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____________________________________________________________________________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(E) of the Securities Exchange Act of 1934)
[Amendment No. 2]
MEGAMATION INC.
(Name of the Issuer)
MEGAMATION INC.
MI MERGER CORP.
MR. TRISTRAM C. COLKET, JR.
MR. MAX COOPER
(Name of Person(s) Filing Statement)
COMMON STOCK, ONE CENT ($.01) PAR VALUE
(Title of Class of Securities)
585 154 10 7
(CUSIP Number of Class of Securities)
Edward Borkowski Tristram C. Colket, Jr.
Megamation Inc. Max Cooper
51 Everett Drive c/o Tekloc Enterprises
Building #B4 500 Chester Field Parkway
Lawrenceville, NJ 08648 Malvern, PA 19355
Edmond M. Coller James D.Epstein, Esq.
Goodkind, Labaton, Rudoff, Pepper, Hamilton & Scheetz
Sucharow, LLP 3000 Two Logan Square
100 Park Avenue Eighteenth & Arch Streets
New York, NY 10017 Philadelphia, PA 19103
(Name, Address and Telephone Number Of Person Authorized to Receive Notices
And Communications On Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under
the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or
information statement referred to in checking box (a) are preliminary copies.
[ ]
CALCULATION OF FILING FEE
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TRANSACTION VALUATION(1) AMOUNT OF FILING FEE
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$920,483.20 $184.10
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(1) For purposes of calculating the filing fee only. This amount is based upon
the purchase of 9,204,832 shares of common stock of the Issuer at $0.10 in
cash per share. The amount of the filing fee, calculated in accordance
with Rule 0-11(c)(1) of the Securities Exchange Act of 1934, equals 1/50th
of one percent of the proposed cash payment to the holders of the common
stock.
[X] Check box if any part of the fee is offset as provided by Rule O-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: $184.10 Filing Party: Megamation Inc.
Form or Registration no.: Schedule 14A Date Filed: May 22, 1996
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This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the
"Statement") relates to an Agreement and Plan of Merger dated as of March 19,
1996 and a First Amendment to Agreement and Plan of Merger dated as of May 10,
1996 (the "Merger Agreement") by and between Megamation Inc., a Delaware
corporation (the "Company"), and MI Merger Corp. a Delaware corporation
("MergerCo"), pursuant to which, among other things, (a) MergerCo will be merged
with and into the Company with the Company being the surviving corporation (the
"Surviving Corporation"), (b) each outstanding share of common stock, par value
$.01 per share (the "Common Shares"), of the Company (except those Common Shares
held by the Company as treasury stock, owned by MergerCo or held by persons who
perfect their dissenters' rights under Delaware law) will be converted into the
right to receive $.10 in cash, without interest, subject to applicable back-up
withholding taxes, (c) each outstanding Common Share held by MergerCo or by the
Company as treasury stock will be canceled without consideration, and (d) each
outstanding share of MergerCo common stock will be converted into one share of
common stock of the Surviving Corporation. This Statement is being filed by the
Company, MergerCo and Tristram C. Colket, Jr. and Max Cooper, the sole
stockholders of MergerCo and currently the largest stockholders and sole members
of the Company's Board of Directors.
The Company has filed its Preliminary Proxy Statement with the
Securities and Exchange Commission contemporaneously herewith in connection with
the Company's Special Meeting of Stockholders called for the purpose of
considering and voting upon the proposal to approve and adopt the Merger
Agreement (the "Proxy Statement"), which Proxy Statement is listed (but not
attached) as Exhibit (d)(1) hereto. The cross reference sheet below is being
supplied pursuant to Instruction F to Schedule 13E-3 and shows the location in
the Proxy Statement to the information required to be included in response to
the items of this Statement. The information in the Proxy Statement, including
all exhibits thereto, is hereby expressly incorporated herein by reference.
