-----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, TGc3DvW+K5KAwyBamdjTz9Xwwfse4VCKaH26bghMnfs+Euy8uSeG4qJklszWTJlB Z/Y2gic20r4rKZuyBwmwww== 0000950149-01-501814.txt : 20020410 0000950149-01-501814.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950149-01-501814 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20011114 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESSIVE ASSET MANAGEMENT INC CENTRAL INDEX KEY: 0000862801 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 943048535 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-62209 FILM NUMBER: 1790735 BUSINESS ADDRESS: STREET 1: 1814 FRANKLIN STREET STREET 2: SUITE 700 CITY: OAKLAND STATE: CA ZIP: 94612 BUSINESS PHONE: 5108343722 MAIL ADDRESS: STREET 1: 1814 FRANKLIN STREET STREET 2: SUITE 700 CITY: OAKLAND STATE: CA ZIP: 94612 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESSIVE ASSET MANAGEMENT INC CENTRAL INDEX KEY: 0000862801 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 943048535 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 1814 FRANKLIN STREET STREET 2: SUITE 700 CITY: OAKLAND STATE: CA ZIP: 94612 BUSINESS PHONE: 5108343722 MAIL ADDRESS: STREET 1: 1814 FRANKLIN STREET STREET 2: SUITE 700 CITY: OAKLAND STATE: CA ZIP: 94612 SC TO-I 1 f77233scto-i.txt SCHEDULE TO-I UNITED STATES 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 PROGRESSIVE ASSET MANAGEMENT, INC. (Name of Subject Company (issuer)) PROGRESSIVE ASSET MANAGEMENT, INC., ISSUER (Name of Filing Person (identifying status as offeror, issuer or other person)) COMMON STOCK (Title of Class of Securities) 742957103 CUSIP Number of Class of Securities Eric Leenson 1010 Oak Grove Road, Concord, CA 94518 800-786-2998 (Name, address and telephone numbers of person authorized to receive notices and communications on behalf of the filing person) Calculation of Filing Fee Transaction valuation Amount of Filing Fee $150,000, which is the maximum amount that $3,000.00 the Issuer will pay for outstanding shares of the Issuer. [ ] 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:___________________ Form or Registration No.:_________________ Filing Party:_____________________________ Date Filed:_______________________________ [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. 1 [ ] Check the appropriate boxes below to designate any transactions to which the statement relates: [ ] third-party tender offer subject to Rule 14d-1. [X] 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: [ ] INCORPORATION BY REFERENCE OF CERTAIN DOCUMENTS IN RESPONSE TO MULTIPLE ITEMS. As provided by General Instructions E and F, Exhibit a(1)(A), the Offer to Purchase and Exhibit a(1)(B), the Letter of Transmittal are incorporated by reference in response to multiple items as follows: Exhibit a(1)(A) Offer to Purchase: Items 1, 2, 3, 4 (a)(i) to (iii), (v) to (ix), and (xii) and (b), 5, 6 (a) and (b), 7(a), 8, 11(b) Exhibit a(1)(B) Letter of Transmittal: Item 4. Responses to certain items and additional information are as follows: ITEM 4. TERMS OF THE TRANSACTION. (a) (iv), (x) and (xi) Not Applicable. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (e) The March 1999 agreement for the purchase of shares of PAM. by Paradox Holdings, Inc., is attached as Exhibit (d)(2) The original Standstill Agreement among Paradox Holdings, Inc., Financial West Group, and PAM is attached as Exhibit (d)(1). The Amendment to the Standstill Agreement, extending the Agreement to January 1, 2003, is attached as Exhibit (d)(3). ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. (f) Not Applicable. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (g) and (h) Not applicable. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. See response to Item 5, which is incorporated by reference herein. ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. None. 2 ITEM 10. FINANCIAL STATEMENTS. Financial statements are not material because the consideration offered consists solely of cash, the offer is not subject to any financing condition, and PAM is a public reporting company. ITEM 11. ADDITIONAL INFORMATION. (a) None. ITEM 12. EXHIBITS. (a) Exhibit a(1)(A) Offer to Purchase. Exhibit a(1)(B) Letter of Transmittal. Exhibit a(5) Press Release Exhibit d(1) Standstill Agreement between PAM and Paradox Holdings(1) Exhibit d(2) Purchase Agreement Among Paradox Holdings, PAM and FWG(2) Exhibit d(3) Amendment to Standstill and Restrictions on Transfer Agreement Between and among Progressive Asset Management, Paradox Holdings Inc., and Financial West Group Footnotes: (1) Incorporated by reference to PAM's Registration Statement on Form 10SB, Amendment 2, filed August 9, 2000, Exhibit 6(b). (2) Incorporated by reference to PAM's Registration Statement on Form 10SB, Amendment 2, filed August 9, 2000, Exhibit 12. (b), (g), (h) Not applicable. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. /s/ - ------------------------------ Eric Leenson, President and Chief Executive Officer November 14, 2001 3 EX-99.A(1)(A) 3 f77233ex99-a1a.txt EXHIBIT A(1)(A) EXHIBIT a(1)(A) OFFER TO PURCHASE UP TO 250,000 OUTSTANDING SHARES OF COMMON STOCK OF PROGRESSIVE ASSET MANAGEMENT, INC. TO REPURCHASE ITS SHARES AT $0.60 NET PER SHARE IN CASH THE OFFER WILL EXPIRE AT 5:00 P.M., PACIFIC TIME, ON JANUARY 18, 2002. THIS OFFER WILL NOT BE EXTENDED. WITHDRAWAL RIGHTS WILL BE AVAILABLE UNTIL THE EXPIRATION DATE AND AT ANY TIME ON OR AFTER JANUARY 18, 2002, UNLESS AND UNTIL THE SHARES ARE ACCEPTED FOR PAYMENT. PROGRESSIVE ASSET MANAGEMENT, INC. IS OFFERING TO REPURCHASE UP TO 250,000 OF ITS OUTSTANDING COMMON STOCK AT A PRICE OF $0.60 NET PER SHARE IN CASH ON THE TERMS DESCRIBED IN THIS DOCUMENT. OUR OFFER IS BEING MADE ON IDENTICAL TERMS TO EACH SHAREHOLDER OF PAM. THE DATE OF THIS DOCUMENT IS NOVEMBER 14, 2001 IMPORTANT INSTRUCTIONS If you desire to participate in the tender offer and receive payment of $0.60 per share, you must follow these instructions: IF YOUR SHARES ARE REGISTERED IN YOUR OWN NAME, complete and sign the Letter of Transmittal, including the Substitute W-9 that is part of the Letter of Transmittal, in accordance with the instructions in the Letter of Transmittal. If your shares are held jointly (for example, as husband and wife), then both owners must sign everything, and - - IF YOU HAVE YOUR STOCK CERTIFICATES, mail or deliver your Letter of Transmittal, your stock certificate(s), and any other required documents to the Depositary at the address listed on the Letter of Transmittal; or - - IF YOUR STOCK CERTIFICATE HAS BEEN MISPLACED, STOLEN OR DESTROYED, follow the procedures set forth in Instruction 16 of the Letter of Transmittal, and mail or deliver your Letter of Transmittal and any other required documents to the Depositary at the address listed on the Letter of Transmittal. In each of the foregoing cases, it is your responsibility to ensure that the Depositary receives your documents on or before January 18, 2002, or any extended expiration date. IF YOUR SHARES ARE REGISTERED IN ANOTHER NAME: If your shares are registered in the name of a broker, dealer, bank, trustee or other nominee, you must contact them and tell them to tender your shares. They will give you instructions on how to direct them to tender your shares. The Depositary must receive a properly executed Letter of Transmittal and stock certificates from your broker, dealer, bank, trustee or other nominee on or before January 18, 2002. We will pay for all tendered shares by check to you at the address set forth on the mailing label on the Letter of Transmittal unless you provide alternative instructions in accordance with the procedures set forth in Instruction 12 in the pink Letter of Transmittal. U.S. Stock Transfer Corporation ("USST") is acting as our depositary in this tender offer. If you accept our offer and tender your shares, USST will hold your shares in trust until the tender offer is complete and you are paid. If the tender offer is not completed for any reason, USST will return your share certificate(s) to you promptly and your Letter of Transmittal will be null and void. Questions, requests for assistance or additional copies of tender offer materials, should be directed to Alison Wise, PAM's Director of Business Development, our Tender Offer Coordinator at (800) 786-2998, 1010 Oak Grove Road, Concord, California 94518. 1 THIS DOCUMENT EXPLAINS IMPORTANT INFORMATION REGARDING THE TENDER OFFER. WE ENCOURAGE YOU TO READ IT CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR SHARES. SUMMARY TERM SHEET PAM is offering to repurchase 250,000 of its outstanding common stock for $0.60 net per share in cash. The following are answers to some important questions that you may have as a PAM shareholder. However, this summary does not contain a description of all the terms of our tender offer. Additional important information is contained in the remainder of this Offer to Purchase and the accompanying Letter of Transmittal, and we urge you to read them carefully before deciding whether to tender your shares. Unless otherwise noted, the references below refer to other sections of this Offer to Purchase which contain related information. WHO IS OFFERING TO BUY MY SHARES? PAM is offering to repurchase its own shares. No third party is purchasing the shares or will receive the shares. See "Introduction" and Section 9--"Certain Information Concerning PAM." WHAT SHARES ARE YOU SEEKING TO BUY IN THE OFFER? We are offering to purchase 250,000 outstanding common stock of PAM on the terms described in this Offer to Purchase and the accompanying Letter of Transmittal. See "Introduction" and Section 1--"General Terms of the Offer." If shareholders offer 250,000 or less, for repurchase, PAM will purchase all shares offered. If the offer is oversubscribed, PAM will pay for as many shares of common stock, as nearly as may be pro rata, without issuing fractional shares, according to the number of securities tendered by each security holder during the period the offer remained open. However, prior to prorating the securities tendered by shareholders, PAM will accept first all securities tendered by any person who owns, beneficially or of record, an aggregate of not more than 99 shares of common stock and who tendered all of that person's shares. WHY ARE YOU OFFERING TO BUY MY SHARES? PAM's management has determined, that the repurchasing of the shares will increase the value of the shares for shareholders by (a) reducing the number of outstanding shares; (b) providing immediate liquidity for PAM shareholders not available through the NASDAQ OTC Bulletin Board, since trading of PAM's stock is infrequent; and (c) it will decrease the costs of the operation of PAM by lessening the number of shareholders who hold only odd lots of PAM shares. HOW MUCH ARE YOU OFFERING TO PAY FOR MY SHARES AND WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? We are offering to pay you $0.60 net in cash for each share that you own, without interest. If you are the registered owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your shares through a broker, trustee or other nominee, they may charge you a fee for tendering the shares on your behalf and you need to ask them whether any charges will apply. See "Introduction" and Section 1--"General Terms of the Offer." WHEN WILL YOU MAKE PAYMENT TO ME IF I TENDER MY SHARES? We expect to pay for all shares tendered prior to January 31, 2002. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER MY SHARES IN THE OFFER? You will have until 5:00 p.m., Pacific Time, on January 18, 2002, to tender your shares in the offer. CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES? PAM will not extend the offer under any circumstances. It is PAM's intention to complete the transaction and distribute payments for PAM shares by January 31, 2002. DO YOU HAVE THE FINANCIAL RESOURCES TO REPURCHASE THESE SHARES? PAM has sufficient capital as required by Section 500(e) of the California General Corporation Law, and PAM will need not to borrow any funds to make these repurchases. IS THIS THE FIRST STEP IN A "GOING-PRIVATE" TRANSACTION? No. PAM will continue to file reports with the SEC and 2 these reports will continue to be available to the public on the SEC's website. HOW DO I TENDER MY SHARES? To tender your shares, you must deliver the stock certificate(s) representing your shares, together with a completed Letter of Transmittal and any other documents required, to USST, at its address listed on the Letter of Transmittal. You must deliver these documents to USST no later than 5:00 p.m., Pacific time, on January 18, 2002. If your shares are held by a broker, trustee or other nominee on your behalf, the shares can only be tendered by your broker, trustee or nominee. See Section 4--"Procedures for Tendering Shares." In either event, it is your responsibility to ensure that USST, as our depositary, receives all required documents BEFORE the tender offer expires. You may choose any delivery method you determine appropriate. So that you can ensure timely delivery, we recommend that you use express, certified or registered mail, a commercial courier service, such as Federal Express or UPS, or that you hand deliver your documents to USST at the office listed on the Letter of Transmittal. Delivery to any other office of USST will not be valid. We recommend that you arrange for delivery of the documents to USST in advance of the expiration date. HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? To withdraw shares, you must deliver a written notice of withdrawal with the required information to USST while you still have the right to withdraw the shares. If you tendered your shares by giving instructions to a broker, trustee or other nominee, you must instruct him or her to arrange for the withdrawal of your shares. See Section 1--"General Terms of the Offer" and Section 5--"Withdrawal Rights." HOW LONG DO I HAVE TO WITHDRAW PREVIOUSLY TENDERED SHARES? You will be able to withdraw any previously tendered shares at any time until 5:00 p.m., Pacific Time, on January 18, 2002. In addition, if we have not accepted any previously tendered shares for payment, you will have the right to withdraw any shares previously tendered by you at any time until we accept your shares for payment. See Section 1--"Terms of the Offer" and Section 5--"Withdrawal Rights." CAN YOU ESTABLISH THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? Transactions in PAM's shares of common stock are reported on the NASDAQ's Over The Counter Bulletin Board (the "OTCBB"). These transactions are available on the OTCBB's website, and the quarterly highs and lows over the last two years are set out in this Offer to purchase on page 9. But, such trading is very infrequent. We do not know the details of any recent privately negotiated transactions that would give an independent indication of market value. WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? The two conditions to the tender offer that we believe are most significant to shareholders are the following: - - You must comply with all of the requirements for tendering shares by the termination date to participate in this Tender Offer. - - If you own more than 99 shares of PAM, and if more than 250,000 shares are tendered for repurchase by PAM, then PAM might not be able to repurchase all your shares. Instead, a portion of your shares will be repurchased so that all shareholders (other than those shareholders holding 99 shares or less) will equally proportionately participate in the repurchase of shares. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? There will be no effect on your shares. WHO CAN I CALL IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? You may call Alison Wise, PAM's Director of Business Development, our Tender Offer Coordinator at (800) 786-2998, 1010 Oak Grove Road, Concord, California 94518, with any questions or to receive additional copies of the tender offer materials. We cannot provide you with individual legal, tax or financial advice; however, we can help answer any general questions that you may have about the terms of the offer or how to tender your shares. The Depositary will also have additional copies of the tender offer materials available upon request. 3 To the Holders of Common Stock of Progressive Asset Management, Inc.: INTRODUCTION Progressive Asset Management, Inc. ("PAM"), hereby offers to purchase 250,000 of the outstanding shares of common stock, ("Common Stock"), at a price of $0.60 per share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). Tendering shareholders whose shares are registered in their own names and who tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 11 of the Letter of Transmittal, transfer taxes on the sale of shares pursuant to this Offer. Shareholders who hold their shares through brokers, dealers, banks, trustees or other nominees should check with such institutions as to whether they charge any service fees. PAM will pay all fees and expenses of USST, which is acting as the depositary (the "Depositary"), incurred in connection with the Offer. See Section 6--"Acceptance for Payment and Payment for Shares." The Board of Directors of PAM has unanimously approved this tender offer and related matters. The factors considered by the Board in arriving at its decision to support the Offer are that the repurchasing of the shares will increase the value of the shares for shareholders by: (a) reducing the number of outstanding shares; (b) providing immediate liquidity for PAM shareholders not available through the NASDAQ OTC Bulletin Board, since trading on the OTCBB is infrequent; and (c) decreasing the costs of the operation of PAM by lessening the number of shareholders who hold only odd lots of PAM shares Certain U.S. federal income tax consequences of the sale of shares pursuant to the Offer are described in Section 7--"Certain U.S. Federal Income Tax Consequences." THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND YOU SHOULD READ THEM CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER. 1. GENERAL TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer, PAM will accept for payment and pay for all shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 3--"Withdrawal Rights." The term "Expiration Date" means 5:00 p.m. Pacific Time, on January 18, 2002. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES. PAM reserves the right (but shall not be obligated), at any time and from time to time prior to the Expiration Date, to waive any condition to the Offer or modify the terms of the Offer, by giving oral or written notice of such waiver or modification to the Depositary, in each case in its sole discretion; provided however, that, PAM shall not (i) reduce the number of shares subject to the Offer, (ii) reduce the price per share to be paid pursuant to the Offer or change the form of consideration payable in the Offer, (iii) amend or add to the conditions of the Offer, (iv) extend the Offer, or (v) otherwise amend the terms of Offer in any manner adverse to the holders of shares. In the event that PAM waives any of the conditions set forth in this Offer to Purchase in Section 12--"Certain Conditions Of The Offer," the Securities and Exchange Commission may, if the waiver is deemed to constitute a material change to the information previously provided to the shareholders, require that the Offer remain open for an additional period of time and/or that PAM disseminate information concerning such waiver. 4 If PAM (whether before or after its acceptance for payment of shares) is delayed in its payment for shares or is unable to pay for shares pursuant to the Offer for any reason, then, without prejudice to PAM' rights under the Offer, the Depositary may retain tendered shares on behalf of PAM, and such shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as described in this Offer to Purchase in Section 5--"Withdrawal Rights." However, as described above, the ability of PAM to delay payment for shares that PAM has accepted for payment is limited by Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If PAM makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, PAM will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of such offer or information concerning such offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, a minimum period of 10 business days is generally required to allow for adequate dissemination to shareholders, and such increase in the consideration being offered will be applicable to all shareholders whose shares are accepted for payment pursuant to the Offer. 2. NUMBER OF SHARES: PRORATION. All shares purchased pursuant to the offer will be purchased at the purchase price. All shares not purchased pursuant to the offer will be returned to the tendering shareholders at PAM's expense as promptly as practicable (which, in the event of proration, is expected to be approximately twelve New York Stock Exchange ["NYSE"] trading days) following the expiration time. If the number of shares properly tendered and not withdrawn prior to the expiration time is less than or equal to 250,000 shares, PAM will, upon the terms and subject to the conditions of the offer, purchase at the purchase price all shares so tendered. If the number of shares properly tendered and not withdrawn prior to the expiration time is greater than 250,000 shares, PAM will, upon the terms and subject to the conditions of the offer, accept shares for purchase in the following order of priority: - - First, all shares properly tendered and not withdrawn prior to the expiration time by any Odd Lot Owner (as defined in Section 3) who: - tenders all shares beneficially owned by such Odd Lot Owner (partial tenders will not qualify for this preference); and - completes the box captioned "Odd Lots" on the letter of transmittal and, if applicable, on the notice of guaranteed delivery; - - then, after purchase of all of the foregoing shares, all other shares properly tendered and not withdrawn before the expiration time on a pro rata basis (with adjustments to avoid purchases of fractional shares). The purchase of shares on a pro rata basis means that PAM will purchase the same percentage of shares that are properly tendered by each tendering shareholder (with adjustments to avoid purchases of fractional shares and excluding purchases of shares properly tendered by Odd Lot Owners). In the event that proration of tendered shares is required, PAM will determine the final proration factor as promptly as practicable after the expiration time. PAM does not expect to be able to determine the final results of such proration until approximately five NYSE trading days after the expiration time. As described in Section 13, the number of shares that PAM will purchase from a shareholder may affect the federal income tax consequences to the shareholder of such purchase and therefore, may be relevant to your decision on 5 whether to tender shares. In the letter of transmittal you may designate the order of priority in which your tendered shares are to be purchased in the event of proration. 3. TENDER BY OWNERS OF FEWER THAN 100 SHARES. PAM, upon the terms and subject to the conditions of the offer, will accept for purchase, without proration, all shares properly tendered and not withdrawn on or before the expiration time by or on beha1f of shareholders who beneficially owned as of the close of business on November 13, 2001, and continue to beneficially own as of the expiration time, an aggregate of fewer than 100 shares ("Odd Lot Owners"). See Section 2. To avoid proration, however, an Odd Lot Owner must properly tender all shares that such Odd Lot Owner beneficially owns; partial tenders will not qualify for this preference. This preference is not available to owners of 100 or more shares, even if such owners have separate stock certificates for fewer than 100 shares. Any Odd Lot Owner wishing to tender all shares beneficially owned by him or her pursuant to this offer must complete the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the notice of guaranteed delivery. See Section 4. 