<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
------------------------
TRAVEL SERVICES INTERNATIONAL, INC.
(NAME OF SUBJECT COMPANY (ISSUER))
AIRTOURS PLC
AND
BLUE SEA FLORIDA ACQUISITION INC.
(NAMES OF FILING PERSONS (OFFERORS))
COMMON STOCK, $.01 PAR VALUE PER SHARE
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
(TITLE CLASS OF SECURITIES)
894169101
(CUSIP NUMBER OF CLASS OF SECURITIES)
PAUL DEVITT
ADDLESHAW BOOTH & CO
100 BARBIROLLI SQUARE
MANCHESTER M2 3AB ENGLAND
011-44-161-934-6000
Copies to:
JOHN C. WHITEHEAD, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
101 PARK AVENUE
NEW YORK, NEW YORK 10178
212-309-6000
(NAME, ADDRESS AND TELEPHONE NUMBERS OF PERSONS
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS)
------------------------
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$385,966,243 $77,193
* For purposes of calculating the filing fee pursuant to Rule 0-11(d), the
Transaction Valuation was calculated on the basis of (i) 14,022,974 shares of
common stock, $.01 par value per share of Travel Services International, Inc.
(the "Common Stock"), including the associated common share purchase rights
(together, the "Shares"), (ii) the tender offer price of $26.00 per Share,
and (iii) 1,745,337 options to acquire Shares with an exercise price of less
than $26.00 per share under various employee stock option plans of Travel
Services International, Inc. with an aggregate value of $21,368,919. Based on
the foregoing, the transaction value is equal to the sum of (1) the product
of 14,022,974 Shares and $26.00 per Share and (2) the product of 1,745,337
Shares subject to options to purchase Shares with an exercise price of less
than $26.00 per share and the difference between $26.00 per Share and the
exercise price per Share of such options.
** The filing fee, calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction
Valuation.
/ / Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid.
Identify the previous filing by registration statement number, or if the
Form or Schedule and the date of its filing.
Amount Previously Paid: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
/x/ third-party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/ / going-private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: / /
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<PAGE>
This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to
the offer by Blue Sea Florida Acquisition Inc. (the "Purchaser"), a Florida
corporation and an indirect wholly-owned subsidiary of Airtours plc, a company
organized under the laws of England ("Parent"), to purchase all the outstanding
shares of common stock, $.01 par value per share ("Common Stock"), of Travel
Services International, Inc., a Florida corporation (the "Company"), including
the associated common share purchase rights (the "Rights"), issued pursuant to
the Shareholders Rights Agreement dated as of January 28, 1999 by and between
Travel Services International, Inc. and American Stock Transfer & Trust Company
(the Common Stock and the Rights together are referred to herein as the
"Shares") at a purchase price of $26.00 per share, net to the seller in cash
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated February 29, 2000 (the "Offer to Purchase") and
in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") which are annexed to
and filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B),
respectively. This Schedule TO is being filed on behalf of the Purchaser and
Parent.
All information set forth in the Offer to Purchase filed as Exhibit
(a)(1)(A) to this Schedule TO is incorporated by reference in answer to items 1
through 11 in this Schedule TO, except those items as to which information is
specifically provided herein.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
(b) Reference is hereby made to the Form of Letter of Transmittal, the form
of Notice of Guaranteed Delivery, the Merger Agreement, dated as of February 21,
2000, among Parent, the Purchaser and the Company, the Stock Voting and Tender
Agreement, dated as of February 27, 2000 by and among Parent, the Purchaser
and the holders of shares party thereto and the Confidentiality Agreement, dated
January 11, 2000 by and between Parent and the Company copies of which are
attached hereto as Exhibits (a)(1)(B), (a)(1)(C), (d)(1), (d)(2) and (d)(3),
respectively, all of which are incorporated herein by reference.
ITEM 12. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)(1)(A) -- Offer to Purchase, dated as of February 29, 2000
(a)(1)(B) -- Form of Letter of Transmittal
(a)(1)(C) -- Form of Notice of Guaranteed Delivery
(a)(1)(D) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(E) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
(a)(1)(F) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
(a)(1)(G) -- Text of press release issued by Parent on February 29, 2000
(a)(1)(H) -- Summary Advertisement, published February 29, 2000
(b) -- Not applicable
(d)(1) -- Agreement and Plan of Merger, dated as of February 21, 2000, by and among Parent, the
Purchaser and the Company
(d)(2) -- Stock Voting and Tender Agreement, dated as of February 27, 2000, by and among Parent, the
Purchaser and the holders of shares party thereto.
(d)(3) -- Confidentiality Agreement, dated January 11, 2000 by and between Parent and the Company
(g) -- Not applicable
(h) -- Not applicable
(i) -- Power of Attorney
</TABLE>
<PAGE>
SIGNATURES
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY
THAT THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: February 29, 2000
AIRTOURS plc
By: /s/ JAMES S. JENNINGS
-----------------------------------
Name: James S. Jennings
Title: Attorney-in-Fact
BLUE SEA FLORIDA ACQUISITION INC.
By: /s/ JAMES S. JENNINGS
-----------------------------------
Name: James S. Jennings
Title: Vice President
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)(1)(A) -- Offer to Purchase, dated as of February 29, 2000
(a)(1)(B) -- Form of Letter of Transmittal
(a)(1)(C) -- Form of Notice of Guaranteed Delivery
(a)(1)(D) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(E) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
(a)(1)(F) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
(a)(1)(G) -- Text of press release issued by Parent on February 29, 2000
(a)(1)(H) -- Summary Advertisement, published February 29, 2000
(b) -- Not applicable
(d)(1) -- Agreement and Plan of Merger, dated as of February 21, 2000, by and among Parent, the Purchaser and
the Company
(d)(2) -- Stock Voting and Tender Agreement, dated as of February 27, 2000, by and among Parent, the Purchaser
and the holders of shares party thereto.
(d)(3) -- Confidentiality Agreement, dated January 11, 2000 by and between Parent and the Company
(g) -- Not applicable
(h) -- Not applicable
(i) -- Power of Attorney
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
BY
BLUE SEA FLORIDA ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
AIRTOURS PLC
AT
$26.00 NET PER SHARE
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, MARCH 27, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF FEBRUARY 21, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG AIRTOURS PLC
("PARENT"), BLUE SEA FLORIDA ACQUISITION INC. (THE "PURCHASER") AND TRAVEL
SERVICES INTERNATIONAL, INC. (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE
COMPANY, AFTER RECEIVING THE UNANIMOUS RECOMMENDATION OF THE SPECIAL COMMITTEE,
(I) HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, (II) HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
SHAREHOLDERS AND (III) UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH REPRESENTS MORE THAN 50% OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"), THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR CONDITION"), AND
THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 15. AS
USED HEREIN "FULLY DILUTED BASIS" TAKES INTO ACCOUNT THE CONVERSION OR EXERCISE
OF ALL OUTSTANDING CONVERTIBLE SECURITIES, OPTIONS AND OTHER RIGHTS EXERCISABLE
OR CONVERTIBLE INTO SHARES OF COMMON STOCK.
------------------------
IMPORTANT
Any shareholder who desires to tender all or any portion of such
shareholder's Shares (as defined herein) should either (i) complete and sign the
Letter of Transmittal (or facsimile thereof) in accordance with the instructions
in the Letter of Transmittal, mail or deliver it and any other required
documents to the Depositary (as defined herein), and either deliver the
certificates for such Shares to the Depositary or tender such Shares pursuant to
the procedures for book-entry transfer set forth in Section 3 or (ii) request
such shareholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such shareholder. Any shareholder whose
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person to tender their Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3. The Rights (as defined herein) are presently evidenced by the certificates
for the Common Stock and a tender by shareholders of their Shares will also
constitute a tender of the Rights.
Questions and requests for assistance may be directed to the Information
Agent (as defined herein) or the Dealer Manager (as defined herein) at their
respective locations and telephone numbers set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
the Information Agent, or the Dealer Manager, or to brokers, dealers, commercial
banks or trust companies. A shareholder also may contact brokers, dealers,
commercial banks or trust companies for assistance concerning the Offer.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
DEUTSCHE BANC ALEX. BROWN
Deutsche Bank Securities Inc.
------------------------
February 29, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY TERM SHEET.......................................................................................... 1
INTRODUCTION................................................................................................ 4
THE OFFER................................................................................................... 5
1. Terms of the Offer.................................................................................... 5
2. Acceptance for Payment and Payment.................................................................... 7
3. Procedure for Tendering Shares........................................................................ 8
4. Withdrawal Rights..................................................................................... 10
5. Certain Federal Income Tax Consequences............................................................... 11
6. Price Range of the Shares; Dividends on the Shares.................................................... 11
7. Effect of the Offer on the Market for the Shares; Stock Listing;
Exchange Act Registration; Margin Regulations....................................................... 12
8. Certain Information Concerning the Company............................................................ 13
9. Certain Information Concerning Parent and the Purchaser............................................... 15
10. Source and Amount of Funds............................................................................ 16
11.
of the Offer; Purpose of the Offer and the Merger;
the Merger Agreement and Certain Other Agreements................................................... 16
12. Plans for the Company; Other Matters.................................................................. 26
13. Dividends and Distributions........................................................................... 28
14. Rights Agreement...................................................................................... 28
15. Conditions of the Offer............................................................................... 30
16. Certain Legal Matters................................................................................. 32
17. Fees and Expenses..................................................................................... 33
18. Miscellaneous......................................................................................... 33
SCHEDULE I-- Directors and Executive Officers of Blue Sea Florida Acquisition Inc., Airtours plc and
Carnival Corporation and Principal Shareholders of Carnival Corporation......................... 35
</TABLE>
<PAGE>
SUMMARY TERM SHEET
Blue Sea Florida Acquisition Inc. is offering to purchase all of the
outstanding common stock of Travel Services International, Inc. for $26.00 per
share in cash. The following are some of the questions you, as a shareholder of
Travel Services International, Inc., may have and answers to those questions. We
urge you to carefully read the remainder of this offer to purchase and the
letter of transmittal because the information in this summary is not complete
and additional important information is contained in the remainder of this offer
to purchase and the letter of transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is Blue Sea Florida Acquisition Inc. We are a Florida corporation
formed for the purpose of making a tender offer for all of the common stock of
Travel Services International, Inc. We are an indirect wholly owned subsidiary
of Airtours plc, a company organized under the laws of England, whose shares are
listed on the London Stock Exchange.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding common stock of Travel
Services International.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
We are offering to pay $26.00 per share, net to you, in cash. If you tender
your shares registered in your own name directly to ChaseMellon Shareholder
Services (which is the depositary for the offer), you will not have to pay
brokerage fees or similar expenses.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Airtours, our parent company, will provide us with approximately
$392.5 million, which we will use to purchase all shares validly tendered and
not withdrawn in the offer and to provide funding 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. It is anticipated that all of such
funds will be obtained from Airtours' own resources.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
Because the form of payment consists solely of cash and all of the funding
which will be needed will come from Airtours' own resources, we do not think our
financial condition is relevant to your decision whether to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on March
27, 2000, which is the initial expiration date of the offer, to decide whether
to tender your shares in the offer. 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 a guaranteed delivery procedure, which is described later in this offer
to purchase.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the Merger Agreement, we can extend the offer and,
under other circumstances, will be required to extend the offer. We have agreed
in the Merger Agreement that:
o we can extend the offer for up to three business days after the initial
expiration date, even if the conditions to the offer have been satisfied,
so long as we waive the continued satisfaction of the conditions to the
offer; and
o we are required to extend the offer until May 29, 2000 if the conditions
to the offer are not satisfied or waived by the initial expiration date
of the offer, unless the Merger Agreement has been terminated.
1
<PAGE>
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform ChaseMellon Shareholder Services,
the depositary for the offer, of that fact and will make a public announcement
of the extension, not later than 9:00 a.m., New York City time, on the day after
the date on which the offer was scheduled to expire.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any shares unless there are validly
tendered that number of shares which represents more than 50% of the shares of
Travel Services International outstanding on a fully diluted basis. We have
agreed in the Merger Agreement not to purchase any shares tendered, without the
consent of Travel Services International, if such number is not more than 50% of
the outstanding shares on a fully diluted basis. We are also not obligated to
purchase shares which are validly tendered if, among other things, there is (or
would be reasonably likely to be) a material adverse change in the business of
Travel Services International.
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to ChaseMellon
Shareholder Services, the depositary for the offer, not later than the time the
tender offer expires. If your shares are held in street name, the shares can be
tendered by your nominee through The Depository Trust Company. If you cannot get
an item that is required to the depositary by the expiration of the tender
offer, you may get a little extra time to do so by having a broker, a bank or
other fiduciary which is a member of the Securities Transfer Agents Medallion
Program or other eligible institution to guarantee that the missing items will
be received by the depositary within three Nasdaq Stock Market trading days.
However, the depositary must receive the missing items within that three trading
day period.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not by April 28, 2000, agreed to accept your shares for payment, you can
withdraw them at any time after such time until we accept shares for payment.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares.
WHAT DOES THE TRAVEL SERVICES INTERNATIONAL BOARD OF DIRECTORS THINK OF THE
OFFER?
We are making the offer pursuant to an agreement and plan of merger among
us, Airtours and Travel Services International, which has been unanimously
approved by each of the Special Committee of the Board of Directors and the
Board of Directors of Travel Services International. The Special Committee of
the Board of Directors and the Board of Directors of Travel Services
International have each unanimously approved the Merger Agreement, our tender
offer and the merger of us with and into Travel Services International, with
Travel Services International as the surviving corporation and becoming, as a
result of the merger, a wholly owned subsidiary of Airtours. The Special
Committee of the Board of Directors and the Board of Directors of Travel
Services International have also unanimously determined that our tender offer
and the merger are advisable and fair to, and in the best interest of, Travel
Services International's shareholders and unanimously recommend that its
shareholders accept our tender offer and tender their shares pursuant to our
tender offer.
IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL TRAVEL
SERVICES INTERNATIONAL CONTINUE AS A PUBLIC COMPANY?
No. If the merger takes place, Travel Services International no longer will
be publicly owned. Even if the merger does not take place, if we purchase all
the tendered shares, there may be so few remaining shareholders and publicly
held shares that Travel Services International common stock will no longer be
eligible to be traded through a Nasdaq market or on a securities exchange, there
may not be a public trading market for Travel
2
<PAGE>
Services International stock, and Travel Services International may cease making
filings with the Securities and Exchange Commission or otherwise cease being
required to comply with the SEC rules relating to publicly held companies.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE TRAVEL SERVICES
INTERNATIONAL SHARES ARE NOT TENDERED IN THE OFFER?
If we accept for payment and pay for more than 50% of the outstanding
shares of Travel Services International on a fully diluted basis, Blue Sea
Florida Acquisition Inc. will be merged with and into Travel Services
International. If that merger takes place, Airtours will own all of the shares
of Travel Services International and all remaining shareholders of Travel
Services International (other than us and Airtours) will receive $26.00 per
share in cash (or any other higher price per share which is paid in the offer).
