<PAGE>
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) January 10, 1995
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BIG O TIRES, INC.
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(Exact name of registrant as specified in its charter)
Nevada 1-8833 87-0392481
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(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File No.) Identification No.)
11755 East Peakview Avenue, Englewood, Colorado 80111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 790-2800
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ITEM 5. OTHER EVENTS.
On January 20, 1995, the Company had agreed to extend until February 8, 1995,
the period of exclusive negotiations with the Dealer-Management Group that had
made an offer to acquire the outstanding shares of the Company for $18.50 per
share. The original period of exclusivity expired January 20, 1995. On
February 7, 1995, the Company was notified that the Dealer-Management Group
elected not to continue negotiations to acquire the Company. The Company has
been advised that the decision not to continue the negotiations with the Company
was based on the difficulties the Dealer-Management Group experienced in
obtaining commitments for the elements of the financing necessary to consummate
the acquisition and the resulting inability of the representatives of the
dealers and management to reach mutual understandings on certain fundamental
issues relating to the acquisition. The proposed transaction would have taken
the Company private and was led by the Company's President and Chief Executive
Officer. The Dealer-Management Group was comprised of other officers, managers
and independent franchised dealers acting on behalf of a significant majority of
the Company's franchised dealers.
The Company was also informed by representatives of management that they
continue to be interested in completing a purchase of the Company on mutually
agreeable terms to shareholders, management and the Board. The Company has
advised the management representatives that it will consider carefully credible
proposals that are in the best interest of the shareholders and the Company. In
the meantime, the Board of Directors will continue to review alternatives to
enhance the value of the Company.
By Letter Agreement dated January 10, 1995, the Consulting Agreement dated
September 22, 1994, by and between Big O Tires, Inc. and Horst K. Mehlfeldt
("Mehlfeldt"), a director of the Company, was amended to adjust the monthly
compensation provided for in the Consulting Agreement from $17,500 to $2,500.
Mr. Mehlfeldt was retained by the Company to serve as a full time representative
to assist the Company in fulfilling the directives of the June 1994 shareholder
proposal.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(10.1) Letter dated February 7, 1995, from the Dealer-Management Group
to the Company's Board Chairman.
(10.2) Agreement between the Company and the Management Dealer
Participants dated January 20, 1995.
(10.3) Letter Agreement dated January 10, 1995, amending the Consulting
Agreement by and between Big O Tires, Inc. and Horst K.
Mehlfeldt.
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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 thereunto duly authorized:
Date: February 10, 1995
BIG O TIRES, INC.
By: /s/ Philip J. Teigen
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General Counsel and Secretary
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February 7, 1995
VIA FACSIMILE
(603) 763-7665
Mr. John E. Siipola, Chairman of the Board
Big O Tires, Inc.
22 Upper Bay Road
Sunapee, New Hampshire 03782
VIA FACSIMILE
(303) 866-0200
Investment Committee of the Board of Directors
of Big O Tires, Inc.
c/o W. Dean Salter, Esq.
Holme, Roberts & Owen
1700 Lincoln, Suite 4100
Denver, CO 80203
Dear Messrs. Siipola and Salter:
The undersigned are representatives of the Big O Tires, Inc. ("Big O")
franchised dealers and the management of Big O, respectively. We have been
directed by our constituencies to pursue the viability of acquiring Big O by a
group comprised of certain members of management of Big O, the Big O Employee
Stock Ownership Plan ("ESOP") and those Big O franchised dealers who elect to
participate.
While we firmly believe that the concept of uniting management, franchised
dealers, and the Big O ESOP into a single organization would benefit and enhance
the growth and future of Big O, we have elected not to continue negotiations at
this time with the Investment Committee in light of the difficulties we have
experienced in obtaining commitments for the elements of the financing necessary
to consummate the acquisition and the resulting inability of the representatives
of the dealers and management to reach mutual understandings on certain
fundamental issues relating to the acquisition. We sincerely appreciate the
efforts made by all of the parties in these negotiations.
