SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 6, 1995
BIG O TIRES, INC.
(Exact name of registrant as specified in its charter)
Nevada 1-8833 87-0392481
(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File No.) Identification No.)
11755 East Peakview Avenue, Englewood, Colorado 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 790-2800
6 Total Pages
Item 5. Other Events.
On April 6, 1995, the Company announced that it had received a proposal from
a group consisting of certain of the Company's franchisees and selected members
of the Company's management (the "Acquisition Group") to acquire the Company
for a cash price of $16 per share (the "Acquisition Proposal"). A substantially
similar group had proposed in December 1994 to purchase the Company for
$18.50 a share, but withdrew the offer in February 1995. The Acquisition
Proposal is subject to a number of conditions, including the ability of the
Acquisition Group to obtain the necessary financing (commitments for which
have not yet been obtained), participation in the Acquisition Group of not
less than 80% of the shares held by the Company's Employee Stock Ownership
Plan ("ESOP"), the ability of the ESOP to obtain an acceptable fairness
opinion, approval by and participation in the Acquisition Group by not less
than 85% of Company franchisees and the negotiation of a definitive merger
agreement. In consideration of the efforts to consummate the Acquisition
Proposal, the Acquisition Group is requesting the Company agree to advance
or reimburse certain expenses incurred by the Acquisition Group. The
Acquisition Proposal, unless accepted by the Company, will expire by its
terms at 5:00 p.m., April 13, 1995.
Item 7. Financial Statements and Exhibits.
(10.1) Acquisition Proposal to the Investment Committee of the Board of
Directors from certain members of management and a representative of certain
Big O Tire, Inc's franchisees dated April 6, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized:
Date: April 10, 1995
BIG O TIRES, INC.
By: /s/ Philip J. Teigen
General Counsel and Secretary
EXHIBITS
1. (10.1) Acquisition Proposal to the Investment Committee of the Board
of Directors from certain members of management and a
representative of certain Big O Tire, Inc's franchisees dated
April 6, 1995.
EXHIBIT 10.1
April 6, 1995
Big O Tires, Inc.
11755 East Peakview Avenue
Englewood, Colorado 80111
Attn: Investment Committee of the Board of Directors
Gentlemen:
As you are aware, over the past several weeks the undersigned members of
the management of Big O Tires, Inc. ("Big O") and the directors of Big O Tire
Dealers of America, Inc. ("BOTA") have been working closely together and
devoting a great deal of time and effort to formulate a financeable
acquisition proposal to acquire the outstanding stock of Big O.
We are pleased to be able to submit for your consideration a proposal on
behalf of a group to be formed by an entity comprised of those franchised Big
O Tire Dealers who elect to participate and the undersigned members of Big O's
management to acquire all outstanding shares of common stock of the Company
for $16.00 per share in a cash merger.
We continue to believe that the combination of Big O's management and
dealers can offer the best price available and can close a transaction in the
shortest time. Our proposal is subject to:
(i) the obtaining of financing commitments on acceptable terms
sufficient to finance the acquisition. We have made substantial progress in
arranging the necessary elements of financing and believe commitments could be
in place within ten days of the execution of a merger agreement;
Big O Tires, Inc.
April 6, 1995
Page 2
(ii) participation in the acquisition group by not less than 80%
of the shares held by Big O's ESOP and the ability of the ESOP to obtain an
acceptable fairness opinion;
(iii) approval by and participation in the acquisition group by not
less than 85% of franchised Big O Tire Dealers; and
(iv) negotiation of a definitive merger agreement.
In consideration of our efforts to consummate the proposed merger, we
request that Big O agree that:
(1) this letter agreement shall not supersede or amend the terms of
any prior agreements with respect to fees or indemnification;
(2) Big O will promptly advance or reimburse the expenses incurred by
the undersigned in such efforts for the period from February 9, 1995 through
the execution of a definitive merger agreement, subject to: (i) our agreement
to submit such expenses to you for reimbursement in increments of
approximately $25,000, and (ii) your ability to halt, at any time, upon 24
hours notice in writing to John B. Adams, your reimbursement obligation
hereunder with respect to future expenses not yet incurred. We agree that
should we not consummate the proposed merger for any reason other than the
reason set forth in the following sentence, we will reimburse Big O for 20% of
the expenses reimbursed to us by Big O pursuant to this paragraph in excess of
the amounts previously agreed to in the letter of December 13, 1994. The
undersigned shall not be obligated to reimburse any of Big O's expense
reimbursements pursuant to the preceding sentence if the proposed merger is
not consummated because the Investment Committee fails to recommend or
withdraws its recommendation of the consummation of the proposed transaction
because of the possibility of engaging in another transaction either (x) on
terms which the Investment Committee has not determined in good faith to be
less favorable to Big O and its shareholders than the transaction proposed by
the undersigned or (y) at a per share price in excess of $16.00; and
(3) subject to applicable Nevada corporate law, Big O will indemnify
and hold harmless the undersigned and any other Big O dealers who participate
in the negotiations of the proposed transaction and each of their respective
employees, managers, and agents, for all costs and expenses (including
attorney fees) in connection with or arising out of any actions brought or
threatened relating to, directly or indirectly, the proposed transaction.
Such indemnification shall survive the termination of this letter agreement.
Big O Tires, Inc.
April 6, 1995
Page 3
We reserve the right to withdraw our proposal without prior notice in
the event that the Company solicits further proposals from any third party or
initiates any action which would result in a major change in the assets,
capitalization or corporate structure of the Company (including incurring
additional debt other than for seasonal working capital needs for inventory
and receivables).
If this proposal is acceptable to you and you agree to the
indemnification and reimbursement requests made in this letter, please
indicate your acceptance and agreement by signing in the space provided below
on the enclosed copy and returning such copy to Steve Cloward or John Adams no
later than 5:00 P.M., April 13, 1995, at which point this proposal, unless
accepted, will expire.
Very truly yours,
Management participants:
Steven P. Cloward John B. Adams
Ron Lautzenheiser Brad Findlay
Thomas L. Staker Philip J. Teigen
Bruce H. Ware Gregory L. Roquet
Dennis J. Fryer Kelley A. O'Reilly
Allen E. Jones
BOTA
By: /s/ Steven P. Cloward By: /s/ Wes Stephenson
Steven P. Cloward Wes Stephenson, President
ACCEPTED AND AGREED TO:
Big O Tires, Inc.
By:
Date: April __, 1995
