<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GETTHERE INC.
AT
$17.75 NET PER SHARE
BY
GETTHERE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
SABRE HOLDINGS CORPORATION
------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, OCTOBER 6, 2000, UNLESS EXTENDED.
--------------------------------------------------------------------------------
THE OFFER (AS HEREINAFTER DEFINED) IS CONDITIONED UPON, AMONG OTHER THINGS,
(I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN IMMEDIATELY PRIOR TO THE
EXPIRATION OF THE OFFER THAT NUMBER OF SHARES (THE "SHARES") OF COMMON STOCK,
$0.0001 PAR VALUE PER SHARE, OF GETTHERE INC. (THE "COMPANY"), THAT WOULD
REPRESENT A MAJORITY OF THE SHARES ENTITLED TO VOTE THAT ARE OUTSTANDING ON A
FULLY DILUTED BASIS AFTER GIVING EFFECT TO THE EXERCISE OR CONVERSION OF ALL
OPTIONS, WARRANTS AND SECURITIES EXERCISABLE OR CONVERTIBLE INTO OR EXCHANGEABLE
FOR SHARES OR SUCH VOTING SECURITIES, AND (II) THE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR BEEN
TERMINATED PRIOR TO THE TERMINATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE "INTRODUCTION"
AND SECTIONS 1 AND 15 HEREOF.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER,
DATED AS OF AUGUST 28, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG SABRE
HOLDINGS CORPORATION, SABRE INC. AND THE COMPANY, AND THE ASSIGNMENT AND
ASSUMPTION AGREEMENT, DATED AS OF AUGUST 30, 2000, BY AND AMONG SABRE INC. AND
GETTHERE ACQUISITION CORP.
--------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (A) DETERMINED THAT
EACH OF THE OFFER, THE MERGER AGREEMENT AND THE MERGER (AS HEREINAFTER DEFINED)
IS FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, (B)
APPROVED THE OFFER AND THE MERGER, (C) APPROVED AND ADOPTED THE MERGER
AGREEMENT, THE EXECUTION OF THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT AND (D) RECOMMENDED THAT THE HOLDERS OF
SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
--------------------------
IMPORTANT
Any stockholder of the Company desiring to tender all or any portion of such
stockholder's Shares should either (i) complete and sign the accompanying Letter
of Transmittal or a facsimile thereof in accordance with the instructions in the
Letter of Transmittal and mail or deliver the Letter of Transmittal with the
certificates representing the tendered Shares, and all other required documents,
to EquiServe Trust Company, the Depositary for the Offer, or follow the
procedure for book-entry transfers set forth in Section 3, "Procedures for
Tendering Shares," or (ii) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. Stockholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such person
if they desire to tender their Shares.
Any stockholder of the Company who desires to tender Shares and whose
certificates representing such Shares are not immediately available or who
cannot comply with the procedure for book-entry transfers on a timely basis or
who cannot deliver all required documents to the Depositary, in each case prior
to the expiration of the Offer, must tender such Shares pursuant to the
guaranteed delivery procedures set forth in Section 3, "Procedures for Tendering
Shares."
Questions and requests for assistance may be directed to D.F. King &
Co., Inc., the Information Agent for the Offer, at its address and telephone
number set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal, the related Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
--------------------------
September 11, 2000
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TABLE OF CONTENTS
<TABLE>
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE OFFER....................... iii
INTRODUCTION................................................ 1
THE OFFER................................................... 3
1. Terms of the Offer; Expiration Date.................... 3
2. Acceptance for Payment and Payment for Shares.......... 5
3. Procedures for Tendering Shares........................ 6
4. Withdrawal Rights...................................... 9
5. Certain United States Federal Income Tax
Consequences............................................ 10
6. Price Range of Shares; Dividends on the Shares......... 11
7. Effect of Offer on Market for Shares; NASDAQ National
Market Listing; Commission Registration; Margin
Regulations............................................. 12
8. Certain Information Concerning the Company............. 13
9. Certain Information Concerning Offeror and Parent...... 16
10. Source and Amount of Funds............................ 17
11. Background of Offer................................... 18
12. Purpose of the Offer; The Merger; Plans for the
Company................................................. 20
13. The Transaction Documents............................. 23
14. Dividends and Distributions........................... 38
15. Certain Conditions to Offeror's Obligations........... 38
16. Certain Regulatory and Legal Matters.................. 39
17. Fees and Expenses..................................... 41
18. Miscellaneous......................................... 41
ANNEX I--DIRECTORS AND EXECUTIVE OFFICERS OF PARENT, PARENT
SUB AND OFFEROR............................................ I-1
</TABLE>
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QUESTIONS AND ANSWERS ABOUT THE OFFER
GetThere Acquisition Corp. is offering to purchase all of the outstanding
common stock of GetThere Inc., for $17.75 per share, net to the seller, without
interest, in cash. The following are some of the questions you, as a stockholder
of GetThere, may have about the offer. We urge you to read carefully the
remainder of this Offer to Purchase and the Letter of Transmittal because the
information in this "Questions and Answers" section is not complete. Additional
important information is contained in the remainder of this Offer to Purchase
and in the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is GetThere Acquisition Corp. We are a Delaware corporation formed
for the purpose of making an offer to purchase all of the outstanding common
stock of GetThere. To date, we have carried on no activities other than in
connection with the offer. We are a wholly owned subsidiary of Sabre Holdings
Corporation, a Delaware corporation. Sabre Holdings Corporation is the leading
provider of technology and marketing services for the travel industry. See the
"Introduction" to this Offer to Purchase and Section 9, "Certain Information
Concerning Offeror and Parent."
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding shares of common stock of
GetThere. See the "Introduction" to this Offer to Purchase and Section 1, "Terms
of the Offer; Expiration Date."
HOW MUCH ARE YOU OFFERING TO PAY? WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $17.75 per share, net to you, without interest, in
cash. If you are the record owner of your shares and you tender your shares to
us in the offer, you will not have to pay brokerage fees or similar expenses. If
you own your shares through a broker or other nominee, and your broker or other
nominee tenders your shares on your behalf, your broker or nominee may charge
you a fee and we will not be responsible for paying that fee. You should consult
your broker or nominee to determine whether any charges will apply. See the
"Introduction" to this Offer to Purchase.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. Sabre Holdings Corporation, our parent company, will provide us with
sufficient funds to purchase all shares validly tendered and not withdrawn in
the offer and will provide us with sufficient funds for the merger, which is
expected to follow the successful completion of the offer in accordance with the
terms and conditions of the merger agreement. We anticipate that these funds
will be obtained from working capital and short-term financing. See Section 10,
"Source and Amount of Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
No. We do not believe our financial condition is relevant to your decision.
We base this conclusion on several factors. We are paying you cash for your
shares. The offer is not subject to any financing condition. The offer is for
any and all of the outstanding shares of common stock of GetThere. See
Section 10, "Source and Amount of Funds."
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER INTO THE OFFER?
Unless the offer is extended, you will have until the expiration of the
offer at 12:00 midnight, New York City time, on Friday, October 6, 2000, to
tender your shares into the offer. We will purchase all properly tendered shares
on the expiration date if the conditions to the offer are then met. Further, if
you cannot deliver everything that is required in order to make a valid tender
by that time, you may be able to use the guaranteed delivery procedure, which is
described later in this Offer to Purchase. See Section 1, "Terms of the Offer;
Expiration Date," and Section 3, "Procedures for Tendering Shares."
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CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that:
- we must extend the offer beyond the scheduled expiration date if at that
date any of the conditions to our obligation to accept for payment and to
pay for the shares is not satisfied or, to the extent permitted by the
merger agreement, waived.
- we may extend the offer for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission or
its staff applicable to the offer.
- we must extend the offer for 30 business days after the time that all
conditions set forth in Section 15, "Certain Conditions to Offeror's
Obligations," have been satisfied except for the Minimum Tender Condition
(as hereinafter defined).
- if all conditions to the offer have been satisfied or waived, we will
accept for payment and pay for all shares validly tendered and not
withdrawn at that time, and we may provide a "subsequent offering period"
during which stockholders whose shares have not been accepted for payment
may tender, but not withdraw, their shares and receive the offer price of
$17.75 per share. We are not permitted under the federal securities laws
to provide a subsequent offering period of less than three or more than 20
business days.
Our rights and obligations to extend the offer are subject to the rights of
Sabre Holdings Corporation and GetThere to terminate the merger agreement if the
offer is not completed by April 30, 2001. For more details on our ability to
extend the offer, see Section 1, "Terms of the Offer; Expiration Date."
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If the offer is extended past 12:00 midnight, New York City time, on Friday,
October 6, 2000, we will make a public announcement of the new expiration date
not later than 9:00 a.m., New York City time, on the next business day after the
day on which the offer was scheduled to expire and will inform EquiServe Trust
Company, the depositary for the offer, of that fact. See Section 1, "Terms of
the Offer; Expiration Date."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any shares that are validly tendered:
- unless the number of shares validly tendered and not withdrawn before the
expiration date of the offer represents a majority of the then outstanding
shares on a fully diluted basis. We call this condition the "Minimum
Tender Condition."
- if the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 has not expired or been terminated.
The offer is also subject to a number of other conditions. See Section 1,
"Terms of the Offer; Expiration Date," and Section 15, "Certain Conditions to
Offeror's Obligations."
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other documents
required by the letter of transmittal, to EquiServe Trust Company, the
depositary for the offer, not later than the time the offer expires. If your
shares are held in street name, the shares can be tendered by your nominee
through EquiServe Trust Company. If you are unable to deliver any required
document or instrument to the depositary by the expiration of the offer, you may
gain some extra time by having a broker, a bank or other fiduciary that is an
eligible institution guarantee that the missing items will be received by the
depositary within three NASDAQ National Market trading days. For the tender to
be valid, however, the depositary must
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receive the missing items within that three trading day period. See Section 3,
"Procedures for Tendering Shares."
UNTIL WHAT TIME MAY I WITHDRAW PREVIOUSLY TENDERED SHARES?
You may withdraw tendered shares at any time prior to the expiration of the
offer at 12:00 midnight, New York City time, on Friday, October 6, 2000. If the
stated expiration date of the offer is extended, you may withdraw tendered
Shares at any time prior to the new time and date of expiration. This right to
withdraw will not apply to the subsequent offering period, if one is included.
See Section 1, "Terms of the Offer; Expiration Date," and Section 4, "Withdrawal
Rights."
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw previously tendered shares, you must deliver a notice of
withdrawal with the required information to the depositary while you still have
the right to withdraw the shares. See Section 4, "Withdrawal Rights."
WHAT DOES THE BOARD OF DIRECTORS OF GETTHERE THINK OF THE OFFER?
We are making the offer pursuant to the merger agreement by and among Sabre
Holdings Corporation, us and GetThere. The board of directors of GetThere has
unanimously approved the offer, the merger and the merger agreement. The board
of directors of GetThere has determined that each of the offer, the merger and
the merger agreement is fair to and in the best interests of the stockholders of
GetThere and has recommended that the stockholders of GetThere accept the offer
and tender their shares in the offer. See the "Introduction" to this Offer to
Purchase.
HAVE ANY STOCKHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Stockholders that own shares representing approximately 28.53% of the
outstanding common stock of GetThere have granted to us an option to purchase
their shares under specified conditions. See the "Introduction" to this Offer to
Purchase.
WILL GETTHERE CONTINUE AS A PUBLIC COMPANY?
No. If the merger takes place, GetThere will no longer be publicly owned.
Even if the merger does not occur, if we purchase all of the tendered shares,
there may be so few remaining stockholders and publicly held shares that the
Shares may no longer be eligible to be traded on the NASDAQ National Market or
any other securities exchange, there may not be a public trading market for the
Shares, and the Company may cease making filings with the Securities and
Exchange Commission or otherwise cease being required to comply with the
Commission rules relating to publicly held companies. See Section 7, "Effect of
Offer on Market for Shares; NASDAQ National Market Listing; Commission
Registration; Margin Regulations."
WILL THE OFFER BE FOLLOWED BY A MERGER IF ALL SHARES OF GETTHERE ARE NOT
TENDERED IN THE OFFER?
If we accept for payment and pay for a majority of the shares of GetThere on
a fully diluted basis, we will be merged with and into GetThere. If that merger
takes place, Sabre Holdings Corporation will own all of the shares of GetThere,
and all other persons who were stockholders of GetThere immediately prior to the
merger, other than stockholders properly exercising appraisal rights, will
receive $17.75 per share in cash, or any higher price per share that is paid in
the offer. See the "Introduction" to this Offer to Purchase.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
It the merger described above takes place, stockholders not tendering in the
offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer, subject to any appraisal
rights properly exercised under Delaware law. Therefore, if the merger takes
place and you do not perfect your appraisal rights, the only difference to you
between tendering
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your shares and not tendering your shares is that you will be paid earlier if
you tender your shares. If the merger does not take place, however, the number
of stockholders and the number of shares of GetThere that are still in the hands
of the public may be so small that there may no longer be an active public
trading market (or, possibly, there may not be any public trading market) for
the GetThere common stock. Also, as described above, GetThere may cease making
filings with the Securities and Exchange Commission or otherwise cease being
required to comply with the Commission rules relating to publicly held
companies. See the "Introduction" to this Offer to Purchase and Section 7,
"Effect of Offer on Market for Shares; NASDAQ National Market Listing;
Commission Registration; Margin Regulations."
There are no appraisal rights in connection with the offer. However, if the
merger takes place, stockholders who have not tendered their shares in the offer
will have appraisal rights under Delaware law. See Section 12, "Purpose of the
Offer; The Merger; Plans for the Company."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On August 25, 2000, the last trading day before we announced the signing of
the merger agreement, the last sale price of GetThere common stock reported on
the NASDAQ National Market was $12.125 per share. On September 8, 2000, the
closing price of GetThere common stock reported on the NASDAQ National Market
was $17.3125 per share. We encourage you to obtain recent quotations for shares
of GetThere common stock in deciding whether to tender your shares. See
Section 6, "Price Range of Shares; Dividends on the Shares."
WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES?
The receipt of cash for shares pursuant to the offer or the merger will be a
taxable transaction for United States federal income tax purposes and possibly
for state, local and foreign income tax purposes as well. In general, a
stockholder who sells shares pursuant to the offer or receives cash in exchange
for shares pursuant to the merger will recognize gain or loss for United States
federal income tax purposes equal to the difference, if any, between the amount
of cash received and the stockholder's adjusted tax basis in the shares sold
pursuant to the offer or exchanged for cash pursuant to the merger. If the
shares exchanged constitute capital assets in the hands of the stockholder, gain
or loss will be capital gain or loss. In general, capital gains recognized by an
individual will be subject to a maximum United States federal income tax rate of
20% if the shares were held for more than one year, and if held for one year or
less they will be subject to tax at ordinary income tax rates. See Section 5,
"Certain United States Federal Income Tax Consequences."
TO WHOM MAY I SPEAK IF I HAVE QUESTIONS ABOUT THE OFFER?
You may call D.F. King & Co., Inc. at (800) 928-0153 (toll free). D.F.
King & Co., Inc. is acting as the information agent for the offer. See the back
cover of this Offer to Purchase.
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To the Holders of Common Stock of
GETTHERE INC.:
INTRODUCTION
GetThere Acquisition Corp., a Delaware corporation ("Offeror") and a wholly
owned subsidiary of Sabre Holdings Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all of the outstanding shares (the
"Shares") of common stock, par value $0.0001 per share (the "Common Stock"), of
GetThere Inc., a Delaware corporation (the "Company"), at a purchase price of
$17.75 per share, net to the seller in cash, without interest (the "Offer
Price"), upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together with this
Offer to Purchase and the Letter of Transmittal and any amendments or
supplements hereto or thereto collectively constitute the "Offer").
Offeror is a corporation newly formed by Parent in connection with the Offer
and the transactions contemplated by the Merger Agreement (as hereinafter
defined). For information concerning Offeror and Parent, see Section 9, "Certain
Information Concerning Offeror and Parent."
Tendering stockholders who are record owners of their Shares and who tender
directly to the Depositary (as hereinafter defined) will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 to the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Offeror pursuant to the Offer. Stockholders who hold their Shares
through a broker or other nominee should consult such institution as to whether
it charges any service fees because neither Parent nor Offeror will be
responsible for those fees. Offeror will pay all fees and expenses of EquiServe
Trust Company (the "Depositary") and D.F. King & Co., Inc. (the "Information
Agent") for their respective services in connection with the Offer and the
Merger. See Section 17, "Fees and Expenses."
The Board of Directors of the Company has unanimously (a) determined that
each of the Offer, the Merger Agreement and the Merger is fair to and in the
best interests of the stockholders of the Company, (b) approved the Offer and
the Merger, (c) approved and adopted the Merger Agreement, the execution of the
Merger Agreement and the transactions contemplated by the Merger Agreement and
(d) recommended that the holders of Shares accept the Offer and tender their
Shares in the Offer.
The Board of Directors of the Company has received the written opinion of
Donaldson Lufkin Jenrette Securities Corporation ("DLJ"), the Company's
financial advisor, dated August 27, 2000, that, as of that date, and based on
and subject to the various assumptions, limitations and qualifications set forth
therein, the $17.75 per Share to be received by the holders of Shares pursuant
to the Offer and the Merger was fair from a financial point of view to such
holders. A copy of that opinion is set forth in full as an exhibit to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which is being mailed to the Company's stockholders, and
stockholders are urged to read the opinion in its entirety.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn immediately prior to the expiration of the Offer that
number of Shares (the "Minimum Number of Shares") that would represent a
majority of the Shares that are then outstanding on a fully diluted basis after
giving effect to the exercise or conversion of all options, rights and
securities exercisable or convertible into or exchangeable for Shares (the
"Minimum Tender Condition") and (ii) the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder (the "Hart-Scott-Rodino Act") having expired or been
terminated prior to the expiration of the Offer. The Offer is also subject to
the satisfaction of certain other conditions. See Section 15, "Certain
Conditions to Offeror's Obligations."
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On August 28, 2000, Parent, Sabre Inc. ("Parent Sub") and the Company
entered into an Agreement and Plan of Merger (the "Merger Agreement").