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CROSS REFERENCE SHEET
SCHEDULE 13E-3 ITEM LOCATION IN PROXY STATEMENT
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Item 1(a).......................... *
Item 1(b).......................... "INTRODUCTION," "SUMMARY--The Special
Meeting," "THE MEETING; MECHANICS OF VOTING
AND PROXIES" and "MARKET PRICE AND
STOCKHOLDER INFORMATION"
Item 1(c).......................... "SUMMARY--The Merger" and "MARKET PRICE AND
STOCKHOLDER INFORMATION"
Item 1(d).......................... "SUMMARY--Special Factors," "SPECIAL
FACTORS--Certain Effects of the Merger" and
"MARKET PRICE AND STOCKHOLDER INFORMATION"
Item 1(e).......................... **
Item 1(f).......................... "PURCHASES OF COMMON SHARES BY AND OTHER
TRANSACTIONS WITH CERTAIN PERSONS"
Item 2(a)-(d) and (g).............. "INTRODUCTION" and "SUMMARY --The Parties"
Item 2(e)-(f)...................... *
Item 3(a)(1)....................... "SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Conflict of Interests of
Principal Stockholders in the Merger" and
"PURCHASES OF COMMON SHARES BY
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AND OTHER TRANSACTIONS WITH CERTAIN
PERSONS"
Item 3(a)(2)....................... "INTRODUCTION," "SUMMARY--Special Factors,"
"SUMMARY--The Merger," "SPECIAL FACTORS--
Background of the Merger," "SPECIAL
FACTORS--Purpose of and Reasons for the
Merger," "THE MERGER AGREEMENT," EXHIBIT A-
1--"AGREEMENT AND PLAN OF MERGER," EXHIBIT
A-2--"FIRST AMENDMENT TO AGREEMENT AND PLAN
OF MERGER"
Item 3(b).......................... "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SPECIAL FACTORS--
Background of the Merger," "SPECIAL
FACTORS--Purpose of and Reasons for the
Merger," "SPECIAL FACTORS--Conflict of
Interests of Principal Stockholders in the
Merger," "CERTAIN INFORMATION REGARDING THE
BUSINESS OF THE COMPANY; RECENT
DEVELOPMENTS" and "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Item 4(a).......................... "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL
FACTORS--Purpose Of And Reasons For The
Merger," "SPECIAL FACTORS--Certain Income
Tax Consequences of the Merger," "SPECIAL
FACTORS--Estimated Fees and Expenses;
Sources of Funds," "THE MERGER AGREEMENT,"
EXHIBIT A-1--"AGREEMENT AND PLAN OF
AGREEMENT," EXHIBIT A-2--"FIRST AMENDMENT
TO AGREEMENT AND PLAN OF MERGER"
Item 4(b).......................... "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Purpose of and Reasons
for the Merger," "SPECIAL FACTORS--Conflict
of Interests of Principal Stockholders in
the Merger," "SPECIAL FACTORS--Certain
Effects of the Merger," "THE MERGER
AGREEMENT--General," "THE MERGER AGREEMENT-
-Surviving Corporation," "THE MERGER
AGREEMENT--Consideration to be Paid to
Public Stockholders; Conversion of Common
Shares," "CERTAIN INFORMATION REGARDING THE
BUSINESS OF THE COMPANY; RECENT
DEVELOPMENTS," "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,"
EXHIBIT A-1--"AGREEMENT AND PLAN OF
MERGER,"
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EXHIBIT A-2--"FIRST AMENDMENT TO AGREEMENT
AND PLAN OF MERGER"
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Item 5(a)--(g)...................... "SUMMARY--The Merger," "SUMMARY--Special
Factors," "SPECIAL FACTORS--Background of
the Merger," "SPECIAL FACTORS--
Determination of Fairness of the Merger by
the Board of Directors," "SPECIAL FACTORS--
Certain Effects of the Merger," "SPECIAL
FACTORS--Future Plans of the Company," "THE
MERGER AGREEMENT--The Surviving
Corporation," EXHIBIT A-1--"AGREEMENT AND
PLAN OF MERGER" and EXHIBIT A-2--"FIRST
AMENDMENT TO AGREEMENT AND PLAN OF MERGER"
Item 6(a)--(b)...................... "SUMMARY--The Merger," "SPECIAL FACTORS--
Background of the Merger," "SPECIAL
FACTORS--Certain Effects of the Merger,"
"SPECIAL FACTORS--Future Plans for the
Company" and "SPECIAL FACTORS--Estimated
Fees and Expenses; Sources of Funds."
Item 6(c)--(d)...................... **
Item 7(a) and (c)................... INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Purpose of and Reasons
for the Merger," "SPECIAL FACTORS--
Determination of Fairness of the Merger by
the Board of Directors," "SPECIAL FACTORS--
Financial Advisor to the Principal
Stockholders," "SPECIAL FACTORS--Certain
Effects of the Merger" and "CERTAIN
INFORMATION REGARDING THE BUSINESS OF THE
COMPANY; RECENT DEVELOPMENTS."
Item 7(b)........................... "SPECIAL FACTORS--Background of the
Merger," "SPECIAL FACTORS--Purpose of and
Reasons for the Merger," "SPECIAL FACTORS--
Determination of Fairness of the Merger by
the Board of Directors."
Item 7(d)........................... "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Purpose of and Reasons
for the Merger," "SPECIAL FACTORS--
Determination of Fairness of the Merger by
the Board of Directors," "SPECIAL FACTORS--
Conflict of Interests of Principal
Stockholders in the Merger," "SPECIAL
FACTORS--Certain Effects of the Merger,"
"SPECIAL FACTORS--Future Plans of the
Company," "SPECIAL FACTORS--Certain Federal
Income Tax Consequences of the Merger,"
"SPECIAL FACTORS--Estimated Fees and
Expenses;
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Sources of Funds," "SPECIAL FACTORS--
Accounting Treatment of the Merger," "THE
MERGER AGREEMENT--The Surviving
Corporation," "THE MERGER AGREEMENT--
Consideration to be Paid to Public
Stockholders of the Company; Conversion of
Common Shares" EXHIBIT A--1"AGREEMENT AND
PLAN OF MERGER" and EXHIBIT A-2--"FIRST
AMENDMENT TO AGREEMENT AND PLAN OF MERGER."
Item 8(a)--(b)..................... "SUMMARY--Special Factors," "SPECIAL
FACTORS--Determination of Fairness of the
Merger by the Board of Directors."
