<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
HOST MARRIOTT SERVICES CORPORATION
(NAME OF SUBJECT COMPANY)
AUTOGRILL S.P.A.
AUTOGRILL ACQUISITION CO.
(BIDDERS)
COMMON STOCK, NO PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
440914 10 9
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
<TABLE>
<S> <C>
PAOLO PROTA GIURLEO COPIES TO:
CHIEF EXECUTIVE OFFICER Michael S. Immordino, Esq.
AUTOGRILL S.P.A Rogers & Wells LLP
VIA CALDERA 21 City Tower, 40 Basinghall Street
20153 MILAN, ITALY London EC2V 5DE
39-02-48261 United Kingdom
(NAME, ADDRESS AND TELEPHONE NUMBER OF 44-171-628-0101
PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF BIDDER)
</TABLE>
------------------------
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Transaction Value*: $528,722,019 Amount of Filing Fee: $105,745
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
* For purposes of calculating the fee only. This amount assumes the
purchase of 33,569,652 shares of common stock, no par value per share
(the "Common Stock") together with the associated preferred stock
purchase rights (the "Rights" and, together with the Common Stock, the
"Shares"), of Host Marriott Services Corporation at a price per share of
$15.75 in cash. The number of Shares outstanding as of July 26, 1999 is
33,569,652. The amount of the filing fee, calculated in accordance with
Section 14(g)(3) and Rule 0-11(d) under the Securities and Exchange Act
of 1934, as amended, equals 1/50th of one percent of the aggregate of the
cash offered by the Bidders.
[ ] Check 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.
<TABLE>
<S> <C>
Amount Previously paid: N/A Filing Party: N/A
Form or registration no.:N/A Date filed: N/A
</TABLE>
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<PAGE> 2
SCHEDULE 14D-1
CUSIP NO. 440914 10 9 PAGE 2 OF 8 PAGES
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Autogrill Acquisition Co.
- ---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------
3. SEC USE ONLY
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4. SOURCES OF FUNDS AF
- ---------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- ---------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- ---------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- ---------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- ---------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
SCHEDULE 14D-1
CUSIP NO. 440914 10 9 PAGE 3 OF 8 PAGES
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Autogrill S.P.A.
- ---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------
3. SEC USE ONLY
- ---------------------------------------------------------------------------
4. SOURCES OF FUNDS BK
- ---------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Italy
- ---------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- ---------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- ---------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON HC
- ---------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
SCHEDULE 14D-1
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Host Marriott Services Corporation,
a Delaware corporation (the "Company"). The address of the Company's principal
executive offices is 6600 Rockledge Drive, Bethesda, Maryland 20817.
(b) This Statement relates to the offer by Autogrill Acquisition Co., a
Delaware corporation (the "Purchaser"), to purchase all the outstanding shares
of common stock, no par value per share (the "Common Stock"), including the
associated Series A Junior Preferred Stock Purchase Rights (the "Rights"; the
Common Stock and the Rights are collectively hereinafter referred to as the
"Shares"), issued pursuant to the Rights Agreement dated as of December 22, 1995
by and between the Company and First Chicago Trust Company of New York, as
Rights Agent (as the same may be amended, the "Rights Agreement"), of the
Company at a purchase price of $15.75 per Share, net to the seller in cash,
without interest (the "Tender Offer Price"), on the terms and subject to the
conditions set forth in the Offer to Purchase, dated July 30, 1999 (the "Offer
to Purchase"), and the related Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer"), copies of which
are filed as Exhibits (a)(1) and (a)(2) hereto, respectively. As of July 26,
1999, there were 33,569,652 Shares outstanding.
(c) The information set forth in the Offer to Purchase in Section 6 ("Price
Range of Shares; Dividends") is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by the Purchaser, which is
wholly owned by Autogrill Overseas S.A., a Luxembourg company ("Autogrill
Overseas"), that, with the exception of one subscription share is a wholly-owned
subsidiary of Autogrill S.p.A. (the "Parent," and, together with the Purchaser,
the "Bidders"). The information set forth in the Offer to Purchase in Section 9
("Certain Information Concerning the Parent, Autogrill Overseas and the
Purchaser) and in Schedule I to the Offer to Purchase is incorporated herein by
reference.
(e)-(f) During the last five years, none of the Bidders nor to the best of
their knowledge, any of the persons listed in Schedule I to the Offer to
Purchase (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Offer to Purchase in Section 9
("Certain Information Concerning the Parent, Autogrill Overseas and the
Purchaser") and in Section 11 ("Background of the Offer; Contacts with the
Company") is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in the Offer to Purchase in Section 10
("Source and Amount of Funds") is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Offer to Purchase in Section 12
("Purpose of the Offer and the Proposed Merger; Plans for the Company; the
Merger Agreement") is incorporated herein by reference.
4
<PAGE> 5
(f)-(g) The information set forth in the Offer to Purchase in Section 7
("Certain Effects of the Transaction") is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Offer to Purchase under
"Introduction", in Section 9 ("Certain Information Concerning the Parent,
Autogrill Overseas and the Purchaser") and in Section 12 ("Purpose of the Offer
and the Proposed Merger; Plans for the Company; the Merger Agreement") is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Offer to Purchase under "Introduction" and
in Section 9 ("Certain Information Concerning the Parent, Autogrill Overseas and
the Purchaser"), Section 11 ("Background of the Offer; Contacts with the
Company") and in Section 12 ("Purpose of the Offer and the Proposed Merger;
Plans for the Company; the Merger Agreement") is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "Introduction" and
in Section 16 ("Fees and Expenses") is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in the Offer to Purchase in Section 9 ("Certain
Information Concerning the Parent, Autogrill Overseas and the Purchaser") is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase in Section 11
("Background of the Offer; Contacts with the Company") and in Section 12
("Purpose of the Offer and the Proposed Merger; Plans for the Company; the
Merger Agreement") is incorporated herein by reference.
(b)-(c) The information set forth in the Offer to Purchase in Section 15
("Certain Legal Matters; Regulatory Approvals") is incorporated herein by
reference.
(d) The information set forth in the Offer to Purchase in Section 7
("Certain Effects of the Transaction") is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Plan and Agreement of Merger, dated as of July 26, 1999,
copies of which are filed as Exhibits (a)(1), (a)(2) and (c)(1) hereto,
respectively, is incorporated herein by reference in its entirety.
5
<PAGE> 6
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
(a)(1) Offer to Purchase, dated July 30, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated July 30, 1999, to brokers, dealers,
commercial banks, trust companies and other nominees.
(a)(5) Form of letter to be used by brokers, dealers, commercial
banks, trust companies and nominees to their clients.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated July 30, 1999.
(a)(8) Press Release, dated July 26, 1999.
(b)(1) Medium Term Multi-Currency Agreement dated July 29, 1999,
between Cariplo-Cassa di Risparmio delle Provincie Lombarde
S.p.A. (Branch 65 of Milan) and Autogrill S.p.A. for an
aggregate amount of Italian Lit. 800 billion.
(b)(2) Medium Term Multi-Currency Agreement dated July 29, 1999,
between Cariplo-Cassa di Risparmio delle Provincie Lombarde
S.p.A. (Branch 65 of Milan) and Autogrill S.p.A. for an
aggregate amount of Italian Lit. 400 billion.
(c)(1) Agreement and Plan of Merger, dated as of July 26, 1999, by
and among the Company, the Parent and the Purchaser.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
</TABLE>
6
<PAGE> 7
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.
AUTOGRILL S.P.A.
By: /s/ PAOLO PROTA GIURLEO
------------------------------------
Name: Paolo Prota Giurleo
Title: Chief Executive Officer
AUTOGRILL ACQUISITION CO.
By: /s/ PAOLO PROTA GIURLEO
------------------------------------
Name: Paolo Prota Giurleo
Title: President
Dated: July 30, 1999
7
<PAGE> 8
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael S. Immordino, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
to sign in any and all capacities any and all amendments to this Statement on
Schedule 14D-1 and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting to such attorney-in-fact and agent full power and authority to do all
such other acts and execute all such other documents as he may deem necessary or
desirable in connection with the foregoing, as fully as the undersigned might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
AUTOGRILL S.P.A.
By: /s/ PAOLO PROTA GIURLEO
------------------------------------
Name: Paolo Prota Giurleo
Title: Chief Executive Officer
AUTOGRILL ACQUISITION CO.
By: /s/ PAOLO PROTA GIURLEO
------------------------------------
Name: Paolo Prota Giurleo
Title: President
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
(a)(1) Offer to Purchase, dated July 30, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated July 30, 1999, to brokers, dealers,
commercial banks, trust companies and other nominees.
(a)(5) Form of letter to be used by brokers, dealers, commercial
banks, trust companies and nominees to their clients.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated July 30, 1999.
(a)(8) Press Release, dated July 26, 1999.
(b)(1) Medium Term Multi-Currency Agreement dated July 29, 1999,
between Cariplo-Cassa di Risparmio delle Provincie Lombarde
S.p.A. (Branch 65 of Milan) and Autogrill S.p.A. for an
aggregate amount of Italian Lit. 800 billion
(b)(2) Medium Term Multi-Currency Agreement dated July 29, 1999,
between Cariplo-Cassa di Risparmio delle Provincie Lombarde
S.p.A. (Branch 65 of Milan) and Autogrill S.p.A. for an
aggregate amount of Italian Lit. 400 billion.
(c)(1) Agreement and Plan of Merger, dated as of July 26, 1999, by
and among the Company, the Parent and the Purchaser.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
FOR
$15.75 NET PER SHARE
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE IN ACCORDANCE WITH AN AGREEMENT AND PLAN OF MERGER
(THE "MERGER AGREEMENT"), DATED AS OF JULY 26, 1999, BY AND AMONG HOST MARRIOTT
SERVICES CORPORATION, A DELAWARE CORPORATION (THE "COMPANY"), AUTOGRILL S.P.A.,
AN ITALIAN COMPANY (THE "PARENT"), AND AUTOGRILL ACQUISITION CO., A DELAWARE
CORPORATION (THE "PURCHASER"). THE BOARD OF DIRECTORS OF THE COMPANY HAS (1)
UNANIMOUSLY APPROVED THE OFFER AND A MERGER OF THE COMPANY AND THE PURCHASER
(THE "MERGER") IN WHICH, IF THE MERGER TAKES PLACE, THE STOCKHOLDER OF THE
PURCHASER WILL BECOME THE SOLE STOCKHOLDER OF THE MERGED COMPANY AND THE
STOCKHOLDERS OF THE COMPANY (OTHER THAN THE PURCHASER) WILL RECEIVE THE SAME
AMOUNT OF CASH PER SHARE AS IS PAID FOR SHARES PURCHASED THROUGH THE OFFER, (2)
HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER TAKEN TOGETHER ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND (3)
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES IN RESPONSE TO THE OFFER.
THIS OFFER IS NOT CONDITIONED ON THE ABILITY OF THE PURCHASER TO OBTAIN
FINANCING. HOWEVER, IT IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN A NUMBER OF SHARES CONSTITUTING AT LEAST TWO-THIRDS OF THE OUTSTANDING
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER TERMS AND CONDITIONS. SEE THE INTRODUCTION AND SECTION 14 OF THIS
OFFER TO PURCHASE.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERIT OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
-------------------------
IMPORTANT
-------------------------
Any stockholder who wishes to tender Shares (as defined herein) should
complete and sign a Letter of Transmittal (or a facsimile of one) in accordance
with the instructions set forth in the Letter of Transmittal and (A) mail or
deliver it, together with the certificate(s) representing the tendered Shares
(the "Share Certificates") and any other required documents, to the Depositary
named on the back cover of this Offer to Purchase or (B) tender the Shares using
the procedures for book-entry transfer described in Section 3 of this Offer to
Purchase. A stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact the broker,
dealer, commercial bank, trust company or other nominee if the stockholder
wishes to tender Shares.
A stockholder who wishes to tender Shares but whose Share Certificates are
not immediately available, or who cannot comply with the procedures for
book-entry transfer described in this Offer to Purchase on a timely basis, may
tender the Shares by following the procedures for guaranteed delivery described
in Section 3 of this Offer to Purchase.
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery or other materials related to this tender offer, may be
directed to the Information Agent at its address and telephone number set forth
on the back cover of this Offer to Purchase. Holders of Shares may also contact
brokers, dealers or banks for additional copies of this Offer to Purchase, the
Letter of Transmittal, the Notice of Guaranteed Delivery or other tender offer
materials.
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
July 30, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
INTRODUCTION..................................................... 1
THE TENDER OFFER................................................. 3
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedures for Tendering Shares............................. 6
4. Withdrawal Rights........................................... 8
5. Certain United States Federal Income Tax Consequences....... 9
6. Price Range of Shares; Dividends............................ 10
7. Certain Effects of the Transaction.......................... 11
8. Certain Information Concerning the Company.................. 12
9. Certain Information Concerning the Parent, Autogrill
Overseas and the Purchaser.................................. 14
10. Source and Amount of Funds.................................. 18
11. Background of the Offer; Contacts with the Company.......... 19
12. Purpose of the Offer and the Proposed Merger; Plans for the
Company; the Merger Agreement............................... 20
13. Dividends and Distributions................................. 27
14. Conditions of the Offer..................................... 27
15. Certain Legal Matters; Regulatory Approvals................. 29
16. Fees and Expenses........................................... 30
17. Miscellaneous............................................... 31
SCHEDULE I....................................................... I
SCHEDULE II...................................................... II
</TABLE>
i
<PAGE> 3
TO THE HOLDERS OF SHARES OF COMMON STOCK OF HOST MARRIOTT SERVICES CORPORATION:
INTRODUCTION
Autogrill Acquisition Co., a Delaware corporation (the "Purchaser"), which
is wholly-owned by Autogrill Overseas S.A., a Luxembourg company ("Autogrill
Overseas"), which, with the exception of one subscription share, is a
wholly-owned subsidiary of Autogrill S.p.A., an Italian company (the "Parent"),
hereby offers to purchase all the outstanding shares of common stock, no par
value per share ("Common Stock"), including the associated Series A Junior
Preferred Stock Purchase Rights (the "Rights"; the Common Stock and the Rights
are collectively hereinafter referred to as the "Shares") issued pursuant to the
Rights Agreement dated as of December 22, 1995 by and between Host Marriott
Services Corporation, a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, as Rights Agent (as the same may be amended, the
"Rights Agreement"), of the Company, for $15.75 per Share, net to the seller in
cash, without interest (the "Offer Price"), on the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended or supplemented from time to time, collectively
constitute the "Offer"). The Offer will expire at 12:00 Midnight, New York City
time, on Thursday, August 26, 1999 (the "Expiration Time") unless the Purchaser
extends the time during which the Offer is open, in which event the term
"Expiration Time" will mean the latest time and date at which the Offer, as
extended, will expire.
The Offer is being made in accordance with an Agreement and Plan of Merger
(the "Merger Agreement") dated as of July 26, 1999 by and among the Parent, the
Company and the Purchaser. After the Purchaser purchases all of the Shares which
are properly tendered in response to the Offer and not withdrawn, the Purchaser
and its stockholder shall take all necessary and appropriate action (including
voting their Shares) to cause the Purchaser to be merged with the Company (the
"Merger") in a transaction in which the stockholder of the Purchaser will own
all the stock of the corporation which results from the Merger (essentially, the
Company), and the other stockholders of the Company will receive the same amount
of cash per Share as is paid for Shares tendered in response to the Offer
(unless particular stockholders elect to exercise statutory rights to demand
appraisal of their Common Shares).
DEUTSCHE BANK ALEX. BROWN, FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED
TO THE COMPANY'S BOARD OF DIRECTORS ITS WRITTEN OPINION TO THE EFFECT THAT, AS
OF THE DATE OF THE MERGER AGREEMENT, THE $15.75 IN CASH TO BE RECEIVED BY THE
HOLDERS OF SHARES AS A RESULT OF THE OFFER AND THE MERGER IS FAIR TO THOSE
HOLDERS FROM A FINANCIAL POINT OF VIEW. THE FULL TEXT OF THE WRITTEN OPINION OF
DEUTSCHE BANK ALEX. BROWN CONTAINING THE ASSUMPTIONS MADE, THE MATTERS
CONSIDERED AND THE SCOPE OF THE OPINION WILL BE INCLUDED WITH THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9")
WHICH IS BEING MAILED TO STOCKHOLDERS TOGETHER WITH THIS OFFER TO PURCHASE.
STOCKHOLDERS ARE URGED TO CAREFULLY READ THE DEUTSCHE BANK ALEX. BROWN OPINION
IN ITS ENTIRETY.
Tendering stockholders will not be required to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes as a result of the sale of Shares to the
Purchaser in response to the Offer.
Any tendering stockholder who fails to complete and sign the Substitute
Form W-9 included in the Letter of Transmittal may be subject to a required
backup Federal income tax withholding of 31% of the gross proceeds payable to
the stockholder or another payee pursuant to the Offer. See Section 5 of this
Offer to Purchase. Stockholders who hold their Shares through a bank or broker
should check with such institution as to whether they will charge any service
fees. The Purchaser will pay all expenses of Goldman, Sachs & Co., as Dealer
Manager (the "Dealer Manager") and the fees and expenses of The Bank of New
York, as Depositary (the "Depositary"), and Morrow & Co.,
<PAGE> 4
Inc., as Information Agent (the "Information Agent"), incurred in connection
with the Offer. See Section 16 of this Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER AND DETERMINED THAT THE OFFER AND THE MERGER TAKEN TOGETHER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES IN RESPONSE TO THE OFFER.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Time such number of Shares
that, together with Shares beneficially owned by the Purchaser or its
affiliates, would constitute at least two-thirds of the outstanding Shares,
determined on a fully diluted basis (the "Minimum Condition") and (2) the
expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Condition"). The Offer is also subject to certain other conditions as described
in Section 14 of this Offer to Purchase. The Purchaser expressly reserves the
right, in its sole discretion, to waive any of the conditions to the Offer,
except the Minimum Condition which may not be waived without the prior written
consent of the Company.
The Merger is subject to the Purchaser's accepting and paying for the
Shares which are properly tendered in response to the Offer and not withdrawn
and to the satisfaction or waiver of certain conditions, including, if required
by law, the approval and adoption of the Merger Agreement by the requisite vote
of the stockholders of the Company. Under the Company's Certificate of
Incorporation, the affirmative vote of the holders of two-thirds of the
outstanding Shares is required to approve and adopt the Merger Agreement and the
Merger. Consequently, if the Purchaser acquires (pursuant to the Offer or
otherwise) at least two-thirds of the then outstanding Shares, calculated on a
fully diluted basis, the Purchaser will have sufficient voting power to approve
and adopt the Merger Agreement and the Merger without the vote of any other
stockholder. See Section 12 of this Offer to Purchase.
Under the Delaware General Corporation Law (the "DGCL"), if the Purchaser
acquires (through the Offer or otherwise) at least 90% of the then outstanding
Shares, the Purchaser will be able to approve and adopt the Merger Agreement and
the Merger without a vote of the Company's stockholders. If that occurs the
Purchaser intends to take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable without a meeting of the
Company's stockholders. If, however, the Purchaser does not acquire at least 90%
of the then outstanding Shares and a vote of the Company's stockholders is
required under Delaware law, a longer period of time will be required to effect
the Merger. See Section 12 of this Offer to Purchase.
If the Purchaser increases the price it will pay for the tendered Shares,
that increase will apply to all Shares which the Purchaser purchased through the
Offer, including Shares which are tendered before the price is increased.
The Company has represented to the Purchaser that as of the close of
business on July 26, 1999, there were 33,569,652 outstanding Shares. At the date
of this Offer to Purchase, neither Purchaser nor any of its affiliates own any
Shares. Therefore, the Minimum Condition will be satisfied if at least
22,379,765 shares are validly tendered and not withdrawn prior to the Expiration
Time.
The Company has distributed one Right for each outstanding share of Common
Stock pursuant to the Rights Agreement. The Company has represented in the
Merger Agreement that it has taken, and shall take, all action necessary to
cause the Rights Agreement to be inapplicable to the transactions contemplated
by the Merger Agreement, including the Offer and the Merger, without any payment
to the stockholders of the Company.
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<PAGE> 5
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER. On the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of the extension or amendment), the Purchaser will accept for payment and pay
for all Shares which are validly tendered prior to the Expiration Time and not
withdrawn in accordance with Section 4 of this Offer to Purchase. The term
"Expiration Time" means 12:00 Midnight, New York City time, on Thursday, August
26, 1999, unless the Purchaser, in accordance with the terms of the Merger
Agreement, extends the period during which the Offer is open, in which event the
term "Expiration Time" will mean the latest time and date at which the Offer, as
extended, will expire.
In the Merger Agreement, the Purchaser has agreed that it will not, without
the prior written consent of the Company, (a) waive the Minimum Condition, (b)
decrease the Offer Price, (c) decrease the number of Shares it is offering to
purchase, (d) change the form of consideration payable in the Offer, (e) change
or amend the conditions to the Offer or impose additional conditions to the
Offer, or (f) amend, add or waive any term or condition of the Offer, in any
manner adverse to the stockholders of the Company, described in Section 14 of
this Offer to Purchase.
The Purchaser reserves the right, at any time and from time to time (except
as limited by the Merger Agreement), to extend the period during which the Offer
is open, by giving oral or written notice of the extension to the Depositary and
by making a public announcement of it as described below. The Merger Agreement
requires the Purchaser to, at the request of the Company, extend the Expiration
Time for up to 10 business days, the last of which may not end later than
October 30, 1999, if, at the initial expiration date of the Offer, or any
extension of that date, the conditions to the Offer, including the Minimum
Condition or the HSR Condition, are not satisfied. In addition, (i) the
Purchaser may, without the consent of the Company, extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") applicable to the Offer and (ii)
if (a) all conditions to the Offer are satisfied or waived and (b) the Shares
validly tendered and not withdrawn pursuant to the Offer represent more than
two-thirds but less than 90% of the total issued and outstanding Shares on a
fully diluted basis, the Purchaser may extend the Offer for a period not to
exceed 10 business days. During any extension, all Shares previously tendered
and not withdrawn will remain tendered in response to the Offer, subject to the
rights of a tendering stockholder to withdraw tendered Shares. See Section 4 of
this Offer to Purchase.
Consummation of the Offer is conditioned upon, among other things,
satisfaction of the Minimum Condition and the HSR Condition. Subject to the
Merger Agreement and the applicable regulations of the SEC, the Purchaser
reserves the right, at any time and from time to time, to (i) delay acceptance
for payment of, or, regardless of whether Shares were already accepted for
payment, payment for, Shares pending receipt of any regulatory or third-party
approval described in Section 15 of this Offer to Purchase or in order to comply
in whole or in part with any other applicable law, (ii) terminate the Offer and
not accept for payment any Shares if any of the conditions described in Section
14 of this Offer to Purchase are not satisfied or upon the occurrence of any of
the events described in Section 14 of this Offer to Purchase or (iii) waive any
condition (except the Minimum Condition) or otherwise amend the Offer in any
respect, in each case, by giving oral or written notice of the delay,
termination, waiver or amendment to the Depositary and by making a public
announcement of it, as described below, so long as any such delay, termination,
waiver or amendment is not in any manner adverse to the stockholders of the
Company.
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<PAGE> 6
If the Purchaser extends the Offer or is delayed in accepting or paying for
Shares, the Depositary may retain the tendered Shares, subject to the right of
stockholders to withdraw Shares to the extent described in Section 4 of this
Offer to Purchase. The Purchaser acknowledges that (i) Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the
Purchaser to pay the consideration offered or return the tendered Shares
promptly after the termination or withdrawal of the Offer and (ii) the Purchaser
may not delay acceptance for payment of, or payment for (except as provided in
clause (i) of the first sentence of the preceding paragraph), any Shares upon
the occurrence of any of the events described in Section 14 of this Offer to
Purchase without extending the period of time during which the Offer is open.
The Purchaser will make a public announcement of any extension, delay,
termination, waiver or amendment as promptly as practicable after it takes
place. In the case of an extension, the Purchaser will make a public
announcement no later than 9:00 a.m., New York City time, on the business day
after the day of the previously scheduled Expiration Time. Subject to applicable
law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which
require that material changes be promptly disseminated to stockholders in a
manner reasonably designed to inform them of the changes), the Purchaser will
have no obligation to publish, advertise or otherwise communicate any public
announcement other than by issuing a press release.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or if it waives a material condition to the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer or information concerning an 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 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 of 10 business days generally is required to allow
for adequate dissemination to stockholders.
If the Purchaser increases the price it will pay for tendered Shares, that
increase will apply to all Shares which are purchased through the Offer,
including Shares which are tendered before the price is increased.
The Company has given the Purchaser a stockholder list and security
position listings for the purpose of enabling the Purchaser to disseminate the
Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant tender offer materials will be mailed to record
holders of Shares and to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list, or who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. On the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of the extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, all Shares which are
validly tendered (and not properly withdrawn in accordance with Section 4 of
this Offer to Purchase) prior to the Expiration Time. Shares will be accepted as
soon as practicable after the later to occur of (i) the Expiration Time and (ii)
the satisfaction or waiver of the conditions set forth in Section 14 of this
Offer to Purchase. Any determination concerning the satisfaction of the terms
and conditions of the Offer will be in the sole discretion of the Purchaser. See
Section 14 of this Offer to Purchase. The Purchaser expressly reserves the
right, in its sole discretion, to delay acceptance for payment of, or, subject
to the applicable SEC rules, payment for, Shares in order to comply in whole or
in part with any applicable law. See Section 15 of this Offer to Purchase.
The Parent and its affiliates will file a Notification and Report Form with
respect to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act").
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<PAGE> 7
The waiting period under the HSR Act with respect to the Offer will expire at
11:59 p.m., New York City time, on the 15th day after the Notification and
Report Form is filed, unless that waiting period is terminated before then.
Either the Antitrust Division of the United States Department of Justice (the
"Antitrust Division") or the United States Federal Trade Commission (the "FTC")
may extend the waiting period by requesting additional information or
documentary material. If there is such a request, the waiting period will expire
at 11:59 p.m., New York City time, on the 10th day after there has been
substantial compliance with the request. See Section 15 of this Offer to
Purchase for additional information concerning the HSR Act and the applicability
of the antitrust laws to the Offer.
In all cases, payment for Shares which are tendered in response to the
Offer and accepted for payment will be made only after timely receipt by the
Depositary of (a) the certificate(s) representing the tendered Shares (the
"Share Certificates"), or timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of the Shares (if that procedure is available) into
the Depositary's account at The Depository Trust Company (the "Book-Entry
Transfer Facility"), as described in Section 3 of this Offer to Purchase, (b) a
properly completed and duly executed Letter of Transmittal (or facsimile of
one), or an Agent's Message in connection with a book-entry transfer, and (c)
any other documents required by the Letter of Transmittal.
An "Agent's Message" is a message, transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant in the Book-Entry Transfer
Facility which is tendering Shares that the participant has received, and agrees
to be bound by the terms of, the Letter of Transmittal and that the Purchaser
may enforce that agreement against the participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, tendered Shares when the Purchaser gives
oral or written notice to the Depositary of the Purchaser's acceptance of the
Shares for payment. Payment for Shares which are accepted will be made by
deposit of the aggregate purchase price for all the Shares which are accepted
for payment with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to the tendering stockholders. UNDER NO CIRCUMSTANCES WILL
THE PURCHASER PAY INTEREST ON THE OFFER PRICE REGARDLESS OF ANY EXTENSION OF THE
OFFER OR BY REASON OF ANY DELAY IN PAYING FOR SHARES. Upon the deposit of funds
with the Depositary for the purpose of making payments to tendering
stockholders, the Purchaser's obligation to pay for Shares will be satisfied and
tendering stockholders must look solely to the Depositary for payment of amounts
owed to them by reason of the acceptance of their Shares pursuant to the Offer.
If, for any reason, acceptance for payment of or payment for any Shares tendered
in response to the Offer is delayed, or the Purchaser is prevented from
accepting for payment or paying for Shares which are tendered in response to the
Offer, the Depositary nevertheless may retain, subject to applicable SEC rules,
tendered Shares on behalf of the Purchaser and those Shares may not be
withdrawn, except to the extent the tendering stockholder exercises withdrawal
rights as described in Section 4 of this Offer to Purchase. The Purchaser will
pay any stock transfer taxes incident to the transfer to it of validly tendered
Shares, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, as well as the expenses of the Dealer Manager and the fees and
expenses of the Depositary and the Information Agent.
If any tendered Shares are not accepted for payment for any reason, or if
Share Certificates which are submitted evidence more Shares than are tendered,
certificates representing unpurchased or untendered Shares will be returned or
sent, without expense to the tendering stockholder (or, in the case of Shares
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, Shares which are not purchased will be credited to an account
at that Book-Entry Transfer Facility), as promptly as practicable following the
expiration, termination or withdrawal of the Offer.
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<PAGE> 8
Subject to the provisions of the Merger Agreement, the Purchaser reserves
the right to transfer or assign, in whole, or in part from time to time, to one
or more of its affiliates the right to purchase all or any portion of the Shares
which are tendered in response to the Offer, but such a transfer or assignment
will not relieve the Purchaser of its obligations under the Offer and will in no
way prejudice the rights of tendering stockholders to receive payment for Shares
which are validly tendered in response to the Offer and accepted for payment.
3. PROCEDURES FOR TENDERING SHARES.
VALID TENDER OF SHARES. Except as set forth below, in order for Shares to
be validly tendered in response to the Offer, (a) a Letter of Transmittal or a
facsimile of one, properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Time and (b) either (i) the Share Certificates
must be received by the Depositary along with the Letter of Transmittal, (ii)
the Shares must be tendered using the procedure for book-entry transfer
described below, and the Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Time, or (iii) the tendering stockholder must
comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL,
AND OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. ITEMS WILL BE
DEEMED DELIVERED ONLY WHEN THEY ARE 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.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer the Shares into the Depositary's
account at the Book-Entry Transfer Facility. Although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
Letter of Transmittal or a facsimile of one, with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other required documents, as well as the Book Entry Confirmation
relating to the Shares, must be transmitted to and received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Time or the guaranteed delivery procedures described below
must be followed.
REQUIRED DOCUMENTS MUST BE TRANSMITTED TO AND RECEIVED BY THE DEPOSITARY AT
ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY OR TO THE PURCHASER
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on Letters of Transmittal need not be
guaranteed, unless, in the case of the Letter of Transmittal, the Shares to
which they relate are being tendered by a registered holder of Shares who has
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on the Letter of Transmittal. Signatures
on Letters of Transmittal on which either of those boxes has been completed must
be guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agents Medallion Program (each an "Eligible Institution"). See
Instruction 1 of the Letter of Transmittal.
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<PAGE> 9
If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or
certificates representing Shares which are not tendered or are not accepted for
payment are to be returned, to a person other than the registered holder(s),
then the Share Certificate must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear on the Share Certificate, with the signature(s) on the Share
Certificate or stock powers guaranteed (as provided above). See Instructions 1
and 5 of the Letter of Transmittal.
If Share Certificates are delivered to the Depositary at different times, a
properly completed and duly executed Letter of Transmittal (or facsimile of one)
must accompany each delivery.
GUARANTEED DELIVERY. If a stockholder wishes to tender Shares in response
to the Offer, but the Share Certificates are not immediately available or time
will not permit all required documents to reach the Depositary prior to the
Expiration Time, or the procedure for book-entry transfer cannot be completed on
a timely basis, the Shares may nevertheless be tendered as follows:
(i) the tender must be made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided with this Offer to Purchase,
is received by the Depositary before the Expiration Time; and
(iii) the Share Certificates representing all tendered Shares, in
proper form for transfer, or the Book-Entry Confirmation, together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
of one), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal must be received by the Depositary within
three NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery.
A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary, but must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery distributed with this Offer to Purchase.
Payment for Shares which are accepted for payment will be made only after
(i) timely receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, the Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or a facsimile of one), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and (iii) any other documents required by the Letter of
Transmittal. Accordingly, it is possible that payment will not be made to all
tendering stockholders at the same time.
BACKUP UNITED STATES FEDERAL WITHHOLDING TAX. Under the United States
federal income tax laws, the Depositary may be required to withhold 31% of the
amount of any payments made to certain stockholders. To prevent backup federal
income tax withholding, each tendering stockholder must provide the Depositary
with the stockholder's correct taxpayer identification number, or certify that
the stockholder is exempt from backup federal income tax withholding, by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 11 of the Letter of Transmittal.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal, a tendering
stockholder irrevocably appoints the Purchaser, its officers and its designees,
as the tendering stockholder's attorneys-in-fact and proxies, in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of the stockholder's rights with respect to the Shares tendered by
the stockholder and accepted for payment by the Purchaser (and with respect to
any other securities issued in respect of those Shares on or after the date of
the Merger Agreement). That proxy is considered irrevocable and coupled with an
interest in the tendered Shares. This appointment will be effective if, when and
to the extent that the Purchaser accepts the tendered Shares for payment
pursuant to the Offer. When tendered Shares are accepted for payment, all prior
proxies given by
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<PAGE> 10
the stockholder with respect to the tendered Shares and any other securities
issued in respect of them will, without further action, be revoked, and no
subsequent proxies may be given (and if given will not be deemed effective). The
Purchaser, its officers and its designees, will, with respect to the tendered
Shares and any other securities for which the appointment is effective, be
empowered to exercise all voting and other rights of the tendering stockholder
as they, in their sole discretion, deem proper at any annual, special, adjourned
or postponed meeting of the Company's stockholders, or by written consent in
lieu of any such meeting or otherwise. The Purchaser reserves the right to
require that in order for Shares or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of the Shares,
the Purchaser will be able to exercise full voting rights with respect to the
Shares.
Proxies are effective only as to Shares accepted for payment pursuant to
the Offer. The Offer does not constitute a solicitation of proxies, absent a
purchase of Shares, for any meeting of the Company's stockholders. Any
solicitation of proxies will be made only pursuant to separate proxy soliciting
materials complying with the Exchange Act.
DETERMINATIONS REGARDING TENDERS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any Shares
using any of the procedures described above will be determined by the Purchaser,
in its sole discretion, and the Purchaser's determination will be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
or all tenders of Shares which it determines were not in proper form or if the
acceptance for payment of, or payment for, the Shares may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the conditions of the Merger
Agreement, to waive any of the conditions of the Offer or any defect or
irregularity in any tender with respect to Shares of any particular stockholder,
whether or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions to it) will be final
and binding. None of the Parent, the Purchaser, any of their affiliates or
assigns, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification.
BINDING AGREEMENT. The Purchaser's acceptance for payment of Shares
tendered in response to the Offer will constitute a binding agreement by the
tendering stockholder to sell, and by the Purchaser to purchase, the tendered
Shares on the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made in response to the Offer are irrevocable. Shares tendered
in response to the Offer may be withdrawn at any time prior to the Expiration
Time and, unless they have been accepted for payment by the Purchaser, may also
be withdrawn at any time after September 28, 1999 (or such later date as may
apply in case the Offer is extended).
If the Purchaser extends the Offer, is delayed in its acceptance of Shares
for payment or is unable to accept Shares for payment for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary may,
nevertheless, retain tendered Shares on behalf of the Purchaser, and those
Shares may not be withdrawn except to the extent that tendering stockholders are
entitled to withdraw them as described in this Section 4. Any such delay will be
accompanied by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written or facsimile transmission of a
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. A notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and (if Share Certificates have
been tendered) the name of the registered holder, if different from that of the
person who tendered the
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<PAGE> 11
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then prior to the release
of those Share Certificates, the serial numbers shown on the particular Share
Certificates to be withdrawn must be submitted to the Depositary, and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless the Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares. Withdrawals of Shares may not be rescinded. After Shares
are properly withdrawn, they will be deemed not to have been validly tendered
for purposes of the Offer. However, withdrawn Shares may be retendered at any
time prior to the Expiration Time using one of the procedures described in
Section 3 of this Offer to Purchase.
All questions as to the form and validity (including, without limitation,
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in its sole discretion, and its determination will be final and binding. None of
the Parent, the Purchaser, any of their affiliates or assigns, the Dealer
Manager, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or will incur any liability for failure to give any such
notification.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following
summary is a general discussion of certain of the expected Federal income tax
consequences of the Offer. The summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), and published regulations, rulings and judicial
decisions in effect at the date of this Offer to Purchase, all of which are
subject to change. The summary does not discuss all aspects of Federal income
taxation that may be relevant to a particular holder in light of his or her
personal circumstances or to certain types of holders subject to special
treatment under the Federal income tax laws, such as life insurance companies,
financial institutions, tax-exempt organizations and non-U.S. persons. The
following summary may not be applicable with respect to Shares acquired through
exercise of employee stock options or otherwise as compensation. It also does
not discuss any aspects of state or local tax laws or of tax laws of
jurisdictions outside the United States of America.
THE DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS FOR
GENERAL INFORMATION ONLY. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE SALE OF THEIR SHARES, INCLUDING
THE APPLICATION OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS AND POSSIBLE
CHANGES IN TAX LAWS.