Subsequent to entering into the Merger Agreement, Parent Sub assigned its rights
and obligations under the Merger Agreement to Offeror pursuant to an Assignment
and Assumption Agreement dated August 30, 2000 (the "Assignment and Assumption
Agreement"). The summary of the Merger Agreement provided in this Offer to
Purchase gives effect to the Assignment and Assumption Agreement. The Merger
Agreement is more fully described in Section 13, "The Transaction Documents--The
Merger Agreement."
The Merger Agreement provides for the commencement by Offeror of the Offer.
Provided sufficient Shares are acquired by Offeror, and subject to the terms and
conditions set forth in the Merger Agreement, Offeror will be merged with and
into the Company (the "Merger"), with the Company continuing as the surviving
corporation (the "Surviving Corporation") as a wholly owned subsidiary of
Parent. In the event Offeror acquires at least 90% of the Shares, Offeror will
complete a short-form merger pursuant to Section 253 of the General Corporation
Law of the State of Delaware (the "DGCL") in order to effect the Merger. If
Offeror is unable to acquire at least 90% of the Shares, but does acquire at
least 50% of the fully diluted Shares, the Company, upon request of Offeror,
will hold a stockholders meeting in accordance with the DGCL in order to effect
the Merger. At any such stockholders meeting, all of the Shares then owned by
Offeror will be voted to approve the Merger. At the time when the Merger becomes
effective (the "Effective Time"), each remaining outstanding Share (other than
Shares owned by Parent, Offeror or any direct or indirect wholly owned
subsidiary of the Company or Parent immediately prior to the Effective Time and
Shares held by stockholders who properly perfect their dissenters' rights under
the DGCL) will be converted automatically into the right to receive the Offer
Price. See Section 12, "Purpose of the Offer; The Merger; Plans for the
Company."
Based on information provided by the Company to Parent, as of August 23,
2000, there were 50,685,298 Shares of Common Stock outstanding on a fully
diluted basis after giving effect to the exercise or conversion of all options,
rights and securities exercisable or convertible into or exchangeable for
Shares, including options to purchase 8,559,076 Shares and warrants to purchase
7,009,224 Shares. Based on the foregoing, Offeror believes that on a fully
diluted basis approximately 25,342,650 Shares must be validly tendered and not
withdrawn prior to the expiration of the Offer in order for the Minimum Tender
Condition to be satisfied. See Section 1, "Terms of the Offer; Expiration Date."
The number of Shares required to be validly tendered and not withdrawn in order
to satisfy the Minimum Tender Condition will decrease to the extent Parent or
Offeror acquires Shares outside the Offer and will increase to the extent
additional Shares were or are issued by the Company after August 23, 2000.
Concurrently with the execution and delivery of the Merger Agreement,
American Express Travel Services Inc., U.S. Venture Partners, Brentwood
Associates, Ambassadors International, Inc., Richard Whilden and Gadi Maier
(together, the "Stockholder Parties") entered into Stockholder Agreements, dated
as of August 28, 2000 (the "Stockholder Agreements"), with Parent and Parent
Sub. On August 30, 2000, Parent Sub assigned all of its rights and obligations
under the Stockholder Agreements to Offeror. As of August 23, 2000, the
Stockholder Parties held 10,017,777 Shares which, as of that date, represented
28.53% of the outstanding Shares. As of September 1, 2000, the Stockholder
Parties also held warrants and options, which are exercisable within 60 days of
September 1, 2000, to purchase an additional 2,272,888 Shares. Pursuant to the
Stockholder Agreements, the Stockholder Parties have, among other things,
entered into voting agreements with Parent and Offeror and have granted a proxy
(subject to revocation in certain limited instances) to Offeror's designees with
respect to their Shares, which permits such proxies to vote the Shares at any
meeting with a record date after August 28, 2000. Also, the Stockholder Parties
have each granted to Offeror an option (the "Option") to purchase the Shares
held by the Stockholder Parties at the Offer Price under specified
circumstances. For purposes of this Offer to Purchase, any reference to
beneficial ownership of Parent or Offeror of Shares or similar references shall
exclude Shares subject to the Stockholder Agreements.
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THE OFFER
This Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is made
with respect to the Offer. This Offer to Purchase contains forward-looking
statements that involve risks and uncertainties, including the risks associated
with satisfying the various conditions to the Offer. Certain of these factors,
as well as additional risks and uncertainties, are detailed in the Company's
periodic filings with the Securities and Exchange Commission (the "Commission").
See Section 8, "Certain Information Concerning the Company--Available
Information."
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions set forth in the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
extension or amendment), Offeror will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn in accordance with Section 4, "Withdrawal Rights." The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday,
October 6, 2000, unless Offeror shall have extended the period of time for which
the Offer is open in accordance with the terms of the Merger Agreement, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by Offeror (other than any extension with respect to a
Subsequent Offering Period, described below), shall expire.
EXTENSION OF OFFER. Pursuant to the Merger Agreement, if at the then
scheduled Expiration Date any of the conditions to the Offer described in
Section 15, "Certain Conditions to Offeror's Obligations" (collectively, the
"Offer Conditions"), has not been satisfied, Parent will cause Offeror to cause
the Offer not to expire until 30 business days after such time as all of the
conditions to the Offer have been satisfied or waived, except for the Minimum
Tender Condition. Offeror may, without the consent of the Company, further
extend the Offer (i) for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable to
the Offer and (ii) from time to time, for an aggregate period of not more than
ten (10) business days beyond the latest expiration date that would be permitted
under the preceding sentence or clause (i) of this sentence. Offeror's rights
and obligations to extend the Offer as described in this paragraph are subject
to Parent's and the Company's rights to terminate the Merger Agreement. Subject
to the foregoing restrictions, Offeror reserves the right (but will not be
obligated), in its reasonable discretion, to extend the period during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that Offeror will exercise its right to extend the Offer.
SUBSEQUENT OFFERING PERIOD. Rule 14d-11 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), permits Offeror, subject to certain
conditions, to provide a subsequent offering period following the expiration of
the Offer on the Expiration Date (a "Subsequent Offering Period"). A Subsequent
Offering Period is an additional period of time from three business days to 20
business days in length, beginning after Offeror purchases Shares tendered in
the Offer, during which stockholders may tender, but not withdraw, their Shares
and receive the Offer Price. Under the terms of the Merger Agreement, Offeror
may provide for a Subsequent Offering Period without the consent of the Company.
During a Subsequent Offering Period, Offeror will promptly purchase and pay for
all Shares tendered at the same price paid in the Offer.
MODIFICATION OF OFFER; WAIVER OF OFFER CONDITIONS. In the Merger Agreement,
Parent and Offeror have expressly reserved the right to modify the terms of the
Offer, except that neither Parent nor Offeror may, without the prior written
consent of the Company, (i) decrease the price per Share payable in the Offer,
(ii) change the form of consideration payable in the Offer, (iii) decrease the
number of Shares sought pursuant to the Offer (except as described in the
following sentence),
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(iv) change or modify the conditions to the Offer in a manner adverse to the
Company or holders of Shares, (v) impose additional conditions to the Offer or
(vi) amend any term of the Offer in any manner adverse to the Company or holders
of Shares. Also, the Merger Agreement provides that Offeror may waive the
Minimum Tender Condition without the consent of the Company as long as it is
permitted by applicable law to do so and it exercises the Options immediately
following the consummation of the Offer and acquires title to all of the Shares
subject to the Options and thereafter promptly consummates the Merger.
DELAY OR TERMINATION OF OFFER. The Merger Agreement provides that, subject
to the terms of the Offer and the Merger Agreement and the satisfaction or
earlier waiver of all the Offer Conditions as of any then scheduled Expiration
Date, Offeror shall accept for payment and pay for all Shares validly tendered
and not withdrawn pursuant to the Offer as soon as practicable after the
expiration of the Offer. Other than as required by the Merger Agreement, and
subject to the applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Exchange Act, Offeror expressly reserves the right, in
its reasonable discretion, to delay acceptance for payment of any Shares (or
delay payment for any Shares, regardless of whether such Shares were theretofore
accepted for payment pending the receipt of required governmental consents), or,
subject to the limitations set forth in the Merger Agreement, to terminate the
Offer and not to accept for payment or pay for any Shares not theretofore
accepted for payment or paid for, upon the failure of any of the Offer
Conditions, by giving oral followed by written notice of such delay or
termination to the Depositary.
SATISFACTION OF OFFER CONDITIONS. The Offer is conditioned upon
satisfaction of the Minimum Tender Condition. The Offer is also subject to other
terms and conditions. See Section 15, "Certain Conditions to Offeror's
Obligations." As described in the "Introduction" to this Offer to Purchase,
Offeror believes the Minimum Number of Shares is approximately 25,342,650. If
the Minimum Tender Condition or any of the other Offer Conditions has not been
satisfied by 12:00 midnight, New York City time, on Friday, October 6, 2000 (or
any other time then set as the Expiration Date), Offeror may elect (i) subject
to the qualifications described above with respect to the extension of the
Offer, to extend the Offer and, subject to applicable withdrawal rights, retain
all tendered Shares until the expiration of the Offer, as extended, subject to
the terms of the Offer, (ii) subject to complying with applicable rules and
regulations of the Commission and the terms of the Merger Agreement (including,
if necessary, obtaining the prior written consent of the Company), to waive all
unsatisfied Offer Conditions and accept for payment all Shares so tendered and
not extend the Offer, (iii) subject to the terms of the Merger Agreement, to
amend the Offer, or (iv) subject to the terms of the Merger Agreement, to
terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders if certain events or conditions
described in the Merger Agreement have occurred.
PUBLIC ANNOUNCEMENTS. Any extension of the period during which the Offer is
open, or delay in acceptance for payment or payment, or termination or amendment
of the Offer, or waiver of an Offer Condition, will be followed, as promptly as
practicable, by a public announcement thereof, such announcement in the case of
an extension to be issued not later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date in accordance
with the public announcement requirements of Rule 14d-4(c) under the Exchange
Act. Without limiting the obligation of Offeror under such rule or the manner in
which Offeror may choose to make any public announcement, Offeror currently
intends to make announcements by issuing a press release to the Dow Jones News
Service and making any appropriate filing with the Commission.
MATERIAL CHANGES. If Offeror makes a material change in the terms of the
Offer or the information concerning the Offer or if it waives a material
condition of the Offer, Offeror will disseminate additional tender offer
materials and extend the Offer if and to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act or otherwise. The minimum period
during
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which an offer must remain open following material changes in the terms of the
offer or information concerning the offer, other than a change in price, in the
percentage of securities sought or in a dealer's soliciting fee, will depend
upon the facts and circumstances, including the relative materiality of the
terms or information changes. With respect to a change in price, in the
percentage of securities sought or in a dealer's soliciting fee, a minimum ten
business day period is generally required to allow for adequate dissemination to
stockholders and investor response.
DISSEMINATIONS TO STOCKHOLDERS. The Company has provided Offeror with the
Company's list of stockholders and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase, the Letter
of Transmittal and other relevant materials will be mailed to record owners of
the Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the list of stockholders or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
BUSINESS DAY. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday, and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Offeror will purchase, by accepting for payment, and will pay for,
all Shares validly tendered prior to the Expiration Date (and not properly
withdrawn) promptly after expiration of the Offer. Any determination concerning
the satisfaction or waiver of such terms and conditions will be within the
reasonable discretion of Offeror, and such determination will be final and
binding on all tendering stockholders. As discussed below, subject to compliance
with Rule 14e-l(c) under the Exchange Act, Offeror expressly reserves the right
to delay payment for Shares in order to comply in whole or in part with any
applicable law. See Section 16, "Certain Regulatory and Legal Matters."
For purposes of the Offer, Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when Offeror gives oral followed by written notice to the
Depositary of Offeror'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 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 Offeror and transmitting such payment to tendering
stockholders whose Shares have been accepted for payment. Upon the deposit of
funds with the Depositary for the purpose of making payments to tendering
stockholders, Offeror's obligation to make such payment will be satisfied, and
tendering stockholders must thereafter look solely to the Depositary for
payments of amounts owed to them by reason of the acceptance for payment of
Shares pursuant to the Offer. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates evidencing such Shares or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in Section 3, "Procedures for
Tendering Shares," (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
hereinafter defined), and (iii) any other documents required by the Letter of
Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that
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the Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the 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 Offeror may enforce such agreement against the participant.
If, for any reason whatsoever (including the extension of the Offer),
acceptance for payment of, or payment for, any Shares tendered pursuant to the
Offer is delayed, or Offeror is unable to accept for payment, or pay for, Shares
tendered pursuant to the Offer, then, without prejudice to Offeror's rights
under the Offer, the Depositary may, nevertheless, on behalf of Offeror, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 4, "Withdrawal Rights." However, the ability of Offeror to delay the
payment for Shares that Offeror has accepted for payment is limited by
(i) Rule 14e-l(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
stockholders promptly after the termination or withdrawal of such bidder's offer
(without affecting Offeror's right to pay for Shares tendered during any
Subsequent Offering Period in accordance with Rule 14d-11 under the Exchange
Act), and (ii) the terms of the Merger Agreement, which requires that, subject
to the terms thereof and of the Offer and the satisfaction or earlier waiver of
all the Offer Conditions as of any then scheduled Expiration Date, Offeror shall
accept for payment and pay for all Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after expiration of the Offer.
Subject to compliance with Rule 14d-11 under the Exchange Act, Offeror expressly
reserves the right to delay payment for Shares in order to comply in whole or in
part with any applicable law. See Section 15, "Certain Conditions to Offeror's
Obligations." Under no circumstances will interest be paid on the purchase price
of the Shares to be paid by Offeror, regardless of any extension of the Offer or
any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer because of an invalid tender or for any other
reason, or if certificates are submitted evidencing more Shares than are
tendered, certificates for such unpurchased or untendered Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer to the Book-Entry Transfer Facility
pursuant to the provisions of Section 3, "Procedures for Tendering Shares," such
Shares will be credited to an account maintained within the Book-Entry Transfer
Facility), as promptly as practicable after the expiration, termination or
withdrawal of the Offer.
If, prior to the Expiration Date, Offeror increases the consideration
offered to stockholders pursuant to the Offer, such increased consideration will
be paid to all stockholders whose Shares are purchased pursuant to the Offer.
Offeror reserves the right to transfer or assign, in whole or from time to
time in part, to one or more direct or indirect wholly owned subsidiaries of
Parent, the right to purchase all or any portion of the Shares tendered pursuant
to the Offer, but any such transfer or assignment will not prejudice the rights
of tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer, 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 in the case of a book-entry delivery) 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 Date. In addition,
either (i) certificates representing such Shares must be received by the
Depositary along with the Letter of Transmittal or such Shares must be tendered
pursuant to the procedure for book-entry transfers set forth below (and
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a Book-Entry Confirmation received by the Depositary), in each case prior to the
Expiration Date, or (ii) the tendering stockholder must comply with the
guaranteed delivery procedure set forth below. No alternative, conditional or
contingent tenders will be accepted.
The method of delivery of certificates representing Shares, the Letter of
Transmittal and all other required documents, including delivery through the
Book-Entry Transfer Facility, is at the election and sole risk of the tendering
stockholder, and Shares will be deemed delivered only when actually received by
the Depositary. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
BOOK-ENTRY TRANSFER. The Depositary will make a request to 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. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make a book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry at the Book-Entry Transfer Facility,
either (i) the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees (or
an Agent's Message in the case of a book-entry delivery) and any other required
documents must, in any case, 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 Date or (ii) the tendering stockholder must comply with the
guaranteed delivery procedure described below. Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
SIGNATURE GUARANTEE. No signature guarantee is required on the Letter of
Transmittal if the Shares tendered thereby are tendered (i) by the registered
holder of Shares (which term, for such purposes, includes any participant in the
Book-Entry Transfer Facility's system whose name appears on a security position
listing as the owner of the Shares) who has not completed the box entitled
"Special Payment Instructions" on the Letter of Transmittal or (ii) for the
account of a member firm of a registered national securities exchange registered
under Section 6 of the Exchange Act, by a member firm of the National
Association of Securities Dealers, Inc., by a commercial bank or trust company
having an office or correspondent in the United States or by any other "Eligible
Guarantor Institution," as defined in Rule 17Ad-15 under the Exchange Act
(collectively, "Eligible Institutions"). In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. If the
certificates evidencing Shares are registered in the name of a person or persons
other than the signer of the Letter of Transmittal, or if payment is to be made,
or certificates for unpurchased Shares are to be issued or returned, to a person
other than the registered owner or owners, then the tendered certificates must
be endorsed or accompanied by duly executed instruments of transfer (such as
stock powers), in either case signed exactly as the name or names of the
registered owner or owners appear on the certificates, with the signatures on
the certificates or instrument of transfer guaranteed by an Eligible Institution
as provided in the Letter of Transmittal. See Instructions 1 and 5 to the Letter
of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available, or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, or the procedure for book-entry
transfers cannot be completed on a timely basis, such Shares may nevertheless be
tendered if such tender complies with all of the following guaranteed delivery
procedures:
(i) the tender is made by or through an Eligible Institution;
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(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Offeror herewith, is
received by the Depositary, as provided below, prior to the Expiration Date;
and
(iii) the certificates representing all tendered Shares, in proper form
for transfer (or a Book-Entry Confirmation with respect to all tendered
Shares), together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), 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, are
received by the Depositary within three NASDAQ National Market trading days
after the date of such Notice of Guaranteed Delivery. If certificates are
forwarded separately to the Depositary, a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) must
accompany each such delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a signature
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for the Shares (or a Book-Entry
Confirmation), (ii) 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 in connection with a book-entry delivery of Shares), and
(iii) any other documents required by the Letter of Transmittal. Accordingly, in
certain circumstances, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations are
actually received by the Depositary. Under no circumstances will interest be
paid on the purchase price of the Shares to be paid by Offeror.
BACKUP UNITED STATES FEDERAL INCOME TAX WITHHOLDING. To prevent United
States federal income tax backup withholding with respect to payment of the
purchase price of Shares purchased pursuant to the Offer, each stockholder must
provide the Depositary with its correct taxpayer identification number and
certify that it is not subject to backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal, or establish another
basis for exemption from backup withholding. See Instruction 10 to the Letter of
Transmittal.