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, shareholders not tendering their
shares in the offer will receive the same amount of cash per share which they
would have received had they tendered their shares in the offer. Therefore, if
the merger takes place, the only difference to you between tendering your shares
and not tendering your shares is that you will be paid earlier if you tender
your shares. However, if the merger does not take place, the number of
shareholders and number of shares of Travel Services International which are
still in the hands of the public may be so small that there no longer will be an
active public trading market (or, possibly, any public trading market) for the
Travel Services International common stock. Also, as described above, Travel
Services International may cease making filings with the SEC or otherwise being
required to comply with the SEC rules relating to publicly held companies.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On February 18, 2000, the last trading day before we announced the
tender offer and the possible subsequent merger, the last sale price of Travel
Services International common stock reported on the Nasdaq National Market was
$17 3/4 per share and on February 28, 2000 the last sale price was $25 1/2 per
share. Between January 1, 2000 and February 28, 2000, the price of a share of
Travel Services International common stock ranged between $9 and $25 9/16. We
advise you to obtain a recent quotation for shares of Travel Services
International common stock in deciding whether to tender your shares.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call Morrow & Co., Inc. ((800) 566-9061 (toll free)). Banks and
brokerage firms should call Morrow & Co., Inc. at ((800) 662-5200 (toll free)).
Morrow & Co., Inc. is acting as the information agent for our tender offer.
3
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF TRAVEL SERVICES INTERNATIONAL, INC.:
INTRODUCTION
Blue Sea Florida Acquisition Inc., a Florida corporation (the "Purchaser")
and an indirect wholly owned subsidiary of Airtours plc, a company organized
under the laws of England ("Parent"), hereby offers to purchase all issued and
outstanding shares of common stock, $.01 par value per share ("Common Stock"),
of Travel Services International, Inc., a Florida corporation (the "Company"),
including the associated common share purchase rights (the "Rights"), issued
pursuant to the Shareholders Rights Agreement, dated as of January 28, 1999, as
amended on February 21, 2000, by and between the Company and American Stock
Transfer & Trust Company (the "Rights Agreement") (the Common Stock and the
Rights together are referred to herein as the "Shares") at a price of $26.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). Tendering shareholders who are record
owners of their Shares and tender directly to the Depositary (as defined below)
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the sale
of Shares pursuant to the Offer. Shareholders who hold their Shares through a
broker or bank should consult such institutions as to whether it charges any
service fee. The Purchaser will pay all fees and expenses incurred in connection
with the Offer of Deutsche Bank Securities Inc., which is acting as the Dealer
Manager (the "Dealer Manager"), Morrow & Co., Inc., which is acting as the
Information Agent (the "Information Agent") and ChaseMellon Shareholder Services
L.L.C., which is acting as the Depositary (the "Depositary").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF
SHARES WHICH REPRESENTS MORE THAN 50% OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS, ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). SEE SECTION
15.
As used in this Offer to Purchase, "fully diluted basis" takes into account
the conversion or exercise of all outstanding convertible securities, options
and other rights exercisable or convertible into shares of Common Stock. The
Company has informed the Purchaser that, as of February 25, 2000, there were
(i) 14,022,974 shares of Common Stock issued and outstanding and
(ii) outstanding options to purchase an aggregate of 2,139,659 shares of Common
Stock under the Company's stock plans. The Merger Agreement (as defined below)
provides, among other things, that the Company will not, without the prior
written consent of Parent, issue any additional Shares (except on the exercise
of outstanding options). Based on the foregoing, and after giving effect to the
exercise of all outstanding options, the Purchaser believes that the Minimum
Condition would be satisfied if 8,082,933 shares of Common Stock were validly
tendered and not withdrawn prior to the expiration of the Offer.
Certain shareholders of the Company (each, a "Shareholder"), who have
voting power and dispositive power with respect to 1,872,057 Shares in the
aggregate, have entered into a Stock Voting and Tender Agreement, dated as of
February 27, 2000 (the "Shareholders Agreement"), with Parent and the Purchaser.
Pursuant to the Shareholders Agreement, the Shareholders have agreed, among
other things, to tender the Shares held by them in the Offer, and to grant
Parent a proxy with respect to the voting of such Shares in favor of the Merger
(as defined below) upon the terms and subject to the conditions set forth
therein. See Section 11.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 21, 2000 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company pursuant to which, as soon as practicable after the
successful completion of the Offer and satisfaction or waiver of all conditions
to the Merger, the Purchaser will be merged with and into the Company and the
separate corporate existence of the Purchaser will thereupon cease. The merger,
as effected pursuant to the immediately preceding sentence, is referred to
herein as the "Merger," and the Company as the surviving corporation of the
Merger is sometimes referred to herein as the "Surviving Corporation." At the
effective time of the Merger (the "Effective Time"), each share of Common Stock
then outstanding (other than shares held by Parent or the Purchaser, and other
than shares held by shareholders who have properly exercised dissenters' rights,
if any) will be cancelled and retired and converted into the right to receive
$26.00 per share, or any higher price per share of Common Stock paid in the
Offer (such price being referred to herein as the "Offer Price"), in cash
payable to the holder thereof without interest (the "Merger Consideration"). The
Merger Agreement is more fully described in Section 11.
4
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY, AFTER RECEIVING THE UNANIMOUS
RECOMMENDATION OF THE SPECIAL COMMITTEE, (I) HAS APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER,
(II) HAS DETERMINED THAT THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO AND IN
THE BEST INTERESTS OF THE COMPANY'S SHAREHOLDERS AND (III) UNANIMOUSLY
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Allen & Company Incorporated, the Company's financial advisor, has
delivered to the Company's Board of Directors its written opinion (the "Fairness
Opinion"), dated February 21, 2000, confirming its oral opinion delivered
February 20, 2000, to the effect that, as of such date, the consideration to be
received by the holders of shares of Common Stock (as defined in the Fairness
Opinion), pursuant to the Offer and under the terms of the Merger Agreement, is
fair from a financial point of view to such holders. Such opinion is set forth
in full as an exhibit to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") that is being mailed to shareholders of
the Company.
The Merger Agreement provides that (A) even if, as of the initial scheduled
expiration date of the Offer (the "Initial Expiration Date"), all conditions to
the Offer have been satisfied, the Purchaser may extend the expiration date of
the Offer for up to three business days after the Initial Expiration Date so
long as Purchaser waives the continued satisfaction of the conditions to the
Offer and (B) in the event that the conditions are not satisfied on a date on
which the Offer is scheduled to expire, the Purchaser is required to, from time
to time, extend the expiration date of the Offer until May 29, 2000, unless the
Merger Agreement has been terminated. In addition, the Merger Agreement provides
that the Purchaser shall, on the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, accept for payment and purchase, as soon
as permitted under the terms of the Offer, all Shares validly tendered and not
withdrawn prior to the expiration of the Offer.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of shareholders of the Company of
the Merger Agreement, if required by applicable law in order to consummate the
Merger. See Section 11. Under the Florida Business Corporation Act (the "FBCA"),
if the Purchaser acquires at least 80% of the Shares then outstanding, the
Purchaser will be able to approve the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
shareholders. In such event, the Company has agreed in the Merger Agreement to
take, at the request of Purchaser, subject to the satisfaction of the conditions
set forth in the Merger Agreement, all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after the
acceptance and payment for Shares by the Purchaser pursuant to the Offer without
a meeting of the Company's shareholders, in accordance with Section 607.1104 of
the FBCA.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer, the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 of this Offer to Purchase. The term "Expiration
Date"shall mean 12:00 Midnight, New York City time, on Monday, March 27, 2000,
unless and until the Purchaser, in accordance with the terms of the Merger
Agreement, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition, and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). See Section 15. If such
conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the
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Merger Agreement, and, subject to complying with applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"),
purchase all Shares validly tendered, (iii) subject to the terms of the Merger
Agreement, extend the Offer and, subject to the right of shareholders to
withdraw Shares until the Expiration Date, retain the Shares which will have
been tendered during the period or periods for which the Offer is open or
extended, or (iv) subject to the Merger Agreement, amend the Offer.
Subject to the terms of the Merger Agreement, the Purchaser may, and under
certain circumstances shall, from time to time, (i) extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary and (ii) amend the Offer by giving oral or written notice of
such amendment to the Depositary. Any extension, amendment or termination of the
Offer will be followed as promptly as practicable by public announcement
thereof, the announcement in the case of an extension to be issued no 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 Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting the obligation of the Purchaser
under such Rule or the manner in which the Purchaser may choose to make any
public announcement, the Purchaser currently intends to make announcements by
issuing a press release to the Dow Jones News Service. UNDER NO CIRCUMSTANCES
WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The Merger Agreement provides that, except as described below, the
Purchaser will not, without the prior written consent of the Company, waive the
Minimum Condition. In addition, the Purchaser will not, without the prior
written consent of the Company (i) reduce the number of Shares sought to be
purchased in the Offer, (ii) reduce the Offer Price or change the form of
consideration payable in the Offer, (iii) impose conditions to the Offer other
than those described in Section 15, (iv) modify any condition of the Offer
described in Section 15 or any other term or condition of the Offer in a manner
that is adverse to the holders of Common Stock, or (v) extend any scheduled
expiration date, except as provided by law, provided, however, (A) that, even if
all conditions to the Offer have been satisfied, the Purchaser may extend the
expiration date of the Offer for up to three business days after the Initial
Expiration Date upon waiving the continued satisfaction of the conditions to the
Offer, and (B) that in the event that the conditions are not satisfied on a date
on which the Offer is scheduled to expire, the Purchaser is required to, from
time to time, extend the expiration date of the Offer until May 29, 2000, unless
the Merger Agreement has been terminated.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by 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 holders of securities promptly after the termination or
withdrawal of a tender offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d), 14d-6(b), (c) and (d) and 14e-1
under the Exchange Act. The minimum period during which the Offer must remain
open following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In a
public release, the Commission has stated that in its view an offer must remain
open for a minimum period of time following a material change in the terms of
the Offer and that waiver of a material condition, such as the Minimum
Condition, is a material change in the terms of the Offer. The release states
that an offer should remain open for a minimum of five business days from the
date a material change is first published, sent or given to security holders and
that, if material changes are made with respect to information not materially
less significant than the offer price and the number of shares being sought, a
minimum of 10 business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that
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would be required because of such amendment. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
Pursuant to Rule 14d-11 under the Exchange Act, the Purchaser may, subject
to certain conditions, elect to provide a Subsequent Offering Period following
the expiration of the Offer on the Expiration Date. Rule 14d-11 provides that
the Purchaser may elect to provide a Subsequent Offering Period so long as,
among other things, (i) the Offer has remained open for a minimum of 20 business
days and has expired, (ii) the Offer is for all outstanding Shares, (iii) the
Purchaser accepts and promptly pays for all securities tendered during the Offer
prior to close of the Offer, (iv) the Purchaser announces the results of the
Offer, including the approximate number and percentage of Shares deposited in
the Offer, no later than 9:00 A.M. Eastern time on the next business day after
the Expiration Date and immediately begins the Subsequent Offering Period,
(v) the Purchaser immediately accepts and promptly pays for Shares as they are
tendered during the Subsequent Offering Period and (vi) the Purchaser offers the
same form and amount of consideration to the holders of Shares in both the Offer
and the Subsequent Offering Period. The Merger Agreement does not, however,
contemplate a Subsequent Offering Period.
The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed by the Purchaser to record holders of Shares and will be
furnished by the Purchaser to brokers, dealers, banks and similar persons whose
names, or the names of whose nominees, appear on the shareholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. 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), the Purchaser will
accept for payment and will pay, promptly after the Expiration Date, for all
Shares validly tendered prior to the Expiration Date and not properly withdrawn
in accordance with Section 4. Subject to the terms of the Merger Agreement, all
determinations concerning the satisfaction of such terms and conditions will be
within the Purchaser's discretion, which determinations will be final and
binding. See Sections 1 and 15. Shareholders who hold their Shares through a
broker on bank should consult such institutions as to whether it charges any
service fee. The Purchaser expressly reserves the right, in its sole discretion,
to delay acceptance for payment of or payment for Shares in order to comply in
whole or in part with any applicable law, including, without limitation, the HSR
Act. Any such delays will be effected in compliance with Rule 14e-l(c) under the
Exchange Act (relating to a bidder's obligation to pay the consideration offered
or return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined below), and (iii)
any other documents required by the Letter of Transmittal. The per Share
consideration paid to any holder of Shares pursuant to the Offer will be the
highest per Share consideration paid to any other holder of such Shares pursuant
to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price for those Shares with the Depositary, which will act as agent
for tendering shareholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering shareholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 15) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain
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tendered Shares, and such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined below) pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
The Purchaser reserves the right to transfer or assign, in whole or in
part, to Parent or to any affiliate of Parent, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), 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 and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case, prior to the Expiration Date or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company (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 systems may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message, 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 the tendering
shareholder must comply with the guaranteed delivery procedures described below.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
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 such 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 the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book-Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box
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entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Purchaser, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect to)
such Shares, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message, and any other required
documents are received by the Depositary within three trading days after the
date of execution of such Notice of Guaranteed Delivery. A "trading day" is any
day on which the National Association of Security Dealers Automated Quotation
System, Inc. (the "NASDAQ") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice 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 (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE OFFER PRICE REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of the Purchaser, and
each of them, as such shareholder's attorneys-in-fact and proxies in the manner
set forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by the Purchaser and with respect
to any and all other Shares or other securities or rights issued or issuable in
respect of such Shares. All such proxies will be considered coupled with an
interest in the tendered Shares. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts for payment Shares tendered by
such shareholder as provided herein. Upon such appointment, all prior powers of
attorney, proxies and consents given by such shareholder with respect to such
Shares or other securities or rights will, without
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further action, be revoked and no subsequent powers of attorney, proxies,
consents or revocations may be given by such shareholder (and, if given, will
not be deemed effective). The designees of the Purchaser will thereby be
empowered to exercise all voting and other rights with respect to such Shares
and other securities or rights, including, without limitation, in respect of any
annual, special or adjourned meeting of the Company's shareholders, actions by
written consent in lieu of any such meeting or otherwise, as they in their sole
discretion deem proper. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting, consent and other rights with respect to such Shares and other
related securities or rights, including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the provisions of the Merger
Agreement, to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares of any particular shareholder, whether
or not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Company 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. Subject to the terms of the Merger Agreement, the Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Backup Withholding. Under the "backup withholding" provisions of U.S.
federal income tax law, unless a tendering registered holder, or his assignee
(in either case, the "Payee"), satisfies the conditions described in Instruction
9 of the Letter of Transmittal or is otherwise exempt, the cash payable as a
result of the Offer may be subject to backup withholding tax at a rate of 31% of
the gross proceeds. To prevent backup withholding, each Payee should complete
and sign the Substitute Form W-9 provided in the Letter of Transmittal or other
applicable form. See Instruction 9 of the Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
April 28, 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 set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the 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 delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 3 any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, 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.
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5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or the Merger will be a taxable transaction for U.S.
federal income tax purposes and may also be a taxable transaction under state,
local, or foreign tax laws. In general, a shareholder who tenders Shares in the
Offer or receives cash in exchange for Shares in the Merger will recognize gain
or loss for U.S. federal income tax purposes equal to the difference, if any,
between the amount of cash received and the shareholder's tax basis in the
Shares sold. Gain or loss will be determined separately for each block of Shares
(i.e., Shares acquired at the same time and price) exchanged pursuant to the
Offer or the Merger. Such gain or loss generally will be capital gain or loss if
the Shares disposed of were held as capital assets by the shareholder and will
be long-term capital gain or loss if such Shares have been held for more than
one year.
