<PAGE> 1
EXHIBIT (a)(1)
PRELIMINARY COMMUNICATION
SUBJECT TO COMPLETION
TEAM AMERICA CORPORATION
OFFER TO PURCHASE FOR CASH UP TO
________ OF ITS COMMON SHARES
AT A PURCHASE PRICE OF
$6.75 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRES AT 12:00 P.M.,
EASTERN STANDARD TIME, ON ___________, ___________ __, 2000, UNLESS THE OFFER IS
EXTENDED.
TEAM America Corporation, an Ohio corporation, (the "Company"), hereby
offers to purchase from its shareholders common shares, without par value (the
"Shares"), of the Company at $6.75 per Share, net to the seller in cash (the
"Purchase Price"), as specified by tendering shareholders, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to ____________ Shares
validly tendered and not withdrawn, representing a total purchase of up to 50%
of the outstanding shares of Company common stock on __________ ___, 2000,
pursuant to the offer. All Shares acquired in the Offer will be acquired at the
Purchase Price. In the event more than 50% of the outstanding Shares are validly
tendered and not withdrawn, the Company will accept for payment, and thereby
purchase, Shares on a pro rata basis (adjusted downward to avoid acceptance for
payment of fractional Shares) upon the terms and subject to the conditions of
the Offer. See Section 1 of "The Offer" herein. Shares not purchased because of
proration will be returned at the Company's expense.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF "THE OFFER" HEREIN.
The Shares are traded on the Nasdaq SmallCap Market ("Nasdaq") under the
symbol "TMAM." On June 16, 2000, the last full trading day prior to the
announcement of the Offer, the closing sales price per Share as reported on
Nasdaq was $4.00. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES. See Section 7 of "The Offer" herein.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. NEITHER THE
COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKE ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER THEIR SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT AS MANY
AS ___ DIRECTORS, ___ EXECUTIVE OFFICERS , AND ___ AFFILIATES CONTROLLED BY SUCH
PERSONS INTEND TO TENDER UP TO _____ SHARES PURSUANT TO THE OFFER. THE COMPANY,
HOWEVER, DOES NOT KNOW AT THIS TIME THE ACTUAL TOTAL NUMBER OF SHARES THAT SUCH
PERSONS WILL TENDER PURSUANT TO THE OFFER. SEE SECTION 10 OF "THE OFFER" HEREIN.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Company at the address and telephone numbers set
forth on the back cover of this Offer to Purchase.
The date of this offer to purchase is _________, 2000.
<PAGE> 2
IMPORTANT
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
mail or deliver such Letter of Transmittal, together with any required signature
guarantee, and any other required documents to National City Bank (the
"Depositary"), at Corporate Trust Operations, Post Office Box 94720, Cleveland,
Ohio 44101-4720 (by mail) or Corporate Trust Operations, 3rd Floor North Annex,
4100 West 150th Street, Cleveland, Ohio 44135-1385 (by hand or overnight
delivery) or by facsimile at (216) 252-9163 (if delivery is to be made by an
Eligible Institution, which shall mean a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit
union, savings association or other entity which is an "eligible institution,"
as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended) and either mail or deliver the certificates for such tendered
Shares to the Depositary (together with any other documents required by the
Letter of Transmittal) or tender such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 of "The Offer" herein, or (b) request
a broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. Holders of Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee should contact
such person if they desire to tender their Shares. Any shareholder who desires
to tender Shares and whose certificates for such Shares are not immediately
available or cannot be delivered to the Depositary or who cannot comply with the
procedure for book-entry transfer or whose other required documents cannot be
delivered to the Depositary, in any case, by the expiration of the Offer must
tender such Shares pursuant to the guaranteed delivery procedure set forth in
Section 3 of "The Offer" herein.
TO VALIDLY TENDER SHARES, SHAREHOLDERS MUST COMPLETE AND EXECUTE THE LETTER OF
TRANSMITTAL AND THE DEPOSITARY MUST RECEIVE SUCH LETTER OF TRANSMITTAL NO LATER
THAN 12:00 P.M. ON _______ __, 2000.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE,
SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
2
<PAGE> 3
Table of Contents
<TABLE>
<CAPTION>
Section Page
<S> <C>
Summary Term Sheet ..................................................... 4
Introduction ........................................................... 8
The Merger Agreement ................................................... 9
The Offer .............................................................. 14
1. Number of Shares; Proration ...................................... 14
2. Purpose of the Offer; Certain Effects of the Offer ............... 16
3. Procedures for Tendering Shares .................................. 18
4. Withdrawal Rights ................................................ 21
5. Purchase of Shares and Payment of Purchase Price ................. 21
6. Certain Conditions of the Offer .................................. 22
7. Price Range of Shares ............................................ 24
8. Source and Amount of Funds ....................................... 25
9. Certain Information Concerning the Company ....................... 25
10. Interest of Directors and Officers and Principal Shareholders;
Transactions and Arrangements Concerning Shares .................. 26
11. Effects of the Offer on the Market for Shares .................... 27
12. Certain Legal Matters; Regulatory Approvals ...................... 28
13. Certain United States Federal Income Tax Consequences ............ 28
14. Extension of the Offer; Termination; Amendment ................... 29
15. Fees and Expenses ................................................ 30
16. Miscellaneous .................................................... 30
Further Information .................................................... 31
</TABLE>
3
<PAGE> 4
SUMMARY TERM SHEET
This general summary is provided for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase and the related Letter of
Transmittal.
The Company .............................. TEAM America Corporation, an Ohio
corporation, with principal
executive offices at 110 East
Wilson Bridge Road, Worthington,
Ohio 43085.
The Shares ............................... Shares of the Company's Common
Stock, no par value.
Number of Shares to be Purchased ......... ____________ Shares (or such lesser
number of Shares as are validly
tendered and not withdrawn),
representing a total of up to 50%
of the outstanding shares on
__________ ___, 2000 pursuant to
the Offer.
Purchase Price ........................... $6.75 per share, net to the seller
in cash. All Shares acquired in the
Offer will be acquired at the
Purchase Price.
Financing of the Offer ................... The Company will pay for Shares
purchased pursuant to the Offer
from a line of credit provided by
____________, with such funds to be
wired to the Depositary, which will
act as agent for tendering
shareholders for the purpose of
receiving payment from the Company
and transmitting payment to the
tendering shareholders.
Market Price of Shares ................... On October __, 2000, the closing
price of the Shares on the Nasdaq
SmallCap Market was $_.__ per
Share. See Section 7 of "The Offer"
herein.
Conditions to the Offer .................. The Offer is subject to certain
conditions, including the approval
of the Merger by TEAM America's
shareholders. See Section 6 of "The
Offer" herein.
How to Tender Shares ..................... For Shares to be validly tendered
pursuant to the Offer (a) the
certificates for such Shares (or
confirmation of receipt of such
Shares pursuant to the procedure
for book-entry transfer), together
with a properly completed and duly
executed Letter of Transmittal (or
a manually signed facsimile
thereof), including any required
signature guarantees, and any other
documents required by the Letter of
Transmittal, must be received by
the Expiration Time by the
Depositary at its address set forth
on the back cover of this Offer to
Purchase, or (b) the tendering
shareholder must comply with the
guaranteed delivery procedure. See
Section 3 of "The Offer" herein.
Call the Company at (614) 848-3995
or consult your broker for
assistance.
Brokerage Commissions .................... Tendering shareholders who hold
Shares in their own name and who
tender their Shares directly to the
Depositary will not be obligated to
pay brokerage commissions.
Shareholders holding Shares through
brokers or banks are urged to
consult the brokers or banks to
determine whether the transaction
costs are applicable if
shareholders tender Shares through
the brokers or banks and not
directly to the Depositary.
Stock Transfer Tax ....................... None, if payment is made to the
registered holder.
4
<PAGE> 5
Expiration Time .......................... 12:00 p.m., Eastern Standard Time,
on _______ __, 2000, the date set
for the Special Meeting of
Shareholders called for the purpose
of voting upon the Merger proposal,
at which time no additional shares
may be tendered or withdrawn,
unless the Offer is extended by the
Company.
Proration Date ........................... As soon as practicable after the
Expiration Time.
Payment Date ............................. As soon as practicable after the
consummation of the Merger, at
which time those shares which been
validly tendered and not withdrawn
will be accepted for payment
(subject to proration). See Section
1 of "The Offer" herein.
Position of the Company and its
Board of Directors ....................... Neither the Company nor its board
of directors makes any
recommendation to any shareholder
as to whether to tender or refrain
from tendering Shares.
Withdrawal Rights ........................ Tendered Shares may be withdrawn at
any time until the Expiration Time.
Additionally, if not yet accepted
for payment after the expiration of
forty business days from the
commencement of the Tender Offer,
shareholders may withdraw their
tendered shares. For a withdrawal
to be effective, a notice of
withdrawal must be in written form
and transmitted by mail, overnight
courier, hand-delivery, telegraph,
telex or facsimile and must be
received in a timely manner by the
Depositary at the address set forth
on the back cover of this Offer to
Purchase. Any such notice of
withdrawal must specify the name of
the tendering shareholder, the
number of Shares to be withdrawn
and the name of the registered
holder of such Shares. See Section
4 of "The Offer" herein.
Proration ................................ In the event more than 50% of the
outstanding Shares are validly
tendered and not withdrawn, the
Company will accept for payment,
and thereby purchase, Shares on a
pro rata basis (adjusted downward
to avoid acceptance for payment of
fractional Shares).
The Merger ............................... On June 16, 2000, the Company
entered into a definitive merger
agreement (the "Merger Agreement")
with Mucho.com, Inc., a Nevada
corporation ("Mucho"), and TEAM
Merger Corporation, a Nevada
Corporation and wholly owned
subsidiary of the Company ("Merger
Sub"), whereby Merger Sub will be
merged with and into Mucho and
Mucho will become a wholly owned
subsidiary of the Company.
The Merger Consideration ................. Pursuant to the Agreement, shares
of Mucho common stock, outstanding
options and warrants, are to be
converted into a total of 5,925,925
shares of Company common stock.
Upon consummation of the Merger,
former holders of Mucho common
stock, options and warrants will
hold approximately ____% of the
outstanding common stock of the
Company, exclusive of the 2,222,222
shares of the Merger Consideration
which shall be held in escrow until
certain conditions have been met.
If a total of 50% of the
outstanding shares are validly
tendered and accepted for payment
by the Company, then former holders
of Mucho common stock, options and
5
<PAGE> 6
warrants will hold approximately
____% of the outstanding common
stock of the Company.
