EXHIBIT 12(a)(1)
ND HOLDINGS, INC.
1 NORTH MAIN STREET
MINOT, NORTH DAKOTA 58703
December 21, 2000
To Our Stockholders:
IF YOU HAVE ANY QUESTIONS REGARDING THE OFFER OR NEED ASSISTANCE IN
TENDERING YOUR SHARES, PLEASE CONTACT MORROW & CO. INC., THE INFORMATION AGENT
FOR THE OFFER, TOLL FREE AT (800) 607-0088.
ND Holdings, Inc. (the "Company") is offering to purchase up to 750,000
shares of its common stock (the "Shares") from existing stockholders. The
purchase price will be $1.25 per Share. The Company is conducting the offer
through a procedure commonly referred to as an "Issuer Self-Tender Offer."
This procedure allows the Company to purchase its Shares at a pre-determined
price, in accordance with the terms of the offer.
Any stockholder whose Shares are properly tendered directly to ND
Resources, Inc., the depositary for the offer, and purchased pursuant to the
offer, will receive the net purchase price in cash, without interest, and
will not incur the usual transaction costs associated with open market sales.
If more than 750,000 Shares (or such greater number of Shares as the Company
elects to purchase) are tendered, the Shares will be purchased on a pro rata
basis from each stockholder who properly tendered their Shares.
The terms and conditions of the offer are explained in detail in the
enclosed Offer to Purchase and the related Letter of Transmittal. We
encourage you to read these materials carefully before making any decision
with respect to the offer. The instructions on how to tender Shares are also
explained in detail in the accompanying materials.
Neither the Company nor the Board of Directors of the Company makes any
recommendation to stockholders as to whether to tender or refrain from
tendering their Shares. Each stockholder must make the decision whether to
tender such stockholder's Shares and, if so, how many Shares to tender. The
Company has been advised that none of its directors or executive officers
intend to tender Shares pursuant to the offer.
The offer will expire at midnight, Central Standard Time, on Monday,
January 22, 2001, unless extended by the Company.
Very Truly Yours,
Robert Walstad
President and Chief Executive Officer
Enclosures:
website: www.ndholdings.com
email: [email protected]
ND HOLDINGS, INC.
OFFER TO PURCHASE FOR CASH UP TO
750,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE OF $1.25 PER SHARE
ND Holdings, Inc. (the "Company"), hereby invites its stockholders to
tender shares (the "Shares") of its common stock, no par value per share
(the "Common Stock"), to the Company at a price of $1.25 per share, net to
the seller in cash, without interest thereon (the "Purchase Price"), upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer"). All Shares acquired in the Offer will be acquired at
the Purchase Price. The Company reserves the right, in its sole discretion,
to purchase more than 750,000 Shares pursuant to the Offer. See Section 14.
SUMMARY TERM SHEET
The following are some of the questions you, as a stockholder of the
Company, may have and answers to those questions. The Company urges you to
carefully read the remainder of this Offer to Purchase and the accompanying
Letter of Transmittal because the information in this Summary Term Sheet is not
complete and additional important information is contained in the remainder of
this Offer to Purchase and the Letter of Transmittal.
* WHO IS OFFERING TO BUY MY SECURITIES?
The Company is offering to purchase its own securities from you, the
stockholder. See Section 1.
* WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
The Company is seeking to purchase 750,000 Shares of its outstanding Common
Stock. See Section 1.
* HOW MUCH IS THE COMPANY OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE
FORM OF PAYMENT?
The Company is offering to pay $1.25 per share in cash. If you tender your
Shares directly to the Company in the Offer, you will not have to pay brokerage
fees or similar expenses. See Section 3.
* DOES THE COMPANY HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
The Company will need approximately $1 million to purchase the Shares
pursuant to the Offer and to pay related fees and expenses. The Company expects
to obtain the necessary funds from operations and its current cash position.
See Section 8.
* IS THE COMPANY'S FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN
THE OFFER?
Because the form of payment consists solely of cash and the Offer is not
conditioned on the Company's ability to obtain financing, the Company does not
think its financial condition is relevant to your decision whether to tender
your Shares in the Offer. See Section 8.
* HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
Initially, you will have at least until midnight, Central Standard
Time, on Monday, January 22, 2001, to decide whether to tender your shares in
the Offer. Further, if you cannot deliver everything that is required in order
to make a valid tender by that time, you may be able to use a guaranteed
delivery procedure, which is described later in this Offer to Purchase.
See Section 3.
* CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
The Company can extend or amend the Offer in its discretion, and if any
condition to the Offer is not satisfied or waived prior to the expiration date,
the Company may extend the expiration date or amend any term of the Offer. See
Section 14.
* HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If the Company decides to extend the Offer, the Company will inform Morrow
& Co., Inc., the information agent, and ND Resources, Inc., the depositary for
the Offer, and will make a public announcement of the extension, not later than
9:00 a.m., Central Standard Time, on the business day after the day on which
the Offer was scheduled to expire. See Section 14.
-2-
* WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The Offer is not conditioned on the receipt of financing or any
governmental or non-governmental approvals. See Section 6.
* HOW DO I TENDER MY SHARES?
To tender Shares, you must deliver the certificates representing your
Shares, together with a completed Letter of Transmittal, to ND Resources, Inc.,
the depositary for the Offer, not later than the time the Offer expires. If
your Shares are held in a street name, the Shares can be tendered by your
nominee through The Depositary Trust Company. If you cannot get something that
is required to the depositary by the expiration of the Offer you will have some
extra time to do so by having a broker, a bank or other fiduciary which is a
member of the Securities Transfer Agents Medallion Program or other eligible
institution to guarantee that the missing items will be received by the
depositary within three American Stock Exchange trading days. However, the
depositary must receive the missing items within that three trading day period.
See Section 3.
* UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw Shares at any time until the Offer has expired and, if the
Company has not by January 27, 2001 agreed to accept your Shares for payment,
you can withdraw them at any time after such time until the Company accepts
Shares for payment. See Section 4.
* HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw Shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary, ND
Resources, Inc., while you still have the right to withdraw the Shares. See
Section 4.
* IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
The Offer allows you to sell all or a portion of your Shares if you so
desire. If you determine not to accept the Offer or your Shares are not
purchased in the Offer, your proportionate ownership in the Company will likely
increase. After the Offer, increases or decreases in the Company's net income
will be reflected in greater increases or decreases in earnings per share than
is presently the case because of the smaller number of Shares that will be
outstanding, assuming the Company does not issue additional Shares in the
future. See Section 11.
* WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On December 15, 2000, the last business day of the week prior to
announcement before the Company announced the Offer, the closing price of the
Company's common stock (symbol: NDHI) reported on the NASDAQ OTC ELECTRONIC
BULLETIN BOARD was approximately $.56 per Share. The Company recommends that
you obtain a recent quotation for Shares of the Company's Common Stock in
deciding whether to tender your Shares. See Section 7.
* WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You may call Morrow & Co., Inc. which is acting as the information agent
for the Offer, toll free at (800) 607-0088. See the last page of this Offer to
Purchase for additional contact information.