A shareholder who perfects his or her shareholder's appraisal rights, if
any, under the FBCA will probably recognize gain or loss at the Effective Time
in an amount equal to the difference between the "amount realized" and such
shareholder's adjusted tax basis of such Shares. For this purpose, although
there is no authority to this effect directly on point, the amount realized
should generally equal the trading value per share of the Shares at the
Effective Time. Ordinary interest income and/or capital gain (capital loss),
assuming that the Shares were held as capital assets, should be recognized by
such shareholder at the time of actual receipt of payment, to the extent that
such payment exceeds (or is less than) the amount realized at the Effective
Time.
The foregoing summary is for general information purposes only and is based
on the U.S. federal income tax law now in effect, which is subject to change,
possibly retroactively. This summary does not discuss all aspects of U.S.
federal income taxation which may be important to particular shareholders in
light of their individual investment circumstances or to certain types of
shareholders subject to special tax rules (including, but not limited to,
insurance companies, tax-exempt organizations, financial institutions, or broker
dealers, foreign shareholders and shareholders who have acquired their Shares
pursuant to the exercise of employee stock options or otherwise as
compensation), nor does it address state, local, or foreign tax consequences.
Each shareholder is urged to consult his or her tax advisor regarding the
specific U.S. federal, state, local and foreign income and other tax
consequences of the Offer and Merger.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES. Since July 23, 1997,
the shares of Common Stock have been traded through the Nasdaq National Market
under the symbol "TRVL". The following table sets forth, for each of the
calendar quarters indicated, the high and low reported closing price per share
of Common Stock on the Nasdaq National Market based on published financial
sources. The Company did not declare or pay any cash dividends during any of the
periods indicated in the table below. In addition, under the terms of the Merger
Agreement, the Company is not permitted to declare or pay dividends with respect
to the Shares without the prior written consent of Parent.
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------
HIGH LOW
------------ ------------
<S> <C> <C>
1997
Third Quarter................................................................... $ 25 5/8 $ 19 5/8
Fourth Quarter.................................................................. 26 19 1/2
1998
First Quarter................................................................... $ 33 11/16 $ 18
Second Quarter.................................................................. 37 7/8 32 7/8
Third Quarter................................................................... 36 9/16 13 9/16
Fourth Quarter.................................................................. 30 1/2 9 7/8
1999
First Quarter................................................................... $ 31 1/2 $ 9 1/16
Second Quarter.................................................................. 12 5/8 6 3/8
Third Quarter................................................................... 14 5/8 10 13/16
Fourth Quarter.................................................................. 12 1/2 8 3/4
2000
First Quarter (through February 28, 2000)....................................... $ 25 9/16 $ 9
</TABLE>
On February 18, 2000, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the Nasdaq National Market was $17 3/4 per
11
<PAGE>
share of Common Stock. On February 28, 2000, the last full trading day prior to
the commencement of the Offer, the last reported sales price of the Shares on
the Nasdaq National Market was $25 1/2 per share of Common Stock.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and will reduce
the number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Stock Listing. The Common Stock is traded through the Nasdaq National
Market. Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion on the Nasdaq
National Market, which requires that an issuer either (i) have at least 750,000
publicly held shares, held by at least 400 round-lot shareholders, with a market
value of at least $5,000,000, net tangible assets (total assets (excluding
goodwill) less total liabilities) of at least $4 million and have a minimum bid
price of $1 or (ii) have at least 1,100,000 publicly held shares, held by at
least 400 round-lot shareholders, with a market value of at least $15,000,000,
have a minimum bid price of $5 and have either (A) a market capitalization of at
least $50,000,000 or (B) total assets and revenues each of at least $50,000,000.
If the Nasdaq National Market and the NASDAQ Smallcap Market were to cease to
publish quotations for the Shares, it is possible that the Shares would continue
to trade in the over-the-counter market and that price or other quotations would
be reported by other sources. The extent of the public market for such Shares
and the availability of such quotations would depend, however, upon such factors
as the number of shareholders and/or the aggregate market value of such
securities remaining at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of registration
under the Exchange Act as described below, and other factors. The Purchaser
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether it would cause
future market prices to be greater or lesser than the Offer Price. The Company
has represented that, as of February 25, 2000, 14,022,974 Shares were issued and
outstanding.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act,
assuming there are no other securities of the Company subject to registration,
would substantially reduce the information required to be furnished by the
Company to its shareholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with shareholders' meetings and the
related requirement of furnishing an annual report to shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated.
The Purchaser may seek 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 termination are met. If the Nasdaq
National Market listing and the Exchange Act registration of the Shares are not
terminated prior to the Merger, then the Shares will be delisted from the Nasdaq
National Market and the registration of the Shares under the Exchange Act will
be terminated following the consummation of the Merger.
Margin Regulations. The Shares currently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
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. If
12
<PAGE>
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including that set forth below
under the caption "Historical Financial Data," has been furnished by the Company
or has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Parent nor the
Purchaser assumes responsibility for the accuracy or completeness of the
information concerning the Company contained in such documents and records or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information but which are
unknown to Parent or the Purchaser.
The Company is a leading specialized distributor of leisure travel products
including cruise vacations, vacation packages, domestic and international
airline tickets and European auto rentals, and is a leading provider of travel
services such as electronic hotel reservation services, specialized hotel
programs and services and incentive travel programs. The Company provides its
services to both travel agents and travelers. The Company is a Florida
corporation with its principal executive offices at 200 Congress Park Drive,
Delray Beach, Florida 33445. The telephone number of the Company at such offices
is (561) 266-0860.
Historical Financial Data. Set forth below is the historical financial data
of the Company as of December 31, 1997 and 1998 and for each of the two years
ending December 31, 1997 and 1998, derived from the audited consolidated
financial statements from the Company's Annual Reports on Form 10-K for the
years ended December 31, 1997 and 1998. The historical financial data of the
Company as of December 31, 1999 and for the year ended December 31, 1999 are
unaudited and have been derived from the Company's financial results as filed
under the Company's Current Report on Form 8-K filed with the Commission on
February 25, 2000. The information contained in these tables should be read in
conjunction with the Consolidated Financial Statements of the Company and the
Notes thereto included in the Company's Form 10-K and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" for the years
ended December 31, 1997 and 1998. The following summary is qualified in its
entirety by reference to such reports and all of the financial information
contained therein. Such reports may be inspected and copies may be obtained from
the Commission in the manner set forth below.
On July 28, 1997, the Company consummated its initial public offering and
acquired five specialized distributors (the "Founding Companies") in
transactions (the "Combinations") accounted for using the purchase method of
accounting. Historical financial data for the year ended December 31, 1997 does
not include the operating results of the Founding Companies (other than Auto
Europe, the "accounting acquiror") prior to July 1997. Historical financial
statements for the years ended December 31, 1997 and 1998 include the operating
results of eight specialized distributors of cruise reservation services
acquired from November 1997 through December 1998 under transactions accounted
for using the pooling of interests method of accounting (the "Pooling
Acquisitions"). Operating results of an additional nine companies acquired in
1998 and 1999 under transactions accounted for using the purchase method of
accounting are included only as of their respective dates of acquisition.
Accordingly, the historical financial data for each year presented represent
those of Auto Europe and the Pooling Acquisitions, and include the operations of
the other four Founding Companies and the Company only since July 28, 1997 and
the nine purchase acquisitions from their respective dates of acquisition
through December 31, 1999.
13
<PAGE>
TRAVEL SERVICES INTERNATIONAL, INC.
HISTORICAL FINANCIAL DATA
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1999 1998 1997
----------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues....................................................... $ 187,042 $ 129,855 $ 62,813
Operating expenses................................................. 115,202 70,920 38,810
----------- ----------- ----------
Gross profit....................................................... 71,840 58,935 24,003
General and administrative expenses................................ 55,378 34,550 19,209
Goodwill amortization.............................................. 4,316 2,628 513
----------- ----------- ----------
Income from operations............................................. 12,146 21,757 4,281
Other income (expense), net........................................ 112 (28) (30)
----------- ----------- ----------
Income before provision for income taxes........................... 12,258 21,729 4,251
Provision for income taxes......................................... 4,903 9,310 770
----------- ----------- ----------
Net income......................................................... $ 7,355 $ 12,419 $ 3,481
----------- ----------- ----------
----------- ----------- ----------
Basic earnings per share........................................... $ 0.53 $ 1.03 $ 0.54
----------- ----------- ----------
----------- ----------- ----------
Diluted earnings per share......................................... $ 0.53 $ 0.99 $ 0.53
----------- ----------- ----------
----------- ----------- ----------
Shares used in computing basic earnings per share.................. 13,840,750 12,075,044 6,394,843
----------- ----------- ----------
----------- ----------- ----------
Shares used in computing diluted earnings per share................ 13,884,610 12,516,195 6,533,769
----------- ----------- ----------
----------- ----------- ----------
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.................................................... $ 10,918 $ 22,728 $ 1,206
Total assets....................................................... $ 231,484 $ 180,129 $ 70,166
Long-term debt..................................................... $ 2,623 $ 2,888 $ 4,140
Shareholders' equity............................................... $ 162,539 $ 145,297 $ 51,257
</TABLE>
Certain Company Projections. The Company does not, as a matter of course,
make public forecasts as to its future financial performance. However, in
connection with the discussions concerning the Offer and the Merger and as part
of Parent's due diligence review of the Company, the Company discussed various
projections of revenues and earnings as a basis of an operating budget for
fiscal year 2000. The Company's various projections for fiscal year 2000
provided to Parent projected net revenues ranging from approximately
$217 million to approximately $223 million. Projected income from operations for
fiscal year 2000 ranged from approximately $21 million to approximately
$23 million.
The Company's 2000 operating budget and the financial projections provided
to Parent were prepared for the limited purpose of managing the operating plan
of the Company for fiscal year 2000. They do not reflect recent developments
which have occurred since they were prepared, such as the Offer and the Merger.
This reference to the projections is provided solely because such projections
have been provided to the Purchaser and none of the Purchaser, Parent, the
Company or any of their respective affiliates or representatives believes that
such projections should be relied upon.
It is the understanding of Parent and the Purchaser that the projections
were not prepared with a view to public disclosure or compliance with published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections or forecasts and
are included herein only because such information was provided to Parent and the
Purchaser. The projections do not purport to present operations in accordance
with generally accepted accounting principles and the Company's independent
auditors have not examined or compiled the projections presented herein, and
accordingly assume no responsibility for them. These forward-looking statements
(as that term is defined in the private securities litigation reform act of
1995) are subject to certain risks and uncertainties that could cause actual
results to differ materially from the projections.
14
<PAGE>
The Company has advised the Purchaser and Parent that its internal
financial forecasts (upon which the projections provided to Parent and the
Purchaser were based in part) are, in general, prepared solely for internal use
and capital budgeting and other management decisions, and are subjective in many
respects and thus susceptible to interpretations and periodic revision based on
actual experience and business developments. The projections also reflect
numerous assumptions (not all of which were provided to Parent and the
Purchaser), all made by management of the Company, with respect to industry
performance, general business, economic, market and financial conditions and
other matters, all of which are difficult to predict, many of which are beyond
the Company's control and none of which were subject to approval by Parent or
the Purchaser. 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 projections herein should not be regarded as an indication that
any of Parent, the Purchaser, the Company or their respective affiliates or
representatives considered or consider the projections to be a reliable
prediction of future events, and the projections should not be relied upon as
such.
None of Parent, the Purchaser, the Company or any of their respective
affiliates or representatives has made, or makes any representation to any
person regarding the ultimate performance of the Company compared to 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. It is expected that there will be differences between actual and
projected results, and actual results may be materially higher or lower than
those projected.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements 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, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's shareholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
relating to the Company that have been filed via the EDGAR System. Such material
should also be available for inspection at the offices of the NASD, Reports
Section, 1735 K Street, Washington, D.C. 20006.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent and the Purchaser. Parent is a company organized under the laws of
England. Parent is the largest air inclusive tour operator in the world,
carrying 10 million passengers per annum. Parent's earnings derive from tour
operations in the U.K., Ireland, Scandinavia, the U.S., Canada, Poland, Belgium,
France, Holland and, through its associate FTi, in Germany, Austria and
Switzerland. In addition, Parent operates aircraft, retail travel agencies,
hotels, cruise ships and vacation ownership developments. Shares of Parent are
listed on the London Stock Exchange.
The Purchaser is a Florida corporation newly formed at the direction of
Parent for the purpose of effecting the Offer and the Merger. Parent owns,
indirectly, all of the outstanding capital stock of the Purchaser through Blue
Sea Investments Limited, a holding company organized under the laws of England.
It is not anticipated that, prior to the consummation of the Offer, the
Purchaser will have any significant assets or liabilities or will engage in any
activities other than those incident to the Offer and the Merger and the
financing thereof. The offices of Parent and Blue Sea Investments Limited are
located Parkway One, Parkway Business Centre, 300 Princess Road, Manchester, M14
7QU, England. The telephone number of Parent at such address is
011-44-161-232-0066. The offices of the Purchaser are located c/o North American
Leisure Group, 130 Merton
15
<PAGE>
Street, Toronto, ON, M4S 1A4, Canada. The telephone number of the Purchaser at
such address is (416) 482-8707.
Carnival Corporation, a corporation organized under the laws of the
Republic of Panama ("Carnival"), owns approximately 26% of the outstanding
voting equity securities of Parent. Carnival is the world's largest cruise
company. The principal executive offices of Carnival are located at 3655 N.W.
87th Avenue, Miami, Florida 33178-2428 and Carnival's telephone number is (305)
599-2600. Mr. Micky Arison, the Administrators of the Estate of Ted Arison and
Ms. Shari Arison (the "Arison Family"), through various corporations,
partnerships and trusts, beneficially own approximately 45% of the outstanding
voting equity securities of Carnival. Pursuant to annual agreements with
Carnival Cruise Lines, Holland America Lines and other cruise lines owned by
Carnival, the Company markets individual and group bookings on cruises. Carnival
Cruise Lines, Holland America Lines and the other cruise lines owned by Carnival
accounted for an aggregate of approximately 16% and 12% of the Company's
consolidated net revenues in 1998 and 1999, respectively.
For certain information concerning the executive officers and directors of
the Purchaser, Parent and Carnival and the Arison Family, see Schedule I.
Except as set forth in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best knowledge of the Purchaser or Parent, Carnival or any of
the persons listed on Schedule I (except as indicated on such Schedule), or any
associate or majority-owned subsidiary of the foregoing, beneficially owns or
has a right to acquire any Shares, and none of the Purchaser, Parent, or, to the
best knowledge of the Purchaser or Parent, Carnival or any of the persons
referred to above, has effected any transaction in Shares during the past
60 days.
Except as set forth in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best knowledge of the Purchaser and Parent, Carnival or any
of the persons listed on Schedule I, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, none of
the Purchaser or Parent, or, to the best knowledge of the Purchaser and Parent,
Carnival or any of the persons listed on Schedule I, has had, since January 1,
1998, any business relationships or transactions with the Company or any of its
executive officers, directors or affiliates that would require reporting under
the rules of the Commission. Except as set forth in this Offer to Purchase,
since January 1, 1998, there have been no contacts, negotiations or transactions
between the Purchaser or Parent, any of their respective subsidiaries or, to the
best knowledge of the Purchaser or Parent, Carnival or any of the persons listed
on Schedule I, and the Company or its affiliates concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
election of directors or a sale or other transfer of a material amount of
assets.