Value of the Merger Consideration ........ The Company will issue a total of
5,925,925 shares of its common
stock for all of the outstanding
common stock and options of Mucho.
As of July 31, 2000, there were
38,224,581 fully diluted shares of
Mucho common stock outstanding.
Consequently, Mucho shareholders
will receive approximately 0.155
shares of TEAM America common stock
for each share of Mucho common
stock they hold. The total number
of shares of TEAM America common
stock to be distributed to Mucho
shareholders will not increase even
if Mucho issues additional stock or
options or other securities. If
Mucho were to issue additional
stock or options or other
securities, the number of TEAM
America shares each existing Mucho
shareholder receives would be
reduced accordingly. TEAM America
will not issue fractional shares in
the Merger. Mucho shareholders will
receive cash in lieu of fractional
shares.
Impact the Merger Might Have on an
Investor's Decision to Tender Shares ..... If you believe that the Merger will
be approved and that the value of
the combined entity will be less
than $6.75, you may consider
tendering your shares.
Impact of the Merger on Shareholders
that Do Not Tender Shares ................ Shareholders who determine not to
accept the Offer will experience,
as a result of the shares to be
issued in the Merger, a
proportionate decrease in their
relative equity interest in the
Company, and thus, in the Company's
future earnings and assets. If the
maximum of ___ shares, representing
50% of the outstanding shares of
the Company on __________ ___, 2000
are validly tendered and accepted
for payment by the Company, current
TEAM America shareholders will hold
approximately ___% of the
outstanding shares of the Company
following the issuance of 5,925,925
shares of common stock to the
current holders of Mucho common
stock pursuant to the Merger.
Shareholder Approval Required ............ Shareholders of record on October
16, 2000, will be asked to approve
the Merger. The Tender Offer is
conditioned upon the approval of
the Merger and shareholders who
wish to tender their shares will be
eligible to vote upon the approval
of the Merger.
Federal Income Tax Consequences .......... A United States Holder
participating in the Offer will be
treated either as having sold
Shares or as having received a
dividend distribution from the
Company. In that regard, under
Section 302 of the Code, a United
States Holder whose Shares are sold
pursuant to the Offer will be
treated as having sold Shares if
the sale (i) results in a "complete
termination" of all of such
holder's equity interest in the
Company, (ii) is a "substantially
disproportionate" redemption with
respect to such holder or (iii) is
"not essentially equivalent to a
dividend" with respect to such
holder. In applying each of the
Section 302 tests, a United States
Holder will be treated as owning
Shares actually or constructively
owned by certain related
individuals and entities.
6
<PAGE> 7
Further Information ...................... Any questions, requests for
assistance or requests for
additional copies of this Offer to
Purchase, the Letter of Transmittal
or other tender offer materials may
be directed to Kevin T. Costello,
President and Chief Executive
Officer, TEAM America Corporation,
110 East Wilson Bridge Road,
Worthington, Ohio 43085, (614)
848-3995.
7
<PAGE> 8
TO THE HOLDERS OF COMMON SHARES OF
TEAM AMERICA CORPORATION:
INTRODUCTION
TEAM America Corporation, an Ohio corporation (the "Company"), hereby
invites its shareholders to tender its Common Shares, without par value (the
"Shares"), to the Company at $6.75 per Share, net to the seller in cash (the
"Purchase Price"), as specified by tendering shareholders, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to ____________ Shares
validly tendered and not withdrawn. All Shares acquired in the Offer will be
acquired at the Purchase Price. In the event more than ____________ Shares,
representing over 50% of the Company's outstanding Shares, are validly tendered
and not withdrawn, the Company will accept for payment, and thereby purchase,
Shares on a pro rata basis (adjusted downward to avoid acceptance for payment of
fractional Shares) upon the terms and subject to the conditions of the Offer.
See Section 1 of "The Offer" herein. Shares not purchased because of proration
will be returned at the Company's expense. The Company reserves the right, in
its sole discretion, to purchase a total of 50% of the Shares then outstanding
pursuant to the Offer. See Section 14 of "The Offer" herein.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF "THE OFFER" HEREIN.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. NEITHER THE
COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKE ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER THEIR SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT AS MANY
AS ___ DIRECTORS, ___ EXECUTIVE OFFICERS AND ___ AFFILIATES CONTROLLED BY SUCH
PERSONS INTEND TO TENDER UP TO _____ SHARES PURSUANT TO THE OFFER. THE COMPANY,
HOWEVER, DOES NOT KNOW AT THIS TIME THE ACTUAL TOTAL NUMBER OF SHARES THAT SUCH
PERSONS WILL TENDER PURSUANT TO THE OFFER. SEE SECTION 10 OF "THE OFFER" HEREIN.
The Purchase Price will be paid net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders who hold Shares in their own
name and who tender their Shares directly to the Depositary 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 purchase
of Shares by the Company pursuant to the Offer. Shareholders holding Shares
registered in the name of brokers or banks are urged to consult the brokers or
banks to determine whether transaction costs are applicable if shareholders
tender Shares through the brokers or banks and not directly to the Depositary.
Any tendering shareholder or other payee who fails to complete, sign and
return to National City Bank (the "Depositary") the substitute Form W-9 included
as part of the Letter of Transmittal may be subject to required United States
federal income tax back-up withholding of 31% of the gross proceeds payable to
the tendering shareholder or other payee pursuant to the Offer. See Section 3 of
"The Offer" herein.
The Company will pay all fees and expenses of the Depositary incurred in
connection with the Offer. See Section 15 of "The Offer" herein.
On June 16, 2000, the Company entered into a definitive merger agreement
(the "Merger Agreement") with Mucho.com, Inc., a Nevada corporation ("Mucho"),
and Team Merger Corporation, a Nevada Corporation and wholly owned subsidiary of
the Company ("Merger Sub"), whereby Merger Sub will be merged with and into
Mucho and Mucho will become a wholly owned subsidiary of the Company (the
"Merger"). Pursuant to the Agreement, shares of Mucho common stock, outstanding
options and warrants, are to be converted into a total of 5,925,925 shares of
Company common stock (the "Merger Consideration"). Upon consummation of the
Merger, former Mucho shareholders will hold approximately ____% of the
outstanding common stock of the Company, exclusive of the 2,222,222 shares of
Company common stock which shall be held in escrow until certain conditions have
been met. If a total of 50% of the outstanding shares are validly tendered and
accepted for payment by the Company, then former Mucho shareholders will hold
approximately ____% of the outstanding common stock of the Company. This Offer
is conditioned upon the approval of the Merger by TEAM America's shareholders.
8
<PAGE> 9
In accordance with the terms of the Agreement, following the consummation
of the Merger, the Company will purchase up to 50% of the outstanding Shares of
the Company's common stock at a purchase price of $6.75 per share. Payment for
the tendered Shares is to be provided from cash or an irrevocable line of credit
from ____________ to be made available to the Depositary, as agent for the
holders of the Company's Shares tendered pursuant to the Offer. By the terms of
the Merger Agreement, Merger Sub shall be merged with and into Mucho, and Mucho
will become a wholly owned subsidiary of the Company.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity, subject to the terms and
conditions of the Offer, to sell those Shares for cash. In addition, the Offer
may give shareholders the opportunity to sell at prices greater than market
prices prevailing prior to the announcement of the Offer. On June 16, 2000, the
last full trading day prior to the announcement of the Offer, the closing sales
price per Share as reported on Nasdaq was $4.00. The $6.75 purchase price
represents a premium of $2.75 over the June 16, 2000 closing sales price.
Shareholders are urged to obtain current market quotations for the Shares. See
Section 7 of "The Offer" herein.
The Offer also allows shareholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company. Shareholders who
determine not to accept the Offer will experience, as a result of the Shares to
be issued in the Merger, a proportionate decrease in their relative equity
interest in the Company, and thus in the Company's future earnings and assets.
If the maximum of ___ shares, representing 50% of the outstanding shares of the
Company on __________ ___, 2000 are validly tendered and accepted for payment by
the Company, current TEAM America shareholders will hold approximately ___% of
the outstanding Shares of the Company following the issuance of up to 5,925,925
shares of common stock to the current Mucho shareholders. Shareholders who
determine not to accept the offer should consider that the Company will not be
limited in its right to issue additional Shares, and other equity securities in
the future. In determining whether to tender Shares pursuant to the Offer,
shareholders should also consider the possibility that they may be able to sell
their Shares in the future on Nasdaq or otherwise at a net price higher than the
Purchase Price. Shareholders should also consider the possibility that,
following completion of the Offer, they may not be able to sell their Shares in
the future on Nasdaq or otherwise at a net price as high as the Purchase Price.
In particular, shareholders should consider that the Company may not satisfy
Nasdaq listing standards. See Sections 2 and 11 of "The Offer" herein.
As of the close of business on ________ __, 2000, the Company had 4,341,999
issued and outstanding Shares and _________ Shares reserved for issuance upon
the exercise of options to purchase Shares granted under the Company's stock
option plans (collectively, the "Plans"). Of these reserved Shares, ________
options have been granted and are exercisable; however ________ of these options
have an exercise price above the Purchase Price. See Section 10 of "The Offer"
herein. The Company is not, in connection with the Offer, offering to cancel for
cash any options outstanding under the Plans and tenders of options will not be
accepted. See Section 3 of "The Offer" herein.
The ____________ Shares that the Company is offering to purchase pursuant
to the Offer represent 50% of the Shares outstanding on ________ __, 2000
(approximately ___% assuming exercise of outstanding exercisable options). The
Shares are listed and traded on Nasdaq under the symbol "TMAM." On June 16,
2000, the last full trading day prior to the announcement of the offer, the
closing sales price per share as reported on Nasdaq was $4.00. Shareholders are
urged to obtain current market quotations for the shares. See Section 7 of "The
Offer" herein.
THE MERGER AGREEMENT
The Company, Merger Sub and Mucho entered into an agreement and plan of
merger on June 16, 2000 (the "Merger Agreement"), whereby Merger Sub is to be
merged with and into Mucho and Mucho will become a wholly owned subsidiary of
the Company. The Merger will be effective upon the filing of a certificate of
merger with the Secretary of State of Nevada. The Boards of Directors of both
the Company and Mucho approved the Merger and recommended that their respective
shareholders vote in favor of the transaction. The Company's board of directors
is soliciting proxies in favor of the Merger, which will have no impact on the
Tender other than the fact that the Company's obligations to accept shares for
payment is conditioned upon the approval of the Merger by the Company's
shareholders. As of ______ __, 2000, certain Mucho shareholders collectively own
_____ shares of the Company's common stock. The terms and conditions of the
Merger Agreement were established through arms-length negotiations between the
Company, Mucho, Merger Sub and their respective counsel. For more information
9
<PAGE> 10
regarding the Merger, please refer to the Company's Registration Statement on
Form S-4 filed with the SEC on August 11, 2000, and as may be amended from time
to time (the "Form S-4").
