with Section 4) at a net cash price of $25.00 per
Share. Holders of Options will be permitted to tender in connection with condi-
tional "cashless" exercises of such Options and will receive the difference be-
tween $25.00 and the exercise price less applicable withholding taxes for each
Option Share purchased by the Company. The term "Expiration Date" means 5:00
p.m., New York City time, on March 24, 1999, unless and until the Company in
its sole discretion shall have extended the period of time during which the Of-
fer is open, in which event the term "Expiration Date" shall refer to the lat-
est time and date at which the Offer, as so extended by the Company, shall ex-
pire. See Section 15 for a description of the Company's right to extend the
time during which the Offer is open and to delay, terminate or amend the Offer.
The Company reserves the right, in its sole discretion, to purchase more
than 24,365,891 Shares pursuant to the Offer. See Section 15. In accordance
with applicable regulations of the
9
<PAGE>
Securities and Exchange Commission (the "SEC"), the Company may purchase pursu-
ant to the Offer an additional amount of Shares not to exceed 2% of the out-
standing Shares without amending or extending the Offer. If (i) the Company in-
creases or decreases the price to be paid for Shares, the Company increases the
number of Shares being sought and such increase in the number of Shares being
sought exceeds 2% of the outstanding Shares, or the Company decreases the num-
ber of Shares being sought; and (ii) the Offer is scheduled to expire at any
time earlier than the expiration of a period ending on the tenth business day
from, and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 15, the Offer will
be extended until the expiration of such period of ten business days. For pur-
poses of the Offer, a "business day" means any day other than a Saturday, Sun-
day or federal holiday until 5:00 p.m., New York City time, on such day.
The Offer is not conditioned on any minimum number of Shares being ten-
dered. The Offer is subject, however, to the receipt of financing on acceptable
terms and certain other conditions. See Section 6.
The Company will pay the $25.00 purchase price per Share or, in the case
of Option Shares, $25.00 per Share less the exercise price per Share and the
applicable tax withholding amount for all Shares validly tendered prior to the
Expiration Date and not withdrawn, upon the terms and subject to the conditions
of the Offer. The Company will return, at its own expense, as promptly as prac-
ticable after the Expiration Date all of the Shares (other than Pledged Shares)
that it does not purchase, including Shares not purchased because of proration
or conditional tenders, and all of the Options that are not exercised because
of proration.
If the number of Shares validly tendered and not withdrawn prior to the
Expiration Date is less than or equal to 24,365,891 Shares (or such greater
number of Shares as the Company may elect to purchase), the Company will, upon
the terms and subject to the conditions of the Offer, purchase at the $25.00
purchase price per Share all of the Shares so tendered.
Priority. Upon the terms and subject to the conditions of the Offer, in
the event that prior to the Expiration Date more than 24,365,891 Shares (or
such greater number of Shares as the Company may elect to purchase pursuant to
the Offer) are validly tendered and not withdrawn, the Company will purchase
such validly tendered Shares in the following order of priority:
(i) first, all of the Shares validly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Owner (as defined in Section 2) who:
(a) tenders all of the Shares beneficially owned by such Odd Lot Owner
(partial tenders will not qualify for this preference); and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and
(ii)second, on a pro rata basis, all of the other Shares properly and uncon-
ditionally tendered, and all of the Shares properly and conditionally
tendered, for which the condition can be satisfied; and
10
<PAGE>
(iii)
finally, if the number of Shares acquired under (i) and (ii) is less
than 24,365,891, such additional Shares to total 24,365,891, by lot from
stockholders who conditionally tendered their Shares for which the con-
dition could not be met and in the respective amounts that each such
stockholder indicated as the minimum number of Shares to be purchased by
the Company.
Proration. In the event that proration of tendered Shares is required,
the Company will determine the proration factor as promptly as practicable af-
ter the Expiration Date. Proration for each stockholder tendering Shares (other
than Odd Lot Owners) shall be based on the ratio of the number of Shares ten-
dered by such stockholder to the total number of Shares tendered by all of the
stockholders (other than Odd Lot Owners). This ratio will be applied to stock-
holders tendering Shares (other than Odd Lot Owners) to determine the number of
Shares that will be purchased from each such stockholder pursuant to the Offer.
The same proration factor will be separately applied to the Option Shares
and the ESPP Shares, with the following additional administrative rules:
. For holders of Option Shares, the Company will purchase Option
Shares in the order in which the Option Shares had already vested
or would have vested under the Option's original vesting schedule.
The Compensation Committee has accelerated the vesting of all of
the Options to permit tenders of Option Shares in connection with
conditional exercises of Options in the Offer.
. For holders of ESPP Shares, the Company will first purchase the
ESPP Shares that have been held the longest.
Although the Company does not expect to be able to announce the final re-
sults of such proration until approximately seven business days after the Expi-
ration Date, it will announce preliminary results of proration by press release
as promptly as practicable after the Expiration Date. Stockholders will be able
to obtain such preliminary information from MacKenzie Partners and may be able
to obtain such information from their brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to that stockholder and therefore, may be relevant to a stockhold-
er's decision whether to tender Shares. The Letter of Transmittal affords each
tendering stockholder the opportunity to designate a minimum number of Shares
that the stockholder wants to tender, if any are purchased.
This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares as of February 19, 1999 and will be fur-
nished to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the Company's stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
2.TENDERS BY OWNERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all of the Shares validly tendered
and not withdrawn on, or prior to, the Expiration Date by, or on behalf of,
stockholders who beneficially own an aggregate of fewer than 100 Shares ("Odd
Lot Owners"). To avoid proration, however, an Odd Lot Owner must validly tender
all of the Shares that such Odd Lot Owner beneficially owns; partial tenders
will not qualify for this preference. This preference is not available to par-
tial tenders or to owners of 100 or more
11
<PAGE>
Shares in the aggregate, even if such owners have separate stock certificates
for fewer than 100 of such Shares. Any Odd Lot Owner wishing to tender all of
the Shares beneficially owned by such stockholder pursuant to this Offer must
complete the box captioned "Odd Lots" in the Letter of Transmittal and, if ap-
plicable, on the Notice of Guaranteed Delivery. See Section 3. Stockholders
owning an aggregate of less than 100 Shares whose Shares are purchased pursuant
to the Offer will avoid both the payment of brokerage commissions and any ap-
plicable odd lot discounts payable on a sale of their Shares in transactions on
Nasdaq.
The Company also reserves the right, but will not be obligated, to pur-
chase all of the Shares duly tendered by any stockholder who tendered all of
the Shares beneficially owned and who, as a result of proration, would then
beneficially own an aggregate of fewer than 100 Shares. If the Company exer-
cises this right, it will increase the number of Shares that it is offering to
purchase in the Offer by the number of Shares purchased through the exercise of
such right.
3.PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares other than Option Shares and ESPP
Shares to be validly tendered pursuant to the Offer:
(i) the certificates for such Shares, other than Pledged Shares (or
confirmation of receipt of such Shares pursuant to the procedures for
book-entry transfer set forth below), together with a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile
thereof) with any required signature guarantees, or an agent's message
(in the case of any book-entry transfer), and any other documents
required by the Letter of Transmittal, must be received prior to 5:00
p.m., New York City time, on the Expiration Date by Harris Trust at its
address set forth on the back cover of this Offer to Purchase; or
(ii)the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
Holders of Options or ESPP Shares should not complete the Letter of
Transmittal but should follow the instructions for tendering Shares discussed
in the instructions referred to below. See "--Tenders by Holders of Options,
ESPP Shares, Restricted Shares and Pledged Shares." In addition, Odd Lot Owners
who tender all of their Shares must complete the section entitled "Odd Lots" on
the Letter of Transmittal and, if applicable, on the Notice of Guaranteed De-
livery, in order to qualify for the preferential treatment available to Odd Lot
Owners as set forth in Section 2.
It is a violation of Section 14(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Rule 14e-4 promulgated thereunder,
for a person to tender Shares for such person's own account unless the person
so tendering:
(i) owns such Shares; or
(ii)owns other securities convertible into or exchangeable for Shares or
owns an option, warrant or right to purchase Shares and intends to
acquire such Shares for tender by conversion, exchange or exercise of
such option, warrant or right.
Section 14(e) and Rule 14e-4 contain a similar restriction applicable to a ten-
der or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Company for payment will constitute a
binding agreement between the tendering stockholder and the Company upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation that such stockholder owns the Shares being ten-
dered within the meaning of Rule 14e-4, and the tender of such Shares complies
with Rule 14e-4.
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<PAGE>
Tenders by Holders of Options, ESPP Shares, Restricted Shares or Pledged
Shares. Holders of Options and ESPP Shares should not complete the Letter of
Transmittal. They should complete the forms discussed in the documents referred
to below. In addition holders of Options, ESPP Shares, Restricted Shares or
Pledged Shares who wish to participate in the Offer must follow the
instructions and procedures set forth in the separate documents described
below. These separate documents are also part of the terms of the Offer.
. Holders of Options, ESPP Shares, Restricted Shares or Pledged
Shares should read this Offer to Purchase and the related Letter
of Transmittal, as they contain the terms of the Offer. The
special instructions in the documents referred to below supplement
the information contained in this Offer to Purchase and the
related Letter of Transmittal. Holders of Options or ESPP Shares
should also see "Certain United States Federal Income Tax
Consequences--Tax Considerations for Holders of Options or ESPP
Shares" in Section 14 for information about tax considerations and
Section 5 for special payment procedures that apply to such
holders if they participate in the Offer.
. Holders of Options who wish to tender Option Shares in the Offer
should review the information and must follow the instructions
contained in the materials printed on green paper.
. Holders of ESPP Shares who wish to tender ESPP Shares in the Offer
should review the information and must follow the instructions
contained in the materials printed on blue paper.
. Holders of Restricted Shares and Pledged Shares who wish to tender
Shares in the Offer should review the information and must follow
the instructions contained in the materials printed on purple
paper.
In addition, see Section 5 below, "Purchases of Shares and Payment of Purchase
Price--Special Procedures for Holders of Options, ESPP Shares, Restricted
Shares or Pledged Shares."
Conditional Tender of Shares. Under certain circumstances and subject to
the exceptions set forth in Section 1, the Company may reduce on a pro rata ba-
sis the number of Shares purchased pursuant to the Offers. As discussed in Sec-
tion 14, the number of Shares to be purchased from a particular stockholder
might affect the tax treatment of such purchase to such stockholder and such
stockholder's decision whether to tender. Accordingly, a stockholder may tender
Shares subject to the condition that a specified minimum number of such hold-
er's Shares must be purchased if any such Shares so tendered are purchased, and
any stockholder desiring to make such a conditional tender must so indicate in
the box captioned "Conditional Tender" in the Letter of Transmittal or, if ap-
plicable, the Notice of Guaranteed Delivery. Holders of ESPP Shares who wish to
make conditional tenders should so indicate in the section captioned "Condi-
tional Tender" in the "Tender Instruction Form for Shares in Building One Serv-
ices Corporation's 1997 Employee Stock Purchase Plan."
Any tendering stockholders wishing to make a conditional tender must cal-
culate and appropriately indicate such minimum number of Shares and each stock-
holder is urged to consult with his own tax advisor. If the effect of accepting
tenders on a pro rata basis would be to reduce the number of Shares to be pur-
chased from any stockholder below the minimum number so specified, such tender
will automatically be regarded as withdrawn (except as provided in the next
paragraph) and all
13
<PAGE>
Shares tendered by such stockholder pursuant to such Letter of Transmittal or
Notice of Guaranteed Delivery will be returned as soon as practicable thereaf-
ter.
If conditional tenders would otherwise be so regarded as withdrawn and
would cause the total number of Shares to be purchased to fall below the number
of Shares sought by the Company, then, to the extent feasible, the Company may
select enough of such conditional tenders that would otherwise have been so
withdrawn to permit the Company to purchase the number of Shares sought by the
Company. In selecting among such conditional tenders, the Company will select
by lot and will limit its purchase in each case to the designated minimum num-
ber of Shares to be purchased.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal (i) if the Letter of Transmittal is
signed by the registered holder of the Shares (which term, for purposes of this
Section, includes any participant in The Depository Trust Company (the "Book-
Entry Transfer Facility") whose name appears on a security position listing as
the holder of the Shares) tendered therewith and payment and delivery are to be
made directly to such registered holder; or (ii) if Shares are tendered for the
account of a member firm of a registered national securities exchange, a member
of the National Association of Securities Dealers, Inc. or a commercial bank or
trust company (not a savings bank or savings and loan association) having an
office, branch or agency in the United States (each such entity being hereinaf-
ter referred to as an "Eligible Institution"). In all other cases, all signa-
tures on the Letter of Transmittal must be guaranteed by an Eligible Institu-
tion. See Instruction 1 of the Letter of Transmittal. If a certificate repre-
senting Shares is registered in the name of a person other than the signer of a
Letter of Transmittal, or if payment is to be made, or Shares not purchased or
tendered are to be issued, to a person other than the registered holder, the
certificate must be endorsed or accompanied by an appropriate stock power, in
either case signed exactly as the name of the registered holder appears on the
certificate, with the signature on the certificate or stock power guaranteed by
an Eligible Institution. In this regard, see Section 5 for information with re-
spect to applicable stock transfer taxes. In all cases, payment for Shares ten-
dered and accepted for payment pursuant to the Offer will be made only after
timely receipt by Harris Trust of certificates for such Shares (or a timely
confirmation of a book-entry transfer of such Shares into Harris Trust's ac-
count at the Book-Entry Transfer Facility as described above), a properly com-
pleted and duly executed Letter of Transmittal (or manually signed facsimile
thereof) or an agent's message (in the case of any book-entry transfer) and any
other documents required by the Letter of Transmittal.
The method of delivery of all documents, including Share certificates,
the Letter of Transmittal and any other required documents, is at the election
and risk of the tendering stockholder. If delivery is by mail, registered mail
with return receipt requested, properly insured, is recommended.
Book-Entry Delivery. Harris Trust 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 finan-
cial institution that is a participant in the Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such Shares into Harris Trust's account in accordance with such
facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into Harris Trust's account at the Book-
Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof), with any required signature
guarantees or an agent's message (in the case of any book-entry transfer) and
other required documents must, in any case, be transmitted to and received by
Harris Trust at one of its addresses set forth on the back cover of this Offer
to
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<PAGE>
Purchase prior to the Expiration Date, or the guaranteed delivery procedure set
forth below must be followed. Delivery of the Letter of Transmittal and any
other required documents to the Book-Entry Transfer Facility does not consti-
tute delivery to Harris Trust.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant
to the Offer and such stockholder's Share certificates cannot be delivered to
Harris Trust prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all re-
quired documents to reach Harris Trust before the Expiration Date, such Shares
may nevertheless be tendered provided that all of the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii)Harris Trust receives (by hand, mail, overnight courier, telegram or
facsimile transmission), on, or prior to, the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer to
Purchase, including (where required) a signature guarantee by an
Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery; and
(iii)
the certificates for all tendered Shares in proper form for transfer (or
confirmation of book-entry transfer of such Shares into Harris Trust's
account at the Book-Entry Transfer Facility), together with a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) and any required signature guarantees or an agent's
message (in the case of any book-entry transfer) or other documents
required by the Letter of Transmittal, are received by Harris Trust
within three Nasdaq trading days after the date Harris Trust receives
such Notice of Guaranteed Delivery.
Return of Shares. If any tendered Shares are not purchased, or if less
than all of the Shares evidenced by a stockholder's certificates are tendered,
certificates for Shares that are not purchased (other than Pledged Shares) will
be returned as promptly as practicable after the expiration or termination of
the Offer or, in the case of Shares tendered by book-entry transfer at the
Book-Entry Transfer Facility, such Shares will be credited to the appropriate
account maintained by the tendering stockholder at the Book-Entry Transfer Fa-
cility, in each case without expense to such stockholder. Restricted Shares
that are returned will bear appropriate legends restricting transfer, as appli-
cable.
Backup Federal Income Tax Withholding. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the ap-
plicable law and regulations, 31% of the gross proceeds payable to a stock-
holder or other payee pursuant to the Offer must be withheld and remitted to
the United States Treasury, unless the stockholder or other payee provides such
person's taxpayer identification number (employer identification number or so-
cial security number) to Harris Trust and certifies under penalties of perjury
that such number is correct. Therefore, each tendering stockholder should com-
plete and sign the Substitute Form W-9 included as part of the Letter of Trans-
mittal so as to provide the information and certification necessary to avoid
backup withholding, unless such stockholder otherwise establishes to the satis-
faction of Harris Trust that the stockholder is not subject to backup withhold-
ing. Certain stockholders, including, among others, all corporations and cer-
tain foreign stockholders (in addition to foreign corporations), are not sub-
ject to these backup withholding and reporting requirements. In order for a
foreign stockholder to qualify as an exempt recipient, that stockholder must
submit an IRS Form W-8 or a Substitute Form W-9, signed under penalties of per-
jury, attesting to that stockholder's exempt status. Such statements can be ob-
tained from Harris Trust. See Instruction 12 of the Letter of Transmittal.
15
<PAGE>
To prevent backup federal income tax withholding equal to 31% of the
gross payments made to stockholders for Shares purchased pursuant to the Of-
fer, each stockholder who does not otherwise establish an exemption from such
withholding must provide Harris Trust with the stockholder's correct taxpayer
identification number and provide certain other information by completing the
Substitute Form W-9 included with the Letter of Transmittal.
For a discussion of certain United States federal income tax conse-
quences to tendering stockholders, see Section 14.
Withholding For Foreign Stockholders. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, Harris Trust
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or his or her agent unless Harris
Trust determines that a reduced rate of withholding is available pursuant to a
tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or busi-
ness within the United States. For this purpose, a foreign stockholder is any
stockholder that is not (i) a citizen or resident of the United States; (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof;
(iii) an estate, the income of which is subject to United States federal in-
come taxation regardless of the source of such income; or (iv) a trust, if a
court within the United States is able to exercise primary supervision of the
administration of the trust and one or more United States persons have the au-
thority to control all of the substantial decisions of the trust. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
stockholder must deliver to Harris Trust before the payment a properly com-
pleted and executed IRS Form 1001. In order to obtain an exemption from with-
holding on the grounds that the gross proceeds paid pursuant to the Offer are
effectively connected with the conduct of a trade or business within the
United States, a foreign stockholder must deliver to Harris Trust a properly
completed and executed IRS Form 4224. Harris Trust will determine a stockhold-
er's status as a foreign stockholder and eligibility for a reduced rate of, or
exemption from, withholding by reference to any outstanding certificates or
statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and circum-
stances indicate that such reliance is not warranted. A foreign stockholder
may be eligible to obtain a refund of all or a portion of any tax withheld if
such stockholder meets the "complete redemption," "substantially dispropor-
tionate" or "not essentially equivalent to a dividend" test described in Sec-
tion 14 or is otherwise able to establish that no tax or a reduced amount of
tax is due. Backup withholding generally will not apply to amounts subject to
the 30% or a treaty-reduced rate of withholding. Foreign stockholders are
urged to consult their own tax advisors regarding the application of United
States federal income tax withholding, including eligibility for a withholding
tax reduction or exemption, and the refund procedure. See Instruction 12 of
the Letter of Transmittal.
Tendering Stockholder's Representation and Warranty; Company's Accept-
ance Constitutes an Agreement. It is a violation of Rule 14e-4, promulgated
under the Exchange Act, for a person acting alone or in concert with others,
directly or indirectly, to tender Shares for such person's own account unless
at the time of tender and at the Expiration Date such person has a "net long
position" equal to or greater than the amount tendered in (i) the Shares and
will deliver or cause to be delivered such Shares for the purpose of tender to
the Company within the period specified in the Offer or (ii) other securities
immediately convertible into, exercisable for or exchangeable into Shares
("Equivalent Securities") and, upon the acceptance of such tender, will ac-
quire such Shares by conversion, exchange or exercise of such Equivalent Secu-
rities to the extent required by the terms of the Offer and will deliver or
cause to be delivered such Shares so acquired for the purpose of tender
16
<PAGE>
to the Company within the period specified in the Offer. Rule 14e-4 also pro-
vides a similar restriction applicable to the tender or guarantee of a tender
on behalf of another person. A tender of Shares made pursuant to any method of
delivery set forth herein will constitute the tendering stockholder's represen-
tation and warranty to the Company that (i) such stockholder has a "net long
position" in Shares or Equivalent Securities being tendered within the meaning
of Rule 14e-4; and (ii) such tender of Shares complies with Rule 14e-4. The
Company's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and the Com-
pany upon the terms and subject to the conditions of the Offer.
Determinations of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form, eligibil-
ity (including time of receipt) and acceptance for payment of any tender of
Shares will be determined by the Company, in its sole discretion, which deter-
mination shall be final and binding on all parties. The Company reserves the
absolute right to reject any or all of the tenders it determines not to be in
proper form or the acceptance of or payment for which may, in the opinion of
the Company's counsel, be unlawful. The Company also reserves the absolute
right to waive any of the conditions of the Offer and any defect or irregular-
ity in the tender of any particular Shares or any particular stockholder. No
tender of Shares will be deemed to be properly made until all defects or irreg-
ularities have been cured or waived. None of the Company, Harris Trust, AST
StockPlan, Inc., MacKenzie Partners or any other person is or will be obligated
to give notice of any defects or irregularities in tenders, and none of them
will incur any liability for failure to give any such notice.