10. SOURCE AND AMOUNT OF FUNDS. Parent and the Purchaser estimate that the
total amount of funds required by the Purchaser to (i) purchase all of the
Shares pursuant to the Offer and the Merger and (ii) pay fees and expenses
incurred in connection with the Offer and the Merger will be approximately
$392.5 million. The Purchaser expects to obtain all of such funds from Parent
(through capital contributions or advances). Parent currently anticipates
funding such capital contributions or advances through a combination of cash on
hand and other internally generated funds. Parent may consider refinancing all
or a portion of such amount in the future. However, no decision in this regard
has been taken and no such arrangements are currently existing or planned.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE
MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS. The following description was
prepared by the Purchaser and the Company. Information about the Company was
provided by the Company, and neither the Purchaser nor Parent takes any
responsibility for the accuracy or completeness of any information regarding
meetings or discussions in which Parent or its representatives did not
participate.
16
<PAGE>
BACKGROUND OF THE OFFER.
Following initial contact with the Company by Hoare Govett Limited ("Hoare
Govett") in early 1999, Parent's stockbrokers, the Chairman of Parent, and the
Chairman and Chief Executive Officer of the Company, met at the offices of Hoare
Govett in London on June 30, 1999 to discuss the operations of Parent and the
Company and discuss possible alternatives for a strategic alliance.
On July 19, 1999, the Chairman and Chief Executive Officer and other
members of senior management of the Company, and the Chairman and the Group
Finance Director of Parent, met in Delray Beach, Florida to explore further the
respective businesses and operations of Parent and the Company.
In October 1999, representatives of Hoare Govett participated in a
conference call with representatives of senior management of the Company during
which discussions continued regarding the Company's business and operations.
On December 8, 1999, representatives of Hoare Govett met again with members
of senior management of the Company in Delray Beach, Florida, and received
a presentation concerning the Company's operations including the Company's
technology and Internet-based business applications. At this meeting, the
representatives of the Company and Hoare Govett further explored the possibility
of a strategic alliance between the Company and Airtours or an acquisition of
the Company by Airtours.
On December 16, 1999, representatives of Hoare Govett met with members of
senior management of Parent to discuss possible strategic options relating to
the Company. At some time following this meeting, on or around December 21,
1999, Parent requested that Hoare Govett contact senior management of the
Company to arrange a meeting between members of senior management of Parent and
members of senior management of the Company.
On or around December 21, 1999, members of Parent's senior management and
representatives of Parent's financial advisor, Deutsche Bank Securities Inc.
("Deutsche Bank"), preliminarily discussed a potential acquisition of the
Company. At the conclusion of such discussion, Parent authorized Deutsche Bank
to examine in greater detail a possible acquisition of the Company by Parent.
From that time through early January 2000, Deutsche Bank internally reviewed the
potential acquisition of the Company by Parent, and members of senior management
of Parent discussed with Deutsche Bank the potential acquisition.
On January 11, 2000, Parent and the Company executed the Confidentiality
Agreement described below. On that date, members of senior management of Parent
and representatives of Deutsche Bank met with members of senior management of
the Company and representatives of Allen & Company Incorporated ("Allen &
Company"), financial adviser to the Company, in Delray Beach. At this meeting,
the Company provided Parent with information concerning the Company, including
information concerning its technology and Internet-based business applications,
and Parent preliminarily expressed its interest in a possible acquisition of the
Company.
On January 14, 2000, the Chairman of Parent, in a telephone call to the
Chairman and Chief Executive Officer of the Company, confirmed Parent's interest
in a possible acquisition of the Company and expressed a preliminary indication
of the price which might be offered, subject, among other things, to the
completion by Parent of satisfactory financial and legal due diligence
investigations. Shortly following that date, a representative of Allen & Company
informed Deutsche Bank in a telephone call that that indicative price was
unlikely to be sufficient to secure the support of the Board of the Company for
an acquisition of the Company by Parent and that the Company had also received
indications of interest from other parties.
On January 22, 2000, the Chairman of Parent met with the Chairman and Chief
Executive Officer of the Company and on January 23, 2000 the Chairman of Parent
met with the President and Chief Operating Officer of the Company, in each case
to discuss further the business and operations of the Company in light of
Parent's interest in possibly acquiring the Company.
On January 26, 2000, representatives of Deutsche Bank met with
representatives of Allen & Company at the offices of Allen & Company in New York
City. In this meeting Allen & Company communicated that the Company had received
expressions of interest from other parties concerning a potential acquisition or
strategic alliance, and that it was proposed that a meeting of a special
committee of the Board of Directors of the Company (the "Special Committee")
would be held in early February, 2000 with a view to comparing offers. It was
also agreed that representatives of Parent, Deutsche Bank and Parent's
accounting and legal advisors could meet at the head office of the Company in
Delray Beach, Florida on January 27, 2000 to discuss arrangements for, and
commence, Parent's due diligence investigations.
17
<PAGE>
On January 27, 2000, representatives of Parent, Deutsche Bank and Parent's
accounting and legal advisors met with members of senior management of the
Company and a representative of Allen & Company in Delray Beach and commenced
their due diligence investigations.
On January 31, 2000, Allen & Company sent a letter to Parent and the other
parties who had presented competing proposals soliciting such parties to submit
offers for the Company by February 7, 2000 and providing Parent with a draft of
the Merger Agreement.
On February 2, 2000, representatives of Deutsche Bank and members of senior
management of Parent participated in a conference call in which Deutsche Bank
reviewed its financial and strategic analyses of Parent's acquisition of the
Company and recommended pursuing the acquisition.
On February 3, 2000, representatives of Deutsche Bank, Parent's accounting
advisors and Parent's legal counsel and members of senior management of Parent
participated in a conference call and discussed, among other things, the terms
of a potential acquisition of the Company.
On February 7, 2000, Deutsche Bank on behalf of Parent submitted to Allen &
Company a non-binding proposal ("the Proposal") to acquire the Company for cash
at the previously indicated price. The Proposal was not conditioned on financing
and proposed, among other things, that the structure of the transaction would be
a cash tender offer followed by a merger of the Company with an acquisition
subsidiary of Parent and proposed changes to the draft Merger Agreement. The
Company did not agree to the Proposal.
On February 8, 2000, representatives of Allen & Company informed
representatives of Deutsche Bank that the Company had received other indications
of interest in the Company. From February 8, 2000 through February 17, 2000,
Parent's legal counsel, accounting advisors and Deutsche Bank completed their
financial and legal due diligence investigation of the Company, and legal
counsel to the Company and Parent discussed the Merger Agreement. From
February 10, 2000 through February 18, 2000, Deutsche Bank and Allen & Company
had discussions concerning Parent's Proposal.
On February 10, 2000, members of senior management of Parent and senior
management of the Company had additional conversations concerning the business
and operations of the Company at the offices of Allen & Company, and
representatives of Parent's and the Company's outside legal counsel participated
in a conference call to discuss Parent's proposed changes to the Merger
Agreement.
On February 15, 2000, a representative of Allen & Company contacted
Deutsche Bank and requested a new bid on February 16, 2000.
On February 16, 2000, Deutsche Bank on behalf of Parent confirmed to Allen
& Company the Proposal, and representatives of legal counsel to Parent and legal
counsel to the Company, together with the Company's General Counsel,
participated in a conference call to discuss and negotiate the Merger Agreement.
On February 17, 2000, the Chairman of Parent met with a member of senior
management of the Company to discuss further the business and operations of the
Company.
On February 18, 2000, Allen & Company informed Deutsche Bank that on
February 20, 2000, the Special Committee and the Board of Directors of the
Company would meet in New York and either select a successful bidder or decide
not to currently sell the Company.
On February 18, and February 19, 2000, representatives of Deutsche Bank and
members of senior management of Parent discussed raising Parent's offer.
On February 19, 2000, Deutsche Bank on behalf of Parent submitted to Allen
& Company a revised non-binding proposal (the "Revised Proposal") to acquire the
Company at a price per Share of $26.00 in cash and Parent's legal counsel
submitted to legal counsel to the Company a revised mark-up of the Merger
Agreement.
On February 20, 2000, Allen & Company notified Deutsche Bank that the
Special Committee and the Board of Directors of the Company had determined to
pursue a transaction with Parent on the basis of the Revised Proposal and,
subject to final negotiations on the Merger Agreement, had approved the Offer,
the Merger, the Merger Agreement and the Shareholders Agreement, and Parent and
the Company and their respective legal counsel finalized the Merger Agreement.
18
<PAGE>
On February 20, 2000, a committee of the Board of Directors of Parent and
the Board of Directors of the Purchaser approved the Offer, the Merger, the
Merger Agreement and the Shareholders Agreement.
On February 21, 2000, Parent, the Purchaser and the Company executed the
Merger Agreement.
On February 21, 2000, Parent and the Company each issued a press release
announcing the execution of the Merger Agreement and the proposed acquisition of
the Company.
On February 27, 2000, Parent, the Purchaser and the Shareholders executed
the Shareholders Agreement.
On February 29, 2000, the Purchaser commenced the Offer.
PURPOSE OF THE OFFER AND THE MERGER.
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
The Offer is being made pursuant to the Merger Agreement and is intended to
increase the likelihood that the Merger will be effected. The purpose of the
Merger is to acquire all outstanding Shares not purchased pursuant to the Offer.
The transaction is structured as a merger in order to ensure the acquisition by
Parent of all the outstanding Shares.
If the Merger is consummated, Parent's common equity interest in the
Company will increase to 100%, and Parent will be entitled to all benefits
resulting from that interest. These benefits include control over management
with regard to the future conduct of the Company's business and any increase in
its value. Similarly, Parent will also bear the risk of any losses incurred in
the operation of the Company and any decrease in the value of the Company.
Shareholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company or to participate in its earnings and
any future growth. If the Merger is consummated, the Company's shareholders will
no longer have an equity interest in the Company and instead will have only the
right to receive cash consideration pursuant to the Merger Agreement. See
Section 12. Similarly, the shareholders of the Company will not bear the risk of
any decrease in the value of the Company after selling their Shares in the Offer
or the subsequent Merger.
The primary benefits of the Offer and the Merger to the shareholders of the
Company are that such shareholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
45% over the closing market price of the Common Stock on the last full trading
day prior to the public announcement that the Company, Parent and the Purchaser
executed the Merger Agreement.
MERGER AGREEMENT.
The following is a summary of certain provisions of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement
which is incorporated herein by reference and a copy of which has been filed
with the Commission as an exhibit to the Schedule TO. The Merger Agreement may
be examined and copies may be obtained at the places and in the manner set forth
in Section 8 of this Offer to Purchase.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer as promptly as practicable, but in no event later than the seventh
business day after the date of the Merger Agreement, and that, upon the terms
and subject to the satisfaction or waiver of the conditions to the Offer
described in Section 15, the Purchaser will purchase all Shares validly tendered
pursuant to the Offer. The Merger Agreement provides that, without the consent
of the Company, the Purchaser will not (i) reduce the number of Shares sought to
be purchased in the Offer, (ii) reduce the Offer Price, (iii) add to the
conditions to the Offer described in Section 15, (iv) modify the conditions to
the Offer described in Section 15 or any other term or condition of the Offer in
a manner that is adverse to the holders of Common Stock, (v) change the form of
consideration payable in the Offer or (vi) extend the Offer beyond any scheduled
expiration date, except as required by law and except (A) that the Purchaser
shall extend the expiration date of the Offer if it is unable to consummate the
Offer on the initial scheduled expiration date due to the failure of the
conditions to the Offer described in Section 15 to be satisfied or waived, and
set subsequent scheduled expiration dates until the Merger Agreement has been
terminated; provided, that any such extended expiration date may not be later
than the earlier of (x) ten business days following the previously scheduled
expiration date and (y) the date on which the Purchaser reasonably believes that
all of the conditions to the Offer described in
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Section 15 will be satisfied or waived and (B) that the Purchaser may extend the
Offer, without the Company's consent, on one or more occasions, for any reason,
up to a maximum of three business days in the aggregate, notwithstanding the
prior satisfaction of the conditions to the Offer described in Section 15 so
long as the Purchaser irrevocably waives the continued satisfaction of any of
the conditions to the Offer described in Section 15.
The Purchaser will, on the terms and subject to the prior satisfaction or
waiver of the conditions to the Offer described in Section 15, accept for
payment and pay for Shares tendered as soon as the Purchaser is legally
permitted to do so under applicable law.
The Merger. Following the consummation of the Offer, the Merger Agreement
provides that, subject to its terms and conditions, at the Effective Time, the
Purchaser will be merged with and into the Company and, as a result of the
Merger, the separate corporate existence of the Purchaser will cease, and the
Company will continue as the surviving corporation (sometimes hereinafter
referred to as the "Surviving Corporation").
The respective obligations of Parent and the Purchaser, on the one hand,
and the Company, on the other hand, to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions: (i) to the extent required by applicable law, the Merger Agreement
and the Merger must have been approved and adopted by holders of a majority of
the outstanding shares of the Common Stock of the Company entitled to vote in
accordance with applicable law and the Company's Articles of Incorporation and
By-Laws, (ii) any applicable waiting period (and any extension thereof) under
the HSR Act applicable to the Merger must have expired or been terminated, (iii)
no preliminary or permanent injunction or other order shall have been issued by
any court or by any governmental or regulatory agency, body or authority which
prohibits the consummation of the Merger and the transactions contemplated by
the Merger Agreement and which is in effect at the Effective Time, (iv) no
statute, rule, regulation, executive order, decree or order of any kind must
have been enacted, entered, promulgated or enforced by any United States or
United Kingdom court or governmental authority which prohibits the consummation
of the Merger; and (v) the Purchaser must have accepted for payment and paid for
the Shares validly tendered and not withdrawn pursuant to the Offer; provided,
that the above will not be a condition to the Purchaser's obligation to
consummate the Merger if the Purchaser's failure to purchase any Shares violates
the terms of the Offer.
At the Effective Time of the Merger (i) each Share then issued and
outstanding (other than any Shares then held by the Purchaser or Parent and any
Shares held by Dissenting Shareholders (as defined in the Merger Agreement))
will be converted into and represent the right to receive the Offer Price in
cash and (ii) each share of common stock, par value $.01 per share, of the
Purchaser then issued and outstanding will become one share of common stock, par
value $.01 per share, of the Surviving Corporation.
The Company's Board of Directors. The Merger Agreement provides that
promptly upon the acceptance for payment of, and payment by the Purchaser in
accordance with the Offer for, any Shares, and from time to time thereafter as
Shares are acquired by the Purchaser, the Purchaser will be entitled to
designate such number of directors on the Board of Directors of the Company,
rounded up to the next whole number, as will give the Purchaser (subject to
compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder) representation on the Board of Directors equal to at least the
product of the total number of directors on the Board of Directors (giving
effect to the directors elected pursuant to this sentence) multiplied by a
fraction, the numerator of which will be the number of Shares so accepted for
payment and paid for or otherwise acquired or owned by Parent or the Purchaser
and the denominator of which will be the number of shares of Common Stock then
issued and outstanding, and the Company and its Board of Directors must, at such
time, use its reasonable efforts to cause the Purchaser's designees to be
appointed to the Company's Board of Directors. In no event will there be less
than two Independent Directors (as defined below) on the Company's Board of
Directors. If necessary, the Company must increase the size of the Company's
Board of Directors, or use its reasonable efforts to secure the resignation of
directors, or both, to permit the Purchaser's designees to be elected to the
Company's Board of Directors.