"SPECIAL FACTORS--Position of Principal
Stockholders as to Fairness"
Item 8(c).......................... "SUMMARY--The Merger," "SUMMARY--Special
Factors," "SPECIAL FACTORS--Purposes and
Reasons for the Merger," "THE MEETING;
MECHANICS OF VOTING AND PROXIES," "THE
MERGER AGREEMENT," EXHIBIT A-1
--"AGREEMENT AND PLAN OF MERGER" and
EXHIBIT A-2--"FIRST AMENDMENT TO THE
AGREEMENT OF PLAN AND MERGER."
Item 8(d).......................... "SUMMARY--Special Factors," "SPECIAL
FACTORS"--Background of the Merger,"
"SPECIAL FACTORS--Determination of Fairness
of the Merger by the Board of
Directors,"SPECIAL FACTORS--Opinion of TM
Capital; Summary of Financial Analyses" and
EXHIBIT H--"OPINION OF FINANCIAL ADVISOR."
Item 8(e).......................... "SUMMARY," "SPECIAL FACTORS--Background of
the Merger," "SPECIAL FACTORS--
Determination of Fairness of the Merger by
the Board of Directors" and "SPECIAL
FACTORS--Conflict of Interests of the Board
of Directors."
Item 8(f).......................... **
Item 9(a)-(c)...................... "SUMMARY--The Merger," "SUMMARY--Special
Factors," "SPECIAL FACTORS--Background of
the Merger," "SPECIAL FACTORS -
Determination of Fairness of the Merger by
the Board of Directors," "SPECIAL FACTORS--
Opinion of TM Capital; Summary of Financial
Analyses," "SPECIAL FACTORS--Financial
Advisor to the Principal Stockholders,"
"SPECIAL FACTORS--Certain Federal Income
Tax Consequences of the Merger," and
EXHIBIT H--"OPINION OF FINANCIAL ADVISOR."
Item 10(a)......................... "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SUMMARY--Special
Factors," "SPECIAL FACTORS--
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Background of the Merger," "SPECIAL
FACTORS--Purpose of and Reasons for the
Merger," "SPECIAL FACTORS--Conflict of
Interests of Principal Stockholders in the
Merger," "CERTAIN INFORMATION REGARDING THE
BUSINESS OF THE COMPANY; RECENT
DEVELOPMENTS," "PURCHASES OF COMMON SHARES
BY AND OTHER TRANSACTIONS WITH CERTAIN
PERSONS" and "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
Item 10(b)......................... "PURCHASES OF COMMON SHARES BY AND OTHER
TRANSACTIONS WITH CERTAIN PERSONS"
Item 11............................ "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SUMMARY--Special
Factors," "SPECIAL FACTORS--Background of
the Merger," "SPECIAL FACTORS--Purpose of
and Reasons for the Merger," "SPECIAL
FACTORS--Conflict of Interests of Principal
Stockholders in the Merger," "SPECIAL
FACTORS--Future Plans of the Company,"
"SPECIAL FACTORS--Certain Effects of the
Merger," "CERTAIN INFORMATION REGARDING THE
BUSINESS OF THE COMPANY; RECENT
DEVELOPMENTS" and "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Item 12(a)......................... "INTRODUCTION," "SUMMARY--The Special
Meeting," SUMMARY--The Merger," "SUMMARY--
Special Factors," "SPECIAL FACTORS--
Background of the Merger," "SPECIAL
FACTORS--Purpose of and Reasons for the
Merger," "SPECIAL FACTORS--Conflict of
Interests of Principal Stockholders in the
Merger" and "THE MEETING; MECHANICS OF
VOTING AND PROXIES."
Item 12(b)......................... "SUMMARY--Special Factors" and "SPECIAL
FACTORS--Determination of Fairness of the
Merger by the Board of Directors,"
Item 13(a)......................... "INTRODUCTION," "SUMMARY--Special Factors,"
"SPECIAL FACTORS--Dissenters' Rights of
Appraisal" and "EXHIBIT I--DISSENTERS'
RIGHTS UNDER SECTION 262 OF THE DGCL."
Item 13(b)-(c)..................... **
Item 14(a)......................... "SELECTED FINANCIAL DATA" and EXHIBITS B-1,
B-2, B-3, C, E-1, E-2, AND G, the Company's
"Annual Report on Form 10-K for the Year
Ended June 30, 1995," "Amendment No.
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1 to Annual Report on Form 10-K for Year
Ended June 30, 1995," "Amendment No. 2 to
the Annual Report on Form 10-K for Year
Ended June 30, 1995," "Quarterly Report on
Form 10-Q for the Quarter Ended September
30, 1995" and "Quarterly Report on Form 10-
Q for the Quarter Ended December 31, 1995,"
"Amendment No. 1 to the Quarterly Report on
Form 10-Q for the Quarter Ended December
31, 1995," and "Quarterly Report on Form
10-Q for the Quarter Ended March 31, 1996,"
respectively.
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Item 14(b).......................... **
Item 15(a).......................... "INTRODUCTION," "SUMMARY--The Special
Meeting" and "THE MEETING; MECHANICS OF
VOTING AND PROXIES."