Certificates for Shares, together with a properly completed Letter of
Transmittal and any other documents required by the Letter of Transmittal, must
be delivered to Harris Trust and not to the Company. Any such documents deliv-
ered to the Company will not be forwarded to Harris Trust and therefore will
not be deemed to be validly tendered.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursu-
ant to the Offer are irrevocable. Shares other than Option Shares and ESPP
Shares tendered pursuant to the Offer may be withdrawn at any time before the
Expiration Date and, unless the Company has accepted the Shares (including Op-
tion Shares and ESPP Shares) for payment as provided in this Offer to Purchase,
may also be withdrawn after 12:00 midnight, New York City time, on April 16,
1999. Option Shares and ESPP Shares may be withdrawn at any time before 5:00
p.m. March 22, 1999.
For a withdrawal to be effective, Harris Trust must receive (at its ad-
dress set forth on the back cover of this Offer to Purchase) a notice of with-
drawal in written, telegraphic or facsimile transmission form on a timely ba-
sis. Such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares tendered, the number of Shares
to be withdrawn and the name of the registered holder, if different from that
of the person who tendered such Shares. If the certificates have been delivered
or otherwise identified to Harris Trust, then, prior to the release of such
certificates, the tendering stockholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares and the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution (except
in the case of Shares tendered by 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 the number of the account
at the Book-Entry Transfer Facility to be credited with the withdrawn Shares
and otherwise comply with the procedures of such facility. Holders of Options
and ESPP Shares must comply with the withdrawal procedures set forth in the
separate documents for such holders.
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<PAGE>
All questions as to the form and validity, including time of receipt and
of notices of withdrawal will be determined by the Company, in its sole discre-
tion, which determination shall be final and binding on all parties. None of
the Company, Harris Trust, AST StockPlan, Inc., MacKenzie Partners or any other
person is or will be obligated to give any notice of any defects or irregulari-
ties in any notice of withdrawal, and none of them will incur any liability for
failure to give any such notice. Withdrawals may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not tendered for purposes
of the Offer. However, withdrawn Shares may be retendered before the Expiration
Date by again following any of the procedures described in Section 3.
If the Company extends the Offer or is delayed in its purchase of Shares
for any reason, then, without prejudice to the Company's rights under the Of-
fer, Harris Trust may, subject to applicable law, retain on behalf of the Com-
pany all tendered Shares, and such Shares may not be withdrawn except to the
extent tendering stockholders are entitled to withdrawal rights as described in
this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, the Company
will purchase and pay the $25.00 per Share purchase price for all of the Shares
accepted for payment pursuant to the Offer or, in the case of Option Shares,
$25.00 per Share less the exercise price per Share and the applicable tax with-
holding amount as soon as practicable after the Expiration Date. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made promptly (subject to possible delay in the event of proration) but only
after timely receipt by Harris Trust of certificates for Shares (or of a timely
confirmation of a book-entry transfer of such Shares into Harris Trust's ac-
count at the Book-Entry Transfer Facility), a properly completed and duly exe-
cuted Letter of Transmittal (or manually signed facsimile thereof) or any other
required documents.
Payment for Shares purchased pursuant to the Offer will be made by depos-
iting the aggregate purchase price therefor with Harris Trust, which will act
as agent for tendering stockholders for the purpose of receiving payment from
the Company and transmitting payment to the tendering stockholders. In the
event of proration, the Company will determine the proration factor and pay for
those tendered Shares accepted for payment as soon as practicable after the Ex-
piration Date. However, the Company does not expect to be able to announce the
final results of any such proration until approximately seven business days af-
ter the Expiration Date. Under no circumstances will the Company pay interest
on the purchase price including, without limitation, by reason of any delay in
making payment. Certificates for all of the Shares not purchased, including all
of the Shares not purchased due to proration, will be returned (or, in the case
of Shares tendered by book-entry transfer, such Shares will be credited to the
account maintained with the Book-Entry Transfer Facility by the participant who
so delivered such Shares) as promptly as practicable following the Expiration
Date or termination of the Offer without expense to the tendering stockholder.
In addition, if certain events occur, the Company may not be obligated to pur-
chase Shares pursuant to the Offer. See Section 6.
The Company will pay any stock transfer taxes payable on the transfer to
it of Shares purchased pursuant to the Offer; provided, however, that if pay-
ment of the purchase price is to be made to, or (in the circumstances permitted
by the Offer) if unpurchased Shares are to be registered in the name of, any
person other than the registered holder, or if tendered certificates are regis-
tered in the name of any person other than the person signing the Letter of
Transmittal, the amount of all of the stock transfer taxes, if any (whether im-
posed on the registered holder or such other person), payable on account of the
transfer to such person will be deducted from the purchase price unless evi-
dence satisfactory to the Company of the payment of such taxes or exemption
therefrom is submitted. See Instruction 6 of the Letter of Transmittal.
18
<PAGE>
Special Procedures for Holders of Options, ESPP Shares, Restricted Shares or
Pledged Shares
Options. Holders of Options to purchase Shares granted under the
Company's Option plans or assumed in acquisitions may tender Option Shares in
connection with the conditional exercise of Options having exercise prices be-
low $25.00 per share as part of the Offer. Such Option holders will instruct
AST StockPlan, Inc., as their agent, to tender part or all of the Option Shares
resulting from the conditional exercise.
This exercise of Options will be "conditional" because the Option holder
is deemed to exercise the Option only if, and to the extent that, the Company
actually purchases the Option Shares in the Offer. If, after taking into ac-
count proration, the Company purchases 50% of a holder's Option Shares, the re-
maining 50% will not be considered to have been exercised and will remain out-
standing subject to the original vesting schedule applicable to the 50% of the
holder's Option Shares that would have vested last. To the extent that the Com-
pany does not purchase 50% of a holder's Option Shares, either because the
holder did not tender the Option Shares or because of proration, the Options
for such Option Shares will remain exercisable, notwithstanding the original
vesting schedule.
As an accommodation to Option holders planning to tender Option Shares in
the Offer, the Company will permit a "cashless" exercise of such Options. In
this event, the Option holder will not be required to pay cash for the exercise
price and the consideration received by the holder whose Option Shares are pur-
chased in the Offer will be the difference between $25.00 per Share and the ex-
ercise price per Share relating to the Option Shares so purchased (less the ap-
plicable tax withholding amount). Option holders who have not exercised their
Options for cash and received Shares may not use the Letter of Transmittal to
direct the tender of the Option Shares. Instead, such holders must follow the
procedures for tender described in the separate materials on green paper in-
cluded with this Offer to Purchase.
ESPP Shares. Participants in the Purchase Plan who wish to have the agent
for such plan tender ESPP Shares attributable to their accounts should notify
the ESPP Agent of such election as provided in the notice sent to such partici-
pants and explained in the materials on blue paper included with this Offer to
Purchase. As explained in greater detail in those materials, employees who own
ESPP Shares who wish to participate in the Offer must instruct the ESPP Agent
as to the number of their ESPP Shares they would like to tender in the Offer,
and must authorize the ESPP Agent to tender the ESPP Shares on their behalf.
Solely for the purpose of allowing participants in the Purchase Plan to partic-
ipate in the Offer, the one-year restriction on sales of ESPP Shares acquired
through the Purchase Plan as of the end of the December 1998 purchase period
has been temporarily waived. Shares purchased through the Purchase Plan after
such date are not eligible for the Offer. Any ESPP Shares that have not satis-
fied the one-year sale restriction and are not purchased in the Offer will be
returned to the employee's Purchase Plan account. Such ESPP Shares will not be
eligible for sale until the one-year period has been satisfied. Holders of ESPP
Shares may not use the Letter of Transmittal to direct the tender of ESPP
Shares. Instead, holders of ESPP Shares must follow the procedures for tender
described in the separate materials on blue paper included herewith.
Restricted Shares. Holders of Restricted Shares may tender part or all of
their Restricted Shares. The Company will purchase Restricted Shares (including
any Pledged Shares) in the order in which their restrictions lapse. If the Com-
pany only purchases 50% of a holder's Restricted Shares (including any Pledged
Shares), the remaining 50% will remain subject to the contractual restrictions
on transfer applicable to the 50% of the holder's Restricted Shares that would
have lapsed last. To
19
<PAGE>
the extent that the Company does not purchase 50% of a holder's Restricted
Shares (excluding any Pledged Shares), either because the holder did not ten-
der the Restricted Shares or because of proration, such Restricted Shares will
remain free of any contractual restriction on transfer (but subject to securi-
ties laws limitations). Holders of Restricted Shares must complete the Letter
of Transmittal to tender Restricted Shares, including any Pledged Shares. The
procedures for tender of Restricted Shares are described in the separate mate-
rials on purple paper included with this Offer to Purchase.
Pledged Shares. Holders of Pledged Shares who desire to tender their
Pledged Shares in the Offer must direct Harris Trust to tender the Pledged
Shares on their behalf as described in the materials on purple paper included
with this Offer to Purchase. By signing the Letter of Transmittal, a holder of
Pledged Shares will authorize Harris Trust to return any Pledged Shares that
are not purchased in the Offer to the Company and to forward the proceeds from
the sale of any Pledged Shares to an account maintained for the Company's ben-
efit by American Stock Transfer & Trust Company. The Company will purchase
Pledged Shares based upon the proration factor applicable in the Offer. The
proceeds from the Pledged Shares received upon tender will be subject to the
same terms and conditions as the Pledged Shares. Holders of Pledged Shares
must complete the Letter of Transmittal to tender Pledged Shares. The proce-
dures for tender of Pledged Shares are described in the separate materials on
purple paper included with this Offer to Purchase.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not
be required to accept for payment, or purchase or pay for any Shares tendered,
and may terminate or amend the Offer or may postpone the acceptance for pay-
ment of, or the purchase of and the payment for Shares tendered, subject to
Rule 13e-4(f) promulgated under the Exchange Act, if at any time on or after
February 19, 1999 and prior to the time of payment for any such Shares
(whether any Shares have theretofore been accepted for payment, purchased or
paid for pursuant to the Offer) any of the following events shall have been
determined by the Company to have occurred that, in the Company's judgment in
any such case and regardless of the circumstances giving rise thereto (includ-
ing any action or omission to act by the Company), makes it inadvisable to
proceed with the Offer or with such acceptance for payment or payment:
(a) (1) there shall not have been made available to the Company, on terms
and conditions satisfactory to the Company in its sole discretion, funds
sufficient to pay $25.00 per Share net to the seller in cash or, in the
case of Option Shares, $25.00 per Share less the exercise price per
Share and applicable withholding taxes for the 24,365,891 Shares and
related costs and expenses of the Offer from (i) $300 million in senior
subordinated debt; (ii) a $100 million term loan; and (iii) a $250
million revolving credit facility and (2) the Company shall have
obtained all necessary consents from lenders for completion of the
Offer; or
(b) there shall have been threatened, instituted or pending before any
court, agency, authority or other tribunal any action, suit or
proceeding by any government or governmental, regulatory or
administrative agency or authority or by any other person, domestic or
foreign, or any judgment, order or injunction entered, enforced or
deemed applicable by any such court, authority, agency or tribunal,
which (i) challenges or seeks to make illegal, or to delay or otherwise
directly or indirectly to restrain, prohibit or otherwise affect the
making of the Offer or, the acquisition of Shares pursuant to the Offer
or is otherwise related in any manner to, or otherwise affects, the
Offer; or (ii) could, in the sole judgment of the Company, materially
affect the business, condition (financial or other), income, operations
or prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any
20
<PAGE>
way the contemplated future conduct of the business of the Company and
its subsidiaries, taken as a whole, or materially impair the Offer's
contemplated benefits to the Company; or
(c) there shall have been any action threatened or taken, or any approval
withheld, or any statute, rule or regulation invoked, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by any
government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the sole judgment of
the Company, would or might directly or indirectly result in any of the
consequences referred to in clause (i) or (ii) of paragraph (b) above; or
(d) there shall have occurred (i) the declaration of any banking moratorium
or any suspension of payments in respect of banks in the United States
(whether or not mandatory); (ii) any general suspension of trading in, or
limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market; (iii) the
commencement or escalation of a war, armed hostilities or any other
national or international crisis directly or indirectly involving the
United States; (iv) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority on, or any
event which, in the sole judgment of the Company, might materially
affect, the extension of credit by banks or other lending institutions in
the United States; (v) any significant decrease in the market price of
the Shares or in the market prices of equity securities generally in the
United States or any change in the general political, market, economic or
financial conditions or in the commercial paper markets in the United
States or abroad that could have in the sole judgment of the Company a
material adverse effect on the business, condition (financial or
otherwise), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or on the trading in the Shares or on the
proposed financing for the Offer; (vi) in the case of any of the
foregoing existing at the time of the announcement of the Offer, a
material acceleration or worsening thereof; or (vii) any decline in
either the Dow Jones Industrial Average or the S&P 500 Composite Index by
an amount in excess of 10% measured from the close of business on
February 19, 1999; or
(e) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which in the sole judgment of the
Company is or may be material to the Company and its subsidiaries taken
as a whole; or
(f) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned
that (i) any person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) shall have acquired or proposed to acquire beneficial
ownership of more than 5% of the outstanding Shares, or any new group
shall have been formed that beneficially owns more than 5% of the
outstanding Shares; or
(g) any person or group shall have filed a Notification and Report Form under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 reflecting an
intent to acquire the Company or any of its Shares.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or
21
<PAGE>
inaction by the Company) or may be waived by the Company in whole or in part.
The Company's failure 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 that may be asserted at any time and from time to time. Any
determination by the Company concerning the events described above and any re-
lated judgment or decision by the Company regarding the inadvisability of pro-
ceeding with the purchase of or payment for any Shares tendered will be final
and binding on all parties.
7. PRICE RANGE OF SHARES
The Shares are quoted on Nasdaq. The high and low sales prices per Share
on Nasdaq as compiled from published financial sources for the periods indi-
cated are listed below. The Shares have been traded under the symbol "BOSS"
since September 1998.
<TABLE>
<CAPTION>
High Low
--------- -------
<S> <C> <C>
Fiscal Year 1997
Fourth Quarter............................................ $ 21.50 $ 20.00
Fiscal Year 1998
First Quarter............................................. $ 25 7/8 $18 3/8
Second Quarter............................................ $25 15/16 $ 19.75
Third Quarter............................................. $ 24.50 $ 11.50
Fourth Quarter............................................ $ 22.50 $ 7 7/8
Fiscal Year 1999
First Quarter through February 12, 1999................... $ 21.00 $16 5/8
</TABLE>
On February 5, 1999, the last full trading day on Nasdaq prior to the an-
nouncement by the Company of its intention to make this Offer to Purchase, the
closing price per Share on Nasdaq was $20 1/8. On February 5, 1999, the Company
also announced the mutual termination of its merger agreement with Boss Invest-
ment LLC, which is discussed in Section 8 below. The Company urges stockholders
to obtain current quotations of the market price of the Shares.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
From time to time, the Company receives indications of interest or pro-
posals for a transaction with the Company. On December 23, 1998, the Company
entered into an Agreement and Plan of Merger with Boss Investment LLC, an af-
filiate of the private investment firm of Apollo Management, L.P. ("Boss In-
vestment"). Pursuant to that Agreement and Plan of Merger, the Company was to
merge with an affiliate of Boss Investment, with the Company as the surviving
corporation. The adoption of the Agreement and Plan of Merger by the Company's
stockholders would have resulted in reducing the number of outstanding Shares
from approximately 45.3 million to 10,578,000. As a part of the merger, stock-
holders would have received $25.00 in cash for each Share of common stock they
beneficially owned unless the stockholder elected to retain such Shares and un-
less stockholders elected to retain less than 10,578,000 Shares in the aggre-
gate, and the Company would have acquired 50% of the outstanding Options for
$25.00 in cash less the exercise price per Share. In addition, the adoption of
the Agreement and Plan of Merger would have resulted in the Company amending
its Restated Certificate of Incorporation, which among other things, would have
authorized the issuance of 11,000,000 shares of series preferred stock, of
which 6,000,000 shares would have been desig-
22
<PAGE>
nated as a new series of convertible preferred stock and issued to Boss Invest-
ment in exchange for $200 million. The Company would have used the $200 million
of proceeds from the sale of the preferred stock, $210 million of cash on hand,
proceeds from the issuance of $300 million of subordinated notes and borrowings
under a $350 million credit facility to finance the transaction. As a result of
the merger, the Company would have increased the debt on its balance sheet and
reduced its public float.
On February 8, 1999, the Company and Boss Investment announced that they
had agreed to mutually terminate the Agreement and Plan of Merger. The Agree-
ment and Plan of Merger had been conditioned on a number of items, including
Boss Investment's comfort with arrangements with management of the Company re-
garding their Shares after the merger. The Company and Boss Investment were un-
able to agree to satisfactory terms with respect to such arrangements and other
matters.
On February 8, 1999, the Company announced its intention to make an offer
to purchase 50% of its outstanding Shares at $25.00 per Share net to the seller
in cash and 50% of its Option Shares at a price of $25.00 per Share less the
exercise price per Share and applicable withholding taxes. The Company is mak-
ing the Offer because it believes the purchase will (i) provide value to its
stockholders; (ii) reconfigure the Company's balance sheet to provide a higher
return on equity; and (iii) afford to those stockholders who desire liquidity
an opportunity to sell their Shares (subject to proration) at a premium to re-
cent market prices and without the usual transaction costs associated with open
market sales. After the Offer is completed, the Company expects to have suffi-
cient cash flow and access to other sources of capital to fund its operations
and acquisitions.
The Company is expected to utilize approximately $600 million to purchase
the 24,365,891 Shares (including Option Shares) and pay various transaction
fees. To finance the tender offer the Company expects to use cash available on
the Company's balance sheet and to obtain $300 million from the sale of senior
subordinated notes and a $100 million term loan. The Company expects to also
obtain a $250 million revolving credit facility to fund future acquisitions,
earn-out payments, capital requirements and future operations.
A successful completion of the tender offer will result in two conse-
quences that are similar to consequences that would have resulted from the pro-
posed Agreement and Plan of Merger: a significant increase in the Company's
debt on its balance sheet and a decrease in its public float. Unlike the pro-
posed Agreement and Plan of Merger, however, the Company will not sell to an
outside investor $200 million of preferred stock having a class vote on certain
transactions and governance matters and the number of Shares that will remain
outstanding after the Offer will be higher than the number that would have re-
mained after the merger.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to sell their Shares to the Company
(subject to proration) without payment of brokerage commissions. Any Odd Lot
Owners whose Shares are purchased pursuant to the Offer will avoid both the
payment of brokerage commissions and any applicable odd lot discounts payable
on sales of odd lots. To the extent the purchase of Shares in the Offer results
in a reduction in the number of record or beneficial holders of Shares, the
costs to the Company for services to stockholders will be reduced. Stockholders
who determine not to accept the Offer will increase their proportionate inter-
est in the Company's equity, and thus in the Company's future earnings and as-
sets, subject to the Company's right to issue additional Shares and other eq-
uity securities in the future.
The Board of Directors of the Company has approved the Offer. However,
stockholders must make their own decisions whether to tender Shares and, if so,
how many Shares to tender. Neither the Company nor its Board of Directors makes
any recommendation to any stockholder as
23
<PAGE>
to whether to tender or refrain from tendering Shares. Neither the Company nor
its Board of Directors has authorized any person to make any such recommenda-
tion.
Shares the Company acquires pursuant to the Offer will be retained as
treasury stock by the Company (unless and until the Company determines to re-
tire such Shares) and will be available for the Company to issue without fur-
ther stockholder action (except as required by applicable law or the rules of
the Nasdaq or any securities exchange on which Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in the Company's business and the satisfaction of
obligations under existing or future employee benefit plans.
9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE SHARES
As of February 10, 1999, there were 45,275,052 Shares outstanding and
3,456,730 Shares issuable upon exercise of outstanding Options with exercise
prices below $25.00 per Share. As of February 10, 1999, the Company's directors
and executive officers as a group (11 persons) beneficially owned 7,390,784
Shares (including 3,532,500 Shares issuable to such persons upon exercise of
Options or warrants exercisable within sixty days of such date ("Exercisable
Securities") without regard to conditional exercises permitted to be made in
the Offer) which constituted approximately 15.1% of the outstanding Shares (in-
cluding Shares issuable if all of the Exercisable Securities held by directors
and executive officers were exercised) at such time.
As of February 10, 1999, the Company had granted or assumed Options with
exercise prices below $25.00 per Share to employees for the purchase of a total
of 3,456,730 Shares of common stock. The Compensation Committee has accelerated
the exercise date for Options so that optionees may tender Option Shares having
exercise prices below $25.00 per Share in connection with the conditional exer-
cise of outstanding Options in exchange for cash in the amount of $25.00 per
Share less the exercise price of the Option and the applicable tax withholding
amount. To the extent that the Company purchases Option Shares, the Company
will recognize compensation expense in an amount equal to the difference be-
tween the $25.00 per Share and the exercise price per Option Share purchased.