Following the election of any of the Purchaser's designees to the Company's
Board of Directors and prior to the Effective Time, (i) any amendment of the
Merger Agreement or the Articles of Incorporation or By-Laws of the Company,
(ii) any termination of the Merger Agreement by the Company, (iii) any extension
by the Company of the time for the performance of any of the obligations or
other acts of the Purchaser or (iv) any waiver of any
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of the Company's rights under the Merger Agreement will require the affirmative
vote of a majority of the directors of the Company then in office who are
neither designees of Parent or the Purchaser nor employees of the Company or any
of its Subsidiaries (as defined in the Merger Agreement) (the "Independent
Directors").
Shareholders' Meeting. Pursuant to the Merger Agreement, the Company must,
if required by applicable law in order to consummate the Merger, duly call,
convene and hold a special meeting of the holders of Common Stock for the
purpose of voting upon the Merger Agreement and the Merger. The Merger Agreement
provides that, if required by applicable law to consummate the Merger, the
Company will, as promptly as practicable after the purchase of shares of Common
Stock pursuant to the Offer, prepare and file with the Commission a preliminary
proxy statement relating to the Merger and the Merger Agreement and use its
reasonable efforts to respond to the comments of the Commission in connection
with the preliminary proxy statement and to furnish all information required to
prepare the definitive proxy statement (the "Proxy Statement"). The Company must
also, promptly after the purchase of Shares pursuant to the Offer and if
required by law to consummate the Merger, cause the Proxy Statement to be mailed
to the shareholders of the Company. The Merger Agreement provides that the
Company must use its reasonable efforts to solicit from its shareholders proxies
and, subject to the fiduciary obligations of the Company's directors under
applicable law, as determined by them in good faith after consulting with
outside counsel, take all other action necessary and advisable to secure the
vote of shareholders required by applicable law to obtain the approval for the
Merger Agreement and the Merger. Subject to the fiduciary obligations of the
Company's directors under applicable law as determined in good faith by them
after consulting with outside counsel, the Company has agreed that it will
include in the Proxy Statement the recommendation of its Board of Directors that
holders of Common Stock approve and adopt the Merger Agreement and approve the
Merger.
The Merger Agreement provides that in the event that the Purchaser acquires
at least 80% of the outstanding Shares pursuant to the Offer, the Company must,
at the request of the Purchaser, subject to the terms of the Merger Agreement,
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 shareholders, in accordance with Section 607.1104 of
the FBCA.
Options. Pursuant to the Merger Agreement, prior to the Effective Time, the
Board must use its reasonable efforts to take all actions necessary to provide
for the cancellation, effective at the Effective Time, of all the outstanding
stock options to purchase Common Stock ("Options") granted under any stock
option plan of the Company (the "Stock Plans"). Immediately prior to the
Effective Time, the Company must use its reasonable efforts to ensure that each
Option, whether or not then vested or exercisable, is no longer exercisable for
the purchase of shares of Common Stock but will instead entitle each holder of
an Option, in cancellation and settlement of the Option, to payments in cash
(subject to any applicable withholding taxes), at the Effective Time, equal to
the product of (x) the total number of shares of Common Stock subject to such
Option whether or not then vested or exercisable and (y) the excess of the Offer
Price over the exercise price per Share subject to such Option, with each such
cash payment to be made at the Effective Time. The Company must use its
reasonable efforts to ensure that the Stock Plans will terminate as of the
Effective Time and the provisions of any employee benefit plan providing for the
issuance or grant of shares of capital stock of the Company will be deleted as
of the Effective Time. The Company must take all reasonable steps to ensure that
neither the Company nor any of its Subsidiaries is or will be bound by any
Options, other options, warrants, rights or agreements which would entitle any
person, other than Parent or its affiliates, to own or purchase any capital
stock of the Surviving Corporation or any of its Subsidiaries. The Company must
use its reasonable efforts to obtain any necessary consents to ensure that after
the Effective Time, the only rights of the holders of Options to purchase shares
of Common Stock in respect of such Options will be to receive the cash payment
described above in cancellation and settlement thereof.
Interim Operations; Covenants. Pursuant to the Merger Agreement, the
Company has agreed that, except as permitted, required or contemplated by the
Merger Agreement or consented to or approved by Parent in writing, during the
period commencing on the date of execution of the Merger Agreement and ending on
the earlier of (x) the date of termination of the Merger Agreement in accordance
with its terms and (y) the time the designees of Parent have been elected to,
and constitute a majority of, the Board of Directors of the Company, (i) the
Company and each of its Subsidiaries will conduct their respective operations
only according to their ordinary course of business consistent with past
practice, or current plans, and will use their commercially reasonable
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efforts to preserve in all material respects their business organizations, keep
available the services of their officers and key employees and maintain their
existing relationships with material customers, suppliers, distributors,
licensors, clients and others having business relationships with them; and (ii)
except as permitted, required or contemplated by the Merger Agreement, neither
the Company nor any of its Subsidiaries will: (a) make any change in or
amendment to its Articles of Incorporation or By-Laws; (b) authorize for
issuance, issue, sell or deliver (or agree or commit to issue, sell or deliver),
whether pursuant to the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise, any shares of its capital stock
(other than in connection with the exercise of Options outstanding on the date
of execution of the Merger Agreement); (c) sell or pledge or agree to sell or
pledge any stock owned by it in any of its Subsidiaries or any other entity in
which it has an equity interest; (d) acquire (by merger, consolidation, or
acquisition of stock or assets or otherwise) any material corporation,
partnership or other business or division thereof; (e) except in the ordinary
course of business and except to the extent required under existing employee and
director benefit plans, agreements or arrangements as in effect on the date of
the Merger Agreement, (A) increase the compensation or fringe benefits of any of
its directors, officers or employees, (B) grant any severance or termination pay
not currently required to be paid under existing severance plans, (C) enter into
any employment, consulting or severance agreement or arrangement with any
present or former director, officer or employee of the Company or any of its
Subsidiaries, or (D) establish, adopt, enter into or amend or terminate any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any directors, officers or employees;
(f) except in the ordinary course of business, transfer, lease, license,
guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien,
any material assets or incur or modify any indebtedness for borrowed money
(other than certain existing indebtedness); (g) make any material tax election
or settle or compromise any material tax liability; (h) except as required by
applicable law or generally accepted accounting principles, make any change in
its method of accounting; (i) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries not constituting an
inactive Subsidiary (other than the Merger); (j) make any material loans,
advances or capital contributions to, or investment in, any person other than to
any Subsidiary of the Company; (k) declare, set aside or pay any dividends on,
or make or cause to be made any other distributions in respect of, any of its
capital stock or other equity securities or any interest in any person other
than dividends and distributions by a direct or indirect Subsidiary of the
Company to its parent; (l) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; (m) enter into any
agreement providing for the acceleration of payment or performance or other
consequences as a result of the transactions contemplated hereby or any other
change of control of the Company except to the extent permitted under the terms
of the Merger Agreement; (n) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Subsidiary or any rights, warrants or
options to acquire any such shares or other securities; (o) enter into any
contract or commitment with respect to capital expenditures (individually or in
the aggregate) in an amount in excess of $2 million over the aggregate budgeted
amount for all capital expenditures of the Company and its Subsidiaries taken as
a whole, (p) other than in the ordinary course of business, cancel, amend or
modify, in any material respect, any material contract or agreement to which the
Company or any of its Subsidiaries is a party or enter into any material
contract, or (q) agree, in writing or otherwise, to take any of the foregoing
actions.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
to notify Parent and the Purchaser promptly, if, on or after the date of the
Merger Agreement, any proposals are received by, any information is requested
from, or any negotiations or discussions are sought to be initiated or continued
with the Company or its representatives, in each case in connection with any
Acquisition Proposal (as hereinafter defined) or the possibility or
consideration of making an Acquisition Proposal ("Acquisition Proposal
Interest") indicating, in connection with such notice, the name of the Person
(as defined in the Merger Agreement) making such Acquisition Proposal or
indicating such Acquisition Proposal Interest and the material terms and
conditions of any proposals or offers. In addition, subject to the terms of the
Merger Agreement, the Company has agreed that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted prior to the date of the Merger Agreement with respect to
any Acquisition Proposal or Acquisition Proposal Interest. The Company agrees
that it will keep Parent and Purchaser informed, on a current basis, of the
status and material terms of any Acquisition Proposal or Acquisition Proposal
Interest.
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An "Acquisition Proposal" means any proposal or offer from any Person or
group relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its Subsidiaries or of all
or any portion of any class of equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning all or any portion of any class of
equity securities of the Company or any of its Subsidiaries, any merger,
consolidation, business combination, recapitalization, liquidation or
dissolution involving the Company or any of its Subsidiaries or any transaction
or series of transactions having similar economic effect, other than the
transactions contemplated by the Merger Agreement.
Except as set forth below, the Company, from the date of the Merger
Agreement until the earlier of the termination of the Merger Agreement and the
Effective Time, will not, nor will it authorize or permit its officers,
directors, employees, to (and the Company must use commercially reasonable
efforts to ensure that such persons and the Company's investment bankers,
attorneys, accountants and other agents do not), directly or indirectly
(i) initiate, solicit or knowingly encourage, or knowingly take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, (ii) enter into any
agreement with respect to any Acquisition Proposal, or (iii) in the event of an
unsolicited Acquisition Proposal for the Company, engage in negotiations or
discussions with, or provide any information or data to, any Person (other than
Parent, any of its affiliates or representatives) relating to any Acquisition
Proposal; except that the provisions of the Merger Agreement described in this
section "No Solicitation" do not prohibit the Company or the Board of Directors
from (A) taking and disclosing to the Company's shareholders its position with
respect to an offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, (B) making such disclosure to the Company's
shareholders as the Board of Directors determines in good faith, after receipt
of advice from outside legal counsel, is required under applicable law or
(C) otherwise complying with their fiduciary duties to shareholders.
Notwithstanding the foregoing, the Company may furnish information
concerning its business, properties or assets to any Person pursuant to a
confidentiality agreement with terms no less favorable to the Company than those
contained in the Confidentiality Agreement dated January 11, 2000 between the
Company and Parent and may negotiate and participate in discussions and
negotiations with such Person concerning an Acquisition Proposal if (x) such
entity or group has on an unsolicited basis submitted a bona fide written
proposal to the Company relating to any such transaction which the Board of
Directors determines in good faith, after receiving advice from a nationally
recognized investment banking firm, is (or could result in) a transaction
superior to the Offer and the Merger and (y) in the good faith opinion of the
Board of Directors, after consultation with outside legal counsel, providing
such information or access or engaging in such discussions or negotiations is in
the best interests of the Company and its shareholders and failure to provide
such information or access or engage in such discussion or negotiations is
inconsistent with the exercise of the fiduciary duties of the Board under
applicable law (an Acquisition Proposal which satisfies clauses (x) (without
regard to the phrase in parentheses) and (y) being a "Superior Proposal").
Within one business day following receipt of a Superior Proposal, the Company
must notify Parent of the receipt thereof. The Company must promptly provide to
Parent any material non-public information regarding the Company provided to any
other party which was not previously provided to Parent.
Except as permitted under the terms of the Merger Agreement, neither the
Board of Directors nor any of its committees may (i) withdraw or modify, or
propose (publicly or to a third party) to withdraw or modify, in any manner
adverse to Parent or the Purchaser, the approval or recommendation by such Board
of Directors or any such committee of the Offer, the Merger Agreement or the
Merger, (ii) approve or recommend or propose (publicly or to a third party) to
approve or recommend, any Acquisition Proposal or (iii) enter into any
acquisition agreement with respect to, or any other agreement which would
approve, adopt or effect, any Acquisition Proposal (other than a confidentiality
agreement as contemplated by the previous paragraph). Notwithstanding the
foregoing, the Board of Directors may (I) withdraw or modify its approval or
recommendation of the Offer, the Merger Agreement or the Merger to the extent
where not to do so would be inconsistent with the Board's fiduciary duties under
applicable law and (II) approve or recommend a Superior Proposal, or enter into
an acquisition agreement with respect to, or any other agreement which would
approve, adopt or effect, a Superior Proposal, in the case of either clause (I)
or (II), at any time after the third business day following the Company's
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delivery to Parent of written notice advising Parent that the Board of Directors
intends to enter into an agreement with respect to a Superior Proposal.
Indemnification and Insurance. The Merger Agreement provides that from and
after the Effective Time, the Surviving Corporation must indemnify, defend and
hold harmless any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer or director (the
"Indemnified Party") of the Company or any of its Subsidiaries against all
losses, claims, damages, liabilities, costs and expenses (including reasonable
attorney's fees and expenses), judgments, fines, losses, and amounts paid in
settlement (provided that any such settlement is effected with the written
consent of Parent or the Surviving Corporation, such consent not to be
unreasonably withheld) in connection with any actual or threatened action, suit,
claim, proceeding or investigation (whether arising before or after the
Effective Time) (each a "Claim") to the extent that any such Claim is based on,
or arises out of, (i) the fact that such person is or was a director or officer
of the Company or any of its Subsidiaries or is or was serving at the request of
the Company or any of its Subsidiaries as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, or (ii) the
Merger Agreement, or any of the transactions contemplated thereby, in each case
to the extent that any such Claim pertains to any matter or fact arising,
existing, or occurring prior to or at the Effective Time, regardless of whether
such Claim is asserted or claimed prior to, at or after the Effective Time, to
the full extent permitted under applicable law or the Company's Articles of
Incorporation, By-Laws or indemnification agreements in effect at the date of
the execution of the Merger Agreement, including provisions relating to
advancement of expenses incurred in the defense of any action or suit. In
addition, the Merger Agreement provides that for a period of six years after the
Effective Time, the Surviving Corporation must maintain the Company's existing
policies of directors' and officers' liability insurance (or a "tail" policy),
for the benefit of those persons who are covered by the Company's directors' and
officers' liability insurance policies as of the date of the Merger Agreement,
to the extent that such liability insurance can be maintained at an annual cost
to the Surviving Corporation of not greater than 200 percent of the premium for
the current Company directors' and officers' liability insurance, provided that
if such insurance (or "tail" policy) cannot be so maintained at such cost, the
Surviving Corporation must maintain as much of such insurance as can be so
maintained at a cost equal to 200 percent of the current annual premiums of the
Company for such insurance.
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and the
Purchaser with respect to, among other things, its organization, capitalization,
authority relative to the Merger Agreement and the Merger, financial statements,
public filings, conduct of business, employee benefit plans, intellectual
property, employment matters, compliance with laws, tax matters, litigation,
environmental matters, material contracts, brokers' fees, vote required to
approve the Merger Agreement, information in any Proxy Statement, the
inapplicability of the Rights Agreement, and the absence of any material adverse
effect on the Company since December 31, 1999.