Item 15(b).......................... "INTRODUCTION"
Item 16............................. Proxy Statement
Item 17............................. *
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* Information is contained in this Statement.
** Not applicable
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The issuer of the class of equity securities which is the subject of
the Rule 13e-3 transaction is the Company. The address of the Company's
principal executive offices is 51 Everett Drive, Building #B4, Lawrenceville,
New Jersey 08648.
(b) The information set forth in "INTRODUCTION," "SUMMARY--The Special
Meeting," "THE MEETING; MECHANICS OF VOTING AND PROXIES" and "MARKET PRICE AND
STOCKHOLDER INFORMATION" in the Proxy Statement is incorporated herein by
reference.
(c) The information set forth in "SUMMARY--The Merger" and "MARKET PRICE
AND STOCKHOLDER INFORMATION" in the Proxy Statement is incorporated herein by
reference.
(d) The information set forth in "SUMMARY--Special Factors," "SPECIAL
FACTORS--Certain Effects of the Merger" and "MARKET PRICE AND STOCKHOLDER
INFORMATION" in the Proxy Statement is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in "PURCHASES OF COMMON SHARES BY AND OTHER
TRANSACTIONS WITH CERTAIN PERSONS" in the Proxy Statement is incorporated herein
by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This statement is being filed by the Company, the issuer
of the class of equity securities which is the subject of the Rule 13e-3
transaction, by MergerCo and by Messrs. Colket and Cooper. The information set
forth in "INTRODUCTION" and "SUMMARY--The Parties" in the Proxy Statement is
incorporated herein by reference.
(e)-(f) None of the Company, MergerCo or Messrs. Colket or Cooper has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining further violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS TRANSACTIONS OR NEGOTIATIONS.
(a)(1) The information set forth in "SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Conflict of Interests of
Principal Stockholders in the Merger" and "PURCHASES OF COMMON SHARES BY AND
OTHER TRANSACTIONS WITH CERTAIN PERSONS" of the Proxy Statement is incorporated
herein by reference.
(a)(2) The information, set forth in "INTRODUCTION," "SUMMARY--The
Merger," "SUMMARY--Special Factors," "SPECIAL FACTORS--Background of the
Merger," "SPECIAL FACTORS--Purpose and Reasons for the Merger," "THE MERGER
AGREEMENT," EXHIBIT A-1--"AGREEMENT AND PLAN OF MERGER" and EXHIBIT A-2--"FIRST
AMENDMENT TO AGREEMENT AND PLAN OF MERGER" of the Proxy Statement is
incorporated herein by reference.
(b) The information set forth in "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SPECIAL FACTORS--Background of the Merger," "SPECIAL
FACTORS--Purpose of and Reasons
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for the Merger," "SPECIAL FACTORS--Conflict of Interests of Principal
Stockholders in the Merger," "CERTAIN INFORMATION REGARDING THE BUSINESS OF THE
COMPANY; RECENT DEVELOPMENTS" and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT" of the Proxy Statement is incorporated herein by
reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL FACTORS--Purpose of and Reasons for the
Merger," "SPECIAL FACTORS--Certain Income Tax Consequences of the Merger,"
"Special Factors--Estimated Fees and Expenses; Sources of Funds" and "THE MERGER
AGREEMENT" of the Proxy Statement is incorporated herein by reference.
(b) The information set forth in "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Purpose of and Reasons for the Merger," "SPECIAL FACTORS--
Conflict of Interests of Principal Stockholders in the Merger," "SPECIAL
FACTORS--Certain Effects of the Merger," "THE MERGER AGREEMENT--General," "THE
MERGER AGREEMENT--Consideration to be Paid to Public Stockholders; Conversion of
Common Shares," "CERTAIN INFORMATION REGARDING THE BUSINESS OF THE COMPANY;
RECENT DEVELOPMENTS," "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT," EXHIBIT A-1--"AGREEMENT AND PLAN OF MERGER," and EXHIBIT A-2--
"FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER" of the Proxy Statement is
incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(g) The information set forth in "SUMMARY--Special Factors," "SUMMARY-
- - -The Merger," "SPECIAL FACTORS--Background of the Merger," "SPECIAL FACTORS--
Certain Effects of Merger," "SPECIAL FACTORS--Future Plans of the Company," "THE
MERGER AGREEMENT--The Surviving Corporation," and EXHIBIT A-1--"AGREEMENT AND
PLAN OF MERGER" and EXHIBIT A-2--"FIRST AMENDMENT TO AGREEMENT AND PLAN OF
MERGER" of the Proxy Statement is incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "SUMMARY--The Merger," "SUMMARY--
Special Factors," "SPECIAL FACTORS--Background of the Merger," "SPECIAL FACTORS-
- - -Certain Effects of the Merger," "SPECIAL FACTORS--Future Plans of the Company"
and "SPECIAL FACTORS--Estimated Fees and Expenses; Sources of Funds" of the
Proxy Statement is incorporated herein by reference.