-3-
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INTRODUCTION........................................................... 5
THE OFFER.............................................................. 6
1. Material Terms of the Offer................................... 6
2. Purpose of the Offer; Certain Effects of the Offer............ 7
3. Procedures for Tendering Shares............................... 8
4. Withdrawal Rights............................................. 10
5. Purchase of Shares and Payment of Purchase Price.............. 11
6. Certain Conditions of the Offer............................... 11
7. Price Range of Shares......................................... 13
8. Source and Amount of Funds.................................... 13
9. Certain Information Concerning the Company.................... 13
10. Interest of Directors, Officers and Nominees; Transactions and
Arrangements Concerning Shares................................ 16
11. Effects of the Offer On the Market for Shares; Registration
Under the Exchange Act........................................ 17
12. Certain Legal Matters; Regulatory Approvals................... 17
13. Certain United States Federal Income Tax Consequences......... 17
14. Extension of the Offer; Termination; Amendment................ 18
15. Fees and Expenses............................................. 19
16. Miscellaneous................................................. 19
</TABLE>
CERTAIN SECTIONS OF THIS OFFER TO PURCHASE INCLUDING, BUT NOT LIMITED TO,
SECTION 2 ENTITLED "PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER"
CONTAIN CERTAIN "FORWARD LOOKING STATEMENTS" AS SUCH TERM IS USED UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE COMPANY'S PERFORMANCE
MAY BE AFFECTED BY MANY UNCERTAINTIES THAT EXIST IN THE COMPANY'S OPERATIONS
AND BUSINESS ENVIRONMENT THAT MAY CAUSE ACTUAL PERFORMANCE TO DIFFER MATERIALLY
FROM PERFORMANCE SUGGESTED BY ANY FORWARD LOOKING STATEMENTS. HOWEVER,
WITH RESPECT TO ANY FORWARD LOOKING STATEMENT MADE IN CONNECTION WITH THIS
TENDER OFFER THE COMPANY AS THE ORIGINATOR OF THE FORWARD LOOKING STATEMENT
IS NOT PROTECTED BY THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT.
-4-
TO THE HOLDERS OF COMMON STOCK OF
ND HOLDINGS, INC.:
INTRODUCTION
ND Holdings, Inc., a North Dakota corporation (the "Company"), invites its
stockholders to tender shares (the "Shares") of its common stock, no par value
per share (the "Common Stock"), to the Company at a price of $1.25 per Share,
net to the seller in cash, without interest thereon (the "Purchase Price"),
upon the terms and subject to the conditions set forth herein and in the
related letter of transmittal (the "Letter of Transmittal") (which, as amended
or supplemented from time to time, together constitute the "Offer").
The Shares are listed and traded on the NASDAQ OTC ELECTRONIC BULLETIN
BOARD ("NASDAQ OTC"). On December 15, 2000, the last business day of the week
prior to announcement prior to the commencement of the Offer, the closing per
Share price as reported on the NASDAQ OTC was approximately $.56.
All Shares properly tendered prior to the Expiration Date (as defined in
Section 1) will be purchased at the Purchase Price, upon the terms and subject
to the conditions of the Offer, including proration provisions, if applicable.
The Company reserves the right, in its sole discretion, to purchase more than
750,000 Shares pursuant to the Offer. See Section 14.
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 6.
The Board of Directors of the Company has approved the Offer. However,
neither the Company nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so,
how many Shares to tender. The Company's directors and officers have advised
the Company that they do not intend to tender any Shares in the Offer. See
Section 10.
Upon the terms and subject to the conditions of the Offer, if, at the
Expiration Date, more than 750,000 Shares (or such greater number of Shares
as the Company may elect to purchase) are properly tendered and not properly
withdrawn, the Company may buy all Shares on a pro rata basis from all
stockholders who properly tender Shares and do not properly withdraw them
prior to the expiration of the Offer. See Section 1.
The Purchase Price will be paid to tendering stockholders in cash, without
interest thereon, for all Shares purchased. Tendering stockholders who hold
Shares in their own name and who tender their Shares directly to ND Resources,
Inc., which is acting as the Depositary in connection with the Offer, will not
be obligated to pay brokerage commissions or solicitation fees on the purchase
of Shares by the Company pursuant to the Offer. Stockholders holding Shares
through brokers or banks are urged to consult the brokers or banks to determine
whether transaction costs are applicable if stockholders tender Shares through
the brokers or banks and not directly to the Depositary. However, any tendering
stockholder or other payee who fails to complete, sign and return to the
Depositary the Substitute Form W-9 that is included as part of the Letter of
Transmittal may be subject to required United States Federal Income Tax Backup
Withholding of 31% of the gross proceeds payable to the tendering stockholder
or other payee pursuant to the Offer. See Section 3. The Company will pay all
fees and expenses of Morrow & Co., Inc., which is acting as the Information
Agent in connection with the Offer. See Section 15.
The Board of Directors determined that an offer to repurchase Shares
directly from the Company's stockholders pursuant to this Offer would be in the
best interests of the Company and its stockholders. The Board of Directors
believes that the purchase of Shares at this time is consistent with the
Company's long term corporate goal of seeking to increase stockholder value.
However, neither the Board of Directors nor the Company makes any
recommendation as to whether any stockholder should tender any or all of such
stockholder's Shares pursuant to the Offer, or as to the Purchase Price.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to sell those Shares for cash
without, where Shares are tendered by the registered owner thereof directly to
the Depositary, the usual transaction costs associated with open market sales.
In addition, the Offer will give stockholders the opportunity to sell at prices
greater than the closing price on the day prior to the commencement of the
Offer. The Offer also allows stockholders to sell only a portion of their
Shares while retaining a continuing equity interest in the Company.
Stockholders who determine not to accept the Offer will realize a proportionate
increase in their interest in the Company, subject to the Company's right to
issue additional Shares and other equity securities in the future. After
consummation of the Offer, increases or decreases in the Company's net income
will be reflected in greater increases or decreases in earnings per share than
is presently the case because of the smaller number of Shares that will be
outstanding, assuming the Company does not issue additional Shares in the
future. In determining whether to tender Shares pursuant to the Offer,
stockholders should consider the possibility that they may be able to sell
their Shares in the future on the NASDAQ OTC ELECTRONIC BULLETIN BOARD, or
otherwise, at a net price higher than the Purchase Price. The Company can give
no assurance, however, as to the price at which a stockholder may be able to
sell non-tendered Shares in the future.
-5-
As of December 14, 2000, the Company had 7,444,687 issued and outstanding
Shares, and had reserved 1,049,000 Shares for issuance upon exercise of
outstanding stock warrants ("Warrants"). The 750,000 Shares that the Company is
offering to purchase pursuant to the Offer represent approximately 10% of the
Company's Shares outstanding on December 14, 2000. All warrants have an
exercise strike price greater than $1.25. On December 15, 2000, the last
business day of the week prior to announcement on the prior to the
commencement of the Offer, the closing per Share sales price as reported on the
NASDAQ OTC was approximately $.56. Stockholders are urged to obtain current
market quotations for the Shares.
THE OFFER
1. MATERIAL TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Company
will purchase 750,000 Shares or such lesser number of Shares as are properly
tendered (and not properly withdrawn in accordance with Section 4) prior to
the Expiration Date (as defined below) at a price of $1.25 per Share, net to
the seller in cash, without interest thereon. The offer will remain open
for a full twenty business days.
The term "Expiration Date" means MIDNIGHT, Central Standard Time,
on January 22, 2001 unless and until the Company, in its sole discretion, shall
have extended the period of time during which the Offer will remain open, in
which event the term "Expiration Date" shall refer to the latest time and date
at which the Offer, as so extended by the Company, shall expire. See Section
14 for a description of the Company's right to extend, delay, terminate or
amend the Offer. The Company reserves the right to purchase more than 750,000
Shares pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Company may
purchase, pursuant to the Offer, an additional number of Shares, not to exceed
2% of the outstanding Shares (148,893 Shares), without amending or extending
the Offer. See Section 14. In the event of an over-subscription of the Offer as
described below, Shares tendered may be subject to proration. The proration
period also expires on the Expiration Date.
The Offer will be extended an additional ten business days, if (a) the
Company increases the number of Shares being sought in the Offer by more than
2% of the outstanding Shares (148,893 Shares), or (b) the Company decreases the
number of Shares being sought, and (c) the Offer is scheduled to expire at any
time earlier than ten business days from, and including, the date that notice
of such increase or decrease is first published, sent or given in the manner
specified in Section 14.
The Offer is not conditioned on the tender of any minimum number of Shares,
but is subject to certain other conditions. See Section 6.
All Shares properly tendered pursuant to the Offer and not properly
withdrawn will be purchased at the Purchase Price, upon the terms and subject
to the conditions of the Offer, including the proration provisions, if
applicable. All Shares tendered and not purchased pursuant to the Offer,
including Shares not purchased because of proration, will be returned to the
tendering stockholders at the Company's expense as promptly as practicable
following the Expiration Date.