It is up to each individual employee to determine whether and to what extent he
or she will (1) exercise Options and tender Option Shares; or (2) continue to
hold such Options for exercise at any time in the future. If, after taking into
account proration, the Company purchases 50% of a holder's Option Shares, the
remaining 50% will not be considered to have been exercised and will remain
outstanding subject to the original vesting schedule applicable to the 50% of
the holder's Option Shares that would have vested last. To the extent that the
Company does not purchase 50% of a holder's Option Shares, either because the
holder did not tender the Option Shares or because of proration, the 50% of the
holder's Options that would have vested first will remain exercisable, notwith-
standing the original vesting schedule.
Among the employees having Options are Timothy C. Clayton (executive vice
president, chief financial officer and treasurer), F. Traynor Beck (executive
vice president, general counsel and secretary) and David Ledecky (executive
vice president, chief administrative officer and a member of the Board of Di-
rectors). These executive officers received Options to purchase 500,000 shares
of common stock at an exercise price of $20.00 per share as part of employment
agreements dated November 25, 1997. Twenty-five percent of each option grant
(125,000 options) became exercisable on November 25, 1998. The remaining 75%
become exercisable in three equal installments on the second, third and fourth
anniversary of the date of the grant except to the extent exercised in connec-
tion with the Offer. Similar to the rest of the holders of Options having exer-
cise prices below $25.00 per Share, these
24
<PAGE>
persons will be permitted to conditionally exercise all of their Options and
tender their Option Shares in the Offer subject to proration and the other
terms of the Offer. The Options expire on November 25, 2007.
The Company expects that its directors and executive officers will tender
Shares, including Shares underlying Options, pursuant to the terms of the Of-
fer. If the Company purchases 24,365,891 Shares pursuant to the Offer, includ-
ing 1,728,365 Option Shares underlying Options with exercise prices of less
than $25.00 and 50% of the other Shares beneficially owned by directors and ex-
ecutive officers, the Company's directors and executive officers as a group
will beneficially own approximately 14.9% of the outstanding Shares after the
completion of the Offer.
Except as discussed below, based upon the Company's records and upon in-
formation provided to the Company by its directors, executive officers, associ-
ates and subsidiaries, neither the Company nor any of its associates or subsid-
iaries or persons controlling the Company nor, to the best of the Company's
knowledge, any of the directors or executive officers of the Company or any of
its subsidiaries, nor any associates or subsidiary of any of the foregoing, has
effected any transactions in the Shares during the 40 business days prior to
February 19, 1999. The Company issued 24,166 Shares to participants in the Pur-
chase Plan on January 1, 1999 and 18,594 Shares upon the exercise of Options
granted to persons other than directors and executive officers since December
7, 1998.
Except as set forth in this Offer to Purchase, neither the Company nor
any person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement, un-
derstanding or relationship with any other person relating, directly or indi-
rectly, to the Offer with respect to any securities of the Company (including,
but not limited to, any contract, arrangement, understanding or relationship
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 authoriza-
tions).
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 24,365,891 Shares pursuant to the Of-
fer at a purchase price of $25.00 per Share, net to the seller in cash, or, in
the case of Option Shares, $25.00 per Share less the exercise price per Share
and applicable withholding taxes, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer, to be approxi-
mately $600 million. The Company estimates that the funds necessary to pay such
amounts will come from available cash, $300 million in senior subordinated
notes, a $100 million term loan and, if necessary, a portion of a $250 million
revolving credit facility. It is estimated that the Company will incur approxi-
mately $20 million in financing, legal, accounting, and other one-time charges
associated with the tender offer. The Company has received a highly confident
letter from BT Alex Brown Incorporated for the offering of $300 million of se-
nior subordinated notes and a commitment letter from Bankers Trust Company for
the $350 million of bank financing.
11. CERTAIN INFORMATION ABOUT THE COMPANY
Building One Services Corporation is a leader in the facilities services
industry. The Company, and the companies it has acquired since its formation,
had revenues of approximately $1 billion in the nine months ended September 30,
1998. The Company's goal is to become a national single-source provider of fa-
cilities services. Facilities services companies provide many products and
services for the routine operation and maintenance of a building. Since its
initial public offering in December 1997, the Company has grown significantly
by purchasing privately-held electrical, mechanical and janitorial services
businesses. Since its formation, the Company has acquired 29 companies with op-
erating locations in 96 cities and 31 states and provides facilities services
in 48 states. It currently offers electrical and mechanical installation, main-
tenance and specialty services and janitorial and maintenance management serv-
ices.
25
<PAGE>
Financial Data. The table below sets forth historical and pro forma sum-
mary consolidated financial information of the Company and its subsidiaries.
The Statement of Operations Data for the year ended December 31, 1997 (except
pro forma combined amounts) have been derived from the Company's audited fi-
nancial statements, which are included in a Current Report on Form 8-K filed
with the SEC on February 18, 1999. The Summary Financial Data for the nine
months ended September 30, 1997 and 1998 have been derived from unaudited in-
terim consolidated financial statements of the Company, which are included in
the Company's Quarterly Report on Form 10-Q/A filed on February 18, 1999. The
unaudited consolidated financial statements have been prepared on the same ba-
sis as the audited financial statements and, in the opinion of management,
contain all adjustments, consisting only of normal recurring accruals, neces-
sary for a fair presentation of the financial position and results of opera-
tions for the periods presented. The financial data have been restated from
prior presentations as a result of the Company's decision to purchase Shares.
The unaudited pro forma combined financial data gives effect to (i) the
transactions contemplated by the Offer, including the offering of $300 million
of senior subordinated notes and estimated borrowings under a $100 million
term loan necessary to finance the purchase of 24,365,891 Shares of common
stock (22,637,526 Shares at a price of $25.00 per Share and 1,728,365 Shares
at a price of $25.00 per Share less the exercise price for the purchase of Op-
tion Shares); and (ii) the 21 business combinations completed during the nine
months ended September 30, 1998 and the acquisitions completed by the Company
after September 30, 1998, as if they had been consummated on January 1, 1997.
The selected unaudited pro forma combined financial data are not necessarily
indicative of the operating results or the financial position that would have
been achieved had the events described above been consummated and should not
be construed as representative of future operating results or financial posi-
tion.
The summary historical financial information should be read in conjunc-
tion with, and is qualified in its entirety by reference to, the audited fi-
nancial statements and the related notes thereto from which it has been de-
rived which are included in the Company's Current Report on Form 8-K filed
with the SEC on February 18, 1999 and the unaudited interim financial state-
ments included in the Company's Quarterly Report on Form 10-Q/A filed on Feb-
ruary 18, 1999. The pro forma financial information should be read in conjunc-
tion with the historical consolidated financial information and does not pur-
port to be indicative of the results that would actually have been obtained
had the purchase of such Shares pursuant to the Offer been completed at the
dates indicated or that may be obtained in the future.
26
<PAGE>
Summary Financial Data
(Dollars in thousands, except share and per share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Nine Months
December 31, Ended September 30,
------------------------ -------------------------------------
1997 1998
1997 Pro Forma(1) 1997 1998 Pro Forma(1)
---------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues............... $ 70,101 $ 1,155,564 $ 52,410 $ 478,595 $ 976,690
Cost of revenues....... 58,857 943,263 44,112 376,318 784,931
---------- ----------- ---------- ----------- -----------
Gross profit........... 11,244 212,301 8,298 102,277 191,759
Selling, general and
administrative........ 11,776 127,741 7,223 59,786 107,447
Goodwill
amortization.......... -- 12,587 -- 4,584 9,493
Non-recurring
acquisition costs..... -- -- -- 768 --
---------- ----------- ---------- ----------- -----------
Operating income
(loss)................ (532) 71,973 1,075 37,139 74,819
Other (income) expense
Interest income...... (2,056) (2,652) -- (16,043) (1,255)
Interest expense..... 208 45,328 160 565 33,063
Other, net........... (221) (2,500) (35) (134) (1,362)
---------- ----------- ---------- ----------- -----------
Income before income
taxes................. 1,537 31,797 950 52,751 44,373
Provision for income
taxes................. 94 17,754 7 22,460 21,332
---------- ----------- ---------- ----------- -----------
Net income............. $ 1,443 $ 14,043 $ 943 $ 30,291 $ 23,041
========== =========== ========== =========== ===========
Net income per
share -- Basic........ $ 0.25 $ 0.62 $ 0.30 $ 0.79 $ 1.02
========== =========== ========== =========== ===========
Net income per
share -- Diluted...... $ 0.25 $ 0.62 $ 0.29 $ 0.77 $ 1.00
========== =========== ========== =========== ===========
Weighted average
shares outstanding --
Basic................ 5,683,464 22,637,526 3,102,079 38,298,295 22,637,526
========== =========== ========== =========== ===========
Weighted average
shares outstanding --
Diluted.............. 5,865,550 22,657,592 3,217,195 39,368,321 23,103,065
========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
As of
September 30, 1998
----------------------
Pro Forma
As of December 31, 1997 Actual Combined(2)
----------------------- ---------- -----------
<S> <C> <C> <C>
Balance Sheet Data:
Working capital............... $528,235 $ 333,615 $ 94,364
Total assets.................. 539,159 1,002,112 854,361
Long term debt, net of current
maturities................... 1,679 3,094 403,513
Stockholders' equity.......... 529,480 817,247 245,396
Book value per share (3)...... $16.84 $18.51 $10.84
</TABLE>
- --------------------------------------------------------------------------------
(1) Interest expense, interest income, and the provision for income taxes have
been adjusted as if the purchase of the 24,365,891 Shares, including Option
Shares, for approximately $600 million (including transaction fees) oc-
curred on January 1, 1997 and January 1, 1998, respectively, financed by
the Company's cash balances, the planned issuance of $300 million of senior
subordinated notes and $100 million in term financing.
(2) The pro forma balance sheet amounts were adjusted for the 24,365,891 Share
purchase, including Option Shares, at an approximate cost of $600 million,
including transaction fees.
(3) Book value per Share was calculated by dividing total stockholders' equity
by the number of Shares outstanding. The pro forma book value per Share
amounts for both periods were adjusted for the Offer at an approximate cost
of $600 million, including transaction fees.
27
<PAGE>
Ratio of Earnings to Fixed Charges
The following table sets forth the ratio of earnings to fixed charges,
on an actual and pro forma basis, for the Company for the periods indicated:
<TABLE>
<CAPTION>
Nine Months
Year Ended December 31, Ended September 30,
----------------------- ---------------------------
1997 1997 1997 1998 1998
Actual Pro Forma(2) Actual Actual Pro Forma(2)
------ ------------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges(1)...... 5.79 1.65 4.88 28.09 2.23
</TABLE>
- -------------------------------------------------------------------------------
(1) For purposes of computing the foregoing ratios: (i) "Earnings" consists of
income from continuing operations before income taxes and fixed charges;
and (ii) "Fixed Charges" consists of interest, amortization of debt issu-
ance costs, and the estimated interest component of rental expense.
(2) Interest expense and interest income have been adjusted as if: (i) the
purchase of 24,365,891 Shares, including Option Shares, for approximately
$600 million (including transaction fees) occurred on January 1, 1997 and
January 1, 1998, respectively; and (ii) the purchase is to be financed by
the Company's cash balances, the planned issuance of $300 million of se-
nior subordinated notes and $100 million in term financing.
Important Factors. The completion of the Offer will affect the Company and its
stockholders in a number of ways. These are discussed below. In addition to
the factors discussed below, readers are encouraged to refer to the Company's
most recent prospectus filed pursuant to Rule 424(b) under the Securities Act
of 1933, as amended, on August 3, 1998 (file no. 333-60053), as supplemented,
for a further discussion of the Company's business and the risks and opportu-
nities attendant thereto, including risks relating to our acquisition program;
the dependence on key personnel of the Company and hourly wage and technical
employees; risks related to the Company's consolidation strategy and its abil-
ity to complete acquisitions; the ability to integrate acquisitions; risks re-
lated to acquisition financing, including potential dilution; possible signif-
icant amortization charges; exposure to downturns in commercial and industrial
construction; and substantial competition in the facilities services industry.
This Offer to Purchase contains some forward-looking statements. You can
identify these statements by the fact that they do not relate strictly to his-
torical or current facts. They use words like "believe," "may," "will," "ex-
pect," "intend," "plan," "anticipate," "estimate," or "continue" and other
words and terms of similar meaning. Any or all of our forward-looking state-
ments in this Offer to Purchase or in any other public statements we make may
turn out to be wrong. They can be affected by inaccurate assumptions we might
make or by known or unknown risks and uncertainties. Many factors will be im-
portant in determining our future results. Consequently, no forward-looking
statement can be guaranteed. Actual results could differ significantly.
Increased Debt. The Company will need to borrow approximately $400 mil-
lion to finance the Offer. This may have important consequences. These conse-
quences include the following:
. the Company will have used substantially all of its cash;
. a substantial portion of the Company's cash flow will be used to
pay interest expense on the debt incurred to finance the Offer,
which will reduce the funds that would otherwise be available to
it for its operations, capital expenditures and future business
opportunities;
28
<PAGE>
. a substantial decrease in the Company's net operating cash flows
or an increase in its expenses could make it difficult for the
Company to meet its debt service requirements and force the
Company to modify its operations;
. the Company may have more debt than its competitors, which may
place it at a competitive disadvantage;
. the Company may not be able to obtain "bid and performance bonds,"
which it must have to obtain contracts for long-term institutional
and public works projects; and
. the Company's high level of debt may make it more vulnerable to a
downturn in its business or the economy in general.
Debt Covenants. The Company will borrow money to, among other things, (i)
finance a portion of the Offer; (ii) pay the fees and expenses incurred in con-
nection with the Offer; (iii) make acquisitions; and (iv) use for general cor-
porate purposes. The senior bank financing that the Company expects to enter
into will contain a number of significant covenants that impose restrictions on
the Company and its subsidiaries. These covenants may include, without limita-
tion, restrictions on (i) indebtedness; (ii) liens; (iii) voluntary prepayments
of the senior subordinated notes and other indebtedness and amendments of orga-
nizational, corporate and other documents; (iv) mergers, acquisitions, and dis-
positions of assets; (v) sale-leaseback transactions, capital lease payments,
and maintenance of existing and material properties; (vi) dividends and other
payments in respect of capital stock; (vii) advances, credit extensions, capi-
tal contributions, investments and capital expenditures; (viii) transactions
with affiliates and formation of subsidiaries, and joint ventures; and (ix)
changes in business. In addition, the Company will be required to comply with
financial covenants with respect to (i) a maximum leverage ratio; and (ii) a
minimum interest coverage ratio. This indebtedness will be guaranteed by each
of the Company's subsidiaries and will be secured by a first priority lien on
substantially all of the Company's properties and assets and those of its sub-
sidiaries, now owned or acquired later. If the Company should be unable to bor-
row under this senior bank facility due to a default, it would be left without
sufficient liquidity.
In addition, the indenture governing the subordinated debt the Company
will issue is expected to contain certain covenants that may restrict, among
other things, the Company's ability, and the ability of its subsidiaries, to
(i) incur additional indebtedness; (ii) pay dividends or make certain other re-
stricted payments; (iii) incur liens; (iv) apply net proceeds from certain
sales of assets; (v) merge or consolidate with any other person, or sell, as-
sign, transfer, lease, convey or otherwise dispose of substantially all of its
assets; (vi) enter into certain transactions with affiliates; (vii) incur other
senior subordinated indebtedness; or (viii) enter into a change in control
without offering to redeem the debt. These covenants may limit our ability to
carry out our business plan.
Additional Information. The Company is subject to the informational fil-
ing requirements of the Exchange Act and, in accordance therewith, is obligated
to file reports and other information with the SEC relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their compensation, options
granted to them, the principal holders of the Company's stock and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the SEC. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Room 2120, Washington DC 20549; at its regional of-
fices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511; and 7 World Trade Center, New York, New York 10048.
29
<PAGE>
Copies of such material may also be obtained by mail, upon payment of the
SEC's customary charges, from the Public Reference Section of the SEC at Judi-
ciary Plaza, 450 Fifth Street, N.W., Washington DC 20549. The SEC also main-
tains a Website on the Internet at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC.
12. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce
the number of stockholders. Nonetheless, the Company believes that a suffi-
cient number of Shares will be outstanding and publicly traded following the
Offer to ensure a continued trading market in the Shares. Based on the pub-
lished guidelines of the National Association of Securities Dealers, the Com-
pany does not believe that its purchase of Shares pursuant to the Offer will
cause its remaining Shares to no longer be quoted on Nasdaq.
The Shares are currently "margin securities" under the rules of the Fed-
eral Reserve. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that, fol-
lowing the purchase of Shares pursuant to the Offer, the Shares will continue
to be "margin securities" for purposes of the Federal Reserve's margin regula-
tions.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the SEC and comply with the SEC's proxy rules in connection with meet-
ings of the Company's stockholders. The Company believes that its purchase of
Shares pursuant to the Offer will not result in the Shares becoming subject to
deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS
The Company is not aware of any license or regulatory permit that ap-
pears to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory author-
ity or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares as contemplated by the Offer. Should any
such approval or other action be required, the Company currently contemplates
that it will seek such approval or other action. The Company cannot predict
whether it may be required to delay the acceptance for payment of, or payment
for, Shares tendered pursuant to the Offer pending the outcome of any such
matter. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions
or that the failure to obtain any such approval or other action might not re-
sult in adverse consequences to the Company's business. The Company's obliga-
tions under the Offer to accept for payment and pay for Shares are subject to
certain conditions. See Section 6.
14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In General. The following summary describes certain United States fed-
eral income tax consequences relevant to the Offer. The discussion contained
in this summary is based upon the Internal Revenue Code of 1986, as amended to
the date hereof (the "Code"), existing and proposed United States Treasury
regulations promulgated thereunder, rulings, administrative pronouncements and
judi-
30
<PAGE>
cial decisions, changes to which could materially affect the tax consequences
described herein and could be made on a retroactive basis. As discussed below,
depending upon a stockholder's particular circumstances, the Company's purchase
of such stockholder's Shares pursuant to the Offer may be treated either as a
sale or a dividend for United States federal income tax purposes. Accordingly,
such a purchase generally will be referred to in this section of the Offer to
Purchase as an "exchange" of Shares for cash.
Scope. This summary does not apply to Shares acquired as compensation (or
Options that are exchanged for cash). The summary discusses only Shares held as
capital assets, within the meaning of Section 1221 of the Code, and does not
address all of the tax consequences that may be relevant to particular stock-
holders in light of their personal circumstances, or to certain types of stock-
holders (such as certain financial institutions, dealers in securities or com-
modities, insurance companies, tax-exempt organizations or persons who hold
Shares as a position in a "straddle" or as a part of a "hedging" or "conver-
sion" transaction for United States federal income tax purposes). In particu-
lar, the discussion of the consequences of an exchange of Shares for cash pur-
suant to the Offer applies only to a United States Holder. For purposes of this
summary, a United States Holder is a holder of Shares that is (i) a citizen or
resident of the United States; (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States, any State or
any political subdivision thereof; (iii) an estate, the income of which is sub-
ject to United States federal income taxation regardless of its source; or (iv)
a trust, if a court within the United States is able to exercise primary super-
vision of the administration of the trust and one or more United States persons
have the authority to control all substantial decisions of the trust. This dis-
cussion does not address the tax consequences to foreign stockholders who will
be subject to United States federal income tax on a net basis on the proceeds
of their exchange of Shares pursuant to the Offer because such income is effec-
tively connected with the conduct of a trade or business within the United
States. Such stockholders are generally taxed in a manner similar to United
States Holders (for purposes of this section, "Stockholder"); however, certain
special rules apply. Foreign stockholders who are not subject to United States
federal income tax on a net basis should see Section 3 for a discussion of the
applicable United States withholding rules and the potential for obtaining a
refund of all or a portion of the tax withheld.
The summary discussion set forth herein is included for general informa-
tion only. The tax consequences of a sale of Shares pursuant to the Offer may
vary depending upon, among other things, the particular situation and circum-
stances of the tendering Stockholder. No information is provided herein as to
the state, local or foreign tax consequences of the transaction contemplated by
the Offer. Stockholders are urged to consult their own tax advisors to deter-
mine the specific federal, state, local, foreign and other tax consequences of
sales made by them pursuant to the Offer, including the effect of the stock
ownership attribution rules mentioned herein.
Characterization of the Sale. An exchange of Shares by a Stockholder pur-
suant to the Offer will be a taxable transaction for United States federal in-
come tax purposes. The United States federal income tax consequences of such
exchange to a Stockholder may vary depending upon the Stockholder's particular
facts and circumstances. Under Section 302 of the Code, an exchange of Shares
by a Stockholder with the Company pursuant to the Offer will be treated as a
"sale or exchange" of such Shares for United States federal income tax purposes
(rather than as a deemed distribution by the Company with respect to Shares
continued to be held (or deemed to be held) by the tendering Stockholder) if
the receipt of cash upon such exchange (i) is "substantially disproportionate"
with respect to the Stockholder; (ii) results in a "complete redemption" of the
Stockholder's interest in the Com-
31
<PAGE>
pany; or (iii) is "not essentially equivalent to a dividend" with respect to
the Stockholder. These tests (the "Section 302 tests") are explained more fully
below.