Conversion of Mucho Common Stock
Pursuant to the Agreement, all of the outstanding Mucho common stock,
warrants and options, specifically excluding shares of Mucho common stock held
in the Treasury of Mucho, which shall be cancelled, shall be converted into the
right to receive that number of shares of Company Shares determined by
multiplying the number of shares of Mucho common stock by the Exchange Ratio,
which is equal to 5,925,925 diluted shares of Company Shares divided by the
number of diluted shares of Mucho common stock outstanding (including (i) all
issued and outstanding shares of Mucho common stock; (ii) all outstanding shares
of other classes of Mucho voting capital stock, including, but not limited to,
shares of Mucho preferred stock, giving effect to the conversion of such capital
stock; (iii) all warrants; (iv) all stock options; (v) all other derivative
securities of any kind or nature; and (vi) any other debt or equity securities
convertible into shares of Mucho capital stock, giving effect to the conversion
of such debt or equity). As of July 31, 2000, there were 38,224,581 fully
diluted shares of Mucho common stock outstanding. Consequently, Mucho
shareholders will receive approximately 0.155 shares of TEAM America common
stock for each share of Mucho common stock they hold. The total number of shares
of TEAM America common stock to be distributed to Mucho shareholders will not
increase even if Mucho issues additional stock or options or other securities.
If Mucho were to issue additional stock or options or other securities, the
number of TEAM America shares each existing Mucho shareholder receives would be
reduced accordingly. TEAM America will not issue fractional shares in the
Merger. Mucho shareholders will receive cash in lieu of fractional shares.
Following the conversion of Mucho common stock into shares of Company
Shares, former Mucho shareholders will hold as much as _________ percent (__%)
of the issued and outstanding shares of Company Shares, dependent upon the
number of shares validly tendered and accepted for payment by the Company,
pursuant to this Offer.
The Company's Reasons for the Merger and Recommendation of TEAM America's
Board of Directors
The Company's board of directors believes that the terms of the Merger,
including the amount of consideration to be paid to Mucho's shareholders, are
fair to TEAM America's shareholders and in the best interest of the Company for
the following reasons:
- the potential impact of not being web-enabled on TEAM America's
ability to maintain historical rates of growth and profit margins and
the consequences on TEAM America's assets, obligations, operations,
earnings and prospects as well as its prospects in the PEO industry,
and those of the industry in which TEAM America competes, including
management's concern regarding TEAM America's ability to maintain
historical rates of growth and profit margins;
- the strategic fit of TEAM America and Mucho, including the belief that
the combination has the potential to enhance shareholder value through
increased growth opportunities, cost savings achievable by combining
the two businesses and the synergies resulting from the combination of
the two companies' strengths, technologies and other assets;
- the potential to accelerate the adoption of PEO services through the
networking opportunities with small businesses that a
business-to-business Internet service provider provides as a result
of:
(1) increased marketing opportunities, and
(2) increased products and services that can be offered to small
business;
- the ability to expand the provision of TEAM America's services to
Mucho's members and Mucho's services to TEAM America's clients;
- the opportunity to provide liquidity to TEAM America's shareholders
through a tender offer at a price of $6.75 per share which represents
a premium over $3.63, the per share closing sale price of TEAM
America's common stock on June 15, 2000, the day prior to the board's
approval of the Merger, and a
10
<PAGE> 11
premium of $0.38 over the per share book value of TEAM America's
common stock on June 30, 2000;
- the results of the board of director's market solicitation conducted
by Raymond James, TEAM America's financial advisors, to determine
whether there were other strategic alternatives for TEAM America
including seeking out other online business centers and PEOs to
acquire TEAM America;
- the written opinion of Raymond James, financial advisors to the board,
dated June 30, 2000, that, as of June 15, 2000, and based on the
considerations set forth in the opinion, the payment of $6.75 per
share to the holders of TEAM America's common stock who tender their
shares in the tender offer is fair from a financial point of view to
TEAM America's shareholders who tender their shares. See "Opinion of
TEAM America's Financial Advisor;"
- the information and presentations by TEAM America's management and
legal and financial advisors concerning the results of their business
and legal due diligence, including the business, technology,
operations, financial conditions, customer relationships and prospects
of both TEAM America and Mucho and the potential synergies resulting
from combining these businesses;
- the benefit that TEAM America would remain a public entity after the
Merger was completed providing continued liquidity to its
shareholders;
- the opportunity that the combined companies will have to raise capital
in the public markets which otherwise would not be available to either
TEAM America or Mucho;
- the fact that Mucho's obligation to complete the Merger is subject to
its arranging of financing for the tender offer; and
- the terms of the Merger Agreement and the related escrow agreement,
including the amount of consideration to be received by the Mucho
shareholders, the hold back of the 2,222,222 shares of TEAM America
stock held in escrow to be earned upon the obtainment of performance
goals by Mucho following the Merger, and Mucho's obligation to arrange
financing for the tender offer.
TEAM America's board of directors also considered the potential adverse
effects and risks associated with the transaction with Mucho and the combined
company, including those risks set forth in the section titled "Risk Factors" in
the Form S-4 and concluded that the potential benefits of the transaction with
Mucho outweighed the potential adverse effects and risks. The list of potential
adverse effects and risks considered by the board included, but was not limited
to, the following:
- the challenges of combining and integrating the businesses, assets and
workforces of two major companies and the risks of not achieving the
expected operating efficiencies or growth;
- the risk of diverting management focus and resources from other
strategic opportunities and from operational matters while working to
implement the transaction contemplated in the Merger Agreement;
- the risk that the transactions contemplated in the Merger Agreement
will not be consummated.
- the possibility that the customers of TEAM America and Mucho could
suffer during the transition to a web-enabled PEO;
- the inclusion in the Merger Agreement of:
(1) a non-solicitation provision restricting the ability of our
management to seek change of control transactions during the
period prior to the closing of the agreement, and
(2) provisions requiring the payment of termination fees to the
owners of Mucho under specified
11
<PAGE> 12
circumstances;
- the risk that Mucho has a limited operating history and that Mucho had
no revenue through June 30, 2000;
- the risk that the Merger will result in new management of TEAM
America;
- the risk that TEAM America did not receive a fairness opinion from a
financial advisor as to the fairness, from a financial point of view,
of the Merger to TEAM America and its shareholders; and
- the impact that 600,000 options granted to Mr. Costello vesting upon
the completion of the Merger.
This discussion of the information and factors considered by TEAM America's
board is not intended to be exhaustive, but includes the material factors
considered. In view of the variety of material factors considered in connection
with the evaluation of the Merger and the related transactions, TEAM America's
board of directors did not find it practicable to quantify or otherwise assign
relative weights or rank to the factors it considered in approving the
transactions. In considering the factors described above, individual members of
the board may have given different weight to various ones. Instead, TEAM
America's board of directors considered all these factors as a whole and overall
considered them to be favorable and to support its recommendation.
The board of directors did not attempt to determine the liquidation value
of TEAM America because they believed that such a measure of asset value is not
relevant in determining the value of TEAM America as a going concern. The board
of directors was aware that some directors and members of management have
interests in the Merger that are separate from the interests of the shareholders
of TEAM America generally. See "The Merger -- Interests of TEAM America's
Directors and Officers in the Merger." On balance, the board viewed such
interests as neutral to their determination because of their belief that such
interests are customary and reasonable under all of the circumstances.
The foregoing discussion of the information and factors considered by the
board of directors is not meant to be exhaustive, but includes the principal
factors considered by the board. The board of directors did not specifically
adopt the conclusions of the opinion of its financial advisors. The fairness
opinion relating to the consideration to be paid to shareholders tendering their
shares was only one of many factors considered by the board in their evaluation
of the Merger.
In light of the variety of factors considered by the board of directors,
the board did not quantify or otherwise attempt to assign relative weights to
the specific factors considered in making its determination. However, in the
view of the board of directors, the potentially negative factors they considered
were not sufficient, either individually or collectively, to outweigh the
positive factors relating to the Merger.
Consequently, after considering all of the factors set forth above,
together with an analysis of the presentations of management and TEAM America's
legal and financial advisors, the board determined that the terms and conditions
of the Merger are fair and in the best interest of TEAM America and its
shareholders.
Corporate Governance
At the Effective Time of the Merger, there will be significant changes to
the governance of the Company. Pursuant to Sections 10.1(m) and 10.2(k) of the
Agreement, certain key shareholders of the Company and Mucho, including Kevin T.
Costello, William W. Johnston, and Crystal Faulkner (the "TEAM Shareholders")
and S. Cash Nickerson, James Tharin, Jose Blanco, David Waal, and Jay Strauss
("Mucho Shareholders" and together with the TEAM Shareholders the "Key
Shareholders") shall have entered into a voting agreement, which provides that
each of the Key Shareholders shall vote in favor of the nine members of TEAM
America's board of directors designated after the Merger.
In addition, in accordance with the terms of the Agreement, S. Cash
Nickerson will become the Company's Chairman of the board of directors and Chief
Executive Officer; Kevin T. Costello will remain the Company's President and
shall assume the position of Chief Operating Officer; Jose Blanco shall be the
Chief Financial Officer
12
<PAGE> 13
of the Company; Thomas L. Gerlacher shall be the Chief Accounting Officer; and
Jay R. Strauss shall be Chief Legal Officer.
Upon consummation of the Merger, the principal shareholders, including the
Key Shareholders, directors elected pursuant to the Voting Agreement and the
executive officers, which shall be appointed pursuant to the Merger Agreement,
will control the Company.
Amendment to TEAM America's Articles of Incorporation
In connection with the Merger, TEAM America and Mucho have agreed to amend
TEAM America's articles of incorporation and code of regulations. The form of
amended articles of incorporation of TEAM America is set forth as Appendix D to
the Form S-4. The form of the amended code of regulations of TEAM America is set
forth as Appendix E to the Form S-4.
Adoption of the Merger Agreement and approval of the Merger will constitute
approval of the amendments to TEAM America's articles of incorporation and code
of regulations.
TEAM America's articles of incorporation are being amended as follows:
- TEAM America's name will be changed to TEAM Mucho, Inc.; and
- the number of authorized shares of TEAM America stock will be
increased from 10,000,000 to 50,000,000.
