<PAGE>
UNITED INNS, INC.
5100 POPLAR AVENUE
SUITE 2300, CLARK TOWER
MEMPHIS, TENNESSEE 38137
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement, which is being mailed on or about November 23,
1994 to holders of record of shares of Common Stock as of November 10, 1994, is
being furnished in connection with the possible designation by Purchaser
pursuant to an Agreement and Plan of Merger, dated as of November 14, 1994 (the
"Merger Agreement"), among United Inns, Inc. (the "Company"), United/Harvey
Holdings, L.P. ("Purchaser"), United/Harvey Hotels, Inc. ("United/Harvey") and
United/Harvey Sub, Inc. ("Merger Sub") of certain persons to be elected to the
Board of Directors (the "Board") of the Company by means other than through a
meeting of the Company's stockholders. This Information Statement is being
distributed with the Company's Schedule 14D-9, to which this Information
Statement is attached as Annex A thereto.
Pursuant to the Merger Agreement, Purchaser commenced a cash tender offer
on November 21, 1994 to acquire all of the issued and outstanding shares of
Common Stock (the "Shares") at a price of $25.00 per Share (such amount, or such
other amount in cash as Purchaser may pay pursuant to the Offer, being
hereinafter referred to as the "Per Share Amount"), net to the seller thereof in
cash, upon the terms and subject to the conditions set forth in Purchaser's
Offer to Purchase, dated November 21, 1994, and the related Letter of
Transmittal. The Merger Agreement also provides that after completion of the
Offer, subject to the terms and conditions set forth in the Merger Agreement,
Merger Sub will be merged with and into the Company and the Company will survive
as the surviving corporation (the "Surviving Corporation"). Each outstanding
Share, other than those held by United/Harvey or in the treasury of the Company
or by any subsidiary of the Company (all of which will be cancelled) and other
than Shares held by holders who have demanded and perfected and not withdrawn or
lost the right for appraisal of such Shares under the Delaware General
Corporation Law, will be converted at the effective time (the "Effective Time")
of the Merger into the right to receive the Per Share Amount, in cash, without
interest thereon.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of a majority of the outstanding Shares pursuant to the Offer (the "Share
Acquisition"), Purchaser shall be entitled, subject to compliance with
applicable law, to designate up to that number of members, rounded up to the
nearest whole number, of the Board as will make the percentage of the members
designated by Purchaser equal to the percentage of outstanding Shares held by
Purchaser and its affiliates (other than the Company and its subsidiaries). The
Company has agreed to increase the size of its Board and/or use its reasonable
efforts to secure the resignation of such number of directors as is necessary to
enable Purchaser's designees to be elected to the Board and will cause
Purchaser's designees to be so elected effective immediately upon Purchaser's
acquisition of a majority of the outstanding Shares pursuant to the Offer or
otherwise. In connection with the foregoing, the Board has taken written action
to (a) increase the number of directors of the Company from six to nine, such
increase to be effective immediately prior to the Share Acquisition, (b) elect
Messrs. J. Peter Kline, Donald J. McNamara and Robert A. Whitman (collectively,
the "Purchaser Designees"), as designees of Purchaser, to fill the vacancies
created by such increase, with such elections to be effective immediately upon
the Share Acquisition, and (c) accept the written
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resignation as a director of the Company of each of the existing members of the
Board, such resignations being effective immediately upon the Share Acquisition;
the Company has represented to Purchaser that such action will be in effect
immediately prior to the Share Acquisition. In addition, the Company has agreed
to cause persons designated by Purchaser to constitute the same percentage
(rounded up to the nearest whole number) on each of the following as the
designees of Purchaser then constitutes on the Board: (a) each committee of
such Board designated by Purchaser, (b) each board of directors of each
subsidiary designated by Purchaser, and (c) each committee of each such board
designated by Purchaser. The Company's obligation to appoint Purchaser
Designees to its Board is subject to Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14f-1 promulgated
thereunder.
NO ACTION IS REQUIRED BY THE STOCKHOLDERS OF THE COMPANY IN CONNECTION WITH
THE ELECTION OF THE PURCHASER DESIGNEES TO THE BOARD. HOWEVER, SECTION 14(F) OF
THE EXCHANGE ACT REQUIRES THE MAILING TO THE COMPANY'S STOCKHOLDERS OF THE
INFORMATION SET FORTH IN THIS INFORMATION STATEMENT PRIOR TO A CHANGE OF A
MAJORITY OF THE COMPANY'S DIRECTORS.