If the number of Shares properly tendered and not properly withdrawn prior
to the Expiration Date is less than or equal to 750,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase all Shares so tendered at the Purchase Price.
If the number of Shares tendered and not withdrawn prior to the Expiration
Date is greater than 750,000 Shares (or such greater number of Shares as the
Company may elect to purchase pursuant to the Offer) the Company, upon the
terms and subject to the conditions of the Offer, will accept Shares for
purchase in the following order of priority: ALL SHARES VALIDLY TENDERED AND
NOT VALIDLY WITHDRAWN PRIOR TO THE EXPIRATION DATE ON A PRO RATA BASIS, IF
NECESSARY (WITH APPROPRIATE ADJUSTMENTS TO AVOID PURCHASES OF FRACTIONAL
SHARES).
In the event that proration of tendered Shares is required, the Company
will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each stockholder other than Odd Lot Holders
tendering Shares shall be based on the ratio of the number of Shares properly
tendered and not properly withdrawn by each stockholder to the total number of
Shares properly tendered and not properly withdrawn by all stockholders.
Because of the 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, the Company does not expect
that it will be able to announce the final proration factor or commence payment
for any Shares purchased pursuant to the Offer until approximately five
business days after the Expiration Date. The preliminary results of any
proration will be announced by press release as promptly as practicable after
the Expiration Date, which press release will be also posted on the Company's
website at http://www.ndholdings.com. Stockholders may obtain preliminary
proration information from the Information Agent and may be able to obtain
such information from their brokers.
-6-
The order of the purchase of Shares by the Company from a stockholder
pursuant to the Offer may affect the United States federal income tax
consequences to the stockholder of the purchase and, therefore, may be relevant
to a stockholder's decision whether or not to tender Shares. The Letter of
Transmittal affords each tendering stockholder the opportunity to designate the
order of priority in which Shares tendered are to be purchased in the event of
proration. Stockholders should consult with their own tax advisors.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to stockholders who were record holders of Shares as of December 14, 2000 and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the Company's stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Board of Directors believes that the Company's financial position,
outlook and current market conditions make this an attractive time to
repurchase a portion of the outstanding Shares.
Since December 1, 1997, pursuant to authorizations by the Board of
Directors to spend up to $2,000,000 to repurchase Shares of the Company, the
Company has repurchased 1,057,000 Shares on the open market at a cost of
approximately $994,000. Such authorizations were based upon the determination
of the Board of Directors that Company repurchases of Shares would provide a
liquidity opportunity for those stockholders wishing to dispose of their
Shares, enhance stockholder value for the remaining stockholders, and that such
repurchases would be in the best interests of the Company and its stockholders.
After considering the results of the Company's Share repurchase program and
the Company's alternatives, the Board of Directors determined that an offer to
repurchase Shares directly from the Company's stockholders pursuant to this
Offer would be in the best interests of the Company and its stockholders, and
authorized the Offer. Shares purchased pursuant to the Offer will be in
addition to Shares purchased under the repurchase program. The Board of
Directors believes that the purchase of Shares at this time is consistent
with the Company's long-term corporate goal of seeking to increase stockholder
value.
Stockholders who determine not to accept the Offer or whose Shares are not
purchased in the Offer will obtain a proportionate increase in their ownership
interest in the Company. After consummation of the Offer, increases or
decreases in the Company's net income will be reflected in greater increases
or decreases in earnings per Share than is presently the case because of the
smaller number of Shares that will be outstanding, assuming the Company does
not issue additional Shares in the future.
Subsequent to the Offer, the Company may periodically consider additional
purchases of Shares pursuant to one or more open-market purchase programs. The
Company may in the future purchase additional Shares on the open market, in
private transactions, through tender offers or otherwise, subject to the
approval of the Board of Directors. Future purchases may be on the same terms
or on terms which are more or less favorable to stockholders than the terms of
the Offer. However, Rule 13e-4 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prohibits the Company and its affiliates from
purchasing any Shares, other than pursuant to the Offer, until at least ten
business days after the Expiration Date. Any possible future purchases by the
Company will depend on many factors, including the market price of the Shares,
the results of the Offer, the Company's business and financial position and
general economic and market conditions.
The Company believes that after the Offer is completed the Company will
have sufficient cash flow and access to other sources of capital to fund its
working capital needs and provide for its current capital expenditure
requirements. The funds required to complete the Offer and pay related expenses
will be generated from operations and cash currently in the Company's accounts.
See Section 8.
The Board of Directors of the Company has approved the Offer. However,
neither the Company nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares and
neither has authorized any person to make any such recommendation. Stockholders
are urged to evaluate carefully all information in the Offer, consult with
their own investment and tax advisors and make their own decisions whether to
tender Shares and, if so, how many Shares to tender. The officers and directors
of the Company have advised the Company that they do not plan to tender Shares
pursuant to the Offer. See Section 10.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire any such
Shares) and will be available for the Company to issue without further
stockholder action (except as required by applicable law or the rules of the
NASDAQ OTC or any other securities exchange on which the Shares may be listed)
for purposes including, but not limited to, the acquisition of other
businesses, the raising of additional capital for use in the Company's business
and the satisfaction of obligations under existing or future employee benefit
plans. The Company has no current plans for the issuance of Shares repurchased
pursuant to the Offer.
-7-
The beneficial ownership of certain Directors of the Company may cause them
to be deemed to have certain interests with respect to the Offer. See Section
10.
Except as disclosed in this Offer to Purchase, the Company currently has no
plans or proposals that relate to or would result in (a) the acquisition by any
person of additional securities of the Company or the disposition of securities
of the Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company in connection with the Offer; (e) any
change in the present dividend policy, or indebtedness or capitalization of the
Company other than in the Company's ordinary course of business; (f) any other
material change in the Company's corporate structure or business; (g) any
change in the Company's Certificate of Incorporation or By-Laws or other
actions which may impede the acquisition of control of the Company by any
person; (h) a class of equity security of the Company being delisted from a
national securities exchange or ceasing to be authorized for quotation in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity security of the Company becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to Section
15(d) of the Exchange Act.
3. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For Shares to be tendered properly pursuant to
the Offer, (a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof), and any other documents required by the
Letter of Transmittal, must be received prior to midnight, Central
Standard Time, on the Expiration Date by the Depositary at its address set
forth on the back cover of this Offer to Purchase, or (b) the tendering
stockholder must comply with the guaranteed delivery procedure set forth below.
Stockholders who hold Shares through brokers or banks are urged to consult
the brokers or banks to determine whether transaction costs are applicable if
stockholders tender Shares through the brokers or banks and not directly to
the Depositary.
Signature Guarantees and Method of Delivery. No signature guarantee is
required: (i) if the Letter of Transmittal is signed by the registered holder
of the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depositary Trust Company (the "Book-Entry Transfer
Facility") whose name appears on a security position listing as the owner of
the Shares) tendered therewith and such holder has not completed either the
box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the Letter of Transmittal; or (ii) if Shares are
tendered for the account of a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit
union, savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (each of the foregoing constituting an
"Eligible Institution"). See Instruction 1 of the Letter of Transmittal. If
a certificate for Shares is registered in the name of a person other than the
person executing a Letter of Transmittal, or if payment is to be made, or
Shares not purchased or tendered are to be issued, to a person other than the
registered holder, then the certificate must be endorsed or accompanied by an
appropriate stock power, in either case, signed exactly as the name of the
registered holder appears on the certificate, with the signature guaranteed by
an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of the book-entry
transfer of the Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. The method of delivery of all documents,
including certificates for Shares, the Letter of Transmittal and any other
required documents, is at the election and risk of the tendering stockholder.
If delivery is by mail, then registered mail with return receipt requested,
properly insured, is recommended.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing the
Book-Entry Transfer Facility to transfer Shares into the Depositary's account
in accordance with the Book-Entry Transfer Facility's procedures for transfer.