(c)-(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) and (c) The information set forth in "INTRODUCTION," "SUMMARY--The
Merger," "SUMMARY--Special Factors," "SPECIAL FACTORS--Background of the
Merger," "SPECIAL FACTORS--Purpose of and Reasons for the Merger," "SPECIAL
FACTORS--Determination of Fairness of the Merger by the Board of Directors,"
"SPECIAL FACTORS--Financial Advisor to the Principal Stockholders," "SPECIAL
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FACTORS--Certain Effects of the Merger" and "CERTAIN INFORMATION REGARDING THE
BUSINESS OF THE COMPANY; RECENT DEVELOPMENT" of the Proxy Statement is
incorporated herein by reference.
(b) The information set forth in "SPECIAL FACTORS--Background of the
Merger," "SPECIAL FACTORS--Determination of Fairness of the Merger by the Board
of Directors" and "SPECIAL FACTORS--Purpose of and Reasons for the Merger" of
the Proxy Statement is incorporated herein by reference.
(d) The information set forth in "INTRODUCTION," "SUMMARY--The Merger,"
"SUMMARY--Special Factors," "SPECIAL FACTORS--Background of the Merger,"
"SPECIAL FACTORS--Purpose of and Reasons for the Merger," "SPECIAL FACTORS--
Conflict of Interests of Principal Stockholders in the Merger," "SPECIAL
FACTORS--Certain Effects of the Merger," "SPECIAL FACTORS--Future Plans of the
Company," "SPECIAL FACTORS--Certain Federal Income Tax Consequences of the
Merger," "SPECIAL FACTORS--Estimated Fees and Expenses; Source of Funds,"
"SPECIAL FACTOR--Accounting Treatment of the Merger," "THE MERGER AGREEMENT--
General," "THE MERGER AGREEMENT--The Surviving Corporation," "THE MERGER
AGREEMENT--Consideration to be Paid to Public Stockholders of the Company,"
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT," EXHIBIT A-1--
"AGREEMENT AND PLAN OF MERGER," and EXHIBIT A-2--"FIRST AMENDMENT TO AGREEMENT
AND PLAN OF MERGER" of the Proxy Statement is incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)--(b) The information set forth in "SUMMARY--Special Factors," "SPECIAL
FACTORS--Determinations of the Fairness of the Merger by the Board of Directors"
and "SPECIAL FACTORS--Position of Principal Stockholders as to Fairness" of the
Proxy Statement is incorporated herein by reference.
(c) The information set forth in "SUMMARY--The Merger," "SUMMARY--Special
Meeting," "SPECIAL FACTORS--Purpose of and Reasons for the Merger," "THE MERGER
AGREEMENT" "THE MEETING; MECHANICS OF VOTING AND PROXIES", EXHIBIT A--"AGREEMENT
AND PLAN OF MERGER" and EXHIBIT A-2--"FIRST AMENDMENT TO AGREEMENT AND PLAN OF
MEMBER,"of the Proxy Statement is incorporated herein by reference.
(d) The Board of Directors has not retained an unaffiliated representative
to act solely on behalf of unaffiliated security holders for the purposes of
negotiating the terms of the Rule 13e-3 transaction but has retained TM Capital
Corp. for the purpose of rendering an opinion with respect to the fairness of
the Merger Consideration, from a financial point of view, to the Public
Stockholders. The information set forth in "SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Determination of Fairness
of the Merger by the Board of Directors," "SPECIAL FACTORS--Opinion of TM
Capital; Summary of Financial Analyses" and EXHIBIT H--"OPINION OF FINANCIAL
ADVISOR" of Proxy Statement is incorporated herein by reference.
(e) The information set forth in "SUMMARY--Special Factors," "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Determination of the
Fairness of the Merger by the Board" and "SPECIAL FACTORS--Conflict of Interests
of the Board of Directors" of the Proxy Statement is incorporated herein by
reference.
(f) Not applicable.
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ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)--(c) The information set forth in "SUMMARY--The Merger," "SUMMARY--
Special Factors," "SPECIAL FACTORS--Background of the Merger," "SPECIAL FACTORS-
- - -Determination of Fairness of the Merger by the Board of Directors," "SPECIAL
FACTORS--Opinion of TM Capital; Summary of Financial Analyses," "SPECIAL
FACTORS--Financial Advisor to the Principal Stockholders," "SPECIAL FACTORS--
Certain Federal Income Tax Consequences of the Merger," and EXHIBIT H--"OPINION
OF FINANCIAL ADVISOR" of the Proxy Statement is incorporated herein by
reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SUMMARY--Special Factors," "SPECIAL FACTORS--Background
of the Merger," "SPECIAL FACTORS--Purpose of and Reasons for the Merger,"
"SPECIAL FACTORS--Conflict of Interests of Principal Stockholders in the
Merger," "CERTAIN INFORMATION REGARDING THE BUSINESS OF THE COMPANY; RECENT
DEVELOPMENTS," "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT"
and "PURCHASES OF COMMON SHARES BY AND OTHER TRANSACTIONS WITH CERTAIN PERSONS"
of the Proxy Statement is incorporated herein by reference.
