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EXHIBIT (a)(1)(A)
[KFORCE.COM LOGO]
OFFER TO PURCHASE FOR CASH
SHARES OF COMMON STOCK OF KFORCE.COM, INC.
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
WE ARE:
- kforce.com, Inc.,
- offering to purchase 10,000,000 shares of our common stock, and
- offering to purchase these shares at a price between $4.75 and $5.50 per share
in cash, without interest.
IF YOU WANT TO TENDER YOUR SHARES INTO OUR OFFER, YOU SHOULD:
- specify the price between $4.75 and $5.50 at which you are willing to tender
your shares,
- specify the amount of shares you want to tender, and
- follow the instructions in this document and related documents, including the
accompanying Letter of Transmittal, to submit your shares.
WHEN OUR OFFER EXPIRES:
- we will select the lowest purchase price specified by tendering shareholders
that will allow us to purchase 10,000,000 shares or such lesser number of
shares as are tendered,
- if the number of shares tendered at or below the selected price is not more
than 10,000,000, we will purchase all these shares at that price, and
- if the number of shares tendered at or below the selected price is more than
10,000,000, we will purchase shares at the selected price first from holders
of less than 100 shares who tendered all of their shares at or below the
selected price, and then, on a pro rata basis, from all other shareholders who
tendered shares at or below the selected price.
Our offer is not conditioned on any minimum number of shares being tendered. Our
offer is, however, subject to other conditions discussed in Section 7.
Our Board of Directors has approved this offer. However, neither we nor our
Board of Directors nor the Dealer Manager nor the Information Agent makes any
recommendation to you as to whether you should tender or not tender your shares
or as to the price or prices at which you may choose to tender your shares. We
urge you to evaluate carefully all information in this offer and consult with
your investment and tax advisors. You must make your own decision as to whether
to tender your shares and, if so, how many shares to tender and the price or
prices at which your shares should be tendered.
This document contains important information about our offer. We urge you to
read it in its entirety.
OUR OFFER AND YOUR RIGHT TO WITHDRAW YOUR SHARES WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN STANDARD TIME, ON TUESDAY, DECEMBER 5, 2000, UNLESS THE OFFER IS
EXTENDED.
WE MAY EXTEND THE OFFER PERIOD AT ANY TIME.
The Dealer Manager for our offer is:
BANC OF AMERICA SECURITIES LLC
November 6, 2000
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IMPORTANT PROCEDURES
If you want to tender all or any part of your shares, you must do one of
the following before our offer expires:
- if you hold certificates in your own name, complete and sign a Letter of
Transmittal according to its instructions, and deliver it, together with
any required signature guarantee, the certificates for your shares and
any other documents required by the Letter of Transmittal to EquiServe,
L.P., the Depositary,
- if your shares are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, contact the nominee if you desire
to tender your shares and request that the nominee tender them for you,
- if you are a participant in our 401(k) Retirement Savings Plan follow the
separate instructions and procedures described in the "Letter to
Participants in the kforce 401(k) Retirement Savings Plan" as described
in Section 3 of this document, or
- if you are an institution participating in The Depository Trust Company,
which we call the "book-entry transfer facility" in this document, tender
your shares according to the procedure for book-entry transfer described
in Section 3.
If you want to tender your shares but:
- your certificates for the shares are not immediately available or cannot
be delivered to the Depositary, or
- you cannot comply with the procedure for book-entry transfer, or
- your other required documents cannot be delivered to the Depositary by
the expiration of our offer,
you can still tender your shares if you comply with the guaranteed delivery
procedure described in Section 3.
TO TENDER YOUR SHARES YOU MUST FOLLOW THE PROCEDURES DESCRIBED IN THIS
DOCUMENT, THE LETTER OF TRANSMITTAL AND THE OTHER DOCUMENTS RELATED TO OUR
OFFER, INCLUDING CHOOSING A PRICE AT WHICH YOU WANT TO TENDER YOUR SHARES.
If you wish to maximize the chance that your shares will be purchased by
us, you should check the box next to "Shares tendered at a price determined
pursuant to the offer" in the section of the Letter of Transmittal called "Price
at Which You Are Tendering." Note that this election could result in your shares
being purchased at the minimum price of $4.75 per share.
If you have any questions or need assistance, you should contact D.F. King
& Co., Inc., the Information Agent for our offer, or Banc of America Securities
LLC, the Dealer Manager for our offer, at their respective addresses and
telephone numbers set forth on the back cover page of this document. You may
request additional copies of this document, the Letter of Transmittal or the
Notice of Guaranteed Delivery from the Information Agent.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF
AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO
THE PURCHASE PRICE AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES IN THIS OFFER.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH
WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR
REPRESENTATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR
REPRESENTATION AS HAVING BEEN AUTHORIZED BY US OR BY THE DEALER MANAGER.
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TABLE OF CONTENTS
<TABLE>
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SECTION PAGE
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<S> <C> <C>
SUMMARY OF TERMS......................................................... 1
FORWARD-LOOKING STATEMENTS............................................... 5
THE OFFER................................................................ 6
Section 1. Number of Shares; Price; Priority of Purchase............... 6
Section 2. Purposes of Our Offer; Certain Effects of Our Offer......... 8
Section 3. Procedures for Tendering Shares............................. 10
Section 4. Withdrawal Rights........................................... 15
Section 5. Purchase of Shares and Payment of Purchase Price............ 16
Section 6. Conditional Tender Procedures............................... 17
Section 7. Conditions of Our Offer..................................... 17
Section 8. Price Range of Shares; Dividends; Our Rights Agreement...... 20
Section 9. Source and Amount of Funds.................................. 21
Section 10. Certain Information Concerning Us........................... 23
Section 11. Interest of Directors and Executive Officers; Transactions
and Arrangements Concerning Shares.......................... 23
Section 12. Effects of the Offer on the Market for Shares; Registration
Under the Exchange Act...................................... 25
Section 13. Certain Legal Matters; Regulatory Approvals................. 26
Section 14. Certain United States Federal Income Tax Consequences....... 26
Section 15. Extension of the Offer; Termination; Amendment.............. 29
Section 16. Fees and Expenses........................................... 30
Section 17. Miscellaneous............................................... 30
</TABLE>
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SUMMARY OF TERMS
We are providing this summary of terms for your convenience. It highlights
material information in this document, but you should realize that it does not
describe all of the details of our offer to the same extent that they are
described in the body of this document. We urge you to read the entire document
and the related Letter of Transmittal because they contain the full details of
our offer. Where helpful, we have included references to the sections of this
document where you will find a more complete discussion.
WHO IS OFFERING TO PURCHASE MY
SHARES? kforce.com, Inc. We are offering to purchase up
to 10,000,000 shares of our outstanding common
stock and the associated common stock purchase
rights. No separate consideration will be paid
for these common stock purchase rights.
WHAT IS THE PURCHASE PRICE FOR
THE SHARES? The price range for our offer is $4.75 to $5.50
per share. We are conducting the offer through
a procedure commonly called a "modified Dutch
Auction." This procedure allows you to choose a
price within this price range at which you are
willing to sell your shares.
We will look at the prices chosen by
shareholders for all of the shares properly
tendered. We will then select the lowest
purchase price that will allow us to buy
10,000,000 shares. If a lesser number of shares
is properly tendered, we will select the lowest
price that will allow us to buy all shares that
were properly tendered. All shares we purchase
will be purchased at the same price, even if
you have chosen a lower price, but we will not
purchase any shares tendered in the offer at a
price above the price we have selected in
accordance with these procedures.
If you wish to maximize the chance that your
shares will be purchased, you should check the
box next to "Shares tendered at a price
determined pursuant to the offer" in the
section on the Letter of Transmittal called
"Price at Which You Are Tendering," indicating
that you will accept the purchase price we
determine. You should understand that this
election could result in your shares being
purchased at the minimum price of $4.75 per
share.
HOW AND WHEN WILL I BE PAID? If your shares are purchased in our offer, you
will be paid the purchase price, in cash,
without interest, as soon as practicable after
the expiration of the offer period and the
acceptance of the shares for payment. There may
be tax consequences to receiving payment. No
separate consideration will be paid for the
associated common stock purchase rights See
Sections 1, 3, 5 and 14.
HOW MANY SHARES WILL KFORCE
PURCHASE? We will purchase 10,000,000 shares in the offer
or such lesser number of shares as are properly
tendered. 10,000,000 shares represent
approximately 23.7% of our outstanding common
stock. We also expressly reserve the right to
purchase additional shares representing up to
2% of our outstanding shares and could decide
to purchase more shares subject to applicable
legal requirements. Our offer is not
conditioned on any minimum number of shares
being tendered by shareholders. See Section 1.
IF I TENDER MY SHARES, HOW
MANY OF MY SHARES WILL
KFORCE PURCHASE? All the shares that you tender in the offer may
not be purchased even if they are tendered at
or below the purchase price we select. If more
than 10,000,000 shares are tendered at or below
the
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selected purchase price, we will purchase
shares based on the following order of
priority:
- First, we will purchase shares from all
holders of "odd lots" of less than 100 shares
(not including any shares held in the kforce
401(k) Retirement Savings Plan) who properly
tender all of their shares at or below the
selected price.
- Second, we will purchase shares from all
other shareholders who properly tender shares
at prices equal to or below the selected
price, on a pro rata basis, subject to the
conditional tender provisions described in
Section 6. As a result, we will purchase the
same percentage of shares from each tendering
shareholder in this second category. We will
announce this proration percentage, if it is
necessary, after our offer expires.
As we noted above, we may also choose to
purchase an additional 2% of the outstanding
shares, subject to applicable legal rules. See
Section 1.
HOW WILL KFORCE PAY FOR THE
SHARES? We have all of the funds necessary to purchase
shares tendered in the offer and to pay related
fees and expenses. These funds were obtained
through a draw upon our $90 million senior
secured revolving credit facility. The offer is
not subject to the receipt of financing. See
Section 9.
HOW LONG DO I HAVE TO TENDER
MYSHARES? You may tender your shares until the offer
expires. Currently, the offer is scheduled to
expire on Tuesday, December 5, 2000, at 12:00
midnight, Eastern Standard time, but we may
choose to extend it at any time. We cannot
assure you that we will extend our offer or, if
we extend it, for how long it will be extended.
See Section 15.
HOW WILL I BE NOTIFIED IF
KFORCE EXTENDS THE OFFER? If our offer is extended, we will make a public
announcement of the extension before 9:00 a.m.,
Eastern Standard time, on the first business
day after the offer was scheduled to expire.
See Section 15.
ARE THERE ANY CONDITIONS TO
THE OFFER? Yes. Our obligation to accept and pay for your
tendered shares depends upon the satisfaction
or waiver of a number of conditions, including:
- No significant decrease in the price of our
common stock or in the price of equity
securities generally and no adverse changes
in the U.S. stock markets or credit markets
shall have occurred during this offer.
- No legal action shall have been threatened,
pending or taken that might adversely affect
the offer.
- No one shall have proposed, announced or made
a tender or exchange offer (other than this
offer), merger, business combination or other
similar transaction involving us.
- No material change in our business, condition
(financial or otherwise), assets, income,
operations, prospects or stock ownership
shall have occurred during this offer.
For more information on conditions to our
offer, See Section 7.
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HOW DO I TENDER MY SHARES? To tender your shares, you must complete one of
the actions described under "Important
Procedures" on the inside front cover of this
document before our offer expires.
You may also contact the Information Agent, the
Dealer Manager or your broker for assistance.
The contact information for the Information
Agent and the Dealer Manager is on the back
cover page of this document.
See Section 3 and the instructions to the
Letter of Transmittal.
ONCE I HAVE TENDERED SHARES IN
THE OFFER, CAN I WITHDRAW MY
TENDER? Yes. If you tender your shares and change your
mind, you may withdraw your shares at any time
before our offer expires. In addition, after
our offer expires, if we have not accepted for
payment the shares you have tendered to us, you
may withdraw your shares at any time after
12:00 midnight, Eastern Standard time, on
Thursday, January 4, 2001. See Section 4.
