SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 3,
2010
TECHTEAM
GLOBAL, INC.
(Exact Name of Registrant as
Specified in Charter)
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Delaware
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0-16284
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38-2774613
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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27335
West 11 Mile Road
Southfield,
Michigan
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48033
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (248) 357-2866
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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| x |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d(b))
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| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
1.01 Entry into a Material Definitive Agreement
On June 3, 2010, TechTeam Global, Inc.,
a Delaware corporation (“TechTeam Global”),
Jacobs Engineering Group Inc., a Delaware corporation (“Jacobs Engineering”),
and Jacobs Technology Inc., a Tennessee corporation and a wholly-owned
subsidiary of Jacobs Engineering (“Jacobs Technology”),
entered into a Stock Purchase Agreement (the “Stock Purchase
Agreement”), pursuant to which, and subject to satisfaction or waiver of
the conditions therein, TechTeam Global would sell to Jacobs Technology its
government solutions business (the “Government Solutions
Business”) for a purchase price of $59 million (the “Purchase Price”),
subject to certain escrows and adjustments in accordance with the terms of the
Stock Purchase Agreement.
Pursuant to the terms of the Stock
Purchase Agreement, Jacobs Technology would acquire the Government Solutions
Business from TechTeam Global by the acquisition of 100% of the shares of the
capital stock (the “Share Acquisition”)
of TechTeam Government Solutions, Inc., a Virginia corporation and a
wholly-owned subsidiary of TechTeam Global (“TTGSI”). TechTeam Global conducts the
Government Solutions Business through TTGSI and its subsidiaries. The Share
Acquisition and the other transactions contemplated by the Stock Purchase
Agreement are hereinafter collectively referred to as the “Transaction.” Subject
to the terms of the Stock Purchase Agreement, Jacobs Engineering has guaranteed
the performance by Jacobs Technology of all of its obligations under the Stock
Purchase Agreement and the Transaction-related agreements to which it is a
party.
Pursuant to the terms of the Stock
Purchase Agreement, at the closing of the Transaction (the “Closing”), $14.75
million of the Purchase Price will be paid into an escrow account (the “Escrow Account”) to
secure TechTeam Global’s indemnification obligations for certain specified
contingencies. In addition, the Stock Purchase Agreement provides for
a post-closing adjustment to the Purchase Price that is tied to the extent to
which the net tangible book value of the assets of the Government Solutions
Business at the Closing exceeds or is less than a target net tangible book value
of approximately $12.2 million. An additional escrow account in the amount of
approximately $2.77 million will be established to secure the aforementioned
post-closing adjustment to the Purchase Price. The Purchase Price is also
subject to adjustment based on TTGSI’s cash and debt at closing. At Closing,
Jacobs Technology, TTGSI and JP Morgan Chase Bank, National Association, as
escrow agent, will enter into an Escrow Agreement which will govern the
operation of the escrow established for purposes of the indemnity and
post-closing obligations described above.
In the Stock Purchase Agreement,
TechTeam Global has made various representations and warranties, including, but
not limited to, representations and warranties regarding TTGSI and the
Government Solutions Business, and has agreed to certain covenants, including
affirmative and negative covenants regarding the operation of Government
Solutions Business during the period between the signing of the Stock Purchase
Agreement and the Closing.