Very truly yours,
Management Participants
Steven P. Cloward John B. Adams
Thomas L. Staker Philip J. Teigen
Bruce H. Ware Gregory D. Roquet
David W. Dwyer Dennis J. Fryer
Allen E. Jones Kelly A. O'Reilly
Brad Findlay
By: /s/ John B. Adams
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John B. Adams
Dealer Respresentatives
Rick Miller
Wes Stephenson
William H. Spencer
Thomas Staker
Guido Bertoli
By: /s/ Wes Stephenson
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Wes Stephenson
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January 20, 1995
Big O Tires, Inc.
11755 East Peakview Avenue
Englewood, Colorado 80111
Attn: Investment Committee of the Board of Directors of Big O Tires, Inc.
("Big O")
Gentlemen:
We refer to the letter among us dated December 22, 1994. We request
that you agree by signing below that the December 22 letter is extended to
5 p.m. Denver time on February 8, 1995, on the terms of this letter.
We agree that (1) the draft Merger Agreement, dated January 19, 1995,
is acceptable to us in all material respects, (2) we will work in good faith
toward a prompt resolution of any outstanding issues that we believe must be
resolved before the management participants and dealer representatives are
prepared to sign a definitive Merger Agreement, (3) we will keep you advised of
our progress toward resolving those issues, and (4) at any time after
January 27, 1995, you may terminate this agreement on 24-hours notice to Steve
Cloward at Big O Tires, Inc. if we have not delivered to you by January 27,
1995, copies of a signed agreement in principle among the purchasers
establishing the terms of their relative equity participation in the purchaser
and a model and anticipated financial forecast and structure of the purchaser.
You and we agree that nothing in this letter obligates either of us to
sign the definitive Merger Agreement.
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Big O Tires, Inc.
January 20, 1995
Page 2
If you are in agreement with the statements set forth above, please
confirm your agreement by signing the copy of this letter which is attached
hereto and returning it to John B. Adams.
Very truly yours,
Management participants Dealer representatives
Steven P. Cloward John B. Adams Rick Miller
Thomas L. Staker Philip J. Teigen Wes Stephenson
Bruce H. Ware Gregory L. Roquet William H. Spencer
David W. Dwyer Dennis J. Fryer Thomas Staker
Allen E. Jones Kelly A. O'Reilly Guido Bertoli
Brad Findlay
By: /s/ John B. Adams By: /s/ William H. Spencer
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John B. Adams William H. Spencer
ACCEPTED AND AGREED TO:
Big O Tires, Inc.
By: /s/ John E. Siipola
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Date: January 20, 1995
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[Big O Tires Letterhead]
January 10, 1995
VIA FACSIMILE AND REGULAR MAIL
Mr. Horst K. Mehlfeldt
207 Lake Point Drive
Akron, OH 44333
RE: Engagement Agreement
Dear Horst:
The purpose of this letter is to formalize the agreement between the Board of
Directors of Big O Tires, Inc. and yourself regarding investment advisory
services provided to the Investment Committee of the Board of Directors.
It is my understanding that the retainer that you will be paid starting
January 1, 1995, will be $2,500 per month. I am not aware of any limitation as
to the number of months that will be covered under this agreement. Accordingly,
subject to the change in fee structure mentioned above, I do not believe that
any further modifications are required to this agreement.
I would prefer to handle this on a fairly informal basis. Accordingly, I prefer
not to modify the agreement, but rather to have you accept this letter as an
amendment to the fee structure. If you would prefer to have a more formal
modification, then please let me know and I will have Phil or Susan draft the
appropriate document.
Sincerely,
/s/ John B. Adams
John B. Adams
Executive Vice President
and Chief Financial Officer
JBA:bjw
cc: Steven P. Cloward
John E. Siipola
Philip J. Teigen, Esq.
Mehlfeldt Consulting File
ACCEPTED AS MODIFICATION OF AGREEMENT DATED SEPT. 22, 1994
Horst Mehlfeldt Jan. 10, 1995