Termination; Fees. The Merger Agreement may be terminated and the
transactions contemplated thereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by the Company's
shareholders:
(a) by mutual written consent of the Company and of Parent;
(b) by either Parent or the Company if any governmental or regulatory
agency issues an order, decree or ruling or takes any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for payment of,
or payment for, shares of Common Stock pursuant to the Offer or the Merger and
such order, decree or ruling or other action becomes final and nonappealable;
(c) by Parent or the Company if the Purchaser has not purchased all Shares
tendered pursuant to the Offer within 90 days after commencement of the Offer
(the "Outside Date"), unless such purchase shall not have occurred because of a
material breach of any representation, warranty, obligation, covenant or
agreement set forth in the Merger Agreement on the part of the party seeking to
terminate the Merger Agreement;
(d) by Parent if the Offer is terminated or expires in accordance with its
terms without Purchaser having purchased any Common Stock thereunder due to an
occurrence which would result in a failure to satisfy the Minimum Condition or
any other of the conditions to the Offer described in Section 15, unless any
such failure
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shall have been caused by or resulted from the material breach by the Purchaser
or Parent of any representation, warranty, obligation, covenant or agreement
contained in the Merger Agreement;
(e) by Parent, if, prior to the purchase of Shares in the Offer, the
representations and warranties of the Company set forth in the Merger Agreement
which are not qualified by "Material Adverse Effect" are not true and correct
and the fact, matter or circumstance giving rise to such untruth or
incorrectness would have, or would be reasonably likely to have a "Material
Adverse Effect" (as defined in the Merger Agreement), and the representations
and warranties that are qualified by "Material Adverse Effect" are not true in
any respect, at any time after the date of the Merger Agreement (except for
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period), or
the Company has breached or failed to perform or comply in any material respect
with any obligation, agreement or covenant required by the Merger Agreement to
be performed or complied with by it, and, with respect to any such breach or
failure to perform that is reasonably capable of being remedied within the time
periods set forth below, the breach or failure to perform is not remedied prior
to the earlier of (x) 10 days after Parent or the Purchaser has furnished the
Company with written notice of such breach or failure to perform or (y) two
business days prior to the date on which the Offer expires; provided, however,
that Parent shall not be entitled to terminate the Merger Agreement under this
provision if it or the Purchaser is in material breach of its representations
and warranties, covenants or other obligations under the Merger Agreement;
(f) by the Company to allow the Company to enter into an agreement in
accordance with the provision described in the last paragraph of the section "No
Solicitation" above with respect to a Superior Proposal which the Board of
Directors has determined is more favorable to the shareholders of the Company
than the transactions contemplated by the Merger Agreement; provided, however,
that the Company shall have complied in all material respects with that relevant
provision, and that it makes simultaneous payment of the Termination Fee (as
defined below);
(g) by the Purchaser, if the Board of Directors of the Company or any
committee thereof has (i) withdrawn, modified or changed in a manner adverse to
Parent or the Purchaser its approval or recommendation of the Offer, the Merger
or the Merger Agreement or (ii) approved, taken a neutral position with respect
to, or recommended to the shareholders of the Company any alternative
Acquisition Proposal;
(h) by the Company, if prior to purchase of shares in the Offer there has
been a breach or failure to perform on the part of the Purchaser or Parent of
any of its representations, warranties, covenants or agreements contained in the
Merger Agreement and such breach or failure to perform has a material adverse
effect on the ability of the Purchaser or Parent to consummate the Offer or the
Merger, and, with respect to any such breach or failure to perform that is
reasonably capable of being remedied within the time periods set forth below,
the breach or failure to perform is not remedied prior to the earlier of (x) 10
days after the Company has furnished Parent with written notice of such breach
or failure to perform or (y) two business days prior to the date on which the
Offer expires unless such failure has been caused by the failure of the Company
to satisfy certain fundamental conditions relating to the truth and correctness
of its representations and warranties and compliance with its covenants set
forth in the Merger Agreement;
(i) by the Company, if the Purchaser has (i) failed to commence the Offer
within seven Business Days following the date of the Merger Agreement, or (ii)
terminated the Offer or the Offer has expired without the Purchaser having
purchased any Shares thereunder unless such failure has been caused by the
failure of the Company to satisfy certain fundamental conditions relating to the
truth and correctness of its representations and warranties and compliance with
its covenants set forth in the Merger Agreement.
If the Company terminates the Merger Agreement pursuant to clause (f)
above, then the Company must pay simultaneously with such termination a fee (the
"Termination Fee") of $13.5 million. If the Purchaser terminates the Merger
Agreement pursuant to clause (g) above, then the Company must pay to Parent the
Termination Fee within two business days following such termination.
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SHAREHOLDERS AGREEMENT
The following is a summary of certain provisions of the Shareholders
Agreement. The summary is qualified in its entirety by reference to the
Shareholders Agreement which is incorporated herein by reference and a copy of
which has been filed with the Commission as an Exhibit to the Schedule TO.
Certain directors of the Company who are also shareholders of the Company
(each a "Shareholder") have entered into the Shareholders Agreement. The
Shareholders have voting power and dispositive power with respect to an
aggregate of 1,872,057 Shares, representing approximately 11.6% of the Shares on
a fully diluted basis and with respect to 80,000 Shares issuable on the exercise
of Options, representing less than one percent of the Shares on a fully diluted
basis. Pursuant to the Shareholders Agreement, each of the Shareholders has
agreed to validly tender (and not withdraw), in accordance with the terms of the
Offer in a timely manner all Shares held by them, subject to the Shareholders
Agreement. Each of the Shareholders has granted to Parent an irrevocable proxy
with respect to the voting of such Shares in favor of the Merger and against any
action, transaction or agreement that would impede, interfere with, delay or
materially adversely affect the Merger.
Each of the Shareholders has agreed that such Shareholder will not (i)
transfer, or consent to the transfer of, any or all of such Shareholder's
Shares; (ii) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of such Shares or any interest
therein; (iii) grant any proxy or power-of-attorney in or with respect to such
Shares or deposit such Shares into a voting trust or enter into a voting
agreement with respect to such Shares; or (iv) take any other action that would
have the effect of preventing, disabling or delaying the performance of such
Shareholder's obligations under the Shareholders Agreement.
The Shareholders Agreement, and all rights and obligations of the parties
thereto, will terminate upon the termination of the Merger Agreement in
accordance with its terms.
CONFIDENTIALITY AGREEMENT.
The following is a summary of the Confidentiality Agreement, dated January
11, 2000, between the Company and Parent. The summary is qualified by reference
to the Confidentiality Agreement which is incorporated herein by reference and a
copy of which is filed as an exhibit to the Schedule TO.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other things, Parent and the Company, and each of their respective
subsidiaries agreed, subject to certain exceptions, to keep confidential all
non-public, confidential information one party has furnished to another (the
"Confidential Information"), and to use the Confidential Information solely for
the purpose of evaluating and implementing a business relationship or
transaction among the parties.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
Plans for the Company. Parent intends to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and will consider,
subject to the terms of the Merger Agreement, what, if any, changes would be
desirable in light of the circumstances which exist upon completion of the
Offer. Such changes could include changes in the Company's business, corporate
structure, articles of incorporation, by-laws, capitalization, Board of
Directors, management or dividend policy, although, except as disclosed in this
Offer to Purchase, Parent has no current plans with respect to any of such
matters. The Merger Agreement provides that, promptly upon the purchase of and
payment for any Shares by the Purchaser pursuant to the Offer, and from time to
time thereafter as Shares are acquired by the Purchaser, Parent has the right to
designate such number of directors, rounded up to the next whole number, on the
Company's Board of Directors as is equal to the product of the total number of
directors on the Company's Board of Directors (giving effect to the directors
designated by Parent) multiplied by the percentage that the number of Shares
beneficially owned by the Purchaser or any affiliate of the Purchaser bears to
the total number of Shares then outstanding. See Section 11. Parent is
considering a transfer of the shares it owns in the Purchaser (which following
the Merger will represent shares in the Company) to another entity owned by
Parent. The Merger Agreement provides that the directors of the Purchaser and
the officers of the Company immediately prior to the Effective Time of the
Merger will, at the Effective Time, be the initial directors and officers,
respectively, of the Surviving Corporation.
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Except as disclosed in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any of its subsidiaries, or any material changes in the Company's
corporate structure, business or composition of its management or personnel.
OTHER MATTERS.
Shareholder Approval. Under the FBCA and the Company's Articles of
Incorporation, the approval of the Board of Directors of the Company and the
affirmative vote of the holders of a majority of the outstanding Shares are
required to adopt and approve the Merger Agreement and the transactions
contemplated thereby, unless the Merger is consummated pursuant to the
short-form merger provisions under the FBCA described below (in which case no
further corporate action by the shareholders of the Company will be required to
complete the Merger). The Merger Agreement provides that Parent and Purchaser
will cause to be voted in favor of the Merger all of the Shares then owned by
Parent, the Purchaser or any of their affiliates. In the event that the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power to cause
the approval of the Merger Agreement and the transactions contemplated thereby
without the affirmative vote of any other shareholders of the Company.
Short-Form Merger. Section 607.1104 of the FBCA provides that, if the
parent corporation owns at least 80% of the outstanding shares of each class of
the subsidiary corporation, the merger into the subsidiary corporation of the
parent corporation may be effected by a plan of merger adopted by the board of
directors of the parent corporation and the appropriate filings with the Florida
Department of State, without the approval of the shareholders of the subsidiary
corporation (a "short-form merger"). Under the FBCA, if the Purchaser acquires
at least 80% of the outstanding Shares, the Purchaser will be able to effect the
Merger without a vote of the shareholders of the Company. In such event, the
Company has agreed in the Merger Agreement to take, at the request of Purchaser,
all necessary and appropriate action to cause the Merger to become effective as
soon as practicable after such acquisition, without a meeting of the Company's
shareholders. In the event that less than 80% of the Shares then outstanding on
a fully diluted basis are tendered pursuant to the Offer on the Initial
Expiration Date, the Purchaser may extend the Offer for up to 3 business days so
that the merger may be consummated as a short-form merger.
Florida Affiliated Transactions Statute. The Company is also subject to
Section 607.0901 (the "Affiliated Transactions Statute") of the FBCA. The
Affiliated Transactions Statute generally prohibits a Florida corporation from
engaging in an "affiliated transaction" with an "interested shareholder," unless
the affiliated transaction is approved by a majority of the disinterested
directors or by the affirmative vote of the holders of two-thirds of the voting
shares other than the shares beneficially owned by the interested shareholder,
the corporation has not had more than 300 shareholders of record at any time for
three years prior to the public announcement relating to the affiliated
transaction or the corporation complies with certain statutory fair price
provisions.
Subject to certain exceptions, under the FBCA an "interested shareholder"
is a person who beneficially owns more than 10% of the corporation's outstanding
voting shares. In general terms, an "affiliated transaction" includes: (i) any
merger or consolidation with an interested shareholder; (ii) the transfer to any
interested shareholder of corporate assets with a fair market value equal to 5%
or more of the corporation's consolidated assets or outstanding shares or
representing 5% or more of the corporation's earning power on net income; (iii)
the issuance to any interested shareholder of shares with a fair market value
equal to 5% or more of the aggregate fair market value of all outstanding shares
of the corporation; (iv) any reclassification of securities or corporate
reorganization that will have the effect of increasing by more than 5% the
percentage of the corporation's outstanding voting shares beneficially owned by
any interested shareholder; (v) the liquidation or dissolution of the
corporation if proposed by any interested shareholder; and (vi) any receipt by
the interested shareholder of the benefit of any loans, advances, guaranties,
pledges, or other financial assistance or any tax credits or other tax
advantages provided by or through the corporation.
Because a majority of the disinterested directors of the Company's Board of
Directors has approved the Merger Agreement and the Shareholders Agreement and
the transactions contemplated thereby, the provisions of the Affiliated
Transactions Statute are not applicable to the Offer and the Merger and the
other such transactions.
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Control Share Acquisition Statute. The Company is also subject to Section
607.0902 of the FBCA (the "Control Share Acquisition Statute"). The Control
Share Acquisition Statute provides that shares of a publicly held Florida
corporation that are acquired in a "control share acquisition" generally will
have no voting rights unless such rights are conferred on those shares by the
vote of the holders of a majority of all the outstanding shares other than
interested shares. A control share acquisition is defined, with certain
exceptions, as the acquisition of the ownership of voting shares which would
cause the acquiror to have voting power within the following ranges or to move
upward from one range into another: (i) 20%, but less than 33 1/3%; (ii) 33
1/3%, but less than 50%; or (iii) 50% or more of such votes.
The Control Share Acquisition Statute does not apply to an acquisition of
shares of a publicly held Florida corporation (i) pursuant to a merger or share
exchange effected in compliance with the FBCA if the publicly held Florida
corporation is a party to the merger or share exchange agreement, or (ii) if
such acquisition has been approved by the board of directors of that corporation
before the acquisition.
Because the Control Share Acquisition Statute specifically exempts a merger
effected in compliance with the FBCA if the publicly held Florida corporation is
a party to the merger agreement and an acquisition which has been approved by
the board of directors before the acquisition, the provisions of the Control
Share Acquisition Statute are not applicable to the Offer or the Merger or the
Shareholders Agreement.
Dissenters' Rights. No dissenters' or appraisal rights are available in
connection with the Offer. Shareholders may be entitled to dissenter's rights,
rights of appraisal or other similar rights in connection with the Merger
pursuant to the FBCA unless, in the event the vote of the shareholders is
required to approve the Merger pursuant to the FBCA, on the record date fixed by
the Company's Board of Directors to determine the shareholders of the Company
entitled to vote at a meeting to approve the Merger (or to consent to the Merger
without a meeting) the Shares are (A) registered on a national securities
exchange or designated as a national market system security by the NASD or (B)
held of record by at least 2,000 record shareholders. In the event dissenters'
rights become available, Section 607.1302 of the FBCA provides that shareholders
of the Company will be entitled to receive the "fair value" of their Shares,
provided that the procedures set forth in Section 607.1320 of the FBCA are
followed. Shareholders should be aware that the "fair value" as determined under
the FBCA, could be more than, the same as or less than the Offer Price and that
failure to follow the steps required by Section 607.1320 of the FBCA for
perfecting dissenters' rights may result in the loss of such rights. The
preceding discussion is only a summary for general information on the
dissenters' rights provisions of the FBCA which are incorporated herein by
reference.
Rule 13e-3. The Merger would have to comply with any applicable Federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions; however, the Purchaser believes that Rule
13e-3 will not be applicable to the Merger because it is anticipated that the
Merger will be effected within one year following the consummation of the Offer.
If Rule 13e-3 were applicable to the Merger, it would require, 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 shareholders in such a transaction, be filed
with the Commission and disclosed to minority shareholders prior to consummation
of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that neither
the Company nor any of its Subsidiaries shall, without the consent of Parent in
writing: (i) declare, set aside or pay any dividend or other distribution
payable with respect to its capital stock; or (ii) purchase, redeem or otherwise
acquire any shares of any class or series of its capital stock, or any rights,
warrants or options to acquire such shares.
14. RIGHTS AGREEMENT. Set forth below is a summary description of the
Rights, as contained in the Company's Registration Statement on Form 8-A, dated
February 2, 1999, relating to the Rights.
On January 28, 1999, the Board of Directors of the Company adopted the
Rights Agreement and declared a dividend distribution of one Right for each
outstanding share of Common Stock of the Company to shareholders of record at
the close of business on January 28, 1999. Each Right entitles the registered
holder to purchase from the Company one share of Common Stock (or in certain
circumstances, cash, property or other securities) at a price of $175.00 per
share (the "Purchase Price"), subject to adjustment.