The purpose of this Information Statement is to satisfy the requirements of
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in
connection with the reconstitution of the Board pursuant to the Merger
Agreement, and to provide information regarding the Board and executive officers
of the Company and the Purchaser Designees. The information contained in this
Information Statement concerning the Purchaser Designees has been furnished to
the Company by Purchaser and the Company assumes no responsibility for the
accuracy or completeness of such information and Purchaser shall be solely
responsible for such information.
BOARD OF DIRECTORS
GENERAL
The shares of Common Stock are the only class of voting securities of the
Company outstanding. Each share of Common Stock is entitled to one vote on each
matter to be considered at meetings of stockholders, including the election of
directors. As of November 14, 1994, there were 2,665,899 shares of Common Stock
outstanding.
The Certificate of Incorporation of the Company provides that directors of
the Company shall be not less than three nor more than ten and shall be elected
by the stockholders at their annual meeting to serve for a term of one year or
until their successors are duly elected and qualified.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AS OF NOVEMBER 14, 1994
The following table sets forth certain information with respect to each of
the current directors and executive officers of the Company including their
names, ages, principal occupations for the past five years, (in the case of
directors) their directorships with other corporations and their terms as
directors and executive officers:
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING EXECUTIVE
THE PAST FIVE YEARS DIRECTOR OFFICER
NAME AGE AND OTHER DIRECTORSHIPS SINCE SINCE
---- --- --------------------------- ----- -----
<S> <C> <C> <C> <C>
DIRECTORS:
Don Wm. Cockroft 56 President and Chief Executive Officer of the Company 1967 1966
(a) (brother of Robert L. Cockroft and Janet C. Virgin,
brother-in-law of J. Howard Lammons)
J. Howard Lammons 65 Private investor (brother-in-law of Don Wm. 1957 --
(a) Cockroft, Robert L. Cockroft and Janet C. Virgin);
Advisory Director of Memphis, NationsBank of TN
Robert L. Cockroft 53 Physician - Memphis Radiological Professional 1971 --
(c) Corporation (brother of Don Wm. Cockroft and Janet
C. Virgin, brother-in-law of J. Howard Lammons)
Howard W. Loveless 67 Private consultant 1977 --
(b) and (c)
Janet C. Virgin 60 Private investor (sister of Don Wm. Cockroft and 1991 --
(a) Robert L. Cockroft, sister-in-law of J. Howard
Lammons)
Ronald J. Wareham 50 President - R.J. Wareham & Company, Incorporated, a 1993 --
(a), (b) and (c) corporate financial advisory firm
NON-DIRECTOR EXECUTIVE
OFFICERS:
Augustus B. Randle, III 53 Secretary and General Counsel -- 1972
J. Don Miller 59 Vice President-Finance -- 1975
John M. Dollar 53 Vice President -- 1973
<FN>
(a) Member of the Executive Committee of the Board.
(b) Member of the Audit Committee of the Board.
(c) Member of the Compensation Committee of the Board.
</TABLE>
The above directors and executive officers have had the principal
occupations set forth above for at least five years, except for Mr. Wareham, Mr.
Lammons and Mr. Loveless. Mr. Wareham has been President of R.J. Wareham &
Company, Incorporated, a corporate financial advisory firm since 1991. From
1984 to 1991, he was a managing director of Dean Witter Reynolds' Corporate
Finance Office in Atlanta, Georgia. Mr. Lammons has been principally involved
in private investment activities since his retirement from the Company in March
1994. Prior to his retirement, Mr. Lammons served as Executive Vice-President
of the Company since 1978. Mr. Loveless has been
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principally involved in private consulting activities since January 1, 1994.
Prior to that date and for over five years, Mr. Loveless served as President of
Haas, Inc., a private investment advisory company.