In addition, TechTeam Global has agreed
to covenants prohibiting it and its representatives from soliciting, providing
information regarding, entering into discussions or arrangements concerning, or
approving or recommending, any proposal relating to an alternative business
combination transaction from a third party with respect to the Government
Solutions Business. Notwithstanding the foregoing restrictions, TechTeam Global
may, prior to a stockholder vote approving the Stock Purchase Agreement and
subject to compliance with the terms of the Stock Purchase Agreement, respond to
an unsolicited bona fide written competing transaction proposal from a third
party for not less than all of the Government Solutions Business, including, but
not limited to, a proposal that contemplates the acquisition of the Government
Solutions Business together with the rest of the operations of TechTeam Global,
that TechTeam Global’s board of directors determines, in good faith, after
consultation with its financial advisor and outside legal counsel, is, or is
reasonably likely to lead to, a Superior Proposal or, that TechTeam Global’s
board of directors determines, in good faith, after consulting with its outside
counsel, that failing to respond to such proposal, as contemplated by the Stock
Purchase Agreement, is reasonably likely to result in a violation of the Board’s
fiduciary duties to TechTeam Global’s stockholders or other violation
of applicable law. For purposes of the Stock Purchase Agreement, a
Superior Proposal is an unsolicited bona fide written competing transaction
proposal that is determined, in good faith, by the TechTeam Global board of
directors, after consultation with its financial advisor, to be more favorable
from a financial point of view to TechTeam Global’s stockholders than the terms
of the Stock Purchase Agreement or, if applicable, any written proposal by
Jacobs Technology to amend the terms of the Stock Purchase Agreement, taking
into account all the terms and conditions of such proposal and the Stock
Purchase Agreement (including the expected timing and likelihood of consummation
and any governmental, regulatory and other approval requirements) and to be
reasonably capable of being consummated; provided, however, that any such
competing transaction proposal shall not be deemed to be a “Superior Proposal”
if any financing required to consummate the transaction contemplated by such
competing transaction proposal is not committed and is not reasonably capable of
being obtained by the third party submitting such competing transaction
proposal.
The consummation of the Transaction is
subject to a number of closing conditions, including, but not limited to, (i)
the approval of the Stock Purchase Agreement and the Transaction by stockholders
representing a majority of the outstanding shares of TechTeam Global’s common
stock entitled to vote on such a matter at a meeting of TechTeam Global’s
stockholders, (ii) the absence of certain legal impediments to the consummation
of the Transaction, (iii) the absence of any proceeding being brought or
threatened which challenges or seeks to restrain, enjoin or prohibit the
Transaction, (iv) the receipt of specified third-party consents and government
approvals, (v) the release of all liens, other than certain permitted liens, on
the assets and properties of TTGSI, (vi) the absence of any material adverse
effect on the Government Solutions Business, TechTeam Global or TTGSI, (vii) the
continued employment by TTGSI of certain designated employees, (viii) no
litigation being pending or threatened which (A) could reasonably be expected to
result in a “material adverse effect” with respect to the Government Solutions
Business or TechTeam Global, (B) relates to any alleged material violation of
any applicable law, or (C) relates to any allegation of fraud or intentional
misrepresentation, (xi) the accuracy of the representations and warranties made
by TechTeam Global or Jacobs Technology in the Stock Purchase Agreement, as the
case may be, as of the closing date, except to the extent such representations
and warranties relate to a particular date or time period (in which case such
representations and warranties shall be true and correct on and as of such date
or for such time period); and (xii) the performance and compliance by the
parties with specified covenants and obligations required to be performed and
complied with under the Stock Purchase Agreement. The obligations of Jacobs
Technology to consummate the Transaction are also subject to TTGSI not entering
into any new teaming agreements, government contracts or government bids which
(i) impose any restriction on the ability of TTGSI to compete in any business or
activity within a certain geographic area, or pursuant to which any benefit or
right is required to be given or lost as a result of so competing, (ii) grant
any exclusive license, supply or distribution agreement or other exclusive
rights, or (iii) grant any “most favored nation,” rights of first refusal,
rights of first negotiation or similar rights with respect to any product,
service or intellectual property right, and which, in the case of (i), (ii) and
(iii), Jacobs Technology reasonably believes would, individually or in the
aggregate, materially and adversely affect Jacobs Technology, its affiliates or
TTGSI following the Closing. In addition, the consummation of the Transaction is
also subject to the delivery of customary closing documents and the satisfaction
of other customary closing conditions.