DETERMINATIONS OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Offeror, in its reasonable
discretion, and its determination will be final and binding on all parties.
Offeror reserves the absolute right to reject any or all tenders of any Shares
(i) that are determined by it not to be in proper form or (ii) the acceptance
for payment of or payment for which may, in the opinion of Offeror or its
counsel, be unlawful. Offeror also reserves the absolute right, in its
reasonable discretion, to waive any of the Offer Conditions (other than as
prohibited by the Merger Agreement, as described in Section 1, "Terms of the
Offer; Expiration Date") or any defect or irregularity in the tender of any
Shares, whether or not similar defects or irregularities are waived in the case
of other Shares. No tender of Shares will be deemed to have been validly made
until all defects and irregularities have been cured or waived to the
satisfaction of Offeror. None of Offeror, Parent, 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 incur any liability
for failure to give any such notification. Offeror's interpretation of the terms
and conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding on all parties.
APPOINTMENT. By executing the Letter of Transmittal as set forth above, a
tendering stockholder will irrevocably appoint designees of Offeror as the
attorneys-in-fact and proxies of such stockholder in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
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of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by Offeror (and any and all other Shares or
other securities or rights issued or issuable in respect of such Shares on or
after August 28, 2000), including, without limitation, the right to vote such
Shares in such a manner as such designees or their substitutes shall, in their
reasonable discretion, deem proper. All such powers of attorney and proxies
shall be considered coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, Offeror accepts
such Shares for payment. Upon such acceptance for payment, all prior powers of
attorney and proxies given by the stockholder with respect to such Shares will
be revoked, without further action, and no subsequent powers of attorney and
proxies may be given (and, if given, will be deemed ineffective). The designees
of Offeror will, with respect to the Shares for which such appointment is
effective, be empowered to exercise all voting and other rights of such
stockholder as they in their reasonable judgment deem proper. Offeror reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, Offeror or its
designees must be able to exercise full voting rights with respect to such
Shares, including voting at any meeting of stockholders then or thereafter
scheduled.
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer as well as the tendering stockholder's representation
and warranty that (a) the stockholder has full power and authority to tender,
sell, assign and transfer the Shares tendered and that, when the tendered Shares
are accepted for payment and paid for by Offeror, Offeror will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances including irrevocable proxies and
(b) the Shares tendered by the stockholder will not be subject to any adverse
claim. Offeror's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering stockholder and
Offeror upon 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
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn pursuant to the procedure set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment pursuant to the
Offer, may also be withdrawn, pursuant to Section 14(d)(5) of the Exchange Act,
at any time after November 10, 2000.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses or received via the facsimile number set forth on the back
cover of this Offer to Purchase. Any notice of withdrawal must specify the name,
address and taxpayer identification number of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered, if different from that of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfers set forth in
Section 3, "Procedures for Tendering Shares," 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 tenders of Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for any purposes of the Offer. However, withdrawn Shares
may be retendered by again following one of the procedures described in
Section 3, "Procedures for Tendering Shares," at any time prior to the
Expiration Date or during the Subsequent Offering Period, if any.
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Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights will
apply to Shares tendered into a Subsequent Offering Period and no withdrawal
rights apply during the Subsequent Offering Period with respect to Shares
tendered in the Offer and accepted for payment.
If Offeror extends the Offer, or if purchase of or payment for Shares is
delayed for any reason, or if Offeror is unable to purchase or pay for Shares
for any reason, then, without prejudice to Offeror's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of Offeror and may
not be withdrawn except to the extent that tendering stockholders are entitled
to withdrawal rights as set forth in this Section 4, subject to Rule 14e-l(c)
under the Exchange Act, which provides that no person who makes a tender offer
shall fail to pay the consideration offered or return the securities deposited
by or on behalf of security holders promptly after the termination or withdrawal
of the Offer, and subject to Offeror's obligations under the Merger Agreement.
See Section 2, "Acceptance for Payment and Payment for Shares."
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Offeror, in its reasonable
discretion, and its determination will be final and binding on all parties. None
of Offeror, Parent, 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 incur any liability for failure to give any such
notification.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted into the right to receive
cash in the Merger. The summary is based on the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), applicable current and proposed
United States Treasury Regulations issued thereunder, judicial authority and
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect, at any time and, therefore, the following
statements and conclusions could be altered or modified. The discussion does not
address holders of Shares in whose hands Shares are not capital assets, nor does
it address holders who hold Shares as part of a hedging, "straddle," conversion
or other integrated transaction, or who received Shares upon conversion of
securities or exercise of warrants or other rights to acquire Shares or pursuant
to the exercise of employee stock options or otherwise as compensation, or to
holders of restricted shares received as compensation or to holders of Shares
who are in special tax situations (such as insurance companies, tax-exempt
organizations, financial institutions, United States expatriates or non-U.S.
persons). Furthermore, the discussion does not address the tax treatment of
holders who exercise appraisal rights in the Merger, nor does it address any
aspect of state, local or foreign taxation or estate and gift taxation.
The United States federal income tax consequences set forth below are
included for general informational purposes only and are based upon current law.
The following summary does not purport to consider all aspects of United States
federal income taxation that might be relevant to stockholders of the Company.
Because individual circumstances may differ, each holder of Shares should
consult such holder's own tax advisor to determine the applicability of the
rules discussed below to such stockholder and the particular tax effects of the
Offer and the Merger, including the application and effect of state, local and
other tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for United States federal income tax purposes (and also may
be a taxable transaction under applicable state, local, foreign and other income
tax laws). In general, for United States federal income tax purposes, a holder
of Shares will recognize gain or loss equal to the difference between the
holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received therefor. Gain
or loss must be determined separately for each block of Shares
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(i.e., Shares acquired at the same cost in a single transaction) sold pursuant
to the Offer or converted to cash in the Merger. If the Shares exchanged
constitute capital assets in the hands of the stockholder, gain or loss will be
capital gain or loss. In general, capital gains recognized by an individual will
be subject to a maximum United States federal income tax rate of 20% if the
Shares were held for more than one year on the date of sale (or, if applicable,
the date of the Merger), and if held for one year or less they will be subject
to tax at ordinary income tax rates.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a 31% rate. Backup withholding generally applies if a
holder (a) fails to furnish its social security number or other taxpayer
identification number ("TIN"), (b) furnishes an incorrect TIN, (c) fails
properly to include a reportable interest or dividend payment on its United
States federal income tax return or (d) under certain circumstances, fails to
provide a certified statement, signed under penalties of perjury, that the TIN
provided is its correct number and that it is not subject to backup withholding.
Backup withholding is not an additional tax but merely an advance payment, which
may be refunded to the extent it results in an overpayment of tax. Certain
persons generally are entitled to exemption from backup withholding, including
corporations, financial institutions and certain foreign stockholders if such
foreign stockholders submit a statement, signed under penalties of perjury,
attesting to their exempt status. Certain penalties apply for failure to furnish
correct information and for failure to include reportable payments in income.
Each stockholder should consult such stockholder's own tax advisor as to its
qualification for exemption from backup withholding and the procedure for
obtaining such exemption.
All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to Offeror and the Depositary). Foreign stockholders
should complete and sign the main signature form and a statement, signed under
penalties of perjury, attesting to that stockholder's exempt status (such forms
can be obtained from the Depositary), in order to avoid backup withholding.
6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.
According to the Company's Annual Report on Form 10-K for the fisal year
ended January 31, 2000 (the "Company 10-K") and information supplied by the
Company, the Shares were approved for listing on the NASDAQ National Market
under the symbol "GTHR" on November 23, 1999. In November 1999, the Company
completed its initial public offering of 5,000,000 Shares at a price of $16.00
per Share.
According to the Company 10-K, the Company has never paid cash dividends on
its Common Stock and intends to retain earnings for the growth and expansion of
its business and not to declare or pay any cash dividends. Pursuant to the
Merger Agreement, the Company has agreed that, without the prior written consent
of Parent, it will not declare, set aside or pay any dividend or other
distribution on any shares of capital stock of the Company, except that a direct
or indirect wholly owned subsidiary may pay a dividend or distribution to its
parent.
The following table sets forth the high and low sales prices per Share on
the NASDAQ National Market for the periods indicated, as reported in published
financial sources.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
Fiscal Year Ended January 31, 2000:
Fourth Quarter (ended January 31, 2000) (from
November 23, 1999)...................................... $52.2500 $23.0000
Fiscal Year Ending January 27, 2001:
First Quarter (ended April 30, 2000)...................... $29.8125 $ 9.0000
Second Quarter (ended July 31, 2000)...................... $15.5000 $ 9.8750
Third Quarter (through September 8, 2000)................. $17.4325 $ 8.0625
</TABLE>
11
<PAGE>
On August 25, 2000, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing sale price
per Share on the NASDAQ National Market was $12.1250. On September 8, 2000, the
last full trading day before commencement of the Offer, the closing sale price
per Share on the NASDAQ National Market was $17.3125. Stockholders are urged to
obtain current market quotations for the Shares and to review all information
received by them from the Company, including the materials referred to in
Section 8, "Certain Information Concerning the Company."
7. EFFECT OF OFFER ON MARKET FOR SHARES; NASDAQ NATIONAL MARKET LISTING;
COMMISSION REGISTRATION; MARGIN REGULATIONS.
MARKET FOR THE SHARES. The purchase of Shares by Offeror pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares, if any, held by stockholders
other than Offeror. Parent and Offeror 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.
NASDAQ NATIONAL MARKET LISTING; COMMISSION REGISTRATION. The Shares are
currently listed and traded on the NASDAQ National Market, which constitutes the
principal trading market for the Shares. Depending upon the number of Shares
purchased pursuant to the Offer, the Shares may no longer meet the requirements
of the NASDAQ National Market for continued listing and may, therefore, be
delisted from such exchange. According to the NASDAQ National Market's published
guidelines, the NASDAQ National Market will consider delisting shares if, among
other things, the number of publicly held shares (excluding shares held by
officers, directors, their immediate families and other concentrated holdings of
10% or more) is less than 500,000 or there are fewer than 300 stockholders. If,
as a result of the purchase of Shares pursuant to the Offer, the Shares no
longer meet the requirements of the NASDAQ National Market for continued listing
and the listing of Shares is discontinued, the market for the Shares could be
adversely affected.
If the NASDAQ National Market were to delist the Shares, it is possible that
the Shares would trade on another securities exchange or in the over-the-counter
market and that price quotations for the Shares would be reported by such
exchange or through other sources. The extent of a public market for the Shares
and availability of such quotations would, however, depend upon such factors as
the number of holders and/or the aggregate market value of the publicly held
Shares at such time, the interest in maintaining a market in the Shares on the
part of securities firms, the possible termination of registration of the Shares
under the Exchange Act (discussed below) and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are neither listed on a national securities exchange nor held of
record by 300 or more persons. If such registration were terminated, the Company
would no longer be legally required to disclose publicly in proxy materials
distributed to stockholders the information which it now must provide under the
Exchange Act or to make public disclosure of financial and other information in
annual, quarterly and other reports required to be filed with the Commission
under the Exchange Act; the officers, directors and 10% stockholders of the
Company would no longer be subject to the "short-swing" insider trading
reporting and profit recovery provisions of Section 16(b) of the Exchange Act or
the proxy statement requirements of Section 14(a) of the Exchange Act in
connection with stockholders' meetings; and the Shares would no longer be
eligible for NASDAQ National Market reporting or for continued inclusion on the
"margin list" of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). Furthermore, if such registration were terminated,
persons holding "restricted securities" of the Company could be deprived of
their ability to dispose of such securities under Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act").
12
<PAGE>
In the Merger Agreement, the Company has agreed to use its commercially
reasonable efforts to cause the Shares to be delisted from the NASDAQ National
Market and de-registered under the Exchange Act as soon as practicable following
the Effective Time. However, Offeror intends to cause the Company to seek
delisting of the Shares from the NASDAQ National Market and to cause the Company
to apply for termination of registration of the Shares under the Exchange Act as
soon after the completion of the Offer as the requirements for such delisting
and termination are met. If registration of the Shares is not terminated prior
to the Merger, then the Shares will cease to be reported on the NASDAQ National
Market and the registration of the Shares under the Exchange Act will be
terminated following the completion of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Federal Reserve Board, which has the effect, among other
things, of allowing brokers to extend credit by using the Shares as collateral.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer the Shares 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.
Except as specifically set forth herein, 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 Commission and other public sources. Neither Parent nor Offeror
has any knowledge that would indicate that any statements contained herein based
on such documents and records are untrue. However, neither Parent nor Offeror
assumes any responsibility for the accuracy or completeness of the information
concerning the Company, whether furnished by the Company or contained in such
documents and records, or for any failure by the Company to disclose events
which may have occurred or which may affect the significance or accuracy of any
such information but which are unknown to Parent and Offeror.
The Company is a Delaware corporation with its principal executive offices
located at 4045 Campbell Avenue, Menlo Park, California 94025, telephone number
650-752-1500. According to the Company 10-K, the Company is a leading provider
of Internet-based business-to-business travel procurement and supply solutions.
Set forth below is certain selected historical consolidated financial
information with respect to the Company and its subsidiaries excerpted or
derived from the audited consolidated financial statements presented in the
Company 10-K and the Form 10-Q for the first quarter ending April 30, 2000 filed
with the Commission on June 13, 2000. More comprehensive financial information
is included in those documents and in other documents filed by the Company with
the Commission (which documents may be inspected or obtained in the manner set
forth below), and the following summary is qualified in its entirety by
reference to those materials and all of the financial information and notes
contained therein or incorporated therein by reference.
13
<PAGE>
GETTHERE INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEARS (52 WEEKS) ENDED THREE MONTHS ENDED
--------------------------------------- ------------------
JANUARY 31, JANUARY 31, JANUARY 31, APRIL 30, 2000
1998 1999 2000 (UNAUDITED)
----------- ----------- ----------- ------------------
<S> <C> <C> <C> <C>
Consolidated Statement of Net Earnings
Data:
Total revenues............................. $ 3,001 $ 6,447 $ 15,452 $ 6,635
Cost of revenues........................... 1,680 4,292 10,923 4,328
Gross profit............................... 1,321 2,155 4,529 2,307
General and administrative expenses........ 2,887 6,127 17,491 5,872
Sales and marketing expenses............... 2,393 5,732 8,822 2,893
Research and development................... 2,266 4,113 5,274 2,016
Loss from operations....................... (6,328) (15,822) (49,243) (12,749)
Interest income (expense)--net............. (30) 173 1,445 2,037
Net loss................................... (6,358) (15,649) (47,798) (10,712)
Basic and diluted net loss per share of
common stock outstanding................. (1.81) (4.03) (5.16) (.35)
</TABLE>
<TABLE>
<CAPTION>
AT AT
------------------------- ---------------
JANUARY 31, JANUARY 31, APRIL 30, 2000
1999 2000 (UNAUDITED)
----------- ----------- ---------------
<S> <C> <C> <C>
Consolidated Balance Sheet Data:
Total current assets...................................... $ 17,141 $152,816 $128,995
Total assets.............................................. 20,806 174,178 168,512
Total current liabilities................................. 5,052 13,419 14,498
Total liabilities......................................... 8,287 17,766 18,573
Long-term obligations..................................... 3,235 4,347 4,075
Total stockholders' equity (deficit)...................... (20,382) 156,412 149,939
</TABLE>
14
<PAGE>
CERTAIN COMPANY PROJECTIONS. During the course of discussions between
Parent and the Company that led to the execution of the Merger Agreement (see
Section 11, "Background of Offer"), the Company provided Parent with certain
information relating to the Company which may not be publicly available. On
August 22, 2000, the Company provided Parent with its forecast for the current
fiscal year, as well as its projections for fiscal years 2002 through 2006.
According to that information, the Company forecasted significant revenue growth
in each of the next four fiscal years, reaching approximately $401 million in
the fiscal year ending January 31, 2004. Revenue was projected to continue to
increase thereafter at a still significant but slower rate to approximately
$931 million in fiscal 2006. The Company forecasted continued net losses for the
next several years, with the first full year of net income occurring in fiscal
2004 of about $91.5 million and increasing net income thereafter, reaching
approximately $263 million in fiscal 2006.
To the knowledge of Parent and Offeror, the Company does not as a matter of
course make public any projections as to future performance or earnings, and the
projections set forth above are included in this Offer to Purchase only because
the information was made available to Parent by the Company. The Company has
informed Parent that the projections were not prepared with a view to public
disclosure or compliance with the published guidelines of the Commission or the
guidelines established by the American Institute of Certified Public Accountants
regarding projections or forecasts. The Company has also informed Parent that
its internal financial projections (upon which the information provided to
Parent were based in part) are, in general, prepared solely for internal use and
capital budgeting and other management decision-making purposes and are
subjective in many respects and thus susceptible to various interpretations and
periodic revision based on actual experience and business developments.
The foregoing projections constitute forward-looking statements and are
based on estimates and assumptions (not all of which were provided to Parent)
made by the management of the Company with respect to industry performance,
general business, economic, market and financial conditions and other matters,
all are which are subject to significant contingencies and are difficult to
predict, and many of which are beyond the control of the Company, Offeror or
Parent or their respective advisors. Risks and uncertainties faced by the
Company are discussed in greater detail in the Company's periodic filings with
the Commission. Also, many of the assumptions upon which the projections were
based, none of which were approved by Parent or Offeror, are dependent upon
economic forecasting (both general and specific to the Company's businesses),
which is inherently uncertain and subjective. Accordingly, there can be no
assurance that the assumptions made in preparing the projections will prove
accurate, and actual results may be materially greater or less than those
contained in the projections.
The inclusion of the foregoing projections should not be regarded as an
indication that the Company, Offeror, Parent or any other person who received
such information considers it a reliable prediction of future events, and
neither Offeror nor Parent has relied (nor should any other person rely) on them
as such. None of Offeror or Parent and any of their advisors assumes any
responsibility for the reasonableness, completeness, accuracy or validity of any
of the projections. None of Parent or Offeror and any of their representatives
has made, or makes, any representation to any person regarding the information
contained in the projections, and none of them intends to update or otherwise
revise the projections to reflect circumstances existing after the date when
made or to reflect the occurrence of future events even in the event that any or
all of the assumptions underlying the projections are shown to be in error.