INDIVIDUALS DESIGNATED BY PURCHASER AS PURCHASER DESIGNEES
The following table sets forth certain information with respect to each of
the Purchaser Designees including their names, ages, principal occupations for
the past five years and their directorships with other corporations:
PRINCIPAL OCCUPATION DURING
THE PAST FIVE YEARS
NAME AGE AND OTHER DIRECTORSHIPS
- ---- --- ---------------------------
Donald J. McNamara 41 Chairman of the Board of Directors and Co-
Chief Executive Officer of The Hampstead
Group, Inc. (which makes and manages real
estate and health-care related investments);
director of LaQuinta Inns, Inc. (which owns
and operates hotels); director of Forum
Retirement, Inc., the general partner of
Forum Retirement Partners, L.P., a public
master limited partnership (which owns
retirement communities) director of FelCor
Suite Hotels (a real estate investment
trust).
Robert A. Whitman 41 President and Co-Chief Executive Officer of
The Hampstead Group, Inc., from 1992 to
present; Chairman of the Board of Forum
Group, Inc. (which owns and operates
retirement communities) from June 1993 to
present; President and Chief Executive
Officer of Forum Group, Inc. from June 1993
to October 1994; Managing Partner and Chief
Executive Officer for Trammel Crow Ventures
(the real estate investment, banking and
investment management unit of the Trammel
Crow Company) from prior to 1989 to 1992; and
Chief Financial Officer for Trammel Crow
Group and Trammel Crow Company from prior to
1988 to 1991.
J. Peter Kline 47 President of Harvey Hotels, Inc., (which owns
and operates hotels) from prior to 1983 to
present.
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MEETINGS AND COMMITTEES OF THE BOARD
The Company's Board conducted nine meetings during fiscal year 1994, four
of which were regular meetings and five of which were special meetings of the
Board. Each of the directors attended at least 75% of the meetings of the Board
and any Committee of the Board on which they serve, except for Mr. Loveless who
attended 66-2/3% of the Board meetings.
Among the three Committees of the Board are an Executive Committee, an
Audit Committee and a Compensation Committee. The Company does not have a
standing Nominating Committee of the Board of Directors. The Audit Committee
(a) meets and reviews with the independent auditors their audit and non-audit
services, (b) meets and reviews with management the audit and non-audit
services, (c) meets and reviews with management the audit and non-audit services
of the independent auditors, and (d) makes such recommendations to management
and the independent auditors as it deems appropriate. The Audit Committee held
one meeting during fiscal year 1994. The Compensation Committee determines the
salaries, bonuses and other remuneration of the officers of the Company,
administers the Company's Bonus Plan, and makes recommendations to the Board
with respect to the Company's compensation policies. The Compensation Committee
held one meeting during fiscal year 1994.
COMPENSATION OF DIRECTORS
For fiscal year 1994 all directors are to be paid a fee of $750 for each
Board meeting attended. In addition, directors who are not employees of the
Company are to be paid a quarterly fee of $1,500, plus $400 for each Board
Committee meeting attended.
The Company has a consulting arrangement with R.J. Wareham & Company,
Incorporated ("Wareham & Co."), under the terms of which Wareham & Co. is to be
paid by the Company for Ronald J. Wareham's time and expenses for financial
advice to the Company related to a variety of corporate projects. Mr. Wareham
is the sole shareholder of Wareham & Co. The Company has made payments in the
aggregate amount of $26,450 to Wareham & Co., during the Company's fiscal year
ended September 30, 1994.
The Company's 1993 Stock Incentive Plan provides that each director who is
not also an employee of the Company and who is incumbent at the date of each of
the five consecutive annual meetings of stockholders beginning with the
Company's 1994 annual meeting of stockholders shall automatically be granted,
immediately after the conclusion of each such annual meeting, an option to
purchase 1,000 shares of Common Stock. In connection with the Company's 1994
annual meeting of stockholders held on February 11, 1994, the Company granted to
each of Robert L. Cockroft, Howard W. Loveless, Janet C. Virgin and Ronald J.
Wareham, an option to purchase up to 1,000 shares of Common Stock at an exercise
price of $12.87 per share of Common Stock.
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EXECUTIVE COMPENSATION
The following table sets forth the compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and its other most highly
compensated executive officer, whose total annual salary and bonus for the
Company's 1994 fiscal year exceeded $100,000, for services rendered in all
capacities during the fiscal years ended September 30, 1994, 1993 and 1992.
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
ALL OTHER
FISCAL SALARY COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(2) ($)(1)(3)
- --------------------------- ------ ------ ------------
<S> <C> <C> <C>
Don Wm. Cockroft 1994 233,250 11,174
President and Chief Executive 1993 216,000 169,262
Officer 1992 216,000
John M. Dollar 1994 117,167 8,272
Vice President 1993 113,000 47,191
1992 113,000
<FN>
(1) In accordance with transitional provisions of the rules of the Securities
and Exchange Commission (the "SEC") on executive compensation disclosure,
amounts of All Other Compensation have not been included for fiscal year
1992.
(2) Salary includes base salary earned and paid in cash during the fiscal year
and the amount of base salary deferred at the election of the executive
officer under the United Inns, Inc. Retirement Savings Plan (401(K) Plan)
for fiscal years 1992, 1993, and 1994.
(3) All Other Compensation consists of (a) the amount ($3,585) in insurance
premiums provided to each executive officer through the Company's Group
Health Insurance Plan that is not available generally to all salaried
employees, and (b) matching contributions to the United Inns, Inc.
Retirement Savings Plan (401(K) Plan); Such amounts, respectively were as
follows for 1994: Mr. Cockroft, $7,589; and Mr. Dollar, $4,687.
</TABLE>
REPORT ON EXECUTIVE COMPENSATION OF THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The compensation of the Company's executives consists of three basic
components: base salary, an executive bonus plan, if applicable, and long-term
incentives. The Compensation Committee of the Board, based upon recommendations
of the chief executive officer of the Company, determines the compensation of
the executive officers of the Company, approves the funding of the executive
bonus plan, if applicable, determines the awards of long-term incentives and the
individuals to whom such awards are made, and establishes the compensation of
the chief executive officer of the Company. For fiscal year 1994, the members
of the Company's Compensation Committee were Mr. Howard W. Loveless, who was the
Chairman, and Messrs. Robert L. Cockroft and Ronald J. Wareham.
BASE SALARY
The establishment of competitive base compensation for the Company's
executives is the primary objective in setting base salaries. The Company
considers a number of factors to determine base salary including company and
individual performance, business conditions, the relative
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importance of an executive officer's position, the extent of accountability of
the position and the skills required to perform the duties of the position.
None of the factors mentioned above is given any particular weight in
determining base compensation. Other factors also may influence such
determination, such as the relative extent of an individual's experience or a
desire to retain a valuable executive.
EXECUTIVE BONUS PLAN
The Company has an executive bonus plan under which individual
discretionary awards can be made to the full-time executive officers of the
Company. The sum to be distributed ranges from 1% to 3% of the consolidated net
income of the Company before income taxes. No cash amounts have been paid under
such plan since fiscal year ending September 30, 1985.
LONG-TERM INCENTIVES
Stock options are authorized to be granted as long-term incentives to
certain key employees of the Company, including executive officers, under the
Company's 1993 Stock Incentive Plan (the "1993 Plan"). Under the terms of this
plan, the Company may grant options to key employees (determined by the
Compensation Committee) to purchase such number of shares of the Common Stock of
the Company as is determined by the Compensation Committee.
The number of shares for which options will be granted to executive
officers will be determined by the Compensation Committee based upon
performance, potential and other subjective factors. However, no set criteria
will be used and other factors may influence the Compensation Committee's
determination with respect to the number of shares granted, such as the
promotion of an individual to a higher position, a desire to retain a valued
executive or the number of shares then available for grant under 1993 Plan. The
stock option holdings of an individual at the time of a grant will not generally
be considered in determining the size of a grant to that individual.
STOCK PERFORMANCE GRAPH
The Stock Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this Information
Statement into any filing under the Securities Act of 1933, as amended, or under
the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The following graph shows changes over the past five fiscal years in the
value of $100 invested on September 30, 1989, in (a) the Common Stock, (b) the
Standard & Poor's 500 Composite Index, and (c) the Dow Jones Lodging Index.
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<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, THE S & P 500 INDEX
AND THE DOW JONES LODGING INDEX
<TABLE>
<CAPTION>
9/89 9/90 9/91 9/92 9/93 9/94
<S> <C> <C> <C> <C> <C> <C>
United Inns, Inc. 100 31 13 7 20 56
S & P 500 100 91 119 132 149 155
D J Lodging 100 32 47 55 79 100
</TABLE>
EMPLOYEE BENEFIT PLANS
The material which follows in this section describes the provisions of
employee benefit plans now in effect, or in effect during the Company's last
fiscal year, other than group life and accident insurance, group hospitalization
and other similar group payments and benefits, in which some or all of the
employees of the Company participate.
1993 STOCK INCENTIVE PLAN
On November 19, 1993, the Company's Board of Directors adopted the 1993
Plan, which was approved by the Company's stockholders at the Company's annual
meeting of stockholders held on February 11, 1994 (the "1994 Annual Meeting").
The 1993 Plan provides for the granting of options to purchase for cash an
aggregate of not more than 300,000 shares of Common Stock. Such options may be
granted to key employees, including officers of the Company and its
subsidiaries, as may be designated by the Compensation Committee of the Board.
At November 14, 1994, the
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Company had granted an aggregate of 4,000 options to non-employee directors of
the Company at an exercise price of $12.87 per share of Common Stock.
Under the terms of the 1993 Plan, the Compensation Committee may from time
to time grant options to key employees to purchase Common Stock at a price which
may not be less than the fair market value of the shares, as determined by the
mean between the high and low prices of the stock on the New York Stock Exchange
on the date the option is granted. In addition, the 1993 Plan provides that
each director who is not also an employee of the Company and who is incumbent at
the date of each of the five consecutive annual meetings of stockholders
beginning with the 1994 Annual Meeting shall automatically be granted,
immediately after the conclusion of each such annual meeting, an option to
purchase 1,000 Shares. Each person who is not also an employee of the Company
and who is elected or appointed a director during such five-year period other
than at an annual meeting shall, upon such election or appointment, be granted
an option to purchase 1,000 shares of Common Stock. The exercise price of
options granted to directors under the 1993 Plan must be equal to the mean
between the high and low prices of the stock on the New York Stock Exchange on
the date of grant of the option and the right to exercise such options will vest
one year from the date of the grant, if not earlier upon the occurrence of
certain specified events as described below.
Options may not be exercised later than five years after the date of grant.
Subject to the limitations imposed by the provisions of the Internal Revenue
Code, certain of the options granted under the 1993 Plan to key employees may be
designated "incentive stock options." The Company may make interest-free demand
loans to holders of options not designated as incentive stock options for the
purpose of exercising such options and paying any tax liability associated with
such exercise.
Except as provided herein, no option may be exercised until the optionee
has completed one year of service after the option is granted, except in the
case of termination of an employee's employment or a director's directorship
because of death or disability, nor may an option be exercised after termination
of an employee's employment or a director's directorship for any reason other
than death, disability, retirement or for cause. Options may be exercised
within twelve months (a) after the optionee retires, (b) after termination of an
employee's employment or a director's directorship on account of permanent
disability, or (c) after death when in the service of the Company or any of its
subsidiaries. Options may also be exercised within three months after
termination of an employee's employment or director's directorship if
termination is for reasons other than death, disability or retirement so long as
such termination is not for cause, as determined by the Compensation Committee.
If termination is for cause, all unexercised options of optionee terminated for
cause shall immediately terminate and be of no further force or effect. In the
event of death within the twelve-month period following termination of an
employee's employment or a director's directorship for retirement or permanent
disability, options may be exercised by the optionee's legal representative
within twelve months following the date of death. However, under no
circumstances may an option be exercised after the expiration of the stated
period of the option.
No cash consideration is paid for the granting of the options. Payment in
full of the option price must be made upon exercise of any option.
The 1993 Plan provides for the use of treasury shares.
No options or awards may be granted under the 1993 Plan after October 1,
2003, but options or awards granted prior to October 1, 2003, may extend beyond
that date. The 1993 Plan
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may be discontinued by the Company's Board of Directors, but no termination may
impair options or awards granted prior thereto.
Upon the occurrence of a Change in Control (as defined in the 1993 Plan) of
the Company, each holder of an unexpired option under the 1993 Plan will have
the right to exercise the option in whole or in part without regard to the date
that such option would be first exercisable, except no option may be exercised
less than six months from the date of grant, and such right will continue, with
respect to any such holder whose employment with the Company or subsidiary or
whose directorship terminates following a change in control, for a period ending
on the earlier of the date of expiration of such option or the date which is
twelve months after such termination of employment or directorship.
The Compensation Committee may alter or amend the 1993 Plan at any time.
No amendment by the Compensation Committee, however, may increase the total
number of shares reserved for purposes of the 1993 Plan, reduce the option price
to an amount less than the fair market value at the time the option was granted,
extend the duration of the 1993 Plan or modify the provision for the automatic
grant of options to directors, unless such amendment is approved by the
stockholders. No amendment or alteration may impair the rights of optionees
with respect to options theretofore granted, except the Compensation Committee
may revoke and cancel any outstanding options which, in the aggregate, would
create a significant adverse effect on the Company's financial statement in the
event that the Financial Accounting Standards Board issues a statement requiring
an accounting treatment which causes such adverse effect with respect to options
then outstanding. The Compensation Committee has the power to interpret the
1993 Plan and to make all other determinations necessary or advisable for its
administration.
Under current federal tax law, non-incentive stock options granted under
the 1993 Plan will not result in any taxable income to the optionee at the time
of grant or any tax deduction to the Company. Upon the exercise of such option,
the excess of the market value of the shares acquired over their cost is taxable
to the optionee as compensation income and is generally deductible by the
Company. The optionee's tax basis for the shares is the market value thereof at
the time of exercise.
Neither the grant nor the exercise of an option designated as an incentive
stock option results in any federal tax consequences to either the optionee or
the Company. At the time the optionee sells shares acquired pursuant to the
exercise of an incentive stock option, the excess of the sale price over the
exercise price will qualify as a capital gain, provided the applicable holding
period is satisfied. If the optionee disposes of such shares within two years
of the date of grant or within one year of the date of exercise, an amount equal
to the lesser of (a) the difference between the fair market value of the shares
on the date of exercise and the exercise price, or (b) the difference between
the exercise price, and the sale price will be taxed as ordinary income and the
Company will be entitled to a deduction in the same amount. The excess, if any,
of the sale price over the sum of the exercise price and the amount taxed as
ordinary income will qualify as capital gain if the applicable holding period is
satisfied. If the optionee exercises an incentive stock option more than three
months after his or her termination of employment due to retirement, he or she
is deemed to have exercised a non-incentive stock option.
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CHANGE IN CONTROL CONTRACTS
On June 1, 1987, the Company entered into a severance agreement with Mr.
John M. Dollar. Under this agreement, Mr. Dollar would be entitled to severance
compensation in the event that his employment is terminated following a change
in control of the Company. The amount of compensation would be equal to a
maximum of 200% of his base compensation for the twelve months prior to his
termination plus an additional amount for benefits. The maximum amount of
compensation which would be payable to Mr. Dollar, if his employment was
terminated, as of November 14, 1994, would be $236,000 plus an additional amount
for benefits.
EFFECT OF MERGER
Pursuant to the Merger Agreement, the Surviving Corporation will maintain,
for at least a one year period after the Effective Time, the employee plans of
the Company in effect on the date of the Merger Agreement or provide benefits to
employees of the Surviving Corporation who were employees of the Company and its
subsidiaries immediately prior to the Effective Time ("United Employees") that
are at least substantially comparable to the benefits provided to similarly
situated employees of the Surviving Corporation who are not United Employees.
BENEFICIAL OWNERS OF MORE THAN
5% OF COMMON STOCK
The following table sets forth the ownership of the Common Stock by the
persons, companies or groups known to the Company on the basis of internal
records and/or required filings under Section 13 of the Exchange Act to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock on
November 14, 1994. As used in this information statement, beneficial ownership
means generally the power to vote or dispose of the shares, regardless of any
personal economic interest therein. Unless otherwise noted these individuals or
entities have sole voting and investment power with respect to their shares.
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NAME AND ADDRESS TITLE NUMBER OF SHARES PERCENT OF
OF BENEFICIAL OWNER OF CLASS BENEFICIALLY OWNED CLASS
- ------------------- -------- ------------------ -----
Cockroft Consolidated Common 1,209,214(1) 45.4
Corporation
Suite 2300
5100 Poplar Avenue
Memphis, TN 38137
Dimensional Fund Advisors Inc. Common 182,400(2) 6.8
1299 Ocean Avenue, Ste. 650
Santa Monica, CA 90401
Mario J. Gabelli Common 581,300(3) 21.8
One Corporate Center
Rye, NY 10580
(1) Don Wm. Cockroft, Robert L. Cockroft, Janet Virgin, and Katherine Lammons
beneficially own a controlling interest in Cockroft Consolidated
Corporation.