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In the event that any person or group of affiliated or associated persons
acquires beneficial ownership of 15% or more of the outstanding shares of Common
Stock (an "Acquiring Person"), each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock having a market value of two times the exercise price of the Right.
Issuances (and consequent beneficial ownership) of Common Stock (at or in excess
of such 15% threshold) by the Company in connection with certain acquisition
transactions effected by the Company and approved by the Board of Directors are
excepted from this provision.
If the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person, each holder of a Right
(other than Rights beneficially owned by the Acquiring Person, which will be
void) will thereafter have the right to receive that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
The Distribution Date is the earlier of: (i) ten days following a public
announcement that a person or group of affiliated or associated persons have
acquired beneficial ownership of 15% or more of the outstanding shares of Common
Stock; or (ii) ten business days (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding shares of
Common Stock.
Until the Distribution Date, the Rights will be evidenced, with respect to
any of the Common Stock certificate(s) outstanding as of the Record Date, by
such Common Stock certificate(s). Until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the shares of Common Stock, no separate rights certificates will be
issued and transfer of Common Stock certificates will also constitute transfer
of the Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the shares of Common Stock as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on January 28, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, on the terms and conditions set forth in
the Rights Plan (as described below).
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution in the event of stock
dividends, stock splits, reclassifications, or certain distributions with
respect to the Common Stock. The number of outstanding Rights and the number of
shares of Common Stock issuable upon exercise of each Right are also subject to
adjustment if, prior to the Distribution Date, there is a stock split of the
Common Stock or a stock dividend on the Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of the Common Stock. With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1.0% in such Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading day prior to the date of exercise.
At any time after any person or group becomes an Acquiring Person, and
prior to the acquisition by any such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which will
have become void), in whole or in part, for shares of Common Stock, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
At any time prior to any person or group becoming an Acquiring Person, the
Board of Directors of the Company may redeem the Rights, in whole but not in
part, at a price of $.001 per Right (the "Redemption Price"). If, however, such
redemption is authorized on or after the date of a change (resulting from a
proxy contest or consent solicitation) in a majority of the directors in office,
then such redemption must be approved by
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a majority of Independent Directors (as defined in the Rights Agreement), if
any, and by a majority of the full board of directors. The redemption of the
Rights may be made effective at such time on such basis with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower the "15%" thresholds described above to not less than the greater of
(i) the sum of .001% and the largest percentage of the outstanding shares of
Common Stock then known to the Company to be beneficially owned by any person or
group of affiliated or associated persons and (ii) 10%, except that from and
after such time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
The Board of Directors of the Company has the sole authority to administer
the Rights Plan and to exercise all rights and powers granted to the Board or to
the Company, or as are advisable in the administration of the Rights Plan,
including the power to (i) interpret the provisions of the Rights Agreement and
(ii) make all determinations appropriate for the administration of the Rights
Plan (including a determination to redeem or not redeem the Rights, to exchange
the Rights or to amend the Rights Agreement). All such interpretations and
determinations in good faith are final and binding on the parties (including the
Rights holders) and do not subject the Board (or the directors) to any liability
to the holders of Rights. In the event a vote, approval or determination of the
Board of Directors (including a determination to redeem or not redeem the
Rights, to exchange the Rights or to amend or supplement the Rights Agreement)
occurs at any time after either a Person becomes an Acquiring Person or a change
(resulting from a proxy contest or consent solicitation) in a majority of the
directors in office, then such vote, approval or determination must be approved
by a majority of Independent Directors (as defined in the Rights Agreement), if
any, and by a majority of the full board of directors.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
In connection with the Company entering into the Merger Agreement, the
Company has amended the Rights Agreement such that the provisions in the Rights
Agreement which prohibit the execution of the Merger Agreement and the
Shareholders Agreement, the consummation of the Offer, the Merger or any of the
transactions contemplated by the Merger Agreement and the Shareholders
Agreement, or the public announcement thereof, will not cause, among other
things, Parent or Purchaser to be deemed to be an Acquiring Person or a
Distribution Date to be deemed to have occurred pursuant to the Rights
Agreement.
15. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer, and in addition to (and not in limitation of) the Purchaser's right to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), the Purchaser shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act, pay for any Shares
validly tendered pursuant to the Offer and may postpone the acceptance of and,
subject to the restrictions referred to above, payment for, Shares tendered
pursuant to the Offer, (i) if any applicable waiting period under the HSR Act
shall not have expired or been terminated or (ii) there shall not have been
validly tendered and not properly withdrawn prior to the expiration of the Offer
that number of Shares representing more than 50% of all Shares outstanding
(calculated on a fully diluted basis, which shall mean, as of any date, the
number of Shares that are actually issued and outstanding plus the number of
Shares that the Company is required to issue pursuant to obligations outstanding
under convertible securities, Options and otherwise on the date of purchase)
(the "Minimum Condition"). Additionally and without limiting the foregoing,
notwithstanding any other provision of the Offer but only in accordance with the
provisions of Section 1.01(a) of the Merger Agreement, the Purchaser shall not
be required to accept for payment or, subject to the restrictions referred to
above, pay for any Shares, and may terminate or amend the Offer and may postpone
the acceptance of, subject to the restrictions referred to above, payment for
Shares, if at any time on or after the date of the Merger Agreement and at or
before the time of payment for any such Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the Offer) any of
the following events shall occur:
(a) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction enacted, entered, enforced,
promulgated, amended, issued, or applied by, any legislative body, court,
government
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or governmental, administrative or regulatory authority or agency, domestic or
foreign, other than the routine application of the waiting period provisions of
the HSR Act to the Offer or to the Merger, which is in effect and would, or
would be reasonably likely to: (i) make illegal or otherwise directly or
indirectly prohibit the Offer or the Merger, (ii) prohibit or materially limit
the ownership or operation by Parent or the Purchaser of all or any material
portion of the business or assets of the Company and its Subsidiaries taken as a
whole or of Parent or to compel the Purchaser or Parent to dispose of or hold
separately all or any material portion of the business or assets of Parent, the
Company and their respective Subsidiaries, in each case taken as a whole, or
seeking to impose any material limitation on the ability of the Purchaser to
conduct its business or own such assets, (iii) impose material limitations on
the ability of the Purchaser or render the Purchaser unable, to accept, pay for
or purchase some or all of the Shares pursuant to the Offer and the Merger, or
(iv) seek to impose material limitation on the ability of the Purchaser or
Parent effectively to exercise rights of ownership of the shares of Common
Stock, including, without limitation, the right to vote any shares of Common
Stock acquired or owned by the Purchaser on all matters properly presented to
the Company's shareholders, or require divestiture by the Purchaser of any
shares of Common Stock;
(b) there shall be threatened in writing or pending any suit, action or
proceeding by any United States or United Kingdom governmental authority against
the Purchaser, Parent, the Company or any Subsidiary of the Company that is
reasonably likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) any of the representations or warranties made by the Company in the
Merger Agreement that are qualified by Material Adverse Effect shall be untrue
or incorrect, or any such representation and warranty that is not so qualified
shall be untrue or incorrect to the extent that such inaccuracy would, in each
case as of the date of the final scheduled expiration of the Offer result in a
Material Adverse Effect, except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct, as of such
date;
(d) the Company shall have failed in a material respect to perform or to
comply with any agreement or covenant of the Company to be performed or complied
with by it under this Agreement and, with respect to any such breach or failure
to perform that is reasonably capable of being remedied within the time periods
set forth below, the breach or failure to perform is not remedied prior to the
earlier of (x) 10 days after the Purchaser has furnished the Company with
written notice of such breach or failure to perform or (y) two business days
prior to the date on which the Offer expires;
(e) the Merger Agreement shall have been terminated in accordance with its
terms;
(f) since the date of the Merger Agreement, there shall have occurred any
change (or any development that would be reasonably likely to result in any
change) that constitutes a Material Adverse Effect on the Company;
(g) the Board of Directors of the Company or any committee thereof shall
have withdrawn, modified or changed in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any Acquisition Proposal or the Company
shall have entered into any acquisition agreement with respect to, or any other
agreement that would approve, adopt or effect, any Superior Proposal in
accordance with Section 4.07(d) of the Merger Agreement; or
(h) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on the London Stock Exchange, the New York
Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market for a
period in excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States or the United Kingdom
(whether or not mandatory), (iii) a commencement of a war, armed hostilities or
other international or national calamity directly or indirectly involving the
United States or the United Kingdom that constitutes a Company Material Adverse
Effect or materially adversely affects or delays the consummation of the Offer,
or (iv) any material limitation (whether or not mandatory) by any United States
or United Kingdom governmental authority on the extension of credit generally by
banks or other financial institutions;
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which, in the good faith judgment of the Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, make it
inadvisable to proceed with the Offer and/or with such acceptance or payment or
payments for shares of Common Stock.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and, subject to the provisions of the Merger Agreement, may be
asserted by Parent or the Purchaser regardless of the circumstances giving rise
to such condition and may be waived by Parent or the Purchaser in whole or in
part. The failure by the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any right, and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS. Except as described in this Section 16, based on
information provided by the Company, none of the Company, the Purchaser or
Parent is aware of any license or regulatory permit that appears to be material
to the business of the Company that might be adversely affected by the
Purchaser's acquisition of Shares as contemplated herein or of any approval or
other action by a domestic or foreign governmental, administrative or regulatory
agency or authority that would be required for the acquisition and ownership of
the Shares by the Purchaser as contemplated herein. Should any such approval or
other action be required, the Purchaser and Parent presently contemplate that
such approval or other action will be sought, except as described below under
"State Takeover Laws." While, except as otherwise described in this Offer to
Purchase, the Purchaser does not presently intend to delay the acceptance for
payment of or payment for Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of or
other substantial conditions complied with in the event that such approvals were
not obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Shares tendered. See Section 15 for certain
conditions to the Offer, including conditions with respect to governmental
actions.
State Takeover Laws. In addition to Florida, a number of states have
adopted laws and regulations applicable to attempts to acquire securities of
corporations which are incorporated, or have substantial assets, shareholders,
principal executive offices or principal places of business, or whose business
operations otherwise have substantial economic effects, in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States invalidated on
constitutional grounds the Illinois Business Takeover Statute, which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court held that the State of Indiana may, as a matter of
corporate law and, in particular, with respect to those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining shareholders. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of shareholders in the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and has not complied with any such
laws. Should any person seek to apply any state takeover law, the Purchaser will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws 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, the Purchaser might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer and the Merger. In such case,
the Purchaser may not be obligated to accept for payment, or pay for, any Shares
tendered pursuant to the Offer. See Section 15.
Antitrust. Under the HSR Act, and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied.
32
<PAGE>
A Notification and Report Form with respect to the Offer was filed under
the HSR Act on February 23, 2000, and the waiting period with respect to the
Offer under the HSR Act will expire at 11:59 P.M., New York City time, on or
about March 9, 2000. Before such time, however, either the FTC or the Antitrust
Division may extend the waiting period by requesting additional information or
material from the Purchaser. If such request is made, the waiting period will
expire at 11:59 P.M., New York City time, on the tenth calendar day after the
Purchaser has substantially complied with such request. Thereafter, the waiting
period may be extended only by court order or with the Purchaser's consent.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, 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 acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties, as well as state governments, may also bring legal action under
the antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the acquisition
of Shares by the Purchaser will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer or other acquisition of
Shares by the Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section 15 for certain conditions to the
Offer, including conditions with respect to litigation and certain governmental
actions.
In addition to the United States, the antitrust and competition laws of
other countries may apply to the Offer and the Merger and additional filings and
notifications may be required. Parent and the Company are reviewing whether any
such filings are required and intend to make such filings promptly to the extent
required.
17. FEES AND EXPENSES. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer.
Deutsche Bank is acting as the Dealer Manager in connection with the Offer
and is acting as financial advisor to Parent in connection with its effort to
acquire the Company. In connection with the Offer, Parent has agreed to pay
Deutsche Bank for its services (i) $1,000,000 (the "Announcement Fee") payable
upon the commencement of a tender offer for part or all of the Shares or the
execution of a definitive agreement with the Company to acquire all or a portion
of the Company (a "Transaction"), (ii) $3,250,000 in the event a Transaction is
consummated (the "Transaction Fee"), provided that the Transaction Fee shall be
reduced by the amount of any previously paid Announcement Fee and (iii) in the
event a Transaction is not consummated, 12.5% of any break-up, lock-up option,
topping fee or other termination fee, provided that the termination fee shall be
reduced by the amount of any previously paid Announcement Fee. Parent has also
agreed, whether or not the Offer is consummated, to pay Deutsche Bank for its
reasonable out-of-pocket expenses, including the reasonable fees and expenses of
its legal counsel, incurred in connection with its engagement, and to indemnify
Deutsche Bank against certain liabilities and expenses in connection with their
engagement. Deutsche Bank renders various investment banking and other advisory
services to Parent and its affiliates and is expected to continue to render such
services, for which it has received and will continue to receive customary
compensation from Parent and its affiliates.
The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent and ChaseMellon Shareholder Services to act as the Depositary in
connection with the Offer. Such firms each will receive reasonable and customary
compensation for their services. The Purchaser has also agreed to reimburse each
such firm for certain reasonable out-of-pocket expenses and to indemnify each
such firm against certain liabilities in connection with their services,
including certain liabilities under federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent and the Dealer Manager) for
making solicitations or recommendations in connection with the Offer. Brokers,
dealers, banks and trust companies will be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding material
to their customers.
18. MISCELLANEOUS. The Offer is being made to all holders of Shares. The
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the tender of Shares in connection therewith would not be in
33
<PAGE>
compliance with the laws of such jurisdiction. If the Purchaser becomes aware of
any jurisdiction in which the making of the Offer would not be in compliance
with applicable law, the Purchaser will make a good faith effort to comply with
any such law. If, after such good faith effort, the Purchaser cannot comply with
any such law, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Parent have filed with the Commission the Schedule TO
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule TO and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission and the Nasdaq National Market in the manner set forth
in Section 9 of this Offer to Purchase (except that they will not be available
at the regional offices of the Commission).
During the last five years, neither the Purchaser nor Parent nor Carnival
nor, to the best of their knowledge, any of the persons listed in Schedule I,
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
Blue Sea Florida Acquisition Inc.
February 29, 2000
34
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
BLUE SEA FLORIDA ACQUISITION INC.
AND
AIRTOURS PLC
AND
CARNIVAL CORPORATION
AND
PRINCIPAL SHAREHOLDERS
OF
CARNIVAL CORPORATION
1. BLUE SEA FLORIDA ACQUISITION INC. Set forth below is the name, business
address and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Blue Sea Florida Acquisition Inc. Unless
otherwise indicated, (a) each such person is a citizen of the United Kingdom,
and (b) the business address of each such person is c/o North American Leisure
Group, 130 Merton Street, Toronto, ON, M4S 1A4, Canada.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Christopher Alan Leigh Mottershead........ Director and President of Blue Sea Florida Acquisition Inc. since
formation; President and Chief Executive Officer of North American
Leisure Group of Airtours since January 2000; Director of Airtours
Holidays Limited from 1994 to 1999; Managing Director of Airtours
Holidays Limited from May 1998 to December 1999.