TEAM America's code of regulations will be amended as follows:
- the number of directors of the TEAM Mucho will be increased to
nine; and
- the duties of the chief executive officer and the president will
be revised.
Escrow of Converted Stock
As part of the negotiations between TEAM America and Mucho, the parties
determined that the relative value of Mucho the component of the on-going
enterprise depended on the ability to raise additional equity funding and
satisfy revenue-related performance criteria. Accordingly, TEAM America required
that S. Cash Nickerson, Jay Strauss, Jose Blanco, David Waal, Tom Anderson,
Joseph Ryan, Bryan Harmes, Joseph Knotek and Michael Weldon, some of Mucho's
founding shareholders, place a total of 2,222,222 shares of Company Shares to be
received by them in the Merger into escrow. These Mucho shareholders who enter
into the escrow agreement will receive half of the escrowed shares on a pro rata
basis if Stonehenge Opportunity Fund, LLC or its affiliates, business partners
or other investors obtained or arranged by Stonehenge provide $10 million in
private equity financing on behalf of TEAM America prior to December 31, 2001.
If Stonehenge provides $10 million in private equity financing, the remaining
half of the escrowed shares will be released on a pro rata basis to the Mucho
shareholders who escrowed shares, if, in any consecutive three-month period
prior to December 31, 2002, the Company's operating revenue from Mucho's
Internet operations plus incremental Company PEO gross margin in excess of eight
percent (8%) over TEAM America's prior year's gross margin during the same
three-month period is $2 million or greater. If Stonehenge does not raise the
$10 million in private equity financing, the Mucho shareholders who enter into
the escrow agreement will receive half of the escrowed shares on a pro rata
basis if the Company raises $15 million in equity financing prior to December
31, 2001. The Mucho shareholders will receive the remaining half of the escrowed
shares on a pro rata basis if Mucho earns $2 million of operating revenue from
its Internet operations in any consecutive three-month period prior to December
31, 2002, provided that the Company has raised $15 million in equity financing.
The Mucho shareholders who enter into the escrow agreement will have no right to
the Company Shares held in escrow if the performance criteria for the release of
such Shares held in escrow have not been satisfied on or before the dates set
forth above.
Conditions to the Merger
The Merger Agreement also contains conditions that TEAM America, Merger
Sub, and Mucho each must satisfy before any of them are obligated to complete
the Merger. These conditions may be amended or waived prior to the time the
Merger becomes effective if such amendment or waiver is in writing and signed by
both TEAM
13
<PAGE> 14
America and Mucho in the case of an amendment or, in the case of a waiver, by
the party against whom the waiver is to be effective. There shall be no
amendment that requires further approval by the shareholders of TEAM America or
Mucho, as the case may be, unless further shareholder approval is required by
law. These conditions require that:
- Mucho and TEAM America obtain adoption of the Merger Agreement
and approval of the Merger from their shareholders;
- the expiration or early termination of any applicable waiting
period under the Hart-Scott-Rodino Act;
- no legal injunction, order or decree be in effect that would
prevent completion of the Merger or tender offer as contemplated
by the parties in the Merger Agreement;
- S. Cash Nickerson, Jose Blanco, Thomas Gerlacher and Jay Strauss
shall have each entered into employment agreements with TEAM
Mucho;
- Key Shareholders of TEAM America and Mucho shall have entered
into a voting agreement;
- the SEC shall have declared effective the Form S-4 Registration
Statement regarding the Merger; and
- holders of not more than 5% of Mucho's outstanding stock notify
Mucho in accordance with Nevada law of their intention to assert
dissenters' rights.
Termination
In addition, the Merger Agreement provides conditions under which TEAM
America or Mucho may terminate the Merger Agreement, several of which are
customary in this type of transaction. The Merger Agreement also allows for
termination under the following circumstances:
- if either TEAM America or Mucho receive a bona fide proposal to
acquire, directly or indirectly, more than 50% of the then
outstanding shares of such company's respective common stock for
consideration of cash and/or securities on terms that the board
of directors of the company receiving such superior proposal
determines in its good faith judgment to be more favorable to the
holders of that company's common stock than the transactions
provided for in the Merger Agreement, then the board of directors
of such company may withdraw its recommendation of the
transactions, including the Merger, contemplated in the Merger
Agreement, provided that the party receiving the superior
proposal provides written notice to the other party to the Merger
Agreement of such proposal and such other company does not,
within seven business days of receipt of such notice, make an
offer at least as favorable as the superior proposal; or
- if the Merger has not been consummated by December 31, 2000.
If either TEAM America or Mucho approves a bona fide offer to acquire more
than 50% of their company's then outstanding common stock, the company that
approves the offer will owe a $1.5 million termination fee to the other company.
In addition, if the Mucho shareholders do not approve the Merger, TEAM America
may receive a $1.5 million termination fee.
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase ____________ Shares or such lesser number of Shares as are validly
tendered and not withdrawn prior to the Expiration Time (as defined below) at a
price of $6.75 per Share, net to the seller in cash.
14
<PAGE> 15
The term "Expiration Time" means at 12:00 p.m., Eastern Standard Time, on
_________ __, 2000, the date of the Special Meeting of Shareholders called for
the purpose of voting upon the Merger Proposal, at which time no additional
shares may be tendered or withdrawn, unless and until the Company, in its sole
discretion, shall have extended the period of time during which the Offer will
remain open, in which event the term "Expiration Time" shall refer to the latest
time and date at which the Offer, as so extended by the Company, shall expire.
See Section 14 of "The Offer" herein for a description of the Company's right to
extend, delay, terminate or amend the Offer.
The term "Payment Date" means as soon as practicable following the
consummation of the Merger, at which time those shares which been validly
tendered and not withdrawn prior to such time will be accepted for payment
(subject to proration) unless and until the Company, in its sole discretion,
shall have extended the period of time during which the Offer will remain open,
in which event the term "Payment Date" shall refer to the latest time and date,
as so extended by the Company, shall expire.
The Company reserves the right, in its sole discretion, to purchase up to
____________ Shares (representing 50% of the Company's outstanding Shares)
pursuant to the Offer. In the event of an over-subscription of the Offer, Shares
validly tendered and not properly withdrawn prior to the Expiration Time will be
subject to proration, as described below. The proration period expires as soon
as practicable after the Expiration Time.
If:
- the Company changes the Purchase Price from $6.75 per Share;
- the Company decreases the number of Shares being sought; and
- the Offer is scheduled to expire at any time earlier than the
expiration of the 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 14 of "The
Offer" herein,
then the Offer will be extended until the expiration of such period of ten
business days.
THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES.
THE OFFER, HOWEVER, IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF
"THE OFFER" HEREIN.
If the number of Shares validly tendered and not withdrawn prior to the
Expiration Time is less than or equal to ____________ the Company will, upon the
terms and subject to the conditions of the Offer, accept for payment and
thereafter purchase, all Shares so tendered at the Purchase Price on the Payment
Date, which is as soon as practicable after the consummation of the Merger. All
Shares tendered and not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering shareholders
at the Company's expense as promptly as practicable following the Payment Date.
The Company reserves the right, in its sole discretion to purchase up to
____________ Shares (representing 50% of the Company's outstanding Shares)
pursuant to the Offer. See Section 14 of "The Offer" herein.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than ____________ Shares have been validly tendered, and not
withdrawn, prior to the Expiration Time, the Company will accept for payment,
and thereby purchase, validly tendered Shares on a pro rata basis (adjusted
downward to avoid acceptance for payment of fractional Shares).
Proration. In the event that proration of tendered Shares is required, the
Company and the Depositary will determine the proration factor as soon as
practicable following the Expiration Time. Proration for each shareholder
tendering Shares will be based on the ratio of the number of Shares validly
tendered and not properly withdrawn by such shareholder to the total number of
Shares validly tendered and not properly withdrawn by all shareholders. For
example, if a total of _____ shares are validly tendered and not withdrawn by
all shareholders and an individual has validly tendered and not withdrawn _____
shares out of a total of _____ shares owned by the shareholder, then a total of
_____ shares will be purchased from the individual shareholder as a result of
the proration factor, which is calculated as follows:
(INSERT CALCULATION FIGURE)
15
<PAGE> 16
The number of shares to be purchased will be adjusted downward to the nearest
whole number to avoid acceptance for payment of fractional shares. As a result
of the adjustment downward to avoid payment of fractional shares in the event
that proration of tendered shares is required, the Company may not purchase a
total of 50% of the shares then outstanding pursuant to the Offer. Because of
the difficulty in determining the number of Shares validly tendered (including
Shares tendered by guaranteed delivery procedures, as described in Section 3 of
"The Offer" herein) and not properly withdrawn, the Company does not expect that
it will be able to immediately announce the final proration factor or commence
payment for any Shares purchased pursuant to the Offer. The preliminary results
of any proration will be announced by press release as promptly as practicable
after the Expiration Time. Shareholders may obtain preliminary proration
information from the Company and may be able to obtain such information from
their brokers.
As described in Section 13 of "The Offer" herein, the number of Shares that
the Company will purchase from a shareholder pursuant to the Offer may affect
the United States federal income tax consequences to the shareholder of the
purchase and, therefore, may be relevant to a shareholder's decision whether or
not to tender Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to shareholders who were record holders of Shares as of October 16, 2000, and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the Company's shareholder 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. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity, subject to the terms and
conditions of the Offer, to sell such Shares for cash without, where Shares are
tendered by the registered owner directly to the Depositary, the usual
transaction costs associated with open market sales.
The Offer also allows shareholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company. Shareholders who
determine not to accept the Offer will experience, as a result of the shares to
be issued in the Merger, a proportionate decrease in their relative equity
interest in the Company, and thus, in the Company's future earnings and assets.
If the maximum of _____ shares, representing 50% of the outstanding shares on
__________ ___, 2000, are validly tendered prior to the Expiration Time and
accepted for payment by the Company on the Payment Date, current TEAM America
shareholders will hold approximately _____% of the outstanding shares of the
surviving Company following the issuance of up to 5,925,925 shares of common
stock to the current holders of Mucho common stock pursuant to the Merger,
shareholders who determine not to accept the offer should also consider that the
Company will not be limited in its right to issue additional Shares and other
equity securities in the future. Shareholders may be able to sell non-tendered
Shares in the future on Nasdaq or otherwise, including in connection with a sale
of the Company, at a net price as high as or higher than the Purchase Price. The
Company can give no assurance, however, as to the price at which a shareholder
may be able to sell Shares in the future. Shareholders should also consider the
possibility that, following completion of the Offer, they may not be able to
sell their Shares in the future on Nasdaq or otherwise at a net price as high as
the Purchase Price. In particular, shareholders should consider that the Company
may not satisfy Nasdaq listing standards. Such a delisting of the Shares could
result in a substantial decrease in the liquidity of the Shares and have a
material adverse effect on the market value of the Shares. See Section 11 of
"The Offer" herein.