4. PROCEDURES FOR TENDERING SHARES. VALID TENDER OF SHARES. For a shareholder to validly tender shares pursuant to the Offer, the shareholder must send the following documents to the Depositary at its address set forth on the back cover of this Offer to Purchase so that they are received by the Depositary on or prior to the Expiration Date: - - the Letter of Transmittal, properly signed and completed, including the Substitute Form W-9, and - - the shareholder's stock certificate(s) for shares of PAM's common stock, however, if the shareholder's certificate has been lost, misplaced or stolen, then the shareholder must check the appropriate box on the Letter of Transmittal and sign and return the enclosed Affidavit of Lost Certificate, which must be notarized, and - - if the shareholder desires to receive payment at some other address or in some other name or account, then the shareholder must complete and return the enclosed Special Delivery Instructions or Special Payment Instructions. The valid tender of shares pursuant to the procedures described above will constitute a binding agreement between the tendering shareholder and PAM upon the terms and subject to the conditions of the Offer. Additional instructions are provided in the Letter of Transmittal. It is important to follow them carefully. GUARANTEED DELIVERY. If a shareholder desires to tender shares pursuant to the offer and such shareholder's certificates are not immediately available or time will not permit all required documents to reach U.S. Stock Transfer Corporation before the expiration time, such shares may nevertheless be tendered provided that all of the following conditions are satisfied: - - such Shares are tendered through an Eligible Institution, ("Medallion Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program ("MSP") (an "Eligible Institution")). - - USST receives (by hand, mail, telegram or facsimile transmission), on or prior to the expiration time, a properly completed and duly executed notice of guaranteed delivery substantially in the form PAM has provided with this offer; and - - the certificates for all tendered shares in proper form for transfer together with a properly completed and duly executed letter of transmittal (or a facsimile thereof) and any other documents required by the letter of transmittal, are received by USST within three NYSE trading days after the date USST receives such notice of guaranteed delivery. THE METHOD OF DELIVERY OF STOCK CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED 6 DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN 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. OTHER REQUIREMENTS. Notwithstanding any provision hereof, payment for shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of - - certificates for such shares, - - a Letter of Transmittal, properly completed and duly executed, and - - any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of shares will be determined by PAM in its sole discretion, which determination will be final and binding. PAM reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of PAM, be unlawful. PAM also reserves the absolute right to waive any defect or irregularity in the tender of any shares of any particular shareholder whether or not similar defects or irregularities are waived in the case of other shareholders. No tender of shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. Neither PAM, the Depositary, nor any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. PAM' interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other related documents thereto) will be final and binding. BACKUP WITHHOLDING TAX. In order to avoid U.S. federal backup withholding tax on payments of cash pursuant to the Offer, a shareholder surrendering shares in the Offer must, unless an exemption applies, provide the Depositary with such shareholder's correct taxpayer identification number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such shareholder is not subject to backup withholding tax. If a shareholder does not provide such shareholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a penalty on such shareholder and any payment of cash to such shareholder pursuant to the Offer may be subject to backup withholding tax at a rate of 30.5%. All shareholders surrendering shares pursuant to the Offer should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding tax (unless an applicable exemption exists and is proved in a manner satisfactory to PAM and the Depositary). Certain shareholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding tax. See Annex A of the Letter of Transmittal. 5. WITHDRAWAL RIGHTS Except as otherwise provided in this Section 5, tenders of shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time on or prior to the Expiration Time and, unless the shares have been accepted for payment and paid for by PAM pursuant to the Offer, may also be withdrawn at any time on or after January 18, 2002. 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 of this Offer to Purchase and must specify the name of the person having tendered the shares to be withdrawn, the number of shares to be withdrawn and the name of the registered holder of the shares to be withdrawn, if different from the name of the person who tendered the shares. If certificates for shares have been delivered or otherwise identified to the Depositary, then, prior to the 7 physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and any and all signatures on the notice of withdrawal must be duly notarized. Withdrawals of tenders of shares may not be rescinded, and any shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn shares may be retendered by again following one of the procedures described in Section 2--"Procedures for Tendering Shares" at any time on or prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by PAM in its sole discretion, which determination will be final and binding. None of PAM, its principals, the Depositary, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. 6. 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), PAM will accept for payment and will pay for all shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 5--"Withdrawal Rights" promptly after the Expiration Date. All questions as to the satisfaction of such terms and conditions will be determined by PAM, in its sole discretion, which determination shall be final and binding. PAM expressly reserves the right, in its sole discretion, to delay acceptance for payment of or payment for shares in order to comply in whole or in part with any applicable law, including, without limitation, any applicable material competition, merger, control, antitrust or similar law or regulation. Any such delays will be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer). In all cases, payment for shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of the certificates for such shares, together with a Letter of Transmittal, properly completed and duly executed, and any other required materials. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for shares are actually received by the Depositary. The per-share consideration paid to any shareholder pursuant to the Offer will be the highest per-share consideration paid to any other shareholder pursuant to the Offer. For purposes of the Offer, PAM will be deemed to have accepted for payment, and thereby purchased, shares validly tendered to PAM and not properly withdrawn as, if and when PAM gives oral or written notice to the Depositary of PAM' acceptance for payment of such shares. 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 therefor with the Depositary, which will act as an agent for tendering shareholders for the purpose of receiving payment from PAM and transmitting payment to tendering shareholders whose shares have been accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES. Upon the deposit of funds with the Depositary for the purpose of making payments to tendering shareholders, PAM's obligation to make such payments shall be satisfied and tendering shareholders must thereafter look solely to the Depositary for payment of amounts owed to them by reason of the acceptance for payment of shares pursuant to the Offer. PAM will pay any stock transfer taxes with respect to the transfer and sale to it or its order pursuant to the Offer, except as otherwise provided in Instruction 12 of the Letter of Transmittal. If PAM is delayed in its acceptance for payment of or payment for shares or is unable to accept for payment or pay for shares pursuant to the Offer for any reason, then, without prejudice to PAM's rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer), the Depositary may, nevertheless, on behalf of PAM, retain tendered shares, and such shares may not be withdrawn except to the extent tendering shareholders are entitled to do so as described in Section 5--"Withdrawal Rights." 8 If any tendered shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, the certificates for such shares will be returned (and, if certificates are submitted for more shares than are tendered, new certificates for the shares not tendered will be sent) in each case without expense to the tendering shareholder, as promptly as practicable after the expiration or termination of the Offer. 7. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income tax purposes, a tendering shareholder will recognize gain or loss equal to the difference between the amount of cash received by the shareholder as consideration for the shares tendered by the shareholder and purchased pursuant to the Offer, and the adjusted tax basis of such shares. Gain or loss will be calculated separately for each block of shares that have the same holding period and adjusted tax basis. If tendered shares are held by a tendering shareholder as capital assets, gain or loss recognized by such shareholder will be capital gain or loss, which will be long-term capital gain or loss if such shareholder's holding period for the shares exceeds one year. A shareholder (other than certain exempt shareholders including, among others, most corporations and certain foreign individuals) that tenders shares may be subject to a 30.5% federal backup withholding tax unless the shareholder provides its TIN and certifies that such number is correct (or properly certifies that it is awaiting a TIN) and certifies as to no loss of exemption from backup withholding tax and otherwise complies with the applicable requirements of the backup withholding tax rules. A shareholder that does not furnish a required TIN or that does not otherwise establish a basis for an exemption from backup withholding tax may be subject to a penalty imposed by the IRS. See "Backup Withholding Tax" under Section 4--"Procedures for Tendering Shares." Each shareholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding tax. If U.S. federal backup withholding tax applies to a shareholder, the Depositary is required to withhold 30.5% from payments to such shareholder. Backup withholding tax is not an additional tax. Rather, the amount of the backup withholding tax can be credited against the U.S. federal income tax liability of the person subject to the backup withholding tax, provided that the required information is given to the IRS. If backup withholding tax results in an overpayment of tax, a refund can be obtained by the shareholder by filing a U.S. federal income tax return. The foregoing discussion may not be applicable with respect to shares received pursuant to the exercise of employee stock options or otherwise as compensation or with respect to holders of shares who are subject to special tax treatment under the Code--such as non-U.S. persons, insurance companies, tax-exempt organizations, partnerships, dealers or traders in securities and financial institutions--and may not apply to a holder of shares in light of individual circumstances, such as holding shares as a hedge or as part of a hedging, straddle, conversion or other risk-reduction transaction. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER. 8. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT REGISTRATION. MARKET FOR THE SHARES. Transactions in PAM's shares effected through broker-dealers are reported on the NASDAQ Over the Counter Bulletin Board. However, such trading is thin and irregular. The purchase of shares pursuant to the Offer will reduce the number of holders of shares and the number of shares that might otherwise be traded, which could further reduce the liquidity and market value of the remaining shares held by the public. 9 PAM's common stock has been reported on the OTCBB under the symbol PAMI since 1997 and the following are the highs and lows reported on the OTCBB for the periods listed.