James Scott Jennings...................... Director and Vice President of Blue Sea Florida Acquisition Inc.
since formation; Director of Corporate Development of Airtours plc
since November 1996; Director of Corporate Finance of Rickitt
Mitchell & Partners Limited from 1994 to 1996. Mr. Jennings'
business address is c/o Airtours plc, Parkway One, Parkway Business
Centre, Manchester M14 7QU, United Kingdom.
Lorrie Lynn King.......................... Director and Secretary of Blue Sea Florida Acquisition Inc. since
formation; Executive Vice President, Strategic and Business
Development of North American Leisure Group of Airtours since October
1999; Chief Financial Officer of North American Leisure Group of
Airtours from 1998 to 1999; Partner, Arthur Andersen, from 1997 to
1998, and Senior Manager prior to that time. Ms. King is a citizen of
Canada.
</TABLE>
2. AIRTOURS PLC. Set forth below is the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years, of each director and executive officer
of Airtours plc. Unless otherwise indicated, (a) each such person is a citizen
of the United Kingdom, and (b) the business address of each such person is c/o
Airtours plc, Parkway One, Parkway Business Centre, Manchester M14 7QU United
Kingdom.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
David Crossland........................... Chairman of Airtours plc since 1972; Director of Carnival Corporation
since April 1996.
Sir Michael David Bishop CBE.............. Non-Executive Director of Airtours plc since 1987; Deputy Chairman of
Airtours plc since September 1996; Chairman of British Midland plc
since July 1978. Sir Michael Bishop's business address is Donnington
Hall, Castle Donnington, Derby DE74 2SB, United Kingdom.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Albert Henry Coe.......................... Non-Executive Director of Airtours plc since January 2000; Group
Managing Director of Airtours plc from 1997 to 1999; Group Finance
Director of Airtours plc from 1988 to 1997; Deputy Chief Executive of
Airtours plc from 1996 to 1997.
Timothy Russell Byrne..................... Group Finance Director of Airtours plc since December 1997; Group
Financial Controller of Airtours plc from 1993 to 1997.
Michael Charles Lee....................... Director of Airtours plc since 1993; Chairman of the Aviation
Division of Airtours plc since October 1998; Chief Executive of
Airtours International Airways Limited from 1990 to 1998.
Peter Francis Rothwell.................... Director of Airtours plc since 1999; Chief Executive of UK
Leisure Group of Airtours since May 1998; Managing Director of
Airtours Holidays Limited from 1995 to 1998.
Bjorn Christer Sandahl.................... Director of Airtours plc since 1996; Chairman and Chief Executive
Officer of Scandinavian Leisure Group since 1994; Non-Executive
Director of PROFFICE AB since 1994. Mr. Sandahl's business address is
c/o Scandinavian Leisure Group, Ralambsvagen 17, 10520 Stockholm,
Sweden. Mr. Sandahl is a citizen of Sweden.
Lars Thuesen.............................. Director of Airtours plc since May 1998; Chairman of European Leisure
Group of Airtours and Accommodation Division of Airtours since
November 1999; Chairman of UK Leisure Group and West European Leisure
Group of Airtours from 1997 to 1999; Deputy Chief Executive Officer
and Chief Financial Officer of Scandinavian Leisure Group of Airtours
from 1994 to 1997. Mr. Thuesen is a citizen of Denmark.
Michael Meir Arison....................... Non-Executive Director of Airtours plc since April 1996; Chief
Executive Officer and Chairman of the Board of Carnival Corporation
since June 1987. Mr. Arison is a citizen of the United States.
Roger Oliver Davies....................... Non-Executive Director of Airtours plc since March 1994; Chairman of
Sunway Travel (Coaching) Limited since 1997.
Sir Tom Farmer CBE KCSG................... Non-Executive Director of Airtours plc since 1994; Chief Executive
Officer and Chairman of the Board of Kwik-Fit Holdings Plc since
1971. Sir Tom Farmer's address is c/o Kwik-Fit Holdings Plc, 17
Corstorphine Road, Edinburgh, EH12 6DD, United Kingdom.
Eric Fenton Sanderson..................... Non-Executive Director of Airtours plc since 1987; Managing Director
of Kwik-Fit Insurance Services Limited since January 2000; Chief
Executive of Bank of Scotland Treasury Services plc from 1997 to
1999; Chief Executive of The British Linen Bank Limited from 1989 to
1997; Non-Executive Director of The Docklands Light Railway Limited
since January 1999; Non-Executive Director of English and Overseas
Properties Limited from 1988 to 1999.
Howard Steven Frank....................... Non-Executive Director of Airtours plc since April 1996; Director of
Carnival Corporation since 1993; Vice Chairman and Chief Operating
Officer of Carnival Corporation since October 1993. Mr. Frank is a
citizen of the United States.
</TABLE>
36
<PAGE>
3. CARNIVAL CORPORATION. Set forth below is the name, business address and
present principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each director and executive
officer of Carnival Corporation. Unless otherwise indicated, (a) each such
person is a citizen of the United States, and (b) the business address of each
such person is c/o Carnival Corporation, 3655 N.W. 87 Avenue, Miami, Florida
33178.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Michael Meir Arison....................... See Part 2 of this Schedule I.
Shari Arison Dorsman...................... Director of Carnival Corporation since June 1995; Chairman of Arison
Holdings (1998) Ltd. since October 1999; Director of Shargad
Orchanim, Ltd. from 1994-1999; Director of Bank Hapolim since 1997;
Chairman, Secretary, Trustee, Member and Treasurer of Arison
Foundation, Inc. since November 1999 and various positions with
Arison Foundation, Inc. prior to that time; Chairman of Ted Arison
Charitable Foundation since November 1999. Ms. Arison Dorsman's
business address is Arison Holdings (1998) Ltd., Golda Center,
23 Shaul Hamelech Boulevard, Tel Aviv, Israel 64367. Ms. Arison
Dorsman is a citizen of the United States and Israel.
Maks L. Birnbach.......................... Director of Carnival Corporation since 1990; Mr. Birnbach is retired.
Mr. Birnbach's business address is c/o Fullcut Manufacturers,
555 Fifth Avenue, New York, New York 10037.
Atle Brynestad............................ Director of Carnival Corporation since 1999; Chief Executive Officer
and Chairman of the Board of CG Holding AS since prior to 1995.
Mr. Brynestad's business address is c/o CG Holding AS, POB 50 Bryn,
N-0611, Oslo, Norway. Mr. Brynestad is a citizen of Norway.
Richard G. Capen, Jr...................... Director of Carnival Corporation since 1994; Author and business
consultant. Mr. Capen's business address is 6077 San Elijo, Rancho
Santa Fe, California 92067.
David Crossland........................... See Part 2 of this Schedule I.
Robert H. Dickinson....................... Director, President and Chief Operating Officer of Carnival Cruise
Lines since 1993.(1)
James M. Dubin............................ Director of Carnival Corporation since 1995; Senior Partner and
attorney of Paul Weiss Rifkind Wharton & Garrison. Mr. Dubin's
business address is Paul Weiss Rifkind Wharton & Garrison, 1285
Avenue of the Americas, New York, New York 10019.
Howard Steven Frank....................... See Part 2 of this Schedule I.
A. Kirk Lanterman......................... Director of Carnival Corporation since 1992; President, Chief
Executive Officer and Chairman of the Board of Holland America
Line--Westours Inc. since August, 1999; Mr. Lanterman has been
employed by Holland America Line--Westours Inc. since 1983.
Mr. Lanterman's business address is c/o Holland America Line--
Westours Inc., 300 Elliott Avenue West, Seattle, Washington 98119.(2)
Modesto A. Maidique....................... Director of Carnival Corporation since 1994; President of Florida
International University since 1986. Mr. Maidique's business address
is Office of the President, Florida International University,
University Park, PG5 28, Miami, Florida, 33199.
</TABLE>
- ------------------
(1) Dickinson Enterprise L.P. purchased 10,000 Shares on February 9, 2000 at
$16.75 per share and sold such Shares on February 18, 2000 at prices ranging
from $15.75 to $16.688 per Share.
(2) Mr. Lanterman beneficially owns 4,000 Shares, and holds sole power to vote
or dispose of such Shares.
37
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
William S. Ruben.......................... Director of Carnival Corporation since 1987; Director of Sales
Service America since November 1990. Mr. Ruben's business address is
40 East 94th Street, #22D, New York, NY 10128.
Stuart S. Subotnick....................... Director of Carnival Corporation since 1987; Executive Vice President
and General Partner of Metromedia Company since July 1986.
Mr. Subotnick's business address is c/o Metromedia Company, One
Meadowlands Plaza, East Rutherford, New Jersey 07073.
Sherwood M. Weiser........................ Director of Carnival Corporation since 1987; Chief Executive Officer
and Chairman of the Board of CRC Holdings, Inc., since 1998; Chief
Executive Officer and Chairman of the Board of CHC International,
Inc. from 1994 to 1998; Director of Wyndham International, Inc. since
1997; Director of Mellon United National Bank since 1978; Director of
Winsleow Furniture, Inc. from 1994 to 1999. Mr. Weiser's business
address is c/o Carnival Resorts and Casinos, 3250 Mary Street,
Coconut Grove, Florida 33133.
Mesnulam Zonis............................ Director of Carnival Corporation since 1987; Senior Vice
President--Operations since 1979. Mr. Zonis is a citizen of the
United States and Israel.
Uzi Zucker................................ Director of Carnival Corporation since 1987; Senior Managing Director
and General Partner of Bear Stearns & Co., Inc. since 1982.
Mr. Zucker's business address is c/o Bear Stearns & Co., Inc., 245
Park Avenue, New York, New York 10167.
Gerald R. Cahill.......................... Senior Vice President--Finance and Chief Financial Officer of
Carnival Corporation since January 1998; Vice President-Finance of
Carnival Corporation from 1994 to 1997.
Lowell Zemnick............................ Vice President and Treasurer of Carnival Corporation since October
1990.
Arnaldo Perez............................. Vice President and Secretary of Carnival Corporation since April
1997; Associate General Counsel of Carnival Corporation from 1992 to
1997.(3)
Kenneth D. Dubbin......................... Vice President--Corporate Development of Carnival Corporation since
May 1999.
Ian Gaunt................................. Senior Vice President--International since May 1999; Partner and
attorney at Sinclair Roche & Temperly from 1982 to 1999. Mr. Gaunt's
business address is c/o Carnival Corporation, Alton House, 177 High
Holborn, London, WC1V 7AA, United Kingdom. Mr. Gaunt is a citizen of
the United Kingdom.
</TABLE>
4. PRINCIPAL SHAREHOLDERS OF CARNIVAL CORPORATION. Set forth below is the
name, business address and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five years
of Mr. Michael Meir Arison, Ms. Shari Arison Dorsman and Mr. Boaz Nahir and
Mr. Andrew Weinstein, Administrators of the Estate of Mr. Ted Arison
(collectively, the "Arison Family"), each of whom is a citizen of the United
States, unless otherwise indicated. The members of the Arison family, through
various corporations, partnerships and trusts beneficially own 45% of the
outstanding equity securities of Carnival Corporation. Unless otherwise
indicated, the business address of each member of the Arison Family is c/o
Carnival Corporation, 3655 N.W. 87 Avenue, Miami, Florida 33178.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Michael Meir Arison....................... See Part 2 of this Schedule I.
Shari Arison Dorsman...................... See Part 3 of this Schedule I.
</TABLE>
- ------------------
(3) Mr. Perez beneficially owns 350 Shares, and holds sole power to vote or
dispose of such Shares.
38
<PAGE>
<TABLE>
<S> <C>
Boaz Nahir................................ Attorney at I. Gornitzky since prior to 1995; Director of Bank
Hapoalim from 1997 to 1999; Director of FIBI Bank from 1992 to 1997;
Director of CLAL Industries from 1994 to 1997. Mr. Nahir's business
address is 45 Rothschild Boulevard, Tel Aviv, Israel. Mr. Nahir is a
citizen of Israel.
Andrew Weinstein.......................... Partner and Attorney at Holland & Knight LLP since prior to 1995.
Mr. Weinstein's business address is c/o Holland & Knight,
701 Brickell Avenue, Miami, Florida 33131.
</TABLE>
39
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each shareholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
Depositary for the Offer is:
CHASEMELLON
SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 07606 13th Floor Mail Stop--Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Receipt by Telephone:
(201) 296-4860
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification on Substitute Form W-9
may be directed to the Information Agent at the locations and telephone numbers
set forth below. Shareholders may also contact Deutsche Bank Securities Inc.,
Dealer Manager for the Offer, or their broker, dealer, commercial bank or trust
company for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms, Please Call:
(800) 662-5200
SHAREHOLDERS PLEASE CALL: (800) 566-9061
The Dealer Manager for the Offer is:
DEUTSCHE BANC ALEX. BROWN
Deutsche Bank Securities Inc.
130 Liberty Street, 33rd Floor
New York, New York 10006
(212) 250-6000 (Call Collect)
or
Call Toll-Free (877) 305-4920
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER
SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 29, 2000
BY
BLUE SEA FLORIDA ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
AIRTOURS PLC
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, MARCH 27, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
CHASEMELLON
SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight:
REORGANIZATION DEPARTMENT REORGANIZATION DEPARTMENT REORGANIZATION DEPARTMENT
P.O. BOX 3301 120 BROADWAY 85 CHALLENGER ROAD
SOUTH HACKENSACK, NJ 07606 13TH FLOOR MAIL STOP--REORG
NEW YORK, NY 10271 RIDGEFIELD PARK, NJ 07660
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions only)
(201) 296-4293
Confirm Receipt by Telephone:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND
COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARES
(PLEASE FILL IN, IF BLANK, EXACTLY TENDERED
AS NAME(S) APPEAR(S) ON THE (ATTACH ADDITIONAL SIGNED LIST IF
CERTIFICATE(S)) NECESSARY)
- --------------------------------------------------------------------------------
TOTAL
NUMBER
OF SHARES
REPRESENTED NUMBER OF
CERTIFICATE BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Total
Shares
- --------------------------------------------------------------------------------
* Need not be completed by Shareholders delivering Shares by Book-Entry
Transfer.
** Unless otherwise indicated, it will be assumed that all Shares
evidenced by each Share Certificate delivered to the Depositary are
being tendered hereby. See Instruction 4.
<PAGE>
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of common stock, $.01 par value per share,
including associated common share purchase rights (the "Shares") is to be made
by book-entry transfer to an account maintained by the Depositary at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase (as defined below).
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Depositary. Shareholders who deliver Shares by book-entry
transfer are referred to herein as "Book-Entry Shareholders" and other
shareholders are referred to herein as "Certificate Shareholders".
Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary or complete the procedures
for book-entry transfer prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN THE SYSTEM OF THE BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER).
Name of Tendering Institution: ______________________________________
Account Number: _____________________________________________________
Transaction Code Number: ____________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING.
Name(s) of Registered Holder(s): ____________________________________
Window Ticket No. (if any): _________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________
Name of Institution which Guaranteed Delivery: ______________________
Account Number (if delivered by Book-Entry Transfer): _______________
Transaction Code Number: ____________________________________________
/ / CHECK HERE IF ANY OF YOUR SHARE CERTIFICATES HAVE BEEN LOST,
DESTROYED OR STOLEN AND CALL (201) 296-4860 TO OBTAIN AN AFFIDAVIT OF
LOSS. SEE INSTRUCTION 10.
Number of Shares represented by lost, destroyed or stolen Share
Certificates: