Offer to Purchase
for Cash
2,500,000
Outstanding Shares of
Common
Stock
GENERAL
EMPLOYMENT ENTERPRISES, INC.
(A
Kentucky Limited Liability Company)
The
Offer and Withdrawal Rights Will Expire at 12:00 Midnight, New
York
City Time, on
June
27, 2009, Unless the
Offer Is Extended.
PSQ, LLC, a Kentucky limited
liability company (“PSQ”), is offering to purchase, at a price of $.60 net per
share in cash without interest, 2,500,000 outstanding shares of common stock, no
par value per share (“Shares”), of General Employment Enterprises,
Inc., an Illinois corporation (“GEE” or the “Company”), on the terms and
subject to the conditions specified in this Offer to Purchase and the related
Letter of Transmittal.
There is
no financing condition to this tender offer. This tender offer is not subject to
the tender of any minimum number of Shares, but is subject to the non-waivable
condition that no more than 2,500,000 Shares may be purchased by PSQ under the
tender offer. In the event that more than 2,500,000 Shares of GEE common stock
are tendered in response to this Offer to Purchase, each tendering shareholder
shall be subject to a proportional reduction of the number of Shares tendered
that will be purchased in this Offer to Purchase.
Concurrent
with this Offer to Purchase, PSQ has entered into a Securities Purchase and
Tender Offer Agreement which provides that PSQ will purchase 7,700,000 newly
issued shares of GEE common stock at a price of $.25 per share, representing an
aggregate purchase price of $1,925,000. As of the date of this tender offer, PSQ
owns no shares of GEE common stock.
A summary of the principal terms of
the tender offer appears on page 5 of this Offer to
Purchase.
This transaction has not been
approved or disapproved by the United States Securities and Exchange Commission or
any state securities commission nor has the Securities and Exchange Commission
or any state securities commission passed upon the fairness or merits of this
transaction or upon the accuracy or adequacy of the information contained in
this document. Any representation to the contrary is
unlawful.
This
Offer to Purchase and the related Letter of Transmittal contain important
information, and you should carefully read both in their entirety before making
a decision with respect to the tender offer.
If you
desire to tender all or any portion of your Shares, you should either
(i) complete and sign the related Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal, have
your signature thereon guaranteed, mail or deliver the Letter of Transmittal (or
a facsimile thereof) and any other required documents to Continental Stock
Transfer + Trust Company, the depositary (“Depositary”) for the tender offer,
and either deliver the certificates for such Shares along with the Letter of
Transmittal to the Depositary or tender such Shares pursuant to the procedures
for book-entry transfer set forth in “The Tender Offer —
Section 3 — Procedures for Tendering Shares” or (ii) request your
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for you. If your Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee, you must contact your
broker, dealer, commercial bank, trust company or other nominee and give
instructions that your Shares be tendered. Any questions regarding
this procedure should be directed to the information agent, Morrow & Co.,
LLC (“Information Agent”), at 470 West Avenue, Stamford, CT 08902, or by
telephone at (203) 658-9400.
If you desire to tender Shares and
the certificates evidencing your Shares are not immediately available, or you cannot comply
with the procedures for book-entry transfer described in this Offer to Purchase
on a timely basis, or you cannot deliver all required documents to the
Depositary prior to the expiration of the tender offer, you may tender such
Shares by following the procedures for guaranteed delivery set forth in “The
Tender Offer — Section 3 — Procedures for Tendering
Shares.”
Questions
and requests for assistance or for additional copies of this Offer to Purchase,
the Letter of Transmittal or other tender offer materials may be directed to the
Information Agent at its address and telephone number set forth on the back
cover of this Offer to Purchase. Stockholders may also contact brokers, dealers,
commercial banks or trust companies for assistance concerning the tender
offer.
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TABLE
OF CONTENTS
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Page
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SUMMARY TERM SHEET
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5
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INTRODUCTION
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10
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SPECIAL FACTORS
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11
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Background of this Offer
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12
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Position of General Employment Enterprises and PSQ Regarding
the Fairness of the Offer
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12
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Summary of Communications between PSQ and
General Employment’s Boards of
Directors
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13
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Purpose and Structure of the Offer; Our Reasons
for the Offer; and Plans for GEE
After the Offer
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13
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Security Ownership of Certain Beneficial
Owners
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13
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Transactions and Arrangements Concerning the
Shares
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14
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Related Party Transactions
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14
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Interests of Certain Persons in the
Offer
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17
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THE TENDER OFFER
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17
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Section 1 — Terms of the Offer;
Expiration Date
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17
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Section 2 — Acceptance for Payment and
Payment for Shares
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19
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Section 3 — Procedures for Tendering
Shares
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19
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Section 4 — Withdrawal
Rights
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22
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Section 5 — Certain U.S. Federal Income
Tax Considerations
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22
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Section 6 — Price Range of Shares;
Dividends
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24
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Section 7 — Certain Information
Concerning General Employment
Enterprises
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24
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Section 8 — Certain Information
Concerning PSQ
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25
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Section 9 — Source and Amount of
Funds
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25
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Section 10 — Possible Effects of the
Offer on the Market for the Shares
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25
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Section 11 — Fees and
Expenses
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25
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Section 12 — Conditions to the
Offer
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26
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Section 13 — Certain Legal
Matters
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26
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Section 14 —
Miscellaneous
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27
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We are
offering to purchase up to a maximum of 2,500,000 shares of GEE common stock, no
par value, for $.60 net per Share in cash without interest. The following are
some of the questions that you, as a shareholder of GEE, may have and answers to
those questions. We urge you to carefully read the remainder of this Offer to
Purchase and the related Letter of Transmittal because the information in this
summary is not complete and additional important information is contained in the
remainder of this Offer to Purchase and the related Letter of Transmittal. When
used in this Offer to Purchase, the terms “we,” “our,” and “us” refer to PSQ,
unless the context requires otherwise.
Who is offering to buy my
securities?
Our name
is PSQ, LLC. We are a Kentucky limited liability company formed specifically to
acquire shares of GEE common stock, including 7,700,000 shares of newly issued
shares of GEE common stock (“New Issue Shares”), which will result in PSQ
controlling the voting class of outstanding capital stock of GEE. We are
offering to purchase up to, but no more than 2,500,000 shares of the outstanding
shares GEE common stock at a price of $.60 per share. As of the date hereof, we
do not own any shares of GEE common stock, but we have entered into an
Securities Purchase and Tender Offer Agreement with GEE dated March 30, 2009
which provides that we will purchase from GEE 7,700,000 shares of GEE common
stock representing approximately 58% of the then outstanding shares of common
stock of GEE, for a price of $.25 per Share, for an aggregate purchase price of
$1,925,000. Our purchase of the New Issue Shares is conditional upon the
commencement of this tender offer and Shareholder approval, among other
conditions listed in Section 12.
General
Employment Enterprises, Inc. was incorporated in the State of Illinois in 1962
and is the successor to employment offices doing business since 1893. In 1987,
GEE established Triad Personnel Services, Inc., a wholly-owned subsidiary,
incorporated in the State of Illinois. The principal executive office of GEE is
located at One Tower Lane, Suite 2200, Oakbrook Terrace, Illinois. GEE operates
in one industry segment, providing professional staffing services. The Company
offers its customers both placement and contract staffing services, specializing
in the placement of information technology, engineering and accounting
professionals.
The
Company’s placement services include placing candidates into regular, full-time
jobs with client-employers. The Company’s contract services include placing its
professional employees on temporary assignments, under contracts with client
companies. Contract workers are employees of the Company, typically working at
the client location and at the direction of client personnel for periods of
three months to one year. The combination of these two services
provides a strong marketing opportunity, because it offers customers a variety
of staffing alternatives that includes direct hire, temporary staffing and a
contract-to-hire approach to hiring.
What are the classes and amounts of
securities sought in the tender offer?
We are
seeking to purchase a maximum of 2,500,000 shares of GEE’s outstanding common
stock.
How much are you offering to pay?
What is the form of payment? Will I have to pay any fees or
commissions?
We are
offering to pay $.60 per Share, net to you in cash without interest. This price
represents premiums of approximately 55.5% over the 10-day volume-weighted
average closing price of GEE’s common stock now listed on the NYSE AMEX US Stock
Exchange and traded under the symbol “JOB.” If you are the record owner of your
Shares and you tender your Shares to us in the tender offer, you will not have
to pay brokerage fees or similar expenses. If you own your Shares through a
broker or other nominee and your broker tenders your Shares on your behalf, your
broker or nominee may charge you a fee for doing so. You should consult your
broker or nominee to determine whether any charges will apply. See “The Tender
Offer — Section 3 — Procedures for Tendering
Shares.”
What are the most important
conditions to the tender offer?
Our
obligation to purchase Shares at the expiration of the tender offer is subject
to satisfaction of, or if permitted, waiver of, several conditions, including
the non-waivable condition that PSQ consummates the purchase of the Newly Issued
Shares from GEE as contemplated in the Securities Purchase and Tender Offer
Agreement. We calculate that, based on the number of outstanding Shares as of
March 30, 2009, there were approximately 5,165,265 shares of common stock
outstanding at that date and our purchase of the 7,700,000 of Newly Issued
Shares will result in our beneficial ownership of approximately 58% to
76%, depending on the number of Shares tendered, of the then outstanding number
of shares of GEE common stock. There is no minimum number of outstanding shares
that must be tendered in the tender offer as a condition to the
offer.
The
tender offer is not conditioned upon any antitrust or other governmental
approvals, consents or clearances. The tender offer is subject to several other
conditions. See “Section 12 – Conditions to the Offer.”
In the
event that all of the conditions to the tender offer have not been satisfied or
waived at the then scheduled expiration date of the tender offer, PSQ may extend
the expiration date of the tender offer in such increments as PSQ may determine
until the earliest to occur of (i) the satisfaction or waiver of such
conditions and (ii) PSQ’s determination that such conditions are not
reasonably capable of being satisfied.
Do you have the financial resources
to make payment?
Yes. We
have already deposited into escrow pursuant to the Securities Purchase and
Tender Offer Agreement the total aggregate purchase price of $1,925,000 for the
Newly Issued Shares and we are required to establish that the maximum aggregate
tender offer purchase amount of $1,500,000 will be placed on deposit with the
same escrow agent no later than three business days prior to the closing of the
tender offer. PSQ also has sufficient cash resources to pay related fees and
expenses of the tender offer. PSQ has the cash on hand to fund the
tender offer and place the required deposit into the escrow as provided in the
Agreement.
Is your financial condition relevant
to my decision to tender my Shares in the tender
offer?
We do not
think that PSQ’s financial condition is relevant to your decision whether to
tender your Shares in the tender offer because (i) PSQ’s obligations in the
tender offer are not subject to any condition relating to financing or the
disbursement of financing and (ii) PSQ’s cash and cash equivalents together
provide adequate financial resources enable PSQ to make all payments promptly
under the tender offer.
How long do I have to decide whether
to tender in the tender offer?
You will
have until 12:00 midnight, New York City time, on Saturday, June 27, 2009, or
such later date to which we may extend the expiration date, to decide whether to
tender your Shares in the tender 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 “The Tender Offer — Section 3 —
Procedures for Tendering Shares.”
Can the tender offer be extended and
how will I be notified if the tender offer is
extended?
We may,
in our sole discretion, extend the tender offer at any time or from time to time
for any reason. If we decide to extend the tender offer, we will inform
Continental Stock Transfer & Trust, the Depositary for the tender offer, of
that fact and will make a public announcement of the extension, no later than
9:00 a.m., New York City time, on the next business day after the earlier
of the day we decide to extend or the date the tender offer was scheduled to
expire. See “Section 1 – Terms of the Offer; Expiration
Date.”
How do I tender my
Shares?
To tender
your Shares, you must deliver the certificates evidencing your Shares, together
with a completed Letter of Transmittal and any required signature guarantees, to
Continental Stock Transfer & Trust Co., the Depositary for the tender offer,
not later than the time the tender offer expires. If your Shares are held in
street name (that is, through a broker, dealer or other nominee), the Shares can
be tendered by your nominee through The Depository Trust Company (“DTC”).
If you are not able to deliver any required items to the Depositary by the
expiration of the tender offer, you may be able to have a broker, bank or other
fiduciary who is a member of the Securities Transfer Agent Medallion Program or
other eligible institution guarantee that the missing items will be received by
the Depositary within three trading days. However, the Depositary must receive
the missing items within that three-trading-day period after the expiration of
the tender offer or you will not be able to tender your Shares in the tender
offer. See “The Tender Offer — Section 3 — Procedures For
Tendering Shares.”
Until what time can I withdraw
previously tendered Shares?
You can
withdraw previously tendered Shares at any time until the tender offer has
expired.
How do I withdraw tendered
Shares?
To
withdraw tendered Shares, you must deliver a written notice of withdrawal, which
includes all required information, to Continental Stock Transfer & Trust
Co., the Depositary for the tender offer, while you have the right to withdraw
the Shares. If you tendered your Shares by giving instructions to a broker,
dealer, commercial bank, trust company or other nominee, you must instruct the
broker, dealer, commercial bank, trust company or other nominee to arrange for
the withdrawal of your Shares. See “The Tender Offer — Section 4
— Withdrawal Rights.”
Have you held discussions with
GEE in the last two years regarding any
transaction?
Shortly
after we initiated discussions with GEE’s board of directors in January, 2009,
we continued those discussions; exchanges of information; conducted due
diligence; negotiated on terms and conditions with the GEE board of directors
and then, on March 30, 2009, we publicly announced the unsolicited tender offer
that is the subject of this Offer to Purchase. Prior to our initial discussions
with the chief executive officer of GEE in January, 2009, PSQ had no contact or
discussions or communications regarding this tender offer or any other similar
corporate transaction with GEE. See “Special Factors — Background of this
Offer.”
What does GEE board of directors think of the
tender offer?
We
obtained the prior approval and recommendation of GEE’s board of directors
before the public announcement of this tender offer. We anticipate that GEE’s
board of directors may form a special committee consisting of independent
directors to consider the merits of our tender offer and will advise
stockholders of GEE’s position with respect to the tender offer within 10
business days of the commencement of the tender offer. However, the consummation
of the tender offer does not require the approval or recommendation of GEE’s
board of directors or a special committee.
Do you have interests in the offer
that may be different from my interests as a stockholder of GEE?
Yes. Our
interests in the tender offer present actual or potential conflicts of interest
such that our interests may be different from those of stockholders being asked
to sell their Shares. In particular, stockholders should be aware that the
financial interests of GEE and PSQ with regard to the price to be paid in the
tender offer are generally adverse to the financial interests of the
stockholders being asked to tender their Shares. Also, if you sell all of your
Shares in the tender offer, you will cease to have any interest in GEE and will
not have the opportunity to participate in the future earnings or growth, if
any, of GEE. On the other hand, we will benefit from any future increase in the
value of GEE, as well as bear the burden of any future decrease in the value of
GEE.
What is your position as to the
fairness of the transaction?
We
believe that the transaction is fair to GEE’s stockholders, based upon the
factors set forth under “Special Factors — Position of PSQ Regarding the
Fairness of the Offer.”
What are the U.S. federal income tax
consequences of participating in the tender offer?
In
general, your sale of Shares pursuant to the tender offer will be a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign income or other tax laws.
You should consult your tax advisor about the tax consequences to you of
participating in the tender offer in light of your particular circumstances. See
“The Tender Offer — Section 5 — Certain U.S. Federal Income
Tax Considerations.”
Following the tender offer, will
GEE continue as a publicly reporting
company?
Yes, we
currently expect that GEE will continue as a publicly reporting company as we
review our options, except in the event the Shares no longer meet the standards
for continued listing on the current NYSE AMEX US Stock Exchange. In the event
that GEE common stock no longer meets the listing standards, we anticipate at
this point to maintain GEE as a fully-reporting company quoting its common stock
on the Over-the-Counter Electronic Bulletin Board interdealer quotation
market.
Will I have the right to have my
Shares appraised?
If you
tender your Shares in the tender offer, you will not be entitled to exercise any
appraisal rights.
If I decide not to tender, how will
the tender offer affect my Shares?
The
purchase of Shares pursuant to the tender offer will reduce the number of Shares
that might otherwise trade publicly and may reduce the number of holders of
Shares, which could affect the liquidity and market value of the remaining
Shares held by the public. We cannot predict whether this would have an adverse
or beneficial effect on the market price for, or marketability of, the Shares or
whether it would cause future market prices to be greater or less than the price
paid in the tender offer. Depending upon the number of Shares purchased pursuant
to the tender offer, GEE’s common stock may no longer meet the standards for
continued listing on the NYSE AMEX US Stock Exchange. Depending on
similar factors, GEE may cease being required to comply with the public
reporting requirements under the Exchange Act and may terminate the same in that
event.
When and how will I be paid for my
tendered Shares?
Subject
to the terms and conditions of the tender offer, we will pay for all Shares
validly tendered and not withdrawn promptly after the expiration of the tender
offer. See “The Tender Offer — Section 2 — Acceptance for Payment
and Payment for Shares.”
We will
pay for your Shares by depositing the purchase price with Continental Stock
Transfer & Trust Co., the Depositary for the tender offer, which will act as
your agent for the purpose of receiving payments from us and transmitting such
payments to you. In all cases, payment for tendered Shares will be made only
after timely receipt by the Depositary of such Shares, a properly completed and
duly executed Letter of Transmittal and any other required documents. See “The
Tender Offer — Section 2 — Acceptance for Payment and Payment for
Shares.”
How will my employee stock options be
treated in the tender offer?
You are
free to exercise any vested stock options you hold in accordance with their
terms and then tender the Shares you acquired through the option exercise under
this tender offer. You should consider whether the exercise price of your
outstanding options is greater than the tender offer price or less than the
tender offer price. Unless exercised by you, your options will continue in
accordance with their terms until their expiration.
How will my restricted stock be
treated in the tender offer?
If you
previously received a restricted stock award and any Shares under that award
have become vested, those vested Shares are the same as any other Shares, and
you are free to tender those Shares in accordance with the terms of the tender
offer.
If you
previously received a restricted stock award and any Shares under that award
have not vested as of the expiration of the tender offer, such restricted Shares
may be tendered only if permitted by the terms of your restricted stock award.
Our understanding is that any and all such awards provide that the restricted
Shares under such restricted stock awards are not transferable. As a result, our
understanding is that under the terms of your restricted stock award, you may
not tender such restricted Shares in the tender offer.
How do I tender shares issued to me
under GEE’s employee stock purchase plan that
are held in an account at Continental Stock Transfer &
Trust Company?
In order
to tender your Shares acquired under GEE’s employee stock purchase plan that are
held in an account with Continental Stock Transfer & Trust Company, the
administrator of the plan, you must direct Continental Stock Transfer &
Trust Company to tender your Shares. To direct Continental Stock Transfer &
Trust Company to tender your Shares you must return a completed, signed and
dated instruction form to Continental Stock Transfer & Trust Company by
5:00 p.m. New York City time on Wednesday, June 24, 2009 (the “Plan
Deadline”), which is two business days prior to the expiration date of the
Offer. In the event the expiration date for the Offer is extended, the Plan
Deadline will automatically be extended to 5:00 p.m. New York City
time two business days prior to such new expiration date. If your tender
instructions are not received before the Plan Deadline, Continental Stock
Transfer & Trust Company will not tender the Shares held in your
account.
What is the market value of my Shares
as of a recent date?
On
March 27, 2009, the last trading day before we announced the tender offer,
the last sale price of the Shares reported on the NYSE AMEX US Stock Exchange
was $.33 per Share. Our tender offer price represents a premium of approximately
81.8% and 55.5% over the closing price and 10-day volume-weighted
average trading price, respectively, of GEE’s common stock on the NYSE AMEX
Stock Exchange as of March 27, 2009. We advise you to obtain a recent
quotation for the Shares in deciding whether to tender your Shares. See “The
Tender Offer — Section 6 — Price Range of Shares;
Dividends.”
Who can I call if I have questions
about the tender offer?
You can
contact the Information Agent, Morrow & Co., LLC by telephone at (203)
658-9400 or by mail to 470 West Avenue, Stamford, CT 06902.
PSQ, LLC, a Kentucky limited
liability Company (“PSQ”), is offering to purchase 2,500,000 of the outstanding
shares of common stock, no par value (the “Shares”), of General Employment
Enterprises, Inc. (“GEE”) for $0.60 per share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in this
Securities Purchase and Tender Offer Agreement to Purchase and in the related
Letter of Transmittal (which together, as they may be amended from time to time,
constitute the “Offer”). The purpose of the Offer is to acquire up to a maximum
of 2,500,000 of the issued and outstanding Shares. GEE has one
class of common stock and no other outstanding voting securities and, as of
March 31, 2009, there were 5,165,265 Shares
outstanding.
Stockholders
who will be accepting the Offer should contact and submit their request(s) to
Continental Stock Transfer and Trust, the “Depositary”, and follow the
instructions included in Section 3 of this Offer on or before expiration, which
is Saturday, June 27, 2009. Shareholders who have Shares registered
in their own names and tender directly to Continental Stock Transfer and Trust,
the Depositary for the Offer, will not have to pay brokerage fees or
commissions. On the other hand, stockholders with Shares held in street name by
a broker, dealer, commercial bank, trust company or other nominee should consult
with their nominee to determine if there are any applicable charges or
transaction fees.
It is
anticipated that GEE’s board of directors will form a special committee
consisting of independent directors to consider the merits of the Offer and that
the special committee will advise stockholders of GEE’s position with respect to
the Offer within 10 business days of the commencement of the Offer. However, the
consummation of the Offer does not require the approval or recommendation of
GEE’s board of directors or a special committee thereof.
This Offer is subject to certain
other conditions described in “The Tender Offer — Section 12 — Conditions to the Offer.” Each of the other conditions to the
Offer may, to the extent permitted by applicable law, be amended or waived by us
in our sole discretion and we reserve the right to terminate this Offer at any
time. There is no financing condition to this Offer.
This
Offer to Purchase includes forward-looking statements. These forward-looking
statements include, among others, statements concerning our plans with respect
to the acquisition of the Shares and GEE, our and GEE’s respective outlooks for
the future and information about GEE’s strategic plans and objectives, other
statements of expectations, beliefs, future plans and strategies, anticipated
events or trends and similar projections, as well as any facts or assumptions
underlying these statements or projections. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Except as required by
applicable law, we undertake no obligation to update any forward-looking
statements or to release publicly the results of any revisions to
forward-looking statements to reflect events or circumstances after the date of
this Offer to Purchase or to reflect the occurrence of unanticipated
events.
Except as
otherwise set forth herein, the information concerning GEE contained in this
Offer to Purchase, including, without limitation, financial information, has
been obtained from GEE or has been taken from or based upon publicly available
documents and records on file with the Securities and Exchange Commission (the
“Commission”) and other public sources. Neither we nor GEE assume any
responsibility for the accuracy or completeness of the information contained in
such documents and records or for any failure by GEE to disclose events which
may have occurred or may affect the significance or accuracy of any such
information but which are unknown to us. Except as otherwise set forth herein,
the information concerning us and GEE contained in this Offer to Purchase
including, without limitation, information about deliberations of our and GEE’s
board of directors and information about our and GEE’ plans or proposals with
respect to GEE, has been furnished by us or GEE.
This
Offer to Purchase does not constitute a solicitation of a proxy, consent or
authorization for or with respect to any meeting of, or action by written
consent by GEE’s stockholders.
Stockholders are urged to read this
Offer to Purchase and the related Letter of Transmittal carefully before
deciding whether to tender their Shares.
Our name
is PSQ, LLC. We are a Kentucky limited liability company formed specifically to
acquire shares of GEE common stock, including 7,700,000 shares of newly issued
shares of GEE common stock (“New Issue Shares”), which will result in PSQ
controlling the voting class of outstanding capital stock of GEE. We are
offering to purchase up to, but no more than 2,500,000 shares of the outstanding
shares GEE common stock of at a price of $.60 per share. As of the date hereof,
we do not own any shares of GEE common stock, but we have entered into an
Securities Purchase and Tender Offer Agreement with GEE dated March 30, 2009
which provides that we will purchase 7,700,000 shares of GEE common stock
representing approximately 58% of the then outstanding shares of common stock of
GEE, for a price of $.25 per Share, for an aggregate purchase price of
$1,925,000. Based on the review of GEE’s business and market position, we
have identified GEE as a strategic opportunity and a foundation for long-term
growth in the providing of professional staffing and related human resource
outsourcing services.
The
following represent the course of events for PSQ that led towards the
Offer:
· A meeting
was then held on February 4, 2009 between representatives of River Falls, GEE,
and certain investment / business partners of River Falls, including
Oppenheimer, Sands Brothers Asset Management and the Park Avenue
Bank.
· On
February 5, 2009, PSQ, a special purpose vehicle formed by River Falls,
submitted a draft letter of intent to GEE, outlining a proposed share purchase
and tender offer to be undertaken by PSQ.
· On
February 11, 2009, PSQ and GEE executed the non-binding letter of intent
outlining certain preliminary terms of the Share Purchase and Tender
Offer.
· On
February 17, 2009, Mr. Heineman met with Mr. Imhoff, Jr. in GEE’s corporate
office. They discussed business operations and Mr. Imhoff, Jr.’s role with the
Company if the proposed transactions were to take place.
· On
February 23, 2009, Mr. Heineman met with GEE’s Board of Directors and discussed
the status of negotiations as well as the merits of a potential transaction
between the parties.
· A first
draft of the Purchase Agreement from PSQ was submitted on March 2,
2009.
· From
March 8 through March 12, 2009, PSQ and Gee, as well as respective legal counsel
exchanged comments to drafts of the Purchase Agreement and negotiated various
terms and conditions of the Purchase Agreement and the transactions contemplated
thereby.
· On March
12, 2009, Mssrs. Imhoff, Jr., Yauch, Baker and Heineman, present in person at
GEE’s headquarters, along with the Company’s counsel and PSQ’s counsel
participating via teleconference, continued to negotiate various open issues in
the Purchase Agreement.
· On March
14, 2009, Mr. Baker discussed certain terms of the Consulting Agreement with Mr.
Heineman.
· On March
19, 2009, PSQ’s counsel distributed a revised draft of the Purchase Agreement to
GEE. In turn, GEE’s counsel delivered a further revised draft of the Purchase
Agreement to PSQ on March 20, 2009.
·
· On March
28 and 29, 2009, the Company and PSQ continued to negotiate the remaining issues
in the Purchase Agreement and the related agreements.
· On March
30, 2009, the Company and PSQ resolved the remaining issues in the various
transaction documents and entered into the Secuities Purchase and Tender Offer
Agreement and the corresponding Escrow Agreement, and the Company, PSQ and Mr.
Imhoff, Jr. entered into the Consulting Agreement and the Registration Rights
Agreement. GEE issued a press release and filed an 8-K with the SEC announcing
the execution of the Purchase Agreement and the other transaction
documents.
Position of PSQ Regarding the
Fairness of the Offer
The rules
of the Commission require us, PSQ, to express our belief to stockholders of GEE
who are unaffiliated with GEE and its subsidiaries as to the fairness of the
transaction. We are recommending stockholders of GEE to Tender Shares pursuant
to this Offer and base our solicitation on the following
factors:
· The
Company would receive $1,925,000 in connection with the sale of stock in the
Share Purchase, which the Company will be able to use (a) for working capital
purposes, (b) for improving operations as the Company works towards returning to
profitability, and (c) for possible acquisitions. Absent the cash
that would be received from the Share Purchase, the Company’s management
estimated that the Company would exhaust its cash resources by the end of the
fourth calendar quarter of 2009, and, in light of the condition of the current
financial markets, the Company may not otherwise be able to obtain financing
needed to continue its operations, or if able to obtain it, such financing may
not have been available on market terms or terms attractive to the
Company;
· The
Tender Offer gives the Company’s shareholders the opportunity to sell shares of
the Company in the Tender Offer at a substantial premium to the market price and
also to remain as shareholders in a company that will be financially
strengthened by PSQ’s cash infusion from the Share Purchase. Based on
the closing market price of the Shares at $0.33, the Tender Offer Price
represents an almost 82% premium and 55.5% to the closing and 10-day
volume-weighted average closing price of the Shares on March 27,
2009;
· GEE has
retained an independent third party, Prairie Capital to opine on the fairness of
the Tender Offer to GEE shareholders and, on the date of its opinion, and based
upon and subject to the various considerations set forth in its opinion, the Tender Offer considered
together with the Share Purchase and the Consulting Agreement, are deemed to be
fair to the Company and the Company’s shareholders from a financial point of
view;
· The
proposed compensation terms for the proposed new Chief Executive Officer and
President of the Company, Ronald E. Heineman, which, as described in more detail
below, provide that Mr. Heineman’s initial compensation would consist of an
annual salary of $1.00 and a grant of 150,000 stock options for each of
three-year term of the proposed compensation agreement, the result of which
would be significantly beneficial to the Company’s cash position in the
near-term and would tie the value of Mr. Heineman’s compensation exclusively to
the performance of the Company and its stock price;
· That, as
a result of the Share Purchase and the Tender Offer, all outstanding unvested
options issued under the Company’s stock option plans will automatically vest in
full prior to the Closing; and
· There are
no unusual requirements or conditions to the Offer, and there is no financing
condition to the Offer. Accordingly, the Offer can be
consummated by us expeditiously to the benefit of the unaffiliated stockholders
tendering their Shares; and if we amend the Offer to include any material
additional information, we will, if necessary to allow adequate dissemination
and investor response, extend the Offer for a sufficient period to allow
stockholders to consider the amended information.
Factors Not
Supportive of Our Fairness Determination
We also
considered the following factors, each of which we considered negative in our
considerations concerning the fairness of the terms of the
transaction:
· As to the
Offer price, our financial interests are adverse to the financial interests of
GEE’s stockholders unaffiliated with us. In addition, as described under the
above paragraph “Interests of Certain Persons in the Offer,” officers and
directors of GEE have actual or potential conflicts of interest in connection
with the Offer.
· The
Shares have historically traded at higher trading price levels. The closing
price of $0.33 reached on March 27, 2009, was comparatively low to the
historical prices of the Company. This trading price history suggests
that many stockholders of GEE may have acquired their Shares at prices
significantly higher than current trading levels.
· The sale
of Shares in the Offer is generally taxable to the selling stockholders. See
“The Tender Offer — Section 5 — Certain U.S. Federal Income
Tax Considerations.”
In
reaching our conclusion as to fairness, we did not consider the liquidation
value or net book value of GEE. The liquidation value was not considered because
GEE is a viable going concern and we have no plans to liquidate
GEE. Therefore, we believe that GEE’s liquidation value is irrelevant to a
determination as to whether the Offer is fair to unaffiliated stockholders.
Further, we did not consider net book value, which is an accounting
concept, as a factor because we believe that net book value is not a material
indicator of the value of GEE as a going concern but rather is indicative of
historical costs.
The
foregoing discussion summarizes the material information and factors we
considered, including factors that support as well as weigh against the Offer
and is not intended to be exhaustive. In view of the variety of factors and the
amount of information considered, we did not find it practicable to, and did
not, make specific assessments of, quantify, or otherwise assign relative
weights to these factors in reaching our conclusion. Our view as to the fairness
of the transaction to unaffiliated stockholders of GEE should not be construed
as a recommendation to any stockholder as to whether that stockholder should
tender in the Offer.
Purpose and Structure of the Offer;
Our Reasons for the Offer; and Plans for GEE After the
Offer
We were
formed as a special purpose vehicle to acquire a controlling interest in GEE and
thereafter, through GEE as its operating subsidiary, to become a recognized
leader in the providing of professional staffing and related human resource
outsourcing services; with specialization on information technology,
engineering, and accounting professionals. Based on the review of
GEE’s business and market position, we have identified General Employment as a
strategic opportunity and a foundation for long-term growth.
We are offering to commence a cash
tender offer for a maximum of 2,500,000 of the outstanding shares of the common
stock of GEE, an Illinois corporation, at a purchase price of $0.60 per share,
net to the holder in cash, without interest thereon, for a maximum aggregate
amount equal to $1,500,000, upon the terms and subject to the conditions set
forth in the Purchase and Tender Offer Agreement.
Holders
of Shares do not have appraisal rights in connection with the
Offer.
Security Ownership of Certain
Beneficial Owners
As of the
date hereof, we do not own any shares of GEE common stock, but we have entered
into an Securities Purchase and Tender Offer Agreement with GEE dated March 30,
2009 which provides that we will
purchase
7,700,000 shares of GEE common stock representing approximately 58% of the then
outstanding shares of common stock of GEE, for a price of $.25 per Share, for an
aggregate purchase price of $1,925,000. Our purchase of the New Issue Shares is
conditional upon the commencement of this tender offer.
Transactions and Arrangements
Concerning the Shares
Neither
GEE nor PSQ, to their respective knowledge, or any of their respective directors
or executive officers or any other person controlling either GEE or PSQ is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to, or in connection with the Tender
Offer and any securities of GEE not otherwise disclosed herein (including,
without limitation, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any such securities, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans, guarantees
against loss or the giving or withholding of proxies, consents or
authorizations).
Except as
described in this Offer to Purchase, no negotiations, transactions or material
contacts concerning a merger, consolidation, or acquisition, a tender offer for
or other acquisition of any securities of GEE, an election of directors of GEE
or a sale or other transfer of a material amount of GEE’s assets, has been
entered into or has occurred between any of GEE or any of its affiliates and GEE
or PSQ or, to the knowledge of GEE and PSQ, between GEE or any of its affiliates
and any unaffiliated person.
To the
knowledge of GEE and PSQ, each executive officer and director of GEE currently
intends to tender all Shares held of record or beneficially owned by such person
in the Tender Offer, other than restricted Shares which are subject to transfer
restrictions and Shares such person has the right to purchase by exercising
stock options, subject to applicable personal considerations (including tax
planning) and securities laws, including Section 16(b) of the Exchange
Act.
Related Party
Transactions
GEE, PSQ
and Herbert F. Imhoff, Jr. (Chairman, Chief Executive Officer and President of
the Company) also entered into a Registration Rights Agreement (the
“Registration Rights Agreement”) on March 30, 2009 that will provide (i) PSQ
with customary demand registration rights with respect to the shares of Common
Stock to be acquired by PSQ in the Share Purchase and the Tender Offer, and (ii)
Mr. Imhoff, Jr. with customary piggyback registration rights with respect to
shares of Common Stock owned by Mr. Imhoff, Jr. in the event that any of PSQ’s
shares of Common Stock are registered by the Company.
Confidentiality
Agreement
PSQ and
the Company entered into a confidentiality agreement, dated February 11, 2009,
during the course of discussions between the parties regarding a potential
acquisition. Under the confidentiality agreement, each party agreed, subject to
certain exceptions, to keep non-public information concerning the other party
confidential.
Imhoff Employment Agreement
and Consulting Agreement
In
connection with entering into the Purchase Agreement, on March 30, 2009, the
Company, PSQ and Mr. Imhoff, Jr. entered into a Consulting Agreement (the
“Consulting Agreement”), which agreement will become effective upon the
Closing. Under the terms of the Consulting Agreement, among other
things, (i) Mr. Imhoff, Jr.’s Employment Agreement with the Company will
terminate, as will his rights and benefits under the Employment Agreement
(except with respect to accrued vacation and his vested benefits under the
Company’s Executive Retirement Plan), (ii) all of Mr. Imhoff, Jr.’s stock
options will be canceled, (iii) Mr. Imhoff, Jr. will be subject to
non-competition and non-solicitation provisions for a period of two years after
the expiration or termination of the Consulting Agreement, (iv) Mr. Imhoff, Jr.
will grant a release in favor of the Company, (iv) Mr. Imhoff, Jr. will provide
consulting services to the Company, and (v) Mr. Imhoff, Jr. will agree to
continue to serve as a member of the Board of Directors of the Company during
the term of the Consulting Agreement.
The
Imhoff Employment Agreement provides, among other things, that Mr. Imhoff, Jr.
will serve as Chairman of the Board, Chief Executive Officer and President; will
have a continuous three-year term of employment with the Company at a minimum
annual base salary of $450,000 (although Mr. Imhoff, Jr. agreed to reduce that
base salary to $350,000 for the year ending December 31, 2009); and will be
eligible to earn an annual performance bonus and be entitled to receive certain
other perquisites and benefits. In addition, the Imhoff Employment
Agreement provides that in the event the Company terminates Mr. Imhoff, Jr.’s
employment for any reason other than for “cause,” Mr. Imhoff, Jr. would be
entitled to receive outplacement assistance; a lump sum cash payment equal to
the sum of his base salary (calculated at the $450,000 base salary amount) and
average annual performance bonus that would have been payable for the remainder
of the term of the Imhoff Employment Agreement; a severance bonus based on a
fraction of his average annual performance bonus; and continuation of certain
perquisites and fringe benefits for the remainder of the term of the Imhoff
Employment Agreement. Also, in the event that any payment, benefit or
distribution under the terms of the Imhoff Employment Agreement was determined
to be an “excess parachute payment” pursuant to section 280G of the Internal
Revenue Code, with the effect that he would become liable for the payment of an
excise tax, Mr. Imhoff, Jr. would be entitled to receive an additional gross-up
payment.
In
consideration therefore, under the terms of the Consulting Agreement, Mr.
Imhoff, Jr. (i) will be paid an annual consulting fee of $300,000 per year, and
director fees no less than the fees currently paid to the Company’s non-employee
directors ($2,000 per month), during the term of the Consulting Agreement, (ii)
will be issued 500,000 shares of Common Stock upon the Closing for no additional
consideration, and (iii) will receive health and life insurance benefits from
the Company, as well as his accrued vacation benefits and accrued benefits under
the Company’s Executive Retirement Plan. The term of the Consulting
Agreement will be three years from the Closing, and it will be terminable at any
time and for any reason by any party, provided that promptly following any such
termination thereof, Mr. Imhoff, Jr. will continue to receive for the remainder
of the term of the Consulting Agreement the fees and benefits that would
otherwise be due to him under the agreement if the agreement had not been
terminated. In addition, if the Company defaults in its payment
obligations to Mr. Imhoff, Jr. under the Consulting Agreement, the Company will
be required to pay to Mr. Imhoff, Jr. the remaining amount of the payments due
under the Consulting Agreement in a lump-sum payment within 30 days of such
default.
Employment Agreements with
Marilyn White and Kent Yauch
The
Company has entered into employment agreements, as amended, with each of Marilyn
White (the “White Employment Agreement”) and Kent Yauch (the “Yauch Employment
Agreement” and together with the White Employment Agreement, collectively, the
“Officer Employment Agreements”). The Officer Employment Agreements provide the
terms for the at-will employment of Ms. White and Mr. Yauch, provide the waiver
by each of Ms. White and Mr. Yauch of any benefits to which they may be
respectively entitled under the Company’s Key Manager Plan, and contain a
covenant not to compete that extends for two years following the termination of
employment with the Company. In the event of a change in control of the Company,
if the executive’s employment were to be terminated by the Company for any
reason other than “cause,” the executive would be entitled to receive a lump sum
cash payment equal to two times the executive’s base salary and average annual
bonus; accelerated vesting of all previous cash or stock awards; a severance
bonus based on a fraction of his or her average annual bonus; and continuation
of certain fringe benefits for a period of two years. If the transactions
contemplated by the Purchase Agreement close, then a change in control will be
deemed to have occurred for purposes of the Officer Employment
Agreements.
Directors’ and Officers’
Insurance; Indemnification
PSQ has
agreed to cause the Company to maintain for not less than six years from the
date of Closing of the Share Purchase and Tender Offer the current policies of
the directors' and officers' liability insurance maintained by the Company with
respect to matters occurring on or prior to such Closing date. PSQ and the
Company will not, however, be required to spend annually more than 150% of the
amount that the Company spent for such policies in fiscal year
2008.
In
addition, from and after the closing of the Share Purchase and Tender Offer, PSQ
has agreed to cause the Company to indemnify and hold harmless each person who
is now, at any time has been or who becomes prior to such closing date a
director or officer of Company or any of its subsidiaries, and their heirs and
personal
representatives
(the “Indemnified Parties”), against any and all expenses incurred in connection
with any claim, suit, investigation or proceeding arising out of or pertaining
to any action or omission occurring on or prior to such closing date (including,
without limitation, any claim, suit, investigation or proceeding which arises
out of or relates to the transactions contemplated by the Purchase Agreement),
and has agreed to cause the Company to pay to each Indemnified Party expenses
incurred by each Indemnified Party in connection with the final disposition of
any such claim, suit, investigation or proceeding.
Cash Consideration Payable
Pursuant to the Tender Offer.
If the
directors and executive officers of the Company who own shares of Common Stock
tender their shares for purchase pursuant to the Tender Offer, they will receive
the same cash consideration on the same terms and conditions as the other
shareholders of the Company. Information set forth in the Company’s
Proxy Statement for the 2009 annual meeting of shareholders under the principal
heading “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” is
incorporated herein by reference.
Stock Option
Plans
As of
March 31, 2009, there were stock options outstanding under the Company’s 1995
Stock Option Plan, Amended and Restated 1997 Stock Option Plan and 1999 Stock
Option Plan (each, a “Plan”, and together, collectively, the “Plans”). The Plans
were approved by the shareholders. The 1995 Stock Option Plan expired during
fiscal 2006, and no further options may be granted under that Plan. The Plans
granted specified numbers of options to non-employee directors, and they
authorized the Compensation Committee of the Board of Directors to grant either
incentive or non-statutory stock options to employees. All stock options
outstanding as of March 31, 2009 were non-statutory stock options, had exercise
prices equal to the market price on the date of grant, and had expiration dates
10 years after the date of grant.
Each of
the plans provides that upon a “Change of Control,” defined in each of the
respective plans to include the commencement by an entity, person or group
(other than the Company or a subsidiary) of a tender offer for more than 20% of
the outstanding voting stock of the Company, all outstanding options shall
become fully exercisable and all restrictions thereon shall
terminate. Accordingly, if the Share Purchase and the Tender Offer
are consummated, all outstanding options will become fully exercisable and all
restrictions thereon will terminate.
Shareholder Rights
Plan
On
February 4, 2000, the Company adopted a shareholder rights plan, and the Board
of Directors declared a dividend of one share purchase right for each share of
outstanding Common Stock. In connection with such rights plan, the Company
entered into the Rights Agreement, dated as of February 4, 2000 (the “Rights
Agreement”), with Continental Stock Transfer & Trust
Company. Under the Rights Agreement, the rights will become
exercisable if any person or affiliated group (other than certain
“grandfathered” shareholders) acquires, or offers to acquire, 10% or more of the
Company’s Shares. Each exercisable right entitles the holder (other than the
acquiring person or group) to purchase, at a price of $21.50 per Share, Common
Stock of the Company having a market value equal to two times the purchase
price. The purchase price and the number of shares of Common Stock issuable on
exercise of the rights are subject to adjustment in accordance with customary
anti-dilution provisions. The Board of Directors may authorize the Company to
redeem the rights at a price of $.01 per right at any time before they become
exercisable. After the rights become exercisable, the Board of Directors may
authorize the Company to exchange any unexercised rights at the rate of one
Share for each right. The rights are nonvoting and will expire on February 22,
2010.
On
March 27, 2009, the Board of Directors determined to exclude from the
trigger events defined in the Rights Agreement the Share Purchase and Tender
Offer with respect to the contemplated transactions with PSQ, and on
March 30, 2009, the Company entered into an amendment (the “Rights
Agreement Amendment”) of the Rights Agreement with Continental Stock Transfer
& Trust Company. The Rights Agreement Amendment, among other things,
generally provides that neither PSQ nor its affiliates or associates will be
deemed to be an “Acquiring Person” (as such term is defined in the Rights
Agreement) if the Share Purchase and Tender Offer are consummated, and a
“Distribution Date” (as such term is defined in the Rights Agreement) will not
be deemed to have occurred, solely as a result of (a) the announcement of
the Share Purchase and Tender Offer, (b) the execution of the
Purchase
Agreement,
or (c) the consummation of the transactions contemplated by the Purchase
Agreement, including the Share Purchase and Tender Offer. In addition, the
previous exception to the definition of Acquiring Person for Herbert F. Imhoff,
Sr., and his family members and related trusts, which allowed such persons and
trusts to own up to 38% of the outstanding shares of Common Stock of the Company
without being treated as an “Acquiring Person” under the Rights Agreement, was
eliminated by the Rights Agreement Amendment.
Interests of Certain Persons in the
Offer
The
Company’s executive officers and the members of the Board of Directors may be
deemed to have interests in the transactions contemplated by the Purchase
Agreement that may be different from or in addition to those of the Company’s
shareholders generally. These interests may create potential conflicts of
interest. The Board of Directors is aware of these potential conflicting
interests and considered them, among other things, in reaching its decision to
approve the Purchase Agreement and the Share Purchase and Tender
Offer.
Employee Stock Options and Restricted
Stock
Certain
officers and directors of GEE hold vested employee stock options, which may be
exercised in accordance with their terms and the Shares acquired thereby may be
tendered in the Offer. However, we understand that all of GEE’s
outstanding employee stock options are exercisable at prices substantially
higher than the Offer price. Accordingly, we do not expect option holders to
exercise their stock options in connection with the Offer.
Certain
executive officers and directors of GEE may also hold Shares which constitute
restricted stock. With respect to any restricted stock award that has become
vested, those vested Shares are the same as any other Shares, and such persons
are free to tender those Shares in accordance with the terms of the Offer.
Unvested Shares of restricted stock may not be tendered in the
Offer.
Section 1 — Terms of the
Offer; Expiration Date
Upon the
terms and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms and conditions of such extension or amendment),
we will accept for payment and pay for all Shares validly tendered and not
withdrawn by the Expiration Date in accordance with the procedures set forth in
“— Section 4 — Withdrawal Rights.” The term “Expiration Date”
means 12:00 midnight, New York City time, on June 27, 2009, unless we have
extended the period during which the Offer is open, in which event the term
“Expiration Date” shall mean the latest time and date at which the Offer, as so
extended by us, shall expire.
We
may waive any or all of the conditions to our obligation to purchase Shares
pursuant to the Offer, except the majority of the minority condition. If by the
initial Expiration Date or any subsequent Expiration Date any or all of the
conditions to the Offer have not been satisfied or waived (except the majority
of the minority condition, which may not be waived), we may elect to
(i) terminate the Offer and return all tendered Shares to tendering
stockholders, (ii) waive all the unsatisfied conditions (except the
majority of the minority condition which may not be waived) and, subject to any
required extension, purchase all Shares validly tendered by the Expiration Date
and not properly withdrawn, or (iii) extend the Offer and, subject to the
right of stockholders to withdraw Shares until the new Expiration Date, retain
the Shares that have been tendered until the expiration of the Offer as
extended. See “— Section 12 — Conditions to the
Offer.”
We
expressly reserve the right (but are not obligated), at any time or from time to
time, to waive or otherwise modify or amend the terms and conditions of the
Offer in any respect, except the majority of the minority condition, which may
not be waived. We acknowledge that (i) the Exchange Act requires us to pay
the consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer and (ii) we may not delay acceptance
for payment of, or payment for, any Shares upon the occurrence of any of the
events specified in “— Section 12 — Conditions to the Offer”
without extending the period of time during which the Offer is
open.
We have
the right to extend the Offer beyond the Expiration Date for any of the
following reasons: (i) from time to time if, at the Expiration Date, any of
the conditions to the Offer have not been satisfied or waived (except the
majority of the minority condition, which may not be waived); (ii) for any
period required by any rule, regulation, interpretation or position of the
Commission or any period required by or advisable under applicable law; or
(iii) if Shares have been accepted for payment but the number of Shares
owned by us is less than 90% of the outstanding Shares, for an aggregate period
of not more than 20 business days (for all such extensions) beyond the date on
which Shares are first accepted for payment as a “subsequent offering period” in
accordance with Rule 14d-11 of the Exchange Act. If provided, a subsequent
offering period would be an additional period of time, following the Expiration
Date and the acceptance for payment of any Shares that are validly tendered in
the Offer and not properly withdrawn prior to the Expiration Date, during which
holders of Shares that were not previously tendered in the Offer may tender such
Shares to us in exchange for the Offer price on the same terms that applied to
the Offer. We will accept for payment, and pay for, any Shares that are validly
tendered during a subsequent offering period, if provided, as promptly as
practicable after any such Shares are validly tendered during such subsequent
offering period. Holders of Shares that are validly tendered during a subsequent
offering period, if provided, will not have the right to withdraw such tendered
Shares.
In the
event that all of the conditions to the Offer have not been satisfied or waived
at the then scheduled Expiration Date of the Offer, we may extend the expiration
date of the Offer in such increments as we may determine until the earliest to
occur of (i) the satisfaction or waiver of such conditions and
(ii) the determination that such conditions are not reasonably capable of
being satisfied.
We will
accept for payment and pay for all Shares validly tendered and not withdrawn
pursuant to the Offer if all the conditions to the Offer are satisfied or waived
on the Expiration Date. Any such extension, delay, termination, waiver or
amendment will be followed as promptly as practicable by public announcement
thereof, such announcement in the case of an extension to be made no later than
9:00 a.m., New York City time, on the next business day after the earlier
of the day we decide to extend or the previously scheduled Expiration Date.
Subject to applicable law and without limiting the manner in which we may choose
to make any public announcement, we shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release.
If we are delayed in making
payment for the Shares or are unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to our rights under the Offer, the
Depositary may retain tendered Shares on our behalf, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described in “— Section 4 — Withdrawal Rights.”
However, our ability to delay the payment for Shares which we have accepted for
payment is limited by Rule 14e-1 under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by, or on behalf of, holders of securities promptly after the termination or
withdrawal of the Offer.
If we
make a material change in the terms of the Offer or the information concerning
the Offer, or if we waive a material condition of the Offer, we will extend the
Offer to the extent required by Rule 14e-1 under the Exchange Act. The
minimum period during which the 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 change in percentage of securities sought, will depend
upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In a public release, the
Commission has stated its view that an offer must remain open for a minimum
period of time following a material change in the terms of the Offer and that
waiver of a material condition is a material change in the terms of the Offer.
The release states that, as a general rule, an offer should remain open for a
minimum of five business days from the date a material change is first published
or sent or given to security holders and that, if material changes are made with
respect to information not materially less significant than the Offer price and
the number of Shares being sought, a minimum of 10 business days may be required
to allow for adequate dissemination to stockholders. For purposes of the Offer,
a “business day” means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time. The requirement to extend the Offer will not apply to the extent
that the number of business days remaining between the occurrence of the change
and the then-scheduled Expiration Date equals or exceeds the minimum extension
period that would be required because of such amendment. If, prior to the
Expiration Date, we increase the consideration offered to holders of Shares
pursuant to the Offer, such increased
consideration
will be paid to all holders whose Shares are purchased in the Offer whether or
not such Shares were tendered prior to such increase.
We have
GEE’s stockholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares whose
names appear on GEE’s stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency’s security position
listing.
Section 2 — Acceptance for
Payment and Payment for Shares
Upon the
terms and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms and conditions of any such extension or
amendment), we will accept for payment, and will pay for, all Shares validly
tendered prior to the Expiration Date and not properly withdrawn, as soon as
practicable after the Expiration Date. If we desire to delay payment for Shares
accepted for payment pursuant to the Offer, and such delay would otherwise be in
contravention of Rule 14e-1 of the Exchange Act, we will otherwise extend
the Offer. 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 (i) the certificates evidencing such Shares (the “Certificates”) or
timely confirmation of a book-entry transfer of such Shares into the
Depositary’s account at DTC (a “Book-Entry Confirmation”) pursuant to the
procedures set forth in “— Section 3 — Procedures For Tendering
Shares,” (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or, in the
case of a book-entry transfer, an Agent’s Message (as defined below) in lieu of
the Letter of Transmittal and (iii) any other documents required by the
Letter of Transmittal.
For
purposes of the Offer, we will be deemed to have accepted for payment, and
thereby purchased, Shares validly tendered and not properly withdrawn as, if and
when we give oral or written notice to the Depositary, as agent for the
tendering stockholders, of our acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefore with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from us and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. Under no circumstances will interest on the Offer price
for Shares be paid, regardless of any delay in making such
payment.
If any
tendered Shares are not accepted for payment for any reason pursuant to the
terms and conditions of the Offer, or if Certificates are submitted evidencing
more Shares than are tendered, Certificates evidencing unpurchased Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Shares tendered by book-entry transfer into the Depositary’s account at DTC
pursuant to the procedure set forth in “— Section 3 — Procedures
For Tendering Shares,” such Shares will be credited to an account maintained at
DTC), as promptly as practicable following the expiration or termination of the
Offer.
If, on or
prior to the Expiration Date, we shall increase the consideration offered to any
holders of Shares pursuant to the Offer, such increased consideration shall be
paid to all holders of Shares that are purchased pursuant to the Offer, whether
or not such Shares were tendered, accepted for payment or paid for prior to such
increase in consideration.
We
reserve the right to transfer or assign, in whole or, from time to time, in
part, to one or more of our affiliates, the right to purchase all or any portion
of the Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve us of our obligations under the Offer and will in no
way prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Tender
Offer.
Section 3 — Procedures for
Tendering Shares
Except as
set forth below, in order for Shares to be validly tendered pursuant to the
Offer, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature
guarantees
(or, in the case of a book-entry transfer, an Agent’s Message (as defined below)
in lieu of the Letter of Transmittal) and any other documents required by the
Letter of Transmittal, must be received by the Depositary at its address set
forth on the back cover of this Offer to Purchase and either (i) the
Certificates evidencing tendered Shares must be received by the Depositary at
such address or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary (including an Agent’s Message if the tendering
stockholder has not delivered a Letter of Transmittal), in each case on or prior
to the Expiration Date or (ii) the tendering stockholder must comply with
the guaranteed delivery procedures described below. No alternative, conditional
or contingent tenders will be accepted. The term “Agent’s Message” means a
message, transmitted by electronic means to, and received by, the Depositary and
forming a part of a Book-Entry Confirmation which states that DTC has received
an express acknowledgment from the participant in DTC tendering the Shares which
are the subject of such Book-Entry Confirmation, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that we may enforce such agreement against such participant.
The
Depositary will establish accounts with respect to the Shares at DTC for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in DTC’s system may
make a book-entry delivery of Shares by causing DTC to transfer such Shares into
the Depositary’s account in accordance with DTC’s procedures for such transfer.
However, although delivery of Shares may be made through book-entry transfer at
DTC, either the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent’s Message in lieu of the Letter of Transmittal, and any other required
documents, must, in any case, be received by the Depositary at its address set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedures
described below. Delivery of
documents to DTC does not constitute delivery to the
Depositary.
Signatures
on all Letters of Transmittal must be guaranteed by a firm which is a member of
the Security Transfer Agents Medallion Program, the NYSE Medallion Guarantee
Program, the Stock Exchange Medallion Program or any other “eligible guarantor
institution” (as such term is defined in Rule 17Ad-15 under the Exchange
Act) (each, an “Eligible Institution”), except in cases where Shares are
tendered (i) by a registered holder of Shares who has not completed either
the box entitled “Special Payment Instructions” or the box entitled “Special
Delivery Instructions” on the Letter of Transmittal or (ii) for the account
of an Eligible Institution. If a Certificate is registered in the name of a
person other than the signatory of the Letter of Transmittal (or a facsimile
thereof), or if payment is to be made, or a Certificate not accepted for payment
or not tendered is to be returned, to a person other than the registered
holder(s), then the Certificate must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear on the Certificate, with the signature(s) on such Certificate
or stock powers guaranteed by an Eligible Institution. If the Letter of
Transmittal or stock powers are signed or any Certificate is endorsed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by us, proper
evidence satisfactory to us of their authority to so act must be submitted. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed
Delivery
If a
stockholder desires to tender Shares pursuant to the Offer and the Certificates
evidencing such stockholder’s Shares are not immediately available or such
stockholder cannot deliver the Certificates and all other required documents to
the Depositary prior to the Expiration Date, or such stockholder cannot complete
the procedure for delivery by book-entry transfer on a timely basis, such Shares
may nevertheless be tendered, provided that all the following conditions are
satisfied:
(i) such
tender is made by or through an Eligible Institution;
(ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form we provide, is received prior to the Expiration Date
by the Depositary as provided below; and
(iii) the
Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in
proper form for transfer, in each case together with the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees (or, in connection with a book-entry transfer, an
Agent’s Message), and any other documents required by the Letter of Transmittal
are received by the Depositary within three NYSE trading days after the date of
execution of such Notice of Guaranteed Delivery. A “trading day” is any day on
which the NYSE is open for business.
The
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
telegram or facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the form of Notice
of Guaranteed Delivery made available by us.
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 the Share
Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Letter of Transmittal, or an Agent’s
Message in the case of a book-entry transfer.
The method of delivery of
Certificates and all other required documents, including delivery through DTC,
is at the option and risk of the tendering stockholder, and the delivery will be
deemed made only when complete delivery is actually received by the Depositary.
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
Determination of
Validity
All
questions as to the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by us in our
sole discretion, which determination shall be final and binding on all parties.
We reserve the absolute right to reject any and all tenders determined by us not
to be in proper form or the acceptance for payment of which may, in the opinion
of our counsel, be unlawful. We also reserve the absolute right to waive any
condition of the Offer (other than the majority of the minority condition) or
any defect or irregularity in the tender of any particular Shares of any
particular stockholder, whether or not similar defects or irregularities are
waived in the case of other stockholders, and our interpretation of the terms
and conditions of the Offer will be final and binding on all persons. No tender
of Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived to our satisfaction. None of us, GEE,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in tenders, or any waiver
thereof, or incur any liability for failure to give any such notification or for
any such determination.
By
executing the Letter of Transmittal as set forth above, a tendering stockholder
irrevocably appoints our designees as such stockholder’s proxies, each with full
power of substitution, in the manner set forth in the Letter of Transmittal, to
the full extent of such stockholder’s rights with respect to the Shares tendered
by such stockholder and accepted for payment by us (and with respect to any and
all other Shares or other securities issued or issuable in respect of such
Shares on or after the date of this Offer to Purchase). All such proxies shall
be considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, we accept such Shares for
payment. Upon such acceptance for payment, all prior proxies given by such
stockholder with respect to such Shares (and such other Shares and securities)
will be revoked without further action, and no subsequent proxies may be given
nor any subsequent written consent executed by such stockholder (and, if given
or executed, will not be deemed to be effective) with respect thereto. Our
designees will, with respect to the Shares for which the appointment is
effective, be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of GEE’s stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. We reserve
the right to require
that, in
order for Shares to be deemed validly tendered, immediately upon our payment for
such Shares, we must be able to exercise full voting rights with respect to such
Shares.
Our
acceptance for payment of Shares pursuant to any of the procedures described
above will constitute a binding agreement between the tendering stockholder and
us upon the terms and subject to the conditions of the Offer.
Section 4 — Withdrawal
Rights
Tenders
of the Shares made pursuant to the Offer are irrevocable except that such Shares
may be withdrawn at any time prior to the initial Expiration Date and, unless
theretofore accepted for payment by us pursuant to the Offer, may also be
withdrawn at any time after June 27, 2009. If we extend the Offer, are
delayed in our acceptance for payment of Shares or are unable to accept Shares
for payment pursuant to the Offer for any reason, then, without prejudice to our
rights under the Offer, the Depositary may, nevertheless, on our behalf, retain
tendered Shares, and such Shares may not be withdrawn except to the extent that
tendering stockholders are entitled to withdrawal rights as described in this
section. Any such delay will be accompanied by an extension of the Offer to the
extent required by law.
For a
withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at its address set forth on
the back cover page of this Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
Certificates, the serial numbers shown on such Certificates must be submitted to
the Depositary and the signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution, unless such Shares have been tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant to
the procedure for book-entry transfer as set forth in
“— Section 3 — Procedures For Tendering Shares,” any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn Shares and must otherwise comply with DTC’s
procedures.
Withdrawals
of tenders of Shares may not be rescinded, and Shares properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by again following the procedures described
in “— Section 3 — Procedures For Tendering Shares” at any time
prior to the Expiration Date or during a subsequent offering period if the Offer
is amended to provide for one.
No
withdrawal rights will apply to Shares tendered into a subsequent offering
period and no withdrawal rights apply during a subsequent offering period with
respect to Shares tendered in the Offer and accepted for payment. All questions
as to the form and validity (including time of receipt) of any notice of
withdrawal will be determined by us, in our sole discretion, and our
determination will be final and binding. None of us, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under a duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such
notification.
Section 5 — Certain U.S.
Federal Income Tax Considerations
The
following summarizes certain of the material U.S. federal income tax
consequences of the Offer to holders of the Shares that are U.S. Holders
(as defined below). This summary is based upon the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”), existing and proposed
regulations promulgated thereunder, published rulings and court decisions, all
as in effect and existing on the date hereof and all of which are subject to
change at any time, which change may be retroactive or prospective. No rulings
have been sought or are expected to be sought from the Internal Revenue Service
(the “IRS”) with respect to any of the tax consequences discussed below, and no
assurance can be given that the IRS will not take contrary positions. Unless
otherwise specifically noted, this summary applies only to those persons that
hold their Shares as a capital asset within the meaning of Section 1221 of
the Internal Revenue Code and does not apply to persons who hold their Shares
pursuant to the exercise of employee stock options or otherwise as
compensation.
This
summary is for general information only and does not address all of the tax
consequences of the Offer that may be relevant to a U.S. Holder (as defined
below) of the Shares. It also does not address any of the tax consequences of
the Offer to holders of the Shares that are Non-U.S. Holders (as defined
below), or to holders that may be subject to special tax treatment, such as
financial institutions, real estate investment trusts, personal holding
companies, tax-exempt organizations, regulated investment companies, insurance
companies, S corporations, brokers and dealers in securities or currencies
and certain U.S. expatriates. Further, this summary does not address: the
U.S. federal income tax consequences of the Offer to stockholders, partners
or beneficiaries of an entity that is a holder of the Shares; the
U.S. federal estate, gift or alternative minimum tax consequences of the
Offer; persons who hold the Shares in a straddle or as part of a hedging,
conversion, constructive sale or other integrated transaction or whose
functional currency is not the U.S. dollar; any state, local or foreign tax
consequences of the Offer; or holders whose status changes from a
U.S. Holder to a Non-U.S. Holder or vice versa; or any person that
owns actually or constructively (giving effect to the ownership attribution
rules of the Internal Revenue Code) shares of common stock of
GEE.
Each holder of the Shares should
consult its own tax advisor regarding the tax consequences of the Offer,
including such holder’s status as a U.S. Holder or a Non-U.S. Holder,
as well as any tax consequences that may arise under the laws of any state,
local, foreign or other non-U.S. taxing jurisdiction and the possible
effects of changes in U.S. federal or other tax
laws.
A
“U.S. Holder” means a beneficial owner of the Shares that, for
U.S. federal income tax purposes, is: (i) a citizen or individual
resident, as defined in Section 7701(b) of the Internal Revenue Code, of
the United States; (ii) a corporation or partnership, including any
entity treated as a corporation or partnership for U.S. federal income tax
purposes, created or organized in the United States or under the laws of the
United States, any State thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise);
(iii) an estate, the income of which is subject to U.S. federal income
tax without regard to its source; or (iv) a trust, if (a) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more U.S. persons have the
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, certain trusts in existence on August 20, 1996, and
treated as U.S. trusts prior to such date, may elect to be treated as
U.S. Holders. If a partnership holds the Shares, the tax treatment of each
of its partners generally will depend upon the status of such partner and the
activities of the partnership. Partners of partnerships holding the Shares
should consult their own tax advisors regarding the U.S. federal tax
consequences of the Offer.
A
“Non-U.S. Holder” means a beneficial owner of the Shares that is not a
U.S. Holder. We urge holders of the Shares that are Non-U.S. Holders
to consult their own tax advisors regarding the U.S. federal income tax
consequences of the Offer, including potential application of
U.S. withholding taxes and possible eligibility for benefits under
applicable income tax treaties.
The sale
of the Shares for cash under the Offer will be a taxable transaction to
U.S. Holders for U.S. federal income tax purposes. In general, a
U.S. Holder who sells the Shares pursuant to the Offer will recognize gain
or loss for U.S. federal income tax purposes in an amount equal to the
difference, if any, between the amount of cash received and the
U.S. Holder’s adjusted tax basis in the Shares sold. Gain or loss will be
determined separately for each block of Shares (that is, Shares acquired at the
same cost in a single transaction) tendered under the Offer.
U.S. Holders
of the Shares that are corporations generally will be taxed on net capital gains
at a maximum rate of 35%. In contrast, U.S. Holders that are individuals
generally will be taxed on net capital gains at a maximum rate of 15% with
respect to those Shares held for more than 12 months at the effective time
of the Offer, and 35% with respect to those Shares held for 12 months or
less. In addition, special rules, and generally lower maximum rates, apply to
individuals in lower tax brackets. Any capital losses realized by a
U.S. Holder that is a corporation generally may be used only to offset
capital gains. Any capital losses realized by a U.S. Holder that is an
individual generally may be used only to offset capital gains plus $3,000 of
ordinary income per year.
Backup
Withholding Tax and Information Reporting
Payment
of proceeds with respect to the sale of the Shares pursuant to the Offer may be
subject to information reporting and U.S. federal backup withholding tax at
the applicable rate if the U.S. Holder or Non-U.S. Holder thereof
fails to supply an accurate taxpayer identification number or otherwise fails to
comply with applicable U.S. information reporting or certification
requirements. These
requirements are set forth in the Letter of Transmittal and should be carefully
reviewed by each holder of the Shares. Backup withholding is not an
additional tax. Any amounts so withheld will be allowed as a refund or a credit
against such U.S. Holder’s or Non-U.S. Holder’s U.S. federal
income tax liability; provided, however, that the required information is timely
furnished to the IRS.
Section 6 — Price Range of
Shares; Dividends
The
Shares are listed and principally traded on the NYSE AMEX US Stock Exchange
under the symbol “JOB.” The following table sets forth, for the quarters
indicated, the high and low sales prices per Share on the NYSE AMEX US Stock
Exchange as reported by published financial sources.
|
Calendar
Year
|
|
High
|
|
|
Low
|
|
|
2007:
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
2.01
|
|
|
1.96
|
|
|
Third
Quarter
|
|
1.76
|
|
|
1.76
|
|
|
Fourth
Quarter
|
|
1.66
|
|
|
1.63
|
|
|
2008:
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
1.38
|
|
|
1.32
|
|
|
Second
Quarter
|
|
.85
|
|
|
.85
|
|
|
Third
Quarter
|
|
.41
|
|
|
.40
|
|
|
Fourth
Quarter
|
|
.42
|
|
|
.39
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
.48
|
|
|
.35
|
|
On
March 27, 2009, the last full trading day prior to the public announcement
and commencement of the Offer, the last sale price per Share was
$0.33.
Stockholders are urged to obtain a
current market quotation for the Shares.
The
principal executive office of GEE is located at One Tower Lane, Suite 2200,
Oakbrook Terrace, Illinois. GEE operates in one industry segment, providing
professional staffing services. The Company offers its customers both placement
and contract staffing services, specializing in the placement of information
technology, engineering and accounting professionals. The Company’s placement
services include placing candidates into regular, full-time jobs with
client-employers. The Company’s contract services include placing its
professional employees on temporary assignments, under contracts with client
companies. Contract workers are employees of the Company, typically working at
the client location and at the direction of client personnel for periods of
three months to one year. The combination of these two services
provides a strong marketing opportunity, because it offers customers a variety
of staffing alternatives that includes direct hire, temporary staffing and a
contract-to-hire approach to hiring.
GEE is
subject to the informational filing requirements of the Exchange Act and, in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 100 F Street, N.W.,
Washington, D.C. 20549. Information regarding the public reference
facilities may be obtained from the
Commission
by telephoning 1-800-SEC-0330. GEE’s filings are also available to the public on
the Commission’s Web site (www.sec.gov). Copies of such
materials may also be obtained by mail from the Public Reference Room of the
Commission at 100 F Street, N.W., Washington, D.C. 20549, upon
payment of the Commission’s customary fees.
Section 8 —
Certain Information Concerning PSQ
PSQ is a
newly-formed Kentucky limited liability company formed specifically to acquire
shares of GEE common stock, including 7,700,000 shares of newly issued shares of
GEE common stock (“New Issue Shares”), which will result in PSQ controlling the
voting class of outstanding capital stock of GEE. By this Offer, we are also
offering to purchase up to, but no more than 2,500,000 shares of the outstanding
shares GEE common stock of at a price of $.60 per share. As of the date hereof,
we do not own any shares of GEE common stock, but we have entered into an
Securities Purchase and Tender Offer Agreement with GEE dated March 30, 2009
which provides that we will purchase 7,700,000 shares of GEE common stock
representing 60% of the then outstanding shares of common stock of GEE, for a
price of $.25 per Share, for an aggregate purchase price of
$1,925,000. With GEE as our operating subsidiary, we intend to
strive to become a recognized leader in the providing of professional staffing
and related human resource outsourcing services; with specialization on
information technology, engineering, and accounting
professionals. Based on the review of GEE’s business and market
position, we have identified GEE as a strategic opportunity and a foundation for
long-term growth.
Section 9 —
Source and Amount of Funds
We will
need approximately $1,750,000 to purchase the maximum number of Shares pursuant
to the Offer and to pay related fees and expenses and an additional $1,925,000
to purchase the Newly Issued Shares that are the subject of the Securities
Purchase and Tender Offer Agreement dated March 30, 2009. PSQ will be deploying
its own proprietary cash under management funding for the Tender Offer and for
the Share Purchase, without the use of third party funding, and the applicable
funds for the Offer will be deposited into escrow no later than three business
days prior to the closing of the Tender Offer. Funds needed for
purchase of the 7,700,000 Newly Issued Shares is currently being held in escrow,
pursuant to an Escrow Agreement, dated March 30, 2009, at the Park Avenue Bank,
located at 460 Park Avenue, New York, NY 10022.
Section 10 —
Possible Effects of the Offer on the Market for the Shares
Effect on the
Market for the Shares
The
purchase of Shares by us pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of holders of
Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the public.
The
Shares are currently listed and traded on the NYSE AMEX US Stock Exchange,
which constitutes the principal trading market for the Shares. Depending upon
the number of Shares purchased pursuant to the Offer, the Shares may no longer
meet the standards for continued listing.
The
Shares are currently “margin securities” as such term is defined under the rules
of the Board of Governors of the Federal Reserve System (the “Federal Reserve
Board”), which has the effect, among other things, of allowing brokers to extend
credit on the collateral of such securities. Depending upon factors similar to
those described above regarding listing and market quotations, following the
Offer it is possible that the Shares might no longer constitute “margin
securities” for purposes of the margin regulations of the Federal Reserve Board,
in which event such Shares could no longer be used as collateral for loans made
by brokers.
Section 11 — Fees and
Expenses
Except as
set forth below, we will not pay any fees or commissions to any broker, dealer
or other person for soliciting tenders of Shares pursuant to the
Offer.
PSQ has
retained Morrow & Co., LLC, as the Information Agent, and Continental Stock
Transfer and Trust, as the Depositary, in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telephone, facsimile,
e-mail and personal interview and may request banks, brokers, dealers and other
nominee stockholders to forward materials relating to the Offer to beneficial
owners.
As
compensation for acting as Information Agent in connection with the Offer,
Morrow & Co., LLC will receive reasonable and customary compensation for its
services and will also be reimbursed for certain reasonable out-of-pocket
expenses and will be indemnified against certain liabilities and expenses in
connection with the Offer, including certain liabilities under the federal
securities laws. GEE will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, plus reimbursement
for reasonable out-of-pocket expenses, and will indemnify the Depositary against
certain liabilities and expenses in connection therewith, including certain
liabilities under federal securities laws.
Brokers,
dealers, commercial banks and trust companies will be reimbursed by us for
customary handling and mailing expenses incurred by them in forwarding material
to their customers.
The
following is an estimate of fees and expenses to be incurred by us in connection
with the Offer (in thousands):
|
|
|
|
|
|
|
Advertising
|
|
|
250.00
|
|
|
Filing
Fees
|
|
|
85.00
|
|
|
Depositary
|
|
|
10,000
|
|
|
Information
Agent (including mailing)
|
|
|
4,800
|
|
|
Legal,
Printing and Miscellaneous
|
|
|
75,000
|
|
|
|
|
|
|
|
|
Total:
|
|
$
|
90,135
|
|
|
|
|
|
|
|
Section 12 — Conditions to
the Offer
Should
the Offer be terminated pursuant to any of the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
to the tendering stockholders. For further information on conditions
to this Offer, please see the Securities Purchase and Tender Offer
Agreement.
Section 13 — Certain Legal
Matters
Except as
described in this section, based on a review of publicly available filings by
GEE with the Commission and a review of certain information furnished by GEE in
the normal course of their business dealings, we are not aware of any license,
franchise or regulatory permit that is material to the business of GEE and that
would be materially adversely affected by our acquisition of Shares pursuant to
the Offer, or of any material filing, approval or other action by or with any
governmental authority or regulatory agency that would be required for the
purchase of Shares pursuant to the Offer or of our acquisition or ownership of
Shares pursuant to the Offer. Should any such approval or other action be
required, it is presently contemplated that such approval or action would be
sought, except as described below under “— State Takeover Laws.” While we
do not currently intend to delay acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if required, would be obtained
without substantial conditions or that adverse consequences would not result to
GEE’s business or that certain parts of GEE’s business would not have to be
disposed of in the event that such approval were not obtained or such other
actions were not taken or in order to obtain any such approval or other action.
If certain types of adverse action are taken with respect to the matters
discussed below, we may decline to accept for payment or pay for any Shares
tendered.
GEE and
certain of its subsidiaries conduct business in a number of states throughout
the United States, some of which have adopted laws and regulations applicable to
offers to acquire shares of corporations that are incorporated or have
substantial assets, stockholders and/or a principal place of business in such
states. In Edgar v. Mite
Corp., the Supreme Court held that the Illinois Business Takeover
Statute, which involved state securities laws that made the takeover of certain
corporations more difficult, imposed a substantial burden on interstate commerce
and was therefore unconstitutional. In CTS Corp. v. Dynamics Corp. of
America, however, the Supreme Court held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions, in
particular, that the corporation has a substantial number of stockholders in and
is incorporated under the laws of such state. Subsequently, in TLX Acquisition Corp. v. Telex
Corp., a federal district court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they applied to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v.
McReynolds, a federal district court in Tennessee ruled that four
Tennessee takeover statutes were unconstitutional as applied to corporations
incorporated outside Tennessee. This decision was affirmed by the
U.S. Court of Appeals for the Sixth Circuit.
GEE
conducts business in a number of states throughout the United States, some of
which have enacted takeover laws. We have not determined whether any of these
state takeover laws and regulations will by their terms apply to the Offer, and,
except as set forth above, we have not presently sought to comply with any state
takeover statute or regulation. We reserve the right to challenge the
applicability or validity of any state law or regulation purporting to apply to
the Offer, and neither anything in this Offer to Purchase nor any action taken
in connection herewith is intended as a waiver of such right. In the event it is
established that one or more state takeover statutes is applicable to the Offer
and an appropriate court does not determine that such statute is inapplicable or
invalid as applied to the Offer, we might be required to file certain
information with, or to receive approval from, the relevant state authorities,
and we might be unable to accept for payment or pay for Shares tendered pursuant
to the Offer, or be delayed in consummating the Offer. In addition, if enjoined,
we might be unable to accept for payment any Shares tendered pursuant to the
Offer, or be delayed in continuing or consummating. In such case, we may not be
obligated to accept for payment any Shares tendered. See
“— Section 12 — Conditions to the Offer.”
Under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), and the
rules that have been promulgated thereunder by the Federal Trade Commission
(“FTC”), certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division of the Department of
Justice (the “Antitrust Division”) and the FTC and certain waiting period
requirements have been satisfied. The purchase of Shares pursuant to the Offer
and the purchase of the Newly Issued Shares is not subject to such requirements
due to the fact that the total value of the transactions on a consolidated basis
do not meet the minimum threshold that requires compliance with the notice and
approval provisions of the HSR Act.
Section 14 —
Miscellaneous
The Offer
is being made to all holders of Shares other than PSQ. We are not aware of any
jurisdiction where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If we become aware of any
valid state statute prohibiting the making of the Offer or the acceptance of
Shares pursuant thereto, we will make a good faith effort to comply with any
such state statute or seek to have such statute declared inapplicable to the
Offer. If, after such good faith effort, we cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on our behalf by one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give
any information or make any representation on behalf of GEE or PSQ not contained
in this Offer to Purchase or in the related Letter of Transmittal and, if given
or made, such information or representation must not be relied upon as having
been authorized.
We have
filed with the Commission a tender offer statement on Schedule TO, together
with all exhibits thereto, pursuant to Regulation M-A under the Exchange
Act, furnishing certain additional information with respect to the Offer. Such
Schedules and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the offices of the Commission in the manner set
forth in “— Section 7 — Certain Information Concerning
GEE.”
Manually
signed facsimile copies of the Letter of Transmittal will be accepted. Letters
of Transmittal and certificates for Shares should be sent or delivered by each
GEE stockholder or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at its address set forth below:
The
Depositary for the Offer is:
Continental
Stock Transfer & Trust Company
17
Battery Place, 8th
Floor
Any
questions or requests for assistance may be directed to the Information Agent at
its address and telephone numbers set forth below. Requests for additional
copies of this Offer to Purchase and the Letter of Transmittal may be directed
to the Information Agent or the Depositary. Stockholders may also contact their
brokers, dealers, commercial banks, trust companies or other nominees for
assistance concerning the Offer.
Morrow
& Co., LLC
470 West
Avenue
Stamford,
CT 06902
(203)
658-9400
Banks
and Brokerage Firms, Please Call: (203) 658-9400
Holders
Call Toll Free: (800) 607-0088