TEAM America's board of directors has determined that the Company's
financial condition, outlook and current market conditions, including the recent
trading prices of Shares, make this an attractive time to repurchase outstanding
Shares. Pursuant to the Merger, however, current shareholders of the Company's
common stock should also consider that they will no longer maintain as much
control over the Company as they presently do, as a result of the issuance of up
to 5,925,925 shares of common stock to current shareholders of Mucho. TEAM
America's board of directors has determined that a tender offer at this time
will afford the Company's shareholders, who are otherwise not entitled to
dissenter's rights under Ohio law, with an opportunity to tender their Shares at
a premium over the market price of $_____ on __________ ___, 2000. Shareholders
are urged to obtain current market quotations for the Shares. See Section 7 of
"The Offer" herein. Finally, the Company, like the PEO industry generally,
expects to face growing competitive threats from Internet-enabled providers of
outsourced human resources. If the Company fails to respond to the threats and
as a result, its results of operations and earnings decline, the trading price
of the Company's common stock may continue to decline. Consequently, TEAM
America's board of directors has determined that the Tender Offer, in
conjunction with the Merger, presents an
16
<PAGE> 17
opportunity for current shareholders to obtain a premium over the closing sales
price of the Company's common stock of $4.00 on June 16, 2000, the last full
trading day prior to the announcement of the offer, while responding to the
competitive threats from Internet-enabled providers of outsourced human
resources. In the view of TEAM America's board of directors, the Offer
represents an attractive investment that should benefit the Company and its
shareholders over the long term by reducing the number of outstanding shares
(subject to the increase in the number of outstanding shares as a result of the
issuance of up to 5,925,925 to current shareholders of Mucho pursuant to the
Merger) and by increasing shareholder value by making cash payments to
shareholders who tender outstanding shares. In particular, the board of
directors believes that the purchase of Shares at this time is consistent with
the Company's long-term corporate goal of seeking to increase shareholder value.
The board of directors considered a number of alternatives to this
transaction. First, the board considered remaining an independent entity. The
board rejected this alternative because it determined that it needed to be
web-enabled if it expected to continue to grow. Second, the board considered
remaining independent and developing its own Internet capabilities. The board
rejected this idea because of the uncertainty of the cost involved in developing
such a capability, the lack of capital to invest in such a venture, the amount
of time it would take to become web-enabled and the fact that a Merger with
Mucho would bring to TEAM America additional visibility due to Mucho's
established market presence. Finally, TEAM America's board considered entering
into a transaction with a party other than Mucho. TEAM America's financial
advisor solicited offers from other companies that could provide similar web
capabilities as Mucho. The results of the solicitations, however, failed to
provide any offers that were as favorable as that received from Mucho or failed
to offer a growth opportunity as favorable as a transaction with Mucho could
provide.
The funds required to complete the Offer and pay related expenses will be
arranged for by Mucho, on behalf of the Company, either in cash by means of an
irrevocable deposit or the establishment of an irrevocable line of credit
accessible by the Depositary, as agent for the holders of the Company's Common
Stock tendered pursuant to the Offer, in accordance with the terms of the
Agreement, whereby Merger Sub will be merged with and into Mucho and Mucho will
become a wholly owned subsidiary of the Company. Pursuant to the Agreement,
shares of Mucho common stock, outstanding options and warrants, are to be
converted into a total of 5,925,925 shares of Company Common Stock. If the
maximum of _____ shares, representing 50% of the outstanding shares of the
Company on ________ _____, 2000 are validly tendered and accepted for payment by
the Company, current TEAM America shareholders will hold approximately _____% of
the outstanding shares of the Company and current holders of Mucho Common Stock
will hold approximately _____% of the outstanding shares of the Company. This
Offer is conditioned upon the approval of the Merger by TEAM America's
shareholders. See Sections 6 and 8 of "The Offer" herein.
THE BOARD OF DIRECTORS HAS APPROVED THE OFFER. THE BOARD OF DIRECTORS
CONSIDERED THE WRITTEN OPINION OF RAYMOND JAMES & ASSOCIATES, INC. IN
DETERMINING THAT THE CASH CONSIDERATION OFFERED TO THE COMPANY'S SHAREHOLDERS IN
THE TENDER OFFER IS FAIR FROM A FINANCIAL POINT OF VIEW TO SUCH SHAREHOLDERS.
THE RAYMOND JONES OPINION, WHICH IS ADDRESSED TO THE COMPANY'S BOARD OF
DIRECTORS, HOWEVER, IS DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF
VIEW, OF THE CASH CONSIDERATION OFFERED TO THE COMPANY'S SHAREHOLDERS IN THE
TENDER OFFER, AS PROVIDED FOR IN THE MERGER AGREEMENT AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER SUCH SHAREHOLDER SHOULD TENDER
THEIR SHARES. FURTHERMORE, NEITHER THE COMPANY, NOR ITS BOARD OF DIRECTORS MAKE
ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING THEIR SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT WITH THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE
COMPANY HAS BEEN ADVISED THAT CERTAIN OF ITS DIRECTORS, EXECUTIVE OFFICERS OR
AFFILIATES CONTROLLED BY SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE
OFFER. SEE SECTION 10 OF "THE OFFER" HEREIN.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise, subject to
the approval of its board of directors. In particular, TEAM America's board of
directors may repurchase Shares in the open market beginning after the
expiration of the period of ten business days after the Payment Date. Future
purchases by the Company may be on the same terms or on terms that are more or
less favorable to shareholders than the terms of the Offer. Rule 13e-4 under the
Securities Exchange Act of 1934 (the "Exchange Act") prohibits the Company and
its affiliates from purchasing any Shares, other than pursuant to the Offer,
until at least ten business days after the Payment Date. Any possible future
purchases by the Company pursuant to this intention or otherwise will depend on
many factors, including the market price of the Shares, the results of the
Offer, the Company's business and financial position and general economic and
market conditions.
17
<PAGE> 18
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire any such
Shares) and will be available for the Company to issue without further
shareholder action (except as required by applicable law or the rules applicable
to companies with shares traded on Nasdaq or any other securities exchange on
which the Shares may be listed) for purposes including, but not limited to the
raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans. The
Company has no current plans for the issuance of Shares repurchased pursuant to
the Offer by the Company. The repurchased Shares will be authorized but unissued
Shares.
Except as disclosed in this Offer to Purchase, the Company currently has no
plans or proposals that relate to or would result in: (a) the acquisition by any
person of additional securities of the Company or the disposition of securities
of the Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) any change in the present board of directors or management of the Company;
(d) any material change in the present dividend rate or policy, or indebtedness
or capitalization of the Company; (e) any other material change in the Company's
corporate structure or business; (f) any change in the Company's articles of
incorporation or code of regulations or other actions which may impede the
acquisition of control of the Company by any person; (g) a class of equity
security of the Company being delisted from a national securities exchange or
ceasing to be authorized for quotation in an inter-dealer quotation system of a
registered national securities association; (h) a class of equity security of
the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act; or (i) the suspension of the Company's
obligation to file reports pursuant to Section 15(d) of the Exchange Act. See
"The Merger Agreement" above for a discussion of certain plans and/or agreements
having a material impact on the Company's governance.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender of Shares. For Shares to be validly tendered pursuant to the
Offer (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), including any required signature guarantees,
and any other documents required by the Letter of Transmittal, must be received
by the Expiration Time by the Depositary at its address set forth on the back
cover of this Offer to Purchase, or (b) the tendering shareholder must comply
with the guaranteed delivery procedure set forth below.
SHAREHOLDERS WHO HOLD SHARES THROUGH BROKERS OR BANKS ARE URGED TO CONSULT
THE BROKERS OR BANKS TO DETERMINE WHETHER TRANSACTION COSTS ARE APPLICABLE IF
SHAREHOLDERS TENDER SHARES THROUGH THE BROKERS OR BANKS AND NOT DIRECTLY TO THE
DEPOSITARY.
Signature Guarantees and Method of Delivery. No signature guarantee is
required if: (i) the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3 of "The Offer" herein,
shall include any participant in The Depository Trust Company (the "Book-Entry
Transfer Facility") whose name appears on a security position listing as the
owner of the Shares) tendered therewith and such holder has not completed the
box entitled "Special Payment Instructions" on the Letter of Transmittal; or
(ii) the Shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program or a bank, broker, dealer,
credit union, savings association or other entity which is an "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Exchange Act (each of the foregoing constituting an "Eligible Institution"). See
Instruction 1 of the Letter of Transmittal. If a certificate for Shares is
registered in the name of a person other than the person executing 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, then 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 guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of the book-entry
transfer of the Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal.
18
<PAGE> 19
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at the Book-Entry Transfer Facility
within five business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing the
Book-Entry Transfer Facility to transfer Shares into the Depositary's account in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
Although delivery of Shares may be effected through a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility, either (i) a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with any required signature guarantees and any other required
documents must, in any case, be transmitted to and received by the Depositary at
its address set forth on the back cover of this Offer to Purchase prior to the
Expiration Time, or (ii) the guaranteed delivery procedure described below must
be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Internal Revenue Service (the "IRS"), unless the
shareholder or other payee provides its taxpayer identification number (employer
identification number or social security number) to the Depositary (as payor)
and certifies under penalties of perjury that such number is correct. Therefore,
each tendering shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding. If the Depositary is
not provided with the correct taxpayer identification number, the United States
Holder (as defined in Section 13 of "The Offer" herein) also may be subject to a
penalty imposed by the IRS. If withholding results in an overpayment of taxes, a
refund may be obtained. Certain "exempt recipients" (including, among others,
all corporations and certain Non-United States Holders (as defined in Section 13
of "The Offer" herein)) are not subject to these backup withholding and
information reporting requirements. In order for a Non-United States Holder to
qualify as an exempt recipient, that shareholder must submit an IRS Form W-8 or
a Substitute Form W-8, signed under penalties of perjury, attesting to that
shareholder's exempt status. Such statements can be obtained from the
Depositary. See Instruction 12 of the Letter of Transmittal.