HOW DO I WITHDRAW SHARES I
PREVIOUSLY TENDERED? To withdraw your shares, you must timely
deliver a written, telegraphic or facsimile
notice of your withdrawal to the Depositary at
the address appearing on the back cover page of
this document. Your notice of withdrawal must
specify your name, the number of shares to be
withdrawn and the name of the registered holder
of such shares. Some additional requirements
apply if the certificates for shares to be
withdrawn have been delivered to the Depositary
or if your shares have been tendered under the
procedure for book-entry transfer set forth in
Section 3. See Section 4.
WHAT DO KFORCE AND ITS BOARD
OF DIRECTORS THINK OF THE
OFFER? Our Board of Directors has approved this offer.
However, neither we nor our Board of Directors
nor the Dealer Manager nor the Information
Agent is making any recommendation to you as to
whether you should tender or refrain from
tendering your shares or at what purchase price
you should choose to tender your shares. You
must make your own decision as to whether to
tender your shares and, if so, how many shares
to tender and the price or prices at which your
shares should be tendered. You should discuss
whether to tender your shares with your broker
or other financial or tax advisor. Our
directors and executive officers have advised
us that they do not intend to tender any shares
in the offer. See Sections 2 and 11.
IF I DECIDE NOT TO TENDER ANY
OF MY SHARES, HOW WILL THE
OFFER AFFECT MY SHARES? Shareholders who choose not to tender will own
a greater interest in us following the offer.
WHAT IS THE RECENT MARKET
PRICE OF MY SHARES? The shares are traded on The Nasdaq Stock
Market under the symbol "KFRC." On November 3,
2000, the last full trading day before we
announced our intention to begin our offer, the
last reported sale price of the shares on The
Nasdaq Stock Market was $4.46875. You are urged
to obtain current market quotations for your
shares. See Section 8.
WILL I HAVE TO PAY BROKERAGE
COMMISSIONS OR STOCK
TRANSFER TAX IF
I TENDER MY SHARES? If you are a registered shareholder and you
tender your shares directly to the Depositary,
you will not need to pay any brokerage
commissions. If you hold shares through a
broker or bank, how-
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ever, you should ask your broker or bank to
determine whether you will be charged a fee to
tender your shares. See Section 3.
If you instruct the Depositary in the Letter of
Transmittal to make the payment for the shares
to the registered holder, you will not incur
any stock transfer tax. See Section 5.
WHAT ARE THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES
IF I TENDER MY SHARES? Generally, you will be subject to United States
federal income taxation when you receive cash
from us in exchange for the shares you tender.
The cash you receive will be treated either as:
- a sale or exchange eligible for capital gains
treatment, or
- a dividend subject to ordinary income tax
rates.
See Section 14.
WHAT ARE THE "ASSOCIATED
COMMON STOCK PURCHASE RIGHTS"? The associated common stock purchase rights
were issued to all shareholders but are not
represented by a separate document. Instead,
they are represented by the certificates for
your shares. Unless the context otherwise
requires, all references to shares include the
associated common stock purchase rights, and,
unless these rights are redeemed prior to the
expiration of our offer, a tender of shares
will include a tender of the associated rights.
See Section 8.
WHO CAN I TALK TO IF I HAVE
QUESTIONS? Our Information Agent and Dealer Manager can
help answer your questions. The Information
Agent is D.F. King & Co., Inc. and the Dealer
Manager is Banc of America Securities LLC.
Their contact information is set forth on the
back cover page of this document.
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FORWARD-LOOKING STATEMENTS
This document contains a number of forward-looking statements regarding the
financial condition, results of operations and business of kforce. These
statements may be made directly in this document or may be incorporated in this
document by reference to other documents. These statements may also include
references to periods following the completion of our offer or other
transactions described in this document. You can find many of these statements
by looking for words such as "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "may," "will" and "potential" and for similar expressions.
These forward-looking statements involve substantial risks and uncertainties.
Some of the factors that may cause actual results to differ materially from
those contemplated by the forward-looking statements include, but are not
limited to, the following possibilities:
- ability to identify, attract, retain, develop and motivate qualified
personnel,
- ability to achieve and manage growth,
- impact of competition,
- employment liability risk,
- successful implementations of new technologies,
- increased costs from government regulation, and
- general economic, market, business and social conditions.
All subsequent written and oral forward-looking statements concerning our
offer or other matters addressed in this document and attributable to us or any
person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. We do not
undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unexpected events.
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THE OFFER
SECTION 1. NUMBER OF SHARES; PRICE; PRIORITY OF PURCHASE.
GENERAL. On the terms and subject to the conditions of our offer, we will
purchase 10,000,000 shares of our common stock, including the associated common
stock purchase rights, or such lesser number of shares that are properly
tendered and not properly withdrawn in accordance with Section 4, at a price not
greater than $5.50 nor less than $4.75 per share, net to the seller in cash,
without interest.
The term "expiration date" with respect to our offer means 12:00 midnight,
Eastern Standard time, on Tuesday, December 5, 2000. We may, in our sole
discretion, extend the period of time during which the offer will remain open.
If extended by us, the term "expiration date" will mean the latest time and date
at which our offer, as extended by us, will expire. See Section 15 for a
description of our right to extend, delay, terminate or amend the offer.
In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender shares must either: (1) specify that they are willing to sell
their shares to us at the purchase price selected by us in the offer, or (2)
specify the price, not greater than $5.50 nor less than $4.75 per share, at
which they are willing to sell their shares to us in the offer. As soon as
practicable following the expiration date, we will select the purchase price for
shares properly tendered and not properly withdrawn pursuant to our offer,
taking into account the number of shares tendered and the prices specified by
tendering shareholders. We will select the lowest purchase price between $4.75
and $5.50 net per share in cash, without interest, that will enable us to buy
10,000,000 shares or, if a lesser number of shares are properly tendered, all
shares that are properly tendered and not properly withdrawn. All shares
purchased in the offer will be purchased at the same purchase price even if you
have specified a lower price.
Shares properly tendered at prices at or below the purchase price we
determine and not properly withdrawn will be purchased at the selected purchase
price upon the terms and conditions of our offer, including the odd lot,
proration and conditional tender provisions described below. If more than
10,000,000 shares are tendered at or below the purchase price we have selected,
shares tendered at or below the purchase price will be subject to proration,
except for odd lots. All shares tendered and not purchased pursuant to our
offer, including shares tendered at prices in excess of the purchase price we
determine and shares not purchased because of proration or the conditional
tender procedures, will be returned to you at our expense as promptly as
practicable following the expiration date.
We reserve the right to purchase more than 10,000,000 shares pursuant to
our offer. In accordance with the rules of the Securities and Exchange
Commission (the "SEC"), we may purchase in our offer an additional number of
shares, not to exceed 2% of the outstanding shares, without amending or
extending our offer. See Section 15.
On the Letter of Transmittal you can specify the order in which portions of
your shares will be purchased if, as a result of the proration provisions or
otherwise, some but not all of your tendered shares are purchased in our offer.
In addition, if you want to tender portions of your shares at more than one
price, you must complete a separate Letter of Transmittal for each price at
which you tender shares.
You may withdraw your shares from our offer by following the procedures in
Section 4. If we:
- increase or decrease the range of prices to be paid for shares,
- increase the number of shares being sought in our offer by more than 2%
of the outstanding shares,
- decrease the number of shares being sought in our offer, or
- materially change the fees paid to the Dealer Manager,
then our offer must remain open, or will be extended, until at least ten
business days from, and including, the date that notice of any such change is
first published, sent or given in the manner described in Section 15. For
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the purposes of our offer, a "business day" means any day other than a Saturday,
Sunday or United States federal holiday and consists of the time period from
12:01 a.m. through 12:00 midnight, Eastern Standard time.
Unless the context otherwise requires, all references to shares in this
document and the documents related to our offer include the associated common
stock purchase rights, and, unless the rights are redeemed prior to the
expiration date of our offer, a tender of shares will also be a tender of the
associated common stock purchase rights. See Section 8 for a description of the
rights agreement under which these rights were issued.
OUR OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. OUR OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 7.
PRIORITY OF PURCHASES. If 10,000,000 or fewer shares are properly tendered
at prices equal to or below the purchase price and not properly withdrawn, we
will purchase all properly tendered shares at the purchase price.
If more than 10,000,000 shares (or a greater number of shares as we may
elect to purchase) are properly tendered at prices equal to or below the
purchase price and not properly withdrawn before the expiration date, we will
purchase properly tendered shares in the following order:
- First, we will purchase all shares tendered by any "odd lot holder" (as
defined below) who:
tenders all shares owned (beneficially or of record) by such odd lot
holder at a price equal to or below the purchase price selected by us
(tenders of less than all the shares owned by the odd lot holder will
not qualify for this preference), and
completes the section entitled "Odd Lots" in the Letter of Transmittal
and, if applicable, in the Notice of Guaranteed Delivery.
- Second, after the purchase of all of the shares properly tendered by odd
lot holders and subject to the conditional tender procedures described in
Section 6, we will purchase all other shares properly tendered at prices
equal to or below the purchase price and not properly withdrawn before
the expiration date, on a pro rata basis with appropriate adjustments to
avoid purchases of fractional shares, as described below.
As a result, all of the shares that you tender in our offer may not be
purchased, even if they are tendered at prices equal to or below the purchase
price.
As we noted above, we may elect to purchase more than 10,000,000 shares in
our offer, subject to applicable law. If we do so, the preceding provisions will
apply to the greater number of shares.
ODD LOTS. For purposes of our offer, the term "odd lots" means all shares
properly tendered prior to the expiration date at prices equal to or below the
purchase price selected by us and not properly withdrawn by any person, referred
to as an "odd lot holder," who owns (beneficially or of record) a total of fewer
than 100 shares (not including any shares held in our 401(k) Retirement Savings
Plan) and certifies to that fact in the "Odd Lots" box on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery. To qualify
for this preference, an odd lot holder must tender all shares owned
(beneficially or of record) by the odd lot holder in accordance with the
procedures described in Section 3.
As set forth above, odd lots will be accepted for payment before proration,
if any, of the purchase of other tendered shares. This preference is not
available to partial tenders or to beneficial or record holders of an aggregate
of 100 or more shares, even if these holders have separate accounts or
certificates representing fewer than 100 shares, or with respect to any shares
held in our 401(k) Retirement Savings Plan. By tendering shares in our offer, an
odd lot holder who holds shares in its name and tenders its shares directly to
the Depositary will avoid the payment of brokerage commissions in a sale of the
holder's shares. Any odd lot holder wishing to tender all of the shareholder's
shares pursuant to our offer should complete the section entitled "Odd Lots" in
the Letter of Transmittal and, if applicable, in the Notice of Guaranteed
Delivery.
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We also reserve the right, but will not be obligated, to purchase all
shares properly tendered by any shareholder who tenders all shares owned
(beneficially or of record) at or below the purchase price selected by us and
who, as a result of proration, would then own beneficially or of record an
aggregate of fewer than 100 shares. If we exercise this right, we will increase
the number of shares that we are offering to purchase in the offer by the number
of shares purchased through the exercise of such right, subject to applicable
law.
PRORATION. If proration of tendered shares is required, we will determine
the proration factor as soon as practicable following the expiration date.
Subject to the conditional tender procedures described in Section 6, proration
for each shareholder tendering shares, other than odd lot holders, will be based
on the ratio of the number of shares properly tendered and not properly
withdrawn by such shareholder to the total number of shares properly tendered
and not properly withdrawn by all shareholders, other than odd lot holders, at
or below the purchase price selected by us.
Because of the potential difficulty in determining the number of shares
properly tendered, including shares tendered by guaranteed delivery procedures,
as described in Section 3, and not properly withdrawn, and because of the odd
lot procedures described above and the conditional tender procedures, we do not
expect that we will be able to announce the final proration factor or commence
payment for any shares purchased under our offer until seven to ten 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.