Quarter High Low ------- ---- --- October-December 1999 .50 .40925 January-March 2000 .4375 .40625 April-June 2000 .4375 .01 July-September 2000 .43 .03 October-December 2000 .50 .01 January-March 2001 .30 .30 April-June 2001 .51 .25 July-September 2001 .60 .40
The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. There are 1,406,654 shares of Common Stock outstanding. RECENT TRANSACTIONS IN PAM SHARES. PAM has been repurchasing its shares through independent broker-dealers utilizing the OTCBB since July 1999. The following are purchases of PAM stock in the 60 days prior to November 14, 2001.
Date of Transaction Amount of Securities (Trade Date) Purchased Price Per Share Total Price Paid - ------------------- -------------------- --------------- ---------------- 8/28/01 5050 $0 .58 $2,929.00 9/24/01 2900 $0.60 $1,740.00 10/19/01 3000 $0.45 $1,350.00
On October 16, 2001, Peter Camejo gifted 10,000 shares of PAM common stock to his brother and sister-in-law, Daniel and Sofia Camejo. These shares were transferred through United States Stock Transfer Corporation. EXCHANGE ACT REGISTRATION. The shares are currently registered under the Securities Exchange Act of 1934 ("Exchange Act"). Such registration may be terminated upon application of PAM to the Commission if the shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the shares under the Exchange Act would reduce the information required to be furnished by the PAM to its shareholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to PAM, such as the short-swing profit-recovery provisions of Section 16(b) of the Exchange Act and the requirement of furnishing a proxy statement pursuant to Section 14(a) or 14(c) of the Exchange Act in connection with shareholders' meetings and the related requirement of furnishing an annual report to shareholders. PAM has no intention at present to terminate such registration. 9. CERTAIN INFORMATION CONCERNING PAM. PAM is a California corporation. Its principal place of business and telephone number is: Progressive Asset Management, Inc. 1010 Oak Grove Road, Concord, CA 94518 (800) 786-2998 INFORMATION AVAILABLE ABOUT PAM. PAM is subject to the informational requirements of the Exchange 10 Act and, in accordance therewith, is required to file reports and other information with the Commission relating to its business, financial condition and other matters. Certain information as of particular dates concerning PAM's directors and officers, their remuneration, stock options and other matters, the principal holders of PAM's securities and any material interest of such persons in transactions with PAM is required to be disclosed in PAM's proxy statements distributed to PAM's shareholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, DC 20549. Copies of such information should be obtainable, by mail, upon payment of the Commission's customary charges, by writing to the Commission's principal office at 450 Fifth Street, N.W., Washington, DC 20549. The Commission also maintains a Web site on the Internet at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. INFORMATION ABOUT OFFICERS AND DIRECTORS AND CERTAIN SHAREHOLDERS OF PAM. The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of PAM are as follows:
Principal's Name, Title and, Address Background ---------------------------- ---------- Peter Camejo, Chairman of Peter Camejo has served as CEO and Board the Board of Directors member since PAM's inception in 1987. From 1010 Oak Grove Road the inception of PAM until April 1, 2001, Concord, California 94518 Mr. Camejo was also the Chief Executive Officer of PAM. Before co-founding PAM, he was an investment broker at Merrill Lynch and Prudential Bache. Mr. Camejo has, in addition to his Series 7 General Securities license, a Series 24 General Principal license, a Series 4 Options license, and a Series 3 Commodities license. Active in the environmental movement, Mr. Camejo has served as a member of the Board of Directors of EarthShare and the Chair of the Council for Responsible Public Investment. He is also a member of the Board of the Contra Costa County Employee Retirement Association. Eric Leenson, President and Eric Leenson has been a member of the Board Chief Executive Officer, and since 1989. He has been CFO since 1990, member of the Board of President since 1992, and became Chief Directors Executive Officer on April 1, 2001. In his 1010 Oak Grove Road positions, he is responsible for the Concord, California 94518 day-to-day oversight of the firm's operations. He is also responsible for its financial accounting and reporting. He holds a Series 7 General Securities license, a Series 24 General Principal license, and a Series 4 Options license. Mr. Leenson left his position as a financial consultant at Merrill Lynch to join PAM in October 1987. Prior to joining Merrill Lynch, he was co-founder and long time Managing Director of La Pena Cultural center in Berkeley, CA. Mr. Leenson is 52 years old. Mr. Leenson received a B.A. from the Woodrow Wilson School of Princeton University in 1970, and an M.B.A. from the University of California, Berkeley in 1986. Catherine Cartier, Secretary Ms. Cartier joined PAM at its inception in and Member of the Board of 1987 and has served as a Board member and Directors Corporate Secretary since 1994. 1010 Oak Grove Road Concord, California 94518 Prior to joining PAM, Ms. Cartier worked for Lehman Brothers and Prudential Bache. She earned a BA from St. Mary's College and holds her Series 7 General Securities license, Series 24 General Principal license, Series 53 Municipal Principal license.
11 Nina Lau-Branson Nina Lau-Branson is serving her second term Member of the Board of on the Board. After receiving her MBA in Directors Finance from the University of Wisconsin, 286 North Oakland Avenue Ms. Lau-Branson was employed by Price Pasadena, California 91101 Waterhouse Coopers. As the first Corporate Controller for Wind River Systems in Alameda, CA, Ms. Lau-Branson was an integral part of the team that brought Wind River Systems public. During her tenure with Wind River Systems they grew to a company with over $50 million in revenues and operations in over ten countries. Ms. Lau-Branson lives in Pasadena, California. Kalman Stein Mr. Stein has been a director since 1997. Member of the Board of Mr. Stein has been the President of Directors EarthShare since its inception in 1989. 9812 Betteker Lane EarthShare now represents more than 40 Potomac, Maryland 20854- leading national environmental and 2125 conservation organizations, and has raised more than $60 million for its member agencies. In addition Mr. Stein is a founder of the Council of Foundations and has served as Chair of that organization. Mr. Stein's business experience includes management consulting with the United Research Company, founding Kalman Stein Associates, a management consulting firm in Berkeley, CA and establishing and managing the Strong Foundation for Environmental Values. He was also the Executive Director of the Environmental Federation of California. Michael Wyman Mr. Wyman is a Board member of PAM, serving Member of the Board of in his second term. Mr. Wyman is a graduate Directors of Pomona College, class of 1972 and 248 Via La Cumbre Hastings College of Law, class of 1981. He San Rafael, California 94904 is member in good standing of the California State Bar. Mr. Wyman has worked as a lettuce picker, dishwasher, writer, editor, corporate director. More recently, he was CEO of It's Electric!, an electric car dealership from 1998 through January 1999. Before his involvement with It's Electric!, and since he left, It's Electric!, he has been a private investor in the field of socially responsible investing. Earlier he held the positions of editor, associate director, and director for the Center for Democracy in the Americas in Washington, D.C. Prior to his tenure at the Center, Mr. Wyman was an attorney in private practice. Gene Valentine Gene Valentine is serving his second full Member of the Board of one-year term on the Board. He joined the Directors Board in June 1999. Mr. Valentine is 2663 Townsgate Road Chairman of the Board and Chief Executive Westlake Village, California Officer of FWG. Mr. Valentine has a BS 91361 degree from Bethany College and also attended the University of Vienna. Mr. Valentine is also the President and Founder of Second Byte Foundation which provides computers to at-risk children. Edward Price Mr. Price is serving his second term. Mr. Member of the Board of Price is Director and Chief Administrative Directors Officer of FWG. Mr. Price has a BA from the 2663 Townsgate Road U.S. Naval Academy and a MBA from the Westlake Village, California University of California, Berkeley. 91361 Previously a CPA with Touche Ross, Mr. Price joined FWG in 1998.
12 Paradox Holdings, Inc. The officers of Paradox Holdings, Inc., Shareholder ("Paradox") are Gene C. Valentine, 2663 Townsgate Road President, Joanne Valentine, Vice-President, Westlake Village, California and Edward Price, Secretary and Treasurer, 91361 each of whom are also directors of Paradox. The sole shareholders of Paradox are the Valentine Charitable Trust dtd 10/30/92 (68.97%) and the Gene Charles Valentine Trust dtd 11/26/86 (31.01%), two trusts for which Gene C. Valentine is the sole trustee. Financial West Group ("FWG") is a wholly-owned subsidiary of Paradox. Paradox holds 100% of PAM's Series B Preferred Stock.
Lakshima Inc., holds 13,669 shares of Class Preferred A (non-voting stock),18.89% of the total outstanding shares of that class. The principal place of business of Lakshima, Inc., is Rosebery Ave., Ottawa, ON K1S 1W2. The top three shareholders of PAM who are officers or directors are Peter Camejo (350,718), Michael Wyman (97,266), and Eric Leenson (78,350). All other officers and directors hold collectively 33,000 shares. Except as described in this Offer to Purchase, neither PAM, nor, to the best knowledge of PAM, none of the preceding persons; - - has effected any transaction in any equity security of PAM during the past 60 days, - - has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years, or - - has been a party during the last five years, to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or - - prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. VOTING RIGHTS OF PARADOX. In March 1999, PAM entered into an agreement with Financial West Group ("FWG") and Paradox Holdings, Inc. ("Paradox"). (FWG is a wholly-owned subsidiary of Paradox. FWG is a broker-dealer, registered with the NASD, with 47 offices and approximately 400 registered representatives. FWG is an NASD, SIPC, and MSRB member. FWG is also registered as a investment adviser with the Securities and Exchange Commission, the State of California and several other states.) Paradox holds 100% of the Series B Preferred Stock of PAM. The Series B Preferred Shares, held by Paradox, when combined with the common stock, has voting power equal to 40% of the total shares that can be cast. Under the Standstill Agreement between PAM and Paradox, until January 1, 2003, neither party can take steps to change the relative voting power of Paradox. As part of the agreement among the parties, Paradox purchased a minority equity stake in PAM equal to 40% of the voting power of all the outstanding stock of PAM, by purchasing all of the Series B Preferred shares of PAM. The parties also entered into a "standstill" agreement, which provided that Paradox could not purchase any additional shares of PAM until January 2, 2002. On November 1, 2001, the parties agreed to extend the standstill agreement until January 1, 2003. The NASD approved the March 1999 agreement among the parties in late June 1999, and the purchase of PAM shares by Paradox was completed in early July 1999. The Series B Preferred Shares, held by Paradox, when combined with the common stock, has voting power equal to 40% of the total shares that can be cast. Consequently, the following is the voting power of the following persons when factoring in the voting power of the Series B Preferred Shares: Peter Camejo 15% ; Eric Leenson 3.3%, Michael Wyman 4.1%; and all Officers and Directors, 23.9%. 10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by PAM to purchase all outstanding shares pursuant to the Offer and to pay fees and expenses related to the Offer is estimated to be approximately $175,000. PAM has sufficient cash on 13 hand to complete this Offer and will not have to withdraw cash. Therefore, completion of the tender offer is not contingent upon receiving financing. 11. PURPOSE OF THE OFFER; PLANS FOR PAM. PURPOSE OF THE OFFER. The PAM Board believes that one of the best ways to increase value for shareholders is to continue buying back PAM common shares on the NASDAQ's OTC Bulletin Board. Trading on the OTCBB is infrequent, and the Board believes it is in the best interest to offer the convenience of allowing current shareholders to sell their shares to PAM. Furthermore, for those who hold 99 shares or less, they can sell of their shares in PAM, thereby simplifying their bookkeeping as well as PAM's. PLANS FOR PAM. Except as described above or elsewhere in this Offer to Purchase, PAM has no present plans or proposals that would relate to or result in; - - any extraordinary corporate transaction involving PAM or any of its subsidiaries (such as a merger, reorganization, liquidation, or sale or other transfer of a material amount of assets), - - any sale or transfer of a material amount of assets of PAM or any of its subsidiaries, - - any change in PAM Board or management of PAM, or - - any other material change in PAM's corporate structure or business. 12. CERTAIN CONDITIONS OF THE OFFER In addition, notwithstanding any other provision of the Offer, PAM shall not be required to accept for payment or pay for any shares, and may delay the acceptance for payment of or, subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to PAM's obligation to pay for or return tendered shares after the termination or withdrawal of the Offer), the payment for any tendered shares, if at any time prior to acceptance for payment of or payment for shares in the tender offer, any of the following events or conditions shall occur or exist: - - there shall have been instituted or be pending any action or proceeding by any governmental entity, whether or not having the force of law, (i) challenging or seeking to make illegal, to delay or otherwise directly or indirectly to restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some of or all the shares of PAM stock by PAM or any affiliate of PAM or the consummation by PAM of the Offer, or seeking to obtain damages in connection with the Offer, (ii) seeking to restrain or prohibit PAM' full rights of ownership or operation (or that of PAM's subsidiaries or affiliates) of any portion of the business or assets of PAM, or any of their respective subsidiaries or affiliates, or to compel PAM or any of its subsidiaries or affiliates to dispose of or hold separate all or any portion of the business or assets of PAM or PAM or any of their respective subsidiaries or affiliates, (iii) seeking to impose material limitations on the ability of PAM or any of its subsidiaries or affiliates effectively to exercise full rights of ownership of the shares of Company stock, including, without limitation, the right to vote any shares of Company stock acquired or owned by PAM or any of its subsidiaries or affiliates on all matters properly presented to PAM's shareholders, or (iv) seeking to require divestiture by PAM or any of its subsidiaries or affiliates of any shares of Company stock; or - - there shall have been any action taken or any statute, rule, regulation, judgment, administrative interpretation, injunction, order or decree enacted, enforced, promulgated, issued or deemed applicable to PAM or any other subsidiary or affiliate of PAM, the acceptance for payment of or payment for any shares of Company stock, or any other transaction, by any governmental entity, that has, directly or indirectly, resulted, or is reasonably likely to, directly or indirectly, result in any of the consequences referred to in the immediately preceding paragraph; or - - there shall have occurred: 14 - the declaration of any banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory); - any general and protracted suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the Over-the-Counter market; - the commencement of a war, armed hostilities or any other national or international crisis directly or indirectly involving the United States; - any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event which, in the sole judgment of PAM, might materially affect, the extension of credit by banks or other lending institutions in the United States; - any significant decrease in the market price of the common stock of PAM or in the market prices of equity securities generally or any adverse changes in the U.S. stock markets or credit markets, or change in the general political, market, economic or financial conditions in the United States or abroad that could have a material adverse effect on the business, condition (financial or other), income, operations or prospects of PAM, or on the trading in the shares; or - in the case of any of the foregoing existing at the time of the commencement of the offer, a material acceleration or worsening thereof; - - any change shall occur or be threatened in the business, condition (financial or other), income, operations or prospects of PAM, which is or may be deemed to be material to PAM. The foregoing conditions are for PAM's sole benefit and may be asserted by PAM, regardless of the circumstances giving rise to any such condition (including any action or inaction by PAM) or may be waived by PAM in whole or in part. PAM's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by PAM concerning the events described in this Section and any related judgment or decision by PAM regarding the inadvisability of proceeding with the purchase of or payment for any shares tendered shall be final and binding on all parties. 13. LEGAL MATTERS PAM might be required to file certain information with, or to receive approvals from, the relevant state authorities, and PAM might be unable to accept for payment or pay for shares tendered pursuant to the Offer, or be delayed in consummating the Offer. In such case, PAM may not be obliged to accept for payment or pay for any shares tendered pursuant to the Offer. 14. FEES AND EXPENSES PAM has retained USST to serve as the Depositary in connection with the Offer. The Depositary will receive reasonable and customary compensation for its services, be reimbursed for certain reasonable out-of-pocket expenses and be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities and expenses under the U.S. federal securities laws. PAM will not pay any fees or commissions to any broker or dealer or other person (other than the Depositary) in connection with the solicitation of tenders of shares pursuant to the Offer. Brokers, dealers, banks, trust companies and other members will be reimbursed by PAM upon request for customary mailing and handling expenses incurred by them in forwarding material to their customers. 15. MISCELLANEOUS The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. PAM is not aware of any jurisdiction in which the making of the Offer or the acceptance thereof 15 would not be in compliance with the laws of such jurisdiction. To the extent PAM becomes aware of any state law that would limit the class of offerees in the Offer, PAM will amend the Offer and, depending on the timing of such amendment, if any, will extend the Offer to provide adequate dissemination of such information to holders of shares prior to the expiration of the Offer. No executive officer, director, affiliate or subsidiary of PAM currently intends to tender or sell any shares of PAM common stock and will continue to hold the shares of PAM common stock. As required by Rule 240.13e- 4(f)(6), no such person will make any purchases of PAM common stock until the expiration of at least ten business days after the date of the termination of the tender offer. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF PAM NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. PAM has filed a Schedule TO with the Commission pursuant to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, PAM is filing the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, setting forth its recommendation with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. Such Schedules and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable in the manner set forth in Section 8--"Certain Information Concerning PAM" (except that such material will not be available at the regional offices of the Commission). November 14, 2001 Progressive Asset Management, Inc. /s/ ---------------------------------------------------- Eric Leenson, President and Chief Executive Officer 16 EX-99.A(1)(B) 4 f77233ex99-a1b.txt EXHIBIT A(1)(B) EXHIBIT a(1)(B) LETTER OF TRANSMITTAL To Accompany Shares of Common Stock of PROGRESSIVE ASSET MANAGEMENT, INC. Tendered Pursuant to the Offer to Purchase by the Issuer, dated November 14, 2001 To Purchase 250,000 shares at $0.60 per Share THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., PACIFIC TIME, ON THURSDAY, JANUARY 18, 2002. THE OFFER WILL NOT BE EXTENDED. To tender Shares, the Letter of Transmittal, certificates for Shares and/or any other required documents should be sent or delivered by each shareholder of the Company or such shareholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at: U.S. STOCK TRANSFER CORPORATION, DEPOSITARY BY MAIL, HAND OR BY HAND OR OVERNIGHT COURIER: FACSIMILE TRANSMISSION: 1745 Gardena Avenue, Suite 200 Shareholder Services Department Glendale, California 94204 (818) 502-0674 (for Eligible Institutions Only) Confirm by Telephone (818) 502-1404 PART I [ ] Check here if your PAM stock certificate(s) has (have) been lost, stolen or destroyed and see Instruction 16. Fill out the remainder of this Letter of Transmittal and state here the number of shares of PAM common stock represented by the lost, stolen, or destroyed certificate(s): ________________________
