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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 EXPIRE AT 10:00 A.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validly tendered and not withdrawn. All Shares acquired in the Offer will be
acquired at the Purchase Price. The Company reserves the right, in its sole
discretion, to purchase a total of 50% of the outstanding Shares pursuant to the
Offer. 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and not withdrawn, the Company will accept for payment, and thereby purchase,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 ________ __, 2000, the last full trading day prior to the
announcement of the Offer, the closing sales price per Share as reported on
Nasdaq was $_.__. 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. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS 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 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.
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.
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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"), 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.
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.
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Table of Contents
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Section Page
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Summary Term Sheet
Factors that May Affect Future Results
Introduction
The Merger Agreement
The Offer
1. Number of Shares; Proration
2. Purpose of the Offer; Certain Effects of the Offer
3. Procedures for Tendering Shares
4. Withdrawal Rights
5. Purchase of Shares and Payment of Purchase Price
6. Certain Conditions of the Offer
7. Price Range of Shares
8. Source and Amount of Funds
9. Certain Information Concerning the Company
10. Interest of Directors and Officers and Principal Shareholders;
Transactions and Arrangements Concerning Shares
11. Effects of the Offer on the Market for Shares
12. Certain Legal Matters; Regulatory Approvals
13. Certain United States Federal Income Tax Consequences
14. Extension of the Offer; Termination; Amendment
15. Fees and Expenses
16. Miscellaneous
Further Information
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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).
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.
Market Price of Shares On August __, 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.
See Section 6 of "The Offer" herein.
How to Tender Shares 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.
Expiration and Proration Dates __________ __, 2000 at 10:00 a.m. Eastern
Standard Time, unless extended by the
Company.
Payment Date As soon as practicable after the Expiration
Date, as defined in Section 1 of "The
Offer" herein.
Position of the Company and its Neither the Company nor its Board of
Board of Directors 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 10:00 a.m. Eastern Standard Time
on _________ __, 2000. 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).
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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.
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FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain sections in this Offer to Purchase, including the "Summary,"
"Introduction" and "Purpose of the Offer; Certain Effects of the Offer," "Source
and Amount of Funds" and "Certain Legal Matters; Regulatory Approvals" contain
certain forward-looking statements based on management's current beliefs,
estimates and assumptions concerning the operations, future results and
prospects of the Company and the professional employer organization industry in
general. All statements addressing operating performance, events or developments
that management anticipates will occur in the future, including statements
related to future revenue, profits, expenses, income and earnings per share or
statements expressing general optimism about future events are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Forward-looking statements are subject to
the safe harbors created in the Exchange Act. In addition, words such as
"expects," "anticipates," "intends," "plans," "believes," "estimates,"
variations of such words, and similar expressions are intended to identify
forward-looking statements.
The statements described in the preceding paragraph constitute
"forward-looking statements" within the meaning of Section 21E of the Exchange
Act. Because these statements are based on a number of beliefs, estimates and
assumptions that could cause actual results to materially differ from those in
the forward-looking statements, there is no assurance that forward-looking
statements will prove to be accurate.
Any number of factors could affect future operations and results,
including the risk factors set forth in the Company's Annual Report on Form 10-K
for the year ended December 31, 1999 (filed on April 14, 2000). This list of
factors is not exclusive.
Forward-looking statements are subject to the safe harbors created in
the Exchange Act. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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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. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS 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 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 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 "Agreement") with Mucho.com, Inc., a Nevada corporation
("Mucho"), and Team Merger Corporation, a Nevada Corporation ("Merger Sub"),
whereby Merger Sub will be merged with and into Mucho ("Mucho" or the "Surviving
Corporation") 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. Upon consummation of the Merger, former holders
of Mucho common stock, outstanding options and warrants will hold approximately
____% of the outstanding Common Stock of the common stock of Company. This Offer
is conditioned upon the consummation of the Merger.
In accordance with the terms of the Agreement, following the Effective
Time of the Agreement and the approval of the Merger and related transactions by
a majority of the voting power of the Company, the Company is offering to
purchase up to 50% of the outstanding Shares of the Company's Common Stock at a
purchase price of
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$6.75 per share. Payment for the tendered Shares is to be provided by the
Surviving Corporation, on behalf of the Company, in the form of either an
irrevocable deposit or the establishment of an irrevocable line of credit to be
made available to the Depositary, as agent for the holders of the Company's
Shares tendered pursuant to 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 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. 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 realize a proportionate increase in their relative equity interest in
the Company, and thus in the Company's future earnings and assets (subject to
the Company's right to issue additional Shares, including the Shares to be
issued in the Merger) and other equity securities in the future). In determining
whether to tender Shares pursuant to the Offer, shareholders should 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 ________
__, 2000, the last full trading day prior to the announcement of the Offer, the
closing sales price per Share as reported on Nasdaq was $_.__. 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, 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. For more information regarding the Merger, please refer to the
Company's Registration Statement on Form S-4 filed with the SEC on August 11,
2000.
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).
Following the conversion of Mucho common stock into shares of Company
Shares, former holders of Mucho common stock will hold _________ percent (__%)
of the issued and outstanding shares of Company Shares.
Corporate Governance
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At the Effective Time of the Merger, there will be significant changes
to the governance of the Company. Pursuant to the terms of the Agreement, Mucho
and the Company will each nominate four members of the Company's Board of
Directors, with one additional member of the Board of Directors of the Company
to be selected jointly by Mucho and the Company. 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 of the Company; and Thomas L.
Gerlacher shall be the Chief Accounting Officer. In addition, the Articles of
Incorporation and the Code of Regulations of the Company will be amended, as set
forth in Exhibits 2.1(h) and 2.1(g) to the Agreement, respectively.
Escrow of Converted Stock
Some of Mucho's founding shareholders have agreed to place a total of
2,222,222 shares of Company Shares 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, 2001, 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, 2001, provided that the Company has
raised $15 million in equity financing.
THE OFFER
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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 Date (as defined below) at a
price of $6.75 per Share, net to the seller in cash.
The term "Expiration Date" means 10:00 a.m., Eastern Standard Time, on
_________, __________ __, 2000, 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 Date" 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 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
tendered prior to the Expiration Date will be subject to proration, as described
below. The proration period also expires on the Expiration Date.
If:
- the Company changes the Purchase Price from $6.75 per Share;
- the Company increases the number of Shares being sought in the
Offer and such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares; or
- the Company decreases the number of Shares being sought;
and
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- 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. HOWEVER, THE OFFER 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 Date is less than or equal to ____________ Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer, not
to exceed 2% of the outstanding Shares), the Company will, upon the terms and
subject to the conditions of the Offer, accept for payment and thereby purchase,
all Shares so tendered at the Purchase Price. 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 Expiration 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 Date, 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 will determine the proration factor as soon as practicable following
the Expiration Date. 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. 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
announce the final proration factor or commence payment for any Shares purchased
pursuant to the Offer until approximately five business days after the
Expiration Date. The preliminary results of any proration will be announced by
press release as promptly as practicable after the Expiration Date. 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 ________ __,
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 realize a proportionate increase in their
relative equity interest in the Company, and thus in the Company's future
earnings and assets, subject to the Company's 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
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net price 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.
The 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.
In the view of the 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 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 funds required to complete the Offer and pay related expenses will
be provided from 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 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, 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. Upon
consummation of the Agreement, former holders of Mucho common stock, outstanding
options and warrants will hold approximately ____% of the outstanding Common
Stock of the Company. This Offer is conditioned upon the approval of the Merger
by a majority of the voting power of the Company. See Sections 6 and 8 of "The
Offer" herein.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
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 the Board of Directors. In particular, the Board of Directors
may repurchase Shares in the open market beginning after the expiration of the
period of ten business days after the Expiration 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 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 Expiration
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.
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
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<PAGE> 12
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
prior to 10:00 a.m., Eastern Standard Time, on the Expiration Date 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.
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 two 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 Date, 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.
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<PAGE> 13
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 Date
(or the procedure for book-entry transfer cannot be completed on a timely basis)
or if time will not permit all required documents to reach the Depositary prior
to the Expiration Date, 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 Date, 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.
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<PAGE> 14
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 expiration 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 Dealer Manager, 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 payment of Shares tendered pursuant
to the Offer 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 Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 10:00 a.m., Eastern Standard Time, on ___________ __, 2000.