The Stock Purchase Agreement may be
terminated by either TechTeam Global or Jacobs Technology if the Closing has not
occurred by October 1, 2010; provided that the Closing has
not occurred by such date due to the failure of the terminating party to fulfill
any material obligations required to be performed by such party pursuant to the
Stock Purchase Agreement at or prior to the Closing. The Stock Purchase
Agreement may also be terminated by TechTeam Global or Jacobs Technology, as the
case may be, upon the occurrence of certain specified events as set forth in the
Stock Purchase Agreement. If the Stock Purchase Agreement is terminated under
certain circumstances, including, but not limited to, in connection with a
determination by TechTeam Global’s board of directors in accordance with the
Stock Purchase Agreement to accept a Superior Proposal and enter into a
definitive agreement with respect thereto immediately following such
termination, TechTeam Global has agreed to pay to Jacobs Technology a
termination fee of $2.36 million and to reimburse Jacobs Technology for certain
expenses incurred by it in connection with the Transaction up to $750,000. If
the Stock Purchase Agreement is terminated because of TechTeam Global’s
inability to obtain stockholder approval of the Transaction, TechTeam Global
will be required to reimburse Jacobs Technology for its expenses as described
above.
In order to induce Jacobs Engineering
and Jacobs Technology to enter into the Stock Purchase Agreement, each of Costa
Brava Partnership III L.P. and Emancipation Capital, LLC, which beneficially own
in the aggregate approximately 18.3% of TechTeam Global’s common stock, have
agreed to enter into voting agreements with Jacobs Technology (each, a “Voting Agreement”)
pursuant to which they have each agreed to, among other things, vote the
TechTeam Common Stock held by them (i) in favor of the Transaction, including
the approval and adoption of the Stock Purchase Agreement, (ii) against approval
or adoption of any competing transaction proposal or any proposal made in
opposition to or in competition with the Transaction, and (iii) against any
actions to the extent that such actions are intended, or could reasonably be
expected to, in any material respect, impede, interfere with, delay, postpone,
discourage or adversely affect the Transaction. Costa Brava Partnership III L.P.
is an affiliate of Seth W. Hamot, a member of the TechTeam Global board of
directors. Emancipation Capital, LLC is an affiliate of Charles Frumberg, a
member of the TechTeam Global board of directors. The description contained in
this Item 1.01 of certain terms of the Voting Agreements is qualified in its
entirety by reference to the full text of the form of Voting Agreement, a copy
of which is attached hereto as Exhibit 99.1.
General John P. Jumper (USAF Retired),
who has been a member of the board of directors of Jacobs Engineering since
February 2007, previously served on the board of directors of TechTeam Global
from June 2006 until May 2009. However, Mr. Jumper did not serve on the TechTeam
Global board of directors at the time of any material negotiations between
TechTeam Global and Jacobs Technology or Jacobs Engineering with respect to the
Stock Purchase Agreement or the Transaction. Furthermore, Mr. Jumper has not
been an active participant in any of the negotiations, transactions or material
contacts among TechTeam Global, Jacobs Engineering and Jacobs Technology with
respect to the Stock Purchase Agreement and the Transaction.
In addition, since January 1, 2008,
TTGSI has entered into a total of seven project subcontracts with Jacobs
Technology as prime contractor, which subcontracts form a part of the Government
Solutions Business. As of March 31, 2010, six of these government services
projects have ended, leaving only one current ongoing project with Jacobs
Technology.
Except as stated above, there are no
material relationships by and among TechTeam Global, Jacobs Technology or Jacobs
Engineering, or any of their respective affiliates, other than with respect to
the Transaction, the Stock Purchase Agreement and the related ancillary
agreements.
In particular, the assertions embodied
in the representations and warranties contained in the Stock Purchase Agreement
are qualified by information in confidential disclosure schedules provided by
TechTeam Global in connection with the execution of the Stock Purchase
Agreement. These disclosure schedules contain information that modifies,
qualifies and creates exceptions to the representations and warranties set forth
in the Stock Purchase Agreement. Moreover, the representations and warranties in
the Stock Purchase Agreement were used for the purpose of allocating risk
between TechTeam Global, on the one hand, and Jacobs Engineering and Jacobs
Technology, on the other hand, rather than establishing matters of fact.
Accordingly, the representations and warranties in the Stock Purchase Agreement
may not constitute the actual state of facts about TechTeam Global, TTGSI,
Jacobs Engineering or Jacobs Technology. In addition, information concerning
the subject matter of the representations and warranties may change after the
date of this agreement, which subsequent information may or may not be fully
reflected in TechTeam Global’s public disclosures.