(2) According to Schedule 13G as filed with the SEC by Dimensional Fund
Advisors Inc., reporting ownership as of February 19, 1991, Dimensional
Fund Advisors Inc. has beneficial ownership of 182,400 shares. Dimensional
Fund Advisors Inc. has sole voting and sole dispositive power over 116,600
of these shares and officers of Dimensional Fund Advisors Inc. have sole
voting and dispositive power over 65,800 of these shares. The shares of
Dimensional Fund Advisors Inc., a registered investment advisor, are held
in portfolios of DFA Investment Dimensions Group Inc., a registered open-
end investment company, or the DFA Group Trust, an investment vehicle for
qualified employee benefit plans, for both of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional Fund Advisors Inc.
disclaims beneficial ownership of all such shares.
(3) According to Schedule 13D as filed with the SEC by Gabelli Funds, Inc.,
Gamco Investors, Inc., Gabelli International Limited II, and Mario J.
Gabelli (the "Reporting Persons") reporting ownership as of June 6, 1994,
Gamco Investors, Inc. is deemed to have beneficial ownership of 420,800 of
these shares; Gabelli Funds, Inc. is deemed to have beneficial ownership of
160,000 of these shares; Gabelli International Limited II is deemed to have
beneficial ownership of 500 of these shares; Mario J. Gabelli is deemed to
have beneficial ownership of all of the 581,300 shares; and Gabelli Funds,
Inc. is deemed to have beneficial ownership of the securities owned by each
of the foregoing persons other than Mario J. Gabelli. Each of the
Reporting Persons has the sole power to vote and sole power to dispose of
the securities reported except that Gamco Investors, Inc. does not have the
authority to vote 50,000 of the reported shares; except that Gabelli Funds,
Inc. has sole dispositive and voting power with respect to the shares held
by The Gabelli Asset Fund, The Gabelli Growth Fund, The Gabelli Convertible
Securities Fund, The Gabelli Value Fund, Inc., The Gabelli Small Cap Growth
Fund, The Gabelli Equity Income Fund, The Gabelli Equity Trust, The Gabelli
Global Telecommunications Fund, The Gabelli Global Convertible Securities
Fund, The Gabelli Interactive Couch Potato Fund, and/or The Gabelli ABC
Fund with respect to the 160,000 shares held by one or more of such funds,
and except that the power of Mr. Mario J. Gabelli and Gabelli Funds, Inc.
is indirect with respect to securities beneficially owned directly by other
Reporting Persons. The Reporting Persons do not admit that they constitute
a group.
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<PAGE>
SECURITIES BENEFICIALLY OWNED BY DIRECTORS,
MANAGEMENT AND PURCHASER DESIGNEES
The following table sets forth, as of November 14, 1994, the amount and
percentage of the Shares beneficially owned by each director, executive officer
and Purchaser Designee and by the directors, officers and Purchaser Designees,
as a group:
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OWNERSHIP
- ------------------------ -------------------- ---------
DIRECTORS:
Don Wm. Cockroft 1,891(1) *
J. Howard Lammons 950(1) *
Robert L. Cockroft 0 --
Howard W. Loveless 500 *
Janet C. Virgin 31 *
Ronald J. Wareham 0 --
NON-DIRECTOR EXECUTIVE OFFICER:
John M. Dollar 24 *
PURCHASER DESIGNEES:
Donald J. McNamara 0 --
Robert A. Whitman 0 --
J. Peter Kline 0 --
All directors, officers and Purchaser Designees
as a group (12 persons) 4,996(2) *
*Less than 1%
(1) Includes: (a) 1,800 shares owned by the wife and dependent child of Don
Wm. Cockroft; and (b) 490 shares owned by the wife of J. Howard Lammons.
Except as noted hereinabove, all of the shares are owned directly by said
persons with sole voting and investment power.
(2) Does not include 1,209,214 shares owned by Cockroft Consolidated
Corporation. The controlling shareholders of Cockroft Consolidated
Corporation are Don Wm. Cockroft, Robert L. Cockroft, Katherine Lammons,
the wife of J. Howard Lammons, and Janet C. Virgin.
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