If any of the Section 302 tests is satisfied, and the sale of the ten-
dered Shares is therefore treated as a "sale or exchange" of such Shares for
United States federal income tax purposes, the tendering Stockholder will rec-
ognize capital gain or loss equal to the difference between the amount of cash
received by the Stockholder pursuant to the Offer and the Stockholder's ad-
justed tax basis in the Shares sold pursuant to the Offer. Such capital gain or
loss will generally be long-term capital gain or loss if the tendering Stock-
holder held the tendered Shares for more than 12 months. Under current law, any
such gain or loss recognized by individuals, trusts or estates will be subject
to a maximum 20% tax rate.
If none of the Section 302 tests is satisfied, then, to the extent of the
Company's current and accumulated earnings and profits, the tendering Stock-
holder will be treated as having received a dividend taxable as ordinary income
in an amount equal to the entire amount of cash received by the Stockholder
pursuant to the Offer (without reduction for the adjusted tax basis of the
Shares sold pursuant to the Offer), no loss will be recognized, and (subject to
reduction as described below for corporate Stockholders eligible for the divi-
dends-received deduction) the tendering Stockholder's adjusted tax basis in the
Shares exchanged pursuant to the Offer will be added to such Stockholder's ad-
justed tax basis in its remaining Shares, if any. No assurance can be given
that any of the Section 302 tests will be satisfied as to any particular Stock-
holder, and thus no assurance can be given that any particular Stockholder will
not be treated as having received a dividend taxable as ordinary income. If the
exchange of Shares by a Stockholder is not treated as a sale or exchange for
federal income tax purposes, any cash received for Shares pursuant to the Offer
in excess of the current and accumulated earnings and profits of the Company
will be treated, first, as a nontaxable return of capital to the extent of the
Stockholder's adjusted tax basis in its Shares, and thereafter, as taxable cap-
ital gain, to the extent the cash received exceeds such basis.
Constructive Ownership of Stock. In determining whether any of the Sec-
tion 302 tests is satisfied, a Stockholder must take into account not only the
Shares which are actually owned by the Stockholder, but also Shares which are
constructively owned by the Stockholder by reason of the attribution rules con-
tained in Section 318 of the Code. Under Section 318 of the Code, a Stockholder
may be treated as owning (i) Shares that are actually owned, and in some cases
constructively owned, by certain related individuals or entities in which the
Stockholder owns an interest, or, in the case of Stockholders that are enti-
ties, by certain individuals or entities that own an interest in the Stockhold-
er; and (ii) Shares which the Stockholder has the right to acquire by exercise
of an Option or a conversion right contained in another instrument held by the
Stockholder. Each Stockholder should be aware that, because proration may occur
in the Offer, even if all of the Shares actually and constructively owned by a
Stockholder are tendered pursuant to the Offer, fewer than all of such Shares
may be purchased by the Company. Thus, proration may affect whether a sale by a
Stockholder pursuant to the Offer will meet any of the Section 302 tests.
Section 302 Tests. One of the following tests must be satisfied in order
for the exchange of Shares pursuant to the Offer to be treated as a sale or ex-
change for federal income tax purposes.
a. Substantially Disproportionate Test. The receipt of cash by a Stockholder
will be "substantially disproportionate" if the percentage of the
outstanding Shares actually and constructively owned by the Stockholder
immediately following the exchange of Shares pursuant to the Offer
(treating as not being outstanding all of the Shares purchased pursuant
to the Offer) is less than 80% of the percentage of the outstanding
Shares actually and
32
<PAGE>
constructively owned by such Stockholder immediately before the exchange
of Shares pursuant to the Offer (treating as outstanding all of the
Shares purchased pursuant to the Offer). Stockholders should consult
their own tax advisors with respect to the application of the
"substantially disproportionate" test to their particular situation and
circumstances.
b. Complete Redemption Test. The receipt of cash by a Stockholder will be a
"complete redemption" of the Stockholder's interest in the Company if
either (i) all of the Shares actually and constructively owned by the
Stockholder are exchanged pursuant to the Offer; or (ii) all of the
Shares actually owned by the Stockholder are exchanged pursuant to the
Offer and, with respect to the Shares constructively owned by the
Stockholder which are not exchanged pursuant to the Offer, the
Stockholder is eligible to waive (and effectively waives) constructive
ownership of all of such Shares under procedures described in Section
302(c) of the Code. Stockholders considering making such a waiver should
do so in consultation with their own tax advisors.
c. Not Essentially Equivalent to a Dividend Test. Even if the receipt of
cash by a Stockholder fails to satisfy the "substantially
disproportionate" test and the "complete redemption" test, a Stockholder
may nevertheless satisfy the "not essentially equivalent to a dividend"
test if the Stockholder's exchange of Shares pursuant to the Offer
results in a "meaningful reduction" in the Stockholder's proportionate
interest in the Company. Whether the receipt of cash by a Stockholder
who exchanges Shares pursuant to the offer will be "not essentially
equivalent to a dividend" will depend upon the Stockholder's particular
facts and circumstances. The IRS has indicated in published Revenue
Rulings that even a small reduction in the proportionate interest of a
small minority Stockholder in a publicly-held corporation who exercises
no control over corporate affairs may constitute such a "meaningful
reduction." The IRS held, for example, in Rev. Rul. 76-385, 1976-2 C.B.
92, that a reduction in the percentage ownership interest of a
Stockholder in a publicly-held corporation who held a minimal interest
and who exercised no control over the affairs of the corporation from
.0001118% to .0001081% (a reduction of only 3.3% in the Stockholder's
prior percentage ownership interest) would constitute a "meaningful
reduction." Stockholders expecting to rely on the "not essentially
equivalent to a dividend" test should consult their own tax advisors as
to its application to their particular situation and circumstances.
The Company cannot predict whether or to what extent the Offer will be
over-subscribed. If the Offer is over-subscribed, proration of the tenders
pursuant to the Offer will cause the Company to accept fewer Shares than are
tendered. Therefore, a Stockholder can be given no assurance that a sufficient
number of such Stockholder's Shares will be exchanged pursuant to the Offer to
ensure that such exchange will be treated as a sale, rather than as a divi-
dend, for United States federal income tax purposes pursuant to the rules dis-
cussed above unless the Stockholder makes a conditional tender as described in
Section 3.
If a Stockholder sells Shares to persons other than the Company at or
about the time such holder also exchanges Shares pursuant to the Offer, and
the various sales effected by the Stockholder are part of an overall plan to
reduce or terminate such Stockholder's proportionate interest in the Company,
then the sales to persons other than the Company may, for United States fed-
eral income tax purposes, be integrated with the Stockholder's exchange of
Shares pursuant to the Offer and, if integrated, should be taken into account
in determining whether the Stockholder satisfies any of the Section 302 tests
described above.
33
<PAGE>
Corporate Shareholder Dividend Treatment. If an exchange of Shares pursu-
ant to the Offer by a corporate Stockholder is treated as a dividend, the cor-
porate Stockholder may be entitled to claim a deduction in an amount equal to
70% of the gross dividend under Section 243 of the Code, subject to applicable
limitations. Corporate Stockholders should consider the effect of Section
246(c) of the Code, which disallows the 70% dividends-received deduction with
respect to any dividend on any share of stock that is held for 45 days or less
during the 90-day period beginning on the date which is 45 days before the date
on which such share becomes ex-dividend with respect to such dividend. For this
purpose, the length of time a taxpayer is deemed to have held stock may be re-
duced by periods during which the taxpayer's risk of loss with respect to the
stock is diminished by reason of the existence of certain options or other
hedging transactions. Moreover, under Section 246A of the Code, if a corporate
Stockholder has incurred indebtedness directly attributable to an investment in
Shares, the 70% dividends-received deduction may be reduced by a percentage
generally computed based on the amount of such indebtedness and the Stockhold-
er's total adjusted tax basis in the Shares.
In addition, any amount received by a corporate Stockholder pursuant to
the Offer that is treated as a dividend may constitute an "extraordinary divi-
dend" under Section 1059 of the Code. In such case, a corporate Stockholder
would be required under Section 1059(a) of the Code to reduce its adjusted tax
basis (but not below zero) in its Shares by the non-taxed portion of the ex-
traordinary dividend (i.e., the portion of the dividend for which a deduction
is allowed), and, if such portion exceeds the Stockholder's adjusted tax basis
in its Shares, to treat the excess as gain from the sale of such Shares in the
year in which the dividend is received. These basis reduction and gain recogni-
tion rules would be applied by taking account only of the Stockholder's ad-
justed tax basis in the Shares that were sold, without regard to other Shares
that the Stockholder may continue to own. Corporate Stockholders should consult
their own tax advisors as to the application of Section 1059 of the Code to the
Offer, and to any dividends which may be treated as paid with respect to Shares
sold pursuant to the offer.
Foreign Stockholders. See Section 3 with respect to the withholding of
taxes for foreign stockholders.
Backup Withholding. See Section 3 with respect to the application of
United States federal income tax backup withholding.
Tax Considerations for Holders of Option Shares or ESPP Shares
Option Shares. An Option holder who receives cash in the Offer in ex-
change for Option Shares will be treated as receiving compensation income per
Share sold equal to the excess of $25.00 over the exercise price per Share of
the relevant Option. Such income will be taxed to the Option holder at ordinary
income rates and will be subject to withholding for income and employment tax-
es.
ESPP Shares. The first offering period under the ESPP commenced July 1,
1998, and therefore no ESPP Shares have been held for a period that exceeds one
year from the commencement of the offering. Accordingly, of the total gain re-
alized on any exchange of ESPP Shares (i.e., the difference between $25.00 mul-
tiplied by the number of ESPP Shares exchanged and the aggregate purchase price
paid for such shares), the portion that equals the difference between the mar-
ket value of the shares on the date the shares were acquired and the price paid
for the shares will be treated as compensation income (taxed at ordinary income
tax rates). Any remaining portion (i.e., the difference between $25.00 multi-
plied by the number of ESPP Shares exchanged and the market value of the
34
<PAGE>
shares on the date the shares were acquired) will be taxed as described under
the heading "Characterization of the Sale" if any of the Section 302 tests are
satisfied and as described under the heading "Characterization of the Sale" if
none of the Section 302 tests are satisfied.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to Harris Trust and making a public
announcement thereof.
The Company also expressly reserves the right, in its sole discretion, to
terminate the Offer and not accept for payment or pay for any Shares not there-
tofore accepted for payment or paid for or, subject to applicable law, to post-
pone payment for Shares upon the occurrence of any of the conditions specified
in Section 6 hereof by giving oral or written notice of such termination or
postponement to Harris Trust and making a public announcement thereof. The
Company's reservation of the right to delay payment for Shares which it has ac-
cepted for payment is limited by Rule 13e-4(f)(5) promulgated under the Ex-
change Act, which requires that the Company must pay the consideration offered
or return the Shares tendered promptly after termination or withdrawal of a
tender offer.
Subject to compliance with applicable law, the Company further reserves
the right, in its sole discretion, and regardless of whether any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to amend the Offer in any respect (including, without limita-
tion, by decreasing or increasing the consideration offered in the Offer to
holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer). Amendments to the Offer may be made at any time and from
time to time effected by public announcement thereof, such announcement, in the
case of an extension, to be issued no later than 12:00 noon, New York City
time, on the next business day after the last previously scheduled or announced
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to stockholders in a manner reasonably designated to in-
form stockholders of such change. Without limiting the manner in which the Com-
pany may choose to make any public announcement, except as provided by applica-
ble law (including Rule 13e-4(e)(2) promulgated under the Exchange Act), the
Company shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rule 13e-4
promulgated under the Exchange Act, which requires that the minimum period dur-
ing which the Offer must remain open following material changes in the terms of
the Offer or information concerning 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 relative materiality of such terms or information.
Pursuant to Rule 13e-4(f)(1)(ii), if (i) the Company increases or decreases the
price to be paid for Shares, the Company increases the number of Shares being
sought and such increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or the Company decreases the number of Shares being sought;
and (ii) the Offer is scheduled to expire at any time earlier than the expira-
tion of a period ending on the tenth business day from, and including, the date
that notice of such increase or decrease is first published, sent or given, the
Offer will be extended until the expiration of such period of ten business
days.
35
<PAGE>
16. FEES AND EXPENSES
MacKenzie Partners, Inc., Harris Trust Company of New York, AST
StockPlan, Inc. and American Stock Transfer and Trust Company are providing
services in connection with the Offer, and the Company will pay reasonable and
customary compensation for their services in such capacities. The Company will
also reimburse MacKenzie Partners and Harris Trust for out-of-pocket expenses
and has agreed to indemnify MacKenzie Partners and Harris Trust against certain
liabilities in connection with the Offer, including certain liabilities under
the federal securities laws. MacKenzie Partners may contact stockholders by
mail, telephone, telex, telegraph and personal interviews, and may request bro-
kers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners. Neither MacKenzie Partners nor Harris Trust has
been retained to make solicitations or recommendations in connection with the
Offer.
The Company will not pay fees or commissions to any broker, dealer, com-
mercial bank, trust company or other person for soliciting any Shares pursuant
to the Offer. The Company will, however, on request, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in re-
spect of the Offer to the beneficial owners for which they act as nominees. No
such broker, dealer, commercial bank or trust company has been authorized to
act as the Company's agent for purposes of the Offer. The Company will pay (or
cause to be paid) any stock transfer taxes on its purchase of Shares, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
17. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Of-
fer is not in compliance with applicable law. If the Company becomes aware of
any jurisdiction where the making of the Offer is not in compliance with any
applicable law, the Company will make a good faith effort to comply with such
law.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company
has filed with the SEC an Issuer Tender Offer Statement on Schedule 13E-4 (the
"Schedule 13E-4") which contains additional information with respect to the Of-
fer. The Schedule 13E-4, including the exhibits and any amendments thereto, may
be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 11 with respect to information concerning the
Company.
No person has been authorized to give any information or make any repre-
sentation on behalf of the Company in connection with the Offer other than
those contained in this Offer to Purchase or in the related Letter of Transmit-
tal. If given or made, such information or representation must not be relied
upon as having been authorized by the Company.
Building One Services Corporation
February 19, 1999
36
<PAGE>
A holder of Shares, other than Option Shares and ESPP Shares, or such
stockholder's broker, dealer, commercial bank, trust company or other nominee,
should properly complete and send or deliver the Letter of Transmittal (or a
manually signed facsimile thereof) and certificates for the Shares, other than
Pledged Shares, and any other required documents to Harris Trust at one of its
addresses set forth below:
The Depositary for the Offer is:
Harris Trust Company of New York
By Mail: Wall Street Station
Post Office Box 1023
New York, NY 10268-1023
By Hand/Overnight Courier: Receive Window
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005
By Facsimile Transmission: 212/701-7636
Confirm Receipt of Notice of Guaranteed Delivery by Telephone (collect):
212/701-7624
A holder of Option Shares or ESPP Shares should follow the applicable
procedures for tendering such Shares in the separate documents relating
to the tendering of Shares.
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
or any of the other documents referred to herein may be directed to MacKenzie
Partners, at the telephone number and address below. Stockholders may also con-
tact their broker, dealer, commercial bank or trust company for assistance con-
cerning the Offer. To confirm delivery of Shares, stockholders are directed to
contact Harris Trust.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, NY 10010
800/322-2885
Banks and Brokers Call: 800/322-2885
37
<PAGE>
Exhibit 99.2
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock
of
BUILDING ONE SERVICES CORPORATION
Tendered Pursuant to the Offer to Purchase
Dated February 19, 1999
The Offer And Withdrawal Rights Expire At 5:00 P.M., New York City Time, On
March 24, 1999,
Unless The Offer Is Extended
Depositary: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Courier:
- -------------------------------------------------------------------------------
Wall Street Station Receive Window
Post Office Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
For Information (call collect):
(212) 701-7624
Delivery of this Letter of Transmittal to an address other than as set forth
above does not constitute a valid delivery.
The instructions accompanying this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed.
This Letter of Transmittal is to be used (a) if you desire to effect the
tender transaction yourself; (b) if you intend to request your broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
you and the Shares (as defined below) are not registered in the name of such
broker, dealer, commercial bank, trust company or other nominee; and (c) by a
broker, dealer, commercial bank, trust company or other nominee effecting the
transaction as a registered owner or on behalf of a registered owner. To
accept the Offer in accordance with its terms, a properly completed and duly
executed Letter of Transmittal (or photocopy thereof bearing original
signature(s) and any required signature guarantees), any certificates
representing Shares tendered, and any other documents required by this Letter
of Transmittal should be mailed or delivered to the Depositary at the
appropriate address set forth herein and must be received by the Depositary
prior to 5:00 p.m., New York City time, on March 24, 1999, or such later time
and date to which the Offer is extended, unless the tendering party has
satisfied the conditions for guaranteed delivery described in Section 3 of the
Offer to Purchase or the Shares are pledged to Building One Services
Corporation. Stockholders are not required to pay a service charge to Building
One Services Corporation or the Depositary in connection with their tender of
Shares, but may be charged a fee by a broker, dealer or other institution for
processing the tender requested. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
1
<PAGE>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, EXACTLY AS NAME(S) APPEAR(S) ON TENDERED CERTIFICATE(S))
DESCRIPTION OF SHARES TENDERED
(See Instructions 3 and 4)
- --------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Certificate(s) Enclosed
Holder(s) (attach signed list if necessary)
(please fill in exactly as name(s)
appear(s) on certificate(s))
- --------------------------------------------------------------------------------
No. of
Certificate No. of Shares
No.* Shares Tendered**
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Total No. of Pledged Shares Tendered
(See Instruction 13)
----------------------------------------
Total No. of Shares Tendered
- --------------------------------------------------------------------------------
* Need not be completed by stockholders who tender Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
THE BOXES BELOW ARE TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST
COMPANY ("DTC") AND COMPLETE THE FOLLOWING:
Name of Tendering Institution __________________________________________________
DTC Participant Number__________________________________________________________
Transaction Code Number ________________________________________________________
CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) ________________________________________________
Window Ticket Number (if any) __________________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________________
Name of Eligible Institution Which Guaranteed Delivery _________________________
DTC Participant Number (if delivered by book-entry transfer) ___________________
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
2
<PAGE>
Ladies and Gentlemen:
The person(s) signing this Letter of Transmittal (the "Signer") hereby
tender(s) to Building One Services Corporation (the "Company"), a Delaware
corporation, the above-described shares of common stock, par value $0.001 per
share (the "Shares"), of the Company, at a price (the "Purchase Price") equal
to $25.00 per Share net in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated February 19, 1999, receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which Offer to
Purchase and Letter of Transmittal together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the Signer hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all of the Shares that are being tendered hereby
that are purchased pursuant to the Offer and hereby irrevocably constitutes and
appoints Harris Trust Company of New York (the "Depositary") as attorney-in-
fact of the Signer with respect to such Shares, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) present certificate(s) for such Shares, if any, for
cancellation and transfer on the Company's books; and (b) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Shares,
subject to the next paragraph, all in accordance with the terms and subject to
the conditions set forth in the Offer.
The Signer hereby represents and warrants that (a) the Signer, if a broker,
dealer, commercial bank, trust company or other nominee, has obtained the
tendering stockholder's instructions to tender pursuant to the terms and
conditions of this Offer in accordance with the letter from the Company to
brokers, dealers, commercial banks, trust companies and other nominees; (b)
when and to the extent the Company accepts the Shares for purchase, the Company
will acquire good, marketable and unencumbered title thereto, free and clear of
all security interests, liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to their sale or transfer, and
not subject to any adverse claim; (c) on request, the Signer will execute and
deliver any additional documents that the Depositary or the Company deems
necessary or desirable to complete the assignment, transfer and purchase of the
Shares tendered hereby; and (d) the Signer has read and agrees to all of the
terms and conditions of the Offer.
The name(s) and address(es) of the registered owner(s) should be printed as
on the registration of the Shares. If the Shares tendered hereby are in
certificated form, the certificate(s) representing such Shares (other than
Pledged Shares) must be delivered together with this Letter of Transmittal.
The Signer recognizes that, under certain circumstances set forth in the
Offer to Purchase, the Company may terminate or amend the Offer or may not be
required to purchase any of the Shares tendered hereby. In any such event, the
Signer understands that certificate(s) for the Shares not purchased (other than
Pledged Shares), if any, will be returned to the Signer at its registered
address unless otherwise indicated under the Special Delivery Instructions
below. The Signer recognizes that the Company has no obligation, pursuant to
the Special Payment Instructions, to transfer any Shares from the name of the
registered owner thereof if the Company purchases none of such Shares. The
Signer understands that acceptance of Shares by the Company for payment will
constitute a binding agreement between the Signer and the Company upon the
terms and subject to the conditions of the Offer.
The check for the Purchase Price of the tendered Shares purchased (other than
Pledged Shares) will be issued to the order of the Signer and mailed to the
address indicated, unless otherwise indicated in the box titled Special Payment
Instructions or the box titled Special Delivery Instructions. The Company will
not pay interest on the Purchase Price under any circumstances.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Signer and all obligations of the Signer hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the Signer. Except as stated in the Offer, this tender is
irrevocable.