Withholding for Non-United States Holders. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 31% of the
gross payments payable to a Non-United States Holder or such Holder's agent
unless the Depositary determines that a reduced rate of withholding is available
pursuant to a tax treaty or that an exemption from withholding is applicable
because the gross proceeds are effectively connected with the conduct of a trade
or business within the United States. In order to obtain a reduced rate of
withholding pursuant to a tax treaty, a Non-United States Holder must deliver to
the Depositary before the payment a properly completed and executed IRS Form
1001. In order to obtain an exemption from withholding 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 Non-United States
Holder must deliver to the Depositary a properly completed and executed IRS Form
4224. The Depositary will determine a shareholder's status as a Non-United
States Holder 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 circumstances indicate
that such reliance is not warranted. A Non-United States Holder may be eligible
to obtain a refund of all or a portion of any tax withheld if such Non-United
States Holder meets those tests described in Section 13 of "The Offer" herein
that would characterize the exchange as a sale (as opposed to a dividend) or is
otherwise able to establish that no tax or a reduced amount of tax is due.
NON-UNITED STATES HOLDERS 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.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and the shareholder's Share certificates are not immediately available
or cannot be delivered to the Depositary prior to the Expiration Time (or the
procedure for book-entry transfer cannot be completed on a timely basis) or if
time will not permit all
19
<PAGE> 20
required documents to reach the Depositary prior to the Expiration Time, the
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) the tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight courier, telegram or
facsimile transmission, on or prior to the Expiration Time, a properly
completed and duly executed Notice of Guaranteed Delivery 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
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together
with a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) and any required signature
guarantees or other documents required by the Letter of Transmittal,
are received by the Depositary within three Nasdaq trading days after
the date of receipt by the Depositary of the Notice of Guaranteed
Delivery.
Return of Tendered Shares. If any tendered Shares are not purchased, or if
less than all Shares evidenced by a shareholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the Payment Date or termination of the Offer or, in the case of Shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares
will be credited to the appropriate account maintained by the tendering
shareholder at the Book-Entry Transfer Facility, in each case without expense to
the shareholder.
Company Option Plans. The Company is not offering, as part of the Offer, to
cancel for cash any Options outstanding under the Company's Option Plans, and
tenders of Options will not be accepted. Holders of Options who wish to
participate in the Offer must exercise their Options and purchase Shares subject
to the Option and then tender the Shares pursuant to the Offer; provided that,
any exercise of an Option and tender of Shares is in accordance with the terms
of the Option Plans and the Options and is in compliance with all applicable
federal and state securities laws. In no event are any Options to be delivered
to the Depositary in connection with a tender of Shares hereunder. An exercise
of an Option cannot be revoked even if Shares received upon the exercise and
tendered in the Offer are not purchased in the Offer for any reason.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. Questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company in its reasonable judgment, and its
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of any Shares that it determines
are not in proper form or the acceptance for payment 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 or any
defect or irregularity in any tender with respect to any particular Shares or
any particular shareholder. The Company's interpretation of the terms of the
Offer will be final and binding on all parties. No tender of Shares will be
deemed to have been properly made until all defects or irregularities have been
cured by the tendering shareholder or waived by the Company. Neither the
Company, the Depositary nor any other person shall be obligated to give notice
of any defects or irregularities in tenders, nor shall any of them incur any
liability for failure to give any notice.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that, among other things, (a) the
shareholder has a "net long position" (as defined in Rule 14e-4 promulgated by
the Commission under the Exchange Act) in the Shares or equivalent securities at
least equal to the Shares tendered within the meaning of Rule 14e-4 and (b) the
tender of Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a
person, directly or indirectly, to tender Shares for that person's own account
unless, at the time of tender and at the end of the proration period or period
during which Shares are accepted by lot (including any extensions thereof), the
person so tendering both (i) has a net long position equal to or greater than
the amount of (x) Shares tendered or (y) other securities immediately
convertible into or exchangeable or exercisable for the Shares tendered and will
acquire the Shares for tender by conversion, exchange or exercise and (ii) will
deliver or cause to be delivered the Shares in accordance with the terms of the
Offer. Rule 14e-4 provides a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. The Company's acceptance for
20
<PAGE> 21
payment of Shares tendered pursuant to the Offer on the Payment Date will
constitute a binding agreement between the tendering shareholder and the Company
upon the terms and conditions of the Offer.
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 THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Time, but in no event after the
Expiration Time. Additionally, if not yet accepted for payment after the
expiration of forty business days from the commencement of the Tender Offer,
shareholders may withdraw their tendered shares.
For a withdrawal to be effective, a notice of withdrawal must be in written
form and transmitted by mail, overnight courier, hand-delivery, telegraph, telex
or facsimile and must be received in a timely manner by the Depositary at the
address set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify the name of the tendering shareholder, the number of
Shares to be withdrawn and the name of the registered holder of such Shares. If
the certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering shareholder must also submit the serial numbers shown on the
particular certificates for Shares to be withdrawn and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution (except in
the case of Shares tendered for the account of an Eligible Institution). If
Shares have been tendered pursuant to the procedure for book-entry transfer set
forth in Section 3 of "The Offer" herein, the notice of withdrawal also must
specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and must otherwise comply with
the Book-Entry Transfer Facility's procedures. All questions as to the form and
validity (including the time of receipt) of any notice of withdrawal will be
determined by the Company, in its sole discretion, which determination will be
final and binding. Neither of the Company the Depositary nor any other person
shall be obligated to give notice of any defects or irregularities in any notice
of withdrawal, nor shall any of them incur liability for failure to give any
notice. Withdrawals may not be rescinded and any Shares properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer unless the
withdrawn Shares are validly retendered prior to the Expiration Time by
following one of the procedures described in Section 3 of "The Offer" herein.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering shareholders 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
accept for payment on the Payment Date and thereafter purchase _____ Shares at
the Purchase Price (subject to increase or decrease as provided in Section 14 of
"The Offer" herein) (representing 50% of the outstanding shares of the Company's
common stock) validly tendered, and not withdrawn, or such lesser number of
shares as are validly tendered as permitted in Section 4 of "The Offer" herein.
For purposes of the Offer, the Company will be deemed to have accepted for
payment, and therefore purchased, Shares that are validly tendered and not
withdrawn (subject to the proration provisions of the Offer) only when and if it
gives written notice to the Depositary of its acceptance of the Shares for
payment pursuant to the Offer, following the Payment Date.
The Company will pay for Shares purchased pursuant to the Offer by either
an irrevocable deposit or the extension of an irrevocable line of credit
arranged for by Mucho, on behalf of the Company, as a wholly owned subsidiary in
an amount equal to the aggregate Purchase Price made available to the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payment from the Company and transmitting payment to the tendering
shareholders.
In the event of proration, the Company will determine the proration factor
as soon as practicable following the Expiration Time and pay for those tendered
Shares accepted for payment on the Payment Date, which shall be
21
<PAGE> 22
immediately upon consummation of the Merger. The Company, however, does not
expect to be able to announce the final results of any proration and commence
payment for Shares purchased until approximately five business days after the
Expiration Time. Certificates for all Shares tendered and not purchased due to
proration, will be returned (or, in the case of Shares tendered by book-entry
transfer, will be credited to the account maintained with the Book-Entry
Transfer Facility by the participant therein who so delivered the Shares) to the
tendering shareholder at the Company's expense as promptly as practicable after
the Payment Date or termination of the Offer without expense to the tendering
shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE BE PAID
BY THE COMPANY BY REASON OF ANY DELAY IN MAKING PAYMENT. In addition, if certain
events occur, the Company may not be obligated to purchase Shares pursuant to
the Offer. See Section 6 of "The Offer" herein.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
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 registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or the other person), payable on account of the transfer to
the person will be deducted from the Purchase Price unless satisfactory evidence
of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 6 of the Letter of Transmittal.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if at any time on or after ________ __, 2000, and prior
to the Payment Date, any of the following events shall have occurred (or shall
have been determined by the Company to have occurred) that, in the Company's
reasonable judgment and regardless of the circumstances giving rise thereto
(including any action or omission to act by the Company), makes it inadvisable
to proceed with the Offer or with acceptance for payment:
(a) the failure of the Company to obtain the approval of the Merger by
TEAM America's shareholders;
(b) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person,
domestic or foreign, before any court, authority, agency or tribunal
that directly or indirectly (i) challenges the making of the Offer,
the acquisition of some or all of the Shares pursuant to the Offer or
otherwise relates in any manner to the Offer, or (ii) in the Company's
reasonable judgment, could materially and adversely affect the
business, condition (financial or otherwise), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct
of the business of the Company or any of its subsidiaries or
materially impair the contemplated benefits of the Offer to the
Company;
(c) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order
or injunction threatened, 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 court or any authority,
agency or tribunal that, in the Company's reasonable judgment, would
or might directly or indirectly (i) make the acceptance for payment
of, or payment for, some or all of the Shares illegal or otherwise
restrict or prohibit consummation of the Offer, (ii) delay or restrict
the ability of the Company, or render the Company unable, to accept
for payment or pay for some or all of the Shares, (iii) materially
impair the contemplated benefits of the Offer to the Company, (iv)
materially and adversely affect the business, condition (financial or
otherwise), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or
any of its subsidiaries, or (v) make it likely that the Shares would
be delisted from trading on Nasdaq following the Offer;
(d) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) the
22
<PAGE> 23
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the commencement of a
war, armed hostilities or other international or national calamity
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 that, in the
Company's reasonable judgment, might affect, the extension of credit
by banks or other lending institutions in the United States, (v) any
change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the
reasonable judgment of the Company, have a material adverse effect on
the Company's business, operations or prospects or the trading in the
Shares, (vi) in the case of any of the foregoing existing at the time
of the commencement of the Offer, a material acceleration or worsening
thereof, or (vii) any decline in either the Dow Jones Industrial
Average or the Standard and Poor's Index of 500 Industrial Companies
by an amount in excess of 10% measured from the close of business on
________ __, 2000; or
(e) except as otherwise disclosed in this Offer to Purchase, a tender or
exchange offer for any or all of the Shares (other than the Offer), or
any merger, business combination or other similar transaction with or
involving the Company or any subsidiary, shall have been proposed,
announced or made by any person (see, "The Merger Agreement" above).
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
omission by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its
reasonable judgment. Except for the approval of the Merger by TEAM America's
shareholders, all of the offering conditions will be satisfied or waived prior
to Expiration Time. 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 which may be asserted at any time and
from time to time. Any determination by the Company concerning the events
described above will be final and binding.