Although delivery of Shares may be effected through a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility, either (i) a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) with any required signature guarantees or an Agent's
Message hereinafter (as defined) or, in the case of a tender through the Book-
Entry Transfer Facility's Automated Tender Offer Program ("ATOP"), the specific
acknowledgment in each case together with any other required documents must, in
any case, be transmitted to and received by the Depositary at its address set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or (ii) the guaranteed delivery procedure described below must be followed. The
confirmation of a book-entry transfer of shares into the Depositary's account
at the Book-Entry Transfer Facility as described above is referred to herein
as a "Book Entry Confirmation." Delivery of the Letter of Transmittal and any
other required documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary and will not constitute a valid tender.
-8-
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility, in accordance with the normal procedures of such facility
to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation (as defined below), 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 Purchaser may enforce such agreement against the participant.
United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption
applies under the applicable law and regulations, 31% of the gross proceeds
payable to a stockholder or other payee pursuant to the Offer must be withheld
and remitted to the United States Internal Revenue Service ("IRS"), unless the
stockholder or other payee provides its taxpayer identification number
(employer identification number or social security number) to the Depositary
(as payor), certifies under penalties of perjury that such number is correct,
and provides certain other certifications regarding the inapplicability of
backup withholding. Therefore, each tendering stockholder should complete and
sign the Substitute Form W-9 included as part of the Letter of Transmittal so
as to provide the information and certification necessary to avoid backup
withholding. If the Depositary is not provided with the correct taxpayer
identification number, the United States Holder (as defined in Section 13
herein) also may be subject to a penalty imposed by the IRS. If withholding
based on the presumption that the payment will be characterized as a dividend
for federal income tax purposes results in an overpayment of taxes, a refund
may be obtained. Certain "exempt recipients" (including, among others, all
corporations and certain Non-United States Holders (as defined in Section 13
herein)) are not subject to these backup withholding, and information reporting
requirements. In order for a Non-United States Holder to qualify as an exempt
recipient, that stockholder must submit an IRS Form W-8 or a Substitute Form
W-8, signed under penalties of perjury, attesting to that stockholder's exempt
status. Such statements can be obtained from the Depositary. See Instruction
11 of the Letter of Transmittal.
To prevent United States Federal Income Tax Backup Withholding equal to
31% of the gross payments made to stockholders for Shares purchased pursuant to
the Offer, each stockholder who does not otherwise establish an exemption from
such backup withholding must provide the Depositary with the stockholder's
correct taxpayer identification number and provide certain other information by
completing the Substitute Form W-9 included as part of the Letter of
Transmittal.
Withholding For Non-United States Holders. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding,
the Depositary will withhold United States federal income taxes equal to 30%
of the gross payments payable to a Non-United States Holder or his agent
unless the Depositary determines that a reduced rate of withholding is
available pursuant to a tax treaty or that an exemption from withholding is
applicable because the gross proceeds are effectively connected with the
conduct of a trade or business within the United States. In order to obtain
a reduced rate of withholding pursuant to a tax treaty, a Non-United States
Holder must deliver to the Depositary, before the payment, a properly
completed and executed IRS Form 1001 or current IRS requirement. In order to
obtain an exemption from withholding on the grounds that the gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a
trade or business within the United States, a Non-United States Holder must
deliver to the Depositary a properly completed and executed IRS Form 4224 or
current IRS requirement. The Depositary will determine a stockholder's status
as a Non-United States Holder and eligibility for a reduced rate of, or
exemption from, withholding based on the presumption that the payment will be
characterized as a dividend for federal income tax purposes and by reference
to any outstanding certificates or statements concerning eligibility for a
reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS
Form 4224) unless facts and circumstances indicate that such reliance is not
warranted. A Non-United States Holder may be eligible to obtain a refund of
all or a portion of any tax withheld if such Non-United States Holder meets
those tests described in Section 13 that would characterize the exchange as a
sale (as opposed to a dividend) or is otherwise able to establish that no tax
or a reduced amount of tax is due.
Non-United States holders are urged to consult their own tax advisors
regarding the application of United States Federal Income Tax Withholding,
including eligibility for a withholding tax reduction or exemption, and the
refund procedure.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and the stockholder's Share certificates are not immediately
available or cannot be delivered to the Depositary prior to the Expiration Date
(or the procedure for book-entry transfer cannot be completed on a timely
basis) or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date, the Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(a) the tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight courier, telegram or
facsimile transmission, on or prior to the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer
to Purchase, including (where required) a signature guarantee by an
Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together
with a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) and any required signature
guarantees or other documents required by the Letter of Transmittal,
are received by the Depositary within three NASDAQ OTC trading days
after the date of receipt by the Depositary of the Notice of
Guaranteed Delivery.
-9-
Return of Tendered Shares. If any tendered Shares are not purchased, or if
less than all Shares evidenced by a stockholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case of Shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares
will be credited to the appropriate account maintained by the tendering
stockholder at the Book-Entry Transfer Facility, in each case without expense
to the stockholder.
By accepting the Offer and tendering Shares directly to the Depositary, an
Odd Lot Holder will avoid the payment of brokerage commissions and any
applicable odd lot discount payable on a sale of such Shares in a transaction
effected on a securities exchange.
Warrants. The Company is not offering, as part of the Offer, to purchase
any Warrants outstanding and tenders of Warrants will not be accepted. Holders
of Warrants who wish to participate in the Offer may first exercise their
Warrants and purchase Shares of the Company's common stock and then tender the
Shares pursuant to the Offer. In no event are any Warrants to be delivered to
the Depositary in connection with a tender of Shares hereunder. Once exercised,
the exercise of a Warrant cannot be revoked even if Shares received upon the
exercise and tendered in the Offer are not purchased in the Offer for any
reason. There are no outstanding Warrants exercisable at prices less than
the $1.25 tender offer price.
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 validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, and its determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders of any Shares that it determines are not in proper form or the
acceptance for payment of or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in
any tender with respect to any particular Shares or any particular stockholder
and the Company's interpretation of the terms of the Offer will be final and
binding on all parties. No tender of Shares will be deemed to have been
properly made until all defects or irregularities have been cured by the
tendering stockholder or waived by the Company. Neither the Company, the
Depositary, the Information Agent or any other person shall be obligated to
give notice of any defects or irregularities in tenders, nor shall any of them
incur any liability for failure to give any notice.
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering stockholder's acceptance of the
terms and conditions of the Offer, as well as the tendering stockholder's
representation and warranty to the Company that (a) the stockholder has a net
long position in the Shares at least equal to the Shares tendered within the
meaning of Rule 14e-4 promulgated by the Commission under the Exchange Act and
(b) the tender of Shares complies with Rule 14e-4. It is a violation of Rule
14e-4 for a person, directly or indirectly, to tender Shares for that person's
own account unless, at the time of tender and at the end of the proration
period (including any extensions thereof), the person so tendering (i) has a
net long position equal to or greater than the amount of (x) Shares tendered
or (y) Warrants exercisable for the Shares tendered and will acquire the
Shares for tender by exercise and (ii) will deliver or cause to be delivered
the Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on
behalf of another person.
The Company's acceptance for payment of Shares tendered pursuant to the
Offer will constitute a binding agreement between the tendering stockholder
and the Company upon and subject to the terms and conditions of the Offer.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL,
MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH
DOCUMENTS DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY
AND, THEREFORE, WILL NOT BE DEEMED TO BE PROPERLY TENDERED.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Company pursuant to the Offer, may
also be withdrawn at any time after 5:00 p.m., Central Standard Time, on
January 27, 2001.
-10-
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic, telex or facsimile transmission form and must be
received in a timely manner by the Depositary at its address set forth on the
back cover of this Offer to Purchase. Any such notice of withdrawal must
specify the name of the tendering stockholder, the number of Shares to be
withdrawn and the name of the registered holder of such Shares. If the
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering stockholder must also submit the serial numbers shown on the
particular certificates for Shares to be withdrawn and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution (except in
the case of Shares tendered for the account of an Eligible Institution). If
Shares have been tendered pursuant to the procedure for book-entry transfer
set forth in Section 3, the notice of withdrawal also must specify the name
and the number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and must otherwise comply with 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 the Company, in its sole discretion, which determination shall
be final and binding. Neither of the Company, the Depositary, the Information
Agent or any other person shall be obligated to give notice of any defects or
irregularities in any notice of withdrawal nor shall any of them incur
liability for failure to give any notice.
Withdrawals may not be rescinded and any Shares properly withdrawn will,
thereafter, be deemed not properly tendered for purposes of the Offer unless
the withdrawn Shares are properly retendered prior to the Expiration Date by
following one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
subject to applicable law, retain tendered Shares on behalf of the Company. In
the event of such an extension or delay, stockholders will continue to be
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company will accept for payment
and pay for (and thereby purchase) Shares properly tendered and not properly
withdrawn prior to the Expiration Date. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased) Shares
that are properly tendered and not properly withdrawn (subject to the proration
provisions of the Offer) only when, as and if it gives oral or written notice
to the Depositary of its acceptance of the Shares for payment pursuant to the
Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date, the Company will accept for payment and pay a
per Share Purchase Price of $1.25 for 750,000 Shares (subject to increase or
decrease as provided in Section 14) properly tendered, or such lesser number
of Shares as are properly tendered, and not properly withdrawn as permitted in
Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering
stockholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately five business days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
not purchased due to proration, will be returned (or, in the case of Shares
tendered by book-entry transfer, will be credited to the account maintained
with the Book-Entry Transfer Facility by the participant therein who so
delivered the Shares) to the tendering stockholder at the Company's expense as
promptly as practicable after the Expiration Date or termination of the Offer
without expense to the tendering stockholders. Under no circumstances will
interest on the Purchase Price be paid by the Company by reason of any delay
in making payment. In addition, if certain events occur, the Company may not
be obligated to purchase Shares pursuant to the Offer. See Section 6.
Any tendering stockholder 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 required Federal Income Tax Backup Withholding
of 31% of the gross proceeds paid to the stockholder or other payee pursuant to
the Offer. See Section 3. Also see Section 3 regarding United States Federal
Income Tax consequences for Non-United States holders.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment of,
or the purchase of and the payment for Shares tendered, subject to Rule
13e-4(f) under the Exchange Act, if at any time on or after December 21, 2000
and prior to the Expiration Date, any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) that,
in the Company's reasonable judgment and regardless of the circumstances giving
rise thereto (including any action or omission to act by the Company), makes it
inadvisable to proceed with the Offer or with acceptance for payment:
-11-
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person,
domestic or foreign, before any court, authority, agency or tribunal
that directly or indirectly (i) challenges the making of the Offer,
the acquisition of some or all of the Shares pursuant to the Offer or
otherwise relates in any manner to the Offer, or (ii) in the
Company's reasonable judgment, could materially and adversely affect
the business, condition (financial or other), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future
conduct of the business of the Company or any of its subsidiaries or
materially impair the contemplated benefits of the Offer to the
Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, or
order threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the
Company or any of its subsidiaries, by any court or any authority,
agency or tribunal that, in the Company's reasonable judgment, would
or might directly or indirectly (i) make the acceptance for payment
of, or payment for, some or all of the Shares illegal or otherwise
restrict or prohibit consummation of the Offer, (ii) delay or
restrict the ability of the Company, or render the Company unable, to
accept for payment or pay for some or all of the Shares, (iii)
materially impair the contemplated benefits of the Offer to the
Company or (iv) materially and adversely affect the business,
condition (financial or other), income, operations or prospects of
the Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) the declaration of
a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) the commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any limitation (whether
or not mandatory) by any governmental, regulatory or administrative
agency or authority on, or any event that, in the Company's
reasonable judgment, might affect, the extension of credit by banks
or other lending institutions in the United States, (v) any
significant decrease in the market price of the Shares or any change
in the general political, market, economic or financial conditions in
the United States or abroad that could, in the reasonable judgment of
the Company, have a material adverse effect on the Company's
business, operations or prospects or the trading in the Shares, or
(vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening
thereof.
(d) a tender or exchange offer for any or all of the Shares (other than
the Offer), or any merger, business combination or other similar
transaction with or involving the Company or any subsidiary, shall
have been proposed, announced or made by any person;
(e) (i) any entity, "group" (as that term is used in Section 13(d)(3) of
the Exchange Act) or person shall have acquired or proposed to
acquire beneficial ownership of more than 5% of the outstanding
Shares (other than any such person, entity or group who has filed a
Schedule 13D or Schedule 13G with the Commission on or before
October 15, 2000), (ii) any such entity, group or person who has
filed a Schedule 13D or Schedule 13G with the Commission on or before
the Expiration Date shall have acquired or proposed to acquire
beneficial ownership of an additional 2% or more of the outstanding
Shares or (iii) any person, entity or group shall have filed a
Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or made a public announcement
reflecting an intent to acquire the Company or any of its
subsidiaries or any of their respective assets or securities other
than in connection with a transaction authorized by the Board of
Directors of the Company; or
(f) any change or changes shall have occurred in the business, financial
condition, assets, income, operations, prospects or stock ownership
of the Company or its subsidiaries that, in the Company's reasonable
judgment, is or may be material to the Company or its subsidiaries.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action
or omission by the Company) giving rise to any such condition, and may be
waived by the Company, in whole or in part, at any time prior to the
expiration of the offer, in its reasonable discretion. The Company's
failure at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time prior to the expiration of
the offer . Any determination by the Company concerning the events
described above will be final and binding. All conditions to the offer,
other than those involving receipt of necessary government approvals, must be
satisfied or waived before expiration of the offer, not when shares are
accepted for payment should the date shares are accepted for payment be
later than the expiration of the offer.
-12-
7. PRICE RANGE OF SHARES.
The Shares are listed and traded on the NASDAQ OTC (Symbol: NDHI). The
following table sets forth, for the fiscal quarters indicated, the high and
low closing sales prices per Share on the NASDAQ OTC as compiled from
published financial sources in each of such fiscal quarters.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Calendar Year 2000
1st quarter................... $ .72................ $ .53
2nd quarter................... .94................ .59
3rd quarter................... .94................ .72
Calendar Year 1999
1st quarter................... 1.06................ .56
2nd quarter................... 1.03................ .81
3rd quarter................... 1.00................ .69
4th quarter................... .97................ .53
Calendar Year 1998
1st quarter................... 2.06................ 1.46
2nd quarter................... 1.75................ .81
3rd quarter................... 1.25................ .81
4th quarter................... .93................ .50
</TABLE>
The closing price per Share on the NASDAQ OTC on December 15, 2000, was
approximately $.56. Shareholders are urged to compare such price with the
current trading price per Share. The Company has not paid any cash dividends
on its Common Stock.
8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases 750,000 Shares pursuant to the Offer at a
purchase price of $1.25 per Share, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer, to be
approximately $1 million. The Company expects to fund the purchase of Shares
pursuant to the Offer and the payment of related fees and expenses with funds
generated from operations and cash currently in the Company's accounts.
The Company believes that current cash accounts, along with funds
generated from operations, will be sufficient to finance the Offer, the
Company's working capital needs and capital expenditures and business
development needs.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
ND Holdings, Inc. ("the Company") is a holding company primarily engaged,
through various subsidiaries, in providing investment management,
distribution, shareholder services, fund accounting and other related
administrative services to the open-end investment companies known as
"Integrity Mutual Funds" and "Ranson Managed Portfolios," hereinafter
collectively referred to as "the Funds." Integrity Mutual Funds currently
consists of four (5) open-end investment companies including ND Tax-Free Fund,
Inc.("ND Tax-Free Fund"), Montana Tax-Free Fund, Inc.("Montana Tax-Free Fund"),
South Dakota Tax-Free Fund, Inc. ("South Dakota Tax-Free Fund"), Integrity
Fund of Funds, Inc. ("Integrity Fund of Funds"), Integrity Small-Cap Fund of
Funds, Inc. ("Integrity Small-Cap Fund of Funds"). Ranson Managed Portfolios
consists of one open-end investment company containing four (4) separate
portfolios including The Kansas Municipal Fund, The Kansas Insured
Intermediate Fund, The Nebraska Municipal Fund, and The Oklahoma Municipal
Fund. Sales of Fund shares are marketed principally in Montana, Kansas,
Oklahoma, North Dakota, Nebraska and South Dakota. In addition, the Company
has commenced marketing of shareholder services, fund accounting and other
administrative services offered by ND Resources, Inc. ("ND Resources") to
fund groups in the United States. The Company has also become involved, on
a limited basis, as an internet provider and has reviewed acquisition
opportunities in other industries involving management services and
information processing. The Company has been engaged in negotiation with a
number of various entities over the past year for with respect to potential
acquisitions of assets or entities as well as potential disposition of assets.
As of December 31, 1999, total assets under management and/or
administration in the Funds was approximately $364.1 million, compared to
approximately $374.6 million as of December 31, 1998 and approximately
$349.9 million as of December 31, 1997. The Company has been engaged in the
financial services business since 1987. The Company was incorporated
September 22, 1987 as a North Dakota corporation by Robert E. Walstad,
current President of the Company. The Company's offices are at 1 North Main
Street, Minot, North Dakota 58703. As of December 31, 1999, the Company had
32 full-time employees and 3 part-time employees, consisting of officers,
investment management, securities distribution, shareholder services, data
processing, law, accounting and clerical support staff.
-13-
THE COMPANY'S SUBSIDIARIES
The Company's principal line of business is providing investment
management, distribution, shareholder services, accounting and related
services to the Funds and other clients. As a result, the Company is
economically dependent on the Funds and others for substantially all of
its revenue and income. The business is conducted through the wholly-owned
subsidiary companies described below. Revenues generated by the subsidiaries
are derived primarily from fees based on the level of assets under management.
Other business opportunities have been considered.
ND MONEY MANAGEMENT, INC.
ND Money Management, Inc. ("ND Money Management") is registered as an
investment advisor with the SEC under the Investment Advisers Act of 1940
(the "Advisers Act"). ND Money Management provides investment advisory
services under investment advisory agreements with ND Tax-Free Fund, Montana
Tax-Free Fund, South Dakota Tax-Free Fund, Integrity Fund of Funds and
Integrity Small-Cap Fund of Funds. As of December 31, 1999, ND Money
Management managed approximately $155.4 million, representing approximately
43% of the Company's total assets under management/service.
ND CAPITAL, INC.
ND Capital, Inc. ("ND Capital") is registered with the SEC as a broker-
dealer and is a member of the National Association of Securities Dealers, Inc.
(the "NASD") and serves as principal underwriter and distributor for ND Tax-
Free Fund, Montana Tax-Free Fund, South Dakota Tax-Free Fund, Integrity Fund
of Funds and Integrity Small-Cap Fund of Funds. ND Capital earns Rule 12b-1
fees pursuant to Rule 12b-1 plans adopted by each such Fund except for
Integrity Fund of Funds and contingent deferred sales charges ("CDSCs") from
shareholders of such Funds if they redeem their shares within 5 years after
their purchase. ND Capital began as principal underwriter for Investors
Research Fund of Santa Barbara, California on December 1, 1998. ND Capital
earned underwriting fees in connection with sales of such Investors Research
Fund shares effected by ND Capital's sales representatives and the
underwriter's portion of front-end sales loads ("FESLs") in connection with
sales of such shares effected by other broker-dealers. On December 31, 1999,
ND Capital terminated the underwriting agreement with Investors Research Fund
due to significant changes in the Funds structure. ND Capital earned Rule
12b-1 fees pursuant to Rule 12b-1 plans adopted by Investors Research Fund.
As principal underwriter for Integrity Fund of Funds and Integrity Small-Cap
Fund of Funds, ND Capital earns CDSCs from shareholders of such Funds if they
redeem their shares within 5 years after their purchase. ND Capital also
earns commission revenue in connection with sales of shares of outside mutual
funds and in connection with effecting other securities transactions.
RANSON CAPITAL CORPORATION
Ranson Capital Corporation ("Ranson") is registered with the SEC as an
investment advisor and a broker-dealer. It is also a member of the NASD.
Ranson provides investment advisory services to the Ranson Managed Portfolios
under an investment advisory agreement. As of December 31, 1999, Ranson
managed approximately $186 million in assets, representing approximately 51%
of the Company's total assets under management/service. Ranson also serves
as principal underwriter for the Ranson Managed Portfolios and earns Rule
12b-1 fees pursuant to Rule 12b-1 plans adopted by certain of the Ranson
Managed Portfolios and the underwriter's portion of front-end sales load
(FESLs) in connection with sales of shares of the Ranson Managed
Portfolios effected by other broker- dealers.
ND RESOURCES, INC.
ND Resources, Inc. ("ND Resources") is registered with the SEC as a
transfer agent under the Securities Exchange Act of 1934. ND Resources
provides shareholder record keeping services and acts as transfer agent and
dividend-paying agent for the Funds and Investors Research Fund. ND Resources
also provides business management services, including fund accounting,
compliance and other related administrative activities for the Funds and
Investors Research Fund. ND Resources is compensated for providing these
services under agreements with each Fund, and is reimbursed for out-of-pocket
expenses.
DESCRIPTION OF BUSINESS
INVESTMENT ADVISORY SERVICES
ND Money Management and Ranson act as the investment advisor to the
Integrity Mutual Funds and Ranson Managed Portfolios, respectively, pursuant
to investment advisory agreements with such Funds. ND Money Management and
Ranson generally supervise and implement the Funds' investment activities,
including deciding which securities to buy and sell. They also decide which
broker-dealers through, or with which, to effect Fund securities transactions.
Generally, each Fund pays ND Money Management or Ranson an investment
advisory fee payable monthly based on the Fund's net assets. Annual investment
advisory fees under the various investment advisory agreements are 0.50% of
assets under management in the case of Ranson Managed Portfolios, 0.90% of
assets under management in the case of Integrity Fund of Funds and Integrity
Small-Cap Fund of Funds and 0.60% of assets under management for the remaining
Funds managed by ND Money Management. Investment advisory fees are generally
voluntarily waived or reduced, and other Fund expenses may be absorbed by the
investment advisor, for a period of time to ensure that the Funds have
competitive fee structures.
-14-
The investment advisory agreements pursuant to which ND Money Management
and Ranson provide investment advisory services continue in effect for
successive annual periods as long as such continuance is approved annually by
(a) either a majority vote cast in person at a meeting of the relevant Fund's
Board of Directors called for that purpose, or a vote of the holders of a
majority of the relevant Fund's outstanding voting securities, and (b) a
majority of the relevant Fund's directors who are not parties to the investment
advisory agreement or interested persons of the Funds or the Company within the
meaning of the Advisers Act.
Either party may terminate the investment advisory agreement without
penalty after specified written notice. Each investment advisory agreement
also automatically terminates in the event of its "assignment" as defined in
the Advisers Act. The termination of one or more investment advisory agreements
between ND Money Management or Ranson and the Funds would have a material
adverse impact on the Company. To date, no such investment advisory agreements
have been terminated.
TRANSFER AGENCY, DIVIDEND DISBURSEMENT AND ADMINISTRATIVE SERVICES
Transfer agency, dividend disbursement and other shareholder administrative
services are provided to the Funds and other clients by ND Resources. ND
Resources receives fees from the Funds and others for providing such services.
As of December 31, 1999 such fees ranged from 0.09% per annum of assets under
management/service to 0.16% per annum of assets under management/service,
depending on the size of the Fund. In addition, ND Resources provides
accounting services to the Funds for which it charges a base fee and an asset
based charge ranging from 0.01% to 0.05% per annum of assets under management/
service depending on the size of the Fund.
