-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V78XDK7laUc5QUfvO+JDzejkLo4cD8XJpFq6oGpaICKl91izA3k60vU/my0kek6X 0i88gL0oYjYwalTJ1MUWGQ== 0001145443-02-000221.txt : 20020626 0001145443-02-000221.hdr.sgml : 20020626 20020626170933 ACCESSION NUMBER: 0001145443-02-000221 CONFORMED SUBMISSION TYPE: SC TO-T/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020626 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: OFFICIAL PAYMENTS CORP CENTRAL INDEX KEY: 0001094998 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 522190781 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-57269 FILM NUMBER: 02688082 BUSINESS ADDRESS: STREET 1: THREE LANDMARK SQUARE CITY: STAMFORD STATE: CT ZIP: 06901-2501 BUSINESS PHONE: 2033564200 MAIL ADDRESS: STREET 1: 2333 SAN RAMON VALLEY BOULEVARD STREET 2: SUITE 450 CITY: SAN RAMON STATE: CA ZIP: 94583 FORMER COMPANY: FORMER CONFORMED NAME: US AUDIOTEX CORP DATE OF NAME CHANGE: 19990914 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TIER TECHNOLOGIES INC CENTRAL INDEX KEY: 0001045150 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 943145844 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC TO-T/A BUSINESS ADDRESS: STREET 1: 1350 TREAT BLVD STREET 2: SUITE 250 CITY: WALNUT CREEK STATE: CA ZIP: 94596 BUSINESS PHONE: 9259373950 MAIL ADDRESS: STREET 1: 1350 TREAT BLVD STREET 2: STE 250 CITY: WALNUT CREEK STATE: CA ZIP: 94596 SC TO-T/A 1 d11132.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 3) ----------------- OFFICIAL PAYMENTS CORPORATION (Name of Subject Company (Issuer)) KINGFISH ACQUISITION CORPORATION a wholly-owned subsidiary of Tier Technologies, Inc. and TIER TECHNOLOGIES, INC. (Names of Filing Persons (Offerors)) ----------------- COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) ----------------- 676235 10 4 (CUSIP Number of Class of Securities) ----------------- JAMES L. BILDNER TIER TECHNOLOGIES, INC. 1350 TREAT BLVD., SUITE 250 WALNUT CREEK, CA 94596 TELEPHONE: (925) 937-3950 FACSIMILE: (925) 937-3752 (Name, address, and telephone numbers of person authorized to receive notices and communications on behalf of filing persons) Copies to: BRUCE R. DEMING, ESQ. JACK G. MARTEL, ESQ. FARELLA BRAUN + MARTEL LLP 235 MONTGOMERY STREET, 30TH FLOOR SAN FRANCISCO, CA 94104 TELEPHONE: (415) 954-4400 FACSIMILE: (415) 954-4480 Calculation of Filing Fee - ---------------------------------------------------------------------------- Amount of filing fee Transaction valuation $86,154,144* $17,231 - ---------------------------------------------------------------------------- * For purposes of calculating the filing fee only. The filing fee calculation assumes the purchase of all outstanding shares of common stock, par value $0.01 per share, as well as the exercise of all exercisable and outstanding stock options, of Official Payments Corporation at a price of $3.00 per share, without interest. As of June 6, 2002, there were 22,952,876 shares issued and outstanding and 5,765,172 shares underlying stock options. Based on the foregoing, the transaction value is equal to the product of 28,718,048 shares and $3.00 per share. The amount of the filing fee calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. [X] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $17,231 Form or Registration No.: Schedule TO-T/A Filing Party: Tier Technologies, Inc. Date Filed: June 20, 2002 [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third-party tender offer subject to Rule 14d-1. [ ] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] SCHEDULE TO This Amendment No. 3 amends and supplements the Tender Offer Statement, as amended, on Schedule TO ("Schedule TO") filed with the Securities and Exchange Commission on June 11, 2002, relating to a tender offer by Kingfish Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Tier Technologies, Inc., a California corporation ("Parent"), to purchase all of the outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Official Payments Corporation, a Delaware corporation (the "Company"), at a price of $3.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 11, 2002 and in the related Letter of Transmittal (which, together with any supplements or amendments, collectively constitute the "Offer"). Capitalized terms used and not otherwise defined shall have the meanings assigned to such terms in the Offer to Purchase. Item 11. Additional Information (a)(5) On June 19, 2002, a purported class action complaint was filed in the Delaware Court of Chancery against the Company, each of the Company's directors, Parent and Purchaser (the "Complaint"). The Complaint purports to assert claims on behalf of all public stockholders of the Company. The Complaint alleges, among other things, that (i) the individual defendants breached a fiduciary duty of disclosure by failing to disclose certain allegedly material information in publicly-filed documents and (ii) Parent and Purchaser are acting in violation of Section 203 of Delaware General Corporations Law by purportedly failing to obtain the approval of the Company's board of directors before becoming an "interested stockholder" (as that term is defined under Section 203) of the Company. The Complaint seeks, among other things, (1) certification of this action as a class action, plaintiff as the class representative and the attorneys as class counsel; (2) to enjoin the Offer; (3) an award of recissory and/or monetary damages; and (4) such other relief as the Court deems equitable and just, including attorneys' fees and costs. The foregoing summary of the Complaint is qualified in its entirety by reference to the Complaint, a copy of which is filed as Exhibit (a)(5)(C) hereto and incorporated by reference herein. On June 26, 2002, the parties to the Complaint entered into a Memorandum of Understanding with respect to a proposed settlement of the purported stockholder class action stockholder. The Memorandum of Understanding provides for certain additional disclosure set forth in the Company's Amendment No. 1 to the Schedule 14D-9 to be filed with the SEC and for full releases of the defendants and certain related or affiliated persons and extinguishes all claims that have been, could have been or could be asserted by or on behalf of any member of the class against the defendants and/or any related or affiliated persons which in any manner relate to the allegations, facts or other matters raised in the lawsuits or which otherwise relate to the transactions contemplated by the Merger Agreement, including the Offer and the Merger. The Memorandum of Understanding provides for the payment of up to $175,000 of fees and expenses for the plaintiff's counsel upon final approval of the settlement of the actions. The final settlement of the Complaint, including the amount of attorneys' fees to be paid, is subject to court approval and there can be no assurance that such approval will be obtained. The defendants to the lawsuits have denied that they have engaged in any wrongdoing whatsoever, and have agreed to the Memorandum of Understanding to eliminate the burden and expense of further litigation and to permit the Offer and Merger to proceed as scheduled. The foregoing summary of the Memorandum of Understanding is qualified in its entirety by reference to the Memorandum of Understanding, a copy of which is filed as Exhibit (a)(5)(D) hereto and is incorporated herein by reference. Item 12. Exhibits (a)(1)(A) Offer to Purchase, dated February 25, 2000. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Notice of Guaranteed Delivery. (a)(1)(D) Form of letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(1)(E) Form of letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(1)(G) Press release issued by Parent and Purchaser, dated June 11, 2002, announcing the commencement of the Offer. (a)(1)(H) Summary Advertisement, dated June 11, 2002, appearing in the Wall Street Journal. (a)(5)(A) Press release issued by Parent, dated June 17, 2002, announcing termination of the waiting period under the Hart-Scott-Rodino Act. (a)(5)(B) Press release issued by Parent, dated June 20, 2002, regarding extension of the Offer until 12:00 midnight, New York City time, on July 9, 2002. (a)(5)(C) Complaint of Roti v. Official Payments Corporation, et al., filed in the Court of Chancery of the State of Delaware on June 19, 2002. (a)(5)(D) Memorandum of Understanding, dated June 26, 2002, between the parties to the Complaint. (b) Not applicable. (d)(1) Agreement and Plan of Merger, dated as of May 30, 2002, by and among Parent, Purchaser and the Company. (d)(2) Stockholders Agreement, dated as of May 30, 2002, by and among Parent, Purchaser and the holders of Shares parties thereto. (d)(3) Confidentiality Agreement, dated April 17, 2002, by and between Parent and the Company. (d)(4) Form of Employment Agreement. (g) Not applicable. (h) Not applicable. Signature. After due inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. KINGFISH ACQUISITION CORPORATION By: /s/ James L. Bildner ------------------------------ Name: James L. Bildner Title: President and Chief Executive Officer Date: June 26, 2002 TIER TECHNOLOGIES, INC. By: /s/ James L. Bildner ------------------------------ Name: James L. Bildner Title: Chairman and Chief Executive Officer Date: June 26, 2002 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION (a)(1)(A) Offer to Purchase, dated June 11, 2002.* (a)(1)(B) Letter of Transmittal.* (a)(1)(C) Notice of Guaranteed Delivery.* (a)(1)(D) Form of letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (a)(1)(E) Form of letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (a)(1)(G) Press release issued by Parent and Purchaser, dated June 11, 2002, announcing the commencement of the Offer.* (a)(1)(H) Summary Advertisement, dated June 11, 2002, appearing in the Wall Street Journal.* (a)(5)(A) Press release issued by Parent, dated June 17, 2002, announcing termination of the waiting period under the Hart-Scott-Rodino Act.* (a)(5)(B) Press release issued by Parent, dated June 20, 2002, regarding extension of the Offer until 12:00 midnight, New York City time, on July 9, 2002.* (a)(5)(C) Complaint of Roti v. Official Payments Corporation, et al. filed in the Court of Chancery of the State of Delaware on June 19, 2002. (a)(5)(D) Memorandum of Understanding, dated June 26, 2002, between the parties to the Complaint. (d)(1) Agreement and Plan of Merger, dated as of May 30, 2002, by and among Parent, Purchaser and the Company.* (d)(2) Stockholders Agreement, dated as of May 30, 2002, by and among Parent, Purchaser and the holders of Shares parties thereto.* (d)(3) Confidentiality Agreement, dated April 17, 2002, by and between Parent and the Company.* (d)(4) Form of Employment Agreement.* - -------- * Previously filed. EX-99 2 ex-a5d.txt IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY ANNETTE ROTI, Civil Action No. 19707 Plaintiff, vs. OFFICIAL PAYMENTS CORPORATION, ANDREW COHAN, THOMAS R. EVANS, JOHN R. HAGGERTY, JOHN D. LEWIS, LEE E. MIKLES, BRUCE S. NELSON, TIER TECHNOLOGIES, INC. and KINGFISH ACQUISITION CORPORATION, Defendants. - ------------------------------------------------------- MEMORANDUM OF UNDERSTANDING WHEREAS, there is now pending a putative class action lawsuit in the Court of Chancery of the State of Delaware in and for New Castle County (the "Court") styled Annette Roti v. Official Payments Corporation, et al., C.A. No. 19707 (the "Action"), purportedly brought on behalf of a class comprised of the common stockholders of Official Payments Corporation ("OPC" or the "Company") other than Defendants and their affiliates (the "Class") against Defendants OPC, Andrew Cohan, Thomas R. Evans, John R. Haggerty, John D. Lewis, Lee E. Mikles, Bruce S. Nelson, Tier Technologies, Inc. ("Parent") and Kingfish Acquisition Corporation, a wholly-owned subsidiary of Tier ("Purchaser") (collectively "Defendants"). WHEREAS, Plaintiff's Complaint was filed on June 19, 2002 (hereinafter, the "Complaint"); WHEREAS, the Complaint challenges a stockholder agreement between Parent and certain OPC stockholders (the "Stockholder Agreement") and a merger agreement (the "Merger Agreement) announced on May 31, 2002 between Parent and OPC, pursuant to which, subject to certain conditions: (i) Parent would conduct a tender offer (the "Tender Offer") to acquire any and all of the outstanding shares of Common Stock of OPC for $3.00 per share, and (ii) Purchaser thereafter will merge with and into OPC, pursuant to which all shares of OPC common stock not theretofore purchased or as to which appraisal rights have not properly been demanded will be converted to the right to receive $3.00 in cash per share, Purchaser will discontinue its separate existence and OPC will become a wholly-owned subsidiary of Parent (the "Merger"); WHEREAS, the Complaint alleges, among other things, that: (i) Defendants failed to disclose certain allegedly material information in its 14D-9 statement; and (ii) Defendants Parent and Purchaser are prohibited by 8 Del. C. ss. 203 from affecting a business combination with OPC for three years without first obtaining the affirmative vote of 66-2/3% of OPC's disinterested stockholders. WHEREAS, plaintiff seeks to enjoin consummation of the Tender Offer; WHEREAS, Defendants OPC, and Parent and Purchaser, submitted letters in opposition to the Complaint and plaintiff's motion for expedited proceedings; WHEREAS, plaintiff's counsel and Defendants' counsel engaged in arm's-length negotiations concerning a possible settlement of the Action; WHEREAS, Defendants maintain that no supplemental disclosures in connection with the Tender Offer or Merger are required and maintain that they have committed no breaches of fiduciary duties or disclosure violations whatsoever, and maintain that plaintiff's claims under 8 Del. C. ss. 203 do not have merit; WHEREAS, counsel for the parties have reached an agreement in principle providing for the settlement of the Action between and among plaintiff, on behalf of herself and the putative Class, and Defendants, on the terms and subject to the conditions set forth below (the "Settlement") NOW THEREFORE, as a result of the foregoing and the negotiations among counsel to the parties, the parties to the Action have agreed in principle as follows: 1. Amendment to the Tender Offer. Defendants maintain that they are not required to issue any supplemental disclosures and that they have committed no breaches of fiduciary duties related to price, disclosure or otherwise. Nevertheless, solely in order to settle and resolve this matter, Defendants shall amend the 14D-9 Statement by filing with the SEC an amendment to 2 the 14D-9 (the "Amendment") and shall deliver the Amendment to stockholders by regular mail, as soon as practicable, which Amendment shall be substantially in the form of Exhibit A hereto. The parties, having considered Exhibit A, agree that the Amendment as filed together with the additional information contained in the 14D-9 or incorporated therein by reference will fairly, reasonably and completely disclose all material information necessary and sufficient to enable OPC shareholders to make an informed decision. 2. Discovery. The parties have agreed to cooperate in such discovery, if any, as is reasonably necessary to confirm the fairness and adequacy of the Settlement contemplated herein, including the production of additional relevant documents and an individual or individuals for interview. Production of documents will be conducted pursuant to a Confidentiality Agreement, the terms of which shall be agreed upon by the parties at a future date. The Settlement shall be subject to completion by plaintiff of confirmatory discovery in the Action reasonably satisfactory to plaintiff's counsel. 3. Stipulation of Settlement. The parties to the Action will agree upon and execute a Stipulation of Settlement (the "Stipulation") and such other documentation as may be required in order to obtain Final Court Approval (as defined below) of the settlement described herein (the "Settlement Documents"). The Stipulation will expressly provide, inter alia, for certification of a non-opt out settlement class pursuant to Delaware Court of Chancery Rules 23(b)(1) and (b)(2) of holders of Common Stock and their successors in interest and transferees, immediate and remote, from May 31, 2002 through and including the effective date of the Merger; for entry of a judgment dismissing the Action with prejudice and without costs; for a complete release and settlement of all past, present or future claims, rights, causes of actions, suits, matters and issues, known or unknown, liquidated or non-liquidated, contingent or absolute, state, federal or foreign, pursuant to statute, rule, regulation, common law or civil law, whether direct, indirect, individual, class, derivative, representative, legal, equitable or any other type, other than statutory appraisal rights, against Defendants or any of their families, parent entities, affiliates, subsidiaries, predecessors, successors or assigns, and each and all of their respective past, present or future officers, directors, associates, stockholders, members, managers, controlling persons, 3 representatives, employees, attorneys, financial or investment advisors, consultants, accountants, investment bankers, commercial bankers, engineers, advisors or agents, heirs, executors, trustees, general or limited partners or partnerships, personal representatives, estates or administrators, which have been, or could have been, asserted relating to the Action, the Tender Offer, the Stockholder Agreement, the Merger, the Merger Agreement, and any related transaction (collectively the "Transaction"), the actions of Defendants relating to the Transaction, the related disclosure materials, disclosures, facts and allegations that are or could (insofar as such transactions, disclosures, facts and allegations relate to, or occurred in connection with, the subject matter of the Action) be the subject of the Action or of an action in any federal, state, arbitration or any other tribunal or forum including any claims arising under federal, state or common law, including the federal securities laws; that Defendants have denied and continue to deny that they have committed or attempted to commit any violations of law or breaches of duty of any kind; that Defendants are entering into the Stipulation solely because the proposed Settlement would eliminate the burden, risk and expense of further litigation, and is in the best interests of OPC and all its shareholders; and that in the event that any claims related to the Transaction or the subject matter of the Action (whether direct, derivative or otherwise) are commenced against any person in any forum, state court, federal court, arbitration or otherwise prior to Final Court Approval of the Settlement, the parties agree to use their good faith efforts to obtain the dismissal or stay in contemplation of dismissal of any such action. 4. Intention of the Parties. It is the intention of the parties to extinguish all such settled claims and consistent with such settled claims and consistent with such intentions, the releasing parties waive their rights to the extent permitted by state law, federal law or principle of common law, which may have the effect of limiting the release set forth above. 