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
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<PAGE> 15
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 Date 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, as promptly
as practicable following the Expiration Date, the Company will accept for
payment and thereby purchase Shares validly tendered, and not withdrawn, prior
to the Expiration Date at the Purchase Price. 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.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay the
Purchase Price per Share for ____________ Shares (subject to increase or
decrease as provided in Section 14 of "The Offer" herein) validly tendered, or
such lesser number of Shares as are validly tendered and not withdrawn as
permitted in Section 4 of "The Offer" herein.
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
made by Mucho 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 and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date; however, the Company 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
Date. 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
Expiration 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
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<PAGE> 16
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 Expiration 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 consummate the Merger;
(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 other), 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
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 significant decrease in the market price
of the Shares or 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;
(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
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<PAGE> 17
with or involving the Company or any subsidiary, shall have been
proposed, announced or made by any person (see, "The Merger
Agreement" above);
(f) (i) except as otherwise disclosed in this Offer to Purchase, any
entity, person or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to
acquire beneficial ownership of more than 5% of the outstanding
Shares (other than any such person, entity or group who has filed
a Schedule 13D or Schedule 13G with the Commission on or before
________ __, 2000), (ii) any such entity, group or person who has
filed a Schedule 13D or Schedule 13G with the Commission on or
before the Expiration Date shall have acquired or proposed to
acquire beneficial ownership of an additional 2% or more of the
outstanding Shares, or (iii) any person, entity or group shall
have filed a Notification and Report Form under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
or made a public announcement reflecting an intent to acquire the
Company or any of its subsidiaries or any of their respective
assets or securities other than in connection with a transaction
authorized by the Board of Directors (see, "The Merger Agreement"
above); or
(g) any change or changes shall have occurred in the business,
financial condition, assets, income, operations, prospects or
stock ownership of the Company or its subsidiaries that, in the
Company's reasonable judgment, is or may have a material adverse
significance to the Company or its subsidiaries.
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. 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.
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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.
CALENDAR PERIOD COMMON STOCK PRICE
--------------- ------------------
HIGH LOW
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 (through August 4, 2000)...... $ 5.00 $ 4.13
As of August 4, 2000, the number of record holders of Company common
stock, was 254. The closing sales price of the common stock on August __, 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.
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8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases ____________ Shares pursuant to the
Offer at the Purchase Price, 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 provided by Mucho
either in cash 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
consummation of the Merger.
On June 16, 2000, the Company, Merger Sub and Mucho, entered into an
agreement and plan of merger. By the terms of the Agreement, Merger Sub is to be
merged with and into Mucho. Upon consummation of the Merger, Mucho shall become
the surviving corporation and the separate existence of Merger Sub shall cease
to exist. The Merger shall be effective upon the filing of a certificate of
merger with the Secretary of State of Nevada. See "The Merger Agreement"
hereinabove. In accordance with the terms of the Agreement, Mucho shall then
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. Upon
consummation of the Agreement, former holders of Mucho common stock, outstanding
options and warrants will hold approximately ____% of the outstanding Common
Stock of the Company.
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 1999 Second Quarter Report"). The Company's 1999
Annual Report, and the Company's 2000 First 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."
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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 certain of its directors and executive officers intend to
tender up to an aggregate of _______ Shares 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.
<TABLE>
<CAPTION>
COMMON SHARES SHARES TO BE
NAME(1) BENEFICIALLY OWNED(2) PERCENT TENDERED
------- --------------------- ------- ------------
<S> <C> <C> <C>
Kevin T. Costello (3)(4) 593,600 13.5%
Thomas R. 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 officers as a group (6 662,960 15.3%
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.
(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.
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<PAGE> 21
(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) Includes 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. Nonetheless, 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. However, depending on the number of Shares
purchased in the Offer and the trading price of the Shares after the Expiration
Date, 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 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
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<PAGE> 22
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 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
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<PAGE> 23
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 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 Date. 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
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<PAGE> 24
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) materially
increases the Dealer Manager fee, (c) 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 (d)
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 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 the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
the jurisdiction.
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 New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
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<PAGE> 25
Washington, D.C. 20549 New York, New York 10048 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
25