DISTRIBUTION OF FUND SHARES
ND Capital acts as the principal underwriter and distributor of shares of
ND Tax-Free Fund, Montana Tax-Free Fund, South Dakota Tax-Free Fund, Integrity
Fund of Funds and Integrity Small-Cap Fund of Funds pursuant to distribution
agreements with such Funds. Pursuant to distribution agreements, Ranson acts
as the principal underwriter and distributor of shares of the Ranson Managed
Portfolios. The distribution agreements generally provide that ND Capital and
Ranson shall distribute Fund shares and pay the expenses thereof. Fund shares
are sold primarily by broker-dealers with whom ND Capital and Ranson Capital
have entered into dealer sales agreements. ND Capital also sells a limited
number of Fund shares directly to investors. The Company markets its Funds
primarily to the residents of the rural states in which the Company's Funds
invest in local bond issues.
BROKERAGE COMMISSIONS
ND Capital and Ranson Capital also earn commission revenue in connection
with sales of shares of outside mutual funds and when acting as a broker in
effecting other securities transactions.
The Company's principal executive office is located at 1 North Main Street,
Minot, North Dakota, 58703. The Company's telephone number at such office is
(701) 852-5292.
Additional Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning the Company's directors and officers, their remuneration,
Warrants granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
stockholders and filed with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 2120,
Washington, D.C. 20549 or at its regional offices located at 1801 California
Street, Suite 4800, Denver, Colorado. Copies of such material may also be
obtained by mail, upon payment of the Commission's customary charges, from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission 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 Commission.
-15-
10. INTEREST OF DIRECTORS, OFFICERS AND NOMINEES; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of December 14, 2000, the Company had 7,444,687 issued and outstanding
Shares, and had reserved 1,049,000 Shares for issuance upon exercise of
outstanding Warrants. The 750,000 Shares that the Company is offering to
purchase represents approximately 10% of the Shares outstanding on December
14, 2000.
As of December 14, 2000, the Company's directors and executive officers as
a group (7 persons) beneficially owned an aggregate of 1,301,003 Shares
(including Warrants) representing approximately 17% of the outstanding Shares.
If the Company purchases 750,000 Shares pursuant to the Offer (no Shares will
be tendered by the executive officers and directors), immediately following
the Offer the Company's executive officers and directors as a group would own
beneficially approximately 19% of the outstanding Shares, assuming exercise
of all outstanding Warrants.
Set forth below is information with respect to beneficial ownership at
December 14, 2000 of the Common Stock (assuming exercise of all outstanding
Warrants) by each Director, Executive Officer and Nominee of the Company.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
APPROXIMATE % OF APPROXIMATE % OF CLASS
AMOUNT AND NATURE OF CLASS BEFORE TENDER ASSUMING TENDER OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF SHARES 750,000 SHARES COMPLETED
-----------------------------------------------------------------------------------------------------------------------------
Robert E. Walstad 806,789 (2) 10.8% 12.1%
Vance Castleman 144,090 (3) 1.9% 2.2%
Daniel L. Feist 23,100 (4) * *
Lyle E. McLain 20,573 (5) * *
Peter A. Quist 123,754 (6) 1.7% 1.8%
Myron Thompson 130,500 1.8% 1.9%
Richard H. Walstad 52,197 (7) * *
All Directors, Executive Officers and
Nominees as a group 7 persons
including the above named) 1,301,003 (8) 17.3% 19.3%
<FN>
* Less than 1% owned.
(1) Unless otherwise indicated in the footnotes to this table, the listed
beneficial owner has sole voting power and investment power with respect to
such shares.
(2) Of these shares, 8,527 are held in Mr. Walstad's 401(k) account, and
8,142 shares held in Mr. Walstad's ESOP. The share total includes 675,200
shares covered by warrants which are currently exercisable or exercisable
within 60 days of February 29, 2000 held by Mr. Walstad.
(3) Of these shares, 144,090 are held as tenants in common with Mr.
Castleman's wife.
(4) The total includes 11,000 shares covered by warrants which are currently
exercisable or exercisable within 60 days of February 29, 2000 held by
Mr. Feist.
(5) Of these shares, 3,210 are held as joint tenants with Mr. McLain's wife,
3,023 are held in an IRA for Mr. McLain, 1,000 are held by Mr. McLain's wife,
160 shares are held by Mr. McLain's wife as custodian under the North Dakota
Uniform Gifts to Minors Act and 3,080 are held in an IRA for Mr. McLain's wife.
Includes 10,100 shares covered by warrants which are currently exercisable or
exercisable within 60 days of February 29, 2000 held as joint tenants with Mr.
McLain's wife.
(6) Of these shares, 4,412 are held in Mr. Quist's ESOP. Includes 56,000
shares covered by warrants which are currently exercisable or exercisable
within 60 days of February 29, 2000 held by Mr. Quist.
(7) Of these shares, Mr. Walstad's wife holds 6,667. Includes 11,300 shares
covered by warrants which are currently exercisable or exercisable within 60
days of February 29, 2000.
(8) The total includes 763,600 shares covered by warrants which are currently
exercisable or exercisable within 60 days of February 29, 2000.
</FN>
</TABLE>
-16-
The Company's executive officers and directors have advised the Company
that they do not intend to tender any Shares pursuant to the Offer.
Based on the Company's records and on information provided to the Company
by its directors, executive officers and subsidiaries, neither the Company, nor
any associate or subsidiary of the Company nor, to the best of the Company's
knowledge, any of the directors or executive officers of the Company or any of
its subsidiaries, nor any associates or subsidiaries of any of the foregoing,
has effected any transactions involving the Shares during the 60 days prior to
the date hereof.
Except as otherwise described herein, neither the Company nor, to the best
of the Company's knowledge, any of its affiliates, directors or executive
officers, is a party to any contract, arrangement, understanding or
relationship with any other person, directly or indirectly, relating to the
Offer with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against
loss or the giving or withholding of proxies, consents or authorizations.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of stockholders. Assuming the purchase of 750,000 Shares by the Company,
the Offer will result in a 10% decrease in outstanding Shares of the Company's
Common Stock. Nonetheless, the Company anticipates that there will be a
sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the NASDAQ OTC, the Company's purchase of
Shares pursuant to the Offer will not cause the Company's remaining Shares
to be delisted from the NASDAQ OTC.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The purchase of Shares by the
Company pursuant to the Offer will not result in the termination of
registration of the Shares under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by
the Company's acquisition of Shares as contemplated herein or of any approval
or other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein.
Should any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company
is unable to predict whether it will be required to delay the acceptance for
payment of or payment for Shares tendered pursuant to the Offering pending
the outcome of any such matter. There can be no assurance that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company's obligations under the Offer to accept for payment and
pay for Shares is subject to certain conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences to United States Holders (as defined below) of a tender of
Shares pursuant to the Offer. Those stockholders who do not participate in the
exchange should not incur any United States federal income tax liability from
the exchange. This summary is based upon the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), existing United States Treasury
Regulations promulgated thereunder, published rulings, administrative
pronouncements and judicial decisions, changes to which could affect the tax
consequences described herein (possibly on a retroactive basis).
This summary addresses only Shares held as capital assets. It does not
address all of the tax consequences that may be relevant to particular
stockholders in light of their personal circumstances, or to certain types of
stockholders (such as certain financial institutions, dealers or traders in
securities or commodities, insurance companies, tax-exempt organizations or
persons who hold Shares as a position in a "straddle" or as part of a
"hedging" or "conversion" transaction or that have a functional currency other
than the United States dollar). This summary may not be applicable with
respect to Shares acquired as compensation (including Shares acquired upon
the exercise of stock Warrants or which were or are subject to forfeiture
restrictions). This summary also does not address the state, local or foreign
tax consequences of participating in the Offer. Each holder of Shares should
consult such holder's tax advisor as to the consequences to such holder of
participation in the Offer.