15
<PAGE>
AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports and other information with the Commission 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 such 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
Commission. Such reports, proxy statements, and other information should be
available for inspection at the Commission's Public Reference Room, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies should be obtainable
upon payment of the Commission's customary charges by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such material should also be available for inspection and copying at the
regional offices of the Commission located at Seven World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission also maintains a World Wide Web site on the
Internet at http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
9. CERTAIN INFORMATION CONCERNING OFFEROR AND PARENT.
INFORMATION CONCERNING OFFEROR. Offeror, a Delaware corporation, was
recently incorporated for the purpose of making the Offer and consummating the
Merger. All of the outstanding capital stock of Offeror is owned by Parent.
Until immediately prior to the time it purchases Shares pursuant to the Offer,
it is not anticipated that Offeror will have any significant assets or
liabilities or engage in activities other than those incidental to its formation
and capitalization and the transactions contemplated by the Offer and the
Merger. Since Offeror is newly formed and has minimal assets and capitalization,
no meaningful financial information is available for it. Offeror is not subject
to the informational filing requirements of the Exchange Act.
The principal executive offices of Offeror are located at 4255 Amon Carter
Boulevard, Fort Worth, Texas 76155, telephone number 817-963-6400. The name,
business address, past and present principal occupations and citizenship of each
of the directors and executive officers of Offeror are set forth in Annex I to
this Offer to Purchase.
INFORMATION CONCERNING PARENT. Parent, a Delaware corporation, is the
leading provider of technology and marketing services for the travel industry.
Revenues of Parent are derived from applying information technology to meet the
needs of the travel and transportation industries with advanced and innovative
technology skills to deliver progressive solutions. At the end of 1999, Parent
and its consolidated subsidiaries had approximately 10,000 employees worldwide.
The principal executive offices of Parent are located at 4255 Amon Carter
Boulevard, Fort Worth, Texas 76155, telephone number 817-963-6400. The name,
business address, past and present principal occupations and citizenship of each
of the directors and executive officers of Parent are set forth in Annex I to
this Offer to Purchase.
Except as set forth in this Offer to Purchase:
(i) none of Parent nor Offeror nor, to the best knowledge of Parent and
Offeror, any of the persons listed in Annex I to this Offer to Purchase, or
any associate or majority owned subsidiary of any of the foregoing,
beneficially owns or has a right to acquire any Shares or any other equity
securities of the Company;
(ii) none of Parent nor Offeror nor, to the best knowledge of Parent and
Offeror, any of the persons listed in Annex I to this Offer to Purchase, or
any associate or majority owned subsidiary
16
<PAGE>
of any of the foregoing, has effected any transaction in the Shares or any
other equity securities of the Company during the past 60 days;
(iii) since January 1, 1998, there have been no negotiations,
transactions or material contacts between any of Parent, Offeror or any of
their respective subsidiaries, including, to the best knowledge of Parent
and Offeror, any of the persons listed in Annex I to this Offer to Purchase,
on the one hand, and the Company or its affiliates, on the other hand,
concerning any merger, consolidation, acquisition, tender offer or other
acquisition of securities of the Company, any election of directors of the
Company, or any sale or other transfer of a material amount of assets of the
Company; and
(iv) since January 1, 1998, there have been no transactions which could
be required to be disclosed under the rules and regulations of the
Commission between any of Parent, Offeror or any of their respective
subsidiaries, including, to the best knowledge of Parent and Offeror, any of
the persons listed in Annex I to this Offer to Purchase, on the one hand,
and the Company or any of its executive officers, directors or affiliates,
on the other hand, except that on October 15, 1999 Parent Sub entered into a
Subscriber Agreement with the Company, whereby the Company contracted to use
Parent Sub's computerized reservation system to reserve, confirm, make
inquiries or obtain information relating to travel products and travel
tickets for the acquisition of travel products. The Company pays Parent Sub
a fee per each use of Parent Sub's computerized reservation system and, from
January 1, 2000 through June 30, 2000, the Parent Sub has billed the Company
approximately $60,000.
Neither Parent nor Offeror had any relationship with the Company prior to
the commencement of the discussions which led to the execution of the Merger
Agreement. See Section 11, "Background of Offer." Each of Parent and Offeror
disclaims that it is an "affiliate" of the Company within the meaning of
Rule 13e-3 under the Exchange Act.
Parent is subject to the information and reporting requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition, and other matters. Information as of particular dates concerning
Parent's directors and officers, their remuneration, stock options granted to
them, the principal holders of Parent's securities, any material interests of
such persons in transactions with Parent, and other matters is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the Commission. Such reports, proxy statements, and other information
should be available for inspection and copies should be attainable at the
offices of the Commission in the same manner as set forth with respect to the
Company in Section 8, "Certain Information Concerning the Company--Available
Information." In addition, stockholders of the Company may also obtain copies of
Parent's 1999 Annual Report by contacting the Office of the Secretary of Parent
at Parent's principal executive offices set forth above.
10. SOURCE AND AMOUNT OF FUNDS.
If all Shares are tendered to and purchased by Offeror in the Offer, the
aggregate purchase price for Shares, outstanding options and warrants of the
Company and Parent's estimated related fees and expenses in the Offer will be
approximately $770 million. In the Merger Agreement, Parent has agreed to
provide or cause to be provided to Offeror the funds necessary to pay for all
Shares that Offeror becomes obligated to purchase in the Offer. Parent, in turn,
would obtain such funds from working capital and various types of short-term
financing. Following the Merger, in order to retire any amounts outstanding
under the short-term financing, Parent intends to sell certain securities
pursuant to a Registration Statement on Form S-3 which has been filed with the
Commission. There are no material conditions to such financing. The Offer is not
conditioned on Offeror or Parent obtaining any financing.
17
<PAGE>
11. BACKGROUND OF OFFER.
In mid-July, 1999, representatives of Parent Sub, on behalf of Parent, had
initial discussions with the Company concerning the possibility of a business
combination.
On July 23, 1999, Parent entered into a preliminary non-disclosure agreement
with the Company with respect to the evaluation and analysis of a possible
business combination.
On January 20, 2000, James E. Murphy, Senior Vice-President, Corporate
Development and Treasurer of Parent Sub, and Ken Pelowski, Chief Financial
Officer and Chief Operating Officer of the Company, met in Dallas and discussed
a potential business combination.
On February 2, 2000, Messrs. Murphy and Pelowski continued these discussions
by telephone.
On February 14, 2000, Michael S. Gilliland, Senior Vice-President and Chief
Marketing Officer of Parent Sub, Mr. Murphy and representatives of Goldman,
Sachs & Co. ("Goldman Sachs"), financial advisors to Parent, met with Gadi
Maier, President and Chief Executive Officer of the Company, Bob Brown,
Treasurer and Director of Financial Planning of the Company, Mr. Pelowski and
representatives of DLJ, financial advisors to the Company, for further
discussions.
On April 4, 2000, William J. Hannigan, President and Chief Executive Officer
of Parent, met with Mr. Maier in Dallas to discuss various business agreements.
During the course of the meeting, Mr. Hannigan stated that Parent was interested
in purchasing the Company. Mr. Maier said he would be interested in hearing the
details of Parent's proposal.
On April 27, 2000, in a telephone call between Messrs. Hannigan and Maier,
it was decided that Messrs. Murphy and Pelowski would prepare some preliminary
financial operational data.
On May 16, 2000, Messrs. Murphy, Pelowski and Brown and representatives of
Goldman Sachs met in Menlo Park, California to discuss preliminary financial due
diligence matters.
On June 6 and 12, 2000, Mr. Hannigan telephoned Mr. Maier to discuss the
pace of negotiations and the schedule going forward.
On June 16, 2000, management of each company and their financial advisors
met in Menlo Park to discuss the major parameters of a potential combination,
but no agreements were reached. Messrs. Pelowski and Murphy continued these
discussions by telephone on June 22 and 26, 2000.
On June 28, 2000, Mr. Murphy and other members of Parent Sub's management
met with Mr. Pelowski to discuss major integration issues of the combined
businesses. These discussions were continued by telephone through July and
August.
On July 5, 2000, Messrs. Hannigan, Murphy, Maier and Pelowski and Parent's
and the Company's financial representatives met in New York City to discuss
dilution and employee retention issues.
On July 13, 2000, Messrs. Hannigan and Maier met and discussed the possible
business combination. Mr. Murphy and representatives of Goldman Sachs met with
Mr. Pelowski and representatives of DLJ to discuss the terms of the potential
business combination.
On July 18, 2000, Messrs. Hannigan and Maier discussed various options
relating to the purchase price and the form of consideration. Jeffery M.
Jackson, the Executive Vice-President, Chief Financial Officer and Treasurer of
Parent, updated Parent's Board of Directors on the status of the negotiations.
On July 19, 2000, Messrs. Hannigan and Maier discussed the possible business
combination and various forms of consideration.
On July 20, 2000, Parent sent a legal and business due diligence list to the
Company.
18
<PAGE>
On July 24, 2000, Messrs. Murphy and Pelowski had a telephone call regarding
economic and structural terms of the transaction and Parent's due diligence
investigation of the Company. Later that same day, representatives of Parent and
the Company and their respective financial and legal advisors commenced
negotiations.
On July 25, 2000, certain representatives of Parent had a telephone
conference with Mr. Pelowski and John Anderson, Vice-President, Human Resources
of the Company, with respect to employee retention and integration. That same
day, Messrs. Hannigan and Maier met in Dallas to discuss how the combined
company would be operated, and the nature of the roles of certain of the
Company's executives. Mr. Hannigan indicated that he would like to meet with
representatives of United Airlines and American Express to describe the
potential transaction and enlist their support.
Also on July 25, 2000, Parent's legal advisor provided an initial draft of
the merger agreement to the Company and its financial and legal advisors.
On July 27, 2000, Parent entered into a second non-disclosure agreement with
the Company. Due diligence materials were provided by the Company to Parent over
the following weeks.
On July 31, 2000, management of the two companies and their respective
financial and legal advisors commenced negotiations of the definitive merger
agreement.
On August 2, 2000, Messrs. Maier and Hannigan met with Jonathan S. Linen,
the American Express designee on the Company's Board, and other executives of
American Express in New York City. Mr. Hannigan presented the proposed
transaction to the American Express executives. On that same day, negotiations
of the definitive merger agreement were held between the parties and their
respective legal and financial advisors in San Francisco.
On August 5, 2000, the legal representatives of Parent met by phone with the
legal representatives of the Company to review their comments to the proposed
merger agreement.
Beginning August 8, 2000, through the time the Merger Agreement was signed,
management of the two companies had daily discussions concerning transaction
terms and integrating and retention issues.
On August 15, 2000, negotiations were continued between representatives of
the two companies and their respective legal and financial advisors concerning
the definitive Merger Agreement.
On August 18, 2000, representatives of Goldman Sachs and DLJ discussed the
price which Parent was willing to pay in the transaction. Also on August 18,
2000, negotiations continued between the two companies and their respective
legal and financial advisors. The transaction schedule was also discussed.
On August 24, 2000, negotiations between the parties and their
representatives continued in San Francisco. During the negotiations, Parent
proposed a purchase price of either $17.50 per share if the merger consideration
was paid in cash, and $18.25 per share if the merger consideration was paid
one-half in cash and one-half in common stock of Parent.
On August 25, 2000, negotiations continued in meetings held in San Francisco
between Parent and the Company and their respective financial and legal
representatives.
On August 26, 2000, Messrs. Hannigan and Maier agreed to a purchase price of
$17.75 per share if the merger consideration was paid in cash.
On August 27, 2000, the Company's Board met by telephone in the morning,
during which the status of the negotiations, terms of the transaction and
outstanding issues were reviewed. In the evening, the Company's Board met again
by telephone, and the directors received the fairness opinion
19
<PAGE>
of DLJ and voted to approve the transaction. Also on August 27, 2000, Parent's
Board met and approved the transaction.
Early on the morning of August 28, 2000, the Merger Agreement and related
documents were executed, and Parent and the Company announced the execution of
the Merger Agreement.
Thereafter, in accordance with the Merger Agreement, Offeror commenced the
Offer.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY.
PURPOSE. The purpose of the Offer and the Merger is for Offeror to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Offeror to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Parent. The Offer is being made pursuant to the Merger Agreement.
NO ASSURANCE. There can be no assurance that the Merger will take place,
although each party has agreed in the Merger Agreement to use its commercially
reasonable efforts in good faith to cause the Merger to occur, because the
Merger is subject to certain conditions, some of which are beyond the control of
either Parent or the Company. Since Parent's ultimate objective is to acquire
ownership of all the Shares, if the Merger does not take place, Parent would
consider the acquisition, whether directly or through an affiliate, of Shares
through private or open market purchases, or subsequent tender offers or a
different type of merger or other combination of the Company with Offeror or an
affiliate or subsidiary thereof, or by any other permissible means deemed
advisable by it. Any of those possible transactions might be on terms the same
as, or more or less favorable than, those of the Offer or the Merger.
APPROVAL. Under the DGCL, the approval of the Board of Directors of the
Company and the affirmative vote of the holders of a majority of the outstanding
Shares may be required to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger. The Board of Directors
of the Company has unanimously (a) determined that each of the Offer, the Merger
and the Merger Agreement is fair to and in the best interests of the
stockholders of the Company, (b) approved the Offer and the Merger,
(c) approved and adopted the Merger Agreement, the execution of the Merger
Agreement and the transactions contemplated by the Merger Agreement and
(d) recommended that the holders of Shares accept the Offer and tender their
Shares in the Offer. Unless the Merger is consummated pursuant to the short-form
merger provisions of the DGCL described below, the only remaining required
corporate action of the Company is the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the affirmative vote of
the holders of a majority of the Shares. Accordingly, if the Minimum Tender
Condition is satisfied, Offeror will have sufficient voting power to cause the
approval and adoption of the Merger Agreement and the transactions contemplated
thereby without the affirmative vote of any other stockholders. Regarding any
approvals necessary under the laws of other states, see Section 16, "Certain
Regulatory and Legal Matters--State Takeover Laws."
STOCKHOLDER MEETINGS. In the Merger Agreement, the Company has agreed, that
after consummation of the Offer, in the event Offeror acquires less than 90% of
the Shares, the Company will take all action necessary to convene a special
meeting of the stockholders at which the stockholders will consider and vote on
the adoption of the Merger Agreement. The Company has further agreed that, if a
stockholders meeting is convened, then, subject to the Company's rights
described in Section 13, "The Transaction Documents--The Merger
Agreement--Nonsolicitation Obligations and Exceptions," and subject to the
fiduciary obligations of the Board of Directors of the Company, the Board of
Directors of the Company shall recommend to its stockholders the adoption of the
Merger Agreement at the stockholders meeting and shall use commercially
reasonable efforts to solicit such adoption. If the Board of Directors
determines that the Offer is no longer fair to, or in the best
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interests of, the Company's stockholders, or that the Merger Agreement is no
longer advisable and either makes no recommendation or recommends that the
Company's stockholders reject the Offer and the Merger Agreement, the Company
shall nevertheless submit the Merger Agreement to the stockholders for adoption
at the stockholders meeting unless the Merger Agreement shall have been
terminated in accordance with its terms prior to the stockholders meeting. At
any such meeting, all of the Shares then owned by Parent, Offeror or any other
subsidiary of Parent will be voted to approve the Merger and the Merger
Agreement, and Parent and Offeror have agreed that neither they nor their
subsidiaries will sell, transfer, assign, encumber or otherwise dispose of the
Shares acquired pursuant to the Offer or otherwise prior to such meeting (except
for transactions involving solely Parent, Offeror and/or their wholly owned
subsidiaries). Notwithstanding the foregoing, if Offeror acquires at least 90%
of the outstanding Shares, then the parties will, at the request of Offeror,
take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 253 of the DGCL, as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders. See "--Short-form Merger."
BOARD REPRESENTATION. For a description of Offeror's rights under the
Merger Agreement to designate directors of the Company, see Section 13, "The
Transaction Documents--The Merger Agreement--Board of Directors." Parent
currently intends to designate a majority of the directors of the Company
following consummation of the Offer. It is currently anticipated that Parent
will designate such persons listed on Annex I as Parent shall determine to serve
as the directors of the Company following consummation of the Offer. Offeror
expects that such representation would permit Offeror to exert substantial
influence over the Company's conduct of its business and operations.
SHORT-FORM MERGER. Under Section 253 of the DGCL, if Offeror acquires,
pursuant to the Offer, at least 90% of the outstanding Shares, Offeror will be
able to approve the Merger without a vote of the Company's stockholders. In such
event, Parent and Offeror anticipate that they will take, and the parties to the
Merger Agreement have agreed, at the request of Offeror, to take, all necessary
and appropriate action to cause the Merger to become effective as soon as
reasonably practicable after such acquisition, without a meeting of the
Company's stockholders. If, however, Offeror does not acquire at least 90% of
the outstanding Shares pursuant to the Offer or otherwise and a vote of the
Company's stockholders is required under the DGCL, a significantly longer period
of time would be required to effect the Merger.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under Section 262 of the DGCL to dissent and demand appraisal of, and to
receive payment in cash of the fair value of, their Shares. Such rights to
dissent, if the statutory procedures are met, could lead to a judicial
determination of the fair value of the Shares, as of the day prior to the date
on which the stockholders' vote was taken approving the Merger or similar
business combination (excluding any element of value arising from the
accomplishment or expectation of the Merger), required to be paid in cash to
such dissenting holders for their Shares. In addition, such dissenting
stockholders would be entitled to receive payment of a fair rate of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, the
court is required to take into account all relevant factors. Accordingly, such
determination could be based upon considerations other than, or in addition to,
the Offer Price and the market value of the Shares, including, among other
things, asset values and earning capacity. In WEINBERGER V. UOP, INC., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding. Therefore, the value so determined in any appraisal
proceeding could be the same as, or more or less than, the Offer Price or the
Merger consideration.