3
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions" and
except with respect to Pledged Shares, the Signer acknowledges that the Company
will issue the check for the Purchase Price and/or return any certificate for
Shares not accepted for payment in the name(s) of the registered holder(s)
appearing under "Description of Shares Tendered." Similarly, unless otherwise
indicated under "Special Delivery Instructions" and except with respect to
Pledged Shares, the Signer acknowledges that the Company will mail the check
for the Purchase Price for any Shares purchased and/or return any certificates
for Shares not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Payment
Instructions and/or the Special Delivery Instructions are completed, the Signer
expects that the Company will issue the check for the Purchase Price and/or
return any certificates for Shares (other than Pledged Shares) not accepted for
payment in the name of, and/or deliver such check and/or return any such
certificates for Shares to, the person(s) so indicated. The Signer recognizes
that the Company has no obligation pursuant to the Special Payment Instructions
to transfer any Shares from the name of the registered holder thereof if the
Company does not accept for payment any of the Shares tendered hereby.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 7 AND 11)
To be completed ONLY if certificates for Shares that are not purchased
and/or any check are to be issued in the name of and sent to someone other
than the Signer. This form is not available for holders of Pledged Shares.
Mail [_] check [_] certificates to:
Name(s) _____________________________________________________________________
(Please Print)
Address _____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________________
(Tax Identification or Social Security No.)
SIGNATURE
(If Special Payment Instructions are Given)
(See Instruction 7)
_____________________________________________________________________________
Signature(s) of Payee(s)
Dated , 1999
By signing and completing the form above, under the penalties of perjury,
I/we certify that the above tax identification or social security number(s)
is/are correct.
Note: Failure to complete and sign may result in backup withholding of 31%
of the payments due to you. See Instruction 12.
5
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4 AND 7)
To be completed ONLY if certificates for Shares that are not purchased
and/or check, issued in the name of the Signer, are to be sent to someone
other than the Signer or to the Signer at an address other than that shown
above. This form is not available for holders of Pledged Shares.
Mail [_] check [_] certificates to:
Name(s) _____________________________________________________________________
(Please Print)
Address _____________________________________________________________________
-----------------------------------------------------------------------------
(Include Zip Code)
ODD LOTS (See Instruction 8)
CONDITIONAL TENDER
To be completed ONLY if Shares Unless this box has been
are being tendered by or on behalf completed and a minimum specified,
of persons owning beneficially an the tender will be deemed
aggregate of fewer than 100 unconditional (see Section 3 of
Shares. the Offer to Purchase).
The undersigned either (check Minimum number of Shares that
one): must be purchased, if any are
purchased:
[_]is the beneficial owner of an
aggregate of fewer than 100
Shares, all of which are
tendered; or
Shares (fill in)
[_]is a broker, dealer, commercial
bank, trust company or other
nominee that (i) is tendering,
for the beneficial owners
thereof, Shares with respect to
which it is the record owner;
and (ii) believes, based upon
representations made to it by
each such beneficial owner,
that such beneficial owner owns
an aggregate of fewer than 100
Shares and is tendering all of
such Shares.
6
<PAGE>
IMPORTANT:
SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 (BELOW) OR FORM W-8 (ENCLOSED) AS
APPLICABLE (SEE INSTRUCTIONS 1, 5, 6 AND 12)
The Offer is hereby accepted in
accordance with its terms.
------------------------------------------
------------------------------------------
(Signature(s) of Stockholder(s))
Dated: , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share certificates or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity,
please provide the following information. See Instruction 5.)
Name(s): _________________________________
(Please Type or Print)
Capacity (Full Title): ___________________
(See Instruction 5)
Address: _________________________________
------------------------------------------
------------------------------------------
Area Codes and Telephone Number:
Home: Business:
Taxpayer Identification or Social Security No. (if
applicable):
(Complete Substitute Form W-9 below or Form W-8 (enclosed), as applicable)
(See Instruction 12)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ____________________
Name: ____________________________________
(Please Type or Print)
Title: ___________________________________
Name of Firm: ____________________________
Address: _________________________________
------------------------------------------
(Including Zip Code)
Area Code and Tel. No.: __________________
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. No signature guarantee is required on this Letter
of Transmittal (a) if this Letter of Transmittal is signed by the registered
holder(s) of Shares tendered herewith (including, for purposes of this
document, any participant in the book-entry transfer facility of The Depository
Trust Company ("DTC") whose name appears on DTC's security position listing as
the owner of Shares), unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" above; or (b) if such Shares are tendered for the account of a
firm (an "Eligible Institution") which is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of a
Stock Transfer Association approved medallion program (such as STAMP, SEMP or
MSP). In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used (a) if Shares are to be forwarded herewith; (b) if
tenders are to be made by book-entry transfer to the account maintained by the
Depositary pursuant to the procedure set forth in Section 3 of the Offer to
Purchase; or (c) if Pledged Shares are being tendered.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL, AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Delivery will be deemed made only when actually received by the Depositary.
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. Stockholders have the responsibility to cause their
Shares (in proper certificated or uncertificated form), this Letter of
Transmittal (or a photocopy hereof bearing original signature(s) and any
required signature guarantees), and any other documents required by this Letter
of Transmittal to be timely delivered in accordance with the Offer. With
respect to Pledged Shares, however, the Company will forward the certificates
representing such Pledged Shares to the Depositary.
All tendering stockholders, brokers, dealers, commercial banks, trust
companies and other nominees, by execution of this Letter of Transmittal (or
photocopy hereof), waive any right to receive any notice of the acceptance of
their tender.
3. Inadequate Space. If the space provided in any of the above boxes is
inadequate, the necessary information should be listed on a separate schedule
signed by all of the required signatories and attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all of the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Description of Shares Tendered."
In such case, a new certificate for the remainder of the Shares represented by
the old certificate will be sent to the person(s) signing this Letter of
Transmittal (unless otherwise provided in the Box titled "Special Payment
Instructions" or "Special Delivery Instructions") as promptly as practicable
following the expiration or termination of the Offer. The certificates for
Pledged Shares will not be delivered by tendering stockholders; therefore only
the number of Pledged Shares being tendered should be indicated. All Shares
(other than Pledged Shares) represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Authorizations and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
(b) If any of the Shares tendered hereby are owned of record by two or
more joint owners, all of such owners must sign this Letter of Transmittal.
8
<PAGE>
(c) If any of the tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations
of certificates.
(d) If this Letter of Transmittal or stock powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence
satisfactory to the Company of their authority so to act must be submitted.
(e) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not purchased are to be issued in the name of a
person other than the registered holder(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
(f) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must
be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name(s) of the registered holder(s) appears on the
certificate(s) for such Shares. Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution.
6. Transfer Taxes. The Company will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, (a)
payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) unpurchased Shares are to be registered in the name(s)
of, any person(s) other than the registered owner(s); or (b) if any tendered
certificate(s) are registered, or the Shares tendered are otherwise held, in
the name(s) of any person(s) other than the registered owner, the amount of any
transfer taxes (whether imposed on the registered owner(s) or such other
person(s)) payable on account of the transfer to such person(s) will be
deducted from the Purchase Price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted.
7. Special Payment and Delivery Instructions. If certificate(s) for
unpurchased Shares (other than Pledged Shares) and/or check(s) are to be issued
in the name of a person other than the registered owner(s) or if such
certificate(s) and/or check(s) are to be sent to someone other than the
registered owner(s) or to the registered owner(s) at a different address, the
captioned boxes "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal must be completed.
8. Odd Lots. As described in the Offer to Purchase, if fewer than all of the
Shares validly tendered and not withdrawn prior to the Expiration Date are to
be purchased, the Shares purchased first will consist of all of the Shares
tendered by a stockholder who owns beneficially an aggregate of fewer than 100
Shares and who validly and unconditionally tendered all of such Shares. Partial
or conditional tenders of Shares will not qualify for this preference. This
preference will not be available unless the box captioned "Odd Lots" in this
Letter of Transmittal and the Notice of Guaranteed Delivery, if any, is
completed.
9. Irregularities. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of tenders will be determined by the
Company, in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any or all tenders
determined not to be in appropriate form or to refuse to accept for payment,
purchase or pay for any Shares if, in the opinion of the Company's counsel,
accepting, purchasing or paying for such Shares would be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer or
any defect in any tender, whether generally or with respect to any particular
Share(s) or stockholder(s). The Company's interpretations of the terms and
conditions of the Offer (including these instructions) shall be final and
binding.
NONE OF THE COMPANY, THE DEPOSITARY, THE INFORMATION AGENT OR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF DEFECTS IN TENDERS, AND
NONE OF THEM SHALL INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE.
9
<PAGE>
10. Questions and Requests for Assistance and Additional Copies. Questions
and requests for assistance may be directed to MacKenzie Partners, Inc., the
Information Agent, by telephoning 800/322-2885 toll-free. Requests for
additional copies of the Offer to Purchase and this Letter of Transmittal may
also be directed to the Information Agent. Stockholders who do not own Shares
directly may also obtain such information and copies from their broker, dealer,
commercial bank, trust company or other nominee. Stockholders who do not own
Shares directly are required to tender their Shares through their broker,
dealer, commercial bank, trust company or other nominee and should NOT submit
this Letter of Transmittal to the Depositary.
11. Restriction on Short Sales. Section 14(e) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 14e-4 promulgated thereunder
make it unlawful for any person, acting alone or in concert with others, to
tender Shares in a partial tender offer for such person's own account unless at
the time of tender, and at the time the Shares are accepted for payment, the
person tendering has a net long position equal to or greater than the amount
tendered in (i) Shares, and will deliver or cause to be delivered such Shares
for the purpose of tender to the person making the Offer within the period
specified in the Offer; or (ii) an equivalent security and, upon acceptance of
his or her tender, will acquire Shares by conversion, exchange, or exercise of
such equivalent security to the extent required by the terms of the Offer, and
will deliver or cause to be delivered the Shares so acquired for the purpose of
tender to the Company prior to or on the Expiration Date. Section 14(e) and
Rule 14e-4 provide a similar restriction applicable to the tender or guarantee
of a tender on behalf of another person.
The acceptance of Shares by the Company for payment will constitute a binding
agreement between the tendering stockholder and the Company, upon the terms and
subject to the conditions of the Offer, including such stockholder's
representation that (i) such stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 promulgated under the Exchange
Act; and (ii) the tender of such Shares complies with Rule 14e-4.
12. Backup Withholding Tax. Subject to the availability of an exemption, each
tendering stockholder is required to provide the Depositary with a correct
Taxpayer Identification number ("TIN") on the Substitute Form W-9, which is
provided under "Important Tax Information" below, and to certify under
penalties of perjury that such number is correct and that such stockholder is
not subject to backup withholding. If a tendering stockholder has been notified
by the Internal Revenue Service that such stockholder is subject to backup
withholding, such stockholder must not check the box in Part 2 of the
Substitute Form W-9, set forth below, unless such stockholder has since been
notified by the Internal Revenue Service that such stockholder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering stockholder to 31% federal income
tax withholding with respect to any payments received pursuant to the Offer. If
the tendering stockholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such stockholder should write
"Applied For" in the space provided for the TIN in Part 1 of the Substitute
Form W-9, check the box in Part 3 of the Substitute Form W-9 and sign and date
the Substitute Form W-9. Such a stockholder must also complete the Certificate
of Awaiting Taxpayer Identification Number, which is provided below.
Notwithstanding that "Applied For" is written in Part 1 and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments of the purchase price to such stockholder until a
TIN is provided to the Depositary. However, such withheld amount will be
refunded to such stockholder if a certified TIN is provided to the Depositary
within 60 days.
Each tendering non-U.S. stockholder should complete a Form W-8, and provide
it to the Depositary. Contact the Information Agent for a copy of the Form W-8.
13. Pledged Shares. As described in the Offer to Purchase, the Company is
permitting stockholders who have Pledged Shares to tender such Shares in the
Offer. The Company has delivered the certificates representing Pledged Shares
to the Depositary. By signing this Letter of Transmittal, the undersigned
hereby agrees that the proceeds from the sale of any of the undersigned's
Pledged Shares that are validly tendered and
10
<PAGE>
accepted for purchase by the Company will be retained in an account maintained
by American Stock Transfer & Trust Company. The undersigned hereby acknowledges
and agrees that the Company will have the authority to direct disbursements
from the account, subject to the terms and conditions under which the Pledged
Shares are pledged to the Company.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR FACSIMILE HEREOF BEARING ORIGINAL
SIGNATURE(S), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES, SHARES (IN PROPER CERTIFICATED OR UNCERTIFICATED FORM),
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR A
PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
The acceptance of Shares by the Company for payment will constitute a binding
agreement between the tendering stockholder and the Company, upon the terms and
subject to the conditions of the Offer, including such stockholder's
representation that the Shares being tendered represent and will represent all
Shares actually owned by such stockholder as of the date of purchase of Shares
pursuant to the Offer, and all Shares constructively owned by such stockholder
as of such date under Section 318 of the Internal Revenue Code of 1986, as
amended, have been or will be tendered pursuant to the Offer.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO NON-U.S. STOCKHOLDERS. ALL
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE OFFER.
SUBSTITUTE FORM W-9 OR FORM W-8
Under the United States federal income tax laws, the Depositary may be
required to withhold 31% of the amount of any payment made to certain holders
pursuant to the Offer. In order to avoid such backup withholding, each
tendering United States stockholder must provide the Depositary with such
stockholder's correct TIN by completing the Substitute Form W-9 set forth
below. In general, if a stockholder is an individual, the TIN is the Social
Security number of such individual. If the Depositary is not provided with the
correct TIN, the stockholder may be subject to a penalty imposed by the
Internal Revenue Service. Certain stockholders (including, among others, all
corporations) are not subject to these backup withholding and reporting
requirements, but should nonetheless complete a Substitute Form W-9 to avoid
possible erroneous backup withholding. For further information regarding backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a TIN if you do not have one and how to complete the Substitute
Form W-9 if Shares are held in more than one name), consult the enclosed
Guidelines for Certification of Taxpayer Identification Number.
In order for a non-United States stockholder to avoid 30% backup withholding,
such stockholder must submit a statement to the Depositary signed under
penalties of perjury attesting as to its non-United States status. Form W-8 and
instructions for such statement may be obtained by contacting the Information
Agent.
11
<PAGE>
CONSEQUENCES OF FAILURE TO FILE SUBSTITUTE FORM W-9 OR FORM W-8
Failure to complete Substitute Form W-9 or Form W-8 will not, by itself,
cause the Shares to be deemed invalidly tendered but may require the Depositary
to withhold 31% (or 30% for non-United States stockholders) of the amount of
any payments made pursuant to the Offer. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of a
person subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, the stockholder
may claim a refund from the Internal Revenue Service.
Part 1: PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ---------------------
CERTIFY BY SIGNING AND
DATING BELOW.
SUBSTITUTE Social Security
Form W-9 Number
OR __________________
Department of the Employer ID Number
Treasury
Internal Revenue -----------------------------------------------------
Service
Part 2:--Check the box if you are NOT subject to
backup withholding under the provisions of section
3406(a)(1)(C) of the Internal Revenue Code because
(1) you have not been notified that you are
subject to backup withholding as a result of
failure to report all interest or dividends or (2)
the Internal Revenue Service has notified you that
you are no longer subject to backup
withholding. [_]
Payer's Request for
Taxpayer Identification
Number (TIN)
-----------------------------------------------------
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM
IS TRUE, CORRECT, AND COMPLETE.
SIGNATURE _________________________________________
DATE ______________________________________________
-----------------------------------------------------
Part 3: Awaiting TIN [_]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER" FOR
ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL SOON
APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a Taxpayer Identification Number to the payer, 31% of
all reportable payments due to me pursuant to the Offer will be withheld until
I provide a Taxpayer Identification Number to the payer and that, if I do not
provide my Taxpayer Identification Number within 60 days, such retained amounts
shall be remitted to the Internal Revenue Service as backup withholding.
Signature: _____________________________
Date:___________________________________
12
<PAGE>
Exhibit 99.3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- --------------------------------------- ---------------------------------------
<TABLE>
<CAPTION>
GiVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. A revocable savings The grantor-
trust account (in which trustee(1)
grantor is also
trustee)
b. Any "trust" account that The actual owner(1)
is not a legal or valid
trust under State law
8. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
--------
<S> <C>
9. A valid trust, estate, or The legal entity
pension (do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account title)
(5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
- -------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
resident individuals), Form SS-4, Application for Employer Identification
Number (for businesses and all other entities), or Form W-7 for International
Taxpayer Identification Number (for alien individuals required to file U.S.
tax returns), at an office of the Social Security Administration or the
Internal Revenue Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification
number in Part 1, sign and date the Form, and give it to the requester.
Generally, you will then have 60 days to obtain a taxpayer identification
number and furnish it to the requester. If the requester does not receive your
taxpayer identification number within 60 days, backup withholding, if
applicable, will begin and will continue until you furnish your taxpayer
identification number to the requester.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan, or a custodial account under section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A state, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
. A foreign government or a political subdivision, agency or instrumentality
thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A foreign central bank of issue.
. Unless otherwise noted herein, all references below to section numbers or
to regulations are references to the Internal Revenue Code and the regula-
tions promulgated thereunder.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. NOTE: You may
be subject to backup withholding if (i) this interest is $600 or more, and
(ii) the interest is paid in the course of the payer's trade or business
and (iii) you have not provided your correct taxpayer identification num-
ber to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup with-
holding. For details, see the regulations under sections 6041, 6041A(a), 6045,
and 6050A.
Privacy Act Notices. Section 6109 requires most recipients of dividends, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for identi-
fication purposes and to help verify the accuracy of your tax return. Payers
must be given the numbers whether or not recipients are required to file tax
returns. Payers must generally withhold 31% of taxable interest, dividends,
and certain other payments to a payee who does not furnish a taxpayer identi-
fication number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income and such failure is due to negligence, a pen-
alty of 20% is imposed on any portion of an underpayment attributable to the
failure.
(3) Civil Penalty for False Statements With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--If you falsify certifica-
tions or affirmations, you are subject to criminal penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit 99.4
NOTICE OF GUARANTEED DELIVERY
Regarding the Offer by
BUILDING ONE SERVICES CORPORATION
TO PURCHASE FOR CASH 24,365,891 SHARES
AT $25.00 PER SHARE
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to tender shares pursuant to the Offer if (i) certificates for
shares of common stock ("Shares") of Building One Services Corporation, a
Delaware corporation (the "Company"), are not immediately available; (ii) time
will not permit all required documents to reach Harris Trust Company of New
York, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in the Offer to Purchase, dated February 19, 1999 (the "Offer to
Purchase")); or (iii) the procedure for delivery by book-entry transfer cannot
be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or transmitted by telegram, facsimile transmission or mail
to the Depositary. See Section 3 of the Offer to Purchase. Tenders using this
form may be made only by or through a member firm of a registered national
securities exchange, or a commercial bank or trust company having an office,
branch or agency in the United States.
Depositary: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Courier:
- -------------------------------------------------------------------------------
Wall Street Station Receive Window
Post Office Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
For Information (call collect):
(212) 701-7624
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE VALID DELIVERY.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Building One Services Corporation (the
"Company"), upon the terms and subject to the conditions set forth in its Offer
to Purchase, dated February 19, 1999, and the related Letter of Transmittal,
receipt of which are hereby acknowledged, the number of Shares specified below
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
Number of Shares Tendered: __________ Name(s) of Record Holder(s):
Certificate Nos. (if available):
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Address: ____________________________
-------------------------------------
-------------------------------------
If Shares will be tendered by book-
entry transfer to The Depository
Trust Company, please check box:
[_]
DTC Participant Number: _____________
Area Code and Telephone Number: _____
ODD LOTS
To be completed ONLY if Shares CONDITIONAL TENDER
are being tendered by or on behalf
of persons owning beneficially an
aggregate of fewer than 100
Shares.
Unless this box has been
completed and a minimum specified,
the tender will be deemed
unconditional (see Section 3 of
the Offer to Purchase).
The undersigned either (check
one):
[_]is the beneficial owner of an Minimum number of Shares that
aggregate of fewer than 100 must be purchased, if any are
Shares, all of which are purchased:
tendered; or
Shares (fill in)
[_]is a broker, dealer, commercial
bank, trust company or other
nominee that (i) is tendering,
for the beneficial owners
thereof, Shares with respect to
which it is the record owner;
and (ii) believes, based upon
representations made to it by
each such beneficial owner,
that such beneficial owner owns
an aggregate of fewer than 100
Shares and is tendering all of
such Shares.
Dated: ________________________, 1999 -------------------------------------
Signature
2
<PAGE>
GUARANTEE
The undersigned, a member firm of a registered national securities exchange,
or a commercial bank or trust company having an office, branch or agency in the
United States, hereby: (a) represents that the above named person(s) "own(s)"
the Shares tendered hereby within the meaning of Rule 14e-4 under the
Securities Exchange Act of 1934, as amended; (b) represents that the tender of
such Shares complies with Rule 14e-4; and (c) guarantees to deliver to Harris
Trust Company of New York, the Depositary, certificates representing the Shares
tendered hereby, in proper form for transfer (or to tender Shares pursuant to
the procedure for book-entry transfer into the Depositary's account at The
Depository Trust Company if so specified on the foregoing page), together with
a properly completed and duly executed Letter of Transmittal with any required
signature guarantees, and any other required documents, within three New York
Stock Exchange trading days after the date of receipt hereof by the Depositary.