Sales of Shares in response to the Offer will be taxable transactions for
Federal income tax purposes, and may also be taxable transactions under
applicable state, local, foreign and other tax laws. For Federal income tax
purposes, a tendering stockholder will generally recognize gain or loss equal to
the difference between the amount of cash received by the stockholder upon sale
of the Shares and the stockholder's tax basis in the Shares which are sold.
Under present law, gain or loss will be calculated separately for each block of
Shares tendered and purchased pursuant to the Offer.
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term or short term depending on whether the tendering
stockholder's holding period for the Shares exceeds one year. Long-term capital
gain recognized by a stockholder who is an individual will generally be taxed at
a maximum Federal tax rate of 20%. Short term capital gain recognized by an
individual will generally be taxed at the individual's ordinary income tax rate.
Capital gain recognized by a tendering corporate stockholder will be taxed at
the same rates as apply to ordinary income.
A stockholder (other than certain exempt stockholders, including all
corporations and certain foreign individuals) who tenders Shares may be subject
to 31% backup withholding unless the stockholder provides its taxpayer
identification number ("TIN") and certifies that the TIN is correct or properly
certifies that it is awaiting a TIN. This should be done by completing and
signing the
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substitute Form W-9 included as part of the Letter of Transmittal. A stockholder
that does not furnish its TIN also may be subject to a penalty imposed by the
Internal Revenue Service (the "IRS").
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from each payment to that stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return. The House recently passed a
bill (the "Financial Freedom Act") which, if enacted into law, would reduce the
maximum long-term capital gains rate for individual stockholders from 20% to 15%
and, for corporate stockholders, from 35% to 30%. The House bill would apply to
tenders of Shares. The Senate is considering tax legislation which does not
include the capital gain reduction. It is not possible to predict whether this
change will become law in its current or a modified form or the effective date
altered.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares trade on the New York
Stock Exchange (the "NYSE") under the symbol "HMS." The following table sets
forth, for the periods indicated, the high and low sales prices per Share on the
NYSE as reported by the NYSE and the Dow Jones News Retrieval Service:
<TABLE>
<CAPTION>
SALES PRICE
-------------
HIGH LOW
---- ---
<S> <C> <C>
1997 FISCAL YEAR
First Quarter............................................. $10 5/8 $ 8 7/8
Second Quarter............................................ 10 5/8 8 3/4
Third Quarter............................................. 14 11/16 10 3/8
Fourth Quarter............................................ 15 9/16 13 3/4
1998 FISCAL YEAR
First Quarter............................................. $14 1/2 $12 11/16
Second Quarter............................................ 14 15/16 14
Third Quarter............................................. 14 13/16 9 7/8
Fourth Quarter............................................ 12 7 3/16
1999 FISCAL YEAR
First Quarter............................................. $10 1/8 $ 6 3/8
Second Quarter............................................ 8 9/16 6 1/2
Third Quarter through July 29, 1999....................... 15 9/16 7 7/8
</TABLE>
On July 23, 1999, the last full day of trading before the day on which the
Parent, the Purchaser and the Company signed the Merger Agreement, the last sale
price of the Shares reported on the NYSE was $9.75 per Share. On July 29, 1999,
the last full day of trading prior to the commencement of the Offer, the last
sale price reported on the NYSE was $15 1/2 per Share. STOCKHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
According to the Company's publicly available documentation and filings
with the SEC, the Company did not declare or pay any cash dividends during any
of the periods indicated in the above table. In addition, under the terms of the
Merger Agreement, the Company is not permitted to declare or pay dividends with
respect to the Shares without the prior written consent of the Parent, and
Parent does not intend to consent to any such declaration or payment. See
Section 13 of this Offer to Purchase.
10
<PAGE> 13
7. CERTAIN EFFECTS OF THE TRANSACTION.
NYSE. The purchase of Shares by the Purchaser pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so purchased,
could adversely affect the liquidity and market value of the remaining Shares
held by the public.
The Shares are listed on the NYSE. After consummation of the Offer and
depending upon the aggregate market value and the per share price of any Shares
not purchased pursuant to the Offer, the Shares may no longer meet the
requirements for continued listing on the NYSE. According to the NYSE's
published guidelines, the NYSE may delist the Shares if, among other things: (i)
the number of total stockholders falls below 400; (ii) the number of total
stockholders falls below 1,200 and the average monthly trading volume is less
than 100,000 shares (for the most recent 12 months); (iii) the number of
publicly held Shares (exclusive of holdings of officers and directors of the
Company and their immediate families and other concentrated holdings of 10% or
more ("Excluded Holdings")) should fall below 600,000; or (iv) the aggregate
market value of such publicly held Shares (exclusive of Excluded Holdings)
should fall below $8 million. If as a result of the purchase of Shares pursuant
to the Offer, the Shares no longer meet the requirements of the NYSE for
continued listing and the listing of the Shares is discontinued, the market for
the Shares could be adversely affected. According to the Company, as of July 26,
1999, there were approximately 36,000 holders of record of the Shares and as of
July 26, 1999, there were 33,569,652 Shares outstanding.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or through
the Nasdaq Stock Market or other sources. The extent of the public market for
the Shares and the availability of such quotations would depend, however, upon
such factors as the number of stockholders and/or the aggregate market value of
the publicly traded Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below, and other factors.
The Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether it would cause
future market prices to be greater or lesser than the Offer Price.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. That registration may be terminated upon application of the
Company to the SEC if the Shares are not listed on a national securities
exchange or quoted on NASDAQ and there are fewer than 300 record holders of the
Shares. The termination of registration of the Shares under the Exchange Act
would substantially reduce the information the Company would be required to
furnish to holders of Shares and to the SEC and would make certain provisions of
the Exchange Act, such as the short-swing profit recovery provisions of Section
16(b) of the Exchange Act, the requirement that the Company furnish a proxy
statement or information statement in connection with stockholder actions
pursuant to Section 14 of the Exchange Act, and the requirements of Rule 13e-3
under the Exchange Act with respect to "going-private" transactions, no longer
applicable to the Company. See Section 15 of this Offer to Purchase. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of those
securities pursuant to Rule 144 under the Securities Act of 1933, as amended.
The Purchaser currently intends to seek termination of the listing of the Shares
on the NYSE and of the registration of the Shares under the Exchange Act as soon
after the completion of the Offer as the requirements for such termination are
met. If the NYSE listing and the Exchange Act registration of the Shares are not
terminated prior to the Merger, then the listing of the Shares on the NYSE and
the registration of the Shares under the Exchange Act will be terminated
following the consummation of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the
11
<PAGE> 14
effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
the Offer, shares of the Common Stock would no longer constitute "margin
securities" for the purposes of the margin regulations of the Federal Reserve
Board and therefore could no longer be used as collateral for loans made by
brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or is based upon publicly available documents
and records on file with the SEC and other public sources. None of the Parent,
the Purchaser, any of their affiliates or assigns, the Dealer Manager, the
Depositary or the Information Agent assumes any responsibility for the accuracy
or completeness of the information concerning the Company contained in those
documents and records or for any failure by the Company to disclose events which
may have occurred or may affect the significance or accuracy of that information
of which none of the Parent, the Purchaser, any of their affiliates or assigns,
the Dealer Manager, the Depositary or the Information Agent is aware.
GENERAL. The Company is the leading provider of food, beverage and retail
concessions at airports, on tollroads, and in shopping malls, with facilities at
many major commercial airports and tollroads in the United States. The Company
began operations as a separate public company on December 29, 1995, when the
food, beverage and retail concessions business of Host Marriott Corporation was
distributed to shareholders in a special dividend. Since that time, the Company
has built a worldwide leadership position by providing recognized brands and
quality service to its customers while they are away from home.
The Company operates primarily in the United States through two
wholly-owned subsidiaries: Host International, Inc. and Host Marriott Tollroads,
Inc. The Company also has international airport concessions operations in The
Netherlands, New Zealand, Australia, Canada, Malaysia and The People's Republic
of China.
The Company's operations are grouped into three business segments: Airports
(including gift and news retail outlets in off-airport locations), Travel Plazas
and Shopping Malls, which represented 74.7%, 23.7% and 1.6%, respectively, of
total revenues in 1998.
FINANCIAL INFORMATION. The following selected consolidated financial data
relating to the Company and its subsidiaries has been taken or derived from the
audited financial statements contained in the Company's Annual Reports on Form
10-K for the fiscal years ended January 1, 1999 and January 2, 1998 (the
"Company 10-K's") and the unaudited financial statements contained in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 26,
1999, each as filed with the SEC pursuant to the Exchange Act. More
comprehensive financial information is included in the Company 10-K's and the
Company 10-Q and the other documents filed by the Company with the SEC, and the
financial data set forth below is qualified in its entirety by reference to
those reports and other documents. They may be examined and copies may be
obtained from the SEC's offices in the manner set forth below.
12
<PAGE> 15
HOST MARRIOTT SERVICES CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEARS ENDED TWELVE WEEKS ENDED
--------------------------------------- ---------------------
JANUARY 1, JANUARY 2, JANUARY 3, MARCH 26, MARCH 27,
1999 1998 1997 1999 1998
---------- ---------- ---------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................... $1,377.6 $1,284.6 $1,277.8 $308.9 $277.3
Income (loss) before income taxes and
cumulative effect of changes in
accounting principles................ $ 22.2 $ 31.0 $ 24.5 (6.7) (6.5)
Net income (loss)...................... $ 24.1 $ 20.8 $ 14.3 (4.8) (3.9)
Net income (loss) per common share:
Basic................................ $ 0.71 $ 0.60 $ 0.43 $(0.14) $(0.11)
Diluted.............................. 0.68 $ 0.57 0.40 (0.14) (0.11)
BALANCE SHEET DATA (at period end):
Total assets........................... $ 567.0 $ 548.0 $ 582.3 $574.4 $567.0
Total long-term debt (excluding current
portion)............................. $ 404.8 $ 404.8 $ 406.6 $404.9 $404.8
Total shareholders' equity (deficit)... $ (72.6) $ (76.2) $ (95.5) $(78.4) $(72.6)
</TABLE>
In a press release (the "Press Release") dated July 20, 1999, the Company
reported total revenues and net income of $658.9 million and $1.8 million,
respectively, for the first two fiscal quarters of 1999, compared to $599.9
million and $2.3 million, respectively, for the first two fiscal quarters of
1998.
COMPANY LONG TERM PLAN. In the course of discussions giving rise to the
Merger Agreement, representatives of the Company furnished representatives of
the Parent with certain estimates showing estimated earnings per share for the
Company of $1.28, $0.83 and $0.91 for the fiscal years 1999, 2000 and 2001,
respectively. In addition, the Company provided the Parent with certain
additional estimates of the Company's projected revenues, net income and
earnings through the Company's fiscal year 2008 (together with the earnings
estimates, the "Company Plan"). The Company Plan was prepared solely for the
Company's internal purposes and was not prepared for publication or with a view
to complying with the published guidelines of the SEC regarding projections or
with the American Institute of Certified Public Accountants Guide for
Prospective Financial Statements, and such information is being included in this
Offer to Purchase solely because it was furnished to the Parent in connection
with the discussions giving rise to the Merger Agreement. The independent
accountants of the Company have neither examined nor compiled the prospective
financial information set forth below and, accordingly, do not express an
opinion or any other form of assurance with respect thereto.
The Company Plan reflects numerous assumptions, including general business
and economic conditions, moderate growth in the food, beverage and retail
concessions industry reflecting current conditions in the marketplace, and
certain other matters, many of which are inherently uncertain or beyond the
Company's or the Parent's control, and do not take into account any changes in
the Company's operations or capital structure which may result from the Offer
and the Merger. It is not possible to predict whether the assumptions made in
preparing the projected financial information will be valid, and actual results
may prove to be materially higher or lower than those contained in the
projections. The inclusion of this information should not be regarded as an
indication that the Company, the Parent, the Purchaser or anyone else who
received this information considered it a reliable predictor of future events,
and this information should not be relied on as such. None of the Parent, the
Purchaser, the Company or any of their respective representatives assumes any
responsibility for the validity, reasonableness or completeness of the projected
financial information
13
<PAGE> 16
or the Press Release, and the Company has made no representation to the Parent,
the Purchaser or any of their affiliates regarding such information.
AVAILABLE INFORMATION. The Company is subject to the informational and
reporting requirements of the Exchange Act and is required to file reports and
other information with the SEC relating to its business, financial condition and
other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities, any material interests of those
persons in transactions with the Company and other matters is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the SEC. These reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: Seven World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of this material may be obtained by
mail, upon payment of the SEC's customary fees, from the SEC's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also maintains an
Internet site on the world wide web at http://www.sec.gov that contains reports,
proxy statements and other information. Reports, proxy statements and other
information concerning the Company should also be available for inspection at
the offices of the NYSE, 20 Broad Street, New York, New York 10005, on which
exchange the Shares are traded. All of the information with respect to the
Company and its affiliates set forth in this Offer to Purchase has been derived
from publicly available information.
9. CERTAIN INFORMATION CONCERNING THE PARENT, AUTOGRILL OVERSEAS AND THE
PURCHASER.
THE PURCHASER. The Purchaser is a Delaware corporation organized in order
to enter into the transactions which are the subject of the Merger Agreement
(including the Offer and the Merger). The principal executive offices of the
Purchaser are located at Via Caldera 21, 20153, Milan, Italy and its registered
office is care of Rogers & Wells LLP, 200 Park Avenue, NY, NY 10166. The
Purchaser is a wholly-owned subsidiary of Autogrill Overseas, which is a
wholly-owned subsidiary of the Parent. The Purchaser does not have any
significant assets or liabilities and has not engaged in activities other than
those incidental to its formation and capitalization, its execution of the
Merger Agreement and preparation for the Offer and the Merger. Because the
Purchaser is newly formed and has minimal assets and capitalization, no
meaningful financial information regarding the Purchaser is available.
AUTOGRILL OVERSEAS. Autogrill Overseas is a Luxembourg company and a
wholly-owned subsidiary of the Parent, with the exception of one subscription
share. Its principal executive offices are located at Via Caldera 21, 20153,
Milan, Italy and its registered office is located at 31, Boulevard du Prince
Henri, L-1724, Luxembourg, The Grand Duchy of Luxembourg. Autogrill Overseas
does not have any significant assets or liabilities and has not engaged in
activities other than those incidental to its formation and capitalization.
Because Autogrill Overseas has minimal assets and capitalization, no meaningful
financial information regarding Autogrill Overseas is available.
PARENT. The Parent and its subsidiaries (collectively, the "Group") are
the second largest commercial food catering group and the leading food catering
group for travelers in Europe. The Parent primarily operates its travelers
catering and services business under concession (on motorways, in airports and
railway stations or at trade fairs). The Parent also operates quick service
restaurants and other non-concession "urban" outlets, either directly or through
franchisees. The Parent's principal markets are Italy, France, Spain, the
Benelux countries and Austria. As of April 30, 1999, the Parent had 654
locations operating under its various brand names in nine countries, of which
548 were operated under concession and 106 were operated by franchisees.
In fiscal 1998, the Group recorded consolidated revenues of Lit. 2,175.4
billion. In fiscal 1998, outlet's in Italy accounted for Lit. 1,647.5 billion
(or approximately 75.7%) of the Group's consolidated revenues.
14
<PAGE> 17
The Parent is headquartered in Italy and has expanded into markets outside
of Italy primarily through acquisitions of leaders or co-leaders in the motorway
restaurant business in their respective markets. In addition to being the
leading motorway restaurant chain in Italy, the Parent is one of the leading
motorway restaurant chains in France, Spain and Austria and is the leading
motorway restaurant chain in the Benelux countries.
The Parent's motorway outlets are its core business and are generally
operated under concession. In fiscal 1998, business under concession accounted
for Lit. 1,856.2 billion (or approximately 85%) of the Group's consolidated
revenues. The motorway outlets offer products and services in a single structure
that seeks to satisfy the needs of travelers. The type of service and the
products offered range from the simple "autobar," or coffee bar, to complete
restaurants, up to the more complex "bridge" structures, which feature table
service restaurants and can be entered from either side of the motorway. Most
motorway outlets are open 24 hours a day, seven days a week, including public
holidays and weekends. The motorway outlets, like the Parent's other outlets
under concession, are not restricted to catering and often include a retail
store selling food and non-food products, newspapers, tobacco and lottery
tickets. As of April 30, 1999, the Parent had 519 motorway outlets, of which 346
were on Italian motorways. Autostrade S.p.A., the Italian motorway operator, has
granted the Parent a non-exclusive concession to operate up to 24 restaurants on
Italian motorways through the year 2013.
The quick service restaurants operate in a variety of locations in major
cities, including shopping centers and exhibition centers. In fiscal 1998, quick
service restaurants and other urban outlets accounted for Lit. 267.0 billion (or
approximately 12%) of the Group's consolidated revenues. The Parent has recently
introduced the "Food Court" concept which brings together numerous catering
alternatives in one location with common seating and services. At December 31,
1998, the Parent had 106 urban locations, with 69 Spizzico outlets, of which 23
were operated by franchisees.
In 1995, the Parent was acquired from an entity controlled by the Italian
government by a group of private investors led by Edizione Holding S.p.A. as
part of the Italian government's privatization program. As a result of
subsequent transactions, at April 30, 1999, Edizione Holding owned 57.09% of the
Parent's Shares. The Parent's Shares were listed on the Milan Stock Exchange in
August 1997 under the symbol "AGL." Shares of the Parent's predecessor companies
have been listed on the Milan Stock Exchange, or its predecessors, since 1975.
On July 29, 1999, the official price on the Telematico for one Parent Share was
10.343 Euro (approximately $11.087 based on the exchange rate reported at 12:00
noon Eastern Standard Time (the "Noon Rate") on July 29, 1999).
As of April 30, 1999, the Parent had approximately 12,305 full-time
equivalent employees of whom approximately 530 were employed at the Parent's
headquarters in Italy. The breakdown of the Group's employees by geographic
regions is as follows: Italy, approximately 55%; France, approximately 22%;
Spain, approximately 7%.
The principal executive offices of the Parent are located at Via Caldera
21, 20153, Milan, Italy.
FINANCIAL INFORMATION. Because the only consideration of the Offer and
Merger is cash, and in view of the amount of consideration payable in relation
to the financial capability of the Parent and its affiliates, the Purchaser
believes the financial condition of the Parent and its affiliates is not
material to a decision by a holder of Shares whether to sell, tender or hold
Shares pursuant to the Offer. Set forth below is a summary of certain
consolidated financial information with respect to the Parent for the fiscal
years ended December 31, 1998 and December 31, 1999. The consolidated financial
information is stated in Italian Lira. Such information is provided for
supplemental information purposes only and is neither intended nor required to
comply with the requirements of the Exchange Act. On July 29, 1999, the noon
buying rate for cable transfers of Lira, as reported by the Federal Reserve Bank
of New York reflected that one U.S. dollar equaled 1,816 Italian Lira. The
following information was prepared in accordance with accounting principles
generally accepted in the Republic of Italy and has not been reconciled to
generally accepted accounting principles in the United States.
15
<PAGE> 18
AUTOGRILL S.P.A.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1998 1997
---- ----
(BILLIONS OF LIRE)
<S> <C> <C>
Revenues from sales and customer services................... 2,175.4 1,718.9
Other revenues and income................................... 77.5 64.1
-------- --------
VALUE OF PRODUCTION......................................... 2,252.9 1,783.0
Cost of Production.......................................... (1,321.7) (1,115.4)
VALUE ADDED................................................. 931.2 667.6
Salaries, wages and employee benefits....................... (602.5) (452.8)
-------- --------
GROSS OPERATING MARGIN...................................... 328.7 214.8
Depreciation, amortization and writedowns................... (152.0) (110.1)
Provisions for risks and other provisions................... (11.5) (15.7)
Other charges............................................... (19.9) (17.4)
-------- --------
OPERATING RESULT............................................ 145.3 71.6
Financial income, net....................................... (4.0) 11.3
Adjustments to financial assets............................. (0.7) (0.2)
-------- --------
RESULTS BEFORE EXTRAORDINARY ITEMS AND TAXES................ 140.6 82.7
Extraordinary income and charges............................ 0.3 5.4
-------- --------
RESULTS BEFORE TAXES........................................ 140.9 88.1
Income taxes for the year................................... (74.4) (38.2)
-------- --------
INCOME FOR THE YEAR......................................... 66.5 49.9
Minority.................................................. 1.0 0.0
-------- --------
GROUP INCOME................................................ 65.5 49.9
======== ========
</TABLE>
16
<PAGE> 19
AUTOGRILL S.P.A.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------
1998 1997
---- ----
(BILLIONS OF LIRE)
<S> <C> <C>
(A) FIXED ASSETS............................................ 677.4 444.0
Intangible fixed assets..................................... 422.5 172.2
Tangible fixed assets....................................... 39.7 250.2
------- ------
Financial fixed assets...................................... 1,139.6 866.4
(B) WORKING CAPITAL
Inventories................................................. 86.7 63.5
Trade receivables........................................... 64.3 52.0
Other assets................................................ 63.5 68.4
Trade payable............................................... (357.0) (283.4)
Reserves for risks and charges.............................. (78.0) (37.8)
Other liabilities........................................... (144.9) (100.0)
------- ------
(365.4) (237.3)
(C) INVESTED CAPITAL, AFTER CURRENT LIABILITIES............. 774.2 629.1
------- ------
(D) RESERVE FOR EMPLOYEE TERMINATION INDEMNITIES AND OTHER
LONG-TERM NON-FINANCIAL LIABILITIES..................... (160.5) (155.3)
------- ------
(E) CAPITAL INVESTED, NET................................... 613.7 473.8
======= ======
Financed by:
(F) SHAREHOLDERS' EQUITY.................................... 435.5 387.4
Minority interests.......................................... 5.5 --
------- ------
441.0 387.4
(G) LONG-TERM FINANCIAL DEBT(1)............................. 110.5 47.8
(H) SHORT-TERM NET FINANCIAL POSITION
Short-term debt............................................. 469.7 254.2
------- ------
Liquid funds and current financial receivables.............. (407.5) (215.6)
------- ------
62.2 38.6
Net financial position G&H.................................. 172.7 86.4
------- ------
(I) TOTALS, AS IN (E)....................................... 613.7 473.8
======= ======
</TABLE>
- ----------------
(1) In June 1999, Autogrill S.A., a wholly-owned subsidiary of the Parent,
issued convertible notes in the aggregate principal amount of 350 million
euros (approximately Lit.677.7 billion) maturing 2014.
The name, citizenship, business address, principal occupation or employment
and employment information for each of the directors and executive officers of
the Purchaser, Autogrill Overseas and the Parent are set forth in Schedule I to
this Offer to Purchase.
Except as described in this Offer to Purchase, none of the Purchaser,
Autogrill Overseas, the Parent or, to the best of their knowledge, any of the
persons listed on Schedule I to this Offer to Purchase or any associate or
majority owned subsidiary of any of those persons beneficially owns any equity
security of the Company, and none of the Purchaser, Autogrill Overseas, or the
Parent or, to the best of their knowledge, any of the other persons referred to
above, or any of their respective directors, executive officers or subsidiaries,
has effected any transaction in any equity security of the Company during the
past 60 days.
17
<PAGE> 20
During the last 5 years none of the Purchaser's, Autogrill Overseas' or the
Parent's officers, directors or general partners was (1) convicted in a criminal
proceeding or (2) party to a civil proceeding of a judicial or administrative
body and as a result of the proceeding was or is subject to a judgment enjoining
future violations of or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.
Except as described above, none of the Purchaser, Autogrill Overseas, the
Parent or, to the best of their knowledge, any of the persons listed on Schedule
I to this Offer to Purchase has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, without limitation, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
Except as described in this Offer to Purchase, none of the Purchaser, Autogrill
Overseas or the Parent or, to the best of their knowledge, any of the persons
listed on Schedule I to this Offer to Purchase has had any transactions with the
Company or any of its executive officers, directors or affiliates that would
require reporting under the rules of the SEC.
Except as described in this Offer to Purchase, since January 1, 1996, there
have been no contacts, negotiations or transactions between the Parent,
Autogrill Overseas or the Purchaser, or their respective subsidiaries or
affiliates, or, to the best of their knowledge, any of the persons listed in
Schedule I to this Offer to Purchase, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets.
AVAILABLE INFORMATION. None of the Purchaser, Autogrill Overseas or the
Parent is subject to the information requirements of the Exchange Act and,
accordingly, do not file reports or other information with the SEC under the
Exchange Act relating to its business, financial position, results of operations
or other matters. However, the Purchaser and the Parent have filed a Schedule
14D-1 and exhibits thereto with the SEC in connection with the Offer and the
Merger.
10. SOURCE AND AMOUNT OF FUNDS. If all the outstanding Shares are tendered
in response to the Offer, the Purchaser would be required to pay a total of
approximately $560,000,000 to purchase the tendered Shares and pay the fees and
other expenses related to the Offer. See Section 16 of this Offer to Purchase.
The Offer is not conditioned on any financing arrangements. The Purchaser
expects to obtain the funds required to consummate the Offer through capital
contributions or advances made directly or indirectly by the Parent. The Parent
will provide such funds from the financing sources described below.
On July 29, 1999, the Parent entered into two separate Medium Term
Multi-Currency Agreements with Cariplo-Cassa di Risparmio delle Provincie
Lombarde S.p.A. (Branch 65 of Milan): one in the principal amount of Lit. 800
billion (the "Lit. 800 billion Acquisition Facility") and the second in the
principal amount of Lit. 400 billion (the "Lit. 400 billion Acquisition
Facility", and together with the Lit. 800 billion Acquisition Facility, the
"Acquisition Facilities"). The Acquisition Facilities may be used by the Parent
or the Purchaser. The Lit. 800 billion Acquisition Facility is unsecured, while
the Lit. 400 billion Acquisition Facility will be secured by short term
investments of the Parent (equal to Lit. 400 billion) to be pledged or otherwise
restricted when drawn in an amount equal to the amount then drawn under such
facility. The Lit. 800 billion Acquisition Facility terminates eighteen months
from the date amounts are first drawn from such facility, while the Lit. 400
billion Acquisition Facility will terminate on December 31, 1999. The interest
rate to be charged in connection with the loans made under both Acquisition
Facilities may be either the LIBOR or EURIBOR interest rate depending on the
currency elected by the Parent. The LIBOR or EURIBOR rate of interest to be
charged shall be 12.5 basis points above the elected rate for the applicable
period. In the event the full amount of the Acquisition Facilities is not
utilized, the Parent shall be required to pay a facility fee of 5 basis points
on all amounts that are not drawn down; provided that such facility fee shall be
reduced to 1
18
<PAGE> 21
basis point if a half of such Acquisition Facility is drawn down. The aggregate
amount available under the Acquisition Facilities to fund the purchase of the
Shares by the Purchaser pursuant to the Offer and Merger and to pay related
transaction expenses is Lit. 1,200 billion (approximately $661 million based
upon the Noon Rate reported on July 29, 1999). As of the date hereof, the Parent
intends to repay such loans from working capital, a refinancing of the
Acquisition Facility or from the future issuance of debt securities.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
The Parent and the Company are engaged in similar lines of business and as
a result have, from time to time, had contact in a business setting at industry
related conferences and otherwise but except as set forth below had no previous
contacts in the form of contracts, agreements or other business dealings
relating to the Offer and Merger.
On March 16, 1999, BT Wolfensohn (currently part of the Deutsche Bank
group), acting as financial advisor to the Company, met with the Chief Executive
Officer of the Parent to determine whether the Parent was interested in
acquiring an equity interest in, or all of the Shares of, the Company. On the
same day the Parent executed a confidentiality and standstill, agreement (dated
March 15, 1999) relating to its review of the Company's business, results of
operations and financial condition.
On March 26, 1999, a representative of the Company together with a
representative of BT Wolfensohn met with the Parent in Milan and presented
certain business and financial data to the Parent. BT Wolfensohn, by letter
dated March 30, 1999, advised Parent of its interest to have the Company make a
detailed management presentation to the principal executives of the Parent. The
Parent accepted the proposal for a meeting.
On April 6, 1999, the chief executive officers of the Company and the
Parent met in Milan, Italy and discussed the strategies of the two companies and
the possibility of a combination. On the following day, April 7, 1999,
representatives of the Company and BT Wolfensohn presented a strategic business
review, certain financial highlights and a long range plan to the Parent and its
advisors, including Goldman Sachs. On April 8, 1998, the Parent was taken on a
tour of certain of the Parent's facilities.
From April 14 through April 20, 1999, Autogrill's advisors visited the
Company in Bethesda, Maryland, to conduct preliminary business due diligence
which included a visit to certain facilities of the Company. During the week of
April 26 executives of the Parent visited certain of the Company's facilities in
the United States.
On May 24, 1999 the advisors of the Parent met with the advisors and
certain executives of the Company to review the principal assumptions of the
Company's long term plan.
On June 3, 1999, the Parent sent a letter to the Company providing a
preliminary non-binding indication of interest to purchase up to 51% of the
equity of the Company at a price per share in the range of $11 to $14 in cash.
Subsequently, BT Wolfensohn advised Goldman Sachs that the terms and conditions
of the preliminary non-binding indication of interest were not acceptable.
On July 6, 1999, the Parent sent a letter to the Company revising its
preliminary non-binding indication of interest and advising the Company of its
willingness to purchase up to 100% of the equity of the Company at a price per
share in the range of $11 to $15 in cash. BT Wolfensohn advised Goldman Sachs
that the proposed price range was not acceptable.
On July 8, 1999, the Parent delivered a letter to the Company increasing
the price range set forth in its July 6, 1999 letter to $14.00 to $16.00 per
Share.
On July 9, 1999, the Company advised the Parent that the Company would be
interested in pursuing further discussions with the Parent based upon the terms
of the Parent's July 8, 1999 letter
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and invited the Parent and its financial advisors and other representatives to
conduct both business and legal due diligence with respect to the Company during
the period from Monday, July 12, 1999 through Friday, July 16, 1999 at the
offices of the Company's outside legal counsel.
Beginning on July 12, 1999 and continuing through the preparation of final
agreements on July 25, 1999, the Parent conducted extensive business and legal
due diligence. During the weeks of July 12 and July 19, the parties and their
respective legal and financial advisors negotiated the Merger Agreement.
On July 22, 1999, the Parent submitted a written proposal to the Company
offering to acquire 100% of the Shares at a price of $15.75 per Share.
On July 22, 1999, the Board of Directors of the Company held a meeting at
which it considered the proposal of the Parent. Following such meeting, the
Parent was advised that the financial terms of its proposal were satisfactory
but that the acceptance of the Parent's proposal was conditioned upon the
satisfactory negotiation of certain terms of the merger agreement, including the
amount and nature of the break-up fee.
On July 25, 1999, the Parent was advised that the conditions to the
approval of the Parent's proposal enumerated by the Board of Directors of the
Company had been satisfied and that Deutsche Bank Alex. Brown had delivered its
opinion to the Board of Directors of the Company that the consideration to be
received by the stockholders of the Company was fair to them from a financial
point of view, and that the Company's Board had unanimously resolved that the
Offer and the Merger taken together were fair to, and in the best interests of,
the stockholders of the Company. The Parent was also informed that the Company's
Board approved the Merger Agreement and the transactions contemplated thereby
and unanimously recommended that the stockholders of the Company accept the
Offer tender their Shares.
In the morning of July 26, 1999, the Board of Directors of the Parent
approved the acquisition and the Merger Agreement. Thereafter, on July 26, 1999,
the Parent, the Purchaser, and the Company executed the Merger Agreement.
On July 30, 1999, the Purchaser commenced the Offer.
12. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR THE COMPANY;
THE MERGER AGREEMENT.
PURPOSE. The purpose of the Offer and the Merger is to enable the Parent
to acquire all of the outstanding capital stock of the Company. The Company has
been advised by each of its directors and by each executive officer who, on July
26, 1999, was actually aware of the Offer, that they intend either to tender all
Shares beneficially owned by them pursuant to the Offer or to vote such Shares
in favor of the approval and adoption of the Merger, unless the recommendation
of the Company's Board of Directors shall have been withdrawn or materially
modified as permitted by the Merger Agreement. Following the Offer, the Parent
and the Purchaser intend to acquire any remaining Shares in the Company not
acquired in the Offer by consummating the Merger. Upon consummation of the
Merger, the Company will become an indirect, wholly-owned subsidiary of the
Parent. Accordingly, the Shares will cease to be publicly traded and will no
longer be quoted on the NYSE.
The primary benefits of the Offer and the Merger to the stockholders of the
Company are that such stockholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
61.5% over the closing sales price of the Shares on July 23, 1999, the last full
trading day prior to the initial public announcement that the Company, the
Purchaser and the Parent had executed the Merger Agreement, and a premium of
approximately 84.41% over the trailing 30-day average closing sales price of the
Shares prior to the execution of the Merger Agreement.
PLANS FOR THE COMPANY. It is expected that, initially following the
Merger, the business and operations of the Company will continue without
substantial change. The Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
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consummation of the Offer and the Merger, and will take such further actions as
it deems appropriate under the circumstances then existing. Such actions could
include changes in the Company's business, corporate structure, certificate of
incorporation, by-laws, capitalization, Board of Directors, management or
dividend policy, although, except as disclosed in this Offer to Purchase, the
Parent has no current plans with respect to any of such matters.
THE MERGER AGREEMENT. The following is a summary of certain provisions of
the Merger Agreement. The summary is qualified in its entirety by reference to
the Merger Agreement which is incorporated herein by reference and a copy of
which has been filed with the SEC as an exhibit to the Schedule 14D-1. The
Merger Agreement may be examined and copies may be obtained at the place and in
the manner set forth in Section 8 of this Offer to Purchase, under the
subheading "Available Information."
THE MERGER. The Merger Agreement requires that as soon as practicable
after the purchase of Shares pursuant to the Offer and the satisfaction or
waiver of the conditions set forth in the Merger Agreement, the Purchaser and
its stockholder shall take all necessary and appropriate action (including
voting their Shares) to cause the Purchaser to be merged with the Company, which
will be the surviving corporation of the Merger (the "Surviving Corporation").
As a result of the Merger (i) the stockholder of the Purchaser will become the
sole stockholder of the Company, and (ii) all the pre-Merger stockholders of the
Company, other than the Purchaser, will receive cash equal to the Offer Price
(i.e., $15.75, or whatever other amount the Purchaser pays for Shares which are
tendered in response to the Offer).
RECOMMENDATION. The Merger Agreement states that the Company's Board of
Directors has unanimously approved the Offer and the Merger and determined that
the Offer and the Merger taken together are fair to, and in the best interests
of, the stockholders of the Company and unanimously recommends that the
stockholders of the Company accept the Offer and tender their Shares in response
to the Offer. The Board may withdraw, modify or refrain from making its
recommendation if, after consultation with and based upon the advice of
independent legal counsel, the Board determines in good faith that such action
is necessary for the Board to comply with its fiduciary duty under applicable
law. The Company has been advised by each of its directors and by each executive
officer who, on July 26, 1999, was actually aware of the Offer, that they intend
either to tender all Shares beneficially owned by them pursuant to the Offer or
to vote such Shares in favor of the approval and adoption of the Merger, unless
the recommendation of the Company's Board of Directors shall have been withdrawn
or materially modified as permitted by the Merger Agreement.
STOCK OF THE COMPANY. At the effective date of the Merger, (a) each Share
which is not owned by the Purchaser will become the right to receive $15.75 in
cash, or any other price per share paid with regard to the Shares tendered in
response to the Offer (which may not be less than $15.75 per Share) and (b) each
Share owned by the Purchaser (or by the Company or its subsidiaries) will be
cancelled and no payment will be made with respect to those Shares.
STOCK OF THE PURCHASER. At the effective date of the Merger, each share of
common stock of the Purchaser which is outstanding immediately before the
effective date of the Merger will be converted into and become one share of
common stock of the Surviving Corporation. Therefore, the stockholder of the
Purchaser will become the sole stockholder of the Surviving Corporation
(effectively, the Company).
CERTIFICATE OF INCORPORATION. The Merger Agreement provides that the
Certificate of Incorporation of the Company will remain as the Certificate of
Incorporation of the Surviving Corporation following the Merger. However,
subject to the terms of the Merger Agreement, immediately following the Merger,
the Parent and the Purchaser intend to amend and restate the Certificate of
Incorporation to read substantially similar to the Certificate of Incorporation
of the Purchaser.
COMPANY STOCK OPTIONS. The holder of each employee stock option
outstanding immediately prior to the effective date of the Merger (each, an
"Employee Option") which is unexercised and vested or which would vest on or
prior to January 2, 2000 pursuant to the applicable vesting
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schedule in effect as of the date of the Merger Agreement which is terminated
immediately prior to the effective date of the Merger, shall be entitled to
receive at the effective time of the Merger from the Company or as soon as
practicable thereafter from the Surviving Corporation, in consideration for such
termination, an amount in cash equal to (i) the product of (A) the number of
Shares subject to such Employee Option (whether or not vested or exercisable)
and (B) the excess, if any, of the Offer Price over the exercise price per share
of Common Stock subject to such Employee Option, (ii) less any required
withholding taxes.