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In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders which requires that the merger be fair to
such other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of consideration to be received by the stockholders and whether there was
fair dealing among the parties. The Delaware Supreme Court stated in WEINBERGER
and in RABKIN V. PHILIP A. HUNT CHEMICAL CORP. that the remedy ordinarily
available to minority stockholders in a cash-out merger is the right to
appraisal described above. However, a damages remedy or injunctive relief may be
available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
Failure to follow the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of such rights. If any holder
of Shares who demands appraisal under Section 262 of the DGCL fails to perfect,
or effectively withdraws or loses his right to appraisal, as provided in the
DGCL, the Shares of such holder will be deemed to have been converted as of the
Effective Time into the right to receive from the Surviving Corporation the
Offer Price in accordance with the Merger Agreement.
RULE 13E-3. The Commission 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 or otherwise
in which Offeror seeks to acquire the remaining Shares not held by it. Offeror
believes, however, that Rule 13e-3 will not be applicable to the Merger if the
Merger is consummated within one year after the Expiration Date at the same per
Share price as paid in the Offer. If applicable, 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 Commission and disclosed to stockholders prior to consummation of the
transaction.
PLANS FOR THE COMPANY. Following the Offer and the Merger, Parent intends
to integrate the Company's business with the business of Sabre Business Travel
Solutions, through which Parent Sub currently provides online travel services to
corporate customers and to conduct the Company's business on a basis generally
consistent with the Company's existing plans and programs. Upon closing of the
transaction, the new Sabre company will operate under the name of the Company
and will be based in Menlo Park, California. Gadi Maier, current Chairman,
President and Chief Executive Officer of the Company, will be President of the
combined organization. Parent will continue to evaluate the business and
operations of the Company and will take such actions as it deems appropriate
under the circumstances then existing.
EXTRAORDINARY CORPORATE TRANSACTIONS. Except as indicated in this Offer to
Purchase, neither Parent nor Offeror has any present plans or proposals which
relate to or would result in (i) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) any purchase, sale or transfer of a material amount of assets
of the Company or any of its subsidiaries, (iii) any material change in the
present dividend policy, or indebtedness or capitalization, of the Company,
(iv) any change in the Company's present Board of Directors or management,
(v) any other material changes in the Company's corporate structure or business,
(vi) any class of equity securities of the Company being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
automated quotations system operated by a national securities association, or
(vii) any class of equity securities of the Company becoming eligible for
termination of registration under Section 12(g)(4) of the Securities Act.
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13. THE TRANSACTION DOCUMENTS.
The following is a summary of the material provisions of the Merger
Agreement, the Stockholder Agreements, the Employment Agreement (as hereinafter
defined) and the Assignment and Assumption Agreement. Copies of the Merger
Agreement, two forms of the Stockholder Agreements and the Assignment and
Assumption Agreement have been filed with the Commission. Summaries of those
Agreements are qualified in their entirety by reference to such Agreements,
which are deemed to be incorporated by reference herein. Capitalized terms used
herein and not otherwise defined have the meanings ascribed to them in such
Agreements.
THE MERGER AGREEMENT
OFFER. The Merger Agreement provides for Offeror to commence (within the
meaning of Rule 14d-2 under the Exchange Act) the Offer as soon as practicable,
but in no event later than the tenth business day after the execution of the
Merger Agreement. Additional provisions relating to the terms and conditions of
the Offer are described in Section 2, "Terms of the Offer; Expiration Date."
SCHEDULE TO AND OFFER DOCUMENTS; SCHEDULE 14D-9; STATE FILINGS. In the
Merger Agreement, Parent and Offeror have agreed to take certain actions with
regard to the filing with the Commission of a Tender Offer Statement on Schedule
TO (the "Schedule TO") including this Offer to Purchase and certain Offer
documents and to make any filings required by applicable state law relating to
the Offer. Also, Parent and Offeror have granted to the Company certain rights
to review and comment on the proposed forms of the Schedule TO and such Offer
documents and state filings, as well as any amendments and supplements thereto.
Parent and Offeror agreed to provide the Company and its counsel in writing any
comments that Offeror, Parent or their counsel receive from the Commission or
its staff or any applicable state authority with respect to such Offer documents
or state filings promptly after the receipt thereof. Parent and Offeror further
agreed to promptly correct any information in the Schedule TO, the Offer
documents or the state filings that becomes false or misleading in any material
respect and to take all steps necessary to cause the Schedule TO or such Offer
documents or state filings as so corrected to be filed with the Commission and
any applicable state authority and disseminated to the stockholders of the
Company, as and to the extent required by applicable law.
In the Merger Agreement, the Company has agreed that it will file with the
Commission on the date of the commencement of the Offer the Schedule 14D-9
containing the recommendations of its Board of Directors in favor of the Offer
and the Merger; provided, however, that the Board of Directors of the Company
may modify, withdraw or change such recommendation solely to the extent that the
Board of Directors and the Company are permitted to do so as described below
under "--Acquisition Proposals." The Company has granted to Parent certain
rights to review and comment on the proposed forms of the Schedule 14D-9 and the
exhibits thereto, as well as any amendments and supplements to the
Schedule 14D-9, prior to their filing with the Commission or dissemination to
stockholders of the Company. The Company will provide Parent and its counsel in
writing any comments that the Company or its counsel may receive from the
Commission or its staff with respect to the Schedule 14D-9 promptly after
receipt thereof, and shall disseminate the Schedule 14D-9 as required by
Rule 14d-9 under the Exchange Act. The Company shall promptly correct any
information in the Schedule 14D-9 that shall have become false or misleading in
any material respect and take all steps necessary to cause such Schedule 14D-9
as so corrected to be filed with the Commission and disseminated to the
stockholders of the Company, as and to the extent required by applicable federal
securities laws.
BOARD OF DIRECTORS. The Merger Agreement provides that, promptly upon the
acceptance of and payment for a number of Shares by Offeror that satisfies the
Minimum Tender Condition pursuant to the Offer (and, to the extent the Minimum
Tender Condition is validly waived, the exercise of the Option), Offeror shall
be entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as will give Offeror, subject
to compliance with
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Section 14(f) of the Exchange Act, representation on the Board of Directors of
the Company equal to the product of (a) the number of directors on the Board of
Directors of the Company and (b) the percentage that such number of votes
represented by Shares so purchased and Shares otherwise held by Offeror and its
affiliates, if any, bears to the number of votes represented by Shares
outstanding, and the Company shall at such time, subject to applicable law,
cause Offeror's designees to be so elected by its existing Board of Directors.
Subject to applicable law, the Company shall take all action requested by
Offeror necessary to effect any such election, including mailing to its
stockholders the information statement (the "Information Statement") containing
the information required by Section 14(f) of the Exchange Act and Rule 14f-1
thereunder, and the Company shall make such mailing with the mailing of the
Schedule 14D-9 (provided that Parent and Offeror shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Offeror's designees). In connection with
the foregoing, the Company has agreed, subject to applicable law, promptly
either to increase the size of the Board of Directors of the Company and/or to
obtain the resignation of such number of its current directors as is necessary
to enable Offeror's designees to be elected or appointed to the Company's Board
of Directors as provided above; provided, however, that prior to the Effective
Time the Board of Directors of the Company shall always have at least two
(2) members who are not officers, directors, stockholders or designees of
Offeror or any of its affiliates ("Offeror Insiders"). If the number of
directors who are not Offeror Insiders is reduced below two for any reason prior
to the Effective Time, then the remaining director who is not an Offeror Insider
shall be entitled to designate a person to fill such vacancy who is not an
Offeror Insider and who shall be a director not deemed to be an Offeror Insider
for all purposes of the Merger Agreement. Following the election of Offeror's
designees to the Company's Board of Directors pursuant to the provisions
described above and prior to the Effective Time (i) any amendment or termination
of the Merger Agreement by the Company, (ii) any extension or waiver by the
Company of the time for the performance of any of the obligations or other acts
of Parent or Offeror under the Merger Agreement or (iii) any waiver of the
Company's rights under the Merger Agreement shall, in any such case, require the
concurrence of a majority of the directors of the Company then in office who are
not Offeror Insiders.
Offeror currently intends to designate a majority of the directors of the
Company following consummation of the Offer. It is currently anticipated that
Offeror will designate such persons listed on Annex I as Offeror shall determine
to serve as the directors of the Company following consummation of the Offer.
VOTE REQUIRED TO APPROVE MERGER. See Section 12, "Purpose of the Offer; The
Merger; Plans for the Company--Stockholder Meetings."
MERGER. Subject to the satisfaction or waiver of the conditions described
under "--Conditions to Obligations of All Parties to Merger Agreement,"
including the consummation of the Offer and, to the extent required by the DGCL,
the approval of the stockholders of the Company of the Merger and the Merger
Agreement, the parties will cause the Merger to become effective (a) on a date
that is not later than three business days after the last of the conditions
discussed under "--Conditions to Obligations of All Parties to Merger Agreement"
(other than conditions that by their terms cannot be satisfied until the
Effective Time) shall have been satisfied or waived in accordance with the terms
of the Merger Agreement or (b) on such other date as the parties may agree in
writing. As a result of the Merger, the separate corporate existence of Offeror
will cease and the Company will continue as the Surviving Corporation and as a
wholly owned subsidiary of Parent. The Merger Agreement also provides that the
Surviving Corporation will be governed by the laws of the State of Delaware, and
will have the same certificate of incorporation, bylaws and directors as the
Offeror had immediately prior to the Effective Time.
CONVERSION OF SECURITIES. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Offeror, or any holder of any
Shares, each Share issued and outstanding
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immediately prior to the Effective Time (other than Shares the holders of which
have exercised dissenters' rights under the DGCL, Shares held by the Company and
Shares held directly or indirectly by Parent), will be converted into the right
to receive, from the Surviving Corporation, an amount of cash equal to the Offer
Price. Each Share, other than Shares the holders of which have exercised
dissenters' rights under the DGCL, shall no longer be outstanding, shall be
canceled and retired and shall cease to exist, and each certificate formerly
representing any of such Shares shall thereafter represent only the right to
receive the Offer Price. In the event that, subsequent to the date of the Merger
Agreement but prior to the Effective Time, the Company changes the number of
Shares issued and outstanding as a result of a stock split, stock combination,
stock dividend, recapitalization, redenomination of share capital or other
similar transaction, the Merger consideration and other items dependent thereon
shall be appropriately adjusted to provide to the holders of Shares the same
economic effect as contemplated by the Merger Agreement prior to such stock
split, stock combination, stock dividend, recapitalization, redenomination of
share capital or other similar transaction. At the Effective Time, each share of
common stock of Offeror issued and outstanding immediately prior to the
Effective Time shall remain outstanding and each certificate therefor shall
continue to evidence one share of common stock of the Surviving Corporation.
TREATMENT OF OPTIONS; OTHER EQUITY AWARDS. Under the Merger Agreement, at
the Effective Time, Parent will assume each outstanding option to acquire Common
Stock (each, a "Company Option") under any Company stock plan. Each Company
Option will be converted into an option (a "New Parent Option") to purchase, on
the same terms and conditions as were applicable to such Company Option, the
number of shares of Parent common stock (rounded to the nearest whole number)
equal to the product of (A) and (B), where (A) is the number of shares of Common
Stock subject to such Company Option and (B) is the Offer Price divided by the
average closing price of Parent common stock on the New York Stock Exchange for
the five (5) trading days immediately preceding the Effective Time. The exercise
price for the New Parent Options (rounded to the nearest whole cent) will be
equal to (x) divided by (y), where (x) is the aggregate exercise price for the
shares of Common Stock subject to such Company Option and (y) is the aggregate
number of shares of Parent common stock purchasable pursuant to the New Parent
Option; provided, however, that in the case of any Company Option to which
Section 422 of the Code applies, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option will be determined in accordance with the foregoing, subject to such
adjustments as are necessary in order to satisfy the requirements of
Section 424(a) of the Code. In the Merger Agreement, Parent has agreed that, on
the date the Merger occurs, it will file a registration statement under the
Securities Act on Form S-8 or other appropriate form covering shares of Parent
common stock subject to issuance upon the exercise of the New Parent Options.
Each Company Option held by a non-employee director of the Company will either
be assumed by Parent and converted as described above or, at the election of
such director, be cancelled in exchange for cash in an amount equal to the
product of (i) the Offer Price minus the per Share exercise price for such
Company Option and (ii) the number of Shares subject to such Company Option.
Each Share that has been acquired pursuant to the exercise of a Company Option
which Share is subject to a right of forfeiture, including a repurchase right by
the Company, shall be converted into the right to receive the Offer Price, and
such payment shall continue to be subject to the same terms, conditions, and
restrictions as were applicable to such Shares prior to the Offer and shall be
paid to such holders, without interest, only upon the lapse of any risk of
forfeiture or repurchase rights in accordance with the vesting schedule which
was applicable prior to the Offer.
TREATMENT OF WARRANTS. Under the Merger Agreement, at the Effective Time,
warrants of the Company currently held by Northwest Airlines and Imperial Bank
and any warrants which are to be issued to Infoseek Corporation and Buena Vista
Internet Group upon the achievement of certain conditions (each an "Old
Warrant") will be deemed to constitute a warrant (a "New Warrant") to purchase,
on the same terms and conditions as were applicable to such Old Warrant, the
number of shares of Parent common stock (rounded to the nearest whole number)
equal to the product of
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(A) and (B), where (A) is the Shares for which the Old Warrant is exercisable
and (B) is the Offer Price divided by the average of the closing price of Parent
common stock on the New York Stock Exchange for the five (5) trading days
immediately preceding the Effective Time. The exercise price for the New Warrant
(rounded to the nearest whole cent) will be equal to (x) divided by (y), where
(x) is the aggregate exercise price for the Shares for which the Old Warrant is
exercisable and (y) is the Offer Price divided by the average of the closing
price of Parent Common Stock on the New York Stock Exchange for the five
(5) trading days immediately preceding the Effective Time. Except as provided
above, the converted or substituted New Warrants shall be subject to the same
terms and conditions (including expiration date, vesting and exercise
provisions) as were applicable to the Old Warrants immediately prior to the
Effective Time.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
representations and warranties of the parties thereto. These include customary
representations and warranties by the Company, including, but not limited to,
representations and warranties with respect to: (i) the due organization,
existence and, subject to certain limitations, the qualification and good
standing of the Company and its subsidiaries, (ii) the Company's authority to
enter into the Merger Agreement and to carry out the transactions contemplated
thereby, (iii) the validity, binding effect and enforceability of the Merger
Agreement with respect to the Company, (iv) required consents and approvals,
(v) subject to certain limitations, the Merger Agreement's compliance with the
organizational documents and other agreements of the Company and of laws
applicable to the Merger Agreement, (vi) the Company's capitalization,
(vii) the timely filing of all required reports, schedules, statements, forms
and other documents with the Commission since November 22, 1999 and the accuracy
of the statements made in such documents, (viii) subject to certain limitations,
the absence of any undisclosed liabilities, (ix) subject to certain limitations,
the absence of certain material adverse changes or events since January 31,
2000, (x) the absence of any litigation or regulatory action against the Company
or any of its subsidiaries, (xi) certain matters relating to the intellectual
property rights of the Company and its subsidiaries, (xii) certain matters
relating to the employee benefit plans and labor relations of the Company and
its subsidiaries, (xiii) certain matters relating to the payment of taxes and
the filing of tax returns by the Company and its subsidiaries, (xiv) the vote
required to adopt the Merger Agreement and approve the transaction contemplated
thereby, (xv), the fairness opinion of DLJ and the absence of arrangements for
finders' fees (other than with DLJ), (xvi) subject to certain limitations, the
Company's and its subsidiaries' compliance with applicable laws and maintenance
of applicable permits, (xvii) the absence of any notice by a party of its
intention to cancel or terminate certain business relationships with the Company
or any of its subsidiaries and the full force and effect of the Company's and
its subsidiaries' contracts, and (xviii) certain matters relating to the
insurance policies of the Company and its subsidiaries.
Parent, on its own behalf and, in certain cases, on behalf of the Offeror,
also made customary representations and warranties, including, but not limited
to, representations and warranties with respect to: (i) the due organization,
existence and, subject to certain limitations, the qualification and good
standing of Parent and Offeror, (ii) Parent's and Offeror's authority to enter
into the Merger Agreement and to carry out the transactions contemplated
thereby, (iii) the validity, binding effect and enforceability of the Merger
Agreement with respect to Parent and Offeror, (iv) required consents and
approvals, (v) subject to certain limitations, the Merger Agreement's compliance
with the organizational documents and other agreements of Parent and Offeror and
of laws applicable to the Merger Agreement, and (vi) the accuracy of the
statements to be made in the documents related to Offeror provided by Parent or
Offeror to the Company for inclusion in the Schedule 14D-9.
Pursuant to the terms of the Merger Agreement, none of the representations
and warranties made in the Merger Agreement will survive after the Effective
Time.