Name of Firm: _______________________
(Please Print)
Authorized Signature: _______________
Name: _______________________________
Title: ______________________________
Address: ____________________________
(Include Zip Code)
-------------------------------------
(Area Code and Telephone Number)
Dated: ___________________________, 1999
3
<PAGE>
Exhibit 99.5
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
Regarding the Offer By
BUILDING ONE SERVICES CORPORATION
To Purchase for Cash 24,365,891 Shares
at $25.00 Per Share
TO:BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES:
Pursuant to your request, we are enclosing herewith the material listed
below relating to the offer by Building One Services Corporation (the
"Company") to purchase 24,365,891 shares of its issued and outstanding common
stock ("Shares"), at a price equal to $25.00 per Share, subject to the terms
and conditions set forth in the Offer to Purchase, dated February 19, 1999,
and the related Letter of Transmittal (which together constitute the "Offer").
THE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON MARCH 24, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE").
The following documents are enclosed:
(1) OFFER TO PURCHASE, DATED FEBRUARY 19, 1999;
(2) LETTER OF TRANSMITTAL TO BE USED TO TENDER SHARES;
(3) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER;
(4) NOTICE OF GUARANTEED DELIVERY;
(5) LETTER TO CLIENTS, WHICH MAY BE SENT UPON ANY REQUEST FOR INFORMATION
BY YOUR CLIENTS FOR WHOSE ACCOUNT YOU HOLD SHARES REGISTERED IN YOUR
NAME (OR IN THE NAME OF YOUR NOMINEE) WITH SPACE PROVIDED FOR OBTAINING
SUCH CLIENTS' INSTRUCTIONS WITH REGARD TO THE OFFER;
(6) RETURN ENVELOPE ADDRESSED TO HARRIS TRUST COMPANY OF NEW YORK, THE
DEPOSITARY; AND
(7) LETTER TO STOCKHOLDERS FROM JONATHAN J. LEDECKY, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER OF BUILDING ONE SERVICES CORPORATION.
PLEASE NOTE THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M.,
NEW YORK CITY TIME, ON MARCH 24, 1999, UNLESS EXTENDED.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY.
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Company will,
however, upon request, reimburse brokers, dealers, commercial banks and trust
companies for reasonable and necessary costs and expenses incurred by them in
forwarding materials to their customers. The Company will pay all transfer
taxes on its purchase of Shares, subject to Instruction 6 of the Letter of
Transmittal. Backup tax withholding at a 31% rate may be required unless an
exemption is proved or unless the required taxpayer identification information
is or has previously been provided. Certain withholdings may also apply with
respect to payments to non-U.S. stockholders. See Instruction 12 of the Letter
of Transmittal.
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 laws
of such jurisdiction.
1
<PAGE>
Additional copies of the enclosed material may be obtained from MacKenzie
Partners, Inc., the Information Agent, by calling 800/322-2885 toll-free. Any
question you have with respect to the Offer should be directed to the
Information Agent at the number indicated in the previous sentence.
Very truly yours,
BUILDING ONE SERVICES CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS THE AGENT OF THE COMPANY, THE DEPOSITARY OR THE
INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON (A) TO MAKE ANY
STATEMENTS WITH RESPECT TO THE OFFER, OTHER THAN THE STATEMENTS SPECIFICALLY
SET FORTH IN THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL, OR (B) TO
DISTRIBUTE ANY MATERIAL WITH RESPECT TO THE OFFER OTHER THAN AS SPECIFICALLY
AUTHORIZED HEREIN.
2
<PAGE>
Exhibit 99.6
LETTER TO CLIENTS OF BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
Regarding the Offer by
BUILDING ONE SERVICES CORPORATION
To Purchase for Cash 24,365,891 Shares
at $25.00 Per Share
To Our Clients:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase, dated February 19, 1999 (the "Offer to Purchase"), of Building One
Services Corporation (the "Company") and the related Letter of Transmittal,
pursuant to which the Company is offering to purchase 24,365,891 shares of its
issued and outstanding common stock ("Shares"), for cash of $25.00 per Share,
subject to the terms and conditions set forth in the Offer to Purchase and the
related Letter of Transmittal (which together constitute the "Offer").
THE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON MARCH 24, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE").
The Offer to Purchase and the Letter of Transmittal are being forwarded to
you as the beneficial owner of Shares held by us for your account but not
registered in your name. We are sending you the Letter of Transmittal for your
information only; you cannot use it to tender Shares we hold for your account.
A tender of such Shares can be made only by us as the holder of record and
only pursuant to your instructions.
Your attention is called to the following:
(1) The purchase price is $25.00 per Share, subject to the terms and
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
(2) The Offer is for 24,365,891 of the issued and outstanding Shares of
the Company (including Shares underlying stock options with exercise prices
below $25.00), and is not conditioned upon any minimum number of
outstanding Shares being tendered, but is subject to certain conditions set
forth in the Offer to Purchase. Under the conditions described in the Offer
to Purchase, the Company may terminate or amend the Offer or may postpone
the acceptance for payment of, payment for or purchase of any Shares.
(3) The Offer is not conditioned on any minimum number of Shares being
tendered.
(4) Assuming more than 24,365,891 Shares are duly tendered prior to the
expiration of the Offer (as extended), the Company will purchase Shares
from tendering stockholders in accordance with the terms and conditions
specified in the Offer to Purchase pro rata in accordance with the number
of Shares tendered by each stockholder during the period the Offer remains
open, unless the Company determines not to purchase any Shares.
(5) Tendering stockholders will not be obligated to pay brokerage
commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares by the Company pursuant to the
Offer; however, a broker, dealer or other person may charge a fee for
processing the transactions on behalf of stockholders. Stockholders are not
required to pay a service charge to the Company or the Depositary in
connection with their tender of Shares.
(6) If you own beneficially an aggregate of fewer than 100 Shares and you
instruct us to tender all of such Shares prior to the expiration of the
Offer and check the box captioned "Odd Lots" in the instruction form, all
of such Shares will be accepted for purchase before proration, if any, of
the purchase of other Shares validly tendered.
1
<PAGE>
If you wish to have us tender your Shares, please so instruct us by
completing, executing and returning to us the instruction form on the
following page.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M., NEW YORK CITY TIME,
ON MARCH 24, 1999, UNLESS EXTENDED.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) owners of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction.
Very truly yours,
BUILDING ONE SERVICES CORPORATION
2
<PAGE>
Instructions Regarding The Offer by
BUILDING ONE SERVICES CORPORATION
To Purchase for Cash 24,365,891 Shares
at $25.00 Per Share
THIS FORM IS NOT TO BE USED TO TENDER SHARES DIRECTLY TO THE DEPOSITARY. IT
SHOULD BE SENT TO YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE ONLY IF SUCH FIRM IS THE HOLDER OF RECORD OF YOUR SHARES AND WILL BE
EFFECTING THE TENDER ON YOUR BEHALF. THE DEPOSITARY MUST RECEIVE YOUR SHARES ON
OR PRIOR TO MARCH 24, 1999.
DO NOT COMPLETE THIS FORM IF YOU HAVE DECIDED NOT TO TENDER YOUR SHARES.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated February 19, 1999, and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by
Building One Services Corporation (the "Company") to purchase 24,365,891 shares
of its issued and outstanding common stock, par value $0.001 per share
("Shares"), at $25.00 per Share expiring on March 24, 1999 (or, if the Offer is
extended, on the new Expiration Date), on the terms and subject to the
conditions of the Offer.
The undersigned hereby instructs you to tender to the Company the number of
Shares indicated below or, if no number is indicated, all Shares held by you
for the account of the undersigned, upon the terms and subject to the
conditions of the Offer.
The undersigned hereby represents and warrants that: (i) the undersigned has
a net long position in the Shares being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended; and
(ii) the tender of such Shares complies with Rule 14e-4.
CONDITIONAL TENDER
By completing this box, the undersigned conditions the tender authorized
hereby on the following minimum number of Shares being purchased if any are
purchased:
Shares
Unless this box is completed, the tender authorized hereby will be made
conditionally.
ODD LOTS
[_]By checking this box, the undersigned represents that the undersigned
owns beneficially an aggregate of fewer than 100 Shares and is tendering
all of such Shares.
Number of Shares to be Tendered:*
Shares
- --------
* Unless otherwise indicated, it will be assumed that all of the Shares held
by us for your account are to be tendered.
1
<PAGE>
Account Number: ______________________________________
Tax Identification of Social Security ______________________________________
Number:
Name(s) of Beneficial Owner(s): ______________________________________
(Please Print)
______________________________________
(Please Print)
______________________________________
(Please Print)
Address: ______________________________________
Area Code and Telephone Number ______________________________________
______________________________________
(Signature of beneficial owner)
______________________________________
(Signature of additional beneficial
owner, if any)
Date: , 1999
2
<PAGE>
Exhibit 99.7
Dear Stockholder:
Enclosed is a copy of Building One Services Corporation's offer to purchase,
dated February 19, 1999 (the "Offer to Purchase"), 24,365,891 shares of its
issued and outstanding common stock, including shares underlying certain
options ("Shares"), at a price of $25.00 per Share, subject to the terms and
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer").
THE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON MARCH 24, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE").
If, after reviewing the information set forth in the Offer to Purchase and
Letter of Transmittal, you wish to tender Shares for purchase by Building One
Services Corporation (the "Company"), please contact your broker, dealer or
other nominee to effect the tender for you or, if you have the certificates
for your Shares and they are in your name, you may follow the instructions
contained in the Offer to Purchase and Letter of Transmittal. Tendering
stockholders will not be obligated to pay brokerage commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares by the Company pursuant to the Offer; however, a broker, dealer or
other person may charge a fee for processing the transactions on behalf of
stockholders. Stockholders are not required to pay a service charge to the
Company or the Depositary in connection with their tender of Shares.
Neither the Company nor its Board of Directors is making any recommendation
to any holder of Shares as to whether to tender Shares. Each stockholder is
urged to consult his or her broker, investment adviser or tax adviser before
deciding whether to tender any Shares.
Should you have any other questions on the enclosed material, please do not
hesitate to contact your broker, dealer or other nominee, or call MacKenzie
Partners, Inc., the Information Agent, at 800/322-2885.
Yours truly,
BUIILDING ONE SERVICES CORPORATION
Jonathan J. Ledecky
Chairman of the Board and Chief
Executive Officer
<PAGE>
Exhibit 99.8
PRESS RELEASE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
For immediate release--February 8, 1999 Release No. 99-002
BUILDING ONE SERVICES CORPORATION
(NASDAQ--"BOSS") Company
Contact: Timothy Clayton
Building One
Services
Corporation
(202) 261-6000
[email protected]
BUILDING ONE SERVICES ANNOUNCES TENDER OFFER PLAN
. Mutually Terminates Transaction with Apollo Management, L. P. Affiliate
over Proposed Transaction Amendments
. Announces Board Approval to Commence Tender Offer for 50% of Outstanding
Shares and Stock Options at $25 Per Share
. Announces Preliminary 4th Quarter Results of $0.38 Per Diluted Share,
Topping Analyst Consensus Estimates
. Announces 25% Increase in Year over Year Same Unit Backlog of $693.5
million vs. $553.4 million
Washington, D.C. (February 8, 1999)---Building One Services Corporation
(NASDAQ: BOSS) today announced that it has agreed to mutually terminate its
merger agreement with Boss Investment LLC, an affiliate of Apollo Management,
L. P., entered into on December 23, 1998.
The merger agreement was conditioned on a number of items, including Boss
Investment's comfort with arrangements with management of Building One
Services regarding their stock after the recapitalization. Building One
Services and Boss Investment have been unable to agree to satisfactory terms
with respect to such arrangements and other matters and, therefore, have
mutually terminated the merger agreement.
Building One Services also announced that its Board of Directors has approved
a tender offer by the Company for approximately 23 million shares at $25 per
share plus 50% of outstanding stock options. The Company expects to receive
shortly a commitment letter from a major financial institution for $350
million in high-yield debt financing and $350 million in a revolving credit
facility. These instruments, coupled with approximately $215 million in cash
on the Company's balance sheet, will be used to effect the tender offer, which
is expected to commence next week. The $700 million in outside financing is
expected to be subject to a number of customary conditions, including
completion of due diligence and execution of a definitive credit agreement.
The tender offer is expected to be completed in April 1999.
"We are gratified that Boss Investment has agreed to release the investment
bankers and commercial bankers who had conducted simultaneous due diligence so
that we may proceed to negotiate directly with them concerning the proposed
financing for our tender offer," said Jonathan Ledecky, Chairman and Chief
Executive Officer of Building One Services.
"Our strong financial results, when coupled with improvements in the capital
markets for high yield financing since December, including the completion of
two high yield debt financings by our direct competitors, is expected to
enable us to move forward with the proposed tender offer," said Timothy
Clayton, Executive Vice President and Chief Financial Officer of Building One
Services. "This transaction provides value to our
<PAGE>
BUILDING ONE SERVICES CORPORATION
- -------------------------------------------------------------------------------
Press Release 99-002
Page 2
shareholders and reconfigures our balance sheet in a manner to provide a
higher return on equity. In addition, this transaction will preserve a
significant public float in Building One Services stock," said Clayton.
Building One Services Corporation also announced preliminary diluted earnings
per share of $0.38 for the fourth quarter and $1.16 for the year ended
December 31, 1998. The full year results reflect a restatement of prior
quarterly results resulting from changes in the accounting treatment for
certain acquisitions that were previously accounted for as pooling-of-
interests transactions. Detailed financial results for the fourth quarter and
full year will be released in early March following the completion of the
Company's annual audit.
"We are pleased that our fourth quarter results came in above the analyst
consensus estimate of $0.37 per share," said Timothy Clayton. "We are also
pleased that our 1998 year-end backlog expanded 25% to $693.5 million from
year ago levels of $553.4 million on a same unit basis," said Clayton.
Under the proposed tender offer, the Company is expected to utilize
approximately $575 million to repurchase approximately 23 million shares out
of approximately 46 million shares projected to be outstanding at the time of
the tender offer. In addition, the Company expects to spend approximately $15
million to repurchase 50% of outstanding stock options. It is estimated that
the Company will have approximately $20 million in financing, legal,
accounting, and other one-time charges associated with the tender offer.
"Given our historical run-rate of approximately $130 million in earnings
before interest, taxes, depreciation and amortization (EBITDA), our total debt
to EBITDA ratio would be approximately 3.0x and our EBITDA to debt service
ratio would be approximately 3.25x following the proposed tender offer
financing. These ratios should enable us to secure a significant credit
facility to allow us to continue our acquisition program, satisfy our
projected earnout payment requirements and provide for appropriate capital
expenditures for the coming fiscal year," said Clayton.
Building One Services Corporation is a leader in the facilities services
industry and has a corporate goal of becoming a national single-source
provider of facilities services. Facility services companies provide many
products and services needed for the routine operation and maintenance of a
building. Building One Services currently has annualized revenues of
approximately $1.2 billion and has acquired companies in the electrical,
mechanical and janitorial segments of the facilities services industry.
This press release contains forward-looking statements. Such statements relate
to, among others things, the transactions contemplated by the tender offer;
the ability to secure the financing for the tender offer; the level of
indebtedness to be incurred by the Company; the ability to finance
acquisitions; the future earnings of the Company; and the Company's
acquisition program. Any or all of our forward-looking statements in this
press release or in any other public statements we make may turn out to be
wrong. They can be affected by inaccurate assumptions we might make or by
known or unknown risks and uncertainties, including, without limitation, the
following: the risks associated with significant indebtedness, the dependence
on key personnel of the Company and hourly wage and technical employees; risks
related to the Company's consolidation strategy, its ability to complete
acquisitions and the continuing consolidation in the industry; the ability to
integrate acquisitions; risks related to acquisition financing, including
potential dilution; possible significant amortization charges; exposure to
downturns in commercial and industrial construction; substantial competition;
and other factors affecting the Company's prospects described in the Company's
most recent Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on August 3, 1998 and its other public filings.
Building One Services Corporation will hold a conference call on Monday,
February 8, 1999 at 9:30 a.m. Eastern time. To participate in the call from
the United States, dial in on 1-800-650-8824. For all callers outside of the
United States, dial in on 703-736-7228. All callers should ask to be included
in the "Building One Services Corporation Conference Call."
- End -
<PAGE>
Exhibit 99.9
February 19, 1999
MEMORANDUM TO HOLDERS OF BUILDING ONE STOCK OPTIONS
TO: Holders of Building One Stock Options
FROM: Building One Services Corporation
RE: Tender of Option Shares in the Company's Tender Offer
We have prepared the following questions and answers for your convenience.
Please review this information together with the Offer to Purchase and other
documents printed on green paper. If, after reviewing the information
provided, you have additional questions, please call AST StockPlan, Inc. at
888/980-6456.
1.WHAT IS THE OFFER?
We are offering to purchase 24,365,891 shares of our common stock ("Shares")
at $25.00 per Share. This offer will be open until it expires at 5:00 p.m.,
New York City time, on March 24, 1999, unless extended by us.
In connection with this offer, we have accelerated the vesting of your
options so that you may, at your election, simultaneously exercise some or all
of your options that have exercise prices below $25.00 per Share and sell the
Shares you acquire upon such exercise ("Option Shares") in the offer. If you
do not want to sell 50% of your Option Shares in the offer or if we do not
purchase 50% of your Option Shares because of proration, the 50% of your
options that would have otherwise become exercisable first will continue to be
vested and exercisable after the tender offer. The remaining 50% of your
options that would have become exercisable last will continue to vest under
their original schedule. The options that may be exercised are those that we
assumed in acquisitions or granted under either of the following plans (the
"Option Plans"):
. Building One Services Corporation's 1998 Long-Term Incentive Plan; or
. Building One Services Corporation's 1997 Long-Term Incentive Plan.
You must instruct AST StockPlan, Inc., to tender part or all of the Option
Shares resulting from a conditional exercise of such options. This exercise of
your options is "conditional" because you can exercise the option only if, and
to the extent, that the Company actually purchases the Option Shares in the
offer.
The offer, which is subject to a number of other conditions, is fully
described in the Offer to Purchase dated February 19, 1999, and related Letter
of Transmittal provided to you. Please read these documents carefully,
together with the following materials printed also on green paper:
. Option Tender Enrollment Form; and
. the "Instructions for Tender of Options."
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<PAGE>
Please remember that neither our company nor our Board of Directors is making
any recommendation as to whether stockholders or option holders should
participate in the offer. You must make your own decision.
You must carefully follow the instructions below and in the enclosed
Instructions for Tender of Options and Option Tender Enrollment Form if you
want to participate in our offer. Failure to follow such instructions may make
you ineligible to tender your Option Shares in our offer.
2. MUST I ACTUALLY EXERCISE MY OPTIONS IN ORDER TO PARTICIPATE IN THE OFFER?
No. As a holder of unexercised options we are allowing you to "conditionally"
exercise all or part of your options and tender the Option Shares you would be
entitled to receive upon such exercise. This exercise of options is
"conditional" because you are deemed to exercise the option only if, and to the
extent that, we actually purchase the Option Shares in the offer.
3. DO I HAVE TO PAY THE EXERCISE PRICE WITH CASH?
No. In order to facilitate your participation in the offer, we are allowing
you to conditionally exercise your options without paying the exercise price in
cash. This is called a "cashless exercise." This means that your options will
be exercised and the Option Shares will be tendered, and the amount of cash you
receive for each Option Share purchased will equal the difference between
$25.00 per Share and the option exercise price per Share, less withholding
taxes. You do not need to send any money with your Option Tender Enrollment
Form.
4. IF MY OPTIONS ARE NOT VESTED MAY I STILL TENDER OPTION SHARES UNDERLYING
THEM?
Yes. The Compensation Committee of the Board of Directors has accelerated the
vesting of all of the options granted pursuant to the Option Plans to permit
tenders in the offer. However, see Question 5 below with respect to the vesting
of your options after the offer.
5. WILL ALL OF THE OPTION SHARES THAT I TENDER BE PURCHASED IN THE OFFER?
Probably not. In the offer, the Company is offering to purchase a total of
24,365,891 Shares at a per share price of $25.00. If more than 24,365,891
Shares are tendered, we will reduce on a pro rata basis the number of Shares we
purchase from each person who tenders Shares. This means that we will not
purchase all of the Option Shares you tender under these circumstances. We
currently do not know how many Shares will be tendered in the offer. If, after
taking into account proration, we purchase 50% of your Option Shares, the
remaining 50% of the Options relating to Option Shares we do not purchase will
not be considered to have been exercised and will remain outstanding subject to
the original vesting schedule applicable to the 50% of your Options that would
have vested last. If you do not want to sell 50% of your Option Shares in the
offer or if we do not purchase 50% of your Option Shares because of proration,
the 50% of your options that would have otherwise become exercisable first will
continue to be vested and exercisable after the tender offer. The remaining 50%
of your options that would have become exercisable last will continue to vest
under their original schedule. For example, if you own 100 options that will
become exercisable in 25% increments over a four-year period, you may
conditionally tender all 100 options. If we buy 40 Option Shares, the options
for the 10 Option Shares that we do not buy will be exercisable after the offer
and the options for the 50 Option Shares that would have become exercisable
last will vest under the original vesting schedule.
2
<PAGE>
6. WHAT WILL HAPPEN TO MY OPTIONS IF THE OPTION SHARES ARE NOT PURCHASED?
We will return to you any Options for Option Shares that we do not purchase.
7. HOW WILL I KNOW IF MY OPTION SHARES HAVE BEEN PURCHASED AND WHEN WILL I BE
PAID?