5. Notice and Court Approval. Subject to prior Court approval of the Stipulation and the form of the Settlement Documents, the parties to the Action will present the Settlement Documents to the Delaware Court of Chancery for approval as soon as practicable following appropriate notice of the proposed Settlement. Plaintiff shall take reasonable steps to file the Stipulation with the Delaware Court of Chancery no later than July 15, 2002. As used herein, 4 "Final Court Approval" of the Stipulation means that the Delaware Court of Chancery has entered an order approving the Stipulation and that such order is finally affirmed on appeal or is no longer subject to appeal and the time for any petition for rearguments, appeal or review, by certiorari or otherwise, has expired. Plaintiff's counsel intend to apply to the Delaware Court of Chancery for an award of attorneys' fees and reasonable out-of-pocket disbursements. Subject to the terms and conditions of this Memorandum of Understanding and the contemplated Stipulation, Plaintiffs' counsel will apply for an award of fees and expenses in an aggregate amount not exceeding $175,000, which Defendants will not oppose, to be paid by Defendants to Prickett, Jones & Elliot, if approved by the Court, within 10 days after the later of (i) the effective date of the Merger; and (ii) Final Court Approval. Approval of such fee application shall not be a condition to settlement. No such fees or expenses shall be payable in the absence of Final Court Approval. 6. Return of Documents. Within 15 days after Final Court Approval, plaintiff's counsel, consistent with the terms of a Confidentiality Agreement, the terms of which shall be agreed upon by the parties at a future date, shall return to the producing party all discovery material produced in the Action by any defendant or third party, and shall not retain any copies or extracts thereof. 7. Termination. This Memorandum of Understanding and the Settlement Documents are not intended to create any obligation for Parent or Purchaser to consummate the Transaction and shall not modify in any way Parent or Purchaser's rights or obligations under any of the Transaction documents. This Memorandum of Understanding and the Settlement Documents shall be null and void and of no force and effect if: (a) the Merger Agreement is terminated and the Tender Offer or Merger are abandoned; or (b) the Settlement does not obtain Final Court Approval for any reason. In such event, this Memorandum of Understanding shall not be deemed to prejudice in any way the positions of the parties with respect to the Action, shall be the subject of Rule 408 of the Delaware Rules of Evidence, and shall not entitle any party to recovery of any costs or expenses incurred in connection with the implementation of the Memorandum of Understanding. 5 8. Interim Stay of The Actions. The parties to the Action agree that, except as expressly provided herein, the Action shall be stayed pending submission of the proposed Settlement to the Court for its consideration. Plaintiff's counsel agrees that the Defendants' time to move, answer or otherwise respond to the Complaint and to respond to any discovery propounded is extended without date. No defendant waives any defense based on lack of personal jurisdiction, insufficiency of process or insufficiency of service of process by reason of entry into this Memorandum of Understanding or execution of the Settlement Documents and presentation thereof to the Court. Counsel shall enter into such additional documentation if any as shall be required to effectuate the foregoing agreements. 9. Counterparts. This Memorandum of Understanding may be executed in counterparts by any of the signatories hereto, including by telecopier, and as so executed shall constitute one agreement. 10. Governing Law. This Memorandum of Understanding and the Settlement contemplated by it shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to Delaware's conflict of law rules. 11. Amendments. This Memorandum of Understanding may be modified or amended only by a writing signed by all the signatories hereto. 12. Successors. This Memorandum of Understanding shall be binding upon and inure to the benefit of the parties and their respective agents, executors, heirs, successors and assigns. 6 IN WITNESS WHEREOF, the parties have executed this Memorandum effective as of June 26, 2002: OF COUNSEL: /s/ Ronald A. Brown, Jr. ------------------------------------ Ronald A. Brown, Jr. Susman & Watkins Prickett, Jones & Elliott Two First National Plaza, Suite 600 1310 King Street, P.O. Box 1328 Chicago, Illinois 60603 Wilmington, Delaware 19899 Attorney for Plaintiff OF COUNSEL: /s/ Karen P. Kimmey ------------------------------------ Karen P. Kimmey The Bayard Firm Farella Braun & Martel, LLP 222 Delaware Avenue, Suite 900 Russ Building, 30th Floor Wilmington, Delaware 19899 235 Montgomery Street San Francisco, California 94104 Attorney for Defendants Tier Technologies, Inc. and Kingfish Acquisition Corporation /s/ Edward P. Welch ------------------------------------ Edward P. Welch Edward B. Micheletti Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square P.O. Box 636 Wilmington, Delaware 19899-0636 Attorney for Defendants Official Payments Corporation, Andrew Cohan, Thomas R. Evans, Lee E. Mikles, Bruce S. Nelson, John R. Haggerty and John D. Lewis 7 EX-99 3 ex-a5c.txt IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY ANNETTE ROTI, ) ) Plaintiff, ) ) v. ) C.A. No. 19707-NC ) OFFICIAL PAYMENTS CORPORATION, ) ANDREW COHAN, THOMAS R. EVANS, ) JOHN R. HAGGERTY, JOHN D. LEWIS, ) LEE E. MICKLES, BRUCE S. NELSON, ) TIER TECHNOLOGIES, INC. and ) KINGFISH ACQUISITION CORPORATION, ) ) Defendants. ) COMPLAINT 1. This is an action on behalf of the public stockholders of Official Payments Corporation ("OPay" or the "Company"), seeking an injunction and other relief for defendants' breach of fiduciary duty of disclosure and violation of 8 Del. C.ss.203 in connection with the proposed acquisition of OPay by Tier Technologies, Inc. ("Tier"). Tier is proposing to acquire OPay by means of a tender offer scheduled to close on July 9, 2002 which will be followed by a second step merger. THE PARTIES 2. Plaintiff is and has at all relevant times been a stockholder of OPay. 3. Defendant OPay, a Delaware corporation, is a leading provider of electronic payment options to government entities. OPay has approximately 23 million shares of stock outstanding which are traded on NASDAQ. Comerica, Inc. ("Comerica"), Beranson Holdings Inc, ("Beranson") and Michaella Stern ("Stern") collectively own or control more than 63% of OPay's outstanding shares. Comerica owns 12,000,000 shares (52%), Beranson (which is owned by Stern) owns 2,642,000 shares and Stern, the widow of OPay's founder, individually holds options to purchase another 199,252 shares. 4. Defendant Andrew Cohan has at all relevant times been a director of OPay. 5. Defendant Thomas R. Evans ("Evans") has at all relevant times been the Chairman of the Board of Directors and Chief Executive Officer of OPay. 6. Defendant John D. Lewis has at all relevant times been a director of OPay. In addition, since January 1994 he has been Vice Chairman and Director of Comerica. Lewis is also the Vice Chairman of Comerica Bank and has held that position since March 1995. 7. Defendant John R. Haggerty has at all relevant times been a director of OPay. He is Executive Vice President of Comerica. He has worked for Comerica since at least 1994. 8. Defendant: Lee E. Mickles has at all relevant times been a director of OPay. 9. Defendant Bruce S. Nelson has at all relevant times been a director of OPay. 10. Defendant Tier is a California corporation. 11. Defendant Kingfish Acquisition Corporation ("Kingfish") is a Delaware corporation. Kingfish is a wholly-owned subsidiary of Tier and was formed for the sole purpose of acquiring on behalf of Tier all of the outstanding shares of OPay's common stock. FACTUAL ALLEGATIONS 12. In early May 2002, Tier made a preliminary offer to purchase OPay for approximately $3 per share. That offer is an extremely low price. OPay went public in November 1999 at a price of $16 per share. OPay currently has cash and cash equivalents of more than $45 million (or approximately $2 per share) and working capital of more than $40 million. The $3 per share offer effectively places the ridiculously low value of approximately $20 million on OPay's business. 13. Tier was only willing to proceed with its low-ball deal if it could "lock-up" the shares owned by OPay's large stockholders, Comerica, Beranson and Stern. In approximately mid-May, 2002, Tier sent a form of stockholders agreement directly to Comerica, Beranson and 2 Stern and their representatives negotiated and reached an agreement, arrangement or understanding with respect to that stockholders agreement prior to May 30, 2002. 14. On May 30, 2002, OPay's board approved an Agreement and Plan of Merger ("Agreement") with Tier and its wholly-owned subsidiary Kingfish. Pursuant to the Agreement, Kingfish commenced a cash tender offer to purchase all of the outstanding shares of OPay's common stock at a price of $3.00 per share. The Agreement further provides that assuming at least 90% of OPay's shares are tendered, Tier and Kingfish will engage in a short-form merger pursuant to which the remaining outstanding shares of OPay will be cashed out for the same low price of $3.00 per share. 15. On May 30, 2002, the OPay board also approved the stockholders agreement that Tier, Comerica, Beranson and Stern had previously agreed on pursuant to which the latter three agreed, inter alia, to tender all of their shares to Kingfish pursuant to the tender offer. 16. On June 11, 2002, Tier and Kingfish commenced the tender offer and filed form SC-TO-T with the Securities and Exchange Commission ("SEC"). On that same day, OPay filed its Schedule 14D-9 with the SEC. The tender offer is currently scheduled to close on July 9, 2002. 17. Neither the SC-TO-T nor the 14D-9 include financial statements for OPay. The SC-TO-T and 14D-9 disclose virtually no financial information at all about OPay from which a reasonable stockholder could make a fully informed investment decision. The 14D-9 does indicate that OPay's board received a fairness opinion from an investment banker, CIBC World Markets ("CIBC"), but does not disclose anything about how CIBC reached its conclusion. The disclosures made to the Class are deficient for these and other reasons discussed below. PLAINTIFF'S CLASS ALLEGATION 18. Plaintiff brings this action on behalf of herself and all other persons who own common stock of OPay (the "Class") as a class action pursuant to Delaware Chancery Court Rule 23. 19. The class action is properly maintained under Delaware Chancery Court Rule 23. 3 20. The members of the Class are so numerous and geographically dispersed that individual joinder is impracticable. OPay has approximately 23 million shares outstanding that are owned by shareholders living in many states across the United States. 21. Common questions of law and fact exist as to all members of the Class. These common questions predominate over any questions which affect individual members of the Class and include, without limitation, whether defendants breached their disclosure duties and otherwise engaged in the violations of law alleged herein. 22. Plaintiff will fairly and adequately protect the interests of the Class. Plaintiff has no interests adverse to the interests of the Class members. Plaintiff has sufficient incentive to prosecute this action diligently for herself and on behalf of the Class. Plaintiff has retained counsel competent and experienced in class action litigation and intend to pursue this action vigorously. 23. This class action is an appropriate method for the fair and efficient adjudication of the claims asserted herein. Repetitive individualized litigation would impose an unnecessary burden on Class members and the court system. This class action is not expected to present any significant management difficulties and focuses, by definition, on the uniform and consistent action of the defendants. COUNT I (BREACH OF FIDUCIARY DUTY OF DISCLOSURE) 24. The foregoing allegations are repeated and realleged as if fully set forth herein. 25. The individual defendants owe to plaintiff and the Class a fiduciary duty which requires them to disclose all material facts to OPay's stockholders in connection with the tender offer. Because of the way this transaction has been structured, the 14D-1 communicates the directors' approval and recommendation of the Agreement to the Company's stockholders and is the only communication OPay's stockholders have or will receive from their directors in connection with this transaction. Delaware law requires that directors who disclose such a recommendation also disclose such information about the background of the transaction, the 4 process followed by them to maximize value in the sale, and their reasons for approving the transaction so as to be materially accurate and complete. The defendants are breaching their fiduciary duty of disclosure in at least the following respects: A. No financial information about OPay has been disclosed to the Class in connection with the tender offer. No financial statements or other organized presentations of financial information are included in the 14D-9 or SC-TO-T. OPay is a company with more than $45 million in cash and cash equivalents ($2 per outstanding share of OPay) and more than $40 million in working capital. OPay just recently completed a restructuring. Under the circumstances, a reasonable stockholder needs detailed financial statements and up-to-date financial projections to be able to make a fully informed investment decision as to whether to tender into the $3 per share tender offer. B. The disclosure of the reasons for the OPay board's recommendation that the stockholders tender into the tender offer are materially misleading and/or materially incomplete. The purported "reasons" disclosed are actually just a list of topics the board supposedly considered. What the stockholders need to know and are entitled to know is why the board believes that $3 per share is a good deal, assuming they in fact believe that. Instead of making that disclosure, the 14D-9 indicates, for example, that "The Company Board also took into account that the Company's current cash position and the continued low market price of the Common Stock made it more expensive and difficult for the Company to complete strategic acquisitions (including, with respect to expansion of the Company's revenue base and attainment of operational efficiencies)." (14D-9 at p. 5). That is misleading without an explanation of what it was about the Company's "cash position" that was deemed to be a problem. The Company has $45 million in cash and cash equivalents and $40 million in working capital (facts that are not disclosed). The Company has plenty of cash and is not going to run out of cash any time soon. C. The 14D-9 indicates that CIBC opined that the $3 per share offer is fair, but there is no disclosure of the methodologies that CIBC employed in reaching that conclusion. The 14D-9 simply refers to the attached CIBC opinion letter which merely states that the offer is "fair," subject to two pages of qualifications. That letter does not explain why or how CIBC concluded that the $3 per share offer is fair. Since the OPay board disclosed that one of the primary factors they relied on in recommending that stockholders tender was the CIBC opinion, and since the offer is only slightly higher than the cash and cash equivalents, that the Company has on hand, an explanation of the methodologies that CIBC employed in reaching its opinion is material. D. The 14D-9 fails to disclose what will happen to Comerica's agreements with OPay following the acquisition. OPay has agreements with Comerica pursuant to which Comerica is paid millions of dollars per year ($8.2 million in 2001) for credit card processing and settlement services. Therefore, Comerica is in a very different situation from other OPay stockholders. Its decision to sell its stock to a particular buyer is influenced by its desire to continue its lucrative credit card processing contracts. The 14D-9 fails to disclose what will become of those agreements following the acquisition of the Company by Tier. 5 E. The 14D-9 states that: "The Company Board also considered the information provided by CIBC World Markets and the Company's management concerning discussions with other potential acquirors and strategic investors since April 2001. The Company Board noted that none of those discussions had resulted in proposals to acquire the Company that were as favorable to the Company and its stockholders as the Offer and the Merger." That disclosure is materially incomplete. The board had a duty to obtain the maximum value reasonably available in connection with the sale of the Company. The stockholders are therefore entitled to a full and fair summary of the process followed by the board, including an explanation of any other offers that; were received, so that the stockholders can evaluate for themselves whether the board acted reasonably to maximize value in the sale. 26. The omitted and misstated information discussed above is material because a reasonable OPay stockholder needs that information to be able to make a fully informed assessment of whether to tender his, her or its shares pursuant to the tender offer. 27. Plaintiff and the Class will suffer irreparable harm as a result of defendants' inadequate disclosures, and have no adequate remedy at law for defendants' breaches of fiduciary duty. COUNT II (VIOLATION OF 8 DEL. C. ss.203) 28. The foregoing allegations are repeated and realleged as if fully set forth herein. 29. Tier and Kingfish are violating 8 Del. C.ss.203. 30. Underss.203, Tier and Kingfish are required to obtain the affirmative vote of 66-2/3% of the disinterested stockholders before effecting a "business combination" with OPay unless the OPay board approved Tier and Kingfish becoming an interested stockholder prior to when they became an interested stockholder. 31. Tier and Kingfish became an interested stockholder prior to May 30, 2002 when they reached an agreement, arrangement or understanding with Comerica on the terms of the stockholders agreement. It was not the formal execution of the stockholders agreement that caused Tier and Kingfish to become an interested stockholder, it was the agreement, arrangement and/or understanding that Tier, Kingfish and Comerica reached prior to May 30 that that agreement was acceptable to both parties that caused Tier and Kingfish to become an interested stockholder. The OPay board did not approve Tier and Kingfish becoming an interested 6 stockholder prior to May 30, 2002. Accordingly, the protections of ss.203 apply and Tier and Kingfish are prohibited from affecting a business combination with OPay for 3 years without first obtaining the affirmative vote of 66-2/3 of OPay's disinterested stockholders. PRAYERS FOR RELIEF WHEREFORE, Plaintiff respectfully requests that the Court grant the following relief'. 1. Certify this action as a class action and plaintiff as the representative of the Class and her attorneys as counsel for the Class; 2. Enjoin the tender offer or award rescissory and/or monetary damages; 3. Order such other relief as the Court deems equitable and just, including an award of attorneys' fees and costs. PRICKETT, JONES & ELLIOTT, P.A. By: /s/ Ronald A. Brown, Jr. ---------------------------- Ronald A. Brown, Jr. 1310 King Street P.O. Box 1328 Wilmington, DE 19899 (302) 888-6500 Attorneys for Plaintiffs Of Counsel: Arthur T. Susman Charles R. Watkins John R. Wylie Susman & Watkins Two First National Plaza, Suite 600 Chicago, Illinois 60603 (312) 346-3466 Dated: June 19, 2002 7 -----END PRIVACY-ENHANCED MESSAGE-----