CONDUCT OF COMPANY'S BUSINESS PENDING MERGER. The Merger Agreement provides
that, during the period from August 28, 2000 to the Effective Time, except
(i) as set forth in the Company's disclosure
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schedule to the Merger Agreement or (ii) as expressly contemplated by the Merger
Agreement, without the prior written consent of Parent, the Company will not,
and will cause each of its subsidiaries not to:
(i) conduct the business of the Company and its subsidiaries other than
in the ordinary and usual course, or fail to use reasonable efforts to
preserve intact its business organizations and assets and maintain its
rights, franchises and existing relations with clients, customers,
suppliers, employees and business associates;
(ii) (a) enter into any new line of business, (b) incur or commit to any
capital expenditures or (C) otherwise engage in any practice, take any
action, or enter into any transaction which would cause any of the Company's
representations or warranties in respect of the absence of certain changes
or events to be untrue in any material respect;
(iii) issue, sell or otherwise permit to become outstanding, or authorize
the creation of, any additional shares of capital stock of the Company or
any of its subsidiaries or any rights to acquire such capital stock, or
enter into any agreement with respect to the foregoing, other than
(1) Shares issuable pursuant to the terms of outstanding Company Options and
certain disclosed commitments, or (2) grants of options and stock purchase
rights to employees or replacements of executive officers (but no other
executive officers) under existing Company share plans in the ordinary
course of business which (A) have vesting and termination provisions that
are consistent with past practice, but no more advantageous than, those
vesting and termination provisions provided in the Company's current forms
of option agreements and (B) have an exercise price not less than fair
market value;
(iv) (a) declare, set aside for payment or pay any dividend or other
distribution (whether in cash, stock or property) on or in respect of, or
declare or make and distribution on any shares of capital stock of the
Company or any of its subsidiaries, or (b) adjust, split, combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock;
(v) (a) hire or otherwise enter into any arrangement with any executive
officer or (b) subject to certain exceptions, enter into, amend, modify or
renew any employment, consulting, severance or similar contract with any
employee or grant any salary or wage increase or increase any employee
benefit (including incentive or bonus payments), subject to certain
exceptions;
(vi) except as required by applicable law or as contemplated by the
Merger Agreement, enter into, establish, adopt or amend any employee
benefit, plan or other arrangement in respect of any director, officer or
employee of the Company or any of its subsidiaries;
(vii) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization or sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of, any of its assets except in
the ordinary course of business, consistent with past practices, or as
contemplated by the Merger Agreement;
(viii) (a) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets (other than the
acquisition of assets used in the operations of the business of the Company
and its subsidiaries in the ordinary course) or (b) except in the ordinary
course of business consistent with past practice, enter into, or agree to
enter into any joint venture or partnership, or any discussions with respect
to any joint venture or partnership;
(ix) amend the certificate of incorporation, bylaws or similar
organizational documents of the Company or any of its subsidiaries;
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(x) (a) subject to certain customary exceptions, change any accounting
methods in effect at January 31, 2000, (b) change its fiscal year or
(c) make any material tax election;
(xi) subject to certain exceptions, settle any material claim, action or
proceeding;
(xii) incur any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practice;
(xiii) except as otherwise explicitly permitted by the Merger Agreement,
knowingly take any action that is reasonably likely to result in any of the
conditions to the Merger not being satisfied; or
(xiv) agree to, commit to or enter into any agreement to take any of the
actions referred to in (i) through (xiii) above.
ACQUISITION PROPOSALS. (a) The Company has agreed in the Merger Agreement
that it will not, and will cause its officers, directors, agents, advisors and
affiliates not to, solicit or encourage inquiries or proposals with respect to,
or engage in any negotiations concerning, or provide any confidential
information to, or have any discussions with, any person relating to any
Acquisition Proposal (as hereinafter defined), other than the transactions
contemplated by the Merger Agreement; provided, that nothing contained in the
Merger Agreement shall prevent the Company or the Board of Directors of the
Company from (i) providing (or authorizing the provision of) information to, or
engaging in (or authorizing) discussions or negotiations with, any person who
has made a bona fide written Acquisition Proposal received after the date of the
Merger Agreement which did not result from a breach of the Company's commitment
not to solicit or cause others to solicit as provided above; or
(ii) recommending such an Acquisition Proposal to its stockholders (and in
connection therewith withdrawing its favorable recommendation to stockholders to
accept the Offer and approve the Merger Agreement), if and only to the extent
that, (x) in the case of actions referred to in clause (i), the Board of
Directors of the Company determines in good faith that such Acquisition Proposal
has a reasonable probability of resulting in a Superior Proposal (as hereinafter
defined) or, in the case of actions referred to in clause (ii), is a Superior
Proposal, (y) in the case of actions referred to in each of clauses (i) and
(ii), the Board of Directors of the Company, after having consulted with and
considered the advice of outside counsel to such Board, determines in good faith
that providing such information or engaging in such negotiations or discussions,
or making such recommendation, is required in order to discharge the directors'
fiduciary duties in accordance with the DGCL and (z) the Company receives from
such person a confidentiality agreement substantially in the form of the
confidentiality agreement by and between Parent and the Company, dated July 27,
2000 (which shall not preclude the making of any Acquisition Proposal).
For purposes of the Merger Agreement, a "Superior Proposal" means any
Acquisition Proposal by a third party on terms which the Board of Directors of
the Company determines in its good faith judgment, after consultation with its
financial advisors, to be more favorable to stockholders than the Merger and the
other transactions contemplated by the Merger Agreement, (x) after taking into
account the likelihood and timing of consummation of such transaction on the
terms set forth therein, taking into account all legal, financial (including the
financing terms of any such proposal), regulatory and other aspects of such
proposal and any other relevant factors permitted under applicable law, (y)
after giving Parent the greater of (i) five business days following Parent's
receipt of certain specified information from the Company or (ii) three business
days after receipt by Parent of the notice specified in this clause (y) to
respond to such third-party Superior Proposal once the Board of Directors of the
Company has notified Parent that in the absence of any further action by Parent
it would consider such Acquisition Proposal to be a Superior Proposal, and (z)
then taking into account any amendment or modification to the Merger Agreement
proposed by Parent.
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"Acquisition Proposal" means any offer or other proposal which, if
consummated, would result in an Acquisition Transaction; provided that solely
for purposes of the definition of Superior Proposal, all references to 20% in
the definition of Acquisition Transaction shall be deemed references to 50%.
"Acquisition Transaction" means a transaction or series of transactions
that, directly or indirectly, constitutes an acquisition by a person (including
a group of persons that would qualify as a "group" within the meaning of
Section 13(d) of the Exchange Act) of (A) assets or businesses that constitute
or represent more than 20% of the total revenue, operating income, assets or
earnings before interest, taxes, depreciation and amortization of the Company
and its subsidiaries, taken as a whole, or (B) more than 20% of the outstanding
shares of the voting securities of the Company or capital stock of, or other
equity or voting interests in, any subsidiary or subsidiaries of the Company
which, taken together, directly or indirectly hold at least the share of assets
or businesses referred to in clause (A) above, whether by means of (a) a merger,
share exchange or consolidation, or any similar transaction, (b) a purchase,
lease or other sale, transfer or disposition, or (c) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise).
The Company also agreed to immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of the
Merger Agreement with any parties other than Parent, with respect to any of the
foregoing. The Company is required to promptly (within 24 hours) advise Parent
following the receipt by it of any Acquisition Proposal and the material terms
thereof (including the identity of the person making such Acquisition Proposal),
and advise Parent of any material developments (including any change in such
terms) with respect to such Acquisition Proposal as promptly as practicable
after the occurrence thereof.
(b) Nothing contained in the Merger Agreement prohibits the Company or the
Board of Directors of the Company from notifying any third party that contacts
the Company on an unsolicited basis after the date of the Merger Agreement
concerning an Acquisition Proposal of the Company's obligations under the Merger
Agreement.
(c) Nothing contained in the Merger Agreement prohibits the Board of
Directors of the Company from complying with Rule 14d-9 and Rule 14e-2 under the
Exchange Act with regard to a tender or exchange offer by a third party or from
making such disclosure as may be required by applicable law.
COMMERCIALLY REASONABLE EFFORTS TO CONSUMMATE OFFER AND MERGER. The parties
to the Merger Agreement have agreed to use their respective commercially
reasonable efforts in good faith to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or desirable, or
advisable under applicable law so as to permit consummation of the transactions
contemplated by the Merger Agreement. The parties to the Merger Agreement have
also agreed to cooperate and to use their respective commercially reasonable
efforts to prepare all documentation, and to effect all filings, notices,
applications, consents, registrations, approvals, permits or authorizations
with, to, or of governmental authorities necessary to consummate the
transactions contemplated by the Merger Agreement as promptly as reasonably
practicable. Parent has agreed to use its commercially reasonable efforts, and
the Company has agreed to cooperate fully with Parent, to prevent or eliminate
any impediments under any antitrust, competition or trade regulation laws that
are asserted by any governmental entity with respect to the Offer or the Merger,
except that Parent is not obligated under the Merger Agreement to waive any
material rights or agree to any material limitations on its operations or to
dispose of any material asset or collection of assets prior to, at, or after the
Closing Date.
EMPLOYEE BENEFITS. The Merger Agreement provides that the employees of the
Company and its subsidiaries as of the Effective Time shall, during the period
commencing on the Effective Time and ending on the first anniversary of the
Effective Time, be provided with employee benefits that are no less advantageous
in the aggregate (at Parent's discretion) to either (a) benefits provided to
such
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employees as a group immediately prior to the Effective Time or (b) the benefits
provided to similarly situated employees of the Parent.
ADDITIONAL COVENANTS. In addition to the covenants noted above, the parties
to the Merger Agreement have agreed to certain other covenants and agreements,
including with respect to (i) Parent's access to the Company's and each
subsidiary's offices and other facilities, books and records, and financial and
operating data (except for competitively sensitive information or as limited by
applicable law), (ii) in the event Offeror acquires less than 90% of the Shares
in the Offer, any proxy statement or special stockholder meeting of the Company,
(iii) the issuances of press releases and other public statements with respect
to the transactions contemplated by the Merger Agreement, (iv) notification of
certain matters which may impede or prevent consummation of the Offer or the
Merger and (v) Parent's ability to review tax returns of the Company and its
subsidiaries before they are filed.
CONDITIONS TO OBLIGATIONS OF ALL PARTIES TO MERGER AGREEMENT. The
respective obligations of each of Parent, Offeror and the Company to consummate
the Merger are subject to the fulfillment or written waiver by Parent and the
Company prior to the Closing Date of each of the following conditions:
(i) if required by applicable law, the Merger and the Merger Agreement
shall have been approved by the affirmative vote of the stockholders of the
Company by the requisite vote in accordance with applicable law;
(ii) all approvals, consents and authorizations of, filings and
registrations with, and applications and notifications to all United States
or foreign government, any state or other political subdivision thereof, any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, without
limitation, the Commission, New York Stock Exchange, Nasdaq or any other
government authority, agency, department, board, commission or
instrumentality and any court tribunal or arbitrator(s) of competent
jurisdiction ("Governmental Authority") required for the consummation of the
Merger shall have been obtained or made and shall be in full force and
effect and all waiting periods required by law shall have expired, except
that none of the preceding shall be deemed obtained or made if it shall
require Parent or any of its subsidiaries to waive any material rights or
agree to any material limitations on its operations or to dispose of any
material asset or collection of assets prior to, at, or after the Closing
Date;
(iii) no Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is in effect and restrains, enjoins or otherwise prohibits the
consummation of the Merger or the other transactions contemplated by the
Merger Agreement; and
(iv) Offeror shall have purchased Shares pursuant to the Offer.
CONDITIONS TO OBLIGATIONS OF OFFEROR. See Section 15, "Certain Conditions
to Offeror's Obligations."
INDEMNIFICATION; CONTINUANCE OF EXISTING INDEMNIFICATION PROVISIONS. In the
Merger Agreement, Parent has agreed, from and after the Effective Time, to
indemnify and hold harmless each present and former director and officer of the
Company or any of its subsidiaries, determined as of immediately prior to the
Effective Time (the "Indemnified Parties"), against any and all costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities arising from, relating to or otherwise in respect
of, any actual or threatened claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time (including with respect to the
transactions contemplated by the Merger Agreement), to the fullest
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extent permitted by law. Parent shall not be required to indemnify any
Indemnified Party if it is determined that the Indemnified Party acted in bad
faith and not in a manner such Indemnified Party believed to be in or not
opposed to the best interests of the Company. Parent shall, and shall cause the
Surviving Corporation to, advance expenses as incurred to the fullest extent
permitted under applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification. Any Indemnified Party
wishing to claim indemnification under the Merger Agreement, upon learning of
any such claim, action, suit, proceeding or investigation, must promptly notify
Parent thereof, but the failure to so notify shall not relieve Parent of any
liability it may have to such Indemnified party to the extent such failure does
not materially prejudice Parent. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), after the Effective Time (a) Parent or the Surviving Corporation shall
have the right to assume the defense and Parent shall not be liable to such
Indemnified Parties for any legal fees or other expenses of the Indemnified
Parties incurred in defense thereof except that if Parent or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are issues which raise conflicts of interest between
Parent or the Surviving Corporation and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and Parent or the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; provided,
however, that Parent shall be obligated to pay for only one firm of counsel
(unless the use of one counsel for such Indemnified Parties would present such
counsel with a conflict of interest) for all Indemnified Parties in any
jurisdiction; (b) the Indemnified Parties will cooperate in the defense of any
such matter; and (c) Parent shall not be liable for any settlement effected
without its prior written consent. Parent shall not have any obligation under
the Merger Agreement to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated by the Merger Agreement is prohibited by applicable law. In
addition, for a period of six years after the Effective Time, Parent will
provide directors' and officers' liability insurance that serves to reimburse
the present and former officers and directors of the Company or any of the
Company's subsidiaries (determined as of the Effective Time) with respect to
claims against such directors and officers arising from facts or events which
occurred before the Effective Time. Pursuant to the Merger Agreement, this
insurance must contain at least the same coverage and amounts, and contain terms
and conditions no less advantageous in any material respect, as that coverage
currently provided by the Company. In no event, however, will Parent be required
to expend per annum more than 150 percent of the current aggregate annual amount
expended by the Company (such amount, the "Insurance Amount") to maintain or
procure such directors' and officers' insurance coverage and if Parent is unable
to maintain or obtain the insurance required under the Merger Agreement, Parent
is obligated to use its commercially reasonable efforts to obtain as much
comparable insurance as is available for the Insurance Amount.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time (notwithstanding approval of the Merger Agreement by the
stockholders of the Company):
(i) by mutual written consent of the Company and Parent;
(ii) by Parent, on the one hand, or the Company, on the other hand, in
the event of either: (a) a breach by the other party of any representation
or warranty contained in the Merger Agreement, which breach cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (b) a breach by the other party of any of
the covenants or agreements contained in the Merger Agreement, which breach
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach and, in the case of clauses
(a) and (b), which breach, individually or in the aggregate with other such
breaches, would cause any of the Offer Conditions, in the case of a breach
by the Company, not to be satisfied or is reasonably likely to prevent,
materially delay or materially impair the ability of the Company, Offeror or
Parent to consummate the Merger and the other transactions contemplated by
the Merger Agreement;
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(iii) by Parent or the Company in the event that the purchase of Shares
pursuant to the Offer has failed to occur on or before February 28, 2001,
except to the extent that such failure arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant to
this clause (which action or inaction constitutes a breach of the Merger
Agreement), provided that either party may elect to extend the term of the
Merger Agreement until not later than April 30, 2001 (the "Drop Dead Date")
if any applicable regulatory approvals required to be obtained to satisfy
conditions set forth in the Merger Agreement shall not have been obtained by
February 28, 2001 but all other conditions to the closing shall have been
fulfilled or capable of being fulfilled by such date;
(iv) by Parent or the Company, if the approval of any governmental
authority required for consummation of the Offer or the Merger and the other
transactions contemplated by the Merger Agreement shall have been denied by
final nonappealable action of such governmental authority, or such
governmental authority shall have requested the permanent withdrawal of any
application therefor;
(v) by Parent, if at any time prior to the purchase of Shares pursuant
to the Offer, the Company's Board of Directors shall have failed to make its
recommendation referred to in the Merger Agreement, withdrawn such
recommendation or modified or changed such recommendation in a manner
adverse to the interests of Parent;
(vi) by Parent, if the Company or its Board of Directors recommends to
the Company's stockholders to accept or accepts a Superior Proposal; or
(vii) by Parent or the Company in the event that the Minimum Tender
Condition shall not have been satisfied 30 business days after all of the
Offer Conditions, except for the Minimum Tender Condition, shall have been
satisfied or waived.
Any termination of the Merger Agreement by Parent or the Company pursuant to
the foregoing provisions will require action by its respective Board of
Directors. If the Merger Agreement is terminated, it will become void and of no
effect with no liability of any party except as described below under
"--Termination Fee"; provided, however, that except as otherwise provided
therein, no such termination shall relieve any party of any liability or damages
resulting from any willful breach of the Merger Agreement.
TERMINATION FEE. The Company has agreed to pay Parent a termination fee of
$22.5 million in cash (the "Termination Fee") in the event that (a) an
Acquisition Proposal shall have been made to the Company or its stockholders or
an Acquisition Proposal shall have become publicly known and (b) except as
provided below, on or following the date on which such Acquisition Proposal is
made or becomes publicly known:
(i) the Merger Agreement is terminated by Parent in the event of a
breach by the Company of any representation, warranty, covenant or agreement
which is not cured within 30 days of notice and which individually or in the
aggregate with other such breaches would cause the condition set forth in
Section 15, "Certain Conditions to Offeror's Obligations," relating to the
representations, warranties and covenants of the Company not to be satisfied
or would be reasonably likely to prevent, materially delay or materially
impair the ability of the Company, Offeror or Parent to consummate the
Merger and the other transactions contemplated by the Merger Agreement;
(ii) the Company has received an Acquisition Proposal within the 60 day
period prior to termination and the Merger Agreement is terminated by either
the Company or Parent as a result of Parent's failure to purchase Shares
pursuant to the Offer prior to February 28, 2001, provided that either party
may extend the period until April 30, 2001 if all conditions to the Closing
shall have been fulfilled or are capable of being fulfilled, except for any
applicable regulatory condition;
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(iii) the Merger Agreement is terminated by the Parent due to the
recommendation of a Superior Proposal by the Board of Directors of the
Company;
(iv) the Merger Agreement is terminated by Parent because the Board of
Directors of the Company has failed to make, withdrawn, modified or changed
its recommendation in respect of the Offer, the Merger or the Merger
Agreement; or
(v) if the Offer is terminated by Parent prior to the purchase of Shares
because of a failure of at least 50% of the Shares on a fully diluted basis
to be tendered in the Offer and prior to the termination of the Offer, an
Acquisition Proposal shall have been made to the Company or its stockholders
or shall have been made publicly known, and concurrently with such
termination or within six months after such termination, either
(x) the Company shall have entered into an agreement to engage in an
Acquisition Transaction or an Acquisition Transaction approved by the
Board of Directors of the Company shall have occurred, or
(y) the Board of Directors of the Company shall have authorized,
recommended or approved an Acquisition Transaction or shall have publicly
announced an intention to authorize, recommend or approve an Acquisition
Transaction.