(b) The information set forth in "PURCHASES OF COMMON SHARES AND OTHER
TRANSACTIONS WITH CERTAIN PERSONS" of the Proxy Statement is incorporated herein
by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth in "INTRODUCTION," "SUMMARY--The Parties,"
"SUMMARY--The Merger," "SUMMARY--Special Factors," "SPECIAL FACTORS--Background
of the Merger," "SPECIAL FACTORS--Purpose of and Reasons for the Merger,"
"SPECIAL FACTORS--Conflict of Interests of Principal Stockholders in the
Merger," "SPECIAL FACTORS--Certain Effects of the Merger," "SPECIAL FACTORS--
Future Plans of the Company," "CERTAIN INFORMATION REGARDING THE BUSINESS OF THE
COMPANY; RECENT DEVELOPMENTS" and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT" of the Proxy Statement is incorporated herein by
reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSON WITH REGARD TO
THE TRANSACTION.
(a) The information set forth in "INTRODUCTION," "SUMMARY--The Special
Meeting," "SUMMARY--The Merger," "SUMMARY--Special Factors," "SPECIAL FACTORS--
Background of the Merger," "SPECIAL FACTORS--Purpose of and Reasons for the
Merger," "SPECIAL FACTORS--Conflict of Interests of Principal Stockholders in
the Merger" and "THE MEETING; MECHANICS OF VOTING AND PROXIES--Required Vote,"
of the Proxy Statement is incorporated herein by reference.
(b) The information set forth in "SUMMARY--Special Factors" and "SPECIAL
FACTORS--Determination of Fairness of the Merger by the Board of Directors" of
the Proxy Statement is incorporated herein by reference.
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<PAGE>
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "INTRODUCTION," "SUMMARY--Special
Factors," "SPECIAL FACTORS--Dissenters Rights' of Appraisal" and EXHIBIT I--
"DISSENTERS' RIGHTS UNDER SECTION 262 OF THE DGCL" of the Proxy Statement is
incorporated herein by reference.
(b) Such provision has not been made.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in "SELECTED FINANCIAL DATA" of the Proxy
Statement and EXHIBITS B-1, B-2, B-3, C, E-1, E-2, and G--the Company's "Annual
Report on Form 10-K for the year ended June 30, 1995," "Amendment No. 1 to the
Annual Report on Form 10-K for the Year Ended June 30, 1995," "Amendment No. 2
to the Annual Report on Form 10-K for the Year Ended June 10, 1995," "Quarterly
Report on Form 10-Q for the Quarter ended September 30, 1995," "Quarterly Report
on Form 10-Q for the Quarter ended December 31, 1995," and "Amendment No. 1 to
the Quarterly Report Form 10-Q for the Quarter Ended December 31, 1995," and
"Quarterly Report on Form 10-Q for the Quarter ended March 31, 1996,"
respectively, to the Proxy Statement is incorporated herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in "INTRODUCTION," "SUMMARY--The Special
Meeting" and "THE MEETING; MECHANICS OF VOTING AND PROXIES" of the Proxy
Statement is incorporated herein by reference.
(b) Not applicable.
ITEM 16. ADDITIONAL INFORMATION.
The information set forth in the Proxy Statement is incorporated hereby by
reference in its entirety.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(b)(1) Opinion of TM Capital (attached as EXHIBIT H to the Proxy
Statement).
(b)(2) Report of TM Capital dated March 19, 1996.
(b)(3) Report of Howard, Lawson dated March 15, 1996.
(b)(4) Opinion of Pepper, Hamilton & Scheetz dated May 20, 1996.
(c)(1) Agreement and Plan of Merger dated as of March 19, 1996 by and
between the Company and MergerCo (attached as EXHIBIT A-1 to the Proxy
Statement).
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<PAGE>
(c)(2) Durable Power of Attorney and Proxy by Rose Fivelson appointing Max
Cooper as proxy and attorney in fact.
(c)(3) Durable Power of Attorney and Proxy by Scott Fivelson appointing Max
Cooper as proxy and attorney in fact.
(c)(4) Durable Power of Attorney and Proxy by Edward Jacobson appointing
Max Cooper as proxy and attorney in fact.
(c)(5) Durable Power of Attorney and Proxy by Sarah Jacobson appointing Max
Cooper as proxy and attorney in fact.
(c)(6) Durable Power of Attorney and Proxy by Kenneth E. Neuman appointing
Max Cooper as proxy and attorney in fact.
(c)(7) Durable Power of Attorney and Proxy by Shirley Neuman appointing Max
Cooper as proxy and attorney in fact.
(c)(8) Durable Power of Attorney and Proxy by Steven Neuman appointing Max
Cooper as proxy and attorney in fact.
(c)(9) First Amendment to Agreement and Plan of Merger dated as of May
10, 1996 by and between the Company and MergerCo (attached as
Exhibit A-2 to the Proxy Statement).
(d)(1) Definitive Proxy Statement dated May 22, 1996 (filed
separately).
(d)(2) Notice of Special Meeting of Stockholders (included with Proxy
Statement).
(d)(3) Proxy Card (included with Proxy Statement).
(d)(4) Press Release issued by the Company on March 19, 1996.
(d)(5) President's Letter to Stockholders (included with Proxy Statement).
(d)(6) Press Release issued by the Company on May 8, 1996.
(e) Text of Section 262 of the Delaware General Corporation Law (attached
as EXHIBIT I to the Proxy Statement).
(f) Not applicable.