After the offer expires, all tenders submitted in the offer will be
tabulated. This may take up to seven business days. Soon thereafter, you will
be advised by Harris Trust Company of New York, the Depositary, of the number,
if any, of your Option Shares that were purchased in the offer. You will
receive a check for the purchase price of all of your Option Shares purchased
in the offer (less the applicable exercise price or prices and applicable
withholding taxes) promptly thereafter.
8. WILL I BE TAXED ON THE MONEY I RECEIVE?
Yes. You will be treated as receiving compensation income for each Option
Share sold equal to the excess of $25.00 over the exercise price for each
Option Share. Such income will be taxed to the Option holder at ordinary income
rates, not capital gains rates, and will be subject to withholding for income
and employment taxes.
9. WHAT WILL HAPPEN TO ANY OPTIONS I STILL HOLD AFTER THE OFFER?
If, after taking into account proration, we purchase 50% of your Option
Shares, the remaining 50% of the Options will not be considered to have been
exercised and will remain outstanding subject to the original vesting schedule
applicable to the 50% of your Option Shares that would have vested last. To the
extent that we do not purchase the 50% of your Option Shares that were to have
become exercisable first, the Options relating to such Option Shares will
remain exercisable, notwithstanding the original vesting schedule.
10. HOW DO I TENDER MY OPTION SHARES IN THE OFFER?
The only way that you can tender Option Shares in the offer is by completing
the Option Tender Enrollment Form on green paper, signing the form, and
returning it to AST StockPlan, Inc. at the address indicated on the form. The
Option Tender Enrollment Form must be received by AST StockPlan, Inc. before
5:00 p.m., New York City time, on March 22, 1999.
On this form, you will direct AST StockPlan, Inc. to conditionally exercise
your options and tender your Option Shares in the offer. This is a
"conditional" exercise, which means that if some or all of the Option Shares
are not purchased in the offer because of the proration process described below
and in the Offer to Purchase (or for any other reason), the options will be
returned to you as unexercised options.
If you would prefer to actually exercise your vested options and tender the
Shares you receive in the Offer, you can do so. If you do exercise vested
options, you should follow the same procedures applicable to all of our other
stockholders. If you decide to exercise your options in order to receive Shares
to tender in the Offer, you will need to exercise such options in sufficient
time to obtain Shares to tender before the Expiration Date for the Company's
offer, 5:00 p.m., New York City time, on March 24, 1999.
Please return your Option Tender Enrollment Form PROMPTLY, recognizing the
slow delivery time inherent in the United States mail today. If you use the
United States mail, we recommend using registered mail, return receipt
requested. You may mail your Option Tender Enrollment Form to AST StockPlan,
Inc. in the preaddressed envelope that has been provided for your reply or send
it by an alternate, faster means (such as hand delivery or overnight courier).
Please remember that in all events the materials must be received by AST
StockPlan, Inc. before 5:00 p.m., New York City time, on March 22, 1999.
3
<PAGE>
Do NOT deliver your instructions to your Human Resources Department or to
your Benefits Administrator or to the Company.
11. WHAT IF I HOLD SHARES OF BUILDING ONE SERVICES CORPORATION COMMON STOCK IN
ADDITION TO MY STOCK OPTIONS?
If you have actual Shares in your possession (or at a brokerage firm), you
may tender those Shares as well. In this case, you may receive two or more sets
of offer materials. You should be careful to follow the separate directions
that apply to Shares and Option Shares. In the event that we must reduce on a
pro rata basis the number of Shares and Option Shares that we purchase from
each stockholder, the total number of Shares, including Option Shares, that you
tender will be reduced independently.
12. CAN I CHANGE MY MIND AND WITHDRAW OPTION SHARES THAT I DIRECTED TO BE
TENDERED?
Yes, but only if you perform the following steps:
. You must send a signed notice of withdrawal to AST StockPlan, Inc.
. The notice of withdrawal must be in writing. You may fax your notice of
withdrawal to 212/659-2319.
. The notice of withdrawal must state your name and social security number
and the amount of Option Shares that you wish to withdraw from the
offer.
. The notice of withdrawal must be received by AST StockPlan, Inc. before
5:00 p.m., New York City time, on March 24, 1999.
The withdrawal procedures are described in the Instructions for Tender of
Options. You must follow these instructions carefully.
You are entitled to retender Option Shares after withdrawal, provided that
all resubmitted materials are completed properly and delivered on time in
accordance with the instructions applicable to the original submission.
13.WHAT DO I DO IF I HAVE ANY QUESTIONS ABOUT THE TENDER OFFER?
If you have questions about the offer or need help in properly responding to
the offer, you may call AST StockPlan, Inc. at 888/980-6456.
******
This memorandum is intended to help you understand the offer and how options
will be handled in the offer. The Offer to Purchase and Letter of Transmittal
contain the legal terms of the offer, and are controlling. We urge you to
carefully read these documents, which explain our offer in detail.
4
<PAGE>
INSTRUCTIONS FOR TENDER OF OPTIONS
(NOTE: Before completing the Option Tender Enrollment Form, you should read the
attached memorandum from Building One Services Corporation, as well as the
Offer to Purchase and related Letter of Transmittal. Holders of options for
Shares granted under one of the option plans or assumed in an acquisition who
desire to tender Option Shares to the Company must complete the Option Tender
Enrollment Form.)
THE OPTION TENDER ENROLLMENT FORM MUST BE RECEIVED BY AST STOCKPLAN, INC.
BEFORE 5:00 P.M. NEW YORK CITY TIME, ON MARCH 22, 1999. YOU MUST SIGN AND
COMPLETE THIS FORM FOR YOUR DIRECTION TO BE VALID.
Send the Option Tender Enrollment Form to: AST StockPlan, Inc.
By Mail, Overnight Delivery or Hand:
250 Broadway, 14th Floor
New York, NY 10007
Telephone: 888/980-6456
Facsimile: 212/659-2319
Note: Delivery of the form to an address other than as set forth above will not
constitute a valid delivery.
1
<PAGE>
By signing the Option Tender Enrollment Form, you acknowledge receipt of the
materials relating to the Offer to Purchase dated February 19, 1999 (the "Offer
to Purchase") and the related Letter of Transmittal with respect to an offer by
Building One Services Corporation, a Delaware corporation (the "Company"), for
24,365,891 shares of common stock (the "Shares"), at a price of $25.00 per
Share. The number of Shares the Company is offering to purchase includes Shares
that may be tendered upon the exercise of options under the Company's stock
option plans and options assumed by the Company in acquisitions with exercise
prices below $25.00 per Share ("Option Shares").
The Compensation Committee of the Board of Directors has accelerated the
vesting of all of the options to permit tenders in the offer. The offer is not
being made for Option Shares if the exercise price of the option is $25.00 per
Share or greater.
1. You should complete the Option Tender Enrollment Form to instruct AST
StockPlan, Inc. to tender, at the $25.00 per Share purchase price set forth in
the Offer to Purchase, the Option Shares that you are entitled to receive upon
exercise, pursuant to the terms and conditions set forth in the Offer to
Purchase furnished to you. By signing the Option Tender Enrollment Form, you
agree that if any Option Shares you validly tendered are accepted, you will
receive a cash payment equal to (a) the number of Option Shares that are
accepted for purchase, multiplied by (b) the difference between the applicable
option exercise price(s) and the $25.00 purchase price, less (c) any taxes
required to be withheld, and you further agree to be bound by the terms and
conditions set forth herein and in the Offer to Purchase and Letter of
Transmittal.
2. By signing the Option Tender Enrollment Form, you acknowledge that the
Company is allowing you to conditionally exercise 100% of your options for the
purpose of allowing you to tender Option Shares in the Company's offer.
Further, by signing the Option Tender Enrollment Form, you acknowledge that
if, after taking into account proration, the Company purchases 50% of your
Option Shares, the option relating to the remaining 50% of your Option Shares
will not be considered to have been exercised and will remain outstanding
subject to the original vesting schedule applicable to the 50% of the options
that would have vested last. In addition, you acknowledge that, to the extent
that the Company does not purchase the 50% of your Option Shares that would
have vested first, the options relating to such Option Shares will remain
exercisable, notwithstanding the original vesting schedule.
3. Option Shares tendered pursuant to the Offer to Purchase may be withdrawn
at any time prior to 5:00 p.m., New York City time, on March 22, 1999. After
that, Option Shares may be withdrawn if they have not been accepted for payment
by the Company as provided in the Offer to Purchase by 12:00 Midnight, New York
City time, on April 16, 1999. An option holder must submit a written,
telegraphic or facsimile transmission notice of withdrawal so that it is
received by AST StockPlan, Inc. at the address indicated above before
5:00 p.m., New York City time, on March 22, 1999. Any such notice of withdrawal
must specify the name and social security number of the option holder who
tendered the Option Shares to be withdrawn and the number of Option Shares to
be withdrawn. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding. None of the
Company, AST StockPlan, Inc., MacKenzie Partners, Inc., Harris Trust Company of
New York or any other person shall be obligated to give any notice of any
defects or irregularities in any notice of withdrawal and none of them shall
incur any liability for failure to give any such notice. Any Option Shares
properly withdrawn will thereafter be deemed not tendered for purposes of the
Offer to Purchase. However, withdrawn Option Shares may be retendered by the
Expiration Date by again following the procedures for properly tendering Option
Shares.
The Option Tender Enrollment Form must be received by AST StockPlan, Inc.
before 5:00 p.m., New York City time, on March 22, 1999. You must sign and
complete this form for your direction to be valid.
2
<PAGE>
General Terms and Conditions of the Offer Applicable to Option Share Tenders:
NOTE: By signing the Option Tender Enrollment Form, you also agree to the
following terms and conditions which shall not be construed to limit in any way
the terms and conditions set forth in the Offer to Purchase.
1. You will, upon request, execute and deliver any additional documents
deemed by AST StockPlan Inc., the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Option Shares
tendered hereby and have read, understand and agree with all of the terms of
the Offer to Purchase.
2. You understand that tenders of Option Shares pursuant to the procedures
described in the Offer to Purchase and in the Instructions for Tender of
Options will constitute an agreement between you and the Company upon the terms
and subject to the conditions of the Offer to Purchase.
3. All authority herein conferred or agreed to be conferred shall survive
your death or incapacity and your obligation hereunder shall be binding upon
your heirs, personal representatives, successors and assigns. Except as stated
in the Offer to Purchase, this tender is irrevocable.
4. The Company will pay any stock transfer taxes with respect to the sale and
transfer of any Option Shares to it or its order pursuant to the Offer to
Purchase. You understand that (a) the purchase price will be paid to you (you
cannot elect to have the purchase price paid to another person); and (b) you
will be responsible for paying federal and state income taxes arising from the
sale of the Option Shares in the Offer (a portion of which will be withheld as
described in Instruction 5 below).
5. Under the U.S. federal income tax laws, the Company will be required to
withhold income and employment taxes from the amount of any payments made to
option holders pursuant to the Offer to Purchase.
6. All questions as to the number of Option Shares accepted, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Option Shares will be determined by the
Company in its sole discretion, which determinations shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders of Option Shares it determines not to be in proper form or the
acceptance of which or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer and any defect or irregularity in the tender of
any particular Option Shares, and the Company's interpretation of the terms of
the Offer to Purchase (including these Instructions for Tender of Options) will
be final and binding on all parties. No tender of Option Shares will be deemed
to be properly made until all defects and irregularities have been cured or
waived. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as the Company shall determine. None of the
Company, AST StockPlan, Inc., Harris Trust Company of New York, MacKenzie
Partners, Inc. or any other person is or will be obligated to give notice of
any defects or irregularities in tenders and none of them will incur any
liability for failure to give any such notice.
7. If the Option Tender Enrollment Form is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Company of the authority of
such person so to act must be submitted to AST StockPlan, Inc.
8. Questions and requests for assistance or additional copies of the Offer to
Purchase and these Instructions for the Tender of Options should be directed to
AST StockPlan, Inc. at 888/980-6456.
3
<PAGE>
[LOGO OF BUILDING ONE SERVICES CORPORATION]
Option Tender Enrollment Form
-----------------------------
"FNAME" "MNAME" "LNAME"
"ADDRESS1" "ADDRESS2"
"CITY", "STATE" "ZIP"
Grant Date: "GRANTDATE"
Grant Type: "GRANTTYPE"
Grant Price: "GRANT_PRICE"
Shares Outstanding: "SHARES"
1. I hereby conditionally exercise options, for the amount of Shares set forth
herein ("Option Shares"), granted to me by a company acquired by the Company
or granted to me under one of the following plans (collectively, the "Option
Plans"):
Building One Services Corporation's 1998 Long-Term Incentive Plan; or
Building One Services Corporation's 1997 Long-Term Incentive Plan.
My exercise of options hereunder is subject to the condition that any
options for Option Shares tendered but not purchased by the Company because
of proration, shall be deemed not to have been exercised. None of the
options underlying any of the Option Shares tendered has an exercise price
of $25.00 or greater.
2. I hereby elect as follows with respect to my options:
(Choose only one)
I wish to conditionally exercise and tender Option Shares underlying ALL
of my options that have an exercise price of less than $25.00 per Share.
I wish to conditionally exercise and tender ______ Option Shares underlying
my options that have an exercise price of less than $________ per Share.
I understand that options will be exercised as accepted in the tender in the
order in which my options vest.
If none of the boxes is checked and the form is otherwise properly
completed, signed and returned to AST StockPlan, Inc, Option Shares
underlying all of your options that have an exercise price of less than
$25.00 per Share will be tendered.
SIGN HERE
................................................................................
_____________________________ _________ ________________________
Signature(s) of Option Holder Dated Daytime Telephone Number
_____________________________ ________________________
Name(s) Please Print Capacity (Full title)
________________________________________________________________________________
Address (if different from that shown on the cover page)
(Must be signed by option holder(s) exactly as name(s) appear(s) on option
account(s) or by authorized agent(s) of option holder(s). If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of
a corporation or other person acting in a fiduciary or representative capacity,
please set forth full title. See Instruction 7.)
<PAGE>
Exhibit 99.10
February 19, 1999
MEMORANDUM TO PARTICIPANTS IN EMPLOYEE STOCK PURCHASE PLAN
TO: Participants in Building One Services Corporation's 1997 Employee
Stock Purchase Plan (the "ESPP")
FROM: Building One Services Corporation
RE: Tender of Shares in the Building One Services Corporation Offer
We have prepared the following questions and answers for your convenience.
Please review this information together with the Offer to Purchase and other
documents printed on blue paper. If, after reviewing the information provided,
you have additional questions, please call American Stock Transfer & Trust
Company at 800/278-4353.
1. WHAT IS THE OFFER?
We are offering to purchase 24,365,891 shares of our common stock ("Shares")
at $25.00 per Share. This offer will be open until it expires at 5:00 p.m.,
New York City time, on March 24, 1999, unless we extend the offer.
We are permitting you to tender in this offer any Shares that you acquired
through the ESPP. This memorandum explains how you, as a participant in the
ESPP, can participate in the offer with respect to Shares held in your ESPP
account if you so choose.
The offer, which is subject to a number of conditions, is fully described in
the Offer to Purchase dated February 19, 1999 and the related Letter of
Transmittal provided to you. Please read these documents carefully, together
with the following materials also printed on blue paper:
. a "Notice to Participants in the Building One Services Corporation's
1997 Employee Stock Purchase Plan" from American Stock Transfer & Trust
Company, the agent for the ESPP (the "ESPP Agent"); and
. the "Tender Instruction Form for Shares in Building One Services
Corporation's 1997 Employee Stock Purchase Plan."
Please remember that neither our company nor our Board of Directors is
making any recommendation as to whether you should participate in the offer.
You must make your own decision.
You must carefully follow the instructions below and in the Tender
Instruction Form for Shares in Building One Services Corporation's 1997
Employee Stock Purchase Plan if you want to tender the Shares held in your
ESPP account. Failure to follow such instructions properly may make you
ineligible to tender such Shares in the offer.
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<PAGE>
2. MAY I STILL TENDER MY SHARES IN THE ESPP EVEN THOUGH THEY ARE SUBJECT TO THE
RESTRICTION ON SALE BECAUSE I ACQUIRED THEM LESS THAN ONE YEAR AGO?
Yes. As you know, the ESPP requires participants to hold all of the shares
purchased through the ESPP for at least one year before they can be sold. We
have decided, for purposes of the offer only, to waive the one-year sale
restriction temporarily for ESPP Shares purchased through the ESPP as of the
end of the purchase period that ended in December 1998. You may tender all of
your ESPP Shares that you have purchased through the ESPP through that purchase
period. Shares purchased through the ESPP after the purchase period that ended
in December 1998, however, will remain subject to the one-year restriction, and
cannot be tendered.
Any of your ESPP Shares that are not purchased in the Offer to Purchase
because of the proration process described below (or for any other reason) will
be returned to your ESPP account. These Shares will not be eligible for sale
until the one-year restriction period has been satisfied. Waiver of the one-
year sale restriction applies only for the purpose of allowing you to
participate in the offer. You may not otherwise sell ESPP Shares that you have
not held for one year.
3. WILL ALL OF MY ESPP SHARES THAT I TENDER BE PURCHASED IN THE OFFER?
Probably not. In the offer, we are offering to purchase a total of 24,365,891
Shares at $25.00 per Share. If more than 24,365,891 Shares are tendered, we
will reduce on a pro rata basis the number of Shares we purchase from each
person who tenders Shares. This means that we will not purchase all of the ESPP
Shares you tender under these circumstances. If we reduce the number of ESPP
Shares we purchase from you, we will purchase those ESPP Shares with the
earliest purchase date first (that is, Shares that you have held in your ESPP
account the longest). We currently do not know how many Shares will be tendered
in the offer.
4. WHAT WILL HAPPEN TO MY SHARES IN THE ESPP IF THEY ARE NOT PURCHASED?
If we do not purchase any of your ESPP Shares because of proration or
otherwise, the ESPP Shares not purchased will be returned to the ESPP Agent to
return to your ESPP account. These ESPP Shares will then have the same terms as
they did before the offer (including the restriction on sale).
5. HOW WILL I KNOW IF MY SHARES IN THE ESPP HAVE BEEN PURCHASED AND WHEN WILL I
BE PAID?
After the offer expires, all tenders submitted in the offer will be
tabulated. This may take up to seven business days. Soon thereafter, you will
be advised of the number, if any, of your ESPP Shares that were purchased in
the offer. You will receive a check for the purchase price (less applicable
withholding taxes) promptly thereafter.
6. WILL I BE TAXED ON THE MONEY I RECEIVE?
Yes. You should review the Offer to Purchase for detailed tax information
and, if necessary, consult a tax advisor.
7. HOW DO I TENDER MY ESPP SHARES IN THE OFFER?
The only way that you can tender ESPP Shares in the offer is by completing
the Tender Instruction Form for Shares in the Building One Services
Corporation's 1997 Employee Stock Purchase Plan on blue paper, signing the
form, and returning it to American Stock Transfer & Trust Company, the ESPP
Agent, at the address indicated on the form. The ESPP Agent will complete a
Letter of Transmittal for these ESPP Shares to be tendered in the offer. The
Tender Instruction Form for Shares in Building One Services Corporation's 1997
Employee Stock Purchase Plan must be received by the ESPP Agent before 5:00
p.m., New York City time, on March 22, 1999 in order to allow the ESPP Agent
sufficient time to tender on your behalf.
On this form, you may direct the ESPP Agent to tender either a specific
number, or all, of your ESPP Shares, if you desire us to purchase them in the
offer.
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<PAGE>
Pursuant to this authority, the ESPP Agent will complete a Letter of
Transmittal with respect to the ESPP Shares you direct the ESPP Agent to tender
on your behalf. Because the terms and conditions of the Letter of Transmittal
will govern the tender of your ESPP Shares, you should read the Letter of
Transmittal carefully. However, the Letter of Transmittal should not be
completed and returned to the ESPP Agent or Harris Trust Company of New York
for tendering ESPP Shares.
Please return your instructions PROMPTLY, recognizing the slow delivery time
inherent in the United States mail today. If you use the United States mail, we
recommend using registered mail, return receipt requested. You may hand deliver
or mail your Tender Instruction Form for Shares in Building One Services
Corporation 1997 Employee Stock Purchase Plan to the ESPP Agent in the
preaddressed envelope that has been provided for your reply or send it by an
alternate, faster means (such as overnight courier). Please remember that in
all events the materials must be received by the ESPP Agent before 5:00 p.m.
New York City time, on March 22, 1999.
Do not deliver your instructions to your Human Resources Department or to
your Benefits Administrator or to the company.
8. WHAT IF I HOLD OTHER SHARES OF BUILDING ONE SERVICES CORPORATION COMMON
STOCK IN ADDITION TO MY ESPP SHARES?
If you have Shares other than ESPP Shares in your possession (or at a
brokerage firm), you may tender the other Shares as well. In this case, you may
receive two or more sets of offer materials. You should be careful to follow
the separate directions that apply to Shares and ESPP Shares. In the event we
must reduce the number of Shares that we purchase from each stockholder, we
will purchase the same percentage of the Shares and the ESPP Shares that you
tender.
9. CAN I CHANGE MY MIND AND WITHDRAW ESPP SHARES THAT I DIRECTED TO BE
TENDERED?
Yes, but only if you perform the following steps:
. You must send a signed notice of withdrawal to the ESPP Agent.