Parent has agreed to pay the Company a cash fee of $22.5 million if:
(i) prior to the termination of the Merger Agreement pursuant to a
failure to purchase the Shares by the Drop Dead Date, the Antitrust Division
of the United States Department of Justice or the Federal Trade Commission
(the "Antitrust Authorities"), obtains a non-appealable, final injunction
enjoining consummation of the Merger or an Antitrust Authority obtains a
preliminary injunction enjoining the Merger following an evidentiary hearing
on the merits at which Parent and the Company have been afforded an
opportunity to present in court testimony from fact and expert witnesses;
(ii) after the Drop Dead Date, Parent terminates the Merger Agreement
and at such time (A) an Antitrust Authority shall have commenced an
injunctive action seeking to enjoin consummation of the Merger or asserted
in writing an intention to file such an injunctive action, (B) the Company
shall have complied, and shall be in compliance with, certain of its
covenants set forth in the Merger Agreement, and (C) the condition set forth
in Section 15, "Certain Conditions to Offeror's Obligations," relating to
the representations, warranties and covenants of the Company shall have been
satisfied by the Company;
(iii) after the Drop Dead Date, the Company terminates the Merger
Agreement pursuant to a failure to purchase the Shares by the Drop Dead Date
and at such time (A) an Antitrust Authority shall have commenced an
injunctive action seeking to enjoin consummation of the Merger or asserted
in writing an intention to file such an injunctive action, (B) Parent shall
not be contesting such injunctive action in good faith with a reasonable
belief that Parent will prevail, (C) the Company shall have complied, and
shall be in compliance with, certain of its covenants set forth in the
Merger Agreement, and (D) the condition set forth in Section 15, "Certain
Conditions to Offeror's Obligations," relating to the representations,
warranties and covenants of the Company shall have been satisfied by the
Company; or
(iv) at any time after 90 days from the Drop Dead Date, the Company
shall terminate the Merger Agreement and at such time (A) an Antitrust
Authority shall have commenced an injunctive action seeking to enjoin
consummation of the Merger or asserted in writing an intention to file such
an injunctive action, (B) the Company shall have complied, and shall be in
compliance with, certain of its covenants set forth in the Merger Agreement,
and (C) the condition set forth in
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Section 15, "Certain Conditions to Offeror's Obligations," relating to the
representations, warranties and covenants of the Company shall have been
satisfied by the Company.
Any payment required to be made under the paragraph above shall be payable,
without setoff, by wire transfer in immediately available funds to an account
specified by the Company, not later than three business days following such
termination.
If either party fails to promptly pay the foregoing amount and a judgment is
rendered against either the Company or Parent for such fee, the Company shall
pay to Parent or Offeror or Parent or Offeror shall pay to the Company, as the
case may be, its costs and expenses in connection with such suit, together with
interest on the amount of the fee at the prime rate of Citibank, N.A. in effect
on the date such payment was required to be made.
The Merger Agreement provides that the termination fee described above shall
be the sole and exclusive remedy of Parent upon termination of the Merger
Agreement pursuant to the Company's knowing and intentional breach of its
representations, warranties, covenants or agreements set forth in the Merger
Agreement. Notwithstanding anything in the Merger Agreement to the contrary, in
no event shall the amount payable by the Company exceed $22.5 million.
Other than as set forth above, the Merger Agreement provides that all fees,
costs and expenses incurred in connection with the transactions contemplated by
the Merger Agreement shall be paid by the party incurring such fees and
expenses, whether or not the Offer or the Merger is consummated.
AMENDMENTS, EXTENSIONS AND WAIVERS. At any time prior to the Effective
Time, a party to the Merger Agreement may, by written instrument signed on
behalf of such party, (a) extend the time for the performance of any of the
obligations or other acts of the other parties thereto, (b) waive any
inaccuracies in the representations and warranties contained therein or in any
document delivered pursuant thereto by any other party or (c) subject to the
following sentence, waive compliance by any other party with any of the
agreements or conditions contained therein. Also, to the extent permitted by
applicable law, the Merger Agreement may be amended by a written instrument
signed on behalf of each of the parties; provided, however, that after the
Company's stockholders have approved the Merger Agreement, no amendment may be
made which by law requires further approval of the Company's stockholders
without the approval of such stockholders. Any amendment, extension or waiver as
described in this paragraph will require, in the case of Parent or the Company,
action by its Board of Directors or, with respect to any amendment of the Merger
Agreement, a duly authorized committee of its Board of Directors.
ASSIGNMENT UNDER THE MERGER AGREEMENT OR THE STOCKHOLDER AGREEMENTS. The
Company may not assign any of its rights and obligations under the Merger
Agreement. Parent or Offeror may assign any of its rights and obligations under
the Merger Agreement or the Stockholder Agreements to any direct or indirect
wholly owned subsidiary of Parent (but no such assignment will relieve Parent of
its obligations under the Merger Agreement) and any of Parent, Offeror or any
direct or indirect wholly owned subsidiary of Parent may purchase Shares in the
Offer.
THE STOCKHOLDER AGREEMENTS
BACKGROUND. In contemplation of entering into the Merger Agreement, and in
order to expedite the acquisition of the Company, Parent and Parent Sub entered
into the Stockholder Agreements with the following parties:
- Gadi Maier, Marlene Maier Annuity Trust (1999), Gadi Maier Annuity Trust
(1999) and Gadi Maier & Marlene Maier Trust 1999;
- Richard D.C. Whilden, The Whilden Family Revocable Trust Dated June 17,
1988 and The Whilden Family Irrevocable Trust Dated October 1999;
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- U.S. Venture Partners V, L.P., USVP V International, L.P., 2180 Associates
Fund V, L.P. and USVP Entrepreneur Partners V, L.P.;
- Brentwood Associates VII, L.P. and Brentwood Affiliates Fund, L.P.;
- Ambassadors International, Inc.; and
- American Express Travel Related Services Company, Inc. ("AmEx Travel").
As of August 23, 2000, the Stockholder Parties currently hold, in the
aggregate, 10,017,777 shares of Common Stock representing approximately 28.53%
of the Shares. In addition, AmEx Travel holds warrants to purchase 1,460,046
Shares which are exercisable within 60 days of September 1, 2000. Gadi Maier and
Richard D.C. Whilden currently hold 793,675 and 19,167 options to purchase
Shares, respectively, which are exercisable within 60 days of September 1, 2000.
GRANT AND EXERCISE OF OPTION. The Stockholder Parties granted to Offeror
the Option to purchase all, and not less than all, of their Shares, whether now
owned or later acquired for $17.75 per Share (or such higher price as may be
paid pursuant to the Offer). The Option may be exercised, at any time after the
expiration or termination of all waiting periods under the Hart-Scott-Rodino Act
applicable to such exercise, by written notice to the Stockholder Parties
specifying a date and time for the closing, which shall be not earlier than two
business days nor later than 30 business days from the date of such notice, and
after the Offer has expired or been terminated.
Notwithstanding the provisions described in the previous paragraph, if the
Company receives an Acquisition Proposal which the Company in good faith, after
compliance with the provisions described under "The Transaction Documents--The
Merger Agreement--Nonsolicitation Obligations and Exceptions," believes is a
Superior Proposal and gives the required written notice to Parent of such
Superior Proposal, Parent and Offeror will not exercise the Option (if it is
then exercisable) for a period commencing on the date of such written notice and
ending on the first to occur of (i) written notice to Parent and Offeror from
the Company that such Superior Proposal is not being pursued, which notice shall
be provided by the Company to Parent and Offeror in writing promptly upon any
such determination and (ii) the date on which the Company receives a written and
binding Offer from Parent that the Board of Directors of the Company determines
is at least as favorable, from a financial point of view, to the stockholders of
the Company as the Superior Proposal (such period, the "Review Period").
If Offeror exercises the Option and the Merger Agreement remains in full
force and effect (i) the Shares will be treated as if purchased by Offeror in
the Offer and (ii) Parent and Offeror will ensure that the transactions
contemplated by the Merger Agreement are consummated. If Offeror exercises the
Option and the Merger Agreement is not in full force and effect (i) Parent and
Offeror will cause the Merger Agreement to again become in full force and effect
(or to cause a merger agreement containing the same economic terms to become in
full force and effect) and (ii) Parent and Offeror will ensure that the
transactions contemplated by the Merger Agreement (or any replacement merger
agreement) are fully consummated. Offeror may not exercise the Option in the
event that it has not purchased that number of Shares (when aggregated with the
number of Shares Offeror has the option to purchase under the Stockholder
Agreements and similar stockholder agreements entered into with other
stockholders of the Company) sufficient to satisfy the Minimum Tender Condition.
EXPIRATION OF OPTION. The Option shall expire on the earliest of (a) the
purchase of the Shares by the Offeror pursuant to the Offer, (b) the Effective
Time, (c) the termination of the Merger Agreement in accordance with its terms,
and (d) two business days after termination or expiration of the Offer.
VOTING. The Stockholder Parties have agreed that, until the expiration of
the Option, they will (a) vote all Shares in favor of the Merger and in favor of
any other action or agreement which would,
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in the reasonable opinion of Parent and Offeror, facilitate the transactions
contemplated in the Merger Agreement; (b) not vote any Shares in favor of any
action or agreement which would result in a breach in any material respect of
any covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement; and (c) vote all Shares against any action or
agreement which would impede, interfere with or attempt to discourage the Offer
or the Merger, including but not limited to (i) any competing Acquisition
Proposal, (ii) any change in the management or board of directors of the
Company, except as otherwise agreed to in writing by Offeror, (iii) any material
change in the capitalization or dividend policy of the Company, or (iv) any
other material change in the Company's corporate structure or business. Also,
the Stockholder Parties have irrevocably (except as described in the following
sentence) appointed James E. Murphy, James F. Brashear and Jeffery M. Jackson as
their proxies, to vote the Shares, at any meeting of stockholders or with
respect to any action of the stockholders by written consent, in such manner as
such proxies shall in their reasonable discretion deem proper, and such proxy
will terminate upon the expiration of the Option. The foregoing proxy revokes
any prior proxy granted by the Stockholder Parties with respect to the Shares.
The obligations described in this paragraph will not apply during any Review
Period, during which the Stockholder Parties may revoke the foregoing proxy as
long as it reinstates such proxy promptly upon expiration of such Review Period
(unless the Company accepts a Superior Proposal, in which case the proxy will
terminate).
RESTRICTIONS ON TRANSFER. The Stockholder Parties generally agreed, prior
to the expiration of the Option, not to dispose of or enter into any arrangement
for the disposition of any Shares, not to deposit any Shares into a voting trust
or grant any proxies or enter into any voting agreement with respect to any
Shares, and not to take or omit to take any action that would prevent the
Stockholder Parties from delivering the Shares to Offeror or otherwise
performing its obligations under the Stockholder Agreements.
NO SOLICITATION. Other than to the extent permitted as described under
"--The Merger Agreement--Acquisition Proposals," the Stockholder Parties agreed,
prior to the expiration of the Option, not to initiate, solicit or knowingly
encourage, directly or indirectly, any inquiries or the making or implementation
of any proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, or enter into any discussions or negotiations in
furtherance of such inquiries or to obtain an Acquisition Proposal, or agree to
or endorse any Acquisition Proposal.
ADDITIONAL COVENANTS OF AMEX TRAVEL AND GADI MAIER. In addition to the
above covenants, AmEx Travel agreed not to exercise any right or option to
abstain from voting in favor of any sale of the Company to a non-approved buyer
under the Standstill and Bring Along Agreement, dated September 14, 1999,
between AmEx Travel and the Company. Gadi Maier agreed to certain noncompetition
provisions.
REPRESENTATIONS AND WARRANTIES. The Stockholder Parties made customary
representations and warranties to Parent and Offeror, including with respect to
(i) their record or beneficial ownership of, and right to vote, the Shares,
(ii) their power and authority to execute and deliver the Stockholder Agreements
without obtaining third-party consents, the noncontravention and nonviolation by
the Stockholder Agreements of the other arrangements of the Company and of
judgments, decrees, orders and laws applicable to it, and the valid, binding and
enforceable effect of the Stockholder Agreements, (iii) the Shares being free of
all other liens, encumbrances, voting or disposition arrangements (except for
certain enumerated agreements), and (iv) upon the exercise of the Option, the
transfer of good and marketable title to the Shares to Offeror, free of all
liens and encumbrances (except as created by Offeror or any federal or state
securities laws).
Each of Parent and Offeror also made customary representations and
warranties under the Stockholder Agreements, including with respect to (i) its
incorporation, (ii) its power and authority to enter into and perform its
obligations under the Stockholder Agreements, (iii) its authorization,
36
<PAGE>
execution and delivery of the Stockholder Agreements, and (iv) the valid,
binding and enforceable effect of the Stockholder Agreements.
ASSIGNMENT. Parent and Offeror may assign or delegate in their sole
discretion any or all of their rights (including, without limitation, the
Option), interests or obligations under the Stockholder Agreements to any,
direct or indirect, wholly owned subsidiary of Parent, but no such assignment
shall relieve Parent of any of its obligations hereunder.
THE EMPLOYMENT AGREEMENT
In connection with the Merger Agreement, on August 27, 2000, Parent Sub
entered into an employment agreement (the "Employment Agreement") with Gadi
Maier (the "Executive"). Pursuant to the terms of the Employment Agreement,
effective as of the Effective Time (the "Employment Date"), the Executive will
be employed as President of a business unit of Parent, and will be an elected
officer of Parent Sub. Either the Executive or Parent Sub may terminate the
Executive's employment at any time.
The Executive will receive an annual salary of $315,000, which will be
reviewed annually. The Executive will be eligible to participate in Parent Sub's
annual incentive bonus plan for the year 2001, which will pay awards based on
the Company meeting pre-determined financial objectives. The Executive's award
for 2001 will be at least 27.5% of the Executive's 2001 base salary.
The Executive will be eligible to participate in Parent's Long-Term
Incentive Plan ("LTIP"). The Executive will be granted a non-qualified stock
option under the LTIP to purchase 100,000 shares of common stock of Parent with
an exercise price equal to the fair market value of common stock of Parent as of
the Employment Date. Such options will be subject to the same vesting schedule
approved by Parent's board of directors for the 2001 option grants made to other
Parent Sub officers. The Executive will also receive a number of restricted
shares of Parent stock under the LTIP, equal to the Executive's initial annual
base salary divided by the fair market value of Parent stock as of the
Employment Date. Such restricted stock shall vest quarterly over two years.
The Executive will be eligible to participate in Parent's 401(k) savings
plan, Parent's life and health insurance programs and Parent's employee stock
purchase plan. The Executive will also participate in a supplemental executive
retirement plan and will be eligible to receive a number of other benefits and
perquisites comparable to those provided to Parent Sub executive vice presidents
at the time of the Employment Date.
If, within two years of the Employment Date, the Executive's employment is
terminated without "cause" or the Executive resigns following his "constructive
termination," Parent Sub will (i) pay the Executive an amount equal to his
target bonus, plus the greater of (a) his base salary for the remainder of the
two year period, or (b) his base salary for a one year period; (ii) accelerate
the vesting on his restricted stock on a pro-rata basis; and (iii) permit him to
keep certain computer equipment that he has been using for business.
In addition, Parent Sub will enter into an executive termination agreement,
which will determine the Executive's benefits in the event of a termination
resulting from a "change in control." The executive termination agreement will
be comparable to those being provided to other Parent Sub executive vice
presidents.
For a period of two years following the termination of the Executive's
employment, the Executive will not solicit employees of Parent Sub or its
affiliates. The Executive will not disparage Parent Sub or its affiliates or
their employees, officers and directors.
37
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
On August 30, 2000, Parent Sub and Offeror entered into the Assignment and
Assumption Agreement whereby Parent Sub assigned all of its rights and
obligations under the Merger Agreement and Stockholder Agreements to Offeror. As
a result of the Assignment and Assumption Agreement, all references to Merger
Sub in the Merger Agreement and the Stockholder Agreements shall now refer to
Offeror.
14. DIVIDENDS AND DISTRIBUTIONS.
For a discussion of the restrictions imposed by the Merger Agreement on the
ability of the Company and its Subsidiaries to pay dividends or make
distributions, see Section 13, "The Transaction Documents--The Merger
Agreement--Conduct of Company's Business Pending Merger."
15. CERTAIN CONDITIONS TO OFFEROR'S OBLIGATIONS.
Offeror shall not be obligated to accept for payment or pay for, subject to
Rule 14e-l(c) under the Exchange Act, any Shares not theretofore accepted for
payment and may terminate or amend the Offer if (a) the Minimum Tender Condition
is not satisfied immediately prior to the expiration of the Offer, (b) any
applicable waiting period under the Hart-Scott-Rodino Act shall not have expired
or been terminated prior to the expiration of the Offer or (c) prior to the
expiration of the Offer, any of the following conditions exist or shall occur:
(i) Parent is unable to obtain any approval, consent, authorization or
clearance from any or all Governmental Authorities as required for the
consummation of the Merger or one of the preceding shall require Parent or
any of its Subsidiaries to waive any material rights or agree to any
material limitations on its operations or to dispose of any material asset
or collection of assets prior to, at, or after the Closing Date;
(ii) a Governmental Authority of competent jurisdiction has enacted,
issued, promulgated, enforced or entered any type of restraint which is in
effect and restrains, enjoins or otherwise prohibits consummation of the
Merger or the purchase of the Shares under the Offer;
(iii) (A) the representations and warranties of the Company set forth in
the Merger Agreement shall have failed to be true and correct in any respect
(in the case of any representation or warranty containing materiality or
knowledge qualifiers) or in any material respect (in the case of those
representations or warranties not containing materiality or knowledge
qualifiers), as applicable as of the date of the Merger Agreement and as of
the date of the purchase of the Shares under the Offer as though made on and
as of the date of the purchase of the Shares under the Offer (except that
representations and warranties that by their terms speak as of the date of
the Merger Agreement or some other date shall be true and correct only as of
such date); provided, however, that if the condition set forth in this
sentence cannot be satisfied due to occurrences, changes or events after the
date of the Merger Agreement that, taken as a whole, could not reasonably be
expected to have a material adverse effect on the Company, then such
condition shall be deemed satisfied notwithstanding any such occurrences,
changes or events. Parent and Offeror shall have received a certificate,
dated as of the purchase of the Shares under the Offer, signed on behalf of
the Company by the Chief Executive Officer and the Chief Financial Officer
of the Company to such effect; or (B) the Company shall have failed to
perform in all material respects any obligation required to be performed by
it under the Merger Agreement at or prior to the purchase of the Shares
under the Offer, and Parent shall have received a certificate, dated as of
the date of purchase of the Shares under the Offer, signed on behalf of the
Company by the Chief Executive Officer and the Chief Financial Officer of
the Company to such effect; or
(iv) the Merger Agreement shall have been terminated in accordance with
its terms.