STOCKHOLDER VOTE REQUIRED TO APPROVE MERGER. The affirmative vote of
holders of at least two-thirds of the outstanding Shares (including any Shares
owned by the Purchaser) is required to approve the Merger. However, the DGCL
also provides that if a parent company owns at least 90% of each class of stock
of a subsidiary, the parent company can effect a short-form merger with that
subsidiary without the action of the other stockholders of the subsidiary.
Accordingly, if, as a result of the Offer or otherwise, the Purchaser acquires
or controls the voting power of at least 90% of the outstanding Shares, the
Purchaser could (and, under the Merger Agreement, is required to) effect the
Merger using the "short-form" merger procedures without prior notice to, or any
action by, any other stockholder of the Company
STOCKHOLDERS MEETING. If approval by the Company's stockholders is
required in order to consummate the Merger the Company will hold a special
meeting of its stockholders as soon as practicable after the acquisition by the
Purchaser of Shares in the Offer for the purpose of adopting the Merger
Agreement and approving the Merger. In connection with any such meeting of
stockholders, the Company shall, through its Board of Directors, recommend to
its stockholders that they vote in favor of the approval of the Merger and the
adoption of the Merger Agreement; provided, however, that the Company's Board
may withdraw, modify or change such recommendation to the extent that the
Company's Board, after consultation with and based upon the advice of
independent legal counsel, determines in good faith that such action is
necessary for the Company's Board to comply with its fiduciary duties under
applicable law.
NO SOLICITATIONS. In the Merger Agreement, the Company has agreed that the
Company shall, and shall cause its subsidiaries to, cause their respective
officers, directors, employees and representatives and agents (the "Company
Representatives") to immediately cease any existing discussions or negotiations,
if any, with any Person conducted with respect to an Acquisition Proposal (as
defined below) or any inquiries or the making of any proposal that constitutes,
or may reasonably be expected to lead to, any Acquisition Proposal. In addition,
the Company has agreed that unless and until the Merger Agreement shall have
been terminated in accordance with its terms, except as otherwise expressly
provided below, neither the Company nor the Company Representatives shall (i)
solicit or initiate the making of any Acquisition Proposal, (ii) participate in
negotiations with any person or group (other than the Parent, the Purchaser and
their respective designees) concerning an Acquisition Proposal, or (iii)
disclose or furnish, in connection with an Acquisition Proposal, any material
non-public information or provide access to its properties, books or records, or
otherwise take action that would facilitate or lead to any Acquisition Proposal,
except as required by law or pursuant to a governmental request for information.
The term "Acquisition Proposal" means any proposal to acquire in any manner,
directly or indirectly, in one or a series of transactions, all or more than 20%
of the Company's business, assets or capital shares whether by merger,
consolidation, other business combination, purchase of assets, tender or
exchange offer or otherwise.
Notwithstanding anything to the contrary set forth above, prior to
acceptance for payment of, and payment by the Purchaser for, Shares pursuant to
the Offer, the Company and the Company Representatives may, to the extent the
Company's Board of Directors, after consultation with and based upon the advice
of independent legal counsel, determines in good faith that such action is
necessary for the Company's Board of Directors to comply with its fiduciary
duties under applicable law, participate in discussions or negotiations with,
and furnish non-public information to, and afford access to the properties,
books, records, officers, employees and representatives of the Company
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to any Person, entity or group after such Person, entity or group has delivered
to the Company, in writing, an Acquisition Proposal not solicited by the Company
or such representative which the Company's Board of Directors determines in good
faith is, if accepted, reasonably likely to be consummated (taking into account
all legal, financial, regulatory and other aspects of the proposal and the
Person making the proposal) and believes in good faith, after consultation with
its financial advisors, if consummated would be more favorable to the Company or
its stockholders from a financial point of view than the transactions
contemplated by the Merger Agreement (a "Superior Proposal"); provided, however,
that prior to taking such action, the Company shall (to the extent practicable)
provide notice to the Parent to the effect that it is taking such action.
Subject to the payment of the termination fee described below, in the event the
Company receives a Superior Proposal, the Merger Agreement does not prevent the
Board of Directors of the Company from executing or entering into an agreement
relating to a Superior Proposal and recommending such Superior Proposal to its
stockholders, if the Board determines in good faith that it is appropriate to do
so; in such case, the Board of Directors of the Company may withdraw, modify or
refrain from making its recommendation of the Offer, the Merger and the Merger
Agreement; provided however that the Company shall (i) provide the Parent at
least 24 hours prior written notice of the Company's intention to execute or
enter into an agreement relating to such Superior Proposal to enable the Parent
to match such Superior Proposal, in which case, the Company's Board of Directors
shall recommend to the Company's stockholders to accept the proposal of the
Parent; and (ii) where the Parent does not match such Superior Proposal,
terminate the Merger Agreement by written notice to the Parent given no sooner
than 48 hours after the Parent's receipt of a copy of such Superior Proposal (or
a description of the significant terms and conditions thereof). Nothing
contained in this referenced provision of the Merger Agreement prohibits the
Company Board from complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a tender or exchange offer.
CONDITIONS TO THE MERGER. The respective obligations of the Company and
the Purchaser to carry out the Merger will be conditioned on the following
conditions: (i) the approval of the Company's stockholders, if required by
applicable law or by the rules of the NYSE (if they are applicable); (ii) no
temporary restraining order, preliminary or permanent injunction or other order
issued by a court or other governmental entity of competent jurisdiction shall
be in effect and have the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger; (iii) any applicable waiting period
under the HSR Act shall have expired or been terminated; and (iv) the Purchaser
or its affiliates shall have purchased all the Shares which are properly
tendered in response to the Offer and not withdrawn.
TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be
terminated at any time prior to the effective date of the Merger by action taken
or authorized by the Board of Directors of the terminating party, whether before
or after approval of the terms of the Merger Agreement and the matters
contemplated thereby by the stockholders of the Company:
(1) By mutual written consent of the Parent and the Company by action
of their respective Board of Directors;
(2) By the Company, if it is not in material breach of its obligations
under the Merger Agreement and (i) the Purchaser fails to commence the
Offer as provided in the Merger Agreement, (ii) the Purchaser shall not
have accepted for payment and paid for all Shares tendered pursuant to the
Offer in accordance with the terms thereof on or before October 30, 1999
(the "Outside Date") or (iii) the Purchaser fails to purchase validly
tendered Shares in violation of the terms of the Offer or the Merger
Agreement;
(3) By the Company or the Parent, if the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder; provided that the Parent may terminate this Agreement pursuant
to this provision of the Merger Agreement only if the Parent's or the
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Purchaser's termination or withdrawal of the Offer is not in violation of
the terms of the Merger Agreement or the Offer;
(4) By the Company or the Parent if any governmental entity of
competent jurisdiction shall have issued, entered, enacted, promulgated or
enforced any order, decree, judgment, statute, regulation or ruling or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by the Merger Agreement, and such
order, decree, judgment, statute, regulation, ruling or other action shall
have become final and nonappealable;
(5) By the Parent, prior to purchase by the Purchaser of Shares of
pursuant to the Offer, if (i) the Company's Board of Directors shall have
withdrawn or materially and adversely modified its recommendation of the
Offer, the Merger or the Merger Agreement (it being understood, however,
that for all purposes, the fact that the Company has supplied any Person
with information regarding the Company or has entered into discussions or
negotiations with such Person as permitted by the Merger Agreement, or the
disclosure of such facts, shall not be deemed a withdrawal or modification
of the Board's recommendation of the Offer, the Merger or the Merger
Agreement); (ii) the Company's Board of Directors shall have recommended to
the stockholders of the Company that they approve a Superior Proposal other
than the Merger and at least two business days have elapsed since the
recommendation; or (iii) a tender offer or exchange offer that, if
successful, would result in any Person or "group" becoming a "beneficial
owner" (such terms having the meaning ascribed to them under Regulation 13D
under the Exchange Act) of 20% or more of the issued and outstanding Shares
on a fully diluted basis is commenced (other than by the Parent or an
affiliate of the Parent) and the Company's Board recommends that the
stockholders of the Company tender their shares in such tender or exchange
offer or the Company's Board announces a neutral position or fails to make
a recommendation with respect to such offer within the shorter of the ten
business days after such tender offer or exchange offer is commenced or the
period remaining until the Outside Date;
(6) By the Company, prior to the purchase by the Purchaser of Shares
pursuant to the Offer, if the Company enters into a definitive agreement
with respect to a Superior Proposal;
(7) By the Parent, prior to the purchase by the Purchaser of Shares
pursuant to the Offer, upon a material breach of any covenant or agreement
on the part of the Company set forth in the Merger Agreement, or if any
representation or warranty of the Company in the Merger Agreement shall at
such time be inaccurate and such inaccuracy would be reasonably likely to
have a material adverse effect on the Company, in either case which breach
or inaccuracy is not reasonably capable of being cured without expenditures
in excess of $6 million by the Company or, if capable of such cure, has not
been cured without expenditures in excess of $6 million by the Company
within ten business days after the Company has knowledge thereof;
(8) By the Company, prior to the purchase by the Purchaser of any
Shares pursuant to the Offer, upon a material breach of any covenant or
agreement on the part of the Parent or the Purchaser set forth in this
Agreement, or if any representation or warranty of the Parent or the
Purchaser shall, at such time, be inaccurate and such inaccuracy would be
reasonably likely to materially and adversely affect the ability of the
Parent and the Purchaser to perform their obligations hereunder, in either
case which breach or inaccuracy is not reasonably capable of being cured by
the Parent or the Purchaser or, if capable of cure, has not been cured
within ten business days after either the Parent or the Purchaser has
knowledge thereof; or
(9) By the Parent, if it is not in material breach of its obligations
hereunder or under the Offer and no Shares shall have been purchased
pursuant to the Offer by the Outside Date.
EFFECT OF TERMINATION OF THE MERGER AGREEMENT; FEES. In the event of
termination of the Merger Agreement by either the Company or the Parent, the
Merger Agreement shall forthwith
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become void and there shall be no liability or obligation on the part of any
party to the Merger Agreement or their respective officers, directors, employees
or stockholders except (i) with respect to any liabilities or damages incurred
or suffered by a party to the Merger Agreement as a result of the willful breach
by another party to the Merger Agreement of any of its covenants or other
agreements set forth in the Merger Agreement and (ii) with respect to any
liabilities or damages incurred or suffered by the Company as a result of the
failure of the Parent or the Purchaser to consummate the Offer or the Merger as
required by the Merger Agreement, including, without limitation, by reason of an
inability to obtain the requisite financing to do so.
In the event that the Merger Agreement is terminated pursuant to clause (5)
or (6) described under the section captioned "Termination of the Merger
Agreement" in this Section 12, then the Company is required to pay to the Parent
a cash fee of $20 million, which amount shall be payable by wire transfer of
immediately available funds no later than two business days after such
termination.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that,
promptly upon the acceptance for payment of, and payment by the Purchaser in
accordance with the Offer for, not less than two-thirds of the outstanding
Shares on a fully diluted basis pursuant to the Offer, the Purchaser shall be
entitled to designate such number of members of the Company's Board of
Directors, rounded up to the next whole number, equal to that number of
directors which equals the product of the total number of directors on the
Company's Board (giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that such number of Shares owned in the
aggregate by the Purchaser or the Parent, upon such acceptance for payment,
bears to the number of Shares outstanding; provided, however, that until the
effective date of the Merger there shall be at least three directors of the
Company who are directors at the date of the Merger Agreement (the "Continuing
Directors"). Upon the written request of the Purchaser, the Company shall, on
the date of such request take all actions necessary to (i) either increase the
size of the Company's Board or secure the resignations of such number of its
incumbent directors as is necessary to enable the Purchaser's designees to be so
elected to the Company's Board and (ii) cause the Purchaser's designees to be so
elected. At such time, the Company shall also use its reasonable best efforts to
cause the Purchaser's designees to constitute no less than the same percentage
as persons designated by the Purchaser shall constitute of the Company's Board
of each committee of the Company's Board, each board of directors of each
subsidiary of the Company and each committee of each such board, in each case
only to the extent permitted by applicable law. In the Merger Agreement, the
Company has agreed to mail to the Company's stockholders an Information
Statement containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and, if necessary, seeking the
resignation of one or more existing directors. However, the Merger Agreement
further provides that until the effective date of the Merger, the Company will
retain as members of its Board of Directors all of the current members of the
Board who are not employees of the Company at the date of the Merger Agreement
("Company Designees"). The Merger Agreement also provides that following the
time that the Purchaser's designees to the Company's Board of Directors
constitute a majority of the Board, any amendment of the Merger Agreement or the
Company's Certificate of Incorporation, any termination of the Merger Agreement
by the Company, any extension of time for performance of any of the obligations
of the Purchaser or the Parent under the Merger Agreement, any waiver of any
condition to the obligations of the Company or of any of the Company's rights
under the Merger Agreement or other action by the Company under the Merger
Agreement which materially and adversely affects the interests of the
stockholders of the Company may be effected only by the action of a majority of
the Company Designees, provided that if there shall be no such Company
Designees, such actions may be effected by unanimous vote of the entire Board of
Directors.
EMPLOYEE BENEFITS. Except as provided below, the Parent has agreed to
maintain, or cause the Surviving Corporation to maintain, until January 1, 2002,
in effect benefit plans which in the aggregate provide benefits that are at
least as favorable to employees as the arrangements (other
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than equity-related benefit plans) currently provided by the Company pursuant to
the benefit plans of the Company in effect on the date of the Merger Agreement.
For purposes of determining eligibility to participate, vesting and accrual or
entitlement to benefits where length of service is relevant under any employee
benefit plan or arrangement of the Parent, the Surviving Corporation or any of
their respective subsidiaries, employees of the Company and its subsidiaries as
of the effective date of the Merger shall receive service credit for service
with the Company and its subsidiaries and their respective predecessors to the
same extent such service credit was granted under the Company's employee benefit
plans, subject to offsets for previously accrued benefits and without
duplication of benefits. Except as any employee may otherwise agree, the Parent
has agreed to cause the Surviving Corporation to assume and honor in accordance
with their terms all written employment, change in control, severance and
termination plans and agreements of employees of the Company and its
subsidiaries.
DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. The Merger Agreement
provides that the Surviving Corporation shall, and that the Parent shall cause
the Surviving Corporation to, maintain in effect (i) for a period of six years
after the effective date of the Merger Agreement, the current provisions
regarding indemnification of current or former officers or directors (each an
"Indemnified Party") contained in the Certificate of Incorporation and By-Laws
of the Company and its subsidiaries and in any agreements between an Indemnified
Party and the Company or any of its subsidiaries, provided that in the event any
claim or claims are asserted or made within such six year period, all rights to
indemnification in respect of any claim or claims shall continue until final
disposition of any and all such claims, and (ii) for a period of six years, the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by the Company (provided that the Parent or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured and provided that such
substitution shall not result in any gaps or lapses in coverage with respect to
matters occurring at or prior to the effective date of the Merger) with respect
to claims arising from facts or events that occurred at or before the effective
date of the Merger; provided, that if such insurance cannot be so maintained or
obtained at a premium not greater than 150% of the premium for the Company's
current directors' and officers' liability insurance, the Parent may maintain or
obtain as much of such insurance as can be maintained or obtained at a cost
equal to 150% of the current annual premiums of the Company for such insurance.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties made by the Company to the Parent and
the Purchaser, including with respect to, among other things, organization,
capitalization, financial statements, public filings, litigation, compliance
with laws, the absence of certain changes with respect to the Company,
intellectual property, insurance, non-contravention, consents and Year 2000
issues.
CREDIT AGREEMENT. In the Merger Agreement, the Company has agreed to use
its reasonable best efforts to obtain all necessary waivers and consents prior
to the consummation of the Offer so that the transactions contemplated by the
Merger Agreement will not result in or constitute a default under the Company's
credit agreements.
RIGHTS AGREEMENT. In the Merger Agreement, the Company has agreed to take
all actions necessary to cause the provisions of the Rights Agreement to be
inapplicable to the transactions contemplated by the Merger Agreement, without
any payment to holders of Rights.
FEES AND EXPENSES. The Merger Agreement provides that, except as provided
above under the section captioned "Effect of Termination of Merger Agreement;
Fees" above, all Expenses incurred in connection with the Merger Agreement and
the transactions contemplated thereby shall be paid by the party incurring such
Expenses. The term "Expenses" includes all out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates) incurred
by a party or on its
26
<PAGE> 29
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of the Merger Agreement and the
transactions contemplated thereby, including the preparation, printing, filing
and mailing of the documents related to the Offer and the Proxy Statement and
the solicitation of stockholder approvals and all other matters related to the
transactions contemplated hereby.
OTHER PROVISIONS. The Merger Agreement also contains provisions requiring
the Company to operate its business in the ordinary course, including precluding
the Company from issuing stock, precluding the Company from amending its
certificate of incorporation or by-laws, precluding the Company from paying
dividends (other than payments by subsidiaries of the Company to the Company or
to other wholly owned subsidiaries of the Company) or taking other steps
regarding its stock, precluding the Company from taking any action with respect
to its accounting policies or procedures, and precluding any action such would
result in any of the representations or warranties or the Merger Agreement being
untrue or in any of the conditions to the Merger set forth in the Merger
Agreement not being satisfied until the Effective Time.
APPRAISAL RIGHTS. If the Merger is consummated, holders of Shares at the
effective date of the Merger will have rights pursuant to the provisions of
Section 262 of the DGCL to dissent and demand appraisal of their Shares. Under
Section 262, dissenting stockholders who comply with the applicable statutory
procedures will be entitled to receive a judicial determination of the fair
value of their Shares (exclusive of any element of value arising from the
Merger) and to receive payment of that fair value in cash, together with a fair
rate of interest, if any. The statutory procedures include notifying the Company
prior to the meeting at which the Company's stockholders vote on the Merger that
the particular stockholder intends to exercise dissenter's rights and giving
that stockholder's name and address. Any judicial determination of the fair
value of Shares could be more or less than the price per Share to be paid in the
Merger.
The foregoing summary of Section 262 is not complete. A copy of Section 262
is reprinted as Schedule II to this Offer to Purchase. You should read Section
262 in its entirety if you are considering the possibility of seeking appraisal
of your Shares.
13. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company shall not and shall not propose to (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, (ii) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock, or (iii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities convertible
into or exercisable for any shares of its capital stock, except as otherwise
permitted under certain option agreements to effect cashless option exercises.
In addition, the Company is not permitted to issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of its
capital stock of any class, or any securities convertible into or exercisable
for, or any rights, warrants or options to acquire, any such shares, or enter
into any agreement with respect to any of the foregoing, other than the issuance
of Shares upon the exercise of stock options pursuant to the Company's stock
plan, and the issuance of shares pursuant to the Company's stock plan and the
Company's stock purchase plan, in each case as in effect on the date of the
Merger Agreement.
14. CONDITIONS OF THE OFFER. The Purchaser will not be required to accept
for payment or, subject to any applicable SEC rules, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
pay for, the Shares which are tendered in response to the Offer if:
(a) the Minimum Condition is not satisfied;
(b) the HSR Condition is not satisfied;
27
<PAGE> 30
(c) an order shall have been entered in any action or proceeding
before any United States federal or state governmental entity (an "Order"),
or a preliminary or permanent injunction by a United States federal or
state court of competent jurisdiction shall have been issued and remain in
effect (an "Injunction"), which (1) prohibits, or imposes any material
limitations on, the Purchaser's or the Parent's ownership or operation of
all or a material portion of their or the Company's businesses or assets,
or compels the Purchaser or the Parent (or their respective subsidiaries
and affiliates) to dispose of or hold separate any material portion of the
business or assets of the Company or the Parent and their respective
subsidiaries, in each case taken as a whole, (2) prohibits or makes illegal
the acceptance for payment, payment for or purchase of Shares pursuant to
the Offer or the consummation of the Offer or the Merger, (3) results in a
material delay in or materially restricts the ability of the Purchaser, or
renders the Purchaser unable, to accept for payment, pay for or purchase
any significant portion of the Shares tendered pursuant to the Offer, (4)
imposes or confers material limitations on the ability of the Purchaser or
the Parent (or any of their respective subsidiaries or affiliates)
effectively to exercise full rights of ownership of the Shares purchased
pursuant to the Offer, including, without limitation, the right to vote
such Shares on all matters properly presented to the Company's
stockholders, or (5) otherwise results in a material adverse effect with
respect to the Company; provided, however, that in order to invoke this
condition, the Purchaser and the Parent shall in good faith have used their
reasonable best efforts to prevent such Order or Injunction or ameliorate
the effects thereof; and provided, further, that, if the Order or
Injunction is a temporary restraining order or preliminary injunction of a
court of competent jurisdiction, the Purchaser may not, by virtue of this
condition alone, amend or terminate the Offer, but may only extend the
Offer and thereby postpone acceptance for payment or purchase of Shares;
(d) there shall be instituted or pending any action, proceeding or
counterclaim brought by a governmental entity that would reasonably be
expected to result, directly or indirectly, in any of the consequences
referred to in clauses (1) through (5) of paragraph (c) above;
(e) (i) the Company's Board of Directors shall have withdrawn or
materially and adversely modified its recommendation of the Offer, the
Merger or the Merger Agreement (it being understood, however, that the fact
that the Company has supplied any Person with information regarding the
Company or has entered into discussions or negotiations with such Person as
permitted by the Merger Agreement, or the disclosure of such facts, shall
not be deemed a withdrawal or modification of the Company's Board of
Directors recommendation of the Offer, the Merger or the Merger Agreement);
(ii) the Company's Board of Directors shall have recommended to the
stockholders of the Company that they approve a Superior Proposal other
than that contemplated by the Merger Agreement and at least two business
days have elapsed since the recommendation; or (iii) a tender offer or
exchange offer that, if successful, would result in any Person or "group"
becoming a "beneficial owner" (such terms having the meaning in this
Agreement as is ascribed under Regulation 13D under the Exchange Act) of
20% or more of the issued and outstanding shares of the Company's common
stock on a fully diluted basis is commenced (other than by the Parent or an
affiliate of the Parent) and the Company's Board of Directors recommends
that the stockholders of the Company tender their shares in such tender or
exchange offer or the Company's Board of Directors announces a neutral
position or fails to make a recommendation with respect to such Offer
within the 10 business days after such tender offer or exchange offer is
commended or the period remaining until the Outside Date;
(f) the Company enters into a definitive agreement with respect to a
Superior Proposal;
(g) any consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, the Purchaser or the Parent with or from any governmental entity
in connection with the execution, delivery and performance of the Merger
Agreement, the Offer and the consummation of the transactions contemplated
by the Merger Agreement (other than any consent or approval required under
the Company's
28
<PAGE> 31
operational contracts) shall not have been made or obtained and such
failure would reasonably be expected to have a material adverse effect with
respect to the Company; or
(h) the Merger Agreement shall have been terminated by the Company or
the Parent pursuant to its terms.
The foregoing conditions are for the sole benefit of the Purchaser and the
Parent and may be asserted by the Purchaser and the Parent in their sole
discretion regardless of the circumstances giving rise to such condition or,
except for the Minimum Condition (which may not be waived without the written
consent of the Company), may be waived by the Purchaser or the Parent in whole
or in part at any time and from time to time. The failure by the Purchaser or
the Parent at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Except as otherwise disclosed in this Offer to Purchase, based on
the Company's representations and warranties in the Merger Agreement and a
review of publicly available filings by the Company with the SEC, the Purchaser
is not aware of (i) any license or regulatory permit that appears to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the acquisition of Shares by the Purchaser
pursuant to the Offer or by the Merger or (ii) any approval or other action by
any governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the Purchaser to acquire and own Shares.
Should any such approval or other action be required, the Purchaser and the
Parent presently contemplate that such approval or other action will be sought,
except as described below under "State Takeover Statutes." While, except as
otherwise described in this Offer to Purchase, the Purchaser does not presently
intend to delay the acceptance for payment of, or payment for, Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that failure to obtain
any such approval or other action might not result in consequences adverse to
the Company's business or that certain parts of the Company's business might not
have to be disposed of, or other substantial conditions complied with, in the
event that such approvals were not obtained or such other actions were not taken
or in order to obtain any such approval or other action. If certain types of
adverse action are taken with respect to the matters discussed below, the
Purchaser could decline to accept for payment, or pay for, any Shares tendered.
See Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
GOING PRIVATE TRANSACTIONS. The SEC has adopted Rule 13e-3 under the
Exchange Act, which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. The
Purchaser believes, however, that Rule 13e-3 will not be applicable to the
Merger. Rule 13e-3 requires, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction, be filed with the SEC and disclosed to
stockholders prior to consummation of the transaction.
ANTITRUST COMPLIANCE. The Company and the Parent (including its
affiliates) are required to make a filing with the FTC and the Antitrust
Division under the HSR Act with respect to the proposed acquisition. The HSR Act
requires that, before an acquisition exceeding certain thresholds and involving
companies exceeding specified sizes can take place, notification must be filed
with the FTC and to the Antitrust Division, and specified waiting periods must
expire or be terminated by the FTC or the Antitrust Division.
29
<PAGE> 32
STATE TAKEOVER STATUTES. The Company is incorporated under the laws of
Delaware. Section 203 of the DGCL limits the ability of a Delaware corporation
to engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting stock
of the corporation) unless, among other things, the corporation's board of
directors has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." Prior to the execution of the Merger Agreement, the Company's
Board of Directors approved the Purchaser's acquiring Shares without limitation
as to amount and, therefore, Section 203 of the DGCL is inapplicable to the
purchase of Shares from the Purchaser, the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
the State of Indiana may, as a matter of corporate law, and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there.
The Parent and the Purchaser do not believe that the antitakeover laws and
regulations of any state other than the State of Delaware will by their terms
apply to the Offer, and, except as set forth above with respect to Section 203
of the DGCL, neither the Parent nor the Purchaser has attempted to comply with
any state antitakeover statute or regulation. The Purchaser reserves the right
to challenge the applicability or validity of any state law purportedly
applicable to the Offer and nothing in this Offer to Purchase or any action
taken in connection with the Offer is intended as a waiver of such right. If it
is asserted that any state antitakeover statute is applicable to the Offer and
an appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and the Purchaser might be unable to accept for payment or pay for Shares
tendered pursuant to the Offer or may be delayed in consummating the Offer. In
such case, the Purchaser may not be obligated to accept for payment, or pay for,
any Shares tendered pursuant to the Offer. See Section 14.
16. FEES AND EXPENSES.
The Parent and the Purchaser have retained Goldman, Sachs & Co. to act as
the Dealer Manager in connection with the Offer. The Parent has also retained
Goldman, Sachs International to provide certain financial advisory services to
it in connection with its efforts to acquire the Company by letter agreement
dated June 22, 1999. The Parent has agreed to pay Goldman, Sachs International a
fee of $5 million plus any value added, sales, turnover, consumption or similar
tax ("VAT") upon consummation of the Offer. In the event the Merger Agreement is
terminated as the result of a Superior Proposal, Goldman, Sachs International
will be entitled to 25% of the $20 million termination fee to be paid to the
Parent pursuant to the Merger Agreement. The Parent will not pay Goldman, Sachs
& Co. any additional fee for acting in its capacity as Dealer Manager in
connection with the Offer. The Parent has also agreed to reimburse Goldman,
Sachs & Co. and Goldman, Sachs International on a quarterly basis beginning July
1, 1999, regardless of whether the Offer or the Merger are consummated, for all
reasonable out-of-pocket expenses for work performed since April 1, 1999,
including the fees and disbursements of legal counsel, together with VAT,
incurred in connection with the proposed Offer or the Merger or otherwise
arising out of Goldman, Sachs & Co.'s and Goldman, Sachs International's
engagement, and to indemnify Goldman, Sachs & Co. and
30
<PAGE> 33
its affiliates and control persons, directors, officers, employees and agents to
the full extent lawful against certain liabilities and expenses in connection
with its engagement, including certain liabilities under the federal securities
laws. Goldman, Sachs & Co. and its affiliates have rendered various investment
banking services and other advisory services to the Parent and its affiliates in
the past and is expected to continue to render such services, for which they
have received and will continue to receive customary compensation from the
Parent and its affiliates. In the ordinary course of business, Goldman, Sachs &
Co. and its affiliates are engaged in securities trading and brokerage
activities a well as investment banking and financial advisory services. In the
ordinary course of their trading and brokerage activities, Goldman, Sachs & Co.
and its affiliates may hold positions, for their own account or the account of
customers, in equity, debt or other securities of the Parent, the Company or any
other company that may be involved in the Offer or the Merger.
The Purchaser has retained Morrow & Co., Inc. to serve as the Information
Agent. The Parent and the Purchaser have retained The Bank of New York to serve
as the Depositary in connection with the Offer. The Dealer Manager and the
Information Agent may contact holders of Shares by personal interview, mail,
telephone, telex, telegraph and other methods of electronic communication and
may request brokers, dealers, commercial banks, trust companies and other
nominees to forward the Offer materials to beneficial holders. The Information
Agent and the Depositary will each receive reasonable and customary compensation
or their services, be reimbursed for certain reasonable out-of-pocket expenses
and be indemnified against certain liabilities in connection with their
services, including certain liabilities and expenses under the federal
securities laws.
Except as set forth above, neither the Parent nor the Purchaser will pay
any fees or commissions to any broker or dealer or other person or entity in
connection with the solicitation of tenders of Shares pursuant to the Offer
(other than the Dealer Manager and the Information Agent). Brokers, dealers,
banks and trust companies will be reimbursed by the Purchaser for customary
mailing and handling expenses incurred by them in forwarding the Offer materials
to their customers.
17. MISCELLANEOUS. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PARENT OR THE PURCHASER WHICH IS NOT CONTAINED
IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE,
THAT INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Parent and the Purchaser have filed with the SEC the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer. Such
Schedule and any amendments thereto, including exhibits, should be available for
inspection and copies should be obtainable in the same manner set forth in
Section 8 of this Offer to Purchase (except that such material will not be
available at the regional offices of the SEC).
AUTOGRILL ACQUISITION CO.
July 30, 1999
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<PAGE> 34
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE PARENT, AUTOGRILL OVERSEAS AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employment for the
past five years of the directors and executive officers of the Parent. The
principal address of the Parent and, unless otherwise indicated below, the
current business address for each person listed below is Via Caldera 21, 20153,
Milan, Italy. Unless otherwise indicated, each such person is a citizen of
Italy. Directors of the Parent are identified by an asterisk.
Under Italian law and pursuant to the Parent's by-laws (the "By-laws"), the
Board of Directors is responsible for managing the Parent's business and
supervising its operations and has the power to take any actions within the
scope of the Parent's corporate purposes other than actions reserved by law or
the By-laws to the shareholders. According to the By-laws, the Board of
Directors of the Parent shall be composed of between three and nine members.
Currently, the Board of Directors consists of nine members. Directors are
elected at the ordinary meeting of shareholders, and serve for three year terms.
Directors may be re-elected for consecutive terms. Pursuant to Italian law,
directors may be removed at any time by the shareholders at an ordinary meeting.
In the case of removal without cause, directors are entitled to ask for damages
from the Parent. Directors may resign at any time by written notice to the Board
of Directors and to the Chairman of the Board of Statutory Auditors. The Board
of Directors, with the approval of the Board of Statutory Auditors, shall
appoint replacements to fill any vacancies that may occur between shareholders
meetings, such replacements to serve until the next ordinary meeting of
shareholders. If a majority of the positions of the Board of Directors became
vacant, the entire Board will be considered dissolved, and a shareholders
meeting shall be called to appoint a new Board.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Gilberto Benetton*........................ Age 58; Director and Chairman of the Board of Directors
since May 1997. Mr. Benetton has also served as the
Chairman of the Board of Directors of Edizione Holding
S.p.A. (holding company, Italy) since June 1987, the
Chairman of the Board of Directors of Benetton Group
S.p.A. (textiles, clothing, sporting equipment and
accessories, Italy) since December 1985, and on the
Board of the Directors of Gruppo G.S. S.p.A. (retail
distribution, Italy) since December 1996. The current
business address of Mr. Benetton is Benetton Group
S.p.A., Villa Minelli, 31050 Ponzano, Veneto, Treviso,
Italy.
Paolo Prota Giurleo*...................... Age 56; Director and Chief Executive Officer since March
1992. Mr. Prota is a graduate of the Cattolica
University (Economics) in Milan, Italy and Insead in
Fontainbleau, France. Mr. Prota served as Vice President
of Parent and President of the Executive Committee of
Parent from February 1987 to March 1992.
</TABLE>
I-i
<PAGE> 35
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Alessandro Benetton*...................... Age 35; Director since August 1997. Mr. Benetton is a
graduate of the University of Boston (Science) and
Harvard (Business Administration). Mr. Benetton has also
served on the Boards of Directors of Benetton Group
S.p.A. (textiles, clothing, sporting equipment and
accessories, Italy) since May 1988, Banca Nazionale del
Lavoro (banking, Italy) since December 1998, Roncadin
S.p.A. (ice-cream and frozen food, Italy) since May 1999
and Grupo Picking Pack S.A. (office products and
communication services, Spain) since May 1999. In
addition, Mr. Benetton has served on the Boards of
Directors of, 21, Investimenti S.p.A. (investment
banking, Italy) since February 1993 (as Managing
Director), Edizione Holding S.p.A. (holding company,
Italy) since June 1992, Societe Centrale pour
L'Industrie (investment bank, France) since April 1998
(and as President of the Supervisory Board since May
1998). The current business address of Mr. Benetton is
c/o 21, Investimenti S.p.A., Piazza Filodrammatici 3,
31100, Treviso, Italy.
Giorgio Brunetti*......................... Age 62; Director since January 1997. Mr. Brunetti is a
graduate of Bocconi University in Milan, Italy. Mr.
Brunetti is a Professor of Business Administration at
Bocconi University. Mr. Brunetti has also served on the
Board of Directors of Carraro S.p.A. (axles and
transmissions, Italy) since June 1997. In addition, Mr.
Brunetti served on the Boards of Directors of Societa'
Finanziaria Meridionale S.p.A. (state holding company,
Italy) from 1995 to 1996 and Gruppo G.S. S.p.A. (retail
distribution, Italy) from 1995 to 1997. The current
business address of Mr. Brunetti is c/o Istituto di
Economia, Aziendale, Via Isonzo 23, 20100, Milan, Italy.
</TABLE>
I-ii
<PAGE> 36
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Antontio Bulgheroni*...................... Age 56; Director since August 1997. Mr. Bulgheroni has
also served on the Boards of Directors of Lindt &
Sprungli S.p.A. (chocolate manufacturing, Italy) since
1990 (as President), Ferro Tubi Lamiere Rossi S.p.A.
(steel products, Italy) since 1990 (as President),
Avionholding S.p.A. (charter flights, Italy) since 1991
(as President), Banca Popolare di Luino e di Varese
(banking, Italy) since 1997 (as President), Caffarel
S.p.A. (chocolate manufacturing, Italy) since 1998 (as
President), Banca Popolare Commercio e Industria
(banking, Italy) since 1997 (as Vice President),
Industria & Universita s.r.l. (law and business
administration, Italy) since 1990, Pallacanestro Varese
S.p.A. (Varese basketball team) since 1992, Societa
Editrice la Prealpina s.r.l. (publishing, Italy) since
1995, Unione degli Industriali della Provincia di Varese
(industry association, Italy) since 1995 and Comitato
Tecnico Scuola Formazione e Ricerca di Confindustria
(industry association, Italy) since 1996. Mr. Bulgheroni
has also been employed by Lindt & Sprungli S.p.A. since
1974. Mr. Bulgheroni has also served in various
capacities for Cattaneo University in Varese, Italy
since 1993 (as President), LUISS University in Roma,
Italy, since 1990 (as Director) and Iniziativa
University in Varese, Italy since 1990. The current
business address of Mr. Bulgheroni is Via Buccari, 33,
I-21056, Induno Olona, Varese, Italy.
Marco Desiderato*......................... Age 53; Director since April 1996. Mr. Desiderato has
also served on the Boards of Directors of San Paolo
Leasint S.p.A. (leasing, Italy) since April 1989 (as
Chairman), Leasint Servizi Integrati S.p.A. (leasing,
Italy) since April 1997 (as Chairman), San Paolo
Riscossioni Genova S.p.A. (tax collection agent, Italy)
since April 1995 (as Chairman), FILSE S.p.A. (Italy)
since April 1999 (as Chairman), BIC Liguria S.p.A.
(regional development agent, Italy) since April 1999 (as
Chairman), Banca Italo Romena S.p.A. (banking, Italy)
since April 1992 and Lertora & Partners Insurance
Brokers S.r.l (insurance, Italy) since October 1997. In
addition, Mr. Desiderato served on the Boards of
Directors of Istituto Bancario San Paolo di Torino
S.p.A. (banking, Italy) from January 1992 to April 1998,
Efibanca S.p.A. (banking, Italy) from March 1992 to
March 1998 and Mediocredito Ligure S.p.A. (banking,
Italy) from February 1989 to January 1994. The current
business address of Mr. Desiderato is c/o San Paolo
Riscossioni Genova S.p.A., Via XII Ottobre, 1, 16121
Genova, Italy.
</TABLE>
I-iii
<PAGE> 37
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Sergio P. Erede*.......................... Age 59; Director since May 19, 1997. Mr. Erede is a
graduate of the University of Milan (Jurisprudence) and
Harvard Law School. Mr. Erede was the founder and
Managing Partner of Erede & Associati, a law firm in
Milan, Italy, from October 1969 until March 1999. Mr.
Erede is currently a Senior Partner of Bonelli Erede
Pappalardo, also a law firm in Milan. Mr. Erede is also
a Vice Chairman of the Board of Directors of Marzotto
S.p.A. (textiles and clothing, Italy) and Telecom Italia
S.p.A. (telecommunications, Italy) and serves on the
Board of Directors of Hugo Boss (clothing and
accessories, Germany), Parmalat Finanziaria S.p.A.
(dairy and food products, Italy), Editoriale L'Espresso
S.p.A. (publishing, Italy), Interpump Group S.p.A.
(water pumps and hydraulics, Italy), Manuli Rubber
Industries S.p.A. (rubber tubing and related products,
Italy), Carraro S.p.A. (axles and transmissions, Italy),
Seat Pagine Gialle S.p.A. (telephone directories, Italy)
and Olivetti S.p.A. (telecommunications and office
products, Italy). The current business address of Mr.
Erede is c/o Bonelli Erede Pappalardo, Via Serbelloni,
12, 20122 Milan, Italy.
Vito Alfonso Gamberale*................... Age 54; Director since April 1999. Mr. Gamberale is a
graduate of the University of Roma. Mr. Gamberale is
also a Vice President of 21, Investimenti S.p.A.
(investment banking, Italy) since October 1998 and an
executive officer of Telecom Italia S.p.A.
(telecommunications, Italy) since 1994. Mr. Gamberale
also served on the Board of Directors of SIP S.p.A.
(telecommunications, Italy) from April 1994 to July 1995
(as Chairman), Telecom Italia Mobile S.p.A.
(telecommunications, Italy) from July 1995 to April 1998
(as Chief Executive Officer) and from April 1998 to July
1998 (as Chairman) and Telecom Italia S.p.A.
(telecommunications, Italy) from February 1998 to June
1998 (as General Manager). The current business address
of Mr. Gamberale is c/o Edizione Holding S.p.A.,
Calmaggiore, 23, 31100 Treviso, Italy.
Gianni Mion*.............................. Age 55; Director since January 1995. Mr. Mion is a
graduate of the Venice University (Economics). Mr. Mion
has also served on the Boards of Directors of Edizione
Holding S.p.A. (holding company, Italy) since October
1986 (as Managing Director), Benetton Group S.p.A.
(textiles, clothing, sporting equipment and accessories)
since April 1993, Gruppo GS S.p.A. (retail distribution,
Italy) since June 1999 (as Chairman) and Jolly Hotel
S.p.A. (hotel management, Italy) since May 1997. The
current business address of Mr. Mion is c/o Edizione
Holding S.p.A., Calmaggiore, 23, 31100 Treviso, Italy.
</TABLE>
I-iv
<PAGE> 38
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Carmine Meoli............................. Age 51; Chief Financial Officer since January 1997. Mr.
Meoli is a graduate of the University of Rome (Political
Science). From June 1995 to January 1997, Mr. Meoli was
employed by Edizione Holding S.p.A. (investment company,
Italy) as a Director of SME Research Services. Mr. Meoli
also served on the Boards of Directors of NCA S.p.A.
(ship building, Italy) from March 1994 to June 1995 (as
President), and GEPI S.p.A. (investment company) from
June 1992 to February 1994 (as Managing Director). Prior
to June 1992, Mr. Meoli held various positions with GEPI
S.p.A.
Eugenio Marco Airoldi..................... Age 39; General Manager International Operations since
April 1998. Mr. Airoldi is a graduate of Bocconi
University. Mr. Airoldi was the Sales and Logistics
Manager -- Motorway Division -- Italy of Parent from
1996 to 1997. Prior to his employment with Parent, Mr.
Airoldi was a Manager with The Boston Consulting Group.
Mario Aspesi.............................. Age 50; General Manager Italian Operations since July
1992. Mr. Aspesi is a graduate of Cattolica University
in Milan, Italy. Prior to his employment with Parent,
Mr. Aspesi was a General Manager of Gruppo GS S.p.A.
(retail distribution, Italy).
Enrico Ceccato............................ Age 38; General Manager of Strategic Marketing and Quick
Service Restaurant Business since June 1998. Mr. Ceccato
is a graduate of the University of Padua (Political
Science). Prior to his employment with Parent, Mr.
Ceccato was the General Manager of Fila Sport S.p.A.
(clothing, sporting equipment and accessories, Italy)
from March 1997 to June 1998, Vice President of Killer
Look S.p.A. (manufacturer of articles and accessories
for extreme sports, Italy) from 1993 to March 1997.
Enrico Biraghi............................ Age 59; General Manager of New Business since May 1998.
Mr. Biraghi has been continuously employed by Parent
since February 1980.
Roberto Degli Esposti..................... Age 35; Manager Human Resources since March 1998. Mr.
Degli also acted as Human Resources Development Head
from June 1997 to March 1998. Prior to his employment
with Parent, Mr. Degli was employed by Towers Perrin
(benefits and compensation consultants, Italy).
</TABLE>
I-v
<PAGE> 39
2. DIRECTORS AND EXECUTIVE OFFICERS OF AUTOGRILL OVERSEAS S.A. Set forth
below is the name, current business address, citizenship, and the present
principal occupation or employment and material occupations, positions, offices
or employment for the past five years of the directors and executive officers of
Autogrill Overseas. The principal address of Autogrill Overseas and, unless
otherwise indicated below, the current business address for each person listed
below is Via Caldera 21, 20153 Milan, Italy. Unless otherwise indicated, each
such person is a citizen of Italy. Directors of Autogrill Overseas are
identified by an asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Carmine Meoli*............................ Age 51; Managing Director since July 1999. See Schedule
I above.
Carlo Santoiemma*......................... Age 32; Director since July 1999. Mr. Santoiemma has
been an employee of Societe Europeenne de Banque,
Luxembourg in the Companies Department, Trustee Services
since March 1996. Prior to March 1996, Mr. Santoiemma
did not hold any corporate positions. The current
business address of Mr. Santoiemma is c/o Societe
Europeenne de Banque, 19-21, 31, Boulevard du Prince
Henri, L-1724, Luxembourg, The Grand Duchy of
Luxembourg.
Luca Schinelli*........................... Age 27; Director since July 1999. Mr. Schinelli has been
an employee of Societe Europeenne de Banque, Luxembourg
in the Companies Department, Trustee Services since
November 1996. Mr. Schinelli has also served on the
Board of Directors of European Cosmetic Group S.A. (The
Grand Duchy of Luxembourg), since November 1998. Prior
to November 1996, Mr. Schinelli did not hold any
corporate positions. The current business address of Mr.
Schinelli is c/o Societe Europeenne de Banque, 19-21,
31, Boulevard du Prince Henri, L-1724, Luxembourg, The
Grand Duchy of Luxembourg.
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Set forth below is
the name, current business address, citizenship, and the present principal
occupation or employment and material occupations, positions, offices or
employment for the past five years of the directors and executive officers of
the Purchaser. The principal address of the Purchaser and, unless otherwise
indicated below, the current business address for each person listed below is
Via Caldera 21, 20153 Milan, Italy. Unless otherwise indicated, each such person
is a citizen of Italy. Directors of the Purchaser are identified by an asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- -------------------------------------------
<S> <C>
Gianni Mion*.............................. Age 55; Chairman since July 1999. See Schedule I above.
Paolo Prota Giurleo*...................... Age 56; Director, President and Chief Executive Officer
since July 1999. See Schedule I above.
Carmine Meoli*............................ Age 51; Director, Treasurer and Secretary since July
1999. See Schedule I above.
</TABLE>
I-vi
<PAGE> 40
SCHEDULE II
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS. -- (a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to sec.228 of this title shall be entitled to an appraisal by the Court
of Chancery of the fair value of the stockholders' shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec.251 (other than a merger effected pursuant to
sec.251(g) of this title), sec.252, sec.254, sec.257, sec.258, sec.263 or
sec.264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec.251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec.251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec.253 of this title is not owned by the
parent corporation immediately prior to the
II-i
<PAGE> 41
merger, appraisal rights shall be available for the shares of the
subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec.228 or
sec.253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the
II-ii
<PAGE> 42
corporation that is required to give either notice that such notice has
been given shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix, in advance,
a record date that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder
who has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw such stockholder's demand for appraisal
and to accept the terms offered upon the merger or consolidation. Within
120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and
(d) hereof, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor
of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10
days after such stockholder's written request for such a statement is
received by the surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal under
subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of
a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and
place fixed for the hearing of such petition by registered or certified
mail to the surviving or resulting corporation and to the stockholders
shown on the list at the addresses therein stated. Such notice shall also
be given by 1 or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The
forms of the notices by mail and by publication shall be approved by the
Court, and the costs thereof shall be borne by the surviving or resulting
corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitle to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates of stock to the Register in
Chancery for notation thereon of the pendency of the appraisal proceedings;
and if any stockholder fails to comply with such direction, the Court may
dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In determining
such fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency
II-iii
<PAGE> 43
of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other
pretrial proceedings and may proceed to trial upon the appraisal prior to
the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or
resulting corporation pursuant to subsection (f) of this section and who
has submitted such stockholder's certificates of stock to the Register in
Chancery, if such is required, may participate fully in all proceedings
until it is finally determined that such stockholder is not entitled to
appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value
of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or
to receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed
within the time provided in subsection (e) of this section, or if such
stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e)
of this section or thereafter with the written approval of the corporation,
then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms as the
Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.
II-iv
<PAGE> 44
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent by each stockholder of the Company
or the stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll Free)
-------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation By Telephone:
(800) 507-9357 (Toll Free)
</TABLE>
-------------------------
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at the telephone numbers and location
listed below. You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Collect Call: (212) 754-8000
Banks and Brokerage Firms Call: (800) 662-5200 (Toll Free)
Shareholders Please Call:
(800) 566-9061 (TOLL FREE)
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
FOR
$15.75 NET PER SHARE
IN RESPONSE TO THE OFFER TO PURCHASE DATED JULY 30, 1999
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY OF
AUTOGRILL S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Delivery Window
New York, New York 10286-1248 For Confirmation Telephone: New York, New York 10286
(800) 507-9357 (Toll Free)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSIONS OF INSTRUCTIONS VIA A TELEX OR FACSIMILE NUMBER OTHER THAN THE
ONES LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- --------------------------------------------------------------------------------
DESCRIPTION OF TENDERED SHARES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
CERTIFICATE REPRESENTED BY
NUMBER(S)(1) CERTIFICATE(S)(1)
<S> <C> <C>
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Total Shares
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------- ----------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- --------------------------------------------------------------- ----------------------
TOTAL NUMBER
OF SHARES
TENDERED(2)
<S> <C>
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE> 2
This Letter of Transmittal is to be used to tender certificates for Shares
(as such term is defined below) of Host Marriott Services Corporation (the
"Company"), in response to a solicitation of tenders by Autogrill Acquisition
Co. (the "Purchaser"). It must be used whether certificates evidencing Shares
are to be forwarded with this Letter of Transmittal or whether delivery of the
Shares is to be made by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility")
as described in Section 3 of the Offer to Purchase. Stockholders whose
certificates are not immediately available or who cannot deliver their
conformation of the book-entry transfer of their Shares into the Depositary's
account at the Book-Entry Transfer Facility ("Book-Entry Conformation") on or
before the Expiration Time may use the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase to tender their Shares. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING.
Name(s) of Registered Holder(s):
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- -------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
- -------------------------------------------------------------------
BY EXECUTING AND DELIVERING THIS LETTER OF TRANSMITTAL THE UNDERSIGNED
ACKNOWLEDGES THAT IT IS TENDERING ALL SHARES REFERENCED IN THIS LETTER OF
TRANSMITTAL INCLUDING ALL OF THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS AND
THAT IT IS WAIVING ANY RIGHTS RELATING TO THE ASSOCIATED PREFERRED STOCK
PURCHASE RIGHTS.
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Autogrill Acquisition Co., a Delaware
corporation (the "Purchaser"), which is wholly-owned by Autogrill Overseas S.A.,
a Luxembourg company that, with the exception of one subscription share, is a
wholly-owned subsidiary of Autogrill S.p.A., an Italian company (the "Parent"),
the above described shares of common stock, no par value per share (the "Common
Stock"), including the associated series A junior preferred stock purchase
rights (the "Rights"; the Common Stock and the Rights are collectively hereafter
referred to as the "Shares"), issued pursuant to the Rights Agreement dated as
of December 22, 1995 by and between Host Marriott Services Corporation, a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York, as Rights Agent (as the same may be amended, the "Rights Agreement"), of
the Company, in response to the Purchaser's offer to purchase all of the
outstanding Shares at a price of $15.75 net per Share, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated July 30, 1999
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which terms and conditions constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to one or more of its
subsidiaries or affiliates the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer. Receipt of the
Offer is hereby acknowledged.
The Company has distributed one Right for each outstanding Share pursuant
to the Rights Agreement. The Rights are currently evidenced by and trade with
certificates evidencing the Common Stock. The Company has taken such action so
as to make the Rights Agreement inapplicable to the Parent, the Purchaser and
their respective affiliates and associates in connection with the transactions
contemplated by the Merger Agreement (as such term is defined below).
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 26, 1999 (the "Merger Agreement"), by and among the Parent, the
Purchaser and the Company.
Subject to, and effective upon, acceptance of the Shares tendered with this
Letter of Transmittal for payment in accordance with the Offer, the undersigned
hereby sells, assigns, and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all the Shares that are being tendered with
this Letter of Transmittal (and any and all other Shares or other securities
issued or issuable in respect of those Shares on or after the date of the Merger
Agreement) and irrevocably constitutes and appoints the Depositary the true and
lawful agent, attorney-in-fact of the undersigned with respect to those Shares
(and any such other Shares or securities), with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for the Shares (and any such other Shares
or securities) or transfer ownership the Shares (and any such other Shares or
securities) on the account books maintained by the Book-Entry Transfer Facility,
together in either case with all accompanying evidences of transfer and
authenticity, to or upon the order of the Purchaser upon receipt by the
Depositary, as the undersigned's agent, of the purchase price (adjusted, if
appropriate, as provided in the Offer to Purchase), (b) present those Shares
(and any such other Shares or securities) for transfer on the books of the
Company and (c) otherwise exercise all rights of beneficial ownership the Shares
(and any such other Shares or securities), all in accordance with the terms of
the Offer.
The undersigned irrevocably appoints Purchaser, it officers and its
designees, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney-in-fact and proxy or his or its substitute, in his or its
sole discretion deems proper, and otherwise act (including acting by written
consent without a meeting) with respect to, all the Shares tendered by this
Letter of Transmittal which have been accepted for payment by the Purchaser
prior to the time of the vote or action (and any other Shares or securities
issued in respect of those Shares after the date of the Merger Agreement). This
proxy is irrevocable and is granted in consideration of, and is effective upon,
the
3
<PAGE> 4
deposit by the Purchaser with the Depositary of the purchase price for the
Shares to which it relates, and acceptance of those Shares for payment, in
accordance with the term of the Offer. That acceptance for payment will revoke
all prior proxies granted by the undersigned with regard to those Shares (and
any such other Shares or other securities) and the undersigned will not give any
subsequent proxies, powers of attorney or consents, with respect to those Shares
(and, if given, will not be deemed effective). The undersigned understands that
the Purchaser reserves the right to require that, in order for Shares (and any
such other Shares or securities) to be deemed validly tendered, immediately upon
the Purchaser's acceptance for payment of such Shares, the Purchaser is able to
exercise full voting, consent and other rights with respect to such Shares and
other securities, including voting at any meeting of the Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered by this Letter of Transmittal (and any and all other Shares or other
securities issued in respect of those Shares after the date of the Merger
Agreement) and that, when those Shares are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title to
the Shares (and any such other Shares or securities), free and clear of all
liens, restrictions, charges, encumbrances or adverse claims. The undersigned,
upon request, will execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered by this Letter of Transmittal
(and any such other Shares or securities) to the Purchaser.
The authority conferred in this Letter of Transmittal will not be affected
by, and will survive, the death or incapacity of the undersigned, and any
obligation of the undersigned under this Letter of Transmittal or otherwise
resulting from the tender of the Shares to which this Letter of Transmittal
relates will be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender made by this Letter of Transmittal is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions to this Letter of Transmittal will constitute a binding agreement
between the undersigned and the Purchaser upon the terms and subject to the
conditions of the Offer (and if the Offer is extended or amended, the terms or
conditions of any such extension or amendment). Without limiting the foregoing,
if the price to be paid in the Offer is amended in accordance with the Merger
Agreement, the price to be paid to the undersigned will be the amended price
notwithstanding the fact that a different price is stated in this Letter of
Transmittal. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the Shares tendered hereby.
Unless otherwise indicated in the box below captioned "Special Payment
Instructions," please issue the check for the purchase price of the Shares
tendered by this Letter of Transmittal, and cause any Shares represented by
certificates accompanying this Letter of Transmittal which are not being
tendered, or are not accepted for payment, in the name(s) of the undersigned.
Similarly, unless otherwise indicated in the box below captioned "Special
Delivery Instructions," please mail the check for the purchase price and deliver
certificates representing any Shares which are not being tendered or are not
accepted for payment ( and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature. If both the
Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and certificates for
any Shares which are not being tendered, or are not accepted for payment, in the
name of, and deliver the check and certificates, or confirmation of transfer of
the Shares at the Book-Entry Transfer Facility, to the person or persons
indicated. Stockholders delivering Shares by book-entry transfer may request
that any Shares not accepted for payment be returned by crediting an account at
the Book-Entry Transfer Facility, by making an appropriate entry under "Special
Payment Instructions." The undersigned recognizes that the Purchaser has no
obligation pursuant to the Special Payment Instructions or otherwise to transfer
any tendered Shares which are not accepted for payment from the name of the
registered holder of the Shares to the name of another person.
4
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares which are not tendered or
not purchased and the check for the purchase price of Shares which are purchased
are to be issued in the name of someone other than the undersigned, or if Shares
delivered by book-entry which are not purchased are to be returned by credit to
an account maintained at a Book-Entry Transfer Facility other than that
designated above:
Issue [ ] Check [ ] Certificate(s) to:
Name
- -------------------------------------------------
(PLEASE PRINT)
Address
- ----------------------------------------------
--------------------------------------------------------
(INCLUDE ZIP CODE)
- ---------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
[ ] Check unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below:
- ---------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares which are not tendered or
are not purchased and the check for the purchase price of Shares which are
purchased are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown after the undersigned's
signature below:
Mail: [ ] Check [ ] Certificate(s) to:
Name
- -------------------------------------------------
(PLEASE PRINT)
Address
- ----------------------------------------------
--------------------------------------------------------
(INCLUDE ZIP CODE)
5
<PAGE> 6
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated:
- --------------------------- , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted with this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-at-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity, please
provide the necessary information described in Instruction 5.)
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
---------------------------------------------------------------
Address ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
----------------------------------------------
Tax Identification or Social Security No.
------------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
--------------------------------------------------------------
Name --------------------------------------------------------------------------
Title---------------------------------------------------------------------------
Name of Firm
---------------------------------------------------------------------
Address ------------------------------------------------------------------------
Area Code and Telephone Number: ( )
----------------------------------------------
Dated:
- --------------------------- , 1999
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered holder of the Shares tendered by it (which, for purposes of this
document, includes any participant in the Book-Entry Transfer Facility whose
name appears on a security position listing as the owner of Shares) unless the
holder has completed either the box entitled "Special Delivery Instructions" or
the box entitled "Special Payment Instructions" on the reverse of this Letter of
Transmittal or (ii) if those Shares are tendered for the account of a member
firm of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
which has an office or correspondent in the United States (collectively,
"Eligible Institutions"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates are being
forwarded with it or, unless an Agent's Message (as defined below) is utilized,
tenders of Shares are being made in accordance with the procedures for delivery
by book-entry transfer set forth in Section 3 of the Offer to Purchase.
Certificates for all physically tendered Shares, or a Book-Entry Confirmation
confirming book-entry transfer of Shares to an account of the Depositary, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile of one) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth above prior to the Expiration Date (as defined in the Offer
to Purchase). Stockholders whose certificates for Shares are not immediately
available, or who cannot deliver Book-Entry Confirmation of a book entry
transfer of the Shares to the Depositary on or prior to the Expiration Date, may
tender their Shares by properly completing and executing a Notice of Guaranteed
Delivery in accordance with the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. Pursuant to that procedure, (i) the tender
must be made by or through an Eligible Institution, (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form
provided by the Purchaser, must be received by the Depositary prior to the
Expiration Date and (iii) the certificates for all physically tendered Shares,
or Book-Entry Confirmation of Shares tendered by book-entry transfer, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile of one) and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three New York
Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. If
certificates for Shares are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or facsimile of one) must
accompany each such delivery.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of this Letter of Transmittal, the certificates for
Shares and all other required documents, including delivery through the
Book-Entry Transfer Facility, is at the option and risk of the tendering
stockholder and, except as otherwise provided in this Instruction 2, the
delivery will be deemed made 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile of one), waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided in this Letter of Transmittal
is inadequate, the certificate numbers and the numbers of Shares being tendered
should be listed on a separate signed schedule which should be attached to this
Letter of Transmittal.
7
<PAGE> 8
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by a certificate
are to be tendered, fill in the number of Shares which are to be tendered in the
box entitled "Number of Shares Tendered." In such case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) will
be sent to you, unless otherwise provided in the appropriate box on this Letter
of Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered, the signature(s) must correspond exactly with the name(s) as written
on the face of the certificate(s), without alteration, enlargement or any change
whatsoever.
If any of the tendered Shares are owned of record by two or more joint
owners, all the owners must sign this Letter of Transmittal.
IF TENDERED SHARES ARE REGISTERED IN DIFFERENT NAMES ON DIFFERENT
CERTIFICATES, IT WILL BE NECESSARY TO COMPLETE, SIGN AND SUBMIT AS MANY SEPARATE
LETTERS OF TRANSMITTAL AS THERE ARE DIFFERENT REGISTRATIONS ON CERTIFICATES.
If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of corporations or other person acting in a fiduciary or representative
capacity, that persons should so indicate when signing, and may be required to
submit evidence satisfactory to the Purchaser of the person's authority to so
act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares being tendered, no endorsements of certificates or separate stock powers
are required, unless payment or certificates for Shares which are not tendered
or purchased are to be issued to a person other than the registered owner(s), in
which case, endorsements of certificates or stock powers are required and the
signatures on those certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares being tendered, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered owner(s) appear on the certificates.
Signatures on the certificates or stock powers must be guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale to it of Shares it purchases pursuant to the Offer. If
payment of the purchase price is to be made to, or if certificates for Shares
which are not tendered or are not purchased are to be registered in the name of,
any person other than the registered holder, or if tendered certificates are
registered in the name of anyone other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes payable on account of the
transfer to another person (whether imposed on the registered holder or on the
other person) will be deducted from the purchase price unless satisfactory
evidence of the payment of, or exemption from the need to pay, stock transfer
taxes is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check or certificates
for unpurchased Shares are to be issued in the name of a person other than the
signer of this Letter of Transmittal, or if a check is to be sent or
certificates are to be returned to someone other than the signer of this Letter
of Transmittal or to an address other than the signer's shown above, the
appropriate boxes on this Letter of Transmittal must be completed. Stockholders
tendering Shares by book-entry transfer may request that any Shares which are
not purchased be credited to an account maintained at the Book-Entry Transfer
Facility which the stockholder designates. If no such instructions are given,
Shares tendered by book-entry transfer which are not purchased will be returned
by crediting the account at the Book-Entry Transfer Facility designated above.
8
<PAGE> 9
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to, or additional copies of the Offer to Purchase and this
Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained from, the Information Agent at its address set forth below or from your
broker, dealer, commercial bank or trust company.
9. WAIVER OF CONDITIONS. Subject to the terms of the Merger Agreement, the
conditions of the Offer may be waived by the Purchaser, in whole or in part, at
any time and from time to time in the Purchaser's sole discretion, as to any
Shares which are tendered.
10. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
for Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary. The stockholder will then be instructed as to the steps
that must be taken in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
11. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to indicate that the stockholder is not subject to backup withholding by
checking the box in Part 2 of the Substitute Form W-9. Failure to provide the
information on Substitute Form W-9 may subject the tendering stockholder to 31%
Federal Income tax withholding from the payment of the purchase price. The box
in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 3 is checked, the stockholder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding. If the box in
Part 3 is checked and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% from all payments of the purchase price to be
made after expiration of that 60 day period until a TIN is provided to the
Depositary.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
(DO NOT WRITE IN THE SPACES BELOW)
Date Received --------------- Accepted by --------------- Checked by
---------------
------------------------------------------------------------------------------------------------------------
CERTIFICATES SHARES SHARES AMOUNT OF SHARES CERTIFICATE
SURRENDERED TENDERED ACCEPTED CHECK NO. CHECK RETURNED NO. BLOCK
NO.
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Delivery Prepared by --------------- Checked by --------------- Date ---------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with the
stockholder's correct TIN on Substitute Form W-9 below. If the stockholder is an
individual, the TIN is his or her social security number. If the Depositary is
not provided with the correct TIN, the stockholder may be subject, among other
things, to penalties imposed by the Internal Revenue Service. In addition,
payments that are made to the stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that individual must submit a Form W-8, signed under penalties of
perjury, attesting to the individual's exempt status. A Form W-8 can be obtained
from the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of the stockholder's correct TIN by completing
the form below certifying that the TIN provided on the Substitute Form W-9 is
correct (or that the stockholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares being tendered are in more than one name or are not in the name of
the actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on which
number to report.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE OF ONE), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS, OR A NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION TIME.
10
<PAGE> 11
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Number
OR
--------------------
Employer
Identification Number
-----------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to backup withholding
DEPARTMENT OF THE TREASURY INTERNAL under the provisions of Section 3406(a)(1)(C) of the Internal Revenue
REVENUE SERVICE Code because (1) you are exempt form backup withholding, or (2) you
have not been notified that you are subject to backup withholding as a
result of failure to report all interest or dividends or (3) the
Internal Revenue Service has notified you that you are no longer
subject to backup withholding. [ ]
-----------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE
TAXPAYER IDENTIFICATION INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
NUMBER (TIN)
SIGNATURE -------------------------- DATE----------------------
- -------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------
Part 3 --
Awaiting TIN [ ]
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE
THE CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
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 by the time of payment, 31% of all
payments made to me will be withheld, but that such amounts will be refunded to
me if I then provide a Taxpayer Identification Number within sixty (60) days.
<TABLE>
<S> <C>
SIGNATURE DATE
-------------------------------- -----------------
</TABLE>
11
<PAGE> 12
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll Free)
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Collect Call: (212) 754-8000
Banks and Brokerage Firms Call: (800) 662-5200 (Toll Free)
Shareholders Please Call:
(800) 566-9061 (TOLL FREE)
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JULY 30, 1999
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY OF
AUTOGRILL S.P.A.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates"), evidencing shares of common stock, no par value per
share (the "Common Stock"), including the associated series A junior preferred
stock purchase rights (the "Rights"; the Common Stock and the Rights are
collectively hereafter referred to as the "Shares"), issued pursuant to the
Rights Agreement dated as of December 22, 1995 by and between Host Marriott
Services Corporation, a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, as Rights Agent (as the same may be amended the
"Rights Agreement"), of the Company, are not immediately available, (ii) if
Share Certificates and all other required documents cannot be delivered to The
Bank of New York, as Depositary (the "Depositary"), prior to the Expiration Time
(as defined in the Offer to Purchase (as defined below)) or (iii) if the
procedure for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary. See Section
3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Delivery Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357 (Toll Free)
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
SHARES MAY NOT BE TENDERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Autogrill Acquisition Co., a Delaware
corporation, wholly-owned by Autogrill Overseas S.A., a Luxembourg company that,
with the exception of one subscription share, is a wholly-owned subsidiary of
Autogrill S.p.A., an Italian company, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated July 30, 1999 (the "Offer
to Purchase"), and the related Letter of Transmittal (the terms and conditions
of which, as amended or supplemented from time to time, together constitute the
"Offer"), receipt of each of which is hereby acknowledged, the number of shares
specified below of common stock, no par value per share (the "Common Stock"),
including the associated series A junior preferred stock purchase rights (the
"Rights"; the Common Stock and the Rights are collectively hereafter referred to
as the "Shares"), issued pursuant to the Rights Agreement dated as of December
22, 1995 by and between Host Marriott Services Corporation, a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, as
Rights Agent (as the same may be amended, the "Rights Agreement") of the
Company, pursuant to the guarantee delivery procedures described in Section 3 of
the Offer to Purchase.
Number of Shares:
- --------------------------------------------------------------------------------
Name(s) of Record Holder(s):
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address(es):
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
- --------------------------------------------------------------------------------
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
Signature(s):
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Dated:
- ------------------------, 1999
THE GUARANTEE ON THE FOLLOWING PAGE MUST BE COMPLETED
2
<PAGE> 3
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, hereby guarantees to deliver to the Depositary, at one of its addresses
set forth above, either the certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation (as defined in
Section 3 of the Offer to Purchase) of a transfer of such Shares into the
Depositary's account at The Depository Trust Company, in any such case together
with a properly completed and duly executed Letter of Transmittal, or a manually
signed facsimile thereof, with any required signature guarantees, or an Agent's
Message (as defined in Section 2 of the Offer to Purchase), and any other
documents required by the Letter of Transmittal within three New York Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
Name of Firm:
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Date:
- ------------------------, 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
FOR
$15.75 NET PER SHARE
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Autogrill Acquisition Co., a Delaware corporation
(the "Purchaser") which is a wholly-owned subsidiary of Autogrill Overseas S.A.,
a Luxembourg company that, with the exception of one subscription share, is a
wholly-owned subsidiary of Autogrill S.p.A., an Italian company (the "Parent"),
to act as Dealer Manager in connection with the Purchaser's offer to purchase
all outstanding shares of common stock, no par value per share (the "Common
Stock"), including the associated series A junior preferred stock purchase
rights (the "Rights"; the Common Stock and the Rights are collectively hereafter
referred to as the "Shares"), issued pursuant to the Rights Agreement dated as
of December 22, 1995 by and between Host Marriott Services Corporation, a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York, as Rights Agent (as the same may be amended, the "Rights Agreement"), of
the Company, at a price of $15.75 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated July 30, 1999 (the "Offer to Purchase"), and the related Letter
of Transmittal (the terms and conditions of which, as amended or supplemented
from time to time, together constitute the "Offer") enclosed herewith. Please
furnish copies of the enclosed materials to those of your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn a number of Shares constituting at least two-thirds
of the outstanding Shares of the Company (determined on a fully-diluted basis),
(ii) the expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder, and (iii) the satisfaction or waiver of certain
conditions to the obligations of the Purchaser and the Parent to consummate the
Offer and the transactions contemplated by the Merger Agreement. The Offer is
also subject to other terms and conditions which are described in the Offer to
Purchase.
<PAGE> 2
Enclosed for your information and for forwarding to your clients for whom
you hold Shares registered in your name or in the name of your nominee are the
following documents:
1. The Offer to Purchase, dated July 30, 1999;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. The Company's Solicitation/Recommendation Statement on Schedule
14D-9 filed with the Securities and Exchange Commission by the Company;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available, or if such
certificates and all other required documents cannot be delivered to The
Bank of New York (the "Depositary"), by the Expiration Date (as defined in
the Offer to Purchase), or if the procedure for book-entry transfer cannot
be completed by the Expiration Date;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made in accordance with an Agreement and Plan of Merger,
dated as of July 26, 1999 (the "Merger Agreement"), by and among the Parent, the
Company and the Purchaser. The Merger Agreement provides, among other things,
that, after the Purchaser purchases all the Shares which are properly tendered
in response to the Offer and not withdrawn, the Purchaser will take all
necessary and appropriate action (including voting its Shares) to cause the
Purchaser to be merged with the Company (the "Merger"), in a transaction in
which the stockholder of the Purchaser will own all the stock of the corporation
which results from the Merger (essentially, the Company) and the other
stockholders of the Company will receive the same amount of cash per Share as is
paid for Shares tendered in response to the Offer (unless particular
stockholders elect to exercise statutory rights to demand appraisal of their
Shares).
The Board of Directors of the Company (the "Board") has unanimously
approved the Offer and the Merger and determined that the Offer and the Merger
taken together are fair to, and in the best interests of, the stockholders of
the Company. The Board unanimously recommends that the stockholders of the
Company accept the Offer and tender their Shares.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
certificates evidencing such Shares or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase) pursuant to the procedures set
forth in the Offer to Purchase, a Letter of Transmittal (or a facsimile of one),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer, and any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or Book-Entry
Confirmations into the Depositary's account at the Book-Entry Transfer Facility
are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
2
<PAGE> 3
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than to the Information Agent and the Depositary as
described in the Offer to Purchase) in connection with the solicitation of
tenders of Shares pursuant to the Offer. However, the Purchaser will reimburse
you for customary mailing and handling expenses incurred by you in forwarding
any of the enclosed materials to your clients. The Purchaser will pay or cause
to be paid any stock transfer taxes payable with respect to the transfer of
Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their telephone numbers and addresses set
forth on the back cover of the Offer to Purchase. Additional copies of the
enclosed material may be obtained from the Information Agent at its address and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
Goldman, Sachs & Co.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PARENT, THE PURCHASER, THE COMPANY, THE
INFORMATION AGENT, OR THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
FOR
$15.75 NET PER SHARE
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated July 30,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (the terms
and conditions of which, together with any supplements or amendments thereto,
collectively constitute the "Offer") relating to the offer by Autogrill
Acquisition Co., a Delaware corporation (the "Purchaser"), which is wholly-owned
by Autogrill Overseas S.A., a Luxembourg company that, with the exception of one
subscription share, is a wholly-owned subsidiary of Autogrill S.P.A., an Italian
company (the "Parent"), to purchase all outstanding shares of common stock, no
par value per share (the "Common Stock"), including the associated series A
junior preferred stock purchase rights (the "Rights"; the Common Stock and the
Rights are collectively hereafter referred to as the "Shares"), issued pursuant
to the Rights Agreement dated as of December 22, 1995 by and between Host
Marriott Service Corporation, a Delaware corporation (the "Company"), and First
Chicago Trust Company of New York, as Rights Agent (as the same may be amended,
the "Rights Agreement"), of the Company, at a price of $15.75 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender, on your behalf, any or all Shares held by us for your account pursuant
to the terms and conditions set forth in the Offer.
Please note the following:
1. The Offer Price is $15.75 per Share, net to you in cash without
interest, upon the terms and subject to the conditions set forth in the
Offer.
2. The Board of Directors of the Company (the "Board") has unanimously
approved the Offer and the Merger (as defined below) and determined that
the Offer and the Merger taken together are fair to,
<PAGE> 2
and in the best interests of, the stockholders of the Company. The Board
unanimously recommends that the stockholders of the Company accept the
Offer and tender their Shares.
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made in accordance with an Agreement and Plan of
Merger, dated as of July 26, 1999 (the "Merger Agreement"), by and among
the Parent, the Company and the Purchaser. After the Purchaser purchases
all the Shares which are properly tendered in response to the Offer and not
withdrawn, the Purchaser will take all necessary and appropriate action
(including voting its Shares) to cause the Purchaser to be merged with the
Company (the "Merger"), in a transaction in which the stockholder of the
Purchaser will own all the stock of the corporation which results from the
Merger (essentially, the Company), and the other stockholders of the
Company will receive the same amount of cash per Share as is paid for
Shares tendered in response to the Offer (unless particular stockholders
elect to exercise statutory rights to demand appraisal of their Shares).
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn a number of Shares constituting at least
two-thirds of the outstanding Shares of the Company (determined on a
fully-diluted basis), (ii) the expiration or termination of all waiting
periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the regulations thereunder, and (iii) the
satisfaction or waiver of certain conditions to the obligations of the
Parent and the Purchaser to consummate the Offer and the transactions
contemplated by the Merger Agreement. The Offer is also subject to the
terms and conditions set forth in the Offer to Purchase.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by
the Purchaser pursuant to the Offer.
7. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time on Thursday, August 26, 1999, unless the Offer is extended
in accordance with the terms of the Merger Agreement.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. An
envelope to return your instructions to us is enclosed. Your instructions should
be forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment, and thereby purchased, tendered Shares, if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment. Upon the terms and subject to the
conditions of the Offer, payment for Shares purchased pursuant to the Offer will
in all cases be made only after timely receipt by The Bank of New York (the
"Depositary") of (a) Share Certificates (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to such Shares) into the account
maintained by the Depositary at The Depository Trust Company (the "Book-Entry
Transfer Facility"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (b) the Letter of Transmittal (or a facsimile of one),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in connection with a
book-entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or Book-Entry
Confirmations into the Depositary's account at the Book-Entry Transfer Facility
are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing 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. In any jurisdiction where securities, blue-sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by Goldman, Sachs & Co., the Dealer
Manager for the Offer, or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HOST MARRIOTT SERVICES CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated July 30, 1999, and the related Letter of Transmittal in
connection with the offer by Autogrill Acquisition Co., a Delaware corporation
(the "Purchaser") which is wholly-owned by Autogrill Overseas S.A., a Luxembourg
company that, with the exception of one subscription share, is a wholly-owned
subsidiary of Autogrill S.p.A., an Italian company, to purchase all outstanding
shares of common stock, no par value per share (the "Common Stock"), including
the associated series A junior preferred stock purchase rights (the "Rights";
the Common Stock and the Rights are collectively hereafter referred to as the
"Shares"), issued pursuant to the Rights Agreement dated as of December 22, 1995
by and between Host Marriott Services Corporation (the "Company"), and First
Chicago Trust Company of New York, as Rights Agent (as the same may be amended,
the "Rights Agreement"), of the Company.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: Date:
- --------------------------------------------------- ---------------
SIGN HERE
Signature(s)
- --------------------------------------------------------------------------------
Print Name(s)
- --------------------------------------------------------------------------------
Print Address(es)
- --------------------------------------------------------------------------------
Area Code and Telephone Number(s)
- --------------------------------------------------------------------------
Taxpayer Identification or Social Security Numbers(s)
- --------------------------------------------------------
BY EXECUTING AND DELIVERING THIS LETTER THE UNDERSIGNED ACKNOWLEDGES THAT
IT IS TENDERING ALL SHARES REFERENCED IN THIS LETTER INCLUDING ALL OF THE
ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS.
3
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: 00-0000000. The table below will help determine the number to give
the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
5. Sole proprietorship account The owner(3)
6. Sole proprietorship The owner(3)
7. A valid, estate, or pension trust The legal entity
(Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
8. Corporate account The corporation
9. Religious, charitable or The organization
educational organization account
10. Partnership account held in the The partnership
name of the partnership
11. Association, club, or other tax- The organization
exempt organization
12. A broker or registered nominee The broker or
nominee
13. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state or
local government, school district
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
business and all other entities), at the local 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, write "Applied For" in the space for the taxpayer identification number
in Part I, 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 60 days, backup withholding, if applicable, will begin and
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding. For interest
and dividends, all listed payees are exempt except item (9). For broker
transactions, payees listed in items (1) through (13) and a person registered
under the Investment Advisers Act of 1940 who regularly acts as a broker are
exempt. Payments subject to reporting under sections 6041 and 6041A are
generally exempt from backup withholding only if made to payees described in
items (1) through (7), except a corporation that provides medical and health
care services or bills and collects payments for such services is not exempt
from backup withholding. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions, patronage
dividends, and payments by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Securities, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnership not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE SUBSTITUTE FORM W-9 TO AVOID POSSIBLE
ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041(a), 6042, 6044, 6045, 6049 and
6050A and 6050N of the Code and the regulations promulgated therein.
PRIVACY ACT NOTICE.--Section 6109 requires recipients of dividends, interest, or
other payments to give taxpayer identification numbers to payers who must report
the payments to 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 31% 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.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer 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.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated July
30, 1999 and the related Letter of Transmittal and 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.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HOST MARRIOTT SERVICES CORPORATION
FOR
$15.75 NET PER SHARE IN CASH
BY
AUTOGRILL ACQUISITION CO.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL OVERSEAS S.A.
A WHOLLY-OWNED SUBSIDIARY
OF
AUTOGRILL S.P.A.
Autogrill Acquisition Co., a Delaware corporation (the "Purchaser"),
which is wholly-owned by Autogrill Overseas S.A., a Luxembourg company, which is
a wholly-owned subsidiary of Autogrill S.p.A., an Italian company (the
"Parent"), is offering to purchase for cash all outstanding shares of common
stock, no par value per share (the "Common Stock"), including the associated
series A junior preferred stock purchase rights (the "Rights"; the Common Stock
and the Rights are collectively hereafter referred to as the "Shares"), issued
pursuant to the Rights Agreement dated as of December 22, 1995 by and between
the Company and First Chicago Trust Company of New York, as Rights Agent (as the
same may be amended, the "Rights Agreement"), of Host Marriott Services
Corporation, a Delaware corporation (the "Company"), at a price of $15.75 per
Share, net to the seller in cash, without interest, on the terms and subject to
the conditions set forth in the Offer to Purchase, dated July 30, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (the terms and
conditions of which, together with any supplements or amendments thereto,
collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, AUGUST 26, 1999, UNLESS THE
OFFER IS EXTENDED.
The Offer is conditioned upon (i) there being validly tendered and not
withdrawn a number of Shares constituting at least two-thirds of the outstanding
Shares of the Company (determined on a fully-diluted basis), (ii) the expiration
or termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder, and (iii)
the satisfaction or waiver of certain other conditions to the obligations of the
Parent and the Purchaser to consummate the Offer and the transactions
contemplated by the Merger Agreement (as defined below). See Section 14 of the
Offer to Purchase. The Offer is not subject to a financing condition.
The Offer is being made in accordance with an Agreement and Plan of
Merger, dated as of July 26, 1999 (the "Merger Agreement"), by and among the
Parent, the Company and the Purchaser. After the Purchaser purchases all the
Shares which are tendered in response to the Offer, the Purchaser will take all
necessary and appropriate action (including voting its Shares) to cause the
Purchaser to be merged into the Company in a transaction in which the
stockholder of the Purchaser will own all the stock of the corporation which
results from the Merger (essentially, the Company) and the other stockholders of
the Company will receive the same amount of cash per Share as is paid for Shares
tendered in response to the Offer (unless particular stockholders elect to
exercise statutory rights to demand appraisal of their Shares).
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER AND DETERMINED THAT THE OFFER AND THE MERGER
TAKEN TOGETHER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF
THE COMPANY. THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES.
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares
through a bank or broker should check with such institution as to whether they
charge any service fees. The Purchaser will pay all fees and expenses of The
Bank of New York, which is acting as the Depositary (the "Depositary"), and
Morrow & Co., Inc., which is acting as the Information Agent (the "Information
Agent"), and the expenses of Goldman, Sachs & Co., which is acting as the Dealer
Manager for the Offer (the "Dealer Manager"), incurred in connection with the
Offer and in accordance with the terms of the agreements entered into between
the Purchaser and/or the Parent and each such person.
For purposes of the Offer, the Purchaser will be deemed to accept for
payment, and thereby purchase, all Shares which are properly tendered and not
properly withdrawn when and if the Purchaser gives oral or written notice to the
Depositary that the Purchaser is accepting those Shares for payment. Payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Purchaser and transmitting payment
to tendering stockholders whose Shares have been accepted for payment. In all
cases, payment for Shares purchased pursuant to the Offer will be made only
after timely receipt by the Depositary of (a) certificates representing Shares
("Share Certificates") (or a timely Book-Entry Confirmation of the book-entry
transfer of Shares into an account maintained by the Depositary at The
Depository Trust Company), pursuant to the procedures set forth in Section 3 of
the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile of one),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in connection with a
book-entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time, depending upon when certificates or Book-Entry Confirmations
are actually received by the Depositary. Under no circumstances will interest be
paid on the purchase price of the Shares, regardless of any extension of the
Offer or any delay in paying for Shares.
<PAGE> 2
The term "Expiration Time" means 12:00 midnight, New York City time, on
Thursday, August 26, 1999, unless and until the Purchaser, in its sole
discretion, but subject to the terms of the Merger Agreement, shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Time" shall mean the latest time and date on which the Offer,
as so extended by the Purchaser, shall expire. Subject to the applicable rules
and regulations of the Securities and Exchange Commission and to applicable law,
the Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms of the Merger Agreement), at any time or from time to time, and
regardless of whether or not any of the events set forth in Section 14 of the
Offer to Purchase shall have occurred, to extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the payment
for, any Shares, by giving oral or written notice of such extension to the
Depositary; provided, however, that, subject to the terms of the Merger
Agreement the Purchaser cannot extend the Offer beyond October 30, 1999. There
can be no assurance that the Purchaser will exercise the right to extend the
Offer. Any such extension will be followed by a public announcement thereof no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Time. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Time and, unless accepted for payment and paid for by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after September 28,
1999. For a withdrawal to be effective, a written or facsimile transmission of a
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the 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 (if Share Certificates have been tendered) 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 Share Certificates evidencing
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of those Share Certificates, the
serial numbers shown on the particular Share Certificates to be withdrawn must
be submitted to the Depositary and the signature on the notice of withdrawal
must be guaranteed by an Eligible Institution (as such term is defined in the
Offer to Purchase), unless the Shares have been tendered for the account of an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with such Book-Entry Transfer Facility's procedures.
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 3 of the Offer to Purchase at any time prior to
the Expiration Time. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding. None of the
Parent, the Purchaser, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent, and copies will be
furnished promptly at the Purchaser's expense. Neither the Parent nor the
Purchaser, nor any of their affiliates, will pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and Brokerage Firms Call: (800) 662-5200
Shareholders Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll Free)
July 30, 1999
<PAGE> 1
NEWS
[HOST MARRIOTT SERVICES LOGO]
FOR IMMEDIATE RELEASE FOR MORE INFORMATION:
HOST MARRIOTT SERVICES:
MEDIA INQUIRIES:
WENDY WATKINS 301-380-7903
INVESTOR RELATIONS:
SHARON WHITING: 301-380-7215
AUTOGRILL CONTACT:
LUCIANO LUFFARELLI
011-39-02-4826-3224
011-39-0335-610-1003
[email protected]
AUTOGRILL TO ACQUIRE HOST MARRIOTT SERVICES
COMBINATION WILL CREATE THE LEADING GLOBAL AIRPORT AND TOLLROAD CONCESSION
COMPANY AND ONE OF THE LEADING QUICK SERVICE RESTAURANT OPERATORS
BETHESDA, MARYLAND, JULY 26, 1999 -- The Board of Directors of Autogrill
(AGL.IM) today announced that it approved a definitive agreement to acquire all
of the outstanding common stock of Host Marriott Services (NYSE: HMS). The
acquisition will create the leading global operator of commercial catering for
travelers with operations in North America, Europe, Australia and Asia and
annual sales of over US$2.6 billion/Euro 2.4 billion based on 1998 data. The
combined company will operate facilities in over 834 sites in five primary
business segments: airports (76), travel plazas (609), shopping malls (66),
railway stations (21) and quick service restaurants (46). In addition the group
will operate (16) facilities in other segments.
The transaction has been unanimously approved by the Board of Directors of
Host Marriott Services which will recommend the transaction to its
shareholders. It remains subject to receipt of customary regulatory approvals.
-more-
Public Relations, Department 86026,
6600 Rockledge Drive, Bethesda, MD 20817
Phone 301-380-3836
Fax 301-380-4645
Website: www.hoscorp.com
<PAGE> 2
ADD 1
AUTOGRILL TO ACQUIRE HOST MARRIOTT SERVICES
In 1998 Host Marriott Services had sales of $1,378 million (Euro 1,312
million) and EBITDA of $126 million (Euro 120 million). In the two quarters
ending June 18, 1999 the company had sales of $659 million (vs. $600 million
for the previous year) and EBITDA of $53 million (vs. $48 million for the
previous year). As of June 18, 1999 Host Marriott Services had net indebtedness
of $400 million (Euro 381 million).
Under the terms of the agreement, Host Marriott Services stockholders will
receive $15.75 per share in cash from Autogrill in a tender offer expected to
commence on August 2, 1999. The tender will remain open for a period of 20
business days and is subject to acceptance by at least two-thirds of Host
Marriott Services shareholders. The company has 33.6 million shares outstanding.
The acquisition will be financed with proceeds from a recent convertible
bond issuance and lines of credit.
Gilberto Benetton, Chairman of Autogrill and Edizione Holding, majority
owner of Autogrill said, "The company will be the largest operator of
concessions in airports and tollroads worldwide and one of the largest food
service providers in the world. The acquisition is an important strategic step
in positioning the company for success in a business that is becoming
increasingly global. Edizione Holding shares the vision of Autogrill and
intends to remain an active and supportive shareholder."
Paolo Prota Giurleo, Chief Executive Officer of Autogrill, commented, "We
have admired Host Marriott Services operations in the US and internationally
for a number of
-more-
<PAGE> 3
ADD 2
AUTOGRILL TO ACQUIRE HOST MARRIOTT SERVICES
years. The combination of Autogrill and Host Marriott Services will create a new
company that will offer clients and investors a unique combination of
distinctive brands, management expertise and strong potential for future growth.
This transaction provides an important opportunity to realize a wide range of
synergies and create value for our shareholders. We have great faith in existing
management and Host Marriott Services employees and will encourage their
continued contribution going forward as we strive to create exciting growth
opportunities for the combined company."
According to Host Marriott Services President and Chief Executive Officer,
Bill McCarten, "This offer is a reflection of the unique and powerful business
we have built over the years and a recognition of our innovative market
leadership in North America and our successful growth strategies. Together with
Autogrill we will continue to provide outstanding client and customer service."
Autogrill, based in Milan, Italy, is a long-established corporation, listed
on the Milan Stock Exchange and majority-owned by the Benetton family. With
annual revenues of approximately $1.2 billion and over 12,000 employees,
Autogrill is the leading catering group for travelers and the second largest
commercial catering group in Europe with 636 restaurants and bars in nine
European countries. Key food service concepts include Autogrill, the brand for
motorway restaurants; Spizzico, a quick service
-more-
<PAGE> 4
ADD 3
AUTOGRILL TO ACQUIRE HOST MARRIOTT SERVICES
pizza chain; Ciao, a self-service restaurant chain; as well as international
brands such as Burger King, which has granted the company an exclusive agreement
for use of the Burger King franchise in Italy.
Host Marriott Services Corporation, headquartered in Bethesda, Maryland and
listed on the New York Stock Exchange, was previously a subsidiary of Host
Marriott Corporation prior to its spin-off in 1995. Host Marriott Services, with
revenues of $1.4 billion (Euro 1.3 billion), is the leading provider of food,
beverage and retail concessions at nearly 200 travel and entertainment venues,
with approximately 26,000 employees in seven countries around the globe. The
company operates in 18 of the 20 largest airports in the US such as JFK in New
York, Boston, Washington DC, Miami, San Francisco and Los Angeles. Host Marriott
Services is best known for its unique business approach that combines
internationally known brands including Burger King, Pizza Hut, Starbucks,
Sbarro, Tie Rack and Bath and Body Works located in airports, travel plazas,
shopping malls and entertainment attractions.
Host Marriott Services was advised by Deutsche Bank Alex. Brown. Goldman
Sachs and Boston Consulting Group acted as advisors to Autogrill.
###
Note: A copy of this release is available on Host Marriott Services website at
www.hmscorp.com and on Autogrill's website at www.Autogrill.com.
<PAGE> 1
Autogrill S.p.A.
Via Luigi Giulietti n.9
28100 - Novara
RE: Medium Term Multi-Currency Acquisition Financing of up to Lit. 800 billion.
In reference to your request for an 18 months financing, which may be
withdrawn in Lire, Euro or U.S. dollars, up to an amount equal to Lit. 800
billion, to be utilized exclusively for the payment of costs and expenses to be
incurred by Autogrill in connection with the acquisition of Host Marriott
Services Corporation ("USA"). We would like to confirm with this letter the
conditions at which Cariplo-Cassa Di Risparmio Delle Provincie Lombarde S.p.A.
agrees to release such financing.
1. DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the meanings
specified below:
Acquisition The acquisition of the majority of the share
capital of Host Marriott Services Corporation by
Autogrill directly or through any of the Debtor
Entities.
Agreement This credit agreement.
Autogrill Autogrill S.p.A. whose address is Via Luigi
Giulietti n. 9, Novara, Italy.
Available Amount The difference between the Total Amount and the
Utilized Amount.
Beginning Date The date of the execution of the Agreement.
Business Day The day in which banks operate in:
(a) Milan; and
(b) London, if it concerns the payment of a
Funding or the determination of an
interest rate; and
(c) New York if it concerns the payment of a
Funding in U.S. Dollars.
Cariplo Cariplo Cassa Di Risparmio Delle Provincie
Lombarde S.p.A..
Debtor Entities The entity or entities at least 90%
owned (directly or indirectly) by Autogrill which
are involved in the Acquisition and to which
Cariplo will grant the power to utilize the
Financing, pursuant to the conditions set forth
in Article 11.
Entities Autogrill and/or the Debtor Entities
Euribor The nominal annual interest rate Euribor (Euro
Interbank Offered Rate) assessed daily at or
around 11:00 A.M. (Central European time) by the
Euribor Panel Steering Committee for three months
deposits. Such Euribor rate will be assessed
daily beginning on the first Business Day of the
Interest Period and will be calculated by
dividing the published annual Euribor rate by
365.
1
<PAGE> 2
Final Termination Date Except as provided in Article 16, the expiration
date is 18 months less 1 day from the Beginning
Date or if such Final Termination Date does not
fall on a Business Day, the first Business Day
immediately preceding.
Financing The opening of a credit line by Cariplo for the
benefit of Autogrill and, in accordance with the
restrictions contained in Article 11, to the
Debtor Entities. This credit line will be
regulated by Article 1842 of the Italian Civil
Code and by this Agreement.
Funding Each payment of funds to the Entities under this
Agreement.
Funding Date The date chosen by the Entities for each Funding
pursuant to a request, which must be filed on a
Business Day, made pursuant to Article 3.1.
Interest Period The periods in which the life of the Agreement
will be subdivided, each of which will have a
quarterly duration ending September 30, December
31, March 31, and June 30 of each year with the
exception of:
(a) the first interest period which begins
from the Funding date of the first
Funding; and
(b) the last interest period which will
terminate concurrently with the Final
Termination Date.
Libor Libor means the nominal annual interest rate
("London Interbank Offered Rate") assessed at or
around 11:00 A.M. London time, and published, by
the British Bankers Association, for three months
deposits in U.S. Dollars. This Libor interest
rate will be assessed daily beginning form the
first Business Day of the Interest Period.
If the Libor rate is not published, the relevant
interest rate will be assessed in reference to
the average of the Interbank interest rates
applied by the following banks:
(a) Cariplo - London branch;
(b) Banca Commerciale Italiana S.p.A. -
London branch.
(c) San Paolo - IMI S.p.A. - London branch.
Margin 0.125% per year.
Optional Currency Lira, Euro or U.S. Dollar
Total Amount Lit. 800 billion
Utilized Amount The amount owed by the Entities to Cariplo in
connection with the Financing. This amount will
be equal to the equivalent Lira amount of the
sum of all the Fundings paid to the Entitities.
2. AMOUNT, DURATION AND USE OF THE FINANCING
2.1. The Financing will be granted by Cariplo to Autogrill and, pursuant to
the conditions set forth in Article 11, to the Debtor Entities, for an
amount equal to the Total Amount. The amounts
2
<PAGE> 3
available under the Financing may be paid in one or more installments as
specified in Article 3 below.
2.2. The Financing shall be available beginning from the Beginning Date and,
except as set forth in Article 16, shall terminate on the Final
Termination Date.
2.3. The Financing may be utilized exclusively for the payment of costs
incurred by the Entities in connection with the Acquisition.
3. REQUEST FOR FUNDING
3.1. The Entities may request Cariplo to pay the Financing in one or more
Funding and in one or more Optional Currency except that no payment
will be made if:
(a) the request for a Funding is not equal to at least Lit 10
billion or any incremental multiples thereof;
(b) the Funding amount will exceed the Available Amount.
3.2. The request for each Funding, in writing or via telex, shall arrive to
Cariplo within the third Business Day prior to the proposed Funding
Date and shall contain the following information:
(a) the nature of the costs to be paid or that have been already
paid by the Entities requesting the Funding, in connection
with the Acquisition. Such information must be supported by
adequate documentation;
(b) the amount of the requested Funding;
(c) the chosen Optional Currency;
(d) the proposed Funding Date.
3.3. Cariplo will not release any Funding which, as a result of the
information contained in the documentation supplied pursuant to sub (a)
of the preceding Article 3.3., will not appear to be connected with the
Acquisition.
3.4. The payment of each Funding will be through a wire transfer of the
related amount, either in Lira, Euro or U.S. Dollars, released by
Cariplo on the Funding Date to an account or accounts opened by the
Entities with Cariplo itself.
3.5. In the event that Cariplo, as a consequence of market contingencies,
will not be able to find the U.S. Dollars chosen as the Optional
Currency for a Funding, Cariplo will inform the Entities within two
Business Day following the receipt of the request for a Funding.
3.6. In such an occurrence, the Entity requesting the Funding will have the
ability to resubmit the same request within two (2) business days
pursuant the formalities specified above, and respecting the time
limitations as set forth in this Article 3. If the requesting Entity
will not follow such formalities, the request for a Funding will be
deemed as not submitted.
4. REIMBURSEMENT
4.1. Except as set forth in Article 16, the Entities will reimburse the
Utilized Amount in a single payment at the Final Termination Date.
3
<PAGE> 4
5. INTEREST RATE
5.1. The interest rate applicable to the Financing will be equal to:
(a) if the Utilized Amount is in Lira or Euro:
(i) the Euribor interest rate;
(ii) plus the Margin;
(iii) rounded to the third highest decimal;
(b) if the Utilized Amount is in U.S. Dollars:
(i) the Libor interest rate for U.S. Dollar deposit;
(ii) plus the Margin;
(iii) rounded to the third highest decimal.
5.2. The interest rate as determined above will be communicated to the
Entities at the moment of its assessment.
6. INTEREST PAYMENTS
6.1. The interest amounts shall be paid by the Entities in the Optional
Currency of the corresponding Funding to Cariplo on the date on which
each Interest Period will expire. If such date will not fall on a
business day, the Entities shall pay on the first Business Day
immediately following the relative expiration date of the Interest
Period.
6.2. The interest amount is calculated by Cariplo on the basis of 365 days a
year or of 360 days a year for the Utilized Amount is denominated in
Lira and Euro or U.S. Dollars, respectively. Such interest amount will
be communicated to the Entities by Cariplo at least two (2) business
days prior to each Interest Period's expiration date.
7. CURRENCY EXCHANGE RATES
7.1. The Central European Bank exchange rate will be used to determine the
corresponding U.S. Dollar value in Lira or Euro. Such rate will be the
rate of the second business day immediately preceding the Funding Date
as published by Reuters and on the "Il Sole 24ore".
7.2. If such exchange rate is not published, Cariplo will determine the
exchange rate so that in relation to its currency exchange
negotiations, Cariplo will not incur in any U.S. Dollar losses.
8. CONVERSION OF THE FUNDING CURRENCY
8.1. At the Expiration Date of each Interest Period, any Entity, other than
for the payment of interest as set forth in Article 6.1, may (with the
same notice and formalities provided in Article 3.1) request for the
conversion of the Optional Currency in which an Utilized Amount is
being denominated (the "Singularly Utilized Amount") in a different
Optional Currency.
8.2. The conversion of the Funding Currency shall be made by exchanging the
Singularly Utilized Amount in the requested Optional Currency at the
exchange rate set forth in Article 7 above.
9. FINANCING VALUE
9.1. The Utilized Amount may not in any circumstances exceed the Total
Amount.
4
<PAGE> 5
9.2. If the Utilized Amount, as a consequence of the fluctuations of
exchange rates, results to be exceeding by at least 5% the Total
Amount, each Entities, in proportion to the Singularly Utilized Amount
or a part of such Singularly Utilized Amount which is denominated in
U.S. Dollars, must, upon Cariplo's five business day notice, pay to
Cariplo such exceeding amount at the expiration of the then current
Interest Period.
9.3. If the Utilized Amount, as a consequence of the fluctuations of
exchange rates, is less than 5% of the Total Amount, Cariplo will pay
to the Entities such amount at the expiration of the then current
Interest Period.
10. PAYMENT CURRENCY
10.1. In accordance with Article 1279 of the Italian Civil Code, the
reimbursement of the principal and the payment of the interests must be
in the same Optional Currency in which the Utilized Amount was drafted.
Such payment or reimbursement is due at the Termination Date or at the
expiration of the Interest Period.
10.2. If any of the Entities will fail to reimburse in U.S. Dollars, Cariplo
is authorized to purchase on the market the U.S. Dollars necessary to
the payment of the debt, on behalf of the same Entities without issuing
any notice or declaring the Entities in default. Cariplo may purchase
U.S. Dollars at any rate or on any date it chooses to.
10.3. If the Entities, as a consequence of a change in Italian law are
compelled to pay the amounts due in U.S. Dollars by using Italian Lira
or if the Entities are not able to obtain any U.S. Dollars, such Entity
shall pay an amount which will be equal to the relative amount in an
Optional Currency other than U.S. Dollars, as determined by the
exchange rate set forth in Article 7 above, plus any additional costs,
commission and exchange fees incurred by Cariplo.
11. DEBTOR ENTITIES AND WARRANT TO GRANT CREDIT
11.1 At any time Autogrill may give notice to Cariplo of the name of one or
more Debtor Entities, which pursuant to the conditions set forth below
will be able to utilize the financing.
11.2. Such warrant to grant credit and consequently the ability of the Debtor
Entities to use the Financing is subordinated to:
(a) Autogrill filing the following supporting documentation with
Cariplo:
(i) document attesting that at least 90% of the share
capital of the Debtor Entities is held directly or
indirectly by Autogrill;
(ii) documents attesting that Autogrill directly, or
indirectly through the Debtor Entities, is conducting
the Acquisition;
(iii) documents attesting that the Debtor Entities are in
good standing pursuant to the relative state laws;
(iv) documents attesting that the necessary and required
corporate governing bodies have approved both the
execution of the Agreement and the intended use of
the Financing;
(v) documents attesting that the individual or
individuals which will execute the Agreement have
power of attorney on behalf of the Debtor Entities.
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(b) the execution of a copy of the Agreement by the Debtor
Entities as acceptance all of the provisions which regulate
the Financing;
(c) the execution by Autogrill of a warrant to grant credit.
Cariplo shall thus have the power to, pursuant to Articles
1958 and 1959 of the Italian Civil Code, grant to the Debtor
Entities the power to use the Financing. The warrant to grant
credit must be executed in conformity to the form attached to
the Agreement under (A).
12. COMMISSION FOR NON-USE OF THE FINANCING
12.1. Beginning from the Beginning Date, Autogrill will correspond to Cariplo
a commission for the non-use of the Financing, which is calculated each
year as the 0.05% of the Available Amount.
12.2. Such commission will be reduced by 0.01% every year beginning from the
date in which the Utilized Amount is over Lit. 400 billion.
12.3. The commission for the non-use of the Financing will be paid by
Autogrill to Cariplo either in Lira or Euro at the expiration of each
Interest Period. If such date will not fall on a Business Day,
Autogrill will pay on the Business Day immediately following.
12.4. The amount of such commission is calculated by Cariplo on the basis of
365 days a year for each day of non-use of the Financing. The
commission for the non-use of the Financing will be communicated to
Autogrill at least two (2) business days prior to the expiration date
of each Interest Period.
13. DEFAULT INTEREST
13.1. The default interest is due on any amount not paid on time by the
Entities. The default interest is calculated as follows:
(a) The Euribor interest rate (if the unpaid amount is denominated
in Lira or Euro) or the Libor interest rate (if the unpaid
amount is denominated in U.S. Dollars) determined for each
month starting from the date in which the payment was due for
the relative Optional Currency amounts;
(b) plus the margin;
(c) plus three additional percentage points per year;
(d) rounded to the third highest decimal.
13.2. Such default interest will be due automatically, without any
requirement for notice of payment or default, upon the expiration of
the payment date and without affecting any of the withdrawal rights
enjoyed by Cariplo pursuant to Article 16 below.
14. REPRESENTATIONS AND WARRANTIES OF THE ENTITIES
14.1. Each Entities represents and warrants that:
(a) it is in good standing under the laws of the relative
countries of incorporation and it is not in breach of any law;
(b) that has the power of executing the Agreement, and that the
execution of such Agreement will not cause a breach of its
statute, or of any other contractual commitments,
administrative rulings and regulations or judicial decrees;
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(c) that there are no liens or encumbrances of any nature over its
assets, except as represented in the Entities financial
statements dated December 31, 1998; and
(d) that such Entities are not, and reasonably foresee that will
not, be in default as defined in Article 16 below.
The representations and warranties above are intended as reaffirmed
upon any requests for Funding on any expiration of the Interest
Periods.
14.2. The Entities (in addition to the obligations imposed by the Italian
Legislative Decree dated February 24, 1998 No. 58 and by the CONSOB
Regulation No. 11971 dated May 14, 1999) promise that during the life
of the Agreement and until the total payment of the Financing they
will:
(a) deliver to Cariplo the audited annual financial statements and
the consolidated financial statements together with the
relative management and administrative bodies reports. Such
delivery shall be made as soon as practicable but not later
than seven (7) months after the day of the closing of the
Entities' books.
(b) to deliver to Cariplo the minutes of any shareholders meeting
within 30 days from such meeting;
(c) deliver to Cariplo a written notice within fifteen (15) days
of the occurrence of any event which may substantially
adversely modify the financial or legal position of the
Entities other than what was disclosed in the latest financial
statements;
(d) deliver a written notice to Cariplo within fifteen (15) days
of any change in the composition of any administrative body or
shareholders base;
(e) deliver to Cariplo, within fifteen (15) days from Cariplo's
request, any declaration, documentation and any other
information or data on the financial and economic situation of
the Entities as required by the Italian Banking Regulatory
Agency.
15. NO DELAY ON THE OBLIGATIONS OF THE ENTITIES
15.1. Any and all of the obligations of Entities to pay at the due dates the
principal or the interest amounts and, more in general, to comply with
any of the obligations pursuant to this Agreement, shall not be
suspended or delayed for any reason including any legislative,
administrative or legal proceeding.
16. EVENTS OF DEFAULT, WITHDRAWAL AND RESOLUTION OF THE AGREEMENT
16.1. It is agreed that the following are considered events of default:
(a) the filing of any proceeding for the payment of debt or other
obligation in a manner different from the regular course of
business;
(b) any issue of a notice for a shareholders meeting called in
order to dissolve or liquidate any of the Entities;
(c) the transfer or sale of all of the assets to creditors or the
structuring of the debt through consolidation or other
agreements;
(d) the issue, against any of the Entities, of a judiciary decree
for payment of debts or other analogous judiciary actions for
material amounts relative to the total financial and economic
situation.
16.2 It is agreed that Cariplo has the withdrawal rights upon the occurrence
of the following events:
(a) the default of any of the Entities from their obligations
under the Agreement;
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(b) the encumbrance or a lien on any of the assets of the Entities
in favor of third parties other than Cariplo except as provided
by Article 14.2(f);
(c) the occurrence of any events which are of such magnitude to
objectively prejudice the performance of the Entities'
obligations under the Agreement, if such Entities are not able
to cure such events within thirty (30) days from their
occurrence.
16.3 It is expressly agreed that the Agreement will be rescinded pursuant to
Article 1456 of the Italian Civil Code if any of the following will
occur:
(a) any delay over fifteen (15) days by the Entities on their
payment obligation in relation to principal interest and any
other amounts due under the Agreement, except as provided by
Article 13.2;
(b) the Entities' failure to comply with their duties and
obligations under the Agreement except as provided by Article
14.2(a), and unless the company cures such failure within
thirty (30) days of Cariplo's written request to cure;
(c) the inaccuracy or untruthfulness of the representations set
forth in Article 14.1 or any other information, data or
account disclosed by any of the Entities in order to obtain
the financing or any subsequent Funding.
16.4 The Entities' default, the rescission of the Agreement or the rescission
of the Financing will be effective upon Cariplo's written notice to the
Entities.
16.5 In the occurrence of any default by the Entities or a rescission of the
Agreement for an event of default the Entities shall repay, within 5
business days from the date in which the written notice will be
received, all of the principal and interests amounts which are due until
the date of such repayment. In addition to such due amounts, the
Entities shall pay the default interests as set forth in Article 13.1.
Such payments will not prejudice any right that Cariplo might have for
the reimbursement of damages caused by the Entities' anticipated
termination of the Agreement.
16.6. If only one of the Debtor Entities is in default, Cariplo may elect to
declare such entity in default and rescind the Agreement only in
relation to such Debtor Entity. The rights and obligations of the
remaining Debtor Entities will not be affected by such action.
17. ADDITIONAL CHARGES AND COMPENSATION AMOUNTS
17.1. Any additional charge for taxes, other rights or conditions that may be
assessed in connection with the Agreement, including registration and
filing fees, will be the sole responsibility of the Entities. Cariplo
will therefore be entitled to receive payments net of any additional
charges as provided by this Agreement.
17.2. Cariplo has the right to charge the Entities for any additional costs,
as certified by Cariplo, that may derive from any change of law,
administrative regulation or any interpretation thereof.
17.3. Any restriction or prohibition pursuant to Italian law that prevents
the Entities from performing their obligations under the Agreement will
entitle Cariplo to modify the interest rates or other provisions of
this Agreement, even if such modification will be unfavorable to the
Entities.
18. PROOF OF CREDIT
18.1. Cariplo's statement of accounts, except when manifestly incorrect, will
be sufficient proof in any legal proceeding of its credit towards the
Entities.
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18.2. Any statement of account sent by Cariplo to the Entities will be
considered as approved by such Entities if not specifically contested
in writing within 60 days from its receipt.
19. MODIFICATIONS TO THE PROVISIONS
19.1. Any modification to the Agreement must be in writing and subject to the
unanimous approval of the Entities and Cariplo.
19.2. Any eventual silence by Cariplo regarding any of the defaults of the
Entities shall not be interpreted as silent approval by Cariplo of such
defaults.
20. APPLICABLE LAW
20.1. The Agreement is regulated by Italian law.
20.2. The jurisdiction for any case or controversy arising out of this
Agreement will be in the forum of Milan except for any of the Entities
which might be located in any other competent jurisdiction.
21. NOTICE
21.1. All of the notices to be delivered pursuant to this Agreement, but for
otherwise specified, should be in writing and will be deemed correctly
executed if:
(a) delivered by hand; or
(b) by certified mail with return receipt; or
(c) via telefax followed by certified mail;
Such notices must be sent to the following addresses or any other addresses
which will be subsequently communicated by the parties. Such addresses must be
within the Italian territory.
(i) For all the Entities:
Autogrill S.p.A.
via Caldera, 21
20153 Milano
Attn: Direttore Generale Amministrazione, Finanza,
Controllo, Sistemi
Fax #: + 39 02 48 26 35 57
(ii) For Cariplo:
Filiale n. 65 de Milano
Via Caldera n. 21
20153 - MILANO
Fax #: + 39 02 40 91 08 15
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Autogrill S.p.A.
Via Luigi Giulietti n.9
28100 - Novara
RE: Medium Term Multi-Currency Acquisition Financing of up to Lit. 400 billion.
In reference to your request for a financing with a term expiring on
December 31, 1999, which may be withdrawn in Lire, Euro or U.S. dollars, up to
an amount equal to Lit. 400 billion, to be utilized exclusively for the payment
of costs and expenses to be incurred by Autogrill in connection with the
acquisition of Host Marriott Services Corporation ("USA"). We would like to
confirm with this letter the conditions at which Cariplo-Cassa Di Risparmio
Delle Provincie Lombarde S.p.A. agrees to release such financing.
1. DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the meanings
specified below:
Acquisition The acquisition of the majority of the share
capital of Host Marriott Services Corporation by
Autogrill directly or through any of the Debtor
Entities.
Agreement This credit agreement.
Autogrill Autogrill S.p.A. whose address is Via Luigi
Giulietti n. 9, Novara, Italy.
Available Amount The difference between the Total Amount and the
Utilized Amount.
Beginning Date The date of the execution of the Agreement.
Business Day The day in which banks operate in:
(a) Milan; and
(b) London, if it concerns the payment of a
Funding or the determination of an
interest rate; and
(c) New York if it concerns the payment of a
Funding in U.S. Dollars.
Cariplo Cariplo Cassa Di Risparmio Delle Provincie
Lombarde S.p.A..
Debtor Entities The entity or entities at least 90%
owned (directly or indirectly) by Autogrill which
are involved in the Acquisition and to which
Cariplo will grant the power to utilize the
Financing, pursuant to the conditions set forth
in Article 11.