. The notice of withdrawal must be in writing. You may fax your notice of
withdrawal to the ESPP Agent at 718/234-5001.
. The notice of withdrawal must state your name, social security number
and the amount of ESPP Shares that you wish to withdraw from the Offer.
. The notice of withdrawal must be received by the ESPP Agent before 5:00
p.m., New York City time on March 22, 1999.
The withdrawal procedures are described in greater detail in the Tender
Instruction Form for Shares in Building One Services Corporation's 1997
Employee Stock Purchase Plan. You must follow these instructions carefully.
You are entitled to resubmit tender materials after withdrawal, provided that
the resubmitted materials are completed properly and delivered on time in
accordance with the instructions applicable to the original submission.
10. WHAT DO I DO IF I HAVE ANY QUESTIONS ABOUT THE TENDER OFFER?
If you have questions about the operation of the offer or need help in
properly responding to the offer, you may call the ESPP Agent at 800/278-4353.
******
This memorandum is intended to help you understand the offer and how ESPP
Shares will be handled in the offer. The Offer to Purchase and Letter of
Transmittal contain the legal terms of the offer and are controlling. We urge
you to carefully read these documents, which explain our offer in detail.
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<PAGE>
FOR HOLDERS OF EMPLOYEE STOCK PURCHASE PLAN SHARES
TENDER INSTRUCTION FORM
FOR SHARES IN
BUILDING ONE SERVICES CORPORATION'S 1997
EMPLOYEE STOCK PURCHASE PLAN
(NOTE: Before completing this Tender Instruction Form, you should read the
Offer to Purchase and the related Letter of Transmittal, the attached
memorandum from Building One Services Corporation, and the letter from American
Stock Transfer & Trust Company (the "ESPP Agent"), the agent for the Building
One Services Corporation's 1997 Employee Stock Purchase Plan ("ESPP"). THIS
FORM SHOULD BE USED ONLY BY EMPLOYEES WHO HAVE SHARES IN THE ESPP WHO DESIRE TO
TENDER SOME OR ALL OF SUCH SHARES TO THE COMPANY.)
THIS TENDER INSTRUCTION FORM MUST BE RECEIVED BY AMERICAN STOCK TRANSFER &
TRUST COMPANY BEFORE 5:00 P.M., NEW YORK CITY TIME, ON MARCH 22, 1999. YOU
MUST SIGN AND COMPLETE THIS FORM FOR YOUR DIRECTION TO BE VALID.
To: American Stock Transfer & Trust Company
Agent for the Building One Services Corporation Employee Stock Purchase Plan
By Mail, Overnight Delivery or Hand:
40 Wall Street, 46th Floor
New York, NY 10005
Attention: Reorganization Department
Telephone: 718/921-8200
Facsimile: 718/234-5001
NOTE: Delivery of this instrument to an address other than as set forth above
will not constitute a valid delivery.
Name(s) and Address(es) of ESPP Participant (Please fill in, if blank, exactly
as name(s) appear(s) on ESPP Account Statement, including ESPP Account Number)
- --------------------------------------------------------------------------------
1
<PAGE>
I am a participant in the ESPP who has Shares in such plan ("ESPP Shares")
and, as such, I have received a copy of the Offer to Purchase dated February
19, 1999 (the "Offer to Purchase") and the related Letter of Transmittal
relating to the offer by Building One Services Corporation (the "Company") to
purchase 24,365,891 shares of its common stock ("Shares"), at a price of $25.00
per Share (the "Purchase Price").
I hereby acknowledge my desire to tender to the Company at the Purchase Price
certain Shares as described herein upon the terms and subject to the conditions
set forth in the Offer to Purchase, Letter of Transmittal and this Tender
Instruction Form.
This notice instructs you to tender, at the Purchase Price, the following
number of Shares I own in the ESPP:
[_] (insert number) ESPP Shares
[_] All of my ESPP Shares eligible for tender
Instructions: Check one of the boxes. If the first box is checked, insert the
number of your ESPP Shares that you desire to be tendered on your behalf. If
neither box is checked and the form is otherwise properly completed, signed and
returned to American Stock Transfer & Trust Company (the "ESPP Agent"), all of
your ESPP Shares eligible for tender will be tendered.
ESPP Shares tendered pursuant to the offer may be withdrawn at any time prior
to 5:00 p.m., New York City time, on March 22, 1999. After that, ESPP Shares
tendered pursuant to the offer may be withdrawn if they have not been accepted
for purchase by the Company as provided in the Offer to Purchase by 12:00
Midnight, New York City time, on April 16, 1999. An owner of ESPP Shares must
submit a written, telegraphic or facsimile transmission notice of withdrawal so
that it is received by the ESPP Agent at the address indicated above no later
than 5:00 p.m., New York City time, on March 22, 1999. Any such notice of
withdrawal must specify the name and social security number of the owner who
tendered the ESPP Shares to be withdrawn and the number of ESPP Shares to be
withdrawn. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding. None of the
Company, American Stock Transfer & Trust Company, Harris Trust Company of New
York, MacKenzie Partners, Inc. or any other person shall be obligated to give
any notice of any defects or irregularities in any notice of withdrawal and
none of them shall incur any liability for failure to give any such notice. Any
ESPP Shares properly withdrawn will thereafter be deemed not tendered for
purposes of the offer. However, withdrawn ESPP Shares may be retendered by 5:00
p.m., New York City time on March 22, 1999 by again following the procedures
for properly tendering ESPP Shares.
Neither the Company nor its Board of Directors makes any recommendation as to
whether to tender or refrain from tendering any ESPP Shares.
This Tender Instruction Form must be received by the ESPP Agent before 5:00
p.m., New York City time, on March 22, 1999 in order to allow the ESPP Agent
sufficient time to tender on your behalf. You must sign and complete this form
for your direction to be valid.
Any tendering stockholder or other payee (other than a non-United States
stockholder) who fails to complete fully and sign the Substitute Form W-9
included below in the Letter of Transmittal may be subject to United States
federal income tax backup withholding equal to 31% of the gross proceeds paid
to such stockholder or other payee pursuant to the offer. The Depositary,
Harris Trust Company of New York, will withhold 30% of the gross proceeds paid
to non-United States stockholders unless it determines that a reduced rate of
withholding is available pursuant to a tax treaty or that an exemption from
withholding is available. As a result, non-United States stockholders will not
be subject to United States federal income tax backup withholding. See
Instruction 12 to the Letter of Transmittal.
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<PAGE>
Sign Here
(Please Complete Substitute Form W-9 Below)
.............................................................................
.............................................................................
Signature(s) of Owner(s)
Name(s) .....................................................................
(Please Print)
.............................................................................
Capacity (full title) .......................................................
Address (if different from that shown on the cover page) ....................
.............................................................................
.............................................................................
(Zip Code)
Daytime Telephone Number: ...................................................
Dated: ......................................................................
Must be signed by participant(s) exactly as name(s) appear(s) on the ESPP
account of the participant(s). If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, agent, officer of a corporation
or other person acting in a fiduciary or representative capacity, please set
forth full title and provide proper evidence to ESPP Agent satisfactory to
the Company of authority to sign.)
3
<PAGE>
NOTICE TO PARTICIPANTS
IN THE BUILDING ONE SERVICES CORPORATION'S 1997
EMPLOYEE STOCK PURCHASE PLAN
OFFER TO PURCHASE FOR CASH
BY
BUILDING ONE SERVICES CORPORATION
24,365,891 SHARES OF ITS COMMON STOCK
AT
$25.00 PER SHARE
February 19, 1999
To Participants in the Building One Services Corporation's 1997 Employee Stock
Purchase Plan (the "ESPP"):
Pursuant to the Offer to Purchase dated February 19, 1999, and the related
Letter of Transmittal, Building One Services Corporation, (the "Company"), is
offering to purchase 24,365,891 shares of its common stock ("Shares") at $25.00
per Share.
American Stock Transfer & Trust Company (the "ESPP Agent") is the holder of
record of Shares held for your account in the ESPP. A tender of your Shares in
the ESPP ("ESPP Shares") can only be made by us, as your agent, pursuant to
your instructions.
IF YOU WISH TO PARTICIPATE IN THIS OFFER BY TENDERING ESPP SHARES, YOU MUST
NOTIFY THE ESPP AGENT BY COMPLETING THE "TENDER INSTRUCTION FORM FOR SHARES IN
THE BUILDING ONE SERVICES CORPORATION'S 1997 EMPLOYEE STOCK PURCHASE PLAN" ON
BLUE PAPER, SIGNING THE FORM, AND RETURNING IT TO US AT THE ADDRESS INDICATED
ON THE FORM BEFORE 5:00 P.M., NEW YORK CITY TIME, ON MARCH 22, 1999 IN ORDER TO
ALLOW US SUFFICIENT TIME TO TENDER ON YOUR BEHALF. If you wish to tender all or
any amount of your ESPP Shares please instruct us by the deadline. If you do
not respond to this notice, none of your ESPP Shares will be tendered.
Solely for the purpose of allowing participants in the ESPP to participate in
the Offer, the one-year restriction on sales of ESPP Shares acquired through
the end of the purchase period that ended December 31, 1998 has been
temporarily waived. Shares purchased through the ESPP after such date are not
eligible for the offer. Any ESPP Shares that have not satisfied the one-year
sale restriction and are not purchased in the offer will not be eligible for
sale until the one-year period has been satisfied.
If the number of ESPP Shares purchased by the Company from each participant
in the ESPP who tenders ESPP Shares in the offer must be reduced on a pro rata
basis, as described in Section 1 of the Offer to Purchase, the Company will
accept first the ESPP Shares that have been held in your ESPP account the
longest.
Cash received from any ESPP Shares tendered and accepted for payment by the
Company will be distributed to participants by check (less applicable federal
withholding taxes). Any ESPP Shares tendered but not accepted by the Company
will remain in your account.
If you are unsure how many Shares you have in your ESPP account that are
eligible to be tendered in the offer, you may contact our Customer Service Unit
at 800/278-4353 before 5:00 p.m., New York City time, on
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<PAGE>
March 22, 1999. Our operators are available to take your call Monday through
Friday between the hours of 9:00 a.m. and 5:00 p.m., New York City time.
Your attention is invited to the following:
1. The tender price is $25.00 per Share, net to you in cash (less
applicable federal withholding taxes).
2. The withdrawal deadline for ESPP Shares is on March 22, 1999, at 5:00
p.m., New York City time, unless the Company extends the Offer.
3. The Offer is not conditioned upon a minimum of 24,365,891 Shares being
tendered. However, the Offer is subject to the receipt of financing on
acceptable terms and certain other conditions. You should refer to
Section 6 of the Offer to Purchase.
4. Any stock transfer taxes applicable to the sale of ESPP Shares to the
Company pursuant to the Offer will be paid by the Company, except as
described in the Letter of Transmittal.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
YOUR INSTRUCTIONS TO US ON THE ATTACHED TENDER INSTRUCTION FORM FOR SHARES IN
THE BUILDING ONE SERVICES CORPORATION'S 1997 EMPLOYEE STOCK PURCHASE PLAN MUST
BE FORWARDED TO US PROMPTLY IN ORDER TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF IN ACCORDANCE WITH THE PROVISIONS OF THE OFFER TO PURCHASE AND LETTER OF
TRANSMITTAL.
Very truly yours,
American Stock Transfer & Trust Company
Agent, Building One Services
Corporation
Employee Stock Purchase Plan
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<PAGE>
Exhibit 99.11
February 19,1999
MEMORANDUM TO STOCKHOLDERS WHO RECEIVED SHARES
IN CONNECTION WITH THE SALE OF A BUSINESS
TO: Stockholders who Received Their Shares of Building One Services
Corporation Common Stock in Connection with the Sale of a Business
FROM: Building One Services Corporation
RE: Tender of Shares in the Company's Tender Offer
We have prepared the following questions and answers for your convenience.
Please review the information together with the Offer to Purchase and other
documents printed on purple paper. If, after reviewing the information
provided, you have additional questions, please call MacKenzie Partners, Inc.
("MacKenzie Partners") at 800/322-2885.
1.WHAT IS THE OFFER?
We are offering to purchase 24,365,891 shares of our common stock ("Shares")
at $25.00 per Share. This offer will be open until it expires at 5:00 p.m.,
New York City time, on March 24, 1999, unless we extend the offer.
We are permitting you to tender in this offer any Shares that you received
from us in connection with the sale of a business to us, including shares that
you cannot now transfer or could not transfer previously because of
contractual restrictions on transfer that you agreed to in connection with the
sale of a business to us ("Restricted Shares"). We are also permitting you to
tender Shares that you pledged to us in connection with the sale of a business
to us ("Pledged Shares"). This memorandum describes how you can tender your
Restricted Shares and your Pledged Shares in this offer. It also describes how
any tender proceeds on Pledged Shares that are purchased in the offer and how
Pledged Shares that are not purchased in the offer will be handled immediately
after the offer.
The offer, which is subject to a number of conditions, is fully described in
the Offer to Purchase dated February 19, 1999 and the related Letter of
Transmittal provided to you. Please read these documents carefully, together
with this memorandum.
Please remember that neither our company nor our Board of Directors is
making any recommendation as to whether you should participate in the Offer.
You must make your own decision.
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<PAGE>
A.QUESTIONS APPLICABLE TO RESTRICTED SHARES
1.Will All Restricted Shares That I Tender Be Purchased in the Offer?
Probably not. In the offer, we are offering to purchase from our stockholders
a total of 24,365,891 Shares at $25.00 per Share. If more than 24,365,891
Shares are tendered, we will reduce on a pro rata basis the number of Shares we
purchase from each person who tenders Shares. This means that we will not
purchase all of the Restricted Shares you tender under these circumstances. We
currently do not know how many Shares will be tendered in the offer.
2. What Will Happen to My Restricted Shares if They Are Not Purchased?
If, after taking into account proration, we purchase 50% of your Restricted
Shares (including any Pledged Shares), the remaining 50% will remain subject to
the contractual restrictions on transfer applicable to the 50% your Restricted
Shares that would have lapsed last. To the extent that we do not purchase 50%
of your Restricted Shares (excluding any Pledged Shares), such Restricted
Shares will remain transferable without restriction. We will return to you the
certificate representing any Restricted Shares (excluding any Pledged Shares)
that we do not purchase in the offer, which will include applicable legends.
3. How Will I Know If My Restricted Shares Have Been Purchased And When Will I
Be Paid?
After the offer expires, all tenders submitted in the offer will be
tabulated. This may take up to seven business days. Soon thereafter, you will
be advised of the number, if any, of your Restricted Shares that we purchased
in the offer. You will receive a check for the purchase price promptly
thereafter.
4. Will I Be Taxed on the Proceeds from the Sale of Restricted Shares?
Yes. You should review the Offer to Purchase and Letter of Transmittal for a
more detailed discussion of tax considerations and, if necessary, consult a tax
advisor.
5. How Do I Tender My Restricted Shares In The Offer?
If you tender fewer than 100% of your Restricted Shares, you must tender your
Restricted Shares whose restrictions have already lapsed (if any), followed
next by other Restricted Shares in the order in which the restrictions lapse.
Accordingly, if you tender fewer than 100% of your Restricted Shares, please
review carefully the legends on the back of your stock certificates to
determine which certificates to send along with the Letter of Transmittal.
The only way that you can tender Restricted Shares (including any Pledged
Shares) in the Offer is by completing the Letter of Transmittal and returning
it to Harris Trust at the address indicated on the form. The Letter of
Transmittal MUST be received by Harris Trust before 5:00 p.m., New York City
time, on March 24, 1999 and MUST be accompanied by the appropriate stock
certificates representing your Restricted Shares, other than Pledged Shares.
Because the terms and conditions of the Letter of Transmittal will govern the
tender of your Restricted Shares, you should read the Letter of Transmittal
carefully.
Please return your Letter of Transmittal PROMPTLY, recognizing the slow
delivery time inherent in the United States mail today. If you use the United
States mail, we recommend using registered mail, return receipt requested. You
may mail your Letter of Transmittal to Harris Trust in the pre-addressed
envelope that has been
provided for your reply or send it by an alternate, faster means (such as
overnight courier). Hand deliveries must be made to Harris Trust. Please
remember that in all events the materials must be received by Harris Trust
before 5:00 p.m. , New York City time, on March 24, 1999.
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<PAGE>
B.QUESTIONS APPLICABLE TO PLEDGED SHARES
1.Will All Pledged Shares That I Tender Be Purchased in the Offer?
Probably not. We are offering to purchase from our stockholders a total of
24,365,891 Shares at $25.00 per Share. If more than 24,365,891 Shares are
tendered, we will reduce on a pro rata basis the number of Shares we purchase
from each person who tenders Shares. This means that we will not purchase all
of the Pledged Shares you tender under these circumstances. Pledged Shares that
are not purchased will be returned to us and remain subject to the pledge. We
currently do not know how many Shares will be tendered in the offer.
2. What Will Happen to My Pledged Shares If They Are Not Purchased?
If we do not purchase Pledged Shares because of proration or otherwise, they
will be returned to us. We will continue to have control of the Pledged Shares
pursuant to the terms and conditions under which they were pledged to us, as
provided in the acquisition agreement you signed at the time your business was
sold to us. The Pledged Shares will continue to be retained by us as collateral
security, subject to the same terms and conditions as the Pledged Shares are
now.
3. How Will I Know If My Pledged Shares Have Been Purchased and When Will I Be
Paid?
After the offer expires, all tenders submitted in the offer will be
tabulated. This may take up to seven business days. Soon thereafter, you will
be advised of the number, if any, of your Pledged Shares that were purchased in
the offer. The proceeds of the purchase price will be retained in an account at
American Stock Transfer & Trust Company. You will not be sent this money or any
Pledged Shares not purchased in the offer until we release them in accordance
with the terms and conditions under which the Pledged Shares are pledged to us.
4. Will I Be Taxed on the Proceeds from the Sale of Pledged Shares Even Though
I Will Not Receive the Money Right Away?
Yes. You should consult a tax advisor with respect to the determination of
the applicable tax.
5. How Do I Tender My Pledged Shares in the Offer?
You may only tender Pledged Shares if you have already tendered any
Restricted Shares whose restrictions lapse prior to those applicable to the
Pledged Shares.
The only way that you can tender Pledged Shares in the Offer is by completing
the Letter of Transmittal, signing the form and returning it to Harris Trust at
the address indicated on the form. You only need to complete one Letter of
Transmittal if you want to tender your Restricted Shares, your Pledged Shares,
or any other Shares other than Shares underlying stock options or Shares held
in the Employee Stock Purchase Plan. The Letter of Transmittal MUST be received
by Harris Trust before 5:00 p.m., New York City time, on March 24, 1999. The
stock certificates representing Pledged Shares will be delivered to Harris
Trust by the Company.
By signing the Letter of Transmittal you will authorize Harris Trust, which
is holding the Pledged Shares in connection with the Company's offer, to tender
a specific number, or all, of your Pledged Shares in the Offer and will also
authorize us to enter into an arrangement with American Stock Transfer & Trust
Company which will govern the terms under which the proceeds of any Pledged
Shares you tender that are purchased by us in the offer will be held.
Disbursements will be made from this account only upon our instructions. You
will not receive the proceeds from the sale of Pledged Shares until we release
them in accordance with the terms and conditions under which the Pledged Shares
are pledged to us, as provided in the acquisition agreement you signed at the
time your business was sold to us.
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Please return your instructions PROMPTLY, recognizing the slow delivery time
inherent in the United States mail today. If you use the United States mail, we
recommend using registered mail, return receipt requested. Please remember that
in all events the materials must be received by Harris Trust before 5:00 p.m.,
New York City time, on March 24, 1999.
C. General Questions
1. What If I Hold Shares of Building One Services Corporation Common Stock in
Addition to Restricted or Pledged Shares?
If you have Shares other than Restricted Shares or Pledged Shares in your
possession (or at a brokerage firm), you may tender the other Shares as well.
In this case, you may receive two or more sets of offer materials. You should
be careful to follow the separate directions that apply to Shares versus
Restricted and Pledged Shares. In the event that we must reduce on a pro rata
basis the number of Shares and Restricted and Pledged Shares that we purchase
from each stockholder, the total number of Restricted and Pledged Shares you
tender will be reduced independently from the number of other Shares that you
tender.
2. Can I Change My Mind and Withdraw Pledged Shares That I Directed to Be
Tendered?
Yes, but only if you perform the following steps:
. You must send a signed notice of withdrawal to Harris Trust, Attn:
Tenders and Exchanges.
. The notice of withdrawal must be in writing. You may fax your notice of
withdrawal to 212/701-7636.
. The notice of withdrawal must state your name, social security number
and the amount of Restricted Shares or Pledged Shares that you wish to
withdraw from the Offer.
. The notice of withdrawal must be received by Harris Trust before 5:00
p.m., New York City time, on March 24, 1999.
3.WHAT DO I DO IF I HAVE ANY QUESTIONS ABOUT THE TENDER OFFER?
If you have questions about the operation of the offer or need help in
properly responding to the offer, you may call MacKenzie Partners, Inc. at
800/322-2885.
******
This memorandum is intended to help you understand the offer and how
Restricted Shares and Pledged Shares will be handled in the offer. The Offer to
Purchase and Letter of Transmittal contain the legal terms of the offer, and
are controlling. We urge you to carefully read these documents, which explain
our offer in detail.
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