38
<PAGE>
16. CERTAIN REGULATORY AND LEGAL MATTERS.
Except as described in this Section 16, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, as well as certain representations
made to Parent and Offeror in the Merger Agreement by the Company, neither
Parent nor Offeror is aware of any material pending legal proceedings relating
to the Offer, nor of any regulatory requirements which must be complied with or
regulatory approvals which must be obtained in connection with the Offer, in
each case which would be material to a stockholder's decision whether to sell,
tender or hold Shares. Should compliance with any such regulatory requirement or
the obtaining of any such regulatory approval be required, Parent and Offeror
currently contemplate that they would seek to comply with such requirement or
obtain such permit, except as described below under "--State Takeover Laws," but
Offeror 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, subject, however, to Offeror's right to decline to purchase Shares
if any of the Offer Conditions shall not have been satisfied. There can be no
assurance that, if necessary, any such requirement would be complied with or
approval be obtained, or would be complied with or obtained without substantial
conditions, or that adverse consequences might not result to the Company's
business or that certain parts of the Company's business might not have to be
disposed of if any such requirement was not complied with or approval obtained,
and in certain such events Offeror could decline to accept for payment, or pay
for, any Shares tendered. See Section 15, "Certain Conditions to Offeror's
Obligations."
STOCKHOLDER LITIGATION. The Company is not currently involved in any
stockholder litigation.
ANTITRUST. Under the Hart-Scott-Rodino Act and the rules promulgated
thereunder by the Federal Trade Commission (the "FTC"), the acquisition of
Shares by Offeror pursuant to the Offer may not be consummated unless certain
information has been furnished to the Anti-Trust Division of the Department of
Justice (the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The rules under the Hart-Scott-Rodino Act
require the filing of a Notification and Report Form (the "Form") with the
Antitrust Division and the FTC. The waiting period under the Hart-Scott-Rodino
Act with respect to the Offer will expire at 11:59 p.m., Washington, D.C. time,
on the 15th day after the Form is filed, unless early termination of the waiting
period is granted. In addition, the Antitrust Division or the FTC may extend
such waiting period by requesting additional information or documentary
material. If such a request is made with respect to the Offer, the waiting
period related to the Offer will expire at 11:59 p.m., Washington, D.C. time, on
the 10th day after substantial compliance with such request. With respect to
each acquisition, the Antitrust Division or the FTC may issue only one request
for additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. Expiration or
termination of applicable waiting periods under the Hart-Scott-Rodino Act is a
condition to Offeror's obligation to accept for payment and pay for Shares
tendered pursuant to the Offer.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Offeror's proposed acquisition of
Shares of the Company. At any time before or after Offeror's purchase of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by Offeror or the divestiture of substantial assets of Parent or its
subsidiaries, or of the Company or its Subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made or, if such a challenge is made, of the results thereof.
As of September 1, 2000 Offeror had filed Forms with the Antitrust Division
and the FTC and the Company filed forms with the Antitrust Division and the FTC
on September 11, 2000.
39
<PAGE>
FEDERAL RESERVE BOARD REGULATIONS. Federal Reserve Board Regulations T, U
and X promulgated by the Federal Reserve Board place restrictions on the amount
of credit that may be extended for the purpose of purchasing margin stock
(including the Shares) if such credit is secured directly or indirectly by
margin stock. Because no borrowings secured by margin stock will be borrowed in
order to finance the Offer, Parent and Offeror believe that such regulations are
not applicable to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
EDGAR V. MITE CORP., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. However, in
1987, in CTS CORP. V. DYNAMICS CORP. OF AMERICA, the Supreme Court held that a
state may, as a matter of corporate law and, in particular, with respect to
those laws concerning corporate governance, constitutionally disqualify a
potential acquirer from voting on the affairs of a target corporation without
prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. In that case, the law of the State of
Indiana 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 Company is incorporated under the laws of the State of Delaware. In
general, Section 203 of the DGCL prevents an "interested stockholder" (defined
generally as a person who owns or has the right to acquire 15% or more of the
corporation's outstanding voting stock, or an affiliate or associate thereof)
from engaging in a "business combination" (defined to include a variety of
transactions, including mergers) with a Delaware corporation for three years
following the date such person became an interested stockholder unless, prior to
the date such person became an interested stockholder, the board of directors of
the corporation approved either the transaction in which the interested
stockholder became an interested stockholder or approved the business
combination. Prior to the execution of the Merger Agreement, the Board of
Directors of the Company unanimously approved the Offer, the Merger and the
Merger Agreement, determined that the terms of the Offer and the Merger are fair
to, and in the best interests of, the Company's stockholders, and recommended
acceptance of the Offer and approval of the Merger and the Merger Agreement by
the stockholders of the Company. Accordingly, Section 203 of the DGCL is not
applicable to the Offer and the Merger.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. In the Merger Agreement, the Company has represented that none of those
takeover laws, other than Section 203 of the DGCL, are applicable to the
Company, the Shares, the Offer, the Merger, the Merger Agreement, the
Stockholder Agreements or the transactions contemplated thereby. However, other
than for the assurances provided to Offeror through that representation, Offeror
does not know whether the takeover laws of any state, other than Section 203 of
the DGCL, will, by their terms, apply to the Offer or the Merger or the other
transactions contemplated by the Merger Agreement or the Stockholder Agreements,
and neither Parent not Offeror has attempted to comply with any such laws other
than Section 203 of the DGCL. If any other such laws are so applicable, Parent
and the Company have agreed, in the Merger Agreement, that they and their
respective Board of Directors will grant such approvals and take such lawful
actions as are necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by the Merger Agreement, the
Stockholder Agreements, the Offer and the Merger and otherwise act to eliminate
or minimize the effects of such statute or regulation on such transactions.
Subject to that requirement under the Merger Agreement, should any person seek
to apply any state takeover law, Offeror reserves the right to take such action
as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings, and nothing
in this Offer to Purchase or any action taken in connection
40
<PAGE>
with the Offer or the Merger is intended as a waiver of such right. If it is
asserted that the takeover laws of any state are applicable to the Offer or the
Merger, and an appropriate court does not determine that it is inapplicable or
invalid as applied to the Offer or the Merger, Offeror might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, Offeror might be unable (pursuant to such laws or an
injunction ordered thereunder) to accept for payment, or pay for, any Shares
tendered pursuant to the Offer, or be delayed in continuing or consummating the
Offer and the Merger. In such case, Offeror may not be obligated to accept for
payment, or pay for, any Shares tendered pursuant to the Offer. See Section 15,
"Certain Conditions to Offeror's Obligations."
17. FEES AND EXPENSES.
Except as described in this Section 17, neither Offeror nor Parent (i) will
pay any fees or commissions to any broker or dealer or other person for
soliciting tenders of Shares pursuant to the Offer or (ii) has directly or
indirectly employed, retained or agreed to compensate any person to make
solicitations or recommendations in connection with the Offer. Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by
Offeror for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
Goldman Sachs has provided certain financial advisory services to Parent in
connection with the proposed acquisition of the Company. Parent has agreed to
pay to Goldman Sachs reasonable and customary compensation for its services and
to reimburse it for its out-of-pocket expenses in connection with the Offer. In
addition, Parent has agreed to indemnify Goldman Sachs and certain related
persons against certain liabilities and expenses, including, without limitation,
certain liabilities under the federal securities laws.
Parent has retained D.F. King & Co., Inc. as Information Agent and EquiServe
Trust Company as Depositary in connection with the Offer. The Information Agent
and the Depositary will receive reasonable and customary compensation for their
services and reimbursement for their out-of-pocket expenses in the Offer. The
Depositary and the Information Agent will also be indemnified by Offeror against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
18. MISCELLANEOUS.
Neither Parent nor Offeror is aware of any jurisdiction in which the making
of the Offer or the tender of Shares in connection therewith would be prohibited
by administrative or judicial action pursuant to any valid state statute. If
Parent or Offeror becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto in such state,
Offeror will make a good faith effort to comply with such statute. If, after
such good faith effort, Offeror cannot comply with any such statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. 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 Offeror by one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Parent or Offeror other than as contained in this
Offer to Purchase or in the Letter of Transmittal, and, if any such information
or representation is given or made, it should not be relied upon as having been
authorized by Offeror or Parent. Neither the delivery of this Offer to Purchase
nor any purchase pursuant to the Offer shall, under any circumstances, create
any implication that there has been no change in the affairs of Parent or the
Company since the date as of which information is furnished or the date of this
Offer to Purchase.
41
<PAGE>
Parent and Offeror have filed with the Commission the Schedule TO pursuant
to Section 14(d)(1) of the Exchange Act and Rule 14d3(a)(1) thereunder,
furnishing certain additional information with respect to the Offer. In
addition, the Company has filed with the Commission the Schedule 14D-9 pursuant
to Rule 14d-9 under the Exchange Act, setting forth its recommendation with
respect to the Offer and the reasons for such recommendation and furnishing
certain additional related information. Such schedules and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable at the same places and in the same manner as set forth with
respect to the Company in Section 8, "Certain Information Concerning the
Company" (except that they may not be available at the regional offices of the
Commission).
GETTHERE ACQUISITION CORP.
September 11, 2000
42
<PAGE>
ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT, PARENT SUB AND OFFEROR
The names and ages of the directors, managers and executive officers of
Parent, Parent Sub and Offeror, and their present principal occupations or
employment and five-year employment history, are set forth below. Unless
otherwise indicated, each individual is a citizen of the United States and has
been employed by Parent, Parent Sub or Offeror, as the case may be, for the last
five years. Except as otherwise noted, the directors and executive officers of
Parent, Parent Sub and Offeror have a business address of 4255 Amon Carter
Boulevard, Fort Worth, Texas 76155, with a business telephone number of
817-963-6700.
PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION, OR EMPLOYMENT WITH PARENT;
NAME AND AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------ --------------------------------------------------------
<S> <C>
Edward A. Brennan (66)....................... Director since November 1996. Retired since August 1995,
400 Michigan Ave. Chairman, President and Chief Executive Officer, Sears,
Suite 400 Roebuck & Co. Director of The Allstate Corporation, AMR
Chicago, IL 60611 Corporation, American Airlines, Inc., Dean Foods
Company, Morgan Stanley Dean Witter & Co., Minnesota
Mining and Manufacturing Company, and Unicom
Corporation.
Paul C. Ely, Jr. (68)........................ Director since January 1997. Owner of Santa Cruz Yachts
3 Alexis Court since 1995. Venture Capitalist at Alpha Partners, from
Menlo Park, CA 94025 1989 to 1997. Director of Parker Hannifan Corporation,
Tektronix, Inc. and Travelocity.com Inc.
William J. Hannigan (41)..................... Chairman of the Board since March 2000. President and
Chief Executive Officer since December 1999. Director
since December 1999. President of SBC Global Markets for
SBC Communications, during 1999. President--Business
Communication Services, Southwestern Bell/SBC, from 1998
to 1999. Chair SBC DataComm Strategy Task Force and
Regional President Central and West Texas Southwestern
Bell, from 1997 to 1999. Vice President--Business and
Government Markets Pacific Bell, from 1996 to 1997. Vice
President--Engineering and Applications Support, Sprint
Corporation, from 1995 to 1996. Director and Chairman of
the Board of Travelocity.com, Inc.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION, OR EMPLOYMENT WITH PARENT;
NAME AND AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------ --------------------------------------------------------
<S> <C>
Glenn W. Marschel, Jr. (54).................. Director since November 1996. Chairman of the Board of
650 Suffolk St. Additech, Inc., since October 1997. Chief Executive
Suite 307 Officer, President and Co- Chairman of Faroudja, Inc.,
Lowell, MA 01854 from October 1998 to August 2000. President and Chief
Executive Officer of Paging Network, Inc., from December
1995 to August 1997. Vice Chairman, First Financial
Management Co., from April 1995 to November 1995. Group
President, Automatic Data Processing, January 1995.
Director of Travelocity.com, Inc., NetNumber.com, and
Sage, Inc.
Bob L. Martin (51)........................... Director since January 1997. Retired since July 1999.
19 Brixham President and Chief Executive Officer, Wal-Mart
Rogerss, AR 72758 International Inc., from September 1992 to June 1999.
Mary Alice Taylor (50)....................... Director since May 2000. Independent Executive since
PO Box 1499 September 2000. Chairman, President and Chief Executive
Fairhope, AL 36533 Officer, HomeGrocer.com, Inc., from 1999 to September
2000. Corporate Executive Vice President--Global
Operations and Technology, Citibank, N.A. from 1997 to
1999. Senior Vice President for the Americas and the
Caribbean, FDX Corporation, from 1994 to 1997. Director
of Autodesk, Inc. and Dell Computer.
Richard L. Thomas (69)....................... Director since November 1996. Retired since 1996.
Bank One Plaza Chairman, First Chicago NBD Corp., from December 1995 to
Mail Code: ILI-0518 May 1996. Chairman, First Chicago Corp., from January
Chicago, IL 60670 1992 to December 1995. Director of IMC Global Inc., Sara
Lee Corp., and Unicom Corporation.
Jeffery M. Jackson (44)...................... Executive Vice President, Chief Financial Officer, and
Treasurer since May 1999. Senior Vice President, Chief
Financial Officer and Treasurer, from August 1998 to May
1999. Vice President and Controller, American Airlines,
Inc., from January 1998 to August 1998. Vice President--
Corporate Development and Treasurer, American Airlines,
Inc., from March 1995 to January 1998. Vice President
and Treasurer, American Airlines, Inc., from April 1992
to March 1995. Vice President--Corporate Development and
Fleet Planning, American Airlines, Inc., from April 1992
to March 1995.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION, OR EMPLOYMENT WITH PARENT;
NAME AND AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------ --------------------------------------------------------
<S> <C>
David A. Schwarte (50)....................... Executive Vice President and General Counsel since March
2000. Director, Kelly Hart & Hallman from July 1998 to
March 2000. Managing Director--International Affairs,
American Airlines, Inc., from December 1996 to July
1998. Associate General Counsel, American Airlines,
Inc., from September 1995 to December 1996.
Eric J. Speck (43)........................... Executive Vice President since May 1999. Senior Vice
President, Sabre Travel Information Network, from March
1997 to May 1999. Vice President for Sabre Travel
Information Network, European Unit, from August 1995 to
March 1997. Vice President--Product Marketing for Sabre
Travel Information Network, from 1991 to March 1997.
</TABLE>
PARENT SUB
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION, OR EMPLOYMENT WITH PARENT
NAME AND AGE SUB; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------ -------------------------------------------------------
<S> <C>
William J. Hannigan (41)..................... Director since December 1999. Chairman of the Board
since March 2000. President and Chief Executive Officer
since December 1999. See also description above.
Jeffery M. Jackson (44)...................... Director since August 1998. Executive Vice President
and Chief Financial Officer since August 1998. See also
description above.
Eric J. Speck (43)........................... Director since March 2000. Executive Vice President,
President--Travel Marketing & Distribution Unit since
May 1999. See also description above.
David A. Schwarte (50)....................... Executive Vice President and General Counsel since
March 2000. See also description above.
</TABLE>
I-3
<PAGE>
OFFEROR
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION, OR EMPLOYMENT WITH OFFEROR;
NAME AND AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------ ---------------------------------------------------------
<S> <C>
William J. Hannigan (41)..................... Director since August 2000. See description above.
Jeffery M. Jackson (44)...................... Director since August 2000. See description above.
Eric J. Speck (43)........................... Director since August 2000. See description above.
James F. Brashear (43)....................... Senior Vice President and Deputy General Counsel of Sabre
Inc. since May 2000. Corporate Secretary of Sabre
Holdings Corporation and Sabre Inc. since March 2000.
Deputy General Counsel at Sabre Inc. from November 1999
to March 2000. Associate General Counsel of Sabre Inc.
from October 1996 to October 1999. Senior Attorney at
American Airlines, Inc. from January 1995 to October
1996.
Thomas Klein (38)............................ President since August 2000. President Emerging Business
of Sabre Inc. since April 2000. Senior Vice President for
North America, Sabre Inc., from 1999 to 2000. Senior Vice
President for Latin America and the Caribbean, Sabre
Inc., from 1997 to 1999. Managing Director Global Agency
Solutions, Sabre Inc., from 1996 to 1997. Director
General--Sabre Joint Venture, Sabre Inc., from 1994 to
1996.
James E. Murphy (46)......................... Treasurer since August 2000. Senior Vice President of
Corporate Development and Treasurer of Sabre Inc. since
July 1997. Vice President--North American Sales and
Service of Sabre Inc. from October 1994 to July 1997.
Scott W. Smith (41).......................... Vice President since August 2000. Senior Vice President
and General Manager for Sabre BTS since 1999. Vice
President of Sales and Marketing for Sabre BTS from 1997
to 1999. Managing Director of National Accounts for Sabre
Travel Information Network from 1996 to 1997. Managing
Director of Market Planning from 1995 to 1996.
</TABLE>
I-4
<PAGE>
MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY
COMPLETED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR ITS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF THE ADDRESSES SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND IN NEW YORK: BY HAND/OVERNIGHT COURIER:
EquiServe Trust Company EquiServe Trust Company EquiServe Trust Company
P.O. Box 842010 C/O Securities Transfer and 40 Campanelli Drive
Boston, MA 02284-2010 Reporting Services Inc. Braintree, MA 02184
100 Williams Street--Galleria
New York, NY 10038
</TABLE>
BY FACSIMILE TRANSMISSION:
(781) 575-4826 or (781) 575-4827
TO CONFIRM RECEIPT OF NOTICE OF GUARANTEED DELIVERY:
(781) 575-4816
Any questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at Offeror's expense. A stockholder may also contact its
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
BANKS AND BROKERAGE FIRMS CALL COLLECT: (212) 425-1685
ALL OTHERS CALL: (800) 928-0153