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<PAGE>
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.
MEGAMATION INC.
By: /s/ Edward Borkowski
-------------------------------
Name: Edward Borkowski
Title: President
May 22, 1996
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<PAGE>
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.
MI MERGER CORP.
By: /s/ Tristram C. Colket, Jr.
--------------------------------
Name: Tristram C. Colket, Jr.
Title: Chief Executive Officer
May 22, 1996
-15-
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
By: /s/ Tristram C. Colket, Jr.
-------------------------------
Name: Tristram C. Colket, Jr.
May 22, 1996
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<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
By: /s/ Max Cooper
-----------------------------
Max Cooper
May 22, 1996
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<PAGE>
INDEX TO EXHIBIT
----------------
Exhibit No. Description
- - ----------- -----------
(b)(1) Opinion of TM Capital (attached as Exhibit H to the Proxy
Statement).
(b)(2) Report of TM Capital dated March 19, 1996.
(b)(3) Report of Howard, Lawson dated March 15, 1996.
(b)(4) Opinion of Pepper, Hamilton & Scheetz dated May 20, 1996.
(c)(1) Agreement and Plan of Merger dated as of March 19, 1996 by and
between the Company and MergerCo (attached as EXHIBIT A-1 to
the Proxy Statement).
(c)(2) Durable Power of Attorney and Proxy by Rose Fivelson
appointing Max Cooper as proxy and attorney in fact.
(c)(3) Durable Power of Attorney and Proxy by Scott Fivelson
appointing Max Cooper as proxy and attorney in fact.
(c)(4) Durable Power of Attorney and Proxy by Edward Jacobson
appointing Max Cooper as proxy and attorney in fact.
(c)(5) Durable Power of Attorney and Proxy by Sarah Jacobson
appointing Max Cooper as proxy and attorney in fact.
(c)(6) Durable Power of Attorney and Proxy by Kenneth E. Neuman
appointing Max Cooper as proxy and attorney in fact.
(c)(7) Durable Power of Attorney and Proxy by Shirley Neuman
appointing Max Cooper as proxy and attorney in fact.
(c)(8) Durable Power of Attorney and Proxy by Steven Neuman
appointing Max Cooper as proxy and attorney in fact.
(c)(9) First Amendment to Agreement and Plan of Merger dated as of
May 10, 1996 by and between the Company and MergerCo (attached
as Exhibit A-2 to the Proxy Statement).
(d)(1) Definitive Proxy Statement dated May 22, 1996 (filed
separately).
Statement).
(d)(3) Proxy Card (included with Proxy Statement).
(d)(4) Press Release issued by the Company on March 19, 1996.
(d)(5) President's letter to Stockholders (included with Proxy
Statement.)
(d)(6) Press Release Issued by the Company on May 7, 1996.
(e) Text of Section 262 of the Delaware General Corporation Law
(attached as Exhibit I to the Proxy Statement).
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<PAGE>
EXHIBIT (b)(4)
[LETTERHEAD OF PEPPER, HAMILTON & SCHEETZ APPEARS HERE]
WRITER'S DIRECT NUMBER
(215)981-4362
May 20, 1996
Megamation Inc.
51 Everett Drive #B4
Lawrenceville, NJ 08648
Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the proposed merger (the "Merger") of MI Merger Corp.
("Mergerco"), a Delaware corporation and Megamation Inc., a Delaware corporation
(the "Company"). The terms of the merger are contained in the Agreement and
Plan of Merger dated as of March 19, 1996 and the First Amendment to the
Agreement and Plan of Merger dated as of May 10, 1996 (the "Plan of Merger").
Terms not otherwise defined in this letter shall have the meanings assigned to
them in the Plan of Merger.
You have directed us to assume in preparing this opinion that (1) the
Merger will be consummated in accordance with the terms, conditions and other
provisions of the Plan of Merger, and (2) all of the factual information,
descriptions, representations and assumptions set forth in the proxy statement
pertaining to the Merger (the "Statement") as filed with the Securities &
Exchange Commission, are accurate and complete and will be accurate and complete
at the time the Merger becomes effective (the "Effective Time"). We have not
independently verified any factual matters relating to the Merger in connection
with our preparation of this opinion and, accordingly, our opinion does not take
into account any matters not set forth herein which might have been disclosed by
independent verifications.
I. PARTIES TO THE MERGER
1. Megamation
----------
Megamation was incorporated in Delaware in 1985. Its principal
executive offices are located at 51 Everett Drive,
<PAGE>
PEPPER, HAMILTON & SCHEETZ
Megamation, Incorporated
Page 2
May 20, 1996
Building #B4, Lawrenceville, New Jersey 08648. Megamation designs, develops,
manufactures, markets and services programmable, flexible, single and multiple
tool, automation work cells designed to help customers improve manufacturing and
materials handling processes by performing more work in less space, more safely
than by traditional work methods.
2. Mergerco
--------
Mergerco is a Delaware corporation recently organized solely for the
purposes of facilitating, by virtue of the merger, the acquisition by Mr. Max
Cooper and Mr. Tristram C. Colket, Jr. (the "Principal Shareholders") of the
Public Shares of the Company. Mergerco will not have any assets (other than the
minimum assets required for state law capitalization purposes) or liabilities or
engage in any activities other than those incident to its formation and
capitalization and the Merger. Mergerco will cease to exist upon the
consummation of the Merger. Mergerco's address is c/o Teckloc Enterprises, 500
Chester Field Parkway, Suite 170, Malvern, Pennsylvania 19355.
II. THE MERGER
Pursuant to the Plan of Merger, Mergerco will be merged with and into
Megamation and Megamation will be the surviving corporation. Megamation will
succeed to all the rights and obligations of Megamation and Mergerco. Upon
consummation of the Merger, each Public Share, other than Public Shares as to
which dissenters rights have been perfected under the DCGL, will be converted
into the right to receive the Merger Consideration of $.10 in cash, subject to
backup withholding taxes, if applicable, payable to the holder thereof, without
interest thereon, upon surrender of the certificate representing each Public
Share. Following the Merger, the Principal Shareholders will own 100% of
Megamation's outstanding shares of common stock. At such time, the holders of
the Public Shares, including the holders of the Cooper affiliate shares (the
"Public Stockholders") will cease to have any ownership interest in the Company
or rights as stockholders.
Shareholders of record of Megamation common stock have the right under
the DCGL to dissent from the Merger and may exercise appraisal rights provided
they comply with the conditions established by the DCGL. Shareholders of
Megamation who comply with the requirements of the DCGL may elect to receive the
fair cash value of their shares of Megamation stock.
<PAGE>
PEPPER, HAMILTON & SCHEETZ
Megamation, Incorporated
Page 3
May 20, 1996
The actions to be undertaken at the Effective Time are those outlined
in the Plan of Merger.
III. REPRESENTATIONS AND ASSUMPTIONS
We have relied with your permission on the following representations
and/or assumptions:
1. Mergerco was organized by the Principal Shareholders under the
laws of Delaware solely in order to effect the Merger.
2. Mergerco has not engaged in any activities other than those
incident to its formation.
3. Mergerco has been formed and the Merger will be effected for the
purpose of the acquisition by the Principal Shareholders of the Public Shares of
the Company.
IV. OPINION
Assuming that the Merger is consummated in accordance with the terms
and conditions set forth in the Plan of Merger and based on the facts,
assumptions and representations set forth in this letter and subject to the
qualifications and other matters set forth herein, it is our opinion that:
. The receipt of cash for Common Shares pursuant to the Merger will
be a taxable transaction for federal income tax purposes under
the Code, and also may be a taxable transaction under applicable
state, local, foreign and other tax laws,
. In general, for federal income tax purposes a stockholder will
recognize gain or loss equal to the difference between the tax
basis for the Common Shares held by such stockholder and the
amount of cash received in exchange therefor. Such gain or loss
will be capital gain or loss if the Common Shares are capital
assets in the hands of the stockholder and will be long-term
capital gain or loss if the holding period for the Common Shares
is more than one year. As of the date of this Proxy Statement,
long-term capital gains recognized in 1996 by stockholders who
are individuals are taxable at a maximum statutory rate of 28%
(as compared with a maximum statutory
<PAGE>
PEPPER, HAMILTON & SCHEETZ
Megamation, Incorporated
Page 4
May 20, 1996
rate of 39.6% on ordinary income). Corporations generally are
subject to tax at a maximum statutory rate of 35% on both capital
gains and ordinary income. The distinction between capital gain
and ordinary income may be relevant for certain other purposes,
including the taxpayer's ability to utilize capital loss
carryovers to offset any gain recognized.
Our opinion is limited to the foregoing federal income tax
consequences of the Merger, which are the only matters as to which you have
requested our opinion. We have not addressed any other federal income tax
consequences of the Merger other than those specifically set forth herein, and
we have not considered any matters (including state or local tax consequences)
arising under the laws of any jurisdiction other than matters of federal law
arising under the laws of the United States as expressly set forth herein.
Our opinion is based on the understanding that the relevant facts are,
and will be at the Effective Time, as set forth or referred to in this letter.
If this understanding is incorrect or incomplete in any respect, our opinion
could be affected.
Our opinion is based upon existing law, including the provisions of
the Code, Treasury Regulations promulgated thereunder, current administrative
rulings and practices of the Internal Revenue Service, case law, and judicial
decisions interpreting the same, none of which squarely addresses every precise
factual circumstance present in the connection with the Merger but all of which,
taken together, in our opinion provide a sufficient legal basis for our opinions
set forth herein.
In addition, the authorities upon which we have relied are all subject
to change and such change may be made with retroactive effect. We are under no
obligation to update this opinion at any future time nor render any further
opinion to you.
This opinion has been provided to Megamation and Mergerco with
respect to the Merger.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to Megamation's Schedule 13E-3
Transaction Statement and to the reference to our firm under the headings
"Summary--Certain Federal Income Tax Consequences" and "Certain Federal Income
Tax Consequences of the
<PAGE>
PEPPER, HAMILTON & SCHEETZ
Megamation, Incorporated
Page 5
May 20, 1996
Merger" in the Proxy Statement. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ
/s/ Joan C. Arnold
__________________________________
Joan C. Arnold, a Partner