Entities Autogrill and/or the Debtor Entities
Euribor The nominal annual interest rate Euribor (Euro
Interbank Offered Rate) assessed daily at or
around 11:00 A.M. (Central European time) by the
Euribor Panel Steering Committee for three months
deposits. Such Euribor rate will be assessed
daily beginning on the first Business Day of the
Interest Period and will be calculated by
dividing the published annual Euribor rate by
365.
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Final Termination Date Except as provided in Articles 12 and 18, the
expiration date is December 31, 1999, or if such
Final Termination Date does not fall on a
Business Day, the first Business Day immediately
preceding.
Financing The opening of a credit line by Cariplo for the
benefit of Autogrill and, in accordance with the
restrictions contained in Article 11, to the
Debtor Entities. This credit line will be
regulated by Article 1842 of the Italian Civil
Code and by this Agreement.
Funding Each payment of funds to the Entities under this
Agreement.
Funding Date The date chosen by the Entities for each Funding
pursuant to a request, which must be filed on a
Business Day, made pursuant to Article 3.1.
Interest Period The periods in which the life of the Agreement
will be subdivided, each of which will have a
quarterly duration ending September 30, December
31, March 31, and June 30 of each year with the
exception of:
(a) the first interest period which begins
from the Funding date of the first
Funding; and
(b) the last interest period which will
terminate concurrently with the Final
Termination Date.
Libor Libor means the nominal annual interest rate
("London Interbank Offered Rate") assessed at or
around 11:00 A.M. London time, and published, by
the British Bankers Association, for three months
deposits in U.S. Dollars. This Libor interest
rate will be assessed daily beginning form the
first Business Day of the Interest Period.
If the Libor rate is not published, the relevant
interest rate will be assessed in reference to
the average of the Interbank interest rates
applied by the following banks:
(a) Cariplo - London branch;
(b) Banca Commerciale Italiana S.p.A. -
London branch.
(c) San Paolo - IMI S.p.A. - London branch.
Margin 0.125% per year.
Optional Currency Lira, Euro or U.S. Dollar
Total Amount Lit. 400 billion
Utilized Amount The amount owed by the Entities to Cariplo in
connection with the Financing. This amount will
be equal to the equivalent Lira amount of the
sum of all the Fundings paid to the Entitities.
2. AMOUNT, DURATION AND USE OF THE FINANCING
2.1 The Financing will be granted by Cariplo to Autogrill and, pursuant to
the conditions set forth in Article 11, to the Debtor Entities, for an
amount equal to the Total Amount. The amounts
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available under the Financing may be paid in one or more installments
as specified in Article 3 below.
2.2 The Financing shall be available beginning from the Beginning Date and,
except as set forth in Articles 12 and 18, shall terminate on the Final
Termination Date.
2.3 The Financing may be utilized exclusively for the payment of costs
incurred by the Entities in connection with the Acquisition.
3. REQUEST FOR FUNDING
3.1 The Entities may request Cariplo to pay the Financing in one or more
Funding and in one or more Optional Currency except that no payment
will be made if:
(a) the request for a Funding is not equal to at least Lit 10
billion or any incremental multiples thereof;
(b) the Funding amount will exceed the Available Amount.
3.2 The request for each Funding, in writing or via telex, shall arrive to
Cariplo within the third Business Day prior to the proposed Funding
Date and shall contain the following information:
(a) the nature of the costs to be paid or that have been already
paid by the Entities requesting the Funding, in connection
with the Acquisition. Such information must be supported by
adequate documentation;
(b) the amount of the requested Funding;
(c) the chosen Optional Currency;
(d) the proposed Funding Date.
3.3 Cariplo will not release any Funding which, as a result of the
information contained in the documentation supplied pursuant to sub (a)
of the preceding Article 3.3., will not appear to be connected with the
Acquisition.
3.4 The payment of each Funding will be through a wire transfer of the
related amount, either in Lira, Euro or U.S. Dollars, released by
Cariplo on the Funding Date to an account or accounts opened by the
Entities with Cariplo itself.
3.5 In the event that Cariplo, as a consequence of market contingencies,
will not be able to find the U.S. Dollars chosen as the Optional
Currency for a Funding, Cariplo will inform the Entities within two
Business Day following the receipt of the request for a Funding.
3.6 In such an occurrence, the Entity requesting the Funding will have the
ability to resubmit the same request within two (2) business days
pursuant the formalities specified above, and respecting the time
limitations as set forth in this Article 3. If the requesting Entity
will not follow such formalities, the request for a Funding will be
deemed as not submitted.
4. REIMBURSEMENT
4.1 Except as set forth in Articles 12 and 18, the Entities will reimburse
the Utilized Amount in a single payment at the Final Termination Date.
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5. INTEREST RATE
5.1 The interest rate applicable to the Financing will be equal to:
(a) if the Utilized Amount is in Lira or Euro:
(i) the Euribor interest rate;
(ii) plus the Margin;
(iii) rounded to the third highest decimal;
(b) if the Utilized Amount is in U.S. Dollars:
(i) the Libor interest rate for U.S. Dollar deposit;
(ii) plus the Margin;
(iii) rounded to the third highest decimal.
5.2 The interest rate as determined above will be communicated to the
Entities at the moment of its assessment.
6. INTEREST PAYMENTS
6.1 The interest amounts shall be paid by the Entities in the Optional
Currency of the corresponding Funding to Cariplo on the date on which
each Interest Period will expire. If such date will not fall on a
business day, the Entities shall pay on the first Business Day
immediately following the relative expiration date of the Interest
Period.
6.2 The interest amount is calculated by Cariplo on the basis of 365 days a
year or of 360 days a year for the Utilized Amount is denominated in
Lira and Euro or U.S. Dollars, respectively. Such interest amount will
be communicated to the Entities by Cariplo at least two (2) business
days prior to each Interest Period's expiration date.
7. CURRENCY EXCHANGE RATES
7.1 The Central European Bank exchange rate will be used to determine the
corresponding U.S. Dollar value in Lira or Euro. Such rate will be the
rate of the second business day immediately preceding the Funding Date
as published by Reuters and on the "Il Sole 24ore".
7.2 If such exchange rate is not published, Cariplo will determine the
exchange rate so that in relation to its currency exchange
negotiations, Cariplo will not incur in any U.S. Dollar losses.
8. CONVERSION OF THE FUNDING CURRENCY
8.1 At the Expiration Date of each Interest Period, any Entity, other than
for the payment of interest as set forth in Article 6.1, may (with the
same notice and formalities provided in Article 3.1) request for the
conversion of the Optional Currency in which an Utilized Amount is
being denominated (the "Singularly Utilized Amount") in a different
Optional Currency.
8.2 The conversion of the Funding Currency shall be made by exchanging the
Singularly Utilized Amount in the requested Optional Currency at the
exchange rate set forth in Article 7 above.
9. FINANCING VALUE
9.1 The Utilized Amount may not in any circumstances exceed the Total
Amount.
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9.2 If the Utilized Amount, as a consequence of the fluctuations of
exchange rates, results to be exceeding by at least 5% the Total
Amount, each Entities, in proportion to the Singularly Utilized Amount
or a part of such Singularly Utilized Amount which is denominated in
U.S. Dollars, must, upon Cariplo's five business day notice, pay to
Cariplo such exceeding amount at the expiration of the then current
Interest Period.
9.3 If the Utilized Amount, as a consequence of the fluctuations of
exchange rates, is less than 5% of the Total Amount, Cariplo will pay
to the Entities such amount at the expiration of the then current
Interest Period.
10. PAYMENT CURRENCY
10.1 In accordance with Article 1279 of the Italian Civil Code, the
reimbursement of the principal and the payment of the interests must be
in the same Optional Currency in which the Utilized Amount was drafted.
Such payment or reimbursement is due at the Termination Date or at the
expiration of the Interest Period.
10.2 If any of the Entities will fail to reimburse in U.S. Dollars, Cariplo
is authorized to purchase on the market the U.S. Dollars necessary to
the payment of the debt, on behalf of the same Entities without issuing
any notice or declaring the Entities in default. Cariplo may purchase
U.S. Dollars at any rate or on any date it chooses to.
10.3 If the Entities, as a consequence of a change in Italian law are
compelled to pay the amounts due in U.S. Dollars by using Italian Lira
or if the Entities are not able to obtain any U.S. Dollars, such Entity
shall pay an amount which will be equal to the relative amount in an
Optional Currency other than U.S. Dollars, as determined by the
exchange rate set forth in Article 7 above, plus any additional costs,
commission and exchange fees incurred by Cariplo.
11. DEBTOR ENTITIES AND WARRANT TO GRANT CREDIT
11.1 At any time Autogrill may give notice to Cariplo of the name of one or
more Debtor Entities, which pursuant to the conditions set forth below
will be able to utilize the financing.
11.2 Such warrant to grant credit and consequently the ability of the Debtor
Entities to use the Financing is conditioned to:
(a) Autogrill filing the following supporting documentation with
Cariplo:
(i) document attesting that at least 90% of the share
capital of the Debtor Entities is held directly or
indirectly by Autogrill;
(ii) documents attesting that Autogrill directly, or
indirectly through the Debtor Entities, is conducting
the Acquisition;
(iii) documents attesting that the Debtor Entities are in
good standing pursuant to the relative state laws;
(iv) documents attesting that the necessary and required
corporate governing bodies have approved both the
execution of the Agreement and the intended use of
the Financing;
(v) documents attesting that the individual or
individuals which will execute the Agreement have
power of attorney on behalf of the Debtor Entities.
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(b) the execution of a copy of the Agreement by the Debtor
Entities as acceptance all of the provisions which regulate
the Financing;
(c) the execution by Autogrill of a warrant to grant credit.
Cariplo shall thus have the power to, pursuant to Articles
1958 and 1959 of the Italian Civil Code, grant to the Debtor
Entities the power to use the Financing. The warrant to grant
credit must be executed in conformity to the form attached to
the Agreement under (A).
12. AUTOGRILL WITHDRAWAL AND PREPAYMENT RIGHTS
12.1 Autogrill and the Debtor Entity may, at any time they choose, withdraw
from the Agreement, by sending a written notice at least 10 Business
Days prior to the date chosen as the withdrawal date.
12.2 Once the notice of withdrawal is communicated, the Entities shall not
be able to use the Financing.
12.3 At the withdrawal date all the Utilized Amount shall become due and
payable to Cariplo, together with any other unpaid interest charges and
any commission for non-use matured pursuant Articles 5 and 13.
13. COMMISSION FOR NON-USE OF THE FINANCING
13.1 Beginning from the Beginning Date, Autogrill will correspond to Cariplo
a commission for the non-use of the Financing, which is calculated each
year as the 0.05% of the Available Amount.
13.2 Such commission will be reduced by 0.01% every year beginning from the
date in which the Utilized Amount is over Lit. 200 billion.
13.3 The commission for the non-use of the Financing will be paid by
Autogrill to Cariplo either in Lira or Euro at the expiration of each
Interest Period. If such date will not fall on a Business Day,
Autogrill will pay on the Business Day immediately following.
13.4 The amount of such commission is calculated by Cariplo on the basis of
365 days a year for each day of non-use of the Financing. The
commission for the non-use of the Financing will be communicated to
Autogrill at least two (2) business days prior to the expiration date
of each Interest Period.
14. DEFAULT INTEREST
14.1 The default interest is due on any amount not paid on time by the
Entities. The default interest is calculated as follows:
(a) The Euribor interest rate (if the unpaid amount is denominated
in Lira or Euro) or the Libor interest rate (if the unpaid
amount is denominated in U.S. Dollars) determined for each
month starting from the date in which the payment was due for
the relative Optional Currency amounts;
(b) plus the margin;
(c) plus three additional percentage points per year;
(d) rounded to the third highest decimal.
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14.2 Such default interest will be due automatically, without any
requirement for notice of payment or default, upon the expiration of
the payment date and without affecting any of the withdrawal rights
enjoyed by Cariplo pursuant to Article 18 below.
15. REPRESENTATIONS AND WARRANTIES OF THE ENTITIES
15.1 Each Entities represents and warrants that:
(a) it is in good standing under the laws of the relative
countries of incorporation and it is not in breach of any law;
(b) that has the power of executing the Agreement, and that the
execution of such Agreement will not cause a breach of its
statute, or of any other contractual commitments,
administrative rulings and regulations or judicial decrees;
(c) that there are no liens or encumbrances of any nature over its
assets; and
(d) that such Entities are not, and reasonably foresee that will
not, be in default as defined in Article 16 below.
The representations and warranties above are intended as reaffirmed
upon any requests for Funding on any expiration of the Interest
Periods.
15.2 The Entities (in addition to the obligations imposed by the Italian
Legislative Decree dated February 24, 1998 No. 58 and by the CONSOB
Regulation No. 11971 dated May 14, 1999) promise that during the life
of the Agreement and until the total payment of the Financing they
will:
(a) deliver to Cariplo the audited annual financial statements and
the consolidated financial statements together with the
relative management and administrative bodies reports. Such
delivery shall be made as soon as practicable but not later
than seven (7) months after the day of the closing of the
Entities' books.
(b) to deliver to Cariplo the minutes of any shareholders meeting
within 30 days from such meeting;
(c) deliver to Cariplo a written notice within fifteen (15) days
of the occurrence of any event which may substantially
adversely modify the financial or legal position of the
Entities other than what was disclosed in the latest financial
statements;
(d) deliver a written notice to Cariplo within fifteen (15) days
of any change in the composition of any administrative body or
shareholders base;
(e) deliver to Cariplo, within fifteen (15) days from Cariplo's
request, any declaration, documentation and any other
information or data on the financial and economic situation of
the Entities as required by the Italian Banking Regulatory
Agency.
16. GUARANTEE
16.1 The Entities shall, as guarantee to the Financing, provide or cause to
be provided the following collateral:
(a) Autogrill shall provide:
(i) Certain Securities having a value of up to Lit 80
billion, currently deposited with Cariplo S.p.A., San
Paolo -- IMI S.p.A., Banca di Trento e Bolzano, Banca
Nazionale del Lavoro S.p.A., Banca di Roma and Banca
di Brescia (the Securities deposited in such bank
shall be transferred to Cariplo S.p.A.)
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(ii) grant Cariplo an irrevocable right to cash from San
Paolo -- IMI S.p.A. all of the amounts due to
Autogrill pursuant to a "repo agreement" already
existing between San Paolo -- IMI S.p.A. and
Autogrill for a value of up to Lit. 100 billion
approximately.
(b) Autogrill Finance S.A. -- Lugano Branch, will assign to
Cariplo the total amount of its cash deposits with the London
Branch of Cariplo itself.
17. NO DELAY ON THE OBLIGATIONS OF THE ENTITIES
17.1 Any and all of the obligations of Entities to pay at the due dates the
principal or the interest amounts and, more in general, to comply with
any of the obligations pursuant to this Agreement, shall not be
suspended or delayed for any reason including any legislative,
administrative or legal proceeding.
18. EVENTS OF DEFAULT, WITHDRAWAL AND RESOLUTION OF THE AGREEMENT
18.1 It is agreed that the following are considered events of default:
(a) the filing of any proceeding for the payment of debt or other
obligation in a manner different from the regular course of
business;
(b) any issue of a notice for a shareholders meeting called in
order to dissolve or liquidate any of the Entities;
(c) the transfer or sale of all of the assets to creditors or the
structuring of the debt through consolidation or other
agreements;
(d) the issue, against any of the Entities, of a judiciary decree
for payment of debts or other analogous judiciary actions for
material amounts relative to the total financial and economic
situation.
18.2 It is agreed that Cariplo has the withdrawal rights upon the occurrence
of the following events:
(a) the default of any of the Entities from their obligations
under the Agreement;
(b) the encumbrance or a lien on any of the assets of the Entities
in favor of third parties other than Cariplo except as
provided by Article 14.2(f);
(c) the occurrence of any events which are of such magnitude to
objectively prejudice the performance of the Entities'
obligations under the Agreement, if such Entities are not able
to cure such events within thirty (30) days from their
occurrence.
18.3 It is expressly agreed that the Agreement will be rescinded pursuant to
Article 1456 of the Italian Civil Code if any of the following will
occur:
(a) any delay over fifteen (15) days by the Entities on their
payment obligation in relation to principal interest and any
other amounts due under the Agreement, except as provided by
Article 14.2;
(b) the Entities' failure to comply with their duties and
obligations under the Agreement except as provided by Article
15.2(a), and unless the company cures such failure within
thirty (30) days of Cariplo's written request to cure;
(c) the nullity or ineffectiveness of any of the guarantees as
provided in Article 16, except for any cause independent from
the Entities' willful actions;
8
<PAGE> 9
(d) the inaccuracy or untruthfulness of the representations set
forth in Article 14.1 or any other information, data or
account disclosed by any of the Entities in order to obtain
the financing or any subsequent Funding.
18.4 The Entities' default, the rescission of the Agreement or the
rescission of the Financing will be effective upon Cariplo's written
notice to the Entities.
18.5 In the occurrence of any default by the Entities or a rescission of the
Agreement for an event of default the Entities shall repay, within 5
business days from the date in which the written notice will be
received, all of the principal and interests amounts which are due
until the date of such repayment. In addition to such due amounts, the
Entities shall pay the default interests as set forth in Article 14.1.
Such payments will not prejudice any right that Cariplo might have for
the reimbursement of damages caused by the Entities' anticipated
termination of the Agreement.
18.6 If only one of the Debtor Entities is in default, Cariplo may elect to
declare such entity in default and rescind the Agreement only in
relation to such Debtor Entity. The rights and obligations of the
remaining Debtor Entities will not be affected by such action, nor will
be affected the guarantees obligations as set forth in Article 11.
19. ADDITIONAL CHARGES AND COMPENSATION AMOUNTS
19.1 Any additional charge for taxes, other rights or conditions that may be
assessed in connection with the Agreement, including registration and
filing fees, will be the sole responsibility of the Entities. Cariplo
will therefore be entitled to receive payments net of any additional
charges as provided by this Agreement.
19.2 Cariplo has the right to charge the Entities for any additional costs,
as certified by Cariplo, that may derive from any change of law,
administrative regulation or any interpretation thereof.
19.3 Any restriction or prohibition pursuant to Italian law that prevents
the Entities from performing their obligations under the Agreement will
entitle Cariplo to modify the interest rates or other provisions of
this Agreement, even if such modification will be unfavorable to the
Entities.
20. PROOF OF CREDIT
20.1 Cariplo's statement of accounts, except when manifestly incorrect, will
be sufficient proof in any legal proceeding of its credit towards the
Entities.
20.2 Any statement of account sent by Cariplo to the Entities will be
considered as approved by such Entities if not specifically contested
in writing within 60 days from its receipt.
21. MODIFICATIONS TO THE PROVISIONS
21.1 Any modification to the Agreement must be in writing and subject to the
unanimous approval of the Entities and Cariplo.
21.2 Any eventual silence by Cariplo regarding any of the defaults of the
Entities shall not be interpreted as silent approval by Cariplo of such
defaults.
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<PAGE> 10
22. APPLICABLE LAW
22.1 The Agreement is regulated by Italian law.
22.2 The jurisdiction for any case or controversy arising out of this
Agreement will be in the forum of Milan except for any of the Entities
which might be located in any other competent jurisdiction.
23. NOTICE
23.1 All of the notices to be delivered pursuant to this Agreement, but for
otherwise specified, should be in writing and will be deemed correctly
executed if:
(a) delivered by hand; or
(b) by certified mail with return receipt; or
(c) via telefax followed by certified mail;
Such notices must be sent to the following addresses or any other addresses
which will be subsequently communicated by the parties. Such addresses must be
within the Italian territory.
(i) For all the Entities:
Autogrill S.p.A.
via Caldera, 21
20153 Milano
Attn: Direttore Generale Amministrazione, Finanza,
Controllo, Sistemi
Fax #: + 39 02 48 26 35 57
(ii) For Cariplo:
Filiale n. 65 de Milano
Via Caldera n. 21
20153 - MILANO
Fax #: + 39 02 40 91 08 15
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<PAGE> 1
AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 26, 1999
AMONG
AUTOGRILL, S.p.A.
AUTOGRILL ACQUISITION CO.,
AND
HOST MARRIOTT SERVICES CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. THE TENDER OFFER....................................................................1
1.1. THE OFFER.................................................................................1
1.2. SEC FILINGS...............................................................................3
1.3. COMPANY ACTION............................................................................4
1.4. COMPOSITION OF THE COMPANY BOARD..........................................................4
ARTICLE II. THE MERGER.........................................................................6
2.1. THE MERGER................................................................................6
2.2. CLOSING...................................................................................6
2.3. EFFECTIVE TIME............................................................................6
2.4. EFFECTS OF THE MERGER.....................................................................6
2.5. CERTIFICATE OF INCORPORATION..............................................................6
2.6. BYLAWS....................................................................................6
2.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATION...........................................7
2.8. EFFECT ON CAPITAL STOCK...................................................................7
2.9. SURRENDER AND PAYMENT.....................................................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES...................................................10
3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................10
3.2. REPRESENTATIONS AND WARRANTIES OF PARENT.................................................19
3.3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..................................21
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS.........................................22
4.1. COVENANTS OF THE COMPANY.................................................................22
4.2. COVENANTS OF PARENT AND MERGER SUB.......................................................24
4.3. ADVICE OF CHANGES; GOVERNMENT FILINGS....................................................24
ARTICLE V. ADDITIONAL AGREEMENTS..............................................................25
5.1. PREPARATION OF PROXY STATEMENT; THE COMPANY STOCKHOLDERS MEETING.........................25
5.2. ACCESS TO INFORMATION....................................................................25
5.3. APPROVALS AND CONSENTS; COOPERATION......................................................26
5.4. ACQUISITION PROPOSALS....................................................................27
5.5. EMPLOYEE BENEFITS........................................................................28
5.6. FEES AND EXPENSES........................................................................28
5.7. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE......................................29
5.8. PUBLIC ANNOUNCEMENTS.....................................................................29
5.9. TAKEOVER STATUTES........................................................................30
5.10. EMPLOYEE STOCK OPTIONS..................................................................30
5.11. RIGHTS AGREEMENT........................................................................30
5.12. CREDIT AGREEMENT........................................................................30
5.13. DEBT TENDER.............................................................................30
5.14. LICENSE AGREEMENT.......................................................................30
5.15. FURTHER ASSURANCES......................................................................31
ARTICLE VI. CONDITIONS PRECEDENT..............................................................31
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...............................31
ARTICLE VII. TERMINATION AND AMENDMENT........................................................31
7.1. TERMINATION..............................................................................31
</TABLE>
i
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<TABLE>
<S> <C>
7.2. EFFECT OF TERMINATION....................................................................33
7.3. AMENDMENT................................................................................33
7.4. EXTENSION; WAIVER........................................................................34
ARTICLE VIII. GENERAL PROVISIONS..............................................................34
8.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
NO OTHER REPRESENTATIONS AND WARRANTIES..................................................34
8.2. NOTICES..................................................................................34
8.3. INTERPRETATION...........................................................................35
8.4. COUNTERPARTS.............................................................................35
8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES...........................................36
8.6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL........................................36
8.7. SEVERABILITY.............................................................................37
8.8. ASSIGNMENT...............................................................................37
8.9. ENFORCEMENT..............................................................................37
8.10. DEFINITIONS.............................................................................37
8.11. PERFORMANCE BY MERGER SUB...............................................................39
</TABLE>
ii
<PAGE> 4
GLOSSARY OF DEFINED TERMS
<TABLE>
<CAPTION>
LOCATION OF
DEFINITION DEFINED TERM
<S> <C>
Acquisition Proposal...............................................................Section 5.4(a)
Agreement................................................................................Preamble
Board of Directors...................................................................Section 8.10
Business Day.........................................................................Section 8.10
Certificate of Merger.................................................................Section 2.3
Certificates.......................................................................Section 2.9(b)
Closing...............................................................................Section 2.2
Closing Date..........................................................................Section 2.2
Code...............................................................................Section 3.1(h)
Company..................................................................................Preamble
Company Benefit Plans...........................................................Section 3.1(l)(i)
Company Board......................................................................Section 1.2(b)
Company Common Stock.....................................................................Recitals
Company Disclosure Schedule...........................................................Section 3.1
Company Material Contracts.........................................................Section 3.1(k)
Company Permits....................................................................Section 3.1(f)
Company Purchase Plan................................................................Section 8.10
Company Representatives............................................................Section 5.4(a)
Company Rights Agreement........................................................Section 3.1(b)(i)
Company SEC Reports.............................................................Section 3.1(d)(i)
Company Stock Plan...................................................................Section 8.10
Company Stock Purchase Plan..........................................................Section 8.10
Company Stockholders Meeting.......................................................Section 5.1(a)
Company Voting Debt...........................................................Section 3.1(b)(iii)
Confidential Information Agreement ...................................................Section 5.2
Continuing Directors...............................................................Section 1.4(c)
DGCL.....................................................................................Recitals
Dissenting Shares..................................................................Section 2.9(j)
Effective Time........................................................................Section 2.3
Employee Option......................................................................Section 5.10
Environmental Laws...................................................................Section 8.10
ERISA...........................................................................Section 3.1(l)(i)
Exchange Act..................................................................Section 3.1(c)(iii)
Exchange Agent.....................................................................Section 2.9(a)
Expenses..............................................................................Section 5.6
GAAP............................................................................Section 3.1(d)(i)
Governmental Entity...........................................................Section 3.1(c)(iii)
HSR Act.......................................................................Section 3.1(c)(iii)
Indemnified Party.....................................................................Section 5.7
</TABLE>
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<TABLE>
<S> <C>
Injunction................................................................................Annex A
Intellectual Property................................................................Section 8.10
Interim Financial Statements.......................................................Section 3.1(d)
Liens..........................................................................Section 3.1(b)(ii)
Material Adverse Effect..............................................................Section 8.10
Material Subsidiaries................................................................Section 8.10
Merger...................................................................................Recitals
Merger Consideration...............................................................Section 2.8(c)
Merger Sub...............................................................................Preamble
Minimum Condition..................................................................Section 1.1(a)
Minimum Shares.....................................................................Section 1.1(a)
Offer....................................................................................Recitals
Offer Documents....................................................................Section 1.2(a)
Operational Contracts................................................................Section 8.10
Order.....................................................................................Annex A
Organizational Documents.............................................................Section 8.10
Outside Date.......................................................................Section 7.1(b)
Parent...................................................................................Preamble
Parent Disclosure Schedule............................................................Section 3.2
Parent Representatives................................................................Section 5.2
Payment Fund.......................................................................Section 2.9(a)
Person...............................................................................Section 8.10
Price Per Share..........................................................................Recitals
Proxy Statement.................................................................Section 3.1(e)(i)
Required Company Votes.............................................................Section 3.1(j)
Schedule 14D-1.....................................................................Section 1.2(a)
Schedule 14D-9.....................................................................Section 1.2(b)
SEC................................................................................Section 1.2(a)
Securities Act................................................................Section 3.1(c)(iii)
Subsidiary...........................................................................Section 8.10
Superior Proposal..................................................................Section 5.4(b)
Surviving Corporation.................................................................Section 2.1
Takeover Statute......................................................................Section 5.9
Tax..................................................................................Section 8.10
Taxable..............................................................................Section 8.10
Taxes................................................................................Section 8.10
Tax Return...........................................................................Section 8.10
Violation..................................................................... Section 3.1(c)(ii)
</TABLE>
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This AGREEMENT AND PLAN OF MERGER, dated as of July 26, 1999 (this
"Agreement"), by and among Autogrill, S.p.A., a corporation organized under the
laws of the Republic of Italy ("Parent"), Autogrill Acquisition Co., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Host
Marriott Services Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have each approved the acquisition of the Company by Parent upon the
terms and subject to the conditions of this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Merger Sub to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all of the issued and
outstanding shares of the Common Stock, no par value, of the Company ("Company
Common Stock") at a price per share of Company Common Stock of $15.75 net to the
seller in cash (such price, as it may be increased in accordance with the terms
of this Agreement, the "Price Per Share") upon the terms and conditions set
forth in his Agreement, including Annex A hereto;
WHEREAS, in order to complete such acquisition, the respective Boards of
Directors of Parent, Merger Sub and the Company have approved the merger of
Merger Sub with and into the Company (the "Merger"), upon the terms and subject
to the conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), whereby each issued and outstanding share of
Company Common Stock not owned directly or indirectly by Parent or the Company
will be converted into the right to receive the Price Per Share in cash;
WHEREAS, the Board of Directors of the Company has unanimously approved
this Agreement, the Offer and the Merger, has determined that the Offer and the
Merger are fair and in the best interests of the Company's stockholders and is
recommending that the Company's stockholders accept the Offer, tender their
shares of Company Common Stock thereunder and adopt and approve the Merger and
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER
1.1. THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VII, Merger Sub shall, and Parent shall cause Merger Sub
to, as soon as practicable, but in no event later than the fifth Business Day
after the date the execution of this Agreement is announced, commence (within
the meaning of Rule 14d-2(a) of the Exchange Act)
1
<PAGE> 7
the Offer to purchase all of the outstanding shares of Company Common Stock at
the Price Per Share net to the seller in cash. The initial expiration date of
the Offer shall be the twentieth Business Day from and after the date the Offer
is commenced, including the date of commencement as the first Business Day in
accordance with Rule 14d-2 under the Exchange Act. The Offer shall be made
pursuant to an Offer to Purchase and related Letter of Transmittal in form
reasonably satisfactory to the Company and containing the terms and conditions
set forth in this Agreement. The obligation of Merger Sub to accept for payment,
purchase and pay for shares of Company Common Stock tendered pursuant to the
Offer shall be subject only to the satisfaction of the conditions set forth in
Annex A hereto, including the condition that a number of shares of Company
Common Stock representing not less than two-thirds of the total issued and
outstanding shares of Company Common Stock on a fully diluted basis on the date
such shares are purchased pursuant to the Offer (the "Minimum Shares") have been
validly tendered and not withdrawn prior to the expiration of the Offer (the
"Minimum Condition"), any of which conditions may be waived by Merger Sub in its
sole discretion; provided, however, that Merger Sub shall not waive the Minimum
Condition without the prior written consent of the Company. The Company agrees
that no shares of Company Common Stock held by the Company or any of its
Subsidiaries will be tendered to Merger Sub pursuant to the Offer.
(b) Without the prior written consent of the Company, neither
Parent nor Merger Sub will (i) decrease the Price Per Share payable in the
Offer, (ii) decrease the number of shares of Company Common Stock sought
pursuant to the Offer or change the form of consideration payable in the Offer,
(iii) change or amend the conditions to the Offer or impose additional
conditions to the Offer, (iv) change the expiration date of the Offer or (v)
otherwise amend, add or waive any term or condition of the Offer in any manner
adverse to the holders of shares of Company Common Stock; provided, however,
that if on any scheduled expiration date of the Offer the conditions set forth
in Annex A hereto have not been satisfied or waived, Merger Sub may (and at the
request of the Company Merger Sub shall), from time to time, extend the
expiration date of the Offer for up to ten additional Business Days (but in no
event shall Merger Sub be required to extend the expiration date of the Offer
beyond the Outside Date); and provided further that (x) Merger Sub may, without
the consent of the Company, extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC applicable to the Offer
and (y) if (i) all conditions to the Offer are satisfied or waived and (ii) the
shares of Company Common Stock validly tendered and not withdrawn pursuant to
the Offer represent more than two thirds but less than 90% of the total issued
and outstanding shares of Company Common Stock on a fully diluted basis, Merger
Sub may extend the Offer for a period not to exceed 10 business days. Assuming
the prior satisfaction or waiver (which is restricted as set forth above) of all
the conditions to the Offer set forth in Annex A as of any expiration date, and
subject to the terms and conditions of this Agreement, Merger Sub shall, and
Parent shall cause Merger Sub to, accept for payment, purchase and pay for, in
accordance with the terms of the Offer, all shares of Company Common Stock
validly tendered and not withdrawn pursuant to the Offer as soon as possible
after such expiration date of the Offer. Parent shall provide, or cause to be
provided, to Merger Sub, on a timely basis, the funds necessary to purchase any
shares of Company Common Stock that Merger Sub becomes obligated to purchase
pursuant to the Offer.
2
<PAGE> 8
1.2. SEC FILINGS.
(a) As soon as reasonably practicable on the commencement date of
the Offer, Parent and Merger Sub shall file with the Securities and Exchange
Commission (the "SEC"), with respect to the Offer, a Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1"). The Schedule 14D-1 will comply as to form
and content in all material respects with the applicable provisions of the
federal securities laws and will contain or incorporate by reference the Offer
to Purchase, the related Letter of Transmittal and other ancillary documents and
agreements pursuant to which the Offer will be made (the Schedule 14D-1, the
Offer to Purchase, the Letter of Transmittal and such other documents being
collectively referred to herein as the "Offer Documents"). The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents and any amendment or supplement thereto prior to the filing thereof
with the SEC, and Parent and Merger Sub shall consider such comments in good
faith. Parent and Merger Sub agree to provide to the Company and its counsel any
comments which Parent, Merger Sub or their counsel may receive from the Staff of
the SEC with respect to the Offer Documents promptly after receipt thereof.
Parent, Merger Sub and the Company agree to correct promptly any information
provided by any of them for use in the Offer Documents which shall have become
false or misleading in any material respect, and Parent and Merger Sub further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by the applicable provisions of the federal
and state securities laws.
(b) The Company shall promptly file with the SEC and mail to its
stockholders a Solicitation/Recommendation Statement on Schedule 14D-9 (as
amended from time to time, the "Schedule 14D-9") which will comply as to form
and content in all material respects with the applicable provisions of the
federal and state securities laws. The Schedule 14D-9 will set forth, and the
Company hereby represents, that the Board of Directors of the Company (the
"Company Board"), at a meeting duly called and held, has unanimously (i)
determined that the Offer and the Merger, taken together, are fair to and in the
best interests of the Company's stockholders, (ii) approved and declared
advisable this Agreement and the transactions contemplated hereby, and such
approval constitutes approval for purposes of Section 203 of the DGCL and
Article 15 of the Company's Certificate of Incorporation, and (iii) recommends
that the Company's stockholders accept the Offer, tender their shares of Company
Common Stock thereunder and approve and adopt the Merger and this Agreement;
provided, however, that, subject to Section 7.1(e), such recommendation may be
withdrawn, modified or amended to the extent that the Company Board determines
to do so in the exercise of its fiduciary duties, and such withdrawal,
modification or amendment shall not constitute a breach of this Agreement. The
Company further represents that it has received the written opinion of Deutsche
Bank Securities Inc., the Company's independent financial advisor, dated the
date hereof, to the effect that, as of the date hereof, the consideration to be
received by the Company's stockholders pursuant to the Offer and the Merger,
taken together, is fair from a financial point of view to the holders of shares
of Company Common Stock, a true and complete copy of which opinion has been
delivered to Parent prior to the execution of this Agreement. The Company will
use its reasonable efforts to cause the Schedule 14D-9 to be filed on the same
date that the Schedule 14D-1 is filed; provided, however, that in any event the
Schedule 14D-9 will be filed no later than ten Business Days following the
commencement date of the Offer. The Company will cooperate
3
<PAGE> 9
with Parent and Merger Sub in mailing or otherwise disseminating the Schedule
14D-9 with the appropriate Offer Documents to the stockholders of the Company as
and to the extent required by the applicable provisions of the federal and state
securities laws. Parent and its counsel shall be given an opportunity to review
and comment upon the Schedule 14D-9 and any amendment or supplement thereto
prior to the filing thereof with the SEC, and the Company shall consider such
comments in good faith. The Company agrees to provide to Parent and Merger Sub
and their counsel any comments which the Company or its counsel may receive from
the Staff of the SEC with respect to the Schedule 14D-9 promptly after receipt
thereof. The Company, Parent and Merger Sub agree to correct promptly any
information provided by any of them for use in the Schedule 14D-9 which shall
have become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause such Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by the applicable provisions of the federal
and state securities laws. Parent, Merger Sub and the Company each hereby agree
to provide promptly such information necessary to the preparation of the
exhibits and schedules to the Schedule 14D-9 and the Offer Documents which the
respective party responsible therefor shall reasonably request. The Company has
been advised by each of its directors and by each executive officer who as of
the date hereof is actually aware (to the knowledge of the Company) of the
transaction contemplated hereby, that they intend either to tender all shares of
Company Common Stock beneficially owned by them to Merger Sub pursuant to the
Offer or to vote such shares of Company Common Stock in favor of the approval
and adoption of the Merger, unless the recommendation of the Company Board shall
have been withdrawn or materially modified as permitted by Section 5.4.
1.3. COMPANY ACTION. Promptly upon execution of this Agreement and in connection
with the Offer, the Company shall furnish Merger Sub with such information
(including a list of the stockholders of the Company, mailing labels and a list
of securities positions, each as of a recent date), and shall thereafter render
such other assistance, as Parent, Merger Sub or its agents may reasonably
request in communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable law and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer or the Merger, Parent and Merger Sub and each of their respective
affiliates and associates shall (a) hold in confidence the information contained
in any of such labels and lists, (b) use such information only in connection
with the Offer and the Merger and (c) if this Agreement is terminated, promptly
deliver to the Company upon its request all copies of such information then in
their possession.