After the expiration date, shareholders may obtain preliminary proration
information from the Information Agent or the Dealer Manager and may be able to
obtain such information from their brokers.
As described in Section 14, the number of shares that we will purchase from
a shareholder under our offer may affect the United States federal income tax
consequences to that shareholder and, therefore, may be relevant to a
shareholder's decision whether or not to tender shares. The Letter of
Transmittal affords each tendering shareholder the opportunity to designate the
order of priority in which shares tendered are to be purchased in the event of
proration, should a shareholder decide to do so for federal income tax reasons.
In addition, shareholders may choose to submit a "conditional tender" under the
procedures discussed in Section 6 in order to structure their tender for federal
income tax reasons.
This Offer to Purchase and the Letter of Transmittal will be mailed to
record holders of shares and will be furnished to brokers, dealers, commercial
banks and trust companies whose names, or the names of whose nominees, appear on
our 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.
SECTION 2. PURPOSES OF OUR OFFER; CERTAIN EFFECTS OF OUR OFFER
PURPOSES OF OUR OFFER. We are making our offer because our Board of
Directors believes that our shares are undervalued in the public market. Over
the past year, we have been considering various strategic alternatives, such as
share repurchases, as a use of available resources to create shareholder value.
This offer effectively accelerates our existing share repurchase program, which
was approved by our Board of Directors on March 11, 1999 and increased to $100
million on October 24, 2000. Since March 11, 1999, we have repurchased an
aggregate of approximately $27.7 million worth of shares, leaving approximately
$72.3 million for additional repurchases, including pursuant to this offer. We
believe that our offer is a prudent use of our financial resources given our
business profile, assets and current market price, and that investing in our own
shares is an attractive use of capital and an efficient means to provide value
to our shareholders. Our offer is consistent with our historical commitment of
repurchasing shares from time to time as a means of increasing shareholder
value.
After the completion of our offer, we expect to have sufficient cash flow
and access to funding (including as a result of the financing described in
Section 9) to meet our cash needs for normal operations and reasonably expected
capital expenditures.
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POTENTIAL BENEFITS OF THIS OFFER. We believe our offer may provide several
benefits to us and our shareholders, including:
- Our offer and related borrowings will provide a capital structure that
makes greater use of financial leverage at stated interest rates, thus
making possible improved earnings per share for continuing shareholders
if future earnings are at the level expected.
- After our offer is completed our financial condition, access to capital
and outlook for continued favorable cash generation will allow us to
continue to pursue the development of our core business.
- Our offer represents the opportunity to provide cash to shareholders who
elect to tender their shares. Shareholders who sell all or a portion of
their common stock have the opportunity to receive a premium of 6.3% to
23.1% to our closing price per share of $4.46875 on November 3, 2000, the
last trading day prior to the announcement of our offer. In addition,
where common stock is tendered by the registered owner of that stock
directly to the Depositary, the sale of those shares in our offer will
permit the seller to avoid the usual transaction costs associated with
open market sales. Furthermore, odd lot holders who hold common stock
registered in their names and tender their shares directly to the
Depositary and whose shares are purchased under our offer will avoid the
payment of brokerage commissions that might be payable on sales of their
shares.
- Shareholders who determine not to participate in our offer will realize a
proportionate increase in their relative equity interest in us and thus
in our future earnings and assets.
Accordingly, our Board of Directors believes that our offer is consistent
with our long-term corporate goal of increasing shareholder value.
POTENTIAL RISKS AND DISADVANTAGES OF OUR OFFER. Our offer also presents
some potential risks and disadvantages to us and our continuing shareholders,
including:
- We will incur significant additional indebtedness in order to pay for the
tendered shares. If our offer is fully subscribed, our ratio of total
debt to total capital will increase materially. In addition, our
shareholders' equity will decrease from $211.3 million to $156.3 million.
We cannot determine whether market or other third party perceptions of us
will be adversely affected by the additional indebtedness. Our higher
leverage will also result in our continuing shareholders bearing a higher
risk in the event of future losses or earnings reductions.
- Our offer will reduce our "public float" (the number of shares owned by
non-affiliate shareholders and available for trading in the securities
markets). This reduction in our public float, combined with higher
leverage, may result in lower stock prices or reduced liquidity in the
trading market for our common stock following the completion of this
offer. If we experience lower stock prices in the trading market, we may
lose coverage by some or all of the market analysts who currently cover
us, which could further reduce the trading price of our stock.
NEITHER WE NOR OUR BOARD OF DIRECTORS NOR THE DEALER MANAGER NOR THE
INFORMATION AGENT MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ANY SHARES OR AS TO THE PRICE OR PRICES AT
WHICH SHAREHOLDERS MAY CHOOSE TO TENDER THEIR SHARES. WE HAVE NOT AUTHORIZED ANY
PERSON TO MAKE ANY SUCH RECOMMENDATION. SHAREHOLDERS SHOULD CAREFULLY EVALUATE
ALL INFORMATION IN OUR OFFER, SHOULD CONSULT THEIR OWN INVESTMENT AND TAX
ADVISORS, AND SHOULD MAKE THEIR OWN DECISIONS ABOUT WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH TO
TENDER. WE HAVE BEEN INFORMED THAT NONE OF OUR DIRECTORS OR EXECUTIVE OFFICERS
INTENDS TO TENDER ANY SHARES IN OUR OFFER.
We may in the future purchase additional shares of common stock on the open
market, in private transactions, through tender offers or otherwise. Any
additional purchases may be on the same terms or on terms that are more or less
favorable to shareholders than the terms of our offer. However, SEC Rule 13e-4
prohibits us and our affiliates from purchasing any shares, other than pursuant
to our offer, until at least ten business days after the expiration date of our
offer, except pursuant to certain limited exceptions provided in Rule 14e-5.
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Shares that we acquire in our offer will be canceled and returned to the
status of authorized but unissued stock, and will be available for us to issue
without further shareholder action (except as required by applicable law or
Nasdaq rules or any other securities exchange on which the shares are listed)
for all purposes including, without limitation, acquisitions, raising additional
capital and the satisfaction of obligations under existing or future employee
benefit or compensation programs or stock plans or compensation programs for
directors. We may establish an executive loan program pursuant to which we would
loan up to $5 million in the aggregate to certain officers and key employees for
the purpose of purchasing our common stock. Except as disclosed in this
document, we have no current plans for the issuance of shares repurchased
pursuant to our offer.
Except as disclosed in this document, we currently have no plans, proposals
or negotiations underway that relate to or would result in:
- any extraordinary transaction, such as a merger, reorganization or
liquidation, involving us or any of our subsidiaries,
- any purchase, sale or transfer of a material amount of our assets or any
of our subsidiaries' assets which is material to us and our subsidiaries,
taken as a whole,
- any material change in our present dividend policy, or indebtedness or
capitalization,
- any change in our present Board of Directors or management, including,
but not limited to, any plans or proposals to change the number or the
term of directors or to fill any existing vacancies on the Board of
Directors or to change any material term of the employment contract of
any executive officer,
- any other material change in our corporate structure or business,
- any class of our equity securities being delisted by Nasdaq or ceasing to
be authorized for quotation in an automated quotations system operated by
a national securities association,
- any class of our equity securities becoming eligible for termination of
registration under Section 12(g)(4) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
- the suspension of our obligation to file reports under Section 15(d) of
the Exchange Act,
- the acquisition or disposition by any person of our securities, or
- any change in our articles of incorporation, by-laws or other governing
instruments or other actions which could impede the acquisition of
control of us.
SECTION 3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For shares to be tendered properly under our
offer, either (1) or (2) below must happen:
(1) The Depositary must receive all of the following before or on the
expiration date at the Depositary's address on the back cover page of
this document:
- either: (a) the certificates for the shares or (b) a confirmation of
receipt of the shares pursuant to the procedure for book-entry
transfer we describe below, and
- one of: (a) a properly completed and executed Letter of Transmittal,
including any required signature guarantees, (b) an "agent's message"
of the type we describe below in the case of a book-entry transfer or
(c) a specific acknowledgement in the case of a tender through the
"automated tender offer program" we describe below, and
- any other documents required by the Letter of Transmittal.
(2) You must comply with the guaranteed delivery procedure set forth below.
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In accordance with Instruction 5 of the Letter of Transmittal, if you want
to tender your shares you must properly complete the pricing section of the
Letter of Transmittal, which is called "Price at Which You Are Tendering":
- If you wish to maximize the chance that your shares will be purchased at
the purchase price determined by us, you should check the box in this
section of the Letter of Transmittal next to "Shares tendered at a price
determined pursuant to the offer." This means that you will accept the
purchase price selected by us in accordance with the terms of our offer.
Note that this election could result in your shares being purchased at
the minimum price of $4.75 per share.
- If you wish to indicate a specific price (in multiples of $0.125) at
which your shares are being tendered, you must check ONE box in this
section under "Shares tendered at a price determined by you." You should
be aware that this election could mean that none of your shares will be
purchased if you choose a price that is higher than the purchase price we
eventually select after the expiration date.
If you wish to tender portions of your shares at different prices you must
complete a separate Letter of Transmittal for each portion of your shares that
you wish to tender at a different price. However, the same shares cannot be
tendered (unless properly withdrawn previously in accordance with Section 4) at
more than one price. To tender shares properly, one and only one price box must
be checked in the "Price at Which You Are Tendering" section on each Letter of
Transmittal.
In addition, odd lot holders who tender all shares must complete the
section captioned "Odd Lots" in the Letter of Transmittal and, if applicable, in
the Notice of Guaranteed Delivery, to qualify for the preferential treatment
available to odd lot holders as set forth in Section 1.
If you tender your shares directly to the Depositary, you will not need to
pay any brokerage commissions. If you hold shares through a broker or bank,
however, you should ask your broker or bank to see if you will be charged a fee
to tender your shares through the broker or bank.
Participants in our 401(k) Retirement Savings Plan who wish to tender some
or all of the shares allocated to their accounts must follow the instructions in
the "Letter to Participants in kforce's 401(k) Retirement Savings Plan"
furnished separately and return it to Merrill Lynch Trust Company in accordance
with those instructions. The instructions must be received by Merrill Lynch
Trust Company no later than three business days prior to the expiration date of
our offer.
ENDORSEMENTS AND SIGNATURE GUARANTEES. Depending on how the certificates
for your shares are registered and to whom you want payments or deliveries made,
you may need to have your certificates endorsed and the signatures on the Letter
of Transmittal and endorsement guaranteed by an eligible guarantor institution.
No endorsement or signature guarantee is required if:
- the Letter of Transmittal is signed by the registered holder of the
shares tendered (which, for purposes of this Section 3, includes any
participant in The Depository Trust Company, referred to as the "book-
entry transfer facility," whose name appears on a security position
listing as the owner of the shares) exactly as the name of the registered
holder appears on the certificate(s) for the shares and payment and
delivery are to be made directly to the holder, unless the holder has
completed either the box captioned "Special Delivery Instructions" or the
box captioned "Special Payment Instructions" on the Letter of
Transmittal, or
- shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity that 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 that is
an "eligible guarantor institution," as such term is defined in Rule
17Ad-15 under the Exchange Act.
See Instruction 1 of the Letter of Transmittal.
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On the other hand, if a certificate for shares is registered in the name of
a person other than the person executing a Letter of Transmittal or you are
completing either the box captioned "Special Delivery Instructions" or the box
captioned "Special Payment Instructions" on the Letter of Transmittal, 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, and
- the signature on: (1) the Letter of Transmittal and (2) on the
certificate or stock power must be guaranteed by an eligible guarantor
institution.
METHOD OF DELIVERY. Payment for shares tendered and accepted for payment
under our offer will be made only after timely receipt by the Depositary of all
of the following:
- certificates for such shares or a timely confirmation of the book-entry
transfer of such shares into the Depositary's account at the book-entry
transfer facility as described below,
- any of: (1) a properly completed and duly executed Letter of Transmittal;
(2) an agent's message in the case of a book-entry transfer; or (3) the
specific acknowledgement in the case of a tender through the automated
tender offer program, and
- any other documents required by the Letter of Transmittal.
THE METHOD OF DELIVERING ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT YOUR ELECTION
AND RISK. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
ALL DELIVERIES IN CONNECTION WITH OUR OFFER, INCLUDING A LETTER OF
TRANSMITTAL AND CERTIFICATES FOR SHARES, MUST BE MADE TO THE DEPOSITARY AND NOT
TO US, THE DEALER MANAGER, THE INFORMATION AGENT OR THE BOOK-ENTRY TRANSFER
FACILITY. ANY DOCUMENTS DELIVERED TO US, THE DEALER MANAGER, THE INFORMATION
AGENT OR THE BOOK-ENTRY TRANSFER FACILITY WILL NOT BE FORWARDED TO THE
DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE PROPERLY TENDERED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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 document, 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. Even if delivery of
shares is made through a book-entry transfer into the Depositary's account at
the book-entry transfer facility, either (1) or (2) below must occur.
(1) The Depositary must receive all of the following before or on the
expiration date at the Depositary's address on the back cover page of
this document:
- one of (a) a properly completed and executed Letter of Transmittal,
including any required signature guarantees, (b) an agent's message as
described below in the case of a book-entry transfer or (c) a specific
acknowledgement in the case of a tender through the automated tender
offer program, and
- any other documents required by the Letter of Transmittal, or
(2) The guaranteed delivery procedure described below must be followed.
Delivery of the Letter of Transmittal or any other required documents to the
book-entry transfer facility does not constitute delivery to the Depositary.
The term "agent's message" means a message transmitted by the book-entry
transfer facility to, and received by, the Depositary, which states that the
book-entry transfer facility has received an express acknowledgment from the
participant in the book-entry transfer facility tendering the shares that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that we may enforce such agreement against such participant.
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Participants in the book-entry transfer facility also may tender their
shares in accordance with the "automated tender offer program" to the extent it
is available to them for the shares they wish to tender. A shareholder tendering
through the automated tender offer program must expressly acknowledge that the
shareholder has received and agrees to be bound by the Letter of Transmittal and
that we may enforce such agreement against them.
GUARANTEED DELIVERY. If you wish to tender your shares pursuant to our
offer but your share certificates are not immediately available or cannot be
delivered to the Depositary before 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 before the expiration
date, you can still tender your shares, if all of the following conditions are
satisfied:
- the tender is made by or through an eligible guarantor institution,
- the Depositary receives by hand, mail, overnight courier, telegram or
facsimile transmission, before the expiration date, a properly completed
and duly executed Notice of Guaranteed Delivery in the form we have
provided with this document, specifying the price at which shares are
being tendered, including (where required) a signature guarantee by an
eligible guarantor institution in the form set forth in such Notice of
Guaranteed Delivery, and
- all of the following are received by the Depositary within three Nasdaq
trading days after the date of receipt by the Depositary of the Notice of
Guaranteed Delivery:
either (a) the certificates for the shares or (b) a confirmation of
receipt of the shares pursuant to the procedure for book-entry transfer
we describe above, and
one of (a) a properly completed and executed Letter of Transmittal,
including any required signature guarantees, (b) an "agent's message" of
the type we describe above in the case of a book-entry transfer or (c) a
specific acknowledgement in the case of a tender through the "automated
tender offer program" we describe above, and
any other documents required by the Letter of Transmittal.
RETURN OF UNPURCHASED SHARES. If any tendered shares are not purchased
pursuant to our offer or are properly withdrawn before the expiration date, or
if less than all shares evidenced by a shareholder's certificates are tendered,
certificates for unpurchased shares will be returned as soon as practicable
after the expiration or termination of our offer or the proper withdrawal of the
shares, as applicable. 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, shares will be returned or credited without expense to
the shareholder.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of shares
to be accepted, the price to be paid for shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of shares will be determined by us, in our sole discretion, and our
determination will be final and binding on all parties. We reserve the absolute
right to reject any or all tenders of any shares that we determine are not in
proper form or the acceptance for payment of or payment for which we determine
may be unlawful. We also reserve the absolute right to waive any of the
conditions of our offer or any defect or irregularity in any tender with respect
to any particular shares or any particular shareholder and our interpretation of
the terms of our 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 us.
Unless waived, any defects and irregularities in connection with tenders must be
cured within the time period, if any, we determine. We will not, nor will the
Depositary, the Information Agent, the Dealer Manager or any other person, be
under any duty to give notification of any defects or irregularities in any
tender or incur any liability for failure to give any such notification.
OUR 401(k) RETIREMENT SAVINGS PLAN. Participants in our 401(k) Retirement
Savings Plan may instruct the Trustee of the plan, Merrill Lynch Trust Company,
to tender some or all of the shares allocated to a
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participant's account by following the instructions in the "Letter to
Participants in kforce's 401(k) Retirement Savings Plan" furnished separately.
All documents furnished to shareholders generally in connection with our offer
will be made available to participants whose savings plan accounts are credited
with shares. Participants in the savings plan cannot use the Letter of
Transmittal to direct the tender of shares, but must use the separate
instruction letter sent to them.
Our 401(k) Retirement Savings Plan is prohibited from selling shares to us
for a price that is less than the prevailing market price. Accordingly, if a
participant in the savings plan elects to tender shares at a price that is lower
than the prevailing market price of our common stock at the expiration of our
offer, the tender price elected by the participant will be deemed to have been
increased to the closest tender price that is not less than the closing price of
our common stock on The Nasdaq Stock Market on the expiration date of our offer.
Delivery of a Letter of Transmittal by a savings plan participant does not
constitute proper tender of his or her 401(k) Retirement Savings Plan shares.
Proper tender can only be made by the Trustee, who is the record owner of the
shares held in the savings plan. If a participant wishes to tender some or all
of the shares held on the participant's behalf in its savings plan account,
Merrill Lynch Trust Company must receive a participant's instructions at least
three business days prior to the expiration date, otherwise the Trustee will not
tender any shares held on behalf of the participant in the savings plan.
The proceeds received by the Trustee from any tender of shares from a
participant's savings plan account will be reinvested pro-rata in accordance
with the participant's current investment directions for new elective deferral
contributions to that plan. However, if the participant's current investment
directions for new elective deferral contributions provide that some or all of
the participant's contributions are to be invested in our common stock, then
that portion of the tender proceeds will be invested in the Merrill Lynch
Retirement Preservation Fund. Once the tender proceeds have been credited to the
participant's savings plan accounts, the participant may reallocate his or her
investments among the various investment funds under the savings plan in the
usual manner. Participants in our 401(k) Retirement Savings Plan are urged to
read the separate instruction letter and related materials carefully.
YOUR REPRESENTATION AND WARRANTY; OUR ACCEPTANCE CONSTITUTES AN
AGREEMENT. A tender of shares under any of the procedures described above will
constitute the tendering shareholder's acceptance of the terms and conditions of
our offer, as well as your representation and warranty to us that:
- you have a "net long position" in the shares or equivalent securities at
least equal to the shares tendered within the meaning of Rule 14e-4
promulgated by the SEC under the Exchange Act, and
- 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:
- has a net long position equal to or greater than the amount tendered in
(a) the subject securities or (b) securities immediately convertible
into, or exchangeable or exercisable for, the subject securities, and
- will deliver or cause to be delivered the shares in accordance with the
terms of our offer.
Rule 14e-4 provides a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. Our acceptance for payment of
shares tendered under our offer will constitute a binding agreement between you
and us on the terms and conditions of our offer described in this and related
documents.
FEDERAL BACKUP WITHHOLDING TAX. Under the United States federal backup
withholding tax rules, 31% of the gross proceeds payable to a shareholder or
other payee under our offer must be withheld and remitted to
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the United States Treasury, unless the shareholder or other payee provides such
person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies under penalties of
perjury that such number is correct or otherwise establishes an exemption. If
the Depositary is not provided with the correct taxpayer identification number
or another adequate basis for exemption, the holder may be subject to certain
penalties imposed by the Internal Revenue Service. Therefore, each tendering
shareholder should complete and sign the Substitute Form W-9 included as part of
the Letter of Transmittal in order to provide the information and certification
necessary to avoid backup withholding, unless such shareholder otherwise
establishes to the satisfaction of the Depositary that the shareholder is not
subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign shareholders (in addition to foreign corporations)) are not subject to
these backup withholding and reporting requirements rules. In order for a
foreign shareholder 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. The applicable form can
be obtained from the Information Agent. See Instruction 13 of the Letter of
Transmittal.
TO PREVENT FEDERAL BACKUP WITHHOLDING TAX EQUAL TO 31% OF THE GROSS
PAYMENTS MADE TO SHAREHOLDERS FOR SHARES PURCHASED UNDER OUR OFFER, EACH
SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING
MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE OTHER INFORMATION BY COMPLETING THE SUBSTITUTE
FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of United States federal income tax consequences to
tendering shareholders, see Section 14.
LOST OR DESTROYED CERTIFICATES. If your certificate for part or all of
your shares has been lost, stolen, misplaced or destroyed, you should contact
EquiServe, L.P., the transfer agent for our shares, at 1-800-426-5523, for
instructions as to obtaining an affidavit of loss. The affidavit of loss will
then be required to be submitted together with the Letter of Transmittal in
order to receive payment for shares that are tendered and accepted for payment.
A bond may be required to be posted by you to secure against the risk that the
certificates may be subsequently recirculated. You are urged to contact
EquiServe, L.P. immediately in order to receive further instructions, to permit
timely processing of this documentation and for a determination as to whether
you will need to post a bond.
SECTION 4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of shares under our
offer are irrevocable. Shares tendered pursuant to our offer may be withdrawn at
any time before the expiration date and, unless already accepted for payment by
us pursuant to our offer, may also be withdrawn at any time after 12:00
midnight, Eastern Standard time, on Thursday, January 4, 2001.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover page of this document. 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, before the release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and the signature(s) on the notice of withdrawal must be guaranteed by an
eligible guarantor institution, unless such shares have been tendered for the
account of an eligible guarantor institution.
If shares have been tendered under the procedure for book-entry transfer
set forth in Section 3, any 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 such 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 us, in our sole discretion,
which determination will be final and binding. Neither we nor the
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Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Participants in our 401(k) Retirement Savings Plan who wish to withdraw
their shares must follow the instructions found in the "Letter to Participants
in kforce's 401(k) Retirement Savings Plan" sent to them separately.
Withdrawals may not be rescinded and any shares properly withdrawn will
thereafter be deemed not properly tendered for purposes of our offer unless the
withdrawn shares are properly re-tendered before the expiration date by
following one of the procedures described in Section 3.
If we extend our offer, are delayed in our purchase of shares or are unable
to purchase shares pursuant to our offer for any reason, then, without prejudice
to our rights under our offer, the Depositary may, subject to applicable law,
retain tendered shares on our behalf, and the shares may not be withdrawn except
to the extent tendering shareholders are entitled to withdrawal rights as
described in this Section 4. Our reservation of the right to delay payment for
shares that we have accepted for payment is limited by Rule 13e-4(f)(5) under
the Exchange Act, which requires that we must pay the consideration offered or
return the shares tendered promptly after termination or withdrawal of a tender
offer.
SECTION 5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and conditions of our offer, as soon as practicable
following the expiration date, we will:
- select the purchase price we will pay for shares properly tendered and
not properly withdrawn, taking into account the number of shares so
tendered and the prices specified by tendering shareholders, and
- accept for payment and pay for, and thereby purchase, shares properly
tendered at prices equal to or below the purchase price we select and not
properly withdrawn.
For purposes of our offer, we will be deemed to have accepted for payment
and therefore purchased shares that are properly tendered at or below the
purchase price and not properly withdrawn, subject to the odd lot priority,
conditional tender and proration provisions of our offer, only when, as and if
we give oral or written notice to the Depositary of our acceptance of the shares
for payment.
Upon the terms and conditions of our offer, as soon as practicable after
the expiration date, we will accept for payment and pay a single per share
purchase price for 10,000,000 shares, subject to increase or decrease as
provided in Sections 1 and 15, if properly tendered and not properly withdrawn,
or such lesser number of shares as are properly tendered and not properly
withdrawn, at prices between $4.75 and $5.50 per share.
We will pay for shares purchased under our offer by depositing the
aggregate purchase price for the shares with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from us
and transmitting payment to the tendering shareholders.
In the event of proration, we will determine the proration percentage and
pay for those tendered shares accepted for payment as soon as practicable after
the expiration date. However, we do not expect to be able to announce the final
results of any proration or to be able to commence payment for shares purchased
until approximately seven to ten business days after the expiration date.
We will not pay interest on the purchase price regardless of any delay in
making such payment. In addition, if certain events occur, we may not be
obligated to purchase shares in our offer. See the conditions to our offer in
Section 7.
We will pay all stock transfer taxes, if any, payable on the transfer to us
of shares purchased under our offer. If, however, (a) payment of the purchase
price is to be made to any person other than the registered holder, (b) shares
not tendered or rejected for purchase are to be registered in the name of any
person other than the registered holder, or (c) if tendered certificates are
registered in the name of any person other than the person signing the Letter of
Transmittal, the amount of all stock transfer taxes, if any (whether imposed on
the registered holder or the other person), payable on account of the transfer
to the other person, will be
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<PAGE> 20
deducted from the purchase price unless satisfactory evidence of the payment of
the stock transfer taxes, or exemption therefrom, is submitted. See Instruction
7 of the Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF
THE GROSS PROCEEDS PAID TO THE SHAREHOLDER OR OTHER PAYEE UNDER OUR OFFER. SEE
SECTION 3. ALSO SEE SECTION 14 REGARDING ADDITIONAL UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.
SECTION 6. CONDITIONAL TENDER PROCEDURES.
Under certain circumstances and subject to the exceptions for odd lot
holders described in Section 1, we may prorate the number of shares purchased
pursuant to our offer. As discussed in Section 14, the number of shares to be
purchased from a particular shareholder may affect the tax treatment of the
purchase to the shareholder and the shareholder's decision whether to tender.
The conditional tender alternative is made available so that a shareholder may
seek to structure the purchase of shares pursuant to our offer in such a manner
that the purchase will be treated as a sale of such shares by the shareholder,
rather than the payment of a dividend to the shareholder, for federal income tax
purposes. Accordingly, a shareholder may tender shares subject to the condition
that all or a specified minimum number of the shareholder's shares tendered
pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery must be
purchased if any of the shareholder's tendered shares are purchased. If you are
an odd lot holder and you tender all of your shares, you cannot conditionally
tender, because your shares will not be subject to proration. EACH SHAREHOLDER
IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR.
If you wish to make a conditional tender, you must indicate this in the box
captioned "Conditional Tender" in the Letter of Transmittal or, if applicable,
the Notice of Guaranteed Delivery. In this box in the Letter of Transmittal or
the Notice of Guaranteed Delivery, you must calculate and appropriately indicate
the minimum number of shares that must be purchased if any are to be purchased.
After our offer expires, if greater than 10,000,000 shares are properly tendered
and not properly withdrawn and we must prorate our acceptance of and payment for
tendered shares, we will calculate a preliminary proration percentage based upon
all shares properly tendered, conditionally or unconditionally. If the effect of
this preliminary proration would be to reduce the number of shares to be
purchased from any shareholder below the minimum number specified by that
shareholder, the conditional tender will automatically be regarded as withdrawn,
unless chosen by lot for reinstatement as discussed in the next paragraph.
After giving effect to these withdrawals, we will accept the remaining
shares properly tendered, conditionally or unconditionally, on a pro rata basis,
if necessary. If we are able to purchase all of the remaining tendered shares
and the number that we would purchase would be below 10,000,000 shares, then, to
the extent feasible, we will select enough of the conditional tenders that would
otherwise have been deemed withdrawn to permit us to purchase 10,000,000 shares.
In selecting among these conditional tenders, we will select by random lot and
will select only from shareholders who tendered all of their shares. Upon
selection by lot, if any, we will limit our purchase in each case to the
designated minimum number of shares to be purchased.
All shares tendered by a shareholder subject to a conditional tender
pursuant to the Letter of Transmittal or Notice of Guaranteed Delivery, regarded
as withdrawn as a result of proration and not eventually purchased will be
returned as soon as practicable after the expiration date without any expense to
the shareholder.
SECTION 7. CONDITIONS OF OUR OFFER.
Notwithstanding any other provision of our offer, we will not be required
to accept for payment, purchase or pay for any shares tendered, and may
terminate or amend our 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 November 6, 2000 and before
the expiration date any of the following events have occurred (or have been
determined by us to have occurred) that, in our sole judgment and
17
<PAGE> 21
regardless of the circumstances giving rise to the event or events (including
any action or omission to act by us), makes it inadvisable to proceed with the
offer or with acceptance for payment:
- there has 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:
(1) challenges or seeks to make illegal, or to delay or otherwise
directly or indirectly to restrain, prohibit or otherwise affect the
making of the offer, the acquisition of some or all of the shares
pursuant to our offer or otherwise relates in any manner to our
offer, including the other conditions to our offer, or
(2) in our judgment, could materially and adversely affect our and our
subsidiaries' business, condition (financial or other), income,
operations or prospects, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of our business or
any of our subsidiaries' or materially impair the contemplated
benefits of the offer to us,
- there has been any action threatened, instituted, pending or taken,
including any settlement, or any approval withheld, or any statute, rule,
regulation, judgment, order or injunction threatened, invoked, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the offer or us or any of our subsidiaries, including any
settlement, by any court, government or governmental, regulatory or
administrative authority, agency or tribunal, domestic, foreign or
supranational, that, in our judgment, could directly or indirectly:
(1) make the acceptance for payment of, or payment for, some or all of
the shares illegal or otherwise restrict or prohibit completion of
our offer,
(2) delay or restrict our ability, or render us unable, to accept for
payment or pay for some or all of the shares,
(3) materially impair the contemplated benefits of the offer to us, or
(4) materially and adversely affect our and our subsidiaries' business,
condition (financial or otherwise), income, operations or prospects,
taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of our or any of our subsidiaries'
business,
- there has occurred any of the following:
(1) any general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market in the United States or the European Union,
(2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or the European
Union, whether or not mandatory,
(3) the commencement of a war, armed hostilities or other international
or national calamity directly or indirectly involving the United
States, any member of the European Union or any of their respective
territories,
(4) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event,
or any disruption or adverse change in the financial or capital
markets generally or the market for loan syndications in particular,
that, in our judgment, might affect, the extension of credit by
banks or other lending institutions in the United States or the
European Union,
(5) any significant decrease in the market price of our common stock or
in the market prices of equity securities generally in the United
States or in the European Union or any changes in the general
political, market, economic or financial conditions in the United
States, the European Union or elsewhere that could have, in our
judgment, a material adverse effect on our and our subsidiaries'
business, condition (financial or otherwise), income, operations or
prospects, taken
18
<PAGE> 22
as a whole or on the trading in the shares of our common stock or on
the benefits of the offer to us,
(6) in the case of any of the foregoing existing at the time of the
commencement of our offer, a material acceleration or worsening
thereof, or
(7) any decline in the Nasdaq Composite Index by an amount in excess of
10% measured from the close of business on November 3, 2000,
- a tender offer or exchange offer for any or all of our shares (other than
this offer), or any merger, acquisition proposal, business combination or
other similar transaction with or involving us or any subsidiary, has
been proposed, announced or made by any person or has been publicly
disclosed.
- we learn that:
(1) any entity, "group" (as that term is used in Section 13(d)(3) of the
Exchange Act) or person has acquired or proposes to acquire
beneficial ownership of more than 5% of our outstanding shares,
whether through the acquisition of stock, the formation of a group,
the grant of any option or right, or otherwise (other than any such
person, entity or group who has filed a Schedule 13D or Schedule 13G
with the SEC on or before November 3, 2000), or
(2) any such entity, group or person who has filed a Schedule 13D or
Schedule 13G with the SEC on or before November 3, 2000 has acquired
or proposes to acquire, whether through the acquisition of stock,
the formation of a group, the grant of any option or right, or
otherwise beneficial ownership of an additional 2% or more of the
outstanding shares,
- any person, entity or group has 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 us
or any of our subsidiaries or any of our or their respective assets or
securities other than in connection with a transaction authorized by our
Board of Directors,
- any change or changes have occurred in our or our subsidiaries' business,
condition (financial or otherwise), assets, income, operations, prospects
or stock ownership that, in our judgment, is or may be material to us or
to our subsidiaries, or
- we determine that the completion of the offer and the purchase of the
shares may cause our common stock to be delisted from The Nasdaq Stock
Market or to be eligible for deregistration under the Exchange Act.
The conditions referred to above are for our sole benefit and may be
asserted by us regardless of the circumstances (including any action or inaction
by us) giving rise to any such condition, and may be waived by us, in whole or
in part, at any time and from time to time in our sole discretion. Our failure
at any time to exercise any of the foregoing rights will not be deemed a waiver
of any such right, and each such right will be deemed an ongoing right that may
be asserted at any time and from time to time. Any determination or judgment by
us concerning the events described above will be final and binding on all
parties.
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<PAGE> 23
SECTION 8. PRICE RANGE OF SHARES; DIVIDENDS; OUR RIGHTS AGREEMENT.
SHARE PRICES. Our common stock is listed for trading on The Nasdaq Stock
Market under the trading symbol "KFRC." The following table sets forth, for the
fiscal quarters indicated, the intraday high and low sales prices per share on
The Nasdaq Stock Market.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
Fiscal 1998:
First Quarter............................................. $29.75 $ 19.375
Second Quarter............................................ 32.125 23.125
Third Quarter............................................. 31.50 16.125
Fourth Quarter............................................ 22.75 11.75
Fiscal 1999:
First Quarter............................................. 24.25 6.875
Second Quarter............................................ 15.4375 6.90625
Third Quarter............................................. 9.75 7.00
Fourth Quarter............................................ 15.625 5.875
Fiscal 2000:
First Quarter............................................. 18.25 8.875
Second Quarter............................................ 13.25 4.4375
Third Quarter............................................. 7.5625 3.50
Fourth Quarter (through November 3, 2000)................. 4.9375 2.25
</TABLE>
On November 3, 2000, the last trading day before the date of announcement
of the offer, the last reported sale price of the shares on The Nasdaq Stock
Market was $4.46875. We urge you to obtain current market quotations for the
shares.
RIGHTS AGREEMENT. Effective October 28, 1998, we entered into a Rights
Agreement with State Street Bank and Trust Company as Rights Agent (as amended,
the "Rights Agreement").
The rights attach to all certificates representing shares of our common
stock outstanding at the close of business on October 28, 1998 and will attach
to any shares of our common stock including upon the exercise of any warrants
and options or upon conversion of any convertible debt securities, after October
28, 1998, and prior to the "separation time," as defined below. The rights will
become exercisable and will separate from the common stock and be represented by
separate certificates at the separation time, which generally will be the date
10 days after anyone acquires or commences a tender or exchange offer to acquire
15% or more of our outstanding common stock (such person being referred to as an
"acquiring person"). The rights will not be exercisable until such date, if any,
and will expire on October 28, 2008, unless this date is extended or unless the
rights are earlier exchanged or redeemed by us. Under the Rights Agreement, the
following are not acquiring persons:
- kforce,
- any of our subsidiaries,
- our employee benefit plans or the employee benefit plans of any of our
subsidiaries,
- David L. Dunkel, kforce's Chief Executive Officer,
- any person who becomes the beneficial owner of 15% or more of our shares
inadvertently as determined by our Board of Directors in good faith and
such person agrees to divest himself of a sufficient number of shares so
that such person ceases to be the beneficial owner of 15% or more of our
common stock,
- any person who becomes the beneficial owner of 15% or more of our common
stock solely as a result of an acquisition by us of our common stock
(including as a result of this offer), except that such a person will be
an acquiring person if such person acquires additional shares totaling 1%
or more of our outstanding common stock, or
- certain other limited exceptions.
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<PAGE> 24
Upon any person becoming an acquiring person, subject to the exception
noted below in this paragraph, each right will entitle the holder to purchase
the number of shares of our common stock having a then current market value of
twice the exercise price of the right. For example, at the initial exercise
price of $125, upon exercise, each right would entitle its holder to receive
$250 worth of our common stock or other consideration, as described below. In
addition, each right will entitle the holder to purchase the number of shares of
common stock of an acquiring company having a current market value of twice the
exercise price of the right, if, after the date upon which someone has become an
acquiring person:
- we are a party to certain merger or other business combination
transactions, or
- we sell or dispose of 50% or more of our consolidated assets, operating
income or cash flow.
If either of the above events occur, the acquiring company shall assume all
of our obligations under the Rights Agreement.
From and after the occurrence of the event which triggers the exercise of
the rights, any rights that are or were acquired or beneficially owned by any
acquiring person, any associate or any affiliate shall be void and any holder of
those rights shall no longer have the right to exercise or transfer those
rights.
At any time prior to the earlier of (1) the close of business on the tenth
day following the date upon which it has been publicly announced by either us or
an acquiring person that someone has become an acquiring person, or (2) October
28, 2008 (or a date that is later than (1) or (2) above if extended by the
concurrence of a majority of our Board of Directors prior to the occurrence of
the earlier of (1) or (2) above), our Board of Directors may redeem all, but not
less than all, of the outstanding rights at a price of $0.01 per right, subject
to adjustment, payable in cash or shares of our common stock. Immediately upon
any redemption of the rights, the right to exercise the rights will terminate,
and the only right of the holders of rights will be to receive the redemption
price.
At any time after a person becomes an acquiring person and prior to the
time that any acquiring person becomes the beneficial owner of more than 50% of
our outstanding shares of common stock, our Board of Directors may exchange all,
but not less than all, of the then outstanding rights, other than those rights
owned by the acquiring person or any associate or affiliate of such person, for
shares of our common stock at an exchange ratio of one share of common stock per
right.
In the event that rights become exercisable for shares of our common stock,
our Board of Directors has the ability to substitute in place of our common
stock an equivalent value in debt or equity securities or other assets (or a
combination of such securities or assets).
Prior to the time that any person has become an acquiring person, the
Rights Agreement may be amended in any respect by our Board of Directors without
the consent of the holders of the rights.
This description of the rights is qualified in its entirety by reference to
the Rights Agreement, a copy of which has been filed as Exhibit 4.1 to Form 8-K
filed by us on October 29, 1998 with the SEC, as amended by the Amendment to
Rights Agreement, a copy of which has been filed as Exhibit 4.1 to Form 8-K
filed by us on November 3, 2000. Such report and exhibit may be obtained from
the SEC in the manner provided in Section 10.
SECTION 9. SOURCE AND AMOUNT OF FUNDS.
Assuming that the maximum 10,000,000 shares are tendered in our offer at a
price between $4.75 and $5.50 per share, the aggregate purchase price will be
between $47.5 million and $55.0 million. We expect that our fees and expenses
for the offer will be approximately $600,000.
We have obtained all of the funds necessary to purchase shares tendered in
our offer, as well as to pay related fees and expenses, by funds we have drawn
under our senior secured revolving credit facility, dated November 3, 2000, with
Bank of America, N.A. ("Credit Facility"). In addition, we will also use funds
available under the Credit Facility to provide working capital and for general
and other corporate purposes. We intend to repay amounts borrowed under the
Credit Facility from available cash flow from time to time.
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<PAGE> 25
Because we already have the necessary funds in our possession to purchase any
shares tendered pursuant to our offer, we do not have alternative financing
plans.
It is BOA's intention to syndicate the Credit Facility to other financial
institutions (the "Bank Group"), which will be selected by BOA with our consent
(not to be unreasonably withheld). BOA will act as collateral agent and
administrative agent for the Bank Group (the "Administrative Agent").
GENERAL DESCRIPTION OF CREDIT FACILITY. The Credit Facility consists of up
to a $90 million revolving credit facility (not to exceed 85% of eligible
accounts receivable) maturing on November 3, 2003, and will renew annually
thereafter, unless either we or BOA provide notice of termination 60 days prior
to the then-current expiration date. The Credit Facility is available to
repurchase the shares tendered in our offer, and provide for ongoing working
capital requirements. Amounts available under the Credit Facility may be
borrowed, repaid and reborrowed until maturity. The $90 million available under
the Credit Facility is also available for the issuance of letters of credit,
which will require us to pay certain fees in connection therewith. We must
maintain a minimum availability of $10 million on the Credit Facility at all
times.
INTEREST RATES. Amounts borrowed under the Credit Facility will bear
interest during the period beginning on November 3, 2000 (the "Closing Date")
until BOA's receipt of our financial statements for the fiscal quarter ended
March 31, 2001 at a rate per annum equal either to 0.50% plus BOA's Prime Rate
or to reserve adjusted LIBOR (as defined in the Credit Facility) plus 2.70%.
Following delivery of our financial statements for the fiscal quarter ended
March 31, 2001, performance pricing will be available, ranging from Prime to
Prime plus 0.75% and LIBOR plus 1.75% to LIBOR plus 3.25%, pursuant to certain
financial performance targets as set forth in the Credit Facility. Pricing shall
thereafter be changed quarterly based on the previous four quarter's
performance.
If an Event of Default (as defined in the Credit Facility) occurs and is
continuing, the applicable interest rates will be equal to the rate of interest
on then applicable Base Rate Loans plus 2.00% per annum.
FEES. Commitment fees on the unused portion of the Credit Facility will
accrue from the Closing Date at a rate per annum ranging from 0.25% to 0.50%.
Additionally, the Administrative Agent will be paid an annual $50,000
administration fee.
VOLUNTARY PREPAYMENTS. The Credit Facility may be prepaid in whole or in
part without premium or penalty, except that loans bearing interest with
reference to the adjusted LIBOR Rate will be prepayable only with certain
associated fees unless prepaid on the last day of the related interest period.
In the event the Credit Facility is terminated by us other than at the end of
the original term, we must pay a termination fee equal to 2% of the Credit
Facility if termination occurs in the first year following closing, a 1%
termination fee if the termination occurs in the second year following closing
and a 0.50% termination fee thereafter. The fee will not be payable if the
Credit Facility or the lending relationship is transferred to a BOA affiliate.
No fee will be due and payable for a partial permanent reduction in the
commitment amount.
SECURITY INTERESTS. The Credit Facility is secured by a first priority
perfected security interest in all of kforce's and its subsidiaries' assets,
including current and future accounts receivable, equipment, real property,
trademarks, chattel paper, documents, instruments, deposit accounts, contract
rights, general intangibles, stock of subsidiaries and proceeds from disposition
of any of the foregoing.
REPRESENTATIONS, WARRANTIES, COVENANTS AND EVENTS OF DEFAULT. The Credit
Facility contains certain representations and warranties, certain affirmative
covenants, certain negative covenants, certain financial covenants, certain
conditions and events of default that are customarily required for similar
financings. Such covenants include restrictions and limitations on liens,
consolidations and mergers, indebtedness, capital expenditures, asset
dispositions, sale-leaseback transactions, limitations on stock repurchases,
subsidiary indebtedness, advances and investments, acquisitions and other
restrictions and limitations. Furthermore, kforce is required to maintain
compliance with certain financial covenants if the availability on the Credit
Facility is less than $20 million.
FUNDING PROTECTIONS. The Credit Facility contains certain funding
protections in favor of the Bank Group customary for transactions of the type
contemplated by the Credit Facility, including breakage costs,
22
<PAGE> 26
gross-ups for withholding, compensation for increased costs and compliance with
capital adequacy and other regulatory restrictions.
The initial funding under the Credit Facility occurred on November 6, 2000.
We borrowed $55.0 million and such funds are currently available to us.
The foregoing description is qualified in its entirety by reference to the
Credit Facility, a copy of which is filed as an exhibit to the Schedule TO in
which this document has been filed with the SEC and is incorporated herein by
reference.
SECTION 10. CERTAIN INFORMATION CONCERNING US.
GENERAL. We are a full-service, web-based specialty staffing firm
providing flexible and permanent staffing solutions for organizations and career
management for individuals in the specialty skill areas of information
technology, finance and accounting, human resources, engineering,
pharmaceutical, health care, legal, scientific, insurance, investments and
e-solutions consulting. Backed by more than 2,000 experienced recruiting
specialists, we offer Web-based services including online resumes and job
postings, interactive interviews and job placements and career management
strategies. We are one of the nation's leading full-service staffing, consulting
and training companies operating through more than 100 offices in 45 markets in
North America.
We are headquartered at 120 West Hyde Park Place, Suite 150, Tampa, Florida
33606. Our telephone number is (813) 251-1700.
WHERE YOU CAN FIND MORE INFORMATION. We are subject to the informational
filing requirements of the Exchange Act, and, accordingly, are obligated to file
reports, statements and other information with the SEC relating to our business,
financial condition and other matters. Information, as of particular dates,
concerning our directors and officers, their remuneration, options granted to
them, the principal holders of our securities and any material interest of these
persons in transactions with us is required to be disclosed in proxy statements
distributed to our shareholders and filed with the SEC. We also have filed with
the SEC an Issuer Tender Offer Statement on Schedule TO and Amendment No. 1 to
the Schedule TO that includes additional information relating to the offer.
These reports, statements and other information can be inspected and copied at
the public reference Credit Facility maintained by the SEC at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549; and at its regional offices located at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of this material may also
be obtained by mail, upon payment of the SEC's customary charges, from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
We urge you to review our Annual Report on Form 10-K for the year ended
December 31, 1999, our Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2000, June 30, 2000 and September 30, 2000, and our Current Reports on
Form 8-K filed on May 17, 2000, August 5, 2000 and November 3, 2000.
SECTION 11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING SHARES.
As of November 3, 2000, we had approximately 42,155,869 issued and
outstanding shares. The 10,000,000 shares that we are offering to purchase
pursuant to the offer represent approximately 23.7% of the shares outstanding as
of November 3, 2000.
As of November 3, 2000, our directors and executive officers as a group (14
persons) beneficially owned an aggregate of 7,222,358 shares of common stock,
representing approximately 17.0% of outstanding shares. The directors and
executive officers are entitled to participate in our offer on the same basis as
all other shareholders. However, they have advised us that they do not intend to
tender any shares in our offer. As of November 3, 2000, the aggregate number and
percentage of our securities that were beneficially owned by our directors and
executive officers were as appears in the table below. Assuming we purchase
10,000,000 shares
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<PAGE> 27
of common stock and that no director or executive officer tenders any shares
pursuant to our offer (as is intended by the directors and executive officers),
then after the purchase of shares pursuant to our offer, our directors and
executive officers as a group will beneficially own approximately 22.3% of the
outstanding common stock immediately after our offer. The business address of
each of our directors and executive officers is 120 West Hyde Park Place, Suite
150, Tampa, Florida 33606.
STOCK OWNERSHIP TABLE
<TABLE>
<CAPTION>
NAME POSITION(S) NUMBER PERCENT
---- ----------- --------- -------
<S> <C> <C> <C>
David L. Dunkel(1)................... Chairman, Chief Executive Officer, and 3,220,439 7.6%
Director
Joseph J. Liberatore(2).............. Chief Sales Officer 73,666 *
Ken W. Pierce(3)..................... Chief Marketing Officer 1,156 *
William L. Sanders(4)................ Vice President, Secretary and Chief 80,738 *
Financial
Officer
Lawrence J. Stanczak(5).............. Senior Vice President of Operations 88,696 *
Howard W. Sutter(6).................. Vice President and Director 1,654,316 3.9%
Fred T. Williams(7).................. Chief Information Officer 3,333 *
John N. Allred(8).................... Director 64,235 *
W.R. Carey, Jr.(7)................... Director 52,000 *
Richard M. Cocchiaro(9).............. Director 1,748,313 4.1%
Todd W. Mansfield(10)................ Director 16,100 *
Ralph E. Struzziero(11).............. Director 133,165 *
A. Gordon Tunstall(7)................ Director 55,000 *
Karl A. Vogeler(12).................. Director 31,201 *
</TABLE>
---------------
* Less than 1% of the outstanding common stock.
(1) The number of shares shown in the table includes (i) 1,829,496 shares held
directly by Mr. Dunkel; (ii) 1,269,231 shares held by Mr. Dunkel's former
spouse for which Mr. Dunkel has voting control but no dispositive control;
(iii) 50,000 shares subject to options that are exercisable within 60 days
of November 3, 2000; (iv) 31,712 shares held by Mr. Dunkel's current spouse
for which Mr. Dunkel disclaims beneficial ownership pursuant to Rule
16a-1(a)(4) of the Exchange Act; and (v) 40,000 shares subject to options
that are exercisable within 60 days of November 3, 2000 which are held by
Mr. Dunkel's current spouse for which Mr. Dunkel disclaims beneficial
ownership pursuant to Rule 16a-1(a)(4) of the Exchange Act.
(2) The number of shares shown in the table includes: (i) 54,333 shares held
directly by Mr. Liberatore and (ii) 19,333 shares subject to options that
are exercisable within 60 days of November 3, 2000.
(3) The number of shares shown in the table includes shares held through the
Employee Stock Purchase Plan.
(4) The number of shares shown in the table includes (i) 20,738 shares held
directly by Mr. Sanders; and (ii) 60,000 shares subject to options that are
exercisable within 60 days of November 3, 2000.
(5) The number of shares shown in the table includes (i) 53,101 shares held
directly by Mr. Stanczak and (ii) 35,595 shares subject to options that are
exercisable within 60 days of November 3, 2000.
(6) The number of shares shown in the table includes (i) 1,595,316 shares held
by H.S. Investments, Inc. as general partner for Sutter Investments, Ltd.;
(ii) 46,000 shares held directly by Mr. Sutter; (iii) 5,000 shares held by
Mr. Sutter's spouse; and (iv) 8,000 shares subject to options that are
exercisable within 60 days of November 3, 2000.
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<PAGE> 28
(7) The number of shares shown in the table includes shares subject to options
that are exercisable within 60 days of November 3, 2000.
(8) The number of shares shown in the table includes (i) 31,140 shares held
directly by Mr. Allred and (ii) 33,095 shares subject to options that are
exercisable within 60 days of November 3, 2000.
(9) The number of shares shown in the table includes (i) 1,607,150 shares held
directly by Mr. Cocchiaro; (ii) 78,163 shares held by the Cocchiaro Family
Foundation; (iii) 39,400 shares held by Mr. Cocchiaro's mother over which
Mr. Cocchiaro exercises voting control; (iv) 2,000 shares subject to
options that are exercisable within 60 days of November 3, 2000; (v) 19,000
shares held by Mr. Cocchiaro's spouse for which Mr. Cocchiaro disclaims
beneficial ownership pursuant to Rule 16a-1(a)(4) of the Exchange Act; (vi)
1,300 shares held by Mr. Cocchiaro's son; and (vii) 1,300 shares held by
Mr. Cocchiaro's son.
(10) The number of shares shown in the table includes (i) 1,100 shares held
jointly between Mr. Mansfield and his wife and (ii) 15,000 shares subject
to options that are exercisable within 60 days of November 3, 2000.
(11) The number of shares in the table includes (i) 80,582 shares held directly
by Mr. Struzziero; (ii) 1,987 shares held by Mr. Struzziero's spouse; (iii)
7,665 shares held by Mr. Struzziero's son; (iv) 4,500 shares held by Mr.
Struzziero's son; and (v) 38,431 shares held by the Company's 401(k) plan.
(12) The number of shares shown in the table includes (i) 21,201 shares held
directly by Mr. Vogeler and (ii) 10,000 shares subject to options that are
exercisable within 60 days of November 3, 2000.
Based on our records and on information provided to us by our directors,
executive officers, affiliates and subsidiaries, neither we nor any of our
affiliates or subsidiaries nor, to the best of our knowledge, any of our or our
subsidiaries' directors or executive officers, nor any associates or
subsidiaries of any of the foregoing, has effected any transactions involving
our shares of common stock during the 60 days prior to November 6, 2000, other
than as stated below:
- The following stock purchases were effected by us, and one of our
executive officers, in open market transactions on The Nasdaq Stock
Market through a registered broker-dealer:
<TABLE>
<CAPTION>
TYPE OF NUMBER SHARE TRANSACTION
NAME DATE TRANSACTION OF SHARES PRICE($) VALUE($)
---- ---- ----------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
kforce................ October 30, 2000 Purchase 142,000 4.4625 633,675
October 31, 2000 Purchase 95,000 4.0625 385,938
Lawrence J.
Stanczak............ October 30, 2000 Purchase 1,100 4.00 4,000
October 30, 2000 Purchase 2,000 4.03125 8,063
October 30, 2000 Purchase 6,900 4.016 27,710
</TABLE>
- Purchases for the accounts of executive officers under our Employee Stock
Purchase Plan or our 401(k) Retirement Savings Plan. We expect that our
Employee Stock Purchase Plan and our 401(k) Retirement Savings Plan will,
in accordance with the terms of the plan, elections in effect and present
patterns of contribution, continue to purchase shares prior to the
expiration of the offer.
Except as otherwise described in this document, and except for customary
margin accounts maintained at a broker by some of our directors and executive
officers, neither we nor, to the best of our knowledge, any of our 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 or with respect to any of our securities, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of the securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies, consents or authorizations.
SECTION 12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER
THE EXCHANGE ACT.
Our purchase of shares pursuant to our offer will reduce the number of
shares that might otherwise be traded publicly and is likely to reduce the
number of shareholders. Nonetheless, we believe that there will be a sufficient
number of shares outstanding and publicly traded following completion of our
offer to ensure a
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<PAGE> 29
continued trading market for the shares. Based upon published guidelines of The
Nasdaq Stock Market, we do not believe that our purchase of shares under our
offer will cause our remaining shares of common stock to be delisted from The
Nasdaq Stock Market.
Our shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such shares as collateral. We believe
that, following the purchase of shares under the offer, the shares will continue
to be "margin securities" for purposes of the Federal Reserve Board's margin
rules and regulations.
Our shares are registered under the Exchange Act, which requires, among
other things, that we furnish certain information to our shareholders and the
SEC and comply with the SEC's proxy rules in connection with meetings of our
shareholders. We believe that our purchase of shares in connection with our
offer will not result in the shares becoming eligible for deregistration under
the Exchange Act.
SECTION 13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
Except as otherwise described in this document, we are not aware of any
license or regulatory permit that appears material to our business that might be
adversely affected by our acquisition of shares as contemplated by our offer or
of any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic, foreign or
supranational, that would be required for our acquisition or ownership of shares
as contemplated by our offer. Should any such approval or other action be
required, we currently contemplate that we will seek that approval or other
action. We are unable to predict whether we will be required to delay the
acceptance for payment of or payment for shares tendered under this 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 cost or conditions or that the failure to obtain the
approval or other action might not result in adverse consequences to our
business and financial condition.
Our obligation to accept for payment and pay for shares under our offer is
subject to conditions. See Section 7.
SECTION 14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences relating to the offer. This summary is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated
thereunder, administrative pronouncements and judicial decisions, all as in
effect as of the date of this letter and all of which are subject to change,
possibly with retroactive effect. This summary addresses only shares that are
held as capital assets within the meaning of Section 1221 of the Code and does
not address all of the tax consequences that may be relevant to shareholders in
light of their particular circumstances or to certain types of shareholders
subject to special treatment under the Code, including, without limitation,
certain financial institutions, dealers in securities or commodities, traders in
securities who elect to apply a mark-to-market method of accounting, insurance
companies, tax-exempt organizations, persons who hold shares as a position in a
"straddle" or as a part of a "hedging," "conversion" or "constructive sale"
transaction for United States federal income tax purposes or persons who
received their shares through the exercise of employee stock options or
otherwise as compensation. In addition, except as otherwise specifically noted,
this discussion applies only to "United States holders" (as defined below). This
summary also does not address the state, local or foreign tax consequences of
participating in the offer. For purposes of this discussion, a "United States
holder" means:
- a citizen or resident of the United States,
- a corporation or other entity taxable as a corporation created or
organized in the United States or under the laws of the United States or
of any political subdivision thereof,
- an estate, the income of which is includible in gross income for United
States federal income tax purposes regardless of its source, or
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<PAGE> 30
- a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who
have the authority to control all of its substantial decisions.
If a partnership holds shares, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership and the "Section 302 test" (as defined below) will apply at the
partnership level. Partners of partnerships holding shares should consult their
tax advisors. Holders of shares who are not United States holders should consult
their tax advisors regarding the United States federal income tax consequences
and any applicable foreign tax consequences of the offer and should also see
Section 3 for a discussion of the applicable United States withholding rules and
the potential for obtaining a refund of all or a portion of any tax withheld.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO YOU OF PARTICIPATING OR NOT PARTICIPATING IN THE OFFER.
CHARACTERIZATION OF THE PURCHASE. The purchase of a United States holder's
shares by kforce under the offer will be a taxable transaction for United States
federal income tax purposes. As a consequence of the purchase, a United States
holder will, depending on the United States holder's particular circumstances,
be treated either as having sold the United States holder's shares or as having
received a distribution in respect of stock from kforce.
Under Section 302 of the Code, a United States holder whose shares are
purchased by kforce under the offer will be treated as having sold its shares,
and thus will recognize capital gain or loss if the purchase:
- results in a "complete termination" of the United States holder's equity
interest in kforce,
- results in a "substantially disproportionate" redemption with respect to
the United States holder, or
- is "not essentially equivalent to a dividend" with respect to the United
States holder.
Each of these tests, referred to as the "Section 302 tests," is explained in
more detail below.
If a United States holder satisfies any of the Section 302 tests explained
below, the United States holder will be treated as if it sold its shares to
kforce and will recognize capital gain or loss equal to the difference between
the amount of cash received under the offer and the United States holder's
adjusted tax basis in the shares surrendered in exchange therefor. This gain or
loss will be long-term capital gain or loss if the United States holder's
holding period for the shares that were sold exceeds one year as of the date of
purchase by kforce under the offer. Specified limitations apply to the
deductibility of capital losses by United States holders. Gain or loss must be
determined separately for each block of shares (shares acquired at the same cost
in a single transaction) that is purchased by kforce from a United States holder
under the offer. A United States holder may be able to designate, generally
through its broker, which blocks of shares it wishes to tender under the offer
if less than all of its shares are tendered under the offer, and the order in
which different blocks will be purchased by kforce in the event of proration
under the offer. United States holders should consult their tax advisors
concerning the mechanics and desirability of that designation.
If a United States holder does not satisfy any of the Section 302 tests
explained below, the purchase of a United States holder's shares by kforce under
the offer will not be treated as a sale or exchange under Section 302 of the
Code with respect to the United States holder. Instead, the entire amount
received by a United States holder with respect to the purchase of its shares by
kforce under the offer will be treated as a dividend distribution to the United
States holder with respect to its shares under Section 301 of the Code, taxable
at ordinary income tax rates, to the extent of the United States holder's share
of the current and accumulated earnings and profits (within the meaning of the
Code) of kforce. To the extent the amount exceeds the United States holder's
share of the current and accumulated earnings and profits of kforce, the excess
first will be treated as a tax-free return of capital to the extent of the
United States holder's adjusted tax basis in its shares and any remainder will
be treated as capital gain (which may be long-term capital gain as described
above). To the extent that a purchase of a United States holder's shares by
kforce under the offer is treated as the receipt by the United States holder of
a dividend, the United States holder's adjusted tax basis in the purchased
shares will be added to any shares retained by the United States holder.