-17-
A "United States Holder" is a holder of Shares that for United States
federal income tax purposes is (i) a citizen or resident of the United States,
(ii) a corporation (or other entity taxable as a corporation) created or
organized in or under the laws of the United States or any State or division
thereof (including the District of Columbia), (iii) an estate the income of
which is subject to United States federal income taxation regardless of its
source or (iv) a trust (a) the administration over which a United States court
can exercise primary supervision and (b) all of the substantial decisions of
which one or more United States persons have the authority to control and
certain other trusts considered United States Holders for federal income tax
purposes. A "Non-United States Holder" is a holder of Shares other than a
United States Holder. In the case of a partnership, the tax treatment of the
disposition of Shares pursuant to the Offer described below will be
determined with reference to the partnership, while the applicability of
foreign withholding rules may depend upon the partner's status. Partners
holding Shares through a partnership are urged to consult their tax advisors.
A United States Holder participating in the exchange will be treated either
as having sold Shares or as having received a dividend distribution from the
Company. In that regard, under Section 302 of the Code, a United States Holder
whose Shares are tendered pursuant to the Offer will be treated as having sold
Shares if the exchange (i) results in a "complete termination" of all of such
holder's equity interest in the Company, (ii) is a "substantially
disproportionate" redemption with respect to such holder or (iii) is "not
essentially equivalent to a dividend" with respect to such holder. In applying
each of the Section 302 tests, a United States Holder will be treated as owning
Shares actually or constructively owned by certain related individuals and
entities.
The receipt of cash by a stockholder will result in a "complete
termination" of the stockholder's interest if either (1) all of the stock of
the Company that is actually and constructively owned by the stockholder is
transferred pursuant to the Offer or (2) all of the stock of the Company
actually owned by the stockholder is sold pursuant to the Offer and the
stockholder is eligible to waive, and effectively waives, the attribution of
stock of the Company constructively owned by the stockholder in accordance with
the procedures described in the Code. An exchange of Shares will be
"substantially disproportionate" with respect to a United States Holder if the
percentage of the then outstanding Shares actually and constructively owned by
such holder immediately after the exchange of Shares (treating Shares exchanged
pursuant to the Offer as no longer outstanding) pursuant to the Offer is less
than 80% of the percentage of the Shares actually and constructively owned by
such holder immediately before the exchange (treating Shares exchanged pursuant
to the Offer as outstanding). A United States Holder will satisfy the "not
essentially equivalent to a dividend" test if the reduction in such holder's
proportionate interest in the Company constitutes a "meaningful reduction"
given such holder's particular facts and circumstances. The IRS has concluded
in a published ruling that even a minor reduction in the percentage interest
of a stockholder whose relative stock interest in a publicly held corporation
is minimal and who exercises no control over corporate affairs constitutes
such a "meaningful reduction."
If a United States Holder is treated as having sold Shares, such holder
will recognize capital gain or loss equal to the difference between the amount
of cash received and such holder's adjusted tax basis in the Shares sold to
the Company. In the case of an individual US Holder, the maximum marginal
United States federal income tax rate applicable to net capital gain on Shares
held for more than one year is 20%.
If a United States Holder who participates in the Offer is not treated as
having sold Shares, such holder will be treated as receiving a dividend to the
extent of such holder's ratable share of the Company's earnings and profits.
Such a dividend will be includible in the United States Holder's gross income
as ordinary income without reduction for the adjusted tax basis of the Shares
tendered. In such event, the United States Holder's adjusted tax basis in its
Shares tendered in the Offer generally will be added to such holder's adjusted
tax basis in the remaining Shares. A dividend received by a corporate United
States Holder may be (i) eligible for a dividends-received deduction (subject
to applicable limitations) and (ii) subject to the "extraordinary dividend"
provisions of the Code. To the extent, if any, that the cash received by a
United States Holder exceeds the Company's earnings and profits, it will be
treated first as a tax-free return of such United States Holder's tax basis in
the Shares and thereafter as capital gain.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to Non-United States Holders and the
backup withholding tax requirements.
The tax discussion set forth above is included for general information
only. Each stockholder is urged to consult such holder's tax advisor
concerning the particular tax consequences to such holder of the Offer,
including the applicability and effect of state, local and foreign tax laws.
14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its
sole discretion, to terminate the Offer and not accept for payment or pay for
any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in Section 6 hereof by giving oral or written notice
of such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay
the consideration offered or return the Shares tendered promptly after
termination or withdrawal of a tender offer.
-18-
Subject to compliance with applicable law, the Company further reserves
the right, in its sole discretion, and regardless of whether any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company
to have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer).
Amendments to the Offer may be made at any time and from time to time
effected by public announcement thereof, such announcement, in the case of an
extension, to be issued no later than 9:00 a.m., Central Standard Time, on the
next business day after the last previously scheduled or announced Expiration
Date. Any public announcement made pursuant to the Offer will be disseminated
promptly to stockholders in a manner reasonably designed to inform
stockholders of such change. Without limiting the manner in which the Company
may choose to make a public announcement, except as required by applicable law,
the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to
Business Wire.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(3) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material
changes in the terms of the Offer or information concerning the Offer (other
than a change in price or a change in percentage of securities sought) will
depend on the facts and circumstances, including the relative materiality of
such terms or information.
For the purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or Federal holiday and consists of the time period from 12:01
am through 12:00 midnight, Central Standard Time.
15. FEES AND EXPENSES.
The Company has retained Morrow & Co., Inc. to act as Information Agent in
connection with the Offer. The Information Agent may solicit certain holders of
Shares by mail, telephone, e-mail and personal interviews and may request
brokers, dealers and other nominee stockholders to forward materials relating
to the Offer to beneficial owners. The Information Agent and Depositary will
receive reasonable and customary compensation for their respective services,
will be reimbursed by the Company for certain reasonable out-of-pocket expenses
and will be indemnified against certain liabilities in connection with the
Offer, including certain liabilities under the federal securities laws.
No fees or commissions will be payable by the Company to brokers, dealers
or other persons (other than fees to the Information Agent as described above)
for soliciting tenders of Shares pursuant to the Offer. Stockholders holding
Shares through brokers or banks are urged to consult the brokers or banks to
determine whether transaction costs are applicable if stockholders tender
Shares through such brokers or banks and not directly to the Depositary. The
Company, however, upon request, will reimburse brokers, dealers and commercial
banks for customary mailing and handling expenses incurred by them in
forwarding the Offer and related materials to the beneficial owners of Shares
held by them as a nominee or in a fiduciary capacity. No broker, dealer,
commercial bank or trust company has been authorized to act as the agent of
the Company, the Information Agent or the Depositary for purposes of the
Offer.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer or the acceptance of Shares is not
in compliance with any valid applicable law, the Company will make a good faith
effort to comply with the applicable law. If, after such good faith effort, the
Company cannot comply with the applicable law, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such jurisdiction. In any jurisdiction the securities or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to
be made on the Company's behalf by one or more registered brokers or dealers
licensed under the laws of the jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission a Schedule TO which
contains additional information with respect to the Offer. Such Schedule TO,
including the exhibits and any amendments thereto, may be examined, and copies
may be obtained, at the same places and in the same manner as is set forth in
Section 9 with respect to information concerning the Company.
No person has been authorized to give any information or make any
representation on behalf of the Company in connection with the Offer other than
those contained in this Offer to Purchase or in the related Letter of
Transmittal. If given or made, such information or representation must not be
relied upon as having been authorized by the Company.
-19-
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates for Shares and any other
required documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or nominee to the
Depositary at the address set forth below.
THE DEPOSITARY FOR THE OFFER IS: ND Resources, Inc.
1 North Main Street
Minot, ND 58703
Facsimile Transmission: (701) 852-2548 (for Eligible Institutions only)
Confirm Receipt of Facsimile by Telephone: (701) 857-0230
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the 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. Stockholders may also contact their broker, dealer, commercial
bank, trust company or nominee for assistance concerning the Offer. To confirm
delivery of Shares, stockholders are directed to contact the Depositary.
THE INFORMATION AGENT FOR THE OFFER IS: Morrow & Co., Inc.
445 Park Avenue - 5th Floor
New York, NY 10022
Call collect: (212) 754-8000
Banks and Brokerage Firms Call (800) 654-2468
Shareholders Please Call: (800) 607-0088
-20-