- -------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 8) - -------------------------------------------------------------------------------------------------------------------- Names and Addresses of Registered Holders Certificates Tendered (Please fill in exactly as names appear on certificates) (attach signed list if necessary) - -------------------------------------------------------------------------------------------------------------------- Number of Shares Certificate Represented by Number of Shares Number Certificates Tendered* - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- Total Shares Tendered - --------------------------------------------------------------------------------------------------------------------
State in this box the order (by certificate number) in which shares are to be purchased in the event of proration.** (Attach additional signed list if necessary.) See Instruction 9. Certificate Number: 1st 2nd 3rd 4th 5th * If you desire to tender fewer than all Shares evidenced by an certificate list above, please indicate in this column the number of Shares you wish to tender. Otherwise, all shares evidenced by such certificate will be deemed to have been tendered. See Instruction 8. ** If you do not designate an order, then in the event less than all Shares tendered are purchased due to proration, Shares will be selected for purchase by the Depositary. Questions and requests for assistance or additional copies of the Offer to Purchase and this Letter of Transmittal may be directed to Alison Wise, Director of Business Development at (800) 786-2998, Progressive Asset Management, Inc., 1050 1 Oak Grove Road, Concord, California 94518. You may also contact your broker, dealer, bank, trust company or other nominee for assistance concerning the tender offer. DELIVERY OF THIS LETTER OF TRANSMITTAL TO ANY ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THAT LIST ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. READ THE TERMS AND INSTRUCTIONS SET FORTH IN PART III OF THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE SIGNING THIS LETTER OF TRANSMITTAL THEY FORM PART OF THE TERMS AND CONDITIONS OF THE OFFER. IF YOU SIGN AND RETURN THIS LETTER OF TRANSMITTAL, YOU ARE AGREEING TO BE BOUND BY THESE PROVISIONS. This Letter of Transmittal is to be used only if certificates for Shares (as defined below) are to be forwarded with it or such certificates will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary. Stockholders whose certificates are not immediately available or who cannot deliver their certificates for Shares and all other required documents to the Depositary before the Expiration Time (as defined in the Offer to Purchase) must tender their Shares according to the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase. See Instructions 1 and 4. Manually signed facsimile copies of the Letter of Transmittal and other required documents will be accepted. PART II [ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, AND COMPLETE THE FOLLOWING: Names of Registered Holders: ------------------------------------------ Date of Execution of Notice of Guaranteed Delivery: ------------------- Name of Institution Which Guaranteed Delivery: ------------------------ Account Number: ------------------------------------------------------- ODD LOTS (SEE INSTRUCTION 4) To be completed ONLY if Shares are being tendered by or on behalf of a person owning beneficially, as of the close of business on November 13, 2001, an aggregate of fewer than 100 shares. The undersigned either (check only one box): - - was the beneficial owner as of the close of business on November 13, 2001, and will continue to be the beneficial owner as of the Expiration Time, of aggregate of fewer than 100 shares, all of which are being tendered; or - - is a broker, dealer, commercial bank, trust company or other nominee which: (a) is tendering, for the beneficial owners thereof, Shares with respect to which it is the record holder; and (b) believes, based upon representations made to it by the beneficial owners, that each person was the beneficial owner as of the close of business on November 13, 2001, and each person will continue to be the beneficial owner as of the Expiration Time, of an aggregate of fewer than 100 Shares and is tendering all of such Shares. 2 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 9, 10 AND 11) To be completed ONLY if certificate for Shares not tendered or not purchased and/or any check for the Purchase Price of Shares purchased are to be issued in the name of and sent to someone other than the undersigned. Issue: [ ] Check [ ] Certificates To: ----------------------------- Address: ----------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax ID No. ---------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 9, 10 AND 11) To be completed ONLY if certificates for Shares not tendered or not purchased that are to be issued in the name of the undersigned and/or any check for the Purchase Price of Shares purchased that is to be issued in the name of the undersigned, are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown here. Deliver: [ ] Check [ ] Certificates To: -------------------------- Address: ----------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3 STOCKHOLDERS SIGN HERE (SEE INSTRUCTIONS 9 AND 10) (COMPLETE SUBSTITUTE FORM W-9 THAT IS PART OF THESE INSTRUCTIONS) Must be signed by the registered holders exactly as names appear on certificates or on a security position listing or by persons authorized to become registered holders by certificates and documents transmitted with this Letter of Transmittal. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary or representative capacity, please set forth the full title. See Instruction 10. - -------------------------------------------------------------------------------- (Signature) (Signature) - -------------------------------------------------------------------------------- (Please Print) (Please Print) - -------------------------------------------------------------------------------- (Capacity; full title) (Capacity; full title) - -------------------------------------------------------------------------------- (Address) (Address) - -------------------------------------------------------------------------------- (Address) (Address) - -------------------------------------------------------------------------------- (Telephone Number) (Telephone Number) - -------------- ---------------------- ------------- ---------------------- (Date) (Tax I.D.# or S.S.N.) (Date) (Tax I.D.# or S.S.N.) GUARANTEE OF SIGNATURE (SEE INSTRUCTIONS 9 AND 10) - -------------------------------------------------------------------------------- (Authorized Signature) (Authorized Signature) - -------------------------------------------------------------------------------- (Please Print) (Please Print) - -------------------------------------------------------------------------------- (Title) (Title) - -------------------------------------------------------------------------------- (Name of Firm) (Name of Firm) - -------------------------------------------------------------------------------- (Address) (Address) - -------------------------------------------------------------------------------- (Address) (Address) - -------------------------------------------------------------------------------- (Telephone Number) (Telephone Number) - -------------- ---------------------- ------------- ---------------------- (Date) (Tax I.D.# or S.S.N.) (Date) (Tax I.D.# or S.S.N.) 4 PART III TERMS AND INSTRUCTIONS PLEASE READ THE FOLLOWING TERMS AND INSTRUCTIONS CAREFULLY. THEY FORM PART OF THE TERMS AND CONDITIONS OF THE OFFER. IF YOU SIGN AND RETURN THIS LETTER OF TRANSMITTAL YOU ARE AGREEING TO BE BOUND BY THESE PROVISIONS. 1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be used only if certificates for Shares (as defined below) are to be forwarded with it or such certificates will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary. Stockholders whose certificates are not immediately available or who cannot deliver their certificates for Shares and all other required documents to the Depositary before the Expiration Time (as defined in the Offer to Purchase) must tender their Shares according to the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase. By signing and returning this Letter of Transmittal, you are tendering to Progressive Asset Management, Inc., a California corporation ("PAM"), its shares of common stock identified in Part I of this Letter of Transmittal (the "Shares") upon the terms and subject to the conditions set forth in PAM's Offer to Purchase dated November 13, 2001 (the "Offer to Purchase") and this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the ("Offer"). You may not revoke your tender of Shares unless you follow the specific withdrawal procedures stated in the Offer to Purchase. If you desire to participate in the tender offer and receive payment by check of $0.60 per share for your shares in the tender offer, you must complete and return the following documents to the Depositary so that they are received no later than January 18, 2002: - - This Letter of Transmittal; - - A Substitute Form W-9, included in this Letter of Transmittal for each owner; - - Your stock certificate(s). - - Special Payment or Delivery Instructions included in this Letter of Transmittal, ONLY if you want the payment for your shares to be made to any person, entity or account, other than the registered owner(s) listed on the mailing label, or sent to any address other than the address on the mailing label. The Special Payment or Delivery Instructions must be signed in front of a notary public. See Instruction 12. Shares will be deemed delivered only when actually received by the Depositary. You will not receive any notice that your tender offer materials have been received or that your Shares have been accepted for payment. Stockholders whose certificates are not immediately available or who cannot deliver Shares and all other required documents to the Depositary before the Expiration Time may tender their Shares by or through an Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery (or a facsimile of it) and by otherwise complying with the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase. Pursuant to such procedure, the certificates for all physically tendered Shares as well as a properly completed Letter of Transmittal and all other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange trading days after receipt by the Depositary of such Notice of Guaranteed Delivery, all as provided in Section 4 of the Offer to Purchase. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For shares to be properly tendered pursuant to the guaranteed delivery procedure, the Depositary must receive the Notice of Guaranteed Delivery before the Expiration Time. THE METHOD OF DELIVERY OF STOCK CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, IS AT YOUR 5 ELECTION AND RISK. IN OTHER WORDS, IF YOU SEND US THE MATERIALS, BUT THEY GET LOST IN THE MAIL, PAM WILL NOT BE ABLE TO PAY YOU UNLESS YOU SEND THE DOCUMENTS AGAIN. FOR THAT REASON, WE RECOMMEND THAT YOU SEND THEM BY A NATIONALLY RECOGNIZED OVERNIGHT COURIER OR BY CERTIFIED MAIL, WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED. IN ADDITION, WE RECOMMEND THAT YOU KEEP A COPY OF WHAT YOU SEND AND YOUR POSTAGE RECEIPT FOR YOUR RECORDS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE DELIVERY ON OR PRIOR TO THE EXPIRATION DATE. PAM will not accept any alternative, conditional or contingent tenders and will not purchase any fractional Shares. You may withdraw your Shares from the Offer by following the procedures set forth in the Offer to Purchase at any time prior to the Expiration Date and unless and until the Shares have been accepted for payment. 2. REPRESENTATIONS OF TENDERING SHAREHOLDER. By signing and returning this Letter of Transmittal, you are representing and warranting that: [ ] You have received and reviewed the Offer to Purchase. [ ] You understand that the valid tender of Shares pursuant to the procedures described in the Offer to Purchase and in this Letter of Transmittal will constitute a binding agreement between you and PAM upon the terms and subject to the conditions of the Offer. [ ] You have full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after January 19, 2001) on the terms and conditions set forth in the Offer to Purchase and this Letter of Transmittal, which are incorporated herein by reference; and, [ ] When the same are accepted for payment by PAM, PAM will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances and the same will not be subject to any adverse claim. 3. INADEQUATE SPACE. If the space provided under Part I is inadequate to list the stock certificate numbers and/or the number of Shares should be listed clearly on a separate sheet of paper and returned with the Letter of Transmittal. 4. ODD LOT TENDERS. The Shares properly tendered and not withdrawn before the Expiration Time, the Shares purchased first will consist of all Shares properly tendered and not withdrawn by any stockholder who owned beneficially as of the close of business on November 13, 2001, and who continues to own as of the Expiration Time, an aggregate of fewer than 100 Shares and who tenders all of his or her Shares (an "Odd Lot Owner"). This preference will not be available unless the box captioned "Odd Lots" is completed. 5. ORDER OF PRORATION OF PURCHASES. Stockholders may designate the order in which their Shares are to be purchased in the event of proration. The order of purchase may have an effect on the federal income tax classification of any gain or loss on the Shares purchased. Furthermore, if more than 250,000 Shares are tendered, then subject to the preference for Odd Lot Owners, the shares will be purchased on a pro rata basis as explained in Section 2 of the Offer to Purchase. 6. PAYMENT FOR SHARES. Unless otherwise indicated in separate "Special Payment Instructions" or "Special Delivery Instructions" provided by the undersigned with this Letter of Transmittal, the check for the purchase price will be issued and/or any certificates for Shares not tendered or accepted for payment will be returned in the name(s) of the addressee of this Letter of Transmittal or other registered holder(s) appearing on the mailing label or under "Description of Shares Tendered" and the check for the purchase price and/or return of any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) will be mailed to the address of the registered holder(s) appearing on the mailing label or under "Description of Shares Tendered." In the event that "Special Payment Instructions" or "Special Delivery Instructions" are completed and submitted with this Letter of Transmittal, the check for the purchase price and/or the return of any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) will be issued in the name of, and such check and/or return such of certificates (and any accompanying documents, as appropriate) will be delivered to, the person or persons so indicated. PAM has no obligation pursuant to the "Special Payment Instructions" or "Special Delivery Instructions" to transfer any Shares from the name of the registered holder thereof if PAM does not accept for payment any of the shares so tendered. 6 7. SUCCESSORS AND ASSIGNS. All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal will be binding upon your successors, assigns, heirs, executors, administrators and legal representatives and shall not be affected by, and will survive, your death or incapacity. 8. PARTIAL TENDERS. If you desire to tender fewer than all the Shares you own, check the box and fill in the number of Shares that you want to tender in the blank provided under "Partial Tenders" on Part I of this Letter of Transmittal. If you only tender a portion of your shares, new certificate(s) for the remainder of the Shares that were evidenced by your old certificate(s) will be sent to you, unless you have provided Special Payment or Delivery Instructions, in which case, the certificate will be issued and delivered in accordance with such instructions, as soon as practicable after the acceptance of payment of, and payment for the Shares tendered herewith. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 9. GUARANTEE OF SIGNATURES. No guarantee of signature is required if either: (a) this Letter of Transmittal is signed by the registered holder of the Shares exactly as the name of the registered holder appears on the certificates tendered with this Letter of Transmittal unless such holder has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" or (b) such Shares are tendered for the account of a member of a "Medallion Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program ("MSP") (an "Eligible Institution"). In all other situations, an Eligible Institution must guarantee all signatures on this Letter of Transmittal. See Instruction 10. 10. SIGNATURES ON LETTER OF TRANSMITTAL AND OTHER DOCUMENTS. (a) If you are signing this Letter of Transmittal as the registered holder(s) of the Shares tendered hereby, you must sign it exactly as your name(s) are written on the face of your stock certificate(s) without any change whatsoever. If your Shares are owned of record by two or more joint owners, for example, as husband and wife, each owner must sign this Letter of Transmittal, the Substitute Form W-9 and all other required documents. (b) If any tendered Shares are registered in different names on several certificates, you must complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. (c) If this Letter of Transmittal is signed by a person other than the registered holders of the certificates listed, or if payment is to be made or certificates for Shares not tendered or not purchased are to be issued to a person other than the registered holders, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the names of the registered holders appear on the certificates, and any signatures on such certificates or stock powers must be "Medallion Signature" guaranteed by an Eligible Institution. See Instruction 9. If this Letter of Transmittal or any certificates or stock powers are signed by officers of corporations, trustees, executors, administrators, guardians, attorneys-in-fact, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to PAM of their authority so to act must be submitted. 11. SPECIAL PAYMENT INSTRUCTIONS AND SPECIAL DELIVERY INSTRUCTIONS. If you want the check for payment of the Shares to be issued in the name of a person other than the signer of this Letter of Transmittal or you want the check for payment of the Shares to be sent a person other than the signer of this Letter of Transmittal or to an address other than that shown above, you must complete Special Payment Instructions or Special Delivery Instructions found on page 3 of this Letter of Transmittal and return it with the Letter of Transmittal. 12. STOCK TRANSFER TAXES. PAM will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or accepted for payment are to be registered in the name of, any person(s) other than the registered owner(s), or if tendered certificates are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person(s)) payable on account of 7 the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. 13. WAIVER OF CONDITIONS. PAM reserves the absolute right in its sole discretion to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered. 14. 30.5% BACKUP WITHHOLDING TAX. In order to avoid U.S. federal backup withholding tax on payments of cash for shares tendered pursuant to the Offer, unless an exemption applies, you must provide the Depositary with your correct taxpayer identification number ("TIN") on Substitute Form W-9 on page 3 of this Letter of Transmittal and certify under penalties of perjury that such TIN is correct and that you are not subject to backup withholding tax. If you do not provide your correct TIN or fail to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on you and any payment of cash to you pursuant to the Offer may be subject to backup withholding tax of 30.5%. Backup withholding tax is not an additional tax. Rather, the amount of the backup withholding tax can be credited against the federal income tax liability of the person subject to the backup withholding tax, provided that the required information is given to the IRS. If backup withholding tax results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. You are required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner of the Shares. If the Shares are held in more than one name or are not in the name of the actual owner, consult the "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" in Part IV to this Letter of Transmittal for additional guidance on which number to report. You should check the box in Part 3 of the Substitute Form W-9 if you have not been issued a TIN and have applied for a TIN or intend to apply for a TIN in the near future. If the box in Part 3 is checked, you must also complete the Certificate of Awaiting Taxpayer Identification Number in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 30.5% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to you if you provide a TIN to the Depositary within 60days of submitting such Certificate. Certain stockholders (including, among others, corporations and certain foreign individuals and entities) are not subject to backup withholding tax. Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding tax. See the "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" in Part IV to this Letter of Transmittal for more instructions. 15. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance may be directed to PAM at the telephone number listed on the cover page of the Letter of Transmittal. Additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from PAM or the Depositary. 16. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificates representing PAM Shares have been lost, destroyed or stolen, please check the box on the first page of this Letter of Transmittal, fill in the blanks to state the number of shares represented by PAM common stock represented by the lost, stolen, or destroyed certificate(s) and complete the remainder of this Letter of Transmittal. The Tender Agent will then contact you with further instructions on the steps to be take in order to receive the tender offer consideration. In addition, the Tender Agent will provide you with a form of affidavit and indemnification, and may require that you provide a bond of indemnity, regarding the loss, theft, or destruction of your PAM certificate(s) that is in a form and in substance reasonably acceptable to the Tender Agent and PAM. 17. TRANSFERRED SHARES. If you have transferred, and are no longer the owner of, the Shares listed on the mailing label of this Letter of Transmittal, you may not tender the shares for payment. Only the current owner of the Shares, or anyone authorized by such owner, may sign this Letter of Transmittal to tender the Shares. You should either send these materials to the current owner of the Shares or contact the current owner of the Shares to instruct him or her to contact PAM to get additional copies of the tender offer materials and for further instruction. If you are the current owner of the Shares listed on the mailing label and you receive these materials from the former owner 8 of the Shares listed on the mailing label, you may tender the Shares by filling out the information in Part I and signing and returning the Letter of Transmittal and the stock certificates representing the Shares. However, the stock certificate must be properly endorsed to you on the back side, or you must send in a separate stock power or other adequate written evidence of the transfer of the Shares to you. IMPORTANT: IF YOU WANT TO TENDER YOUR SHARES AND RECEIVE PAYMENT, IT IS YOUR RESPONSIBILITY TO ENSURE THAT THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF), AND CERTIFICATES FOR TENDERED SHARES AND/OR ANY OTHER REQUIRED DOCUMENTS, ARE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE. PART IV GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER. Unless otherwise noted herein, all references below to section numbers or to regulations are references to the Internal Revenue Code and the regulations promulgated thereunder. If you do not have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Card (for resident individuals), Form SS-4, Application for Employer Identification Number (for businesses and all other entities), or Form W-7 for Individual Taxpayer Identification Number (for alien individuals without social security numbers required to file U.S. tax returns), at an office of the Social Security Administration or the Internal Revenue Service. To complete Substitute Form W-9, if you do not have a taxpayer identification number, check the "Awaiting TIN" box in Part 3, sign and date the Form, and give it to the requester. Generally, you will then have 60 days to obtain a taxpayer identification number and furnish it to the requester. If the requester does not receive your taxpayer identification number within 60days, backup withholding tax, if applicable, will begin and will continue until you furnish your taxpayer identification number to the requester. PAYEES EXEMPT FROM BACKUP WITHHOLDING PENALTIES. Payees specifically generally exempt from backup withholding tax on ALL payments include the following: - - A corporation. - - A financial institution. - - An organization exempt from tax under section 501(a), or an individual retirement account, or a custodial account under section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2). - - The United States or any agency or instrumentality thereof. - - A State, the District of Columbia, a possession of the United States, or any political subdivision or instrumentality thereof. - - A foreign government or a political subdivision, agency or instrumentality thereof. - - An international organization or any agency or instrumentality thereof. - - A registered dealer in securities or commodities registered in the United States or a possession of the United States. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a). - - An entity registered at all times during the tax year under the Investment Company Act of 1940. - - A foreign central bank of issue. Exempt payees described above should file a substitute Form W-9 to avoid possible erroneous backup withholding tax. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM. Certain payments other than interest, dividends and patronage dividends that are not subject to backup withholding. For details, see the regulations under sections 6041, 6041(A), 6045, and 6050A. PENALTIES. Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail to furnish your correct taxpayer 9 identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil Penalty for False Statements with Respect to Withholding.--If you make a false statement with no reasonable basis, which results in no imposition of backup withholding tax, you are subject to a $500 penalty. Criminal Penalty for Falsifying Information--If you willfully falsify certifications or affirmations, you are subject to criminal penalties including fines and/or imprisonment. PRIVACY ACT NOTICES. Section 6109 requires most recipients of dividends, interest or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 30.5% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. NOTE: IF YOU DO NOT COMPLETE AND RETURN THE SUBSTITUTE FORM W-9, IT WILL BE NECESSARY TO WITHHOLD 30.5% OF ANY PAYMENTS MADE TO YOU FOR YOUR SHARES. TO AVOID MANDATORY BACKUP WITHHOLDING TAX, YOU MUST COMPLETE THE FOLLOWING SUBSTITUTE FORM W-9 AND RETURN IT TO THE DEPOSITARY WITH THE LETTER OF TRANSMITTAL. YOU MUST PROVIDE YOUR TAX IDENTIFICATION NUMBER, OR TIN, WHICH IS GENERALLY YOUR SOCIAL SECURITY NUMBER FOR INDIVIDUALS OR YOUR EMPLOYER IDENTIFICATION NUMBER FOR ENTITIES; AND FOLLOW THE INSTRUCTIONS PROVIDED BELOW AND SIGN AND DATE AT THE BOTTOM. IF YOUR SHARES ARE HELD JOINTLY (FOR EXAMPLE, BY HUSBAND AND WIFE), THEN EACH OWNER MUST COMPLETE A SUBSTITUTE FORM W-9. YOU MAY PHOTOCOPY THIS FORM IF YOU NEED ADDITIONAL COPIES. PLEASE REVIEW INSTRUCTION 14 AND PART IV FOR ADDITIONAL INFORMATION REGARDING CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9. 10 U.S. STOCK TRANSFER CORPORATION SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN SOCIAL SECURITY FORM W-9 THE BOX AT RIGHT AND CERTIFY BY NUMBER(S) OR EMPLOYER IDENTIFICATION NUMBER: Department of the Treasury SIGNING AND DATING BELOW. Internal Revenue Service --------------------------------- ------------------------------------------- (list-TIN-of-each-owner) PART 2--Certification under penalties of perjury, I certify that (1) I am a U.S. person (includes resident aliens) and (2) the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued for me) and (3) I am not subject to backup withholding because: (a) I am exempt from backup withholding or Payer's Request for Taxpayer (b) I have not been notified by the Internal Revenue Identification Number Service (the "IRS") that I am subject to backup ("TIN") withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax returns. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS stating that you are not longer subject to backup withholding, do not cross out such item (2). If you have applied for but not received a taxpayer [ ] PART 3 identification number, check the box in Part 3 Awaiting TIN to the left, and complete the Certificate of Awaiting Taxpayer Identification Number below. [ ] PART 4 If you are exempt from backup withholding, Exempt TIN check the box in Part 4 to the left. Signature: Date: -------------------------------------------------------- ---------------------------- Print Name: -------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER ONLY IF YOU CHECKED THE BOX IN PART 3 OF THIS SUBSTITUTE FORM W-9 ABOVE. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either: 1. I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office; or 2. I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number to the Depositary, 30.5% of all reportable payments made to me will be withheld, but will be refunded to me if I provide a certified taxpayer identification number within 60 days. Signature: Date: ---------------------------------------------------- ---------- Print Name: -------------------------------------------------- 11 EX-99.A(5) 5 f77233ex99-a5.txt EXHIBIT A(5) [PRESS RELEASE ON COMPANY LETTERHEAD] EXHIBIT a(5) For Release November 14, 2001 Progressive Asset Management, Inc. (PAM), a leading provider of socially responsible investing resources, announced today that it has launched a tender offer to repurchase 250,000 shares of its common stock at $0.60 per share. PAM trades on the Over-the-Counter Bulletin Board under the symbol "PAMI." The announcement was made by Eric Leenson, president and chief executive officer. Mr. Leenson explained that PAM's board of directors had authorized the repurchase for several reasons. "This tender offer will reduce the number of outstanding shares and thereby increase the value of existing shares. The offer provides immediate liquidity for PAM shareholders, who usually trade only through the limited facilities of the NASDAQ OTC Bulletin Board. Furthermore, it will reduce the number of shareholders who hold less than 100 shares of PAM's common stock and therefore decrease PAM's overhead." The tender offer is being conducted through the United States Stock Transfer Corporation, Glendale, California, which is distributing information to shareholders and brokers holding shares of PAM on how shareholders can tender their shares. The tender offer will expire on January 18, 2002. All shareholders who hold less than 100 shares of PAM's common stock (an "odd lot") will have their shares repurchased. If more than 250,000 shares are tendered, then PAM will prorate the number of shares it repurchases so that proportionally all shareholders will have an equal percentage of their shares repurchased (except for those whose shares were repurchased because they own only "odd lots"). PAM is based in Concord, California and is a NASD, SIPC and MSRB Member. Established in 1987, the company was the first independent full service investment firm specializing in socially responsible investing and continues to be a leader in the socially responsible investment industry. Members of the PAM Network are registered representatives with Financial West Group (FWG), a broker-dealer located in Westlake Village, California. FWG is a NASD, SIPC and MSRB Member and a registered investment advisor with the SEC. For more information, please contact the Tender Offer Coordinator, Alison Wise at 800-786-2998. 1 EX-99.(D)(3) 6 f77233ex99-d3.txt EXHIBIT (D)(3) EXHIBIT (d)(3) AMENDMENT TO STANDSTILL AND RESTRICTIONS ON TRANSFER AGREEMENT BETWEEN AND AMONG PROGRESSIVE ASSET MANAGEMENT, PARADOX HOLDINGS INC., AND FINANCIAL WEST GROUP This Agreement is made and entered into on November 1, 2001, by and among Progressive Asset Management ("PAM"), Paradox Holdings, Inc. ("Paradox"), and Financial West Group, ("FWG"), each a California Corporation, with reference to the following facts: RECITALS WHEREAS the parties entered into a "Purchase Agreement" dated March 5, 1999, (hereinafter the "Purchase Agreement"); WHEREAS under the Purchase Agreement, Paradox acquired 25,000 shares of stock of PAM, designated Series B Convertible Preferred Stock ("Series B Stock"); WHEREAS the parties contemporaneously entered into an agreement titled "Standstill and Restrictions on Transfer Agreement Between and among Progressive Asset Management, Paradox Inc., and Financial West Group" (the "Standstill Agreement") to ensure the percentage ownership of Paradox in PAM remains constant until at least January 1, 2002; WHEREAS the Agreement requires that it may be modified only in writing; and WHEREAS the parties to the Standstill Agreement believe it is in the best interest of all the parties that the Standstill Agreement be extended until January 1, 2003, to ensure the parties remain focused on developing the business of PAM and its relationship with FWG; AGREEMENT NOW, THEREFORE, In consideration of the promises and mutual covenants contained herein, 1. The Parties agree that the Standstill Agreement shall be amended to extend it from January 1, 2002, to January 1, 2003, the termination date of the Standstill Agreement as set forth in paragraph 1 of the Standstill Agreement. 1 2. The Parties agree that all other provisions of the Standstill Agreement remain in force and effect against all the parties. Progressive Asset Management, Inc. /s/ ----------------------------------------- by Eric Leenson, Chief Executive Officer Paradox Holdings, Inc. /s/ ----------------------------------------- by Gene C. Valentine, Chief Executive Officer Financial West Group /s/ ----------------------------------------- by Gene C. Valentine, Chief Executive Officer 2 -----END PRIVACY-ENHANCED MESSAGE-----