ITEM
7.01 Regulation FD Disclosure
On June 4, 2010, TechTeam Global issued
a press release announcing the execution of the Stock Purchase Agreement, a copy
of which has been included as Exhibit 99.2 hereto. The information in this
Current Report on Form 8-K under Item 7.01 (including Exhibit 99.2) is being
furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for
purposes of Section 11 and 12(a)(2) of the Securities Act of 1933, as amended
(the “Securities
Act”), or Section 18 of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), or otherwise subject to the liabilities of that section.
Furthermore, the information contained in Exhibit 99.2 shall not be deemed to be
incorporated by reference into the filings of TechTeam Global under the
Securities Act or the Exchange Act.
Important
Additional Information Will Be Filed With The SEC
TechTeam Global plans to file with the
SEC a proxy statement and other relevant materials in connection with the
proposed sale of TTGSI. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE PROPOSED SALE OF TTGSI OR THE TRANSACTION, INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS FILED
BY TECHTEAM GLOBAL WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED SALE OF TTGSI AND THE
TRANSACTION.
Investors
and security holders will be able to obtain free copies of the proxy statement,
including all exhibits thereto, and other documents filed with the SEC by
TechTeam Global through the web site maintained by the SEC at
http://www.sec.gov. In addition, investors and security holders will
be able to obtain, without charge, a copy of the proxy statement, and all
exhibits thereto, from TechTeam Global by submitting a written request to
TechTeam Global, Inc., Attention: Investor Relations, 27335 West 11 Mile Road,
Southfield, Michigan, 48033; or by calling 1-248-357-2866; or by visiting
TechTeam Global’s Web site at http://www.techteam.com/investors. Any reference
to TechTeam Global’s website in this Current Report on Form 8-K is an inactive
hyperlink reference and is not intended to incorporate the contents thereof into
this Current Report on Form 8-K or any other public announcement or
filing.
TechTeam Global, Jacobs Engineering,
and their respective directors and executive officers, and certain other
employees of TechTeam Global and Jacobs Engineering, may be deemed to be
participants in the solicitation of proxies with respect to the proposed sale of
TTGSI and the other matters to be brought at the special meeting of TechTeam
Global stockholders to which the proxy statement will relate. Information
regarding the directors and executive officers of TechTeam Global and their
ownership of TechTeam Global shares is contained in the annual report of
TechTeam Global on Form 10-K for the year ended December 31, 2009 and its proxy
statement for its 2010 Annual Meeting of Stockholders which was filed with the
SEC on April 30, 2010, and is supplemented by other public filings made, and to
be made, with the SEC. Information regarding the directors and executive
officers of Jacobs Engineering Group Inc. is contained in the annual report of
Jacobs Engineering Group Inc. on Form 10-K for the year ended October 2, 2009,
which was filed with the SEC on November 20, 2009, and its proxy statement for
its 2010 Annual Meeting of Shareholders, which was filed with the SEC on
December 17, 2009. TechTeam Global investors and security holders may obtain
additional information regarding the direct and indirect interests of TechTeam
Global, Jacobs Engineering Group Inc. and their respective directors and
executive officers with respect to the proposed sale of TTGSI by reading the
proxy statement and other filings referred to above. A more complete description
will be available in the proxy statement to be filed in connection with the
proposed sale of TTGSI. TechTeam Global investors and security holders may
obtain additional information regarding the direct and indirect interests of
TechTeam Global, Jacobs Engineering and their respective directors and executive
officers with respect to the proposed sale of TTGSI by reading the proxy
statement and other filings referred to above.
Safe
Harbor for Forward-Looking Statements
This Current Report on Form 8-K
contains “forward-looking statements” within the meaning of Section 21E of the
Exchange Act, including forward-looking statements about the proposed sale
of TTGSI and the Transaction, and any actions contemplated thereby. The
forward-looking statements are not historical facts but rather are based on
current expectations, estimates and projections about the Transaction, TechTeam
Global’s business and industry, and its beliefs and assumptions. Words such as
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “assume,” “may,”
“plan,” “seek to,” “will,” “would,” “should,” “guidance,” “potential,”
“continue,” “project,” “forecast,” “confident,” “prospects,” and “plan,” and
variations of these words and similar expressions, identify forward-looking
statements, although not all forward-looking statements contain these
identifying words.
These statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors,
many of which are beyond the control of TechTeam Global, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted in the forward-looking statements. These risks and uncertainties
include, but are not limited to, those described above in Item 1.01 of this
Current Report on Form 8-K with respect to the completion of the Transaction and
the material terms and conditions of the Stock Purchase Agreement, including the
calculation of the final Purchase Price and any adjustments
thereto. Factors, risks and uncertainties that may affect TechTeam
Global’s ability to consummate the Transaction and its business, financial
condition and operating results include, but are not limited to:
(i) TechTeam Global’s ability to complete the proxy statement with
respect to the Transaction and file it with the SEC on a timely basis; (ii) the
failure to satisfy any of the conditions to completing the Transaction,
including the receipt of the required approval of TechTeam Global’s stockholders
and other third parties; (iii) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Stock Purchase
Agreement; (iv) the occurrence of any event, change or other circumstances that
could give rise to a “material adverse effect” under the Stock Purchase
Agreement; (v) the failure of the Transaction to close for any other reason;
(vi) the amount of the purchase price adjustments, costs, fees, expenses and
charges relating to the Transaction; (vii) uncertainties related to TechTeam
Global’s future indemnification obligations under the Stock Purchase Agreement,
including the possibility that it may not receive some or all of the escrowed
portion of the Purchase Price; (viii) TechTeam Global’s ability to recognize any
of the benefits of the Transaction; (ix) the implementation of TechTeam Global’s
strategy to refocus its resources on its commercial business and market
acceptance of its refocused strategy; (x) uncertainties related to TechTeam
Global’s proposed refocused strategy, including TechTeam Global’s ability to
successfully operate the remaining portion of its business after the completion
of the Transaction on a stand-alone basis; and (xi) other risks, including but
not limited to the items discussed in TechTeam Global’s other filings with the
SEC, including in “Item 1A — Risk Factors” of TechTeam Global’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Form 10-K”) and
in the proxy statement.
Unpredictable or unknown factors could
also have material adverse effects on TechTeam Global. Forward-looking
statements that were believed to be true when made may ultimately prove to be
incorrect or false. All forward-looking statements included in this
Current Report on Form 8-K, or to the documents to which investors are referred
to in this Current Report on Form 8-K, are expressly qualified in their entirety
by the foregoing cautionary statements. Investors should not place
undue reliance upon these forward-looking statements. These
forward-looking statements are based on the information available to TechTeam
Global as of the date of this Current Report, or, in the case of forward-looking
statements included in the 2009 Form 10-K or the proxy statement, as of the date
of the filing or mailing thereof. TechTeam Global does not undertake any
obligation to update or revise these forward-looking statements or to publicly
release the results of any update or revision thereto.
ITEM
9.01. Financial Statements and Exhibits
(c)
Exhibits:
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2.1*
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Stock
Purchase Agreement, dated as of June 3, 2010, by and among TechTeam
Global, Inc., Jacobs Engineering Group Inc. and Jacobs Technology
Inc.
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99.1
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Form
of Voting Agreement.
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99.2
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Press
release issued by TechTeam Global, Inc. on June 4,
2010.
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* Schedules
omitted pursuant to Item 601(b)(2) of Regulation S-K. TechTeam Global
agrees to furnish supplementally a copy of any omitted schedule upon
request by the Securities and Exchange Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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TECHTEAM GLOBAL,
INC. |
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By:
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/s/ Michael
A. Sosin |
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Michael
A. Sosin |
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Vice
President, General Counsel and Secretary |
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Date:
June 4, 2010
EXHIBIT
INDEX
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2.1*
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Stock
Purchase Agreement, dated as of June 3, 2010, by and among TechTeam
Global, Inc., Jacobs Engineering Group Inc. and Jacobs Technology
Inc.
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99.1
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Form
of Voting Agreement. |
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99.2
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Press
release issued by TechTeam Global, Inc. on June 4,
2010.
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* Schedules
omitted pursuant to Item 601(b)(2) of Regulation S-K. TechTeam Global
agrees to furnish supplementally a copy of any omitted schedule upon
request by the Securities and Exchange Commission.