1.4. COMPOSITION OF THE COMPANY BOARD.
(a) Promptly upon the acceptance for payment of, and payment by
Merger Sub in accordance with the Offer for, not less than two-thirds of the
outstanding shares of Company Common Stock on a fully diluted basis pursuant to
the Offer, Merger Sub shall be entitled to designate such number of members of
the Company Board, rounded up to the next whole number, equal to that number of
directors which equals the product of the total number of directors on the
Company's Board (giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that such number of shares of Company
Common Stock owned in the aggregate by Merger Sub or Parent, upon such
acceptance for payment, bears to the number of shares of Company Common Stock
outstanding; provided, however, that until the
4
<PAGE> 10
Effective Time there shall be at least three Continuing Directors. Upon the
written request of Merger Sub, the Company shall, on the date of such request
take all actions necessary to (i) either increase the size of the Company Board
or secure the resignations of such number of its incumbent directors as is
necessary to enable Merger Sub's designees to be so elected to the Company Board
and (ii) cause Merger Sub's designees to be so elected, in each case as may be
necessary to comply with the foregoing provisions of this Section 1.4(a). At
such time, the Company shall also use its reasonable best efforts to cause
Merger Sub's designees to constitute no less than the same percentage as persons
designated by Merger Sub shall constitute of the Company Board of each committee
of the Company Board, each board of directors of each Subsidiary and each
committee of each such board, in each case only to the extent permitted by
applicable law. Notwithstanding the foregoing, until the earlier of the time
Merger Sub acquires two-thirds of the then outstanding shares of Company Common
Stock and the Effective Time, the Company shall use its reasonable best efforts
to ensure that all the members of the Company Board as of the date hereof who
are not employees of the Company shall remain members of the Company Board.
(b) The Company's obligation to cause designees of Merger Sub to
be elected or appointed to the Company's Board shall be subject to Section 14(f)
of the Exchange Act and Rule l4f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule l4f-1 in
order to fulfill its obligations under this Section 1.4, and shall include in
the Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1. Parent and
Merger Sub will supply to the Company in writing and be solely responsible for
any information with respect to any of them and their nominees, officers,
directors and affiliates required by Section 14(f) and Rule l4f-1 and applicable
rules and regulations.
(c) After the time that Merger Sub's designees constitute at least
a majority of the Company Board and until the Effective Time, any (i) amendment
or termination of this Agreement, (ii) amendment to the Certificate of
Incorporation or material amendment to the bylaws of the Company, (iii)
extension of time for the performance or waiver of the obligations or other acts
of Parent or Merger Sub or waiver of the Company's rights hereunder, or (iv)
action by the Company with respect to this Agreement and the transactions
contemplated hereby which materially and adversely affects the interests of the
stockholders of the Company, shall require, in addition to any other affirmative
vote required under the DGCL, the approval of a majority of the then serving
directors who are directors as of the date hereof (the "Continuing Directors");
provided, however, that if the foregoing provisions of this subsection (c)
relating to the concurrence of a majority of Continuing Directors are invalid or
incapable of being enforced under applicable law, then neither Parent nor Merger
Sub shall approve (either in its capacity as a stockholder or as a party to this
Agreement, as applicable), and Parent and Merger Sub shall use their reasonable
best efforts to prevent the occurrence of, any of the actions referred to in
clauses (i) to (iv) above unless such actions shall have received the unanimous
approval of the entire Company Board. If there is more than one Continuing
Director and, prior to the Effective Time, the number of Continuing Directors is
reduced for any reason, the remaining Continuing Director or Directors shall be
entitled to designate persons to fill such vacancies who shall be deemed
Continuing Directors for purposes of this Agreement. In the event there is only
one Continuing Director and he or she resigns or is removed or if all Continuing
Directors resign or are removed,
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he, she or they, as applicable, shall be entitled to designate his, her or their
successors, as the case may be, each of whom shall be deemed a Continuing
Director for purposes of this Agreement. The Company Board shall not delegate
any matter set forth in this Section 1.4 to any committee of the Company Board.
ARTICLE II.
THE MERGER
2.1. THE MERGER. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub
shall be merged with and into the Company. Following the Merger, the separate
corporate existence of Merger Sub shall cease and the Company shall continue as
the surviving corporation (the "Surviving Corporation") in accordance with the
DGCL.
2.2. CLOSING. The closing of the Merger (the "Closing") will take place as soon
as practicable after satisfaction or waiver (as permitted by this Agreement and
applicable law) of the conditions (excluding conditions that, by their terms,
cannot be satisfied until the Closing Date) set forth in Article VI (the
"Closing Date"), unless another time or date is agreed to in writing by the
parties hereto. The Closing shall be held at the offices of Rogers & Wells LLP,
200 Park Avenue, New York, NY 10166-0153, unless another place is agreed to in
writing by the parties hereto.
2.3. EFFECTIVE TIME. At the Closing, the parties shall file with the Secretary
of State of the State of Delaware either (i) a certificate of merger, in form
and substance satisfactory to the Company and Parent, or (ii) in the event
Merger Sub shall have acquired 90% or more of the outstanding shares of Company
Common Stock, a certificate of ownership and merger (in either such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings, recordings or publications required
under the DGCL in connection with the Merger. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such other time as the parties may agree and specify
in the Certificate of Merger (the time the Merger becomes effective being the
"Effective Time").
2.4. EFFECTS OF THE MERGER. At and after the Effective Time, the Merger will
have the effects set forth in Section 259 of the DGCL.
2.5. CERTIFICATE OF INCORPORATION. At the Effective Time and without any
further action on the part of the Company and Merger Sub, the certificate of
incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
2.6. BYLAWS. At the Effective Time, the bylaws of the Company shall be amended
in their entirety to read as the bylaws of Merger Sub read as in effect at the
Effective Time and, as so amended, shall be the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
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2.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The directors of Merger
Sub immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be a director or until their respective successors are duly
elected and qualified, as the case may be. The officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be.
2.8. EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, the Company or the
holder of any shares of Company Common Stock or any shares of capital stock of
Merger Sub:
(a) Capital Stock of Merger Sub. Each issued and outstanding share
of capital stock of Merger Sub shall be converted into and become one fully paid
and nonassessable share of common stock, no par value, of the Surviving
Corporation, which shall constitute the only issued and outstanding shares of
capital stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of Company Common Stock that is owned by the Company or by a wholly owned
Subsidiary of the Company and each share of Company Common Stock that is owned
by Parent, Merger Sub or any other wholly owned Subsidiary of Parent shall
automatically be canceled and retired and shall cease to exist, and no Merger
Consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 2.9(h),
each issued and outstanding share of Company Common stock (other than shares to
be canceled in accordance with Section 2.8(b)) shall be converted into the right
to receive the Price Per Share in cash, without interest (the "Merger
Consideration"). As of the Effective Time, all such shares of Company Common
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any such shares of Company Common Stock shall cease to have any rights with
respect thereto, except the right to receive, upon the surrender of such
certificates, the Merger Consideration.
2.9. SURRENDER AND PAYMENT.
(a) Exchange Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company reasonably acceptable to the Company to act as
agent for the holders of shares of Company Common Stock in connection with the
Merger (the "Exchange Agent") to receive the Merger Consideration to which
holders of shares of Company Common Stock shall become entitled pursuant to
Section 2.8. Upon the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, Parent or Merger Sub shall deposit with the
Exchange Agent cash in an aggregate amount equal to the product of (i) the
number of shares of Company Common Stock outstanding (and not to be canceled
pursuant to Section 2.8(b)) immediately prior to the Effective Time, multiplied
by (ii) the Price Per Share. The deposit made by Parent or Merger Sub pursuant
to the preceding sentence is hereinafter referred to as the "Payment Fund." For
purposes of determining the Payment Fund, Parent shall assume that no
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<PAGE> 13
holder of shares of Company Common Stock will perfect its right to appraisal of
its shares. The Paying Agent shall cause the Payment Fund to be (i) held for the
benefit of the holders of Company Common Stock, and (ii) promptly applied to
making the payments provided or in Section 2.8(c). The Payment Fund shall not be
used for any purpose that is not provided for herein.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock, other
than shares to be canceled or retired in accordance with Section 2.8(b), (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the Exchange Agent shall pay the holder of such
Certificate the Merger Consideration in respect of such Certificate, and the
Certificate so surrendered shall forthwith be canceled. In no event shall the
holder of any Certificate be entitled to receive interest on any Merger
Consideration received. If any portion of the Merger Consideration is to paid to
a Person other than the registered holder of the shares represented by the
Certificate or Certificates surrendered in exchange therefor, it shall be a
condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. Until surrendered
as contemplated by this Section 2.9, each Certificate (other than Certificates
representing Dissenting Shares or shares of Company Common Stock to be canceled
pursuant to Section 2.8(b)) shall be deemed at any time after the Effective Time
to represent only the right to receive, upon the surrender of such Certificate,
the Merger Consideration.
(c) No Further Ownership Rights in Company Common Stock. All
Merger Consideration paid upon the surrender for exchange of Certificates in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificates. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. From and after the Effective Time, the
holders of Certificates evidencing ownership of the shares of Company Common
Stock outstanding immediately prior to the Effective time shall cease to have
rights with respect to such shares, except as otherwise provided for herein or
by applicable law. If, after the Effective Time, Certificates are presented to
the Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged for the Merger Consideration as provided in this Article
II, except as otherwise provided by law.
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<PAGE> 14
(d) Unclaimed Funds. Subject to applicable escheat, abandoned
property or similar laws, any portion of the Payment Fund made available to the
Exchange Agent pursuant to Section 2.9(a) that remains unclaimed by holders of
the Certificates for six months after the Effective Time of the Merger shall be
delivered to Parent, upon demand, and any holders of Certificates who have not
theretofore complied with this Article II shall thereafter look only to Parent
for payment of their claim for Merger Consideration.
(e) No Liability. None of Parent, Merger Sub, the Company or the
Exchange Agent shall be liable to any Person in respect of any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f) Withholding Taxes. Parent and Merger Sub shall be entitled to
deduct and withhold and pay to the applicable taxing authority, or cause the
Exchange Agent to deduct and withhold and pay to the applicable taxing
authority, from the Merger Consideration payable to a holder of shares of
Company Common Stock pursuant to the Offer or the Merger any amounts as are
required to be withheld therefrom under the Code or any applicable provision of
state, local or foreign tax law; provided, however, that (x) Merger Sub shall
take appropriate steps to minimize such withholding and (y) Merger Sub shall pay
(and not withhold) any applicable transfer taxes, except to the extent provided
in Section 2.9(b). To the extent that amounts are properly withheld by Parent or
Merger Sub and paid to the applicable taxing authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such
withholding was made by Parent or Merger Sub.
(g) Investment of Funds. The Payment Fund shall be invested by the
Exchange Agent as directed by Parent in obligations of, or guaranteed by, the
United States of America, in commercial paper obligations rated A-1 or P-1 or
better by Moody's Investor Services or Standard & Poor's Corporation,
respectively, in each case with maturities not exceeding seven days. All
earnings thereon shall inure to the benefit of Parent.
(h) Lost Certificates. In the event that any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent, the posting by such Person of a bond in such
reasonable amount as Parent may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will pay
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration with respect to such Certificate.
(i) Return of Funds Relating to Dissenting Shares. Any portion of
the Merger Consideration made available to the Exchange Agent to pay for shares
of outstanding Company Common Stock for which appraisal rights have been
perfected shall be returned to the Parent, upon demand.
(j) Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
in accordance with the DGCL
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<PAGE> 15
("Dissenting Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses its right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses its right to appraisal, such shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration, without any interest thereon. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of shares of Company Common Stock, attempted withdrawals of such
demands and any other instruments served pursuant to applicable law and received
by the Company relating to stockholders' rights of appraisal, and Parent shall
have the right to direct all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to, or settle or offer to settle, any such
demands.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as otherwise set
forth in the Company Disclosure Schedule delivered by the Company to Parent at
or prior to the execution of this Agreement (the "Company Disclosure Schedule")
or the Company SEC Reports (as defined below), the Company represents and
warrants to Parent and Merger Sub as follows:
(a) Organization, Standing and Power. Each of the Company and its
Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and has full
corporate power and authority to conduct its business as and to the extent now
conducted and to own, use and lease its assets and properties, except (in the
case of any Subsidiary of the Company) for such failures to be in good standing
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company. Each of the Company and its
Subsidiaries is qualified and in good standing or otherwise authorized to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The copies of the
Organizational Documents of the Company which were previously furnished or made
available to Parent are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
(b) Capital Structure.
(i) As of the date of this Agreement, the authorized capital
stock of the Company consists of (A) 100,000,000 shares of Company
Common Stock, of which 35,886,200 shares are outstanding or held in
treasury, and (B) 1,000,000 shares of preferred stock, no par value, of
which no shares are outstanding. All issued and outstanding shares of
the capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, and no class of capital stock is entitled
to preemptive rights. As of the date of this Agreement, there are no
outstanding options, warrants or other rights to acquire capital stock
from the Company other than (x) options representing in the aggregate
the right to purchase 4,089,631 shares of Company Common Stock under the
Company Stock Plan and (y) rights issued pursuant to the Rights
Agreement dated as of
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<PAGE> 16
December 22, 1995 between the Company and First Chicago Trust Company of
New York (the "Company Rights Agreement"). Section 3.1(b)(i) of the
Company Disclosure Schedule sets forth information regarding the
exercise price, date of grant and number granted of stock options for
each holder thereof.
(ii) All of the issued and outstanding shares of capital stock
of each of the Material Subsidiaries of the Company are duly authorized,
validly issued, fully paid and nonassessable and are owned by the
Company, free and clear of any liens, claims, encumbrances,
restrictions, preemptive rights or any other claims of any third party
("Liens").
(iii) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of the Company having the right to vote on
any matters on which stockholders may vote ("Company Voting Debt") are
issued or outstanding.
(iv) Except as otherwise set forth in this Section 3.1(b), as of
the date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of
any kind to which the Company or its Subsidiaries is a party or by which
any of them is bound obligating the Company or any Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or any
Subsidiary or obligating the Company or any Subsidiary to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the date of
this Agreement, there are no outstanding obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Subsidiary.
(v) Except as otherwise set forth in this Section 3.1(b), as of
the date of this Agreement, there are no stockholder agreements, voting
trusts, proxies or other commitments, understandings, restrictions or
arrangements in favor of any person other than the Company or a
Subsidiary of the Company with respect to the voting of or the right to
participate in dividends or other earnings on any capital stock of any
Subsidiary of the Company.
(c) Authority; No Conflicts.
(i) The Company has all requisite corporate power and corporate
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject, in the case of the Merger, to
the adoption of this Agreement and approval of the Merger by the holders
of shares representing not less than two-thirds of the voting power of
the outstanding Company Common Stock. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of the Company, subject in the case of the consummation of the Merger to
the adoption of this Agreement and approval of the Merger by the holders
of shares representing not less than two-thirds of the voting power of
the outstanding Company Common Stock. The Company Board
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<PAGE> 17
has unanimously duly and validly authorized the execution and delivery
of this Agreement and approved the consummation of the transactions
contemplated hereby, including the Offer and the Merger, and has
unanimously (i) determined that the Offer and the Merger, taken
together, are fair to and in the best interest of the Company's
stockholders, (ii) approved and declared advisable this Agreement and
the transactions contemplated hereby, and (iii) recommended that the
Company's stockholders accept the Offer, tender their shares of Company
Common Stock pursuant to the Offer and approve and adopt the Merger and
this Agreement. This Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally and by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or constitute a default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, amendment, cancellation or acceleration of
any right or obligation or the loss of a material benefit under, or the
creation of a lien, pledge, security interest, charge or other
encumbrance on any assets (any such conflict, violation, default, right
of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
Organizational Documents of the Company, (B) any provision of the
Organizational Documents of any Subsidiary or (C) subject to obtaining
or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii)
below, any loan or credit agreement, note, mortgage, bond, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company, the
Subsidiaries or their respective properties or assets, except, in the
case of the representations set forth in clauses (B) and (C) above, any
Violation that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal or local government, any instrumentality, subdivision,
court, administrative agency or commission or other authority thereof,
or any quasi-governmental or private body exercising any regulatory,
taxing, or other governmental or quasi-governmental authority (a
"Governmental Entity"), is required by or with respect to the Company or
any Subsidiary in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (x) those required under or
in relation to (A) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (B) the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (C) the DGCL with respect to the
filing and recordation of appropriate merger or other documents, (D)
antitrust or other competition laws of United States and foreign
jurisdictions, (E) the Operational Contracts and (y) such consents,
approvals, orders, authorizations, registrations, declarations and
filings the
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<PAGE> 18
failure of which to make or obtain would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
(d) Reports and Financial Statements.
(i) The Company has filed all required reports, schedules,
forms, statements and other documents required to be filed by it with
the SEC since January 1, 1998 (collectively, including all exhibits
thereto, the "Company SEC Reports"). None of the Company SEC Reports, as
of their respective dates (and, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing),
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements
(including the related notes) included in the Company SEC Reports and
the unaudited interim financial statements as of and for the twenty four
weeks ended June 18, 1999 previously provided to Parent (the "Interim
Financial Statements") present fairly, in all material respects, the
consolidated financial position and consolidated results of operations
and cash flows of the Company and its Subsidiaries as of the respective
dates or for the respective periods set forth therein, all in conformity
with U.S. generally accepted accounting principles ("GAAP") consistently
applied during the periods involved except as otherwise noted therein,
and subject, in the case of the unaudited interim financial statements,
to normal year-end adjustments that have not been and are not expected
to be material in amount and the absence of notes thereto. Such Company
SEC Reports, as of their respective dates (and as of the date of any
amendment to the respective Company SEC Report), complied as to form in
all material respects with the applicable requirements of the Securities
Act and the Exchange Act and the rules and regulations promulgated
thereunder.
(ii) Except as set forth in the Company SEC Reports filed prior
to the date of this Agreement or in the Interim Financial Statements,
and except for liabilities and obligations incurred in the ordinary
course of the Company's business since June 18, 1999, the Company does
not have any liabilities or obligations required by GAAP to be set forth
on a consolidated balance sheet of the Company which would, individually
or in the aggregate, have a Material Adverse Effect on the Company.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (A) the proxy
statement related to the Company Stockholders Meeting (the "Proxy
Statement"), (B) the Schedule 14D-9 or (C) the Offer Documents will, at
the respective times such documents are filed, and, with respect to the
Offer Documents and the Proxy Statement, if any, when first published,
sent or given to the stockholders of the Company, contain an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not false or
misleading or, in the case of the Offer Documents and the Proxy
Statement, if any, or
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<PAGE> 19
any amendment thereof or supplement thereto, at the time of the Company
Stockholders Meeting (as defined below), if any, and at the Effective
Time, contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under
which they are made, not false or misleading or necessary to correct any
statement in any earlier communication with respect to the offer or the
solicitation of proxies for the Company Stockholders Meeting, if any,
which shall have become false or misleading. The Proxy Statement and
Schedule 14D-9 will comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and the rules
and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by the Company with
respect to statements made or incorporated by reference in the Proxy
Statement and Schedule 14D-9 based on information supplied in writing by
Parent or Merger Sub for inclusion or incorporation by reference
therein.
(f) Compliance with Applicable Laws; Regulatory Matters. The
Company and its Subsidiaries hold all permits, licenses, certificates,
franchises, registrations, variances, exemptions, orders and approvals of all
Governmental Entities which are necessary to the operation of the Company's
businesses (the "Company Permits"), except for any Company Permits the failure
of which to obtain or hold would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure so
to comply would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Except as disclosed in the Company SEC Reports, the
businesses of the Company and its Subsidiaries are not being and have not been
conducted in violation of any law, ordinance, regulation, judgment, decree,
injunction, rule or order of any Governmental Entity, except for violations
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. As of the date of this Agreement, to the knowledge of
the Company, no investigation by any Governmental Entity with respect to the
Company or any of its Subsidiaries is pending or threatened, other than
investigations which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(g) Litigation. There is no litigation, arbitration, claim, suit,
action, investigation or proceeding pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company, nor is there any judgment, award,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any Material Subsidiary which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
(h) Taxes. (i) The Company and the Material Subsidiaries have duly
and timely filed (taking into account any extension of time within which to
file) all Tax Returns required to be filed by them and all such filed Tax
Returns are complete and accurate in all material respects; (ii) the Company and
the Subsidiaries have paid all Taxes that are shown as due
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<PAGE> 20
on such filed Tax Returns or that the Company or any Subsidiary is obligated to
withhold from amounts owing to any employee, creditor or third party, except
with respect to matters contested in good faith or for such amounts that would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company; (iii) as of the date of this Agreement, there are no pending or, to the
knowledge of the Company, threatened audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters relating to the Company or
any Subsidiary which, if determined adversely to the Company or such Subsidiary,
would, individually or in the aggregate, have a Material Adverse Effect on the
Company; (iv) there are no deficiencies or claims for any Taxes that have been
proposed, asserted or assessed against the Company or any Subsidiary which, if
such deficiencies or claims were finally resolved against the Company or such
Subsidiary, would, individually or in the aggregate, have a Material Adverse
Effect on the Company; (v) there are no material Liens for Taxes upon the assets
of the Company or any Subsidiary, other than Liens for current Taxes not yet due
and payable and Liens for Taxes that are being contested in good faith by
appropriate proceedings; (vi) neither of the Company nor any Subsidiary has made
an election under Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code"); and (vii) neither the Company nor any of its Subsidiaries
has waived any statute of limitations or agreed to any extension of time with
respect to a material Tax assessment or deficiency.
(i) Absence of Certain Changes or Events. Since December 31, 1998
through the date of this Agreement, (A) the Company and its Subsidiaries have
conducted their business in the ordinary course and have not incurred any
material liability, except in the ordinary course of their respective
businesses, and (B) there has not been:
(1) any declaration or setting aside for payment of any
dividend or other distribution with respect to any shares of capital stock of
the Company, or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries of any outstanding shares of capital stock or other
equity securities of, or other ownership interests in, the Company;
(2) any amendment of any term of any outstanding security of the
Company or any of its Subsidiaries that would materially increase the
obligations of the Company or such Subsidiary under such security;
(3) any incurrence, assumption or guarantee by the Company or
any its Subsidiaries of any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practices;
(4) any creation or assumption by the Company or any of its
Subsidiaries of any Lien on any asset material to the Company and its
Subsidiaries, taken together, other than in the ordinary course of business
consistent with past practices;
(5) the making of any (i) material loan, advance or capital
contribution to or investment in any Person (other than a Subsidiary of the
Company) by the Company or any of its Subsidiaries or (ii) material loans or
advances to
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employees of the Company or any of its Subsidiaries, in each case, other than
have been made in the ordinary course of business consistent with past
practices;
(6) any contract or agreement entered into by the Company or any
of its Subsidiaries relating to any acquisition or disposition of any assets
material to the Company and its Subsidiaries, taken together, or any material
portion of the Company's business, other than transactions, commitments,
contracts or agreements in the ordinary course of business consistent with past
practices and those contemplated by this Agreement;
(7) any material change in any method of accounting or
accounting practices by the Company or any of its Subsidiaries, except for any
such change required by reason of a change in GAAP;
(8) any (i) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any director or officer
of the Company (or any amendment to any such existing agreement), (ii) grant of
any severance or termination pay to any director or officer of the Company, or
(iii) material change in benefits payable to any director, officer or employee
of the Company pursuant to any severance, retirement or welfare plans or
policies thereof, in each case other than in the ordinary course of business
consistent with past practices; or
(9) any agreement or commitment by the Company or its
Subsidiaries to do any of its foregoing.
(j) Vote Required. The affirmative vote of the holders of shares
representing no less than two-thirds of the voting power of the outstanding
shares of Company Common Stock (the "Required Company Votes") is the only vote
of the holders of any class or series of the Company capital stock necessary to
approve the Merger.
(k) Certain Agreements. Each of (i) the contracts listed as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 1999 under the rules and regulations of the SEC relating to the
business of the Company and its Subsidiaries and (ii) the Operational Agreements
(x) to which the Company or any of its Subsidiaries is a party and that is
material to the Company's business and (y) that are the 40 largest in terms of
revenues recorded by the Company and its Subsidiaries for the most recent fiscal
year of the Company (the "Company Material Contracts") are valid and in full
force and effect except to the extent they have previously been terminated or
expired in accordance with their terms, and neither the Company nor its
Subsidiaries has violated any provision of, or committed or failed to perform
any act which, with or without notice, lapse of time, or both, would constitute
a default under the provisions of any such Company Material Contract, except for
such defaults which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. To the knowledge of the Company, no counterparty
to any such Company Material Contract has violated any provision of, or
committed or failed to perform any act which, with or without notice, lapse of
time, or both, would constitute a default under the provisions of such Company
Material
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Contract, except for defaults which would not, individually or in the aggregate,
have a Material Adverse Effect on the Company.
(l) Employee Benefit Plans; Labor Matters.
(i) With respect to each employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and any bonus, deferred
compensation, stock bonus, stock purchase, restricted stock, stock
option, employment, termination, change in control and severance plan,
program, arrangement and contract) to which the Company or any Material
Subsidiary is a party, which is maintained or contributed to by the
Company or any Material Subsidiary, or with respect to which the Company
or any Material Subsidiary could incur material liability under ERISA
(the "Company Benefit Plans"), the Company has made available to Parent
and Merger Sub a true and complete copy of such Company Benefit Plan.
(ii) Each of the Company Benefit Plans that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the IRS, and the Company
is not aware of any circumstances which would reasonably be expected to
result in the revocation of any such favorable determination letter.
(iii) With respect to the Company Benefit Plans, no event has
occurred and, to the knowledge of the Company, there exists no condition
or set of circumstances in connection with which the Company or any
Material Subsidiary would be subject to any liability under the terms of
such Company Benefit Plans, ERISA, the Code or any other applicable law
(but giving no effect to the actions contemplated by this Agreement)
which would, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(m) There is no pending labor dispute, strike or work stoppage
against the Company or any Material Subsidiary which would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. There is no pending charge or complaint against the Company or any
Material Subsidiary by the National Labor Relations Board or any comparable
state agency, except where such unfair labor practice, charge or complaint would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(n) Environmental Matters. Except to the extent that failure to
satisfy the following representations would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, the Company and each
of its Subsidiaries: (i) have obtained all permits, licenses and other
authorizations which are required to be obtained under all applicable
Environmental Laws by the Company or the Subsidiaries; (ii) are in substantial
compliance with the terms and conditions of such required permits, licenses and
authorizations, and also are in
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substantial compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements and obligations contained in applicable
Environmental Laws; (iii) have not received any Order or complaint, or notice of
any assessed penalty or investigation or review pending or threatened by any
Governmental Entity, with respect to any alleged failure by the Company or any
of its Subsidiaries to have any license, permit, authorization, approval or
consent from Governmental Entities required under any applicable Environmental
Law in connection with the conduct of the business or operations of the Company
or any of its Subsidiaries and (iv) have not received notice of any past or
present violations of Environmental Laws, or of any event, incident or action
which is reasonably likely to prevent continued substantial compliance with such
Environmental Laws, or which would give rise to any common law environmental
liability, or which would otherwise form the basis of any claim, action, suit or
proceeding against the Company or any Subsidiary based on, or resulting from,
the manufacture, processing, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge or release into the environment, of any
toxic or hazardous substance or waste.
(o) Intellectual Property. Except as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company, (i) the Company
and each Subsidiary owns, has the right to acquire or is licensed or otherwise
has the right to use (in each case, clear of any liens or encumbrances of any
kind), all Intellectual Property, (ii) no claims are pending or, to the
knowledge of the Company, threatened that the Company or any Subsidiary is
infringing on or otherwise violating the rights of any person with regard to any
Intellectual Property and (iii) to the knowledge of the Company, no person is
infringing on or otherwise violating any right of the Company or any of its
Subsidiaries with respect to any Intellectual Property owned by and/or licensed
to the Company or any of its Subsidiaries.
(p) Insurance. The Company has made available to Parent prior to the
execution of this Agreement a true and complete list of all liability, property,
workers' compensation, directors' and officers' liability and other insurance
policies currently in effect that insure the business, operations, properties,
assets or employees of the Company or any of its Subsidiaries. Such insurance
policies are placed with financially sound and reputable insurers and, in light
of the respective business, operations, assets and properties of the Company and
its Subsidiaries, are in amounts and have coverages that are reasonable and
customary for persons engaged in such businesses and operations and having such
assets and properties.
(q) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company, except fees payable to Deutsche Bank Securities
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation.
(r) Opinion of Financial Advisor. The Company has received the
written opinion of Deutsche Bank Securities Inc., the Company's independent
financial advisor, dated the date hereof, to the effect that, as of the date
hereof, the consideration to be received by the Company's stockholders pursuant
to the Offer and the Merger, taken together, is fair, from a financial point of
view, to the holders of Company Common Stock.
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(s) Inapplicability of Certain Provisions. The Company Board has
approved the Merger and this Agreement, and assuming that Parent's
representation set forth in Section 3.2(f) below is true and correct, taken all
other actions necessary to render inapplicable to the Merger, this Agreement and
the transactions contemplated by this Agreement, the provisions of Section 203
of the DGCL or Article 15 of the Company's certificate of incorporation.
(t) Real Property. Except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, (i) the Company has
not received notice of any pending or threatened annexation or condemnation
proceedings affecting any of the Company's properties, and (ii) the personal
property fixtures and equipment material to the conduct of the operations of the
business of the Company are owned free and clear of all Liens.
(u) Year 2000. The Company has reviewed the areas within its
businesses and operations which could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Company and
its Subsidiaries may be unable to recognize and perform properly date-sensitive
functions on and after December 31, 1999). The Company's current assessment of
the potential effect on the Company of the Year 2000 Problem set forth in the
Company SEC Reports is accurate in all material respects.
(v) Debt Tender. Except customary transaction expenses incurred in
connection with the debt tender offer referred to in the Offer to Purchase and
Consent Solicitation Statement of the Company dated July 2, 1999, as amended,
the Company has not incurred any other costs in connection with such debt tender
offer and, to the knowledge of the Company, there is no litigation, arbitration,
claim, suit, action, investigation or proceeding threatened against or affecting
the Company or any of its Subsidiaries in respect of a proposed withdrawal or
termination of such debt tender offer that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company.
3.2. REPRESENTATIONS AND WARRANTIES OF PARENT. Except as otherwise set forth in
the Parent Disclosure Schedule delivered by Parent to the Company at or prior to
the execution of this Agreement (the "Parent Disclosure Schedule"), Parent
represents and warrants to the Company as follows:
(a) Organization, Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the law of the Republic
of Italy, is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, except where the failure so
to qualify would not, individually or in the aggregate, have a Material Adverse
Effect on Parent.
(b) Authority; No Conflicts.
(i) Parent has all requisite corporate power and corporate
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate
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<PAGE> 25
action on the part of Parent. This Agreement has been duly executed and
delivered by Parent and constitutes a valid and binding agreement of
Parent, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally, or by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(ii) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, result
in any Violation of: (A) any provision of the Organizational Documents of
Parent or any of its Subsidiaries or (B) except as would not,
individually or in the aggregate, have a Material Adverse Effect on
Parent or impair or delay the ability of Parent to consummate the
transactions contemplated hereby, and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (iii) below, any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent, any of its Subsidiaries or their
respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent in connection with the execution
and delivery of this Agreement by Parent or the consummation by Parent of
the transactions contemplated hereby, except for (A) the consents,
approvals, orders, authorizations, registrations, declarations and
filings required under or in relation to clause (x) of Section
3.1(c)(iii) and (B) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain would not, individually or in the aggregate, have a Material
Adverse Effect on Parent or impair or delay the ability of Parent to
consummate the transactions contemplated hereby and (C) any consents,
approvals, orders, authorizations, registrations, declarations or filings
not required to be obtained or made until after the Effective Time.
(c) Information Supplied.
(i) None of (A) the Offer Documents, (B) the Schedule 14D-1 or
(C) the information supplied or to be supplied by Parent or Merger Sub
for inclusion or incorporation by reference in the Proxy Statement, the
Schedule 14D-9 and any other documents to be filed with the SEC in
connection with the transactions contemplated hereby, including any
amendment or supplement to such documents, will, at the respective times
such documents are filed, and, with respect to the Proxy Statement and
the Offer Documents, when first published, sent or given to stockholders
of the Company, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances
under which they are made, not false or misleading or, in the case of the
Proxy Statement, or any amendment thereof or supplement thereto, at the
time of the Company Stockholders Meeting, and at the Effective Time,
contain any untrue statement
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of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to made the statements made therein,
in light of the circumstances under which they are made, not false or
misleading or necessary to correct any statement in any earlier
communication with respect to the Offer or the solicitation of proxies
for the Company Stockholders Meeting, which shall have become false or
misleading.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(e), no representation or warranty is made by Parent or Merger Sub
with respect to statements made or incorporated by reference in the Offer
Documents or Schedule 14D-1 based on information supplied by the Company
for inclusion or incorporation by reference therein.
(d) Financing. Parent has available, and will make available to
Merger Sub, the funds necessary to consummate the Offer and the Merger and the
transactions contemplated hereby on a timely basis and to otherwise satisfy the
obligations of the Company and to conduct the Company's business.
(e) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent on Merger Sub, except Goldman Sachs & Co. or certain of
its affiliated entities.
(f) Ownership of Company Capital Stock. As of the date of this
Agreement, neither Parent nor any of its affiliates or associates (as such terms
are defined under Section 203 of the DGCL and the Exchange Act) (x) beneficially
owns, directly or indirectly or (y) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
case of either clause (x) or (y), shares of capital stock of the Company.
(g) No Vote Required. No vote of the holders of any securities of
Parent is necessary to approve this Agreement or the transactions contemplated
hereby.
3.3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent and Merger
Sub represent and warrant to the Company as follows:
(a) Organization and Corporate Power. Merger Sub is a wholly owned
Subsidiary of Parent and a corporation duly incorporated, validly existing and
in good standing under the laws of Delaware. The copies of the Organizational
Documents of Merger Sub which were previously furnished or made available to the
Company are true, complete and correct copies of such documents as in effect on
the date of this Agreement.
(b) Corporate Authorization. Merger Sub has all requisite corporate
power and corporate authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been
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<PAGE> 27
duly executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict with
the Organizational Documents of Merger Sub or any agreements by which Merger Sub
is bound.
(d) No Business Activities. Merger Sub is not a party to any
material agreements (other than this Agreement) and has not conducted any
activities other than in connection with its organization, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. COVENANTS OF THE COMPANY. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or to the extent that Parent shall
otherwise consent in writing, which consent shall not be unreasonably withheld
or delayed:
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course consistent
with past practice, and shall use their reasonable best efforts to preserve
intact their present business organizations and preserve their relationships
with customers, suppliers and others having business dealings with them.
(b) Dividends; Changes in Share Capital. The Company shall not, and
shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, (iii) repurchase, redeem or otherwise acquire
any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock, except as otherwise permitted
under certain option agreements to effect cashless option exercises or (iv)
adopt a plan of complete or partial liquidation or resolutions providing for or
authorizing such liquidation or a dissolution, or (except as permitted under
Section 5.4) any merger, consolidation, restructuring, recapitalization or other
reorganization.
(c) Issuance of Securities. The Company shall not and shall cause
its Material Subsidiaries not to issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock of any class,
any Company Voting Debt or any securities convertible into or exercisable for,
or any rights, warrants or options to acquire, any such shares or Company Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
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than the issuance of Company Common Stock upon the exercise of stock options
pursuant to the Company Stock Plan, and the issuance of shares pursuant to the
Company Stock Plan and the Company Purchase Plan, in each case as in effect on
the date of this Agreement.
(d) Organizational Documents. Except to the extent required to
comply with their respective obligations hereunder or required by law, the
Company and its Material Subsidiaries shall not amend or propose to amend their
respective Organizational Documents.
(e) Indebtedness; Investments. The Company shall not, and shall
cause its Subsidiaries not to, directly or indirectly, except pursuant to the
Company's Refinancing Plan set forth on Schedule 4.1(e) to this Agreement, (i)
incur or assume any long-term or short-term debt or issue any debt securities,
except for borrowings under existing lines of credit in the ordinary and usual
course of business consistent with past practice and borrowings in amounts not
material to the Company and its Subsidiaries taken as a whole; (ii) pledge or
otherwise encumber shares of capital stock of the Company or its Subsidiaries,
or mortgage or pledge any of their material assets, tangible or intangible,
except to secure existing debt and except for such of the foregoing as is not
material to the Company and its Subsidiaries taken as a whole; or (iii) except
in an aggregate amount not to exceed $8 million, (A) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except in the ordinary and
usual course of business consistent with past practice and guarantees in amounts
not material to the Company and its Subsidiaries, taken as a whole, and except
for obligations of the wholly owned Subsidiaries of the Company; or (B) make any
loans, advances or capital contributions to, or investments in, any other Person
(other than Subsidiaries of the Company, or customary loans or advances to
employees in the ordinary and usual course of business consistent with past
practice and in amounts not material to the Company and its Subsidiaries taken
as a whole).
(f) Benefit Plans. The Company shall not, and shall not permit the
Material Subsidiaries to, (i) increase the compensation payable or to become
payable to any of its executive officers or employees or (ii) take any action
with respect to the grant of any severance or termination pay, or stay, bonus or
other incentive arrangement (other than pursuant to benefit plans and policies
in effect on the date of this Agreement), except (A) any such increases or
grants made in the ordinary and usual course of business consistent with past
practice or (B) as provided in Section 5.5; provided, however, that nothing in
this Section 4.1(f) shall reduce, modify, change or diminish the rights of any
executive officer or employee of the Company to receive, now or in the future,
stock, cash compensation or other benefits pursuant to any existing Company
Benefit Plan.
(g) Accounting and Tax Practice or Policy. Except to the extent
required by applicable law or GAAP, the Company will not, and will not permit
any of its Subsidiaries to (i) make any material change in any method of
accounting or accounting practice or policy, or (ii) make any material Tax
election or settle or compromise any material income Tax liability with any
Governmental Entity.
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(h) Capital Expenditures. The Company will not, and will not permit
any of its Subsidiaries to, make, in the aggregate, any capital expenditures in
excess of $40 million.
(i) Line of Business. The Company and its Subsidiaries will not make
any material change in the lines of business in which they participate or are
engaged.
(j) Operational Contracts; Company Permits. The Company will not,
and will not permit any of the Subsidiaries to, amend or modify any Company
Permit or any Operational Contract for which revenues were recorded during the
Company's most recent fiscal year in excess of $15 million (other than the
entering into, amendment or modification of any Operational Contract in respect
of the New Jersey Turnpike, which shall not be prohibited), except for any
extensions or renewals thereof or otherwise in the ordinary and usual course of
business, consistent with past practice.
(k) Other Actions. The Company shall not, and shall not permit its
Subsidiaries to, take any action that would reasonably be expected to result in
(i) any of the representations or warranties of the Company becoming untrue in
any material respect or (ii) except as otherwise permitted by Section 5.4, any
of the conditions to the Merger set forth in Article VI not being satisfied.
4.2. COVENANTS OF PARENT AND MERGER SUB. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or to the extent that the Company
shall otherwise consent in writing, which consent shall not be unreasonably
withheld or delayed; Parent shall not, and shall not permit any of its
Subsidiaries to, take any action that would reasonably be expected to result in
(i) any of the representations or warranties of Parent becoming untrue in any
material respect or (ii) any of the conditions to the Merger set forth in
Article VI not being satisfied.
4.3. ADVICE OF CHANGES; GOVERNMENT FILINGS. Each party shall promptly advise
the other orally and in writing of (i) any representation or warranty becoming
inaccurate, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement required to be complied with or
satisfied by it under this Agreement or (iii) any change, event or circumstance
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on such party or materially adversely affect its ability
to consummate the transactions contemplated hereby in a timely manner; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement or constitute a waiver thereunder. Each party
agrees that, to the extent practicable, it will consult with the other party
with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other party apprised of the status of matters relating to
completion of the transactions contemplated hereby.
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ARTICLE V.
ADDITIONAL AGREEMENTS
5.1. PREPARATION OF PROXY STATEMENT; THE COMPANY STOCKHOLDERS MEETING.
(a) If required by the DGCL or the Company's Organizational
Documents in order to consummate the Merger, the Company shall, as soon as
practicable following the acquisition by Merger Sub of shares of Company Common
Stock pursuant to the Offer, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Company Stockholders Meeting") for the purpose
of obtaining the Required Company Votes, and, the Company shall, through its
Board of Directors, recommend to its stockholders that they vote in favor of the
approval of the Merger and the adoption of this Agreement; provided, however,
that the Company Board may withdraw, modify or change such recommendation to the
extent that the Company Board, after consultation with and based upon the advice
of independent legal counsel, determines in good faith that such action is
necessary for the Company Board to comply with its fiduciary duties under
applicable law. Parent and Merger Sub shall vote or cause to be voted all the
shares of Company Common Stock owned of record by Parent, Merger Sub or any of
Parent's other Subsidiaries in favor of the approval of the Merger and the
adoption of the Agreement. After the date hereof and prior to the expiration of
the Offer, Parent shall not purchase, offer to purchase, or enter into any
contract, agreement or understanding regarding the purchase of shares of Company
Common Stock, except pursuant to the terms of the Offer and the Merger.
(b) Notwithstanding the preceding paragraph or any other provision
of this Agreement, in the event Parent, Merger Sub or any other Subsidiary of
Parent shall beneficially own, in the aggregate, at least 90% of the outstanding
shares of the Company Common Stock, the Company shall not be required to call
the Company Stockholders Meeting or to file or mail the Proxy Statement, and the
parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the acceptance for
payment of and payment for shares of Company Common Stock by Merger Sub pursuant
to the Offer without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
(c) In connection with any stockholder meeting, the Company shall
promptly prepare and file with the SEC the Proxy Statement. The Company shall
use reasonable best efforts to cause the Proxy Statement to be cleared with the
SEC and mailed to the Company's stockholders, as promptly as practicable, and,
thereafter, to obtain approval of the Merger by its stockholders.
5.2. ACCESS TO INFORMATION. Subject to the Confidential Information Agreement
dated March 15, 1999 between Parent and the Company (the "Confidential
Information Agreement"), from the date hereof until the earlier of the Effective
Time or the termination of this Agreement, upon reasonable notice, the Company
shall, and shall cause its Subsidiaries to, (a) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives of
Parent ("Parent Representatives") reasonable access during normal business hours
to all of its and its Subsidiaries' properties, books, contracts, commitments
and records and its officers, management employees,
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accountants and representatives and (b) furnish promptly to such persons upon
request (i) a copy of each report, statement, schedule and other document filed
or received by the Company or any of the Subsidiaries pursuant to the
requirements of federal or state securities laws, and (ii) all other information
and data (including, without limitation, copies of Operational Contracts,
Company Benefit Plans and other books and records) concerning the business and
operations of the Company and its Subsidiaries as Parent or any of such other
Persons reasonably may request (subject, however, to confidentiality and similar
non-disclosure obligations and the preservation of attorney client and work
product privileges). Notwithstanding the foregoing, neither Parent nor any
Parent Representatives shall perform any environmental testing at any of the
Company's or its Subsidiaries' properties or facilities.
5.3. APPROVALS AND CONSENTS; COOPERATION
(a) Each of the Company and Parent shall cooperate with each other
and use (and shall cause their respective Subsidiaries to use) its reasonable
best efforts to take or cause to be taken all actions, and do or cause to be
done all things, necessary, proper or advisable on their part under this
Agreement and applicable laws to consummate and make effective the Merger and
the other transactions contemplated by this Agreement as soon as practicable,
including (i) preparing and filing as promptly as practicable all documentation
to effect all applications, notices, petitions, filings, tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations as are necessary or advisable to be obtained from any third party
and/or any Governmental Entity in connection with the Merger or any of the other
transactions contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals.
(b) In furtherance and not in limitation of the foregoing, each of
the Company and Parent shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any United States or foreign
Governmental Entity. Any party hereto shall promptly inform the others of any
material communication from the United States Federal Trade Commission, the
Department of Justice or any other United States or foreign Governmental Entity
regarding the transactions contemplated by this Agreement. If any party or any
affiliate thereof receives a request for additional information from any such
Governmental Entity with respect to the Transactions contemplated by this
Agreement, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request (a copy of such
response to be provided to the other party hereto).
(c) The Company and Parent each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may reasonably be
necessary or advisable in connection with the Offer Documents, Schedule 14D-9,
Proxy Statement or any other statement, filing, tax ruling request, notice or
application made by or on behalf of the Company, Parent or any of their
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respective Subsidiaries to any third party and/or any Governmental Entity in
connection with the Merger or the other transactions contemplated by this
Agreement.
5.4. ACQUISITION PROPOSALS.
(a) The Company shall, and shall cause its Subsidiaries to, cause
their respective officers, directors, employees and representatives and agents
(the "Company Representatives") to immediately cease any existing discussions or
negotiations, if any, with any Person conducted heretofore with respect to an
Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal.
Unless and until this Agreement shall have been terminated pursuant to Article
VII hereof, except as otherwise expressly provided in Section 5.4(b), neither
the Company nor the Company Representatives shall (i) solicit or initiate the
making of any Acquisition Proposal, (ii) participate in negotiations with any
person or group (other than Parent, Merger Sub and their respective designees)
concerning an Acquisition Proposal, or (iii) disclose or furnish, in connection
with an Acquisition Proposal, any material non-public information or provide
access to its properties, books or records, or otherwise take action that would
facilitate or lead to any Acquisition Proposal, except as required by law or
pursuant to a governmental request for information. As used herein "Acquisition
Proposal" shall mean any proposal to acquire in any manner, directly or
indirectly, in one or a series of transactions, all or more than 20% of the
Company's business, assets or capital shares whether by merger, consolidation,
other business combination, purchase of assets, tender or exchange offer or
otherwise.
(b) Notwithstanding anything to the contrary contained in Section
5.4(a) or elsewhere in this Agreement, prior to acceptance for payment of, and
payment by Merger Sub for, shares of Company Common Stock pursuant to the Offer,
the Company and the Company Representatives may, to the extent the Company
Board, after consultation with and based upon the advice of independent legal
counsel, determines in good faith that such action is necessary for the Company
Board to comply with its fiduciary duties under applicable law, participate in
discussions or negotiations with, and furnish non-public information to, and
afford access to the properties, books, records, officers, employees and
representatives of the Company to any Person, entity or group after such Person,
entity or group has delivered to the Company, in writing, an Acquisition
Proposal not solicited after the date hereof which the Company Board determines
in good faith is, if accepted, reasonably likely to be consummated (taking into
account all legal, financial, regulatory and other aspects of the proposal and
the Person making the proposal) and believes in good faith, after consultation
with its financial advisors, if consummated would be more favorable to the
Company or its stockholders from a financial point of view than the transactions
contemplated by this Agreement (a "Superior Proposal"); provided, however, that
prior to taking such action, the Company shall (to the extent practicable)
provide notice to Parent to the effect that it is taking such action. Subject to
Section 7.2(b), in the event the Company receives a Superior Proposal, nothing
contained in this Agreement shall prevent the Board of Directors of the Company
from executing or entering into an agreement relating to such Superior Proposal
and recommending such Superior Proposal to its stockholders, if the Board
determines in good faith that it is appropriate to do so; in such case, the
Board of Directors of the Company may withdraw, modify or refrain from making
its recommendation of the Offer, the Merger and this Agreement; provided however
that the Company shall (i) provide Parent at least
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24 hours prior written notice of the Company's intention to execute or enter
into an agreement relating to such Superior Proposal to enable Parent to match
such Superior Proposal, in which case, the Company Board shall recommend to the
Company's stockholders to accept the proposal of Parent; and (ii) where Parent
does not match such Superior Proposal, terminate this Agreement by written
notice to Parent given no sooner than 48 hours after Parent's receipt of a copy
of such Superior Proposal (or a description of the significant terms and
conditions thereof). Notwithstanding anything to the contrary contained in
Section 5.4 or elsewhere in this Agreement, prior to the acceptance for payment
of, and payment by Merger Sub for, shares of Company Common Stock pursuant to
the Offer, the Company may, in connection with a possible Acquisition Proposal,
refer any Person to this Section 5.4 and Article VII and make a copy of this
Section 5.4 and Article VII available to any Person. Nothing contained in this
Section 5.4 shall prohibit the Company Board from complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer.
5.5. EMPLOYEE BENEFITS.
(a) Subject to subparagraph 5.5(c) below, for the period from the
Closing Date until two years from the January 1 next following the Closing Date,
Parent shall or shall cause the Surviving Corporation to maintain in effect
benefit plans which in the aggregate provide benefits that are at least as
favorable to employees as the arrangements (other than equity-related benefit
plans) currently provided by the Company Benefit Plans.
(b) For purposes of determining eligibility to participate, vesting
and accrual or entitlement to benefits where length of service is relevant under
any employee benefit plan or arrangement of Parent, the Surviving Corporation or
any of their respective Subsidiaries, employees of the Company and its
Subsidiaries as of the Effective Time shall receive service credit for service
with the Company and its Subsidiaries and their respective predecessors to the
same extent such service credit was granted under the Company Benefit Plans,
subject to offsets for previously accrued benefits and without duplication of
benefits.
(c) Except as any employee may otherwise agree, Parent shall cause
the Surviving Corporation to assume and honor in accordance with their terms all
written employment, change in control, severance and termination plans and
agreements of employees of the Company and its Subsidiaries and the severance
pay policies identified in Section 5.5(c) of the Company Disclosure Schedule.
5.6. FEES AND EXPENSES. Whether or not the transactions contemplated hereby are
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except as provided in Section 7.2. As used in this Agreement,
"Expenses" includes all out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Offer Documents and the Proxy Statement and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated
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hereby. Without limiting the generality of the foregoing, in connection with the
consummation of the Offer and the Merger, the parties will take all actions
necessary to ensure prompt payment of all expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
5.7. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Surviving Corporation
shall, and Parent shall cause Surviving Corporation to, maintain in effect (i)
for a period of six years after the Effective Time, the current provisions
regarding indemnification of current or former officers or directors (each an
"Indemnified Party") contained in the Organizational Documents of the Company
and its Subsidiaries and in any agreements between an Indemnified Party and the
Company or any of its Subsidiaries, provided that in the event any claim or
claims are asserted or made within such six year period, all rights to
indemnification in respect of any claim or claims shall continue until final
disposition of any and all such claims, and (ii) for a period of six years, the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by the Company (provided that Parent or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured and provided that such
substitution shall not result in any gaps or lapses in coverage with respect to
matters occurring at or prior to the Effective Time) with respect to claims
arising from facts or events that occurred at or before the Effective Time;
provided, that if such insurance cannot be so maintained or obtained at a
premium not greater than 150% of the premium for the Company's current
directors' and officers' liability insurance, Parent may maintain or obtain as
much of such insurance as can be maintained or obtained at a cost equal to 150%
of the current annual premiums of the Company for such insurance. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any action, proceeding or investigation in connection with
any matter occurring prior to or at the Effective Time, including (without
limitation) the transactions contemplated hereby, the Surviving Corporation will
pay as incurred the reasonable fees and expenses of counsel selected by the
Indemnified Party and reasonably acceptable to the Surviving Corporation
(including the cost of any investigation and preparation and the cost of any
appeal) incurred in connection therewith. In the event a claim is asserted
against an Indemnified Party more than six years after the Effective Date, and
if such claim is not barred by the applicable statute of limitations, the
Surviving Corporation shall defend, indemnify and hold harmless the Indemnified
Party in accordance with the foregoing. This covenant shall survive the closing
of the transactions contemplated hereby and is intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties and their
respective heirs and legal representatives.
5.8. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the Company
and Parent shall use all reasonable efforts to develop a joint communications
plan and each party shall use all reasonable efforts (i) to ensure that all
press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan, and
(ii) unless otherwise required by applicable law or by obligations pursuant to
any listing agreement with or rules of any United States national securities
exchange or the Milan Stock Exchange, to consult with each other before issuing
any press release or otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
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5.9. TAKEOVER STATUTES. If Section 203 of the DGCL or any other takeover
statute ("Takeover Statute") shall become applicable to the transactions
contemplated hereby, the Company and the members of the Board of Directors of
the Company, shall grant such approvals and take such actions as are necessary
so that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to eliminate or
minimize the effects of such Takeover Statute on the transactions contemplated
hereby.
5.10. EMPLOYEE STOCK OPTIONS.
The holder of each employee stock option outstanding immediately
prior to the Effective Time (an "Employee Option") which is unexercised and
vested or which would vest on or prior to January 2, 2000 pursuant to the
applicable vesting schedule in effect as of the date hereof which is terminated
immediately prior to the Effective Time, shall be entitled to receive at the
Effective Time from the Company or as soon as practicable thereafter from the
Surviving Corporation, in consideration for such termination, an amount in cash
equal to (i) the product of (A) the number of shares of Company Common Stock
subject to such Employee Option (whether or not vested or exercisable) and (B)
the excess, if any, of the Price Per Share over the exercise price per share of
Company Common Stock subject to such Employee Option, (ii) less any required
withholding taxes. The Company shall take any action reasonably requested by
Parent in connection with the foregoing.
5.11. RIGHTS AGREEMENT. The Company shall take all action necessary to cause
the provisions of the Company Rights Agreement to be inapplicable to the
transactions contemplated by this Agreement, without any payment to holders of
rights issued pursuant to such rights agreement.
5.12. CREDIT AGREEMENT. The Company shall use its reasonable best efforts to
obtain all necessary waivers and consents prior to the consummation of the Offer
so that the transactions contemplated hereby will not result in or constitute a
default under that certain Amended and Restated Credit Agreement dated as of
April 18, 1997 by and among the Company, the Lenders named therein and the First
Bank of Chicago, as Agent.
5.13. DEBT TENDER. Promptly upon execution of this Agreement, the Company will
withdraw and terminate the debt tender offer referred to in the Offer to
Purchase and Consent Solicitation Statement of the Company dated July 2, 1999,
as amended.
5.14. LICENSE AGREEMENT. The Company will use its reasonable best efforts to
ensure that the license to use the name "Marriott" granted in the License
Agreement dated December 29, 1995, between the Company and Marriott
International, Inc. shall be extended for a period equivalent to the period
Marriott International has granted to Sodexho Marriott a license to use the name
"Marriott" in the agreement dated March 1998, and that such license to the
Company, shall, at its option, be further extended for a period equivalent to
any subsequent extension granted to Sodexho Marriott or any of its successors or
assigns.
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5.15. FURTHER ASSURANCES. In case at any time after the Effective Time any
further action is reasonably necessary to carry out the purposes of this
Agreement, the proper officers of the Company, Parent and Merger Sub shall take
any such reasonably necessary action.
ARTICLE VI.
CONDITIONS PRECEDENT
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligations of the Company, Parent and Merger Sub to effect the Merger are
subject solely to the satisfaction or waiver (subject to Section 1.4(c) and
where legally permissible) on or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. The Company shall have obtained all
approvals of holders of shares of capital stock of the Company necessary to
approve the Merger, to the extent required by law.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(c) No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
a court or other Governmental Entity of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(d) Purchase of Shares. Merger Sub shall have commenced the Offer
pursuant to Article I hereof and purchased, pursuant to the terms and conditions
of such Offer, all shares of Company Common Stock duly tendered and not
withdrawn.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1. TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, by action taken or authorized by the Board of Directors of the
terminating party or parties, whether before or after approval of this Agreement
and the matters contemplated herein, including the Merger, by the stockholders
of the Company:
(a) By mutual written consent of Parent and the Company, by action
of their respective Boards of Directors;
(b) By the Company, if it is not in material breach of its
obligations hereunder and (i) Merger Sub fails to commence the Offer as provided
in Section 1.01 hereof, (ii) Merger Sub shall not have accepted for payment and
paid for all shares of Company Common Stock tendered pursuant to the Offer in
accordance with the terms thereof on or before October 30, 1999 (the "Outside
Date") or (iii) Merger Sub fails to purchase validly tendered shares of Company
Common Stock in violation of the terms of the Offer or this Agreement;
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(c) By the Company or Parent if the Offer is terminated or withdrawn
pursuant to its terms without any shares of Company Common Stock being purchased
thereunder; provided that Parent may terminate this Agreement pursuant to this
Section 7.1(c) only if Parent's or Merger Sub's termination or withdrawal of the
Offer is not in violation of the terms of this Agreement or the Offer;
(d) By the Company or Parent if any Governmental Entity of competent
jurisdiction shall have issued, entered, enacted, promulgated or enforced any
order, decree, judgment, statute, regulation or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, judgment, statute,
regulation, ruling or other action shall have become final and nonappealable;
(e) By Parent, prior to purchase by Merger Sub of shares of Company
Common Stock pursuant to the Offer, if (i) the Company Board shall have
withdrawn or materially and adversely modified its recommendation of the Offer,
the Merger or this Agreement (it being understood, however, that for all
purposes of this Agreement, the fact that the Company has supplied any Person
with information regarding the Company or has entered into discussions or
negotiations with such Person as permitted by this Agreement, or the disclosure
of such facts, shall not be deemed a withdrawal or modification of the Company
Board's recommendation of the Offer, the Merger or this Agreement); (ii) the
Company Board shall have recommended to the stockholders of the Company that
they approve a Superior Proposal other than that contemplated by this Agreement
and at least two Business Days have elapsed since the recommendation; or (iii) a
tender offer or exchange offer that, if successful, would result in any Person
or "group" becoming a "beneficial owner" (such terms having the meaning in this
Agreement as is ascribed under Regulation 13D under the Exchange Act) of 20% or
more of the issued and outstanding shares of Company Common Stock on a fully
diluted basis is commenced (other than by Parent or an affiliate of Parent) and
the Company Board recommends that the stockholders of the Company tender their
shares in such tender or exchange offer or the Company Board announces a neutral
position or fails to make a recommendation with respect to such offer within the
shorter of the ten Business Days after such tender offer or exchange offer is
commenced or the period remaining until the Outside Date;
(f) By the Company, prior to the purchase by Merger Sub of shares of
Company Common Stock pursuant to the Offer, if the Company enters into a
definitive agreement with respect to a Superior Proposal;
(g) By Parent, prior to the purchase by Merger Sub of shares of
Company Common Stock pursuant to the Offer, upon a material breach of any
covenant or agreement on the part of the Company set forth in this Agreement, or
if any representation or warranty of the Company in this Agreement shall at such
time be inaccurate and such inaccuracy would be reasonably likely to have a
Material Adverse Effect on the Company, in either case which breach or
inaccuracy is not reasonably capable of being cured without expenditures in
excess of $6 million by the Company or, if capable of such cure, has not been
cured without expenditures in excess of $6 million by the Company within ten
Business Days after the Company has knowledge thereof;
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(h) By the Company, prior to the purchase by Merger Sub of any
shares of Company Common Stock pursuant to the Offer, upon a material breach of
any covenant or agreement on the part of Parent or Merger Sub set forth in this
Agreement, or if any representation or warranty of Parent or Merger Sub shall,
at such time, be inaccurate and such inaccuracy would be reasonably likely to
materially and adversely affect the ability of Parent and Merger Sub to perform
their obligations hereunder, in either case which breach or inaccuracy is not
reasonably capable of being cured by Parent or Merger Sub or, if capable of
cure, has not been cured within ten Business Days after either Parent or Merger
Sub has knowledge thereof; or
(i) By Parent, if it is not in material breach of its obligations
hereunder or under the Offer and no shares of Company Common Stock shall have
been purchased pursuant to the Offer by the Outside Date.
7.2. EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either the
Company or Parent as provided in Section 7.1, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of any
party hereto or their respective officers, directors, employees or stockholders
except (i) pursuant to the last sentence of Section 5.2, Section 5.6, this
Section 7.2 and Article VIII, (ii) with respect to any liabilities or damages
incurred or suffered by a party hereto as a result of the willful breach by
another party hereto of any of its covenants or other agreements set forth in
this Agreement and (iii) with respect to any liabilities or damages incurred or
suffered by the Company as a result of the failure of Parent or Merger Sub to
consummate the Offer or the Merger as required under the terms of this
Agreement, including, without limitation, by reason of an inability to obtain
the requisite financing to do so. Any damages or liabilities referenced in
clauses (ii) and (iii) above shall be recoverable in full from the party or
parties whose breach or failure to consummate caused such damages or liabilities
to be incurred.
(b) In the event that this Agreement is terminated pursuant to
Section 7.1(e) or 7.1(f), then the Company shall pay to Parent a cash fee of $20
million, which amount shall be payable by wire transfer of immediately available
funds no later than two Business Days after such termination. The Company
acknowledges that the agreements contained in this Section 7.2(b) are an
integral part of the transactions contemplated in this Agreement, and that,
without these agreements, the Parent and Merger Sub would not enter into this
Agreement.
7.3. AMENDMENT. Subject to Section 1.4(c), this Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company, but, after any
such approval, no amendment shall be made which by law or in accordance with the
rules of the New York Stock Exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto which expressly states that the parties intend to amend this Agreement.
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7.4. EXTENSION; WAIVER. Subject to Section 1.4(c), at any time prior to the
Effective Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements of any other party or with any
condition to its own obligations. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. No delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. Unless
otherwise provided, the rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VIII.
GENERAL PROVISIONS
8.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS; NO OTHER
REPRESENTATIONS AND WARRANTIES. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such representations, warranties, covenants and other agreements, shall survive
the Effective Time, except for those covenants and agreements contained herein
and therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article VIII. Each party hereto agrees that,
except for the representations and warranties contained in this Agreement, (i)
none of the Company, Parent or Merger Sub or any of their respective officers,
directors, employees, affiliates, agents, financial or legal advisors or other
representatives makes any other representations or warranties, whatsoever, oral
or written, express or implied, and each hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, affiliates, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing, and (ii)
none of the parties hereto is relying on any disclosure, statement,
representation or warranty, oral or written, express or implied, made by any
other party hereto or such party's officers, directors, employees, affiliates,
agents, financial or legal advisors or other representatives.
8.2. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the first Business Day following the date of dispatch if
delivered by a nationally recognized next-day courier service, (c) on the fifth
Business Day following the date of mailing if delivered by registered or
certified mail,
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return receipt requested, postage prepaid or (d) if sent by facsimile
transmission, with a copy mailed on the same day in the manner provided in (a)
or (b) above, when transmitted (receipt confirmed). All notices hereunder shall
be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice in the manner set
forth above:
(a) if to Parent or Merger Sub, to Autogrill S.p.A. Via Caldera, 21
20153 Milan, Italy (Attention: Carmine Meoli) Facsimile: +39-02-4826-3557) with
copies to with copies to Rogers & Wells LLP, City Tower, 40 Basinghall Street,
London EC2V 5DE, United Kingdom (Attention: Michael S. Immordino), Facsimile
+44-171-628-6111, and to Bonelli Erede Pappalardo, Via Serbelloni, 12, 20122
Milan, Italy (Attention: Sergio Erede), Facsimile +39-02-77-11-32-60
(b) if to the Company, to Host Marriott Services Corporation, 6600
Rockledge Drive, Bethesda, Maryland 20817, Facsimile (301) 380-7626, Attention:
Joe P. Martin, General Counsel, with a copy to Latham & Watkins, 1001
Pennsylvania Avenue, N.W., Suite 1300, Facsimile (202) 637-2201, Attention:
Bruce E. Rosenblum.
8.3. INTERPRETATION. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents,
glossary of defined terms and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden or proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statue or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the content requires otherwise. It is understood
and agreed that neither the specifications of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits is
intended to imply that such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and neither party shall use
the fact or setting or such amounts or the fact of the inclusion of such item in
the Schedules or Exhibits in any dispute or controversy between the parties as
to whether any obligation, item or matter is or is not material for purposes
hereof. References in this Agreement to the "knowledge" of a party shall mean
the actual knowledge of the executive officers of such party after due inquiry.
8.4. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that both parties need not
sign the same counterpart.
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8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
(a) This Agreement (including the Schedules and Exhibits)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidential Information Agreement, which
shall survive the execution and delivery of this Agreement.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Article II and Sections 1.4(c), 5.5, 5.7 and 8.1 (which are intended to be for
the benefit of the Persons covered thereby and may be enforced by such Persons).
8.6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to the laws that might be
applicable under conflicts of laws principles.
(b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any Delaware State court, or Federal court of the United States
of America sitting in Delaware, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby or for recognition or enforcement of any judgment relating
thereto, and each of the parties hereby irrevocably and unconditionally (i)
agrees not to commence any such action or proceeding except in such courts, (ii)
agrees that any claim in respect of any such action or proceeding may be heard
and determined in such Delaware State court or, to the extent permitted by law,
in such Federal court, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (iv) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such Delaware State or Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 8.2. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
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AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv)
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6(c).
8.7. SEVERABILITY. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible. Any provision of this Agreement held invalid or
unenforceable only in part, degree or certain jurisdictions will remain in full
force and effect to the extent not held invalid or unenforceable. To the extent
permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.
8.8. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective permitted successors and assigns.
8.9. ENFORCEMENT. The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent such breaches and specific performance of the terms hereof, this being
in addition to any other remedy to which they are entitled at law or in equity.
8.10. DEFINITIONS. As used in this Agreement:
"Board of Directors" means the Board of Directors of any specified
Person and any properly serving and acting committees thereof.
"Business Day" means any day on which banks are not required or
authorized to close in the City of New York or Milan, Italy.
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"Company Stock Plan" means the Host Marriott Services Corporation
Comprehensive Stock Plan.
"Company Stock Purchase Plan" means the Host Marriott Services
Corporation Stock Purchase Plan.
"Environmental Laws" shall mean any federal, state or local law,
statute, ordinance, order, decree, rule or regulation relating to releases,
discharges, emissions or disposals to air, water, land or groundwater of toxic
or hazardous substance or waste; to the use, handling or disposal or any toxic
or hazardous substance or waste; to the treatment, storage, disposal or
management of toxic or hazardous substance or waste; to exposure to toxic or
hazardous substance or waste; and to the transportation, release or other
movement of toxic or hazardous substance or waste.
"Intellectual Property" shall mean patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, copyrights
and copyright rights and other proprietary intellectual property rights, and all
pending applications for and registrations of any of the foregoing, that are
material to the business of the Company and its subsidiaries (taken as a whole).
"Material Adverse Effect" means with respect to any Person a
material adverse effect on the business, assets, financial condition or results
of operation of such Person and its Subsidiaries taken as a whole, provided,
however, that with respect to the Company the term Material Adverse Effect shall
not include (i) any change, circumstance, event or effect that relates to or
results primarily from the announcement or other disclosure or consummation of
the transactions contemplated by this Agreement, (ii) changes in general
economic conditions, financial markets (including fluctuations in the price of
shares of Company Common Stock or shares of capital stock of Parent) or
conditions in the business sectors in which the Company and its Subsidiaries
operate not disproportionately affecting the Company and its Subsidiaries, or
(iii) the failure to obtain any consents or approvals under any Operational
Contracts in connection with the transactions contemplated hereby.
"Material Subsidiaries" shall mean Host International, Inc. and any
other subsidiary of the Company which constitutes a "significant subsidiary" as
defined under Regulation S-X promulgated by the SEC.
"Operational Contracts" means agreements pertaining to the conduct
of the business operations of the Company and its Subsidiaries, including
(without limitation) leases, operating agreements, concession agreements,
franchise agreements, licensing agreements, joint venture agreements,
noncompetition agreements and other agreements or contractual arrangements.
"Organizational Documents" means, with respect to any entity, the
certificate of incorporation, bylaws or other governing documents of such
entity.
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"Person" means an individual, corporation, partnership, limited
liability company association, trust, unincorporated organization, entity or
group (as defined in the Exchange Act).
"Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such Person or any other Subsidiary of such Person is a general partner
(excluding partnerships, the general partnership interests of which held by such
Person or any Subsidiary of such Person do not have a majority of the voting and
economic interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries.
(i) "Tax" (including, with correlative meaning, the terms "Taxes"
and "Taxable") means all federal, state, local and foreign income, profits,
franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties, fines and additions to tax imposed with respect to such
amounts and any interest in respect of such penalties and additions to tax, and
(ii) "Tax Return" means all returns and reports (including elections, claims,
declarations, disclosures, schedules, estimates, computations and information
returns) required to be supplied to a Tax authority in any jurisdiction relating
to Taxes.
8.11. PERFORMANCE BY MERGER SUB. Parent hereby agrees to cause Merger Sub to
comply with its obligations hereunder and under the Offer and to cause Merger
Sub to consummate the Merger as contemplated herein, and whenever this Agreement
requires Merger Sub to take any action, such requirement shall be deemed to
include an undertaking of Parent to cause Merger Sub to take such action.
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IN WITNESS WHEREOF, Parent, the Company and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first set forth above.
AUTOGRILL S.p.A.,
a corporation organized under the laws of the
Republic of Italy
By: /s/ Paolo Prota Giurleo
--------------------------------
Name: Paolo Prota Giurleo
Title: Chief Executive Officer
AUTOGRILL ACQUISITION CO.,
a Delaware corporation
By: /s/ Paolo Prota Giurleo
--------------------------------
Name: Paolo Prota Giurleo
Title: President
HOST MARRIOTT SERVICES CORPORATION,
a Delaware corporation
By: /s/ William W. McCarten
--------------------------------
Name: William W. McCarten
Title: President and Chief Executive Officer
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ANNEX A
Conditions To The Offer
The Offer shall be conditioned upon the Minimum Shares being validly
tendered and not withdrawn prior to the date which is 20 Business Days following
the commencement of the Offer or such later expiration date to which the Offer
has been extended in accordance with the provisions of the Agreement. Moreover,
notwithstanding any other provision of the Offer, and subject to the terms and
conditions of the Agreement, Merger Sub shall not be obligated to accept for
payment any shares of Company Common Stock until expiration of all applicable
waiting periods (and extensions thereof) under the HSR Act, and Merger Sub shall
not be required to accept for payment, purchase or pay for, and may delay the
acceptance for payment of or payment for, any shares of Company Common Stock
tendered in the Offer, or if the Minimum Shares shall not have been validly
tendered pursuant to the Offer and not withdrawn, may terminate or amend the
Offer, subject to the terms and conditions of the Agreement and Merger Sub's
obligation to extend the Offer pursuant to Section 1.1(b), if, prior to the time
of acceptance for payment of any such shares of Company Common Stock, any of the
following shall occur and remain in effect:
(a) an order shall have been entered in any action or proceeding
before any United States federal or state Governmental Entity (an "Order"), or a
preliminary or permanent injunction by a United States federal or state court of
competent jurisdiction shall have been issued and remain in effect (an
"Injunction"), which (1) prohibits, or imposes any material limitations on,
Parent's or Merger Sub's ownership or operation of all or a material portion of
their or the Company's businesses or assets, or compels Parent or Merger Sub (or
their respective Subsidiaries and affiliates) to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and their
respective Subsidiaries, in each case taken as a whole, (2) prohibits or makes
illegal the acceptance for payment, payment for or purchase of shares of Company
Common Stock pursuant to the Offer or the consummation of the Offer or the
Merger, (3) results in a material delay in or materially restricts the ability
of Merger Sub, or renders Merger Sub unable, to accept for payment, pay for or
purchase any significant portion of the shares of Company Common Stock tendered
pursuant to the Offer, (4) imposes or confirms material limitations on the
ability of Merger Sub or Parent (or any of their respective Subsidiaries or
affiliates) effectively to exercise full rights of ownership of the shares of
Company Common Stock purchased pursuant to the Offer, including, without
limitation, the right to vote such shares of Company Common Stock on all matters
properly presented to the Company's stockholders, or (5) otherwise results in a
Material Adverse Effect with respect to the Company; provided, however, that in
order to invoke this condition, Parent and Merger Sub shall in good faith have
used their reasonable best efforts to prevent such Order or Injunction or
ameliorate the effects thereof; and provided, further, that, if the Order or
Injunction is a temporary restraining order or preliminary injunction of a court
of competent jurisdiction, Merger Sub may not, by virtue of this condition
alone, amend or terminate the Offer, but may only extend the Offer and thereby
postpone acceptance for payment or purchase of Shares; or
(b) there shall be instituted or pending any action, proceeding or
counterclaim brought by a Governmental Entity that would reasonably be expected
to result,
<PAGE> 47
directly or indirectly, in any of the consequences referred to in clauses (1)
through (5) of paragraph (a) above;
(c) Parent shall be entitled to terminate the Agreement pursuant to
Section 7.1(e) or Section 7.1(g) thereof; or
(d) any consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or Merger Sub with or from any Governmental Entity in connection
with the execution, delivery and performance of the Agreement, the Offer and the
consummation of the transactions contemplated by the Agreement (other than any
consent or approval required under Operational Contracts) shall not have been
made or obtained and such failure would reasonably be expected to have a Company
Material Adverse Effect with respect to the Company; or
(e) the Agreement shall have been terminated by the Company or
Parent pursuant to its terms.
The foregoing conditions are for the sole benefit of Parent and
Merger Sub and may be asserted by Parent and Merger Sub in their sole discretion
regardless of the circumstances giving rise to such condition or, except for the
Minimum Condition (which may not be waived without the written consent of the
Company), may be waived by Parent and Merger Sub in whole or in part at any time
and from time to time. The failure by Parent or Merger Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
The capitalized terms used in this Annex A shall have the meanings
set forth in the Agreement to which it is annexed, except that the term
Agreement shall be deemed to refer to the Agreement to which this Annex A is
appended.