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<PAGE> 31
CONSTRUCTIVE OWNERSHIP OF STOCK AND OTHER ISSUES. In applying each of the
Section 302 tests explained below, United States holders must take into account
not only shares that they actually own but also shares they are treated as
owning under the constructive ownership rules of Section 318 of the Code. Under
the constructive ownership rules, a United States holder is treated as owning
any shares that are owned (actually and in some cases constructively) by certain
related individuals and entities as well as shares that the United States holder
has the right to acquire by exercise of an option or by conversion or exchange
of a security. Due to the factual nature of the Section 302 tests explained
below, United States holders should consult their tax advisors to determine
whether the purchase of their shares under the offer qualifies for sale
treatment in their particular circumstances.
We cannot predict whether or the extent to which the offer will be
oversubscribed. If the offer is oversubscribed, proration of tenders under the
offer will cause kforce to accept fewer shares than are tendered. Therefore, no
assurance can be given that kforce will purchase a sufficient number of a United
States holder's shares under the offer to ensure that the United States holder
receives sale treatment, rather than dividend treatment, for United States
federal income tax purposes under the rules discussed below.
SECTION 302 TESTS. One of the following tests must be satisfied in order
for the purchase of shares by us under the offer to be treated as a sale or
exchange for federal income tax purposes:
- Complete Termination Test. Our purchase of a United States holder's
shares under the offer will result in a "complete termination" of the
United States holder's equity interest in us if all of the shares that
are actually owned by the United States holder are sold under the offer
and all of the shares that are constructively owned by the United States
holder, if any, are sold under the offer or, with respect to shares owned
by certain related individuals, the United States holder effectively
waives, in accordance with Section 302(c) of the Code, attribution of
shares which otherwise would be considered as constructively owned by the
United States holder. United States holders wishing to satisfy the
"complete termination" test through waiver of the constructive ownership
rules should consult their tax advisors.
- Substantially Disproportionate Test. Our purchase of a United States
holder's shares pursuant to the offer will result in a "substantially
disproportionate" redemption with respect to the United States holder if,
among other things, the percentage of the then outstanding shares
actually and constructively owned by the United States holder immediately
after the purchase is less than 80% of the percentage of the shares
actually and constructively owned by the United States holder immediately
before the purchase (treating as outstanding all shares purchased under
the offer).
- Not Essentially Equivalent to a Dividend Test. Our purchase of a United
States holder's shares pursuant to the offer will be treated as "not
essentially equivalent to a dividend" if the reduction in the United
States holder's proportionate interest in us as a result of the purchase
constitutes a "meaningful reduction" given the United States holder's
particular circumstances. Whether the receipt of cash by a shareholder
who sells shares pursuant to the offer will be "not essentially
equivalent to a dividend" will depend upon the shareholder's particular
facts and circumstances. The IRS has indicated in a published revenue
ruling that even a small reduction in the percentage interest of a
shareholder whose relative stock interest in a publicly held corporation
is minimal (for example, an interest of less than 1%) and who exercises
no control over corporate affairs should constitute a "meaningful
reduction." United States holders should consult their tax advisors as to
the application of this test in their particular circumstances.
CORPORATE SHAREHOLDER DIVIDEND TREATMENT. In the case of a corporate
United States holder, to the extent that any amounts received under the offer
are treated as a dividend, such holder may be eligible for the
dividends-received deduction. The dividends-received deduction is subject to
certain limitations. In addition, any amount received by a corporate United
States holder pursuant to the offer that is treated as a dividend may constitute
an "extraordinary dividend" under Section 1059 of the Code. Corporate United
States holders should consult their own tax advisors as to the application of
Section 1059 of the Code to the offer, and to the tax consequences of dividend
treatment in their particular circumstances.
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<PAGE> 32
SHAREHOLDERS WHO DO NOT RECEIVE CASH UNDER THE OFFER. Shareholders whose
shares are not purchased by us pursuant to the offer will not incur any tax
liability as a result of the completion of the offer.
BACKUP WITHHOLDING. See Section 3 with respect to the application of
United States federal backup withholding tax.
401(k) RETIREMENT SAVINGS PLAN. The trust under the 401(k) Retirement
Savings Plan maintained by us and our affiliates is exempt from federal income
taxation. Accordingly, such trust will not be taxed upon the receipt of any cash
proceeds pursuant to the offer. The shares of our common stock allocated to
participants' accounts under our 401(k) Retirement Savings Plan are employer
securities as defined in the Code. If a distribution from the savings plan
includes employer securities, the participant has the option of deferring
federal income tax on the increase in value of the common stock that occurred
while it was held in the savings plan until after the distribution of the common
stock. In addition, the increase in value of the common stock that occurred
while it was held in the savings plan may be taxed at long-term capital gains
rates rather than ordinary income tax rates.
THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISOR TO DETERMINE THE PARTICULAR
TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF
STATE, LOCAL AND FOREIGN TAX LAWS.
SECTION 15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.
We expressly reserve the right, in our sole discretion, at any time and
from time to time, and regardless of whether or not any of the events set forth
in Section 7 shall have occurred or are deemed by us to have occurred, to extend
the period of time during which our offer is open and 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 of such extension.
We also expressly reserve the right, in our sole discretion, to terminate our
offer and reject for payment or pay for any shares not 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 7 by giving oral or
written notice of such termination or postponement to the Depositary and making
a public announcement of the termination or postponement. Our reservation of the
right to delay payment for shares which we have accepted for payment is limited
by Rule 13e-4(f)(5) under the Exchange Act, which requires that we 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, we also reserve the right, in
our sole discretion, and regardless of whether any of the events set forth in
Section 7 have occurred or are deemed by us to have occurred, to amend our offer
in any respect, including, without limitation, by decreasing or increasing the
consideration offered in our offer to holders of shares or by decreasing or
increasing the number of shares being sought in our offer. Amendments to our
offer may be made at any time and from time to time effected by public
announcement, such announcement, in the case of an extension, to be issued no
later than 9:00 a.m., Eastern Standard time, on the first 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 we may choose to make a public
announcement, except as required by applicable law, we have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release through Business Wire, Dow Jones News Service or
another comparable service.
If we materially change the terms of our offer or the information
concerning our offer, we will extend our offer to the extent required by Rules
13e-4(d)(2), 13e-4(e)(3) and 13e-4(f)(1) promulgated under the Exchange Act.
These rules and certain related releases and interpretations of the SEC 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
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<PAGE> 33
information. If: (1) we increase or decrease the price to be paid for shares,
materially increase the Dealer Manager's fee, or increase or decrease the number
of shares being sought in the offer and, in the event of an increase in the
number of shares being sought, the increase exceeds 2% of the outstanding shares
of our common stock, and (2) 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 15, then, in
each case, the offer will be extended until the expiration of such period of ten
business days. For purposes of the offer, a "business day" means any day other
than a Saturday, Sunday or United States federal holiday and consists of the
time period from 12:01 a.m. through 12:00 midnight, Eastern Standard time.
SECTION 16. FEES AND EXPENSES.
We have retained Banc of America Securities LLC to act as our financial
advisor, as well as the Dealer Manager, in connection with the offer. Banc of
America Securities LLC will receive reasonable and customary compensation. We
also have agreed to reimburse Banc of America Securities LLC for reasonable
out-of-pocket expenses incurred in connection with the offer, including
reasonable fees and expenses of counsel, and to indemnify Banc of America
Securities LLC against certain liabilities in connection with the offer,
including liabilities under the federal securities laws. Banc of America
Securities LLC and its affiliates, have rendered various investment banking and
other services to us in the past and may continue to render such services, for
which they have received and may continue to receive customary compensation from
us. In the ordinary course of its trading and brokerage activities, Banc of
America Securities LLC and its affiliates may hold positions, for their own
accounts or for those of their customers, in our securities.
We have retained D.F. King & Co., Inc. to act as Information Agent and
EquiServe, L.P. to act as Depositary in connection with the offer. The
Information Agent may contact holders of shares by mail, telephone, telegraph
and in person and may request brokers, dealers, commercial banks, trust
companies and other nominee shareholders to forward materials relating to the
offer to beneficial owners. The Information Agent and the Depositary will each
receive reasonable and customary compensation for their respective services,
will be reimbursed by us for specified 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.
Merrill Lynch Trust Company acts as Trustee of our 401(k) Retirement
Savings Plan. Merrill Lynch Trust Company will be reimbursed for certain
out-of-pocket costs in connection with the offer.
We will not pay any fees or commissions to brokers, dealers, commercial
banks or trust companies (other than fees to the Dealer Manager and the
Information Agent as described above) 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. We will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies 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 our agent or the agent of, the Dealer Manager, the
Information Agent or the Depositary for purposes of the offer. We will pay or
cause to be paid all stock transfer taxes, if any, on our purchase of shares,
except as otherwise provided in this document and Instruction 7 in the related
Letter of Transmittal.
SECTION 17. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the offer is not
in compliance with applicable law. If we become aware of any jurisdiction where
the making of the offer or the acceptance of shares pursuant to the offer is not
in compliance with applicable law, we will make a good faith effort to comply
with the applicable law. If, after such good faith effort, we 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 where the securities, blue sky or other laws require the offer to
be made by a licensed broker or
30
<PAGE> 34
dealer, the offer shall be deemed to be made on our behalf by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of that
jurisdiction.
Pursuant to Rule 13e-4 under the Exchange Act, we have filed with the SEC
an Issuer Tender Offer Statement on Schedule TO and Amendment No. 1 to the
Schedule TO which contain additional information with respect to the offer. The
Schedule TO and Amendment No. 1, including the exhibits and any amendments and
supplements, may be examined, and copies may be obtained, at the same places and
in the same manner as is set forth in Section 10 with respect to information
concerning us.
Tendering shareholders should rely only on the information contained in
this document or to which we have referred them. We have not authorized anyone
to provide tendering shareholders with information or make any representation on
behalf of us in connection with this offer other than those contained in this
Offer to Purchase or in the related Letter of Transmittal. If given or made,
tendering shareholders should not rely on that information or representation as
having been authorized by us.
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<PAGE> 35
The Letter of Transmittal, certificates for shares and any other required
documents should be sent or delivered by each shareholder or such shareholder's
broker, dealer, commercial bank, trust company or nominee to the Depositary at
one of its addresses set forth below:
The Depositary for the offer is:
EQUISERVE, L.P.
(800) 426-5523
<TABLE>
<S> <C> <C>
By overnight courier
By hand delivery: or express mail: By Mail:
Securities Transfer & EquiServe, L.P. EquiServe, L.P.
Reporting Services, Inc. Attn: Corporate Actions Attn: Corporate Actions
c/o EquiServe, L.P. 40 Campanelli Drive P.O. Box 9573
100 Williams Street, Galleria Braintree, Massachusetts 02184 Boston, Massachusetts
New York, New York 10038 02205-9573
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
set forth below. Requests for additional copies of the Offer to Purchase, the
related Letter of Transmittal or the Notice of Guaranteed Delivery may be
directed to the Information Agent at the telephone number and address set forth
below. Shareholders may also contact their broker, dealer, commercial bank,
trust company or nominee for assistance concerning the offer. To confirm
delivery of shares, shareholders are directed to contact the Depositary.
The Information Agent for the offer is:
D.F. KING & CO., INC.
77 WATER STREET, 20TH FLOOR
NEW YORK, NEW YORK 10005
BANKS AND BROKERAGE FIRMS PLEASE CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 848-3416
The Dealer Manager for the offer is:
BANC OF AMERICA SECURITIES LLC
9 W. 57TH STREET
NEW YORK, NY 10019
(212) 583-8537
1-888-583-8900 EXT. 8537