23
<PAGE> 24
7. PRICE RANGE OF SHARES.
The Company's common stock was quoted on the Nasdaq National Market under
the symbol "TMAM" from the commencement of its initial public offering on
December 10, 1996 until October 1, 1999, when its common stock began trading on
the Nasdaq SmallCap Market. The following table sets forth, for the periods
indicated, the high and low sales prices for the Company's common stock, as
reported on the Nasdaq National Market and the Nasdaq SmallCap Market.
<TABLE>
<CAPTION>
CALENDAR PERIOD COMMON STOCK PRICE
HIGH LOW
<S> <C> <C>
Fiscal 1998:
First Quarter........................................... $ 17.50 $ 9.50
Second Quarter.......................................... $ 14.00 $ 10.00
Third Quarter........................................... $ 10.44 $ 5.00
Fourth Quarter.......................................... $ 7.50 $ 4.13
Fiscal 1999:
First Quarter........................................... $ 6.50 $ 4.00
Second Quarter.......................................... $ 5.38 $ 4.13
Third Quarter........................................... $ 6.88 $ 4.00
Fourth Quarter.......................................... $ 7.25 $ 5.25
Fiscal 2000:
First Quarter........................................... $ 7.13 $ 5.63
Second Quarter.......................................... $ 6.66 $ 3.13
Third Quarter........................................... $ 6.00 $ 4.06
Fourth Quarter (through October __, 2000)............... $ ___ $ ___
</TABLE>
As of October __, 2000, the number of record holders of Company common
stock, was ___. The closing sales price of the common stock on October __, 2000,
was $______.
The Company has not paid any cash dividends to holders of its common stock
and does not anticipate paying any cash dividends in the foreseeable future, but
intends instead to retain future earnings for reinvestment in its business. The
payment of any future dividends would be at the discretion of the Company's
board of Directors and would depend upon, among other things, its future
earnings, operations, capital requirements, general financial condition and
general business conditions.
24
<PAGE> 25
8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases ____________ Shares pursuant to the Offer at
the Purchase Price, representing up to 50% of the outstanding shares of the
Company on ________ ___, 2000, the Company expects the maximum aggregate cost,
including all fees and expenses applicable to the Offer, to be approximately $__
million. The Company intends to fund the purchase of Shares pursuant to the
Offer and the payment of related fees and expenses from funds arranged for by
Mucho, on behalf of the Company, either in cash or by means of an irrevocable
deposit or the establishment of an irrevocable line of credit accessible by the
Disbursing Agent, as agent for the holders of the Company's Common Stock
tendered pursuant to the Offer, in accordance with the terms of the Agreement.
This Offer is conditioned upon the approval of the Merger by TEAM America's
shareholders.
In connection with the Offer and the Merger, the Company and Mucho expect
the Company to enter into a senior secured bank credit facility of approximately
$_______. The Company expects that several banks will commit, as a group, to
provide the facility on a revolving basis for the first ___ months after the
Merger is consummated, at which point the outstanding balance would be converted
into a term loan. The ______ Bank would arrange the facility with the bank
syndicate and will act as administrative agent for the banks. The proceeds from
the facility will be available to fund the payment of costs and expenses
associated with the tender offer and the Merger, and to provide funds for future
acquisitions by the Company. We expect borrowings under the facility will bear
interest at __________. It is likely also to include typical covenants and
default provisions, including ________. The Company plans to make its initial
borrowings under the facility as soon as the Merger is consummated.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company provides outsourcing to small and medium sized businesses in
the areas of human resource administration, regulatory compliance management,
employee benefits administration, regulatory compliance management, employee
benefits administration, risk management services and employer liability
protection, payroll and payroll tax administration and placement services. The
Company's principal executive office is located at 110 East Wilson Bridge Road,
Worthington, Ohio 43085.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The Company's financial information (other than book value per share) set
forth for the years ended December 31, 1998 and 1999 is set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999 (the
"Company's 1999 Annual Report"). The financial information (other than book
value per share) set forth below for the six months ended June 30, 1999 and 2000
is summarized or prepared from the unaudited consolidated financial statements
set forth in the company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000 (the "Company's 2000 Second Quarter Report"). The Company's 1999
Annual Report, and the Company's 2000 Second Quarter Report are hereby
incorporated herein by reference. More comprehensive financial information is
included in such reports and the information below is qualified in its entirety
by reference to such reports and all of the financial statements and related
notes contained therein, copies of which may be obtained as set forth below
under the caption "Further Information."
25
<PAGE> 26
10. INTEREST OF DIRECTORS AND OFFICERS AND PRINCIPAL SHAREHOLDERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES.
As of the close of business on ________ __, 2000, the Company had 4,341,999
Shares issued and outstanding.
Each outstanding Share is entitled to one vote. The ____________ Shares
that the Company is offering to purchase pursuant to the Offer represent 50% of
the Shares outstanding on ________ __, 2000 (approximately ___% assuming
exercise of outstanding exercisable Options).
As of ________ __, 2000, the Company's directors and executive officers as
a group (__ persons) beneficially owned an aggregate of ________ Shares
representing approximately ___% of the outstanding Shares, assuming the exercise
by such persons of options that are currently exercisable or that are
exercisable within 60 days.
Neither the Company nor, to the best of the Company's knowledge, any of the
Company's directors or executive officers, nor any affiliates of any of the
foregoing, had any transactions involving the Shares during the 60 business days
prior to the date hereof.
Executive officers and directors of the Company may participate in the
Offer on the same basis as the Company's other shareholders. The Company has
been advised that as many as ________ directors, ________ executive officers and
________ affiliates controlled by such persons intend to tender up to ________
Shares pursuant to the Offer. The Company, however, does not know at this time
the actual total number of shares that such persons will tender pursuant to the
Offer.
The following table sets forth, as of ________ __, 2000, the beneficial
ownership of the Shares of each of the directors and executive officers of the
Company and all directors and executive officers as a group, the number of
Shares for which the director or executive officer has indicated an intention to
tender, and the percent of Shares currently beneficially owned to the total
number of shares outstanding after the Offer, assuming ____________ shares have
been purchased pursuant to the Offer.
Unless otherwise indicated, all information with respect to beneficial
ownership has been furnished by the respective director or executive officer, as
the case may be.
The following table shows the beneficial ownership of the Company's
directors and executive officers as of June 30, 2000 and the amount of shares
each person currently intends on selling in the Offer. The number of Shares for
which the director or executive officer has indicated an intention to tender is
based on the present intention of the named individual, and each such individual
reserves the right to tender all or a portion of the Shares beneficially owned
by him or her.
<TABLE>
<CAPTION>
COMMON SHARES SHARES TO BE
NAME(1) BENEFICIALLY OWNED(2) PERCENT TENDERED
<S> <C> <C> <C>
Kevin T. Costello (3)(4) 718,600 16.5%
Thomas L. Gerlacher 0 * 0
Charles Dugan (5) 37,200 *
Crystal Faulkner (6) 3,500 *
William W. Johnston (7) 12,660 *
M.R. Swartz (8) 16,000 *
All directors and executive 773,560 17.8%
officers as a group (6 persons)
</TABLE>
*Represents less than 1% of the Company's outstanding Shares.
(1) The address of Messrs. Costello, Gerlacher, Dugan, Johnston and Swartz and
Ms. Faulkner is 110 East Wilson Bridge Road, Worthington, Ohio 43085.
26
<PAGE> 27
(2) Beneficial ownership is determined in accordance with the rules of the SEC
which generally attribute ownership of securities to persons who possess
sole or shared voting power and/or investment power with respect to those
shares.
(3) Includes 28,200 shares owned of record by Mr. Costello of which he has the
sole voting and investment power and 273,200 shares owned of record by Mr.
Costello and his wife, Anne M. Costello, as joint tenants, of which Mr.
Costello shares with his wife voting and investment power. Also includes
232,200 shares, which Mr. Costello has a right to vote and dispose as
general partner of TEAM Partners LP, a limited partnership in which Mr.
Costello contributed 100,000 shares, Mr. Schilg contributed 100,000 shares
and Mr. Dugan contributed 32,200 shares as limited partners. Also includes
60,000 shares as to which Mr. Costello has the right to acquire beneficial
ownership upon the exercise of stock options exercisable within 60 days of
June 30, 2000.
(4) Does not include 600,000 shares that vest upon the closing of the Merger.
(5) Includes 5,000 shares as to which Mr. Dugan has the right to acquire
beneficial ownership upon the exercise of stock options exercisable within
60 days of June 30, 2000.
(6) Includes 2,000 shares as to which Ms. Faulkner has the right to acquire
beneficial ownership upon the exercise of stock options exercisable within
60 days of June 30, 2000.
(7) Includes 12,360 shares as to which Mr. Johnston has the right to acquire
beneficial ownership upon the exercise of stock options exercisable within
60 days of June 30, 2000.
(8) Includes 5,000 shares as to which Mr. Swartz has the right to acquire
beneficial ownership upon the exercise of stock options exercisable within
60 days of June 30, 2000.
Except for outstanding options to purchase shares granted to directors and
executive officers and as otherwise described herein, neither the Company nor,
to the best of the Company's knowledge, any of its affiliates, 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 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 authorizations.
11. EFFECTS 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 be traded publicly and may reduce the
number of shareholders. Pursuant to the Merger, however, the Company will issue
up to an additional 5,925,925 shares of the Company's common stock to current
holders of Mucho common stock, which will serve to increase the number of shares
and should serve to increase the number of shareholders of the Company.
Regardless, the Company anticipates there will be a sufficient number of Shares
outstanding and publicly traded following consummation of the Offer to ensure a
continued trading market for the Shares. Based upon published guidelines of
Nasdaq, the Company does not believe its purchase of Shares pursuant to the
Offer will cause the Company's remaining Shares to be delisted from Nasdaq.
Depending on the number of Shares purchased in the Offer and the trading price
of the Shares after the Expiration Time, however, the Company may not satisfy
one of the continued listing standards of Nasdaq, which would require the
Company to prepare a reasonable plan to meet then-existing listing standards
within 90 days in order to maintain its listing on Nasdaq. Such a delisting of
the Shares, together with the substantial decrease in the percentage of Shares
held by shareholders, could result in a substantial decrease in the liquidity of
the Shares, even if the Company continues to be a reporting company under the
Exchange Act and continues to file the periodic reports (including annual and
quarterly reports) required to be filed thereunder. If the Shares are delisted
from Nasdaq, the Shares may only be able to trade in the over-the-counter
market. Although prices in respect of trades may be published by the National
Association of Securities Dealers, Inc. on its electronic bulletin board and
"pink sheets," quotes for such shares would not be as readily available;
accordingly, the Shares could trade much less frequently than the Shares traded
prior to any such delisting, which could have a material adverse effect on the
market value of the Shares.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules
27
<PAGE> 28
in connection with meetings of the Company's shareholders. The Company believes
its purchase of Shares pursuant to the Offer will not result in the Shares
becoming eligible for deregistration under the Exchange Act.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire any such
Shares) and will be available for the Company to issue without further
shareholder action (except as required by applicable law or the rules applicable
to companies with shares traded on Nasdaq or any other securities exchange on
which the Shares may be listed) for purposes including, but not limited to the
raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans. The
Company has no current plans for the issuance of Shares repurchased pursuant to
the Offer by the Company. The repurchased Shares will be authorized but unissued
Shares.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit material to
the Company's business that might be adversely affected by the Company's
acquisition of Shares as contemplated herein or of any approval or other action
by any government or governmental, administrative or regulatory authority or
agency, domestic or foreign, that would be required for the acquisition or
ownership of Shares by the Company as contemplated herein. Should any such
approval or other action be required, the Company presently contemplates that
such approval or other action will be sought. The Company is unable to predict
whether it will 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 result in
adverse consequences to the Company's business. The Company's obligations under
the Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 6 of "The Offer" herein.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences to United States Holders (as defined below) of a sale of Shares
pursuant to the Offer. Those shareholders who do not participate in the Offer
should not incur any United States federal income tax liability from the Offer.
This summary is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), existing United States Treasury Regulations promulgated thereunder,
published rulings, administrative pronouncements and judicial decisions, changes
to which could affect the tax consequences described herein (possibly on a
retroactive basis).
This summary addresses only Shares held as capital assets. It does not
address all of the United States federal tax consequences that may be relevant
to particular shareholders in light of their personal circumstances, or to
certain types of shareholders (such as certain financial institutions, dealers
or traders in securities or commodities, insurance companies, tax-exempt
organizations or persons who hold Shares as a position in a "straddle" or as
part of a "hedging" or "conversion" transaction or that have a functional
currency other than the United States dollar). This summary may not be
applicable with respect to Shares acquired as compensation (including Shares
acquired upon the exercise of options or which were or are subject to forfeiture
restrictions). This summary does not address the state, local or foreign tax
consequences of participating in the Offer. EACH HOLDER OF SHARES SHOULD CONSULT
SUCH HOLDER'S TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES TO SUCH HOLDER OF
PARTICIPATION IN THE OFFER.
A "United States Holder" is a holder of Shares that for United States
federal income tax purposes is (i) a citizen or resident of the United States,
(ii) a corporation or partnership created or organized in or under the laws of
the United States or any State or division thereof (including the District of
Columbia), (iii) an estate the income of which is subject to United States
federal income taxation regardless of its source, or (iv) a trust (a) the
administration over which a United States court can exercise primary supervision
and (b) all of the substantial decisions of which one or more United States
persons have the authority to control, and certain other trusts considered
United States Holders for federal income tax purposes. A "Non-United States
Holder" is a holder of Shares other than a United States Holder.
A United States Holder participating in the Offer will be treated either as
having sold Shares or as having received a dividend distribution from the
Company. In that regard, under Section 302 of the Code, a United States Holder
whose Shares are sold pursuant to the Offer will be treated as having sold
Shares if the sale (i) results in a "complete termination" of all of such
holder's equity interest in the Company, (ii) is a "substantially
disproportionate" redemption with respect to such holder or (iii) is "not
essentially equivalent to a dividend" with
28
<PAGE> 29
respect to such holder. In applying each of the Section 302 tests, a United
States Holder will be treated as owning Shares actually or constructively owned
by certain related individuals and entities.
The receipt of cash by a shareholder will result in a "complete
termination" of the shareholder's interest if either (i) all of the Shares that
are actually and constructively owned by the shareholder are transferred
pursuant to the Offer or (ii) all of the Shares actually owned by the
shareholder are sold pursuant to the Offer and the shareholder is eligible to
waive, and effectively waives, the attribution of the Shares constructively
owned by the shareholder in accordance with the procedures described in the
Code. A sale of Shares will be "substantially disproportionate" with respect to
a United States Holder if the percentage of the then outstanding Shares actually
and constructively owned by such holder immediately after the sale of Shares
pursuant to the Offer is less than 80% of the percentage of the Shares actually
and constructively owned by such holder immediately before the sale (treating
Shares sold pursuant to the Offer as outstanding). A United States Holder will
satisfy the "not essentially equivalent to a dividend" test if the reduction in
such holder's proportionate interest in the Company constitutes a "meaningful
reduction" given such holder's particular facts and circumstances. The IRS has
concluded in a published ruling that even a minor reduction in the percentage
interest of a shareholder whose relative stock interest in a publicly held
corporation is minimal and who exercises no control over corporate affairs
constitutes such a "meaningful reduction."
If a United States Holder is treated as having sold Shares, such holder
will recognize capital gain or loss equal to the difference between the amount
of cash received and such holder's adjusted tax basis in the Shares sold to the
Company. In the case of an individual United States Holder whose holding period
for such Shares exceeds one year, the maximum marginal United States federal
income tax rate of 20% applicable to such gain will be lower than the maximum
marginal United States federal income tax rate applicable to ordinary income of
39.6%.
If a United States Holder who participates in the Offer is not treated as
having sold Shares, such holder will be treated as receiving a dividend to the
extent of such holder's ratable share of the Company's earnings and profits.
Such a dividend may be included in the United States Holder's gross income as
ordinary income without reduction for the adjusted tax basis of the Shares sold.
In such event, the United States Holder's adjusted tax basis in its Shares sold
in the Offer generally will be added to such holder's adjusted tax basis in the
remaining Shares. A dividend received by a corporate United States Holder may be
(i) eligible for a dividends-received deduction (subject to applicable
limitations) and (ii) subject to the "extraordinary dividend" provisions of the
Code. To the extent, if any, that the cash received by a United States Holder
exceeds the Company's earnings and profits, it will be treated first as a
tax-free return of such United States Holder's tax basis in the Shares and
thereafter as capital gain. See Section 3 with respect to the application of
United States federal income tax withholding to payments made to Non-United
States Holders and the backup withholding tax requirements.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS, AND OF
CERTAIN FEDERAL TAX LAWS.
14. 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 of "The Offer" herein 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 the
Depositary and making a public announcement thereof. During any such extension,
all Shares previously tendered and not properly withdrawn will remain subject to
the Offer and to the rights of a tendering shareholder to withdraw such
shareholder's Shares. The Company also expressly reserves the right, in its
reasonable discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 of "The Offer" hereof by giving oral or
written notice of such termination or postponement to the Depositary and making
a public announcement thereof. The Company's reservation of the right to delay
payment for Shares which it has accepted for payment is limited by the Exchange
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 reasonable discretion, and regardless of whether any of the
events set forth in Section 6 of "The Offer" herein shall have occurred or shall
be deemed by the Company to have occurred, to amend the Offer in
29
<PAGE> 30
any respect (including, without limitation, 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 9:00 a.m., Eastern Standard Time, on the next business day
after the last previously scheduled or announced Expiration Time. Any public
announcement made pursuant to the Offer will be disseminated promptly to
shareholders in a manner reasonably designed to inform shareholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, 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 materially changes 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 under the Exchange Act.
These rules provide that the minimum period during which an 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 on the facts and circumstances, including the
relative materiality of such terms or information. If (i)(a) the Company
increases or decreases the price to be paid for Shares, (b) increases the number
of Shares being sought in the Offer and, in the event of an increase in the
number of Shares being sought, such increase exceeds 2% of the outstanding
Shares, or (c) decreases the number 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 such notice
of an increase or decrease is first published, sent or given in the manner
specified in this Section 14, the Offer will be extended until the expiration of
such period of ten business days. For the purposes of the Offer, a "business
day" means any day other than a Saturday, Sunday or Federal holiday and consists
of the time period from 12:01 a.m. through 12:00 Midnight, Eastern Standard
Time.
15. FEES AND EXPENSES.
The Company has retained National City Bank to act as Depositary in
connection with the Offer. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed by the Company for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the Offer, including certain liabilities under
the federal securities laws. The Company estimates that it will pay National
City up to $_____ in fees.
THE DEPOSITARY HAS NOT BEEN RETAINED TO MAKE SOLICITATIONS OR
RECOMMENDATIONS IN CONNECTION WITH THE OFFER.
No fees or commissions will be payable by the Company to brokers, dealers
or other persons for soliciting tenders of Shares pursuant to the Offer.
Shareholders holding Shares through brokers or banks are urged to consult the
brokers or banks to determine whether transaction costs are applicable if
shareholders tender Shares through such brokers or banks and not directly to the
Depositary. The Company, however will reimburse brokers, dealers and commercial
banks for customary mailing and handling expenses incurred by them in forwarding
the Offer and related materials to the beneficial owners of Shares held by them
as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or
trust company has been authorized to act as the agent of the Company or the
Depositary for purposes of the Offer. The Company will pay or cause to be paid
all stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Instruction 6 in the Letter of Transmittal.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer or the acceptance of Shares pursuant
thereto is not in compliance with any valid applicable law, the Company will
make a good faith effort to comply with the applicable law. If, after such good
faith effort, the Company cannot comply with the applicable law, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Shares in such jurisdiction. In any jurisdiction the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on the Company's behalf by one or more
registered brokers or dealers licensed under the laws of the jurisdiction.
30
<PAGE> 31
FURTHER INFORMATION
The Company files reports, proxy statements and other information with the
Commission under the Exchange Act. These reports and statements are available
upon request from the Secretary of the Company at the Company's principle
executive office. This information may be read and copied at the following
Commission locations:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
New York Regional Office
7 World Trade Center
Suite 1300
New York, New York 10048
Chicago Regional Office
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
Copies of this information are also available by mail from the Commission's
Public Reference Section, 450 Fifth Street, N.W., Room 1024, Washington D.C.,
20549, at prescribed rates. Further information on the operation of the
Commission's Public Reference Room in Washington, D.C. may be obtained by
calling the Commission at 1-800-SEC-0330.
The Commission also maintains a world wide web site that contains reports,
proxy statements and other information about registrants, such as the Company,
that file electronically with the Commission. The address of that web site is
http://www.sec.gov.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS 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 OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY.
Pursuant to Rule 13e-4 of the General Rules and Regulations of the
Commission under the Exchange Act, the Company has filed with the Commission a
Schedule TO that contains additional information with respect to the Offer. Such
Schedule TO, 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 9 of "The Offer" herein with respect to information concerning
the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION 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
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
TEAM AMERICA CORPORATION
_______________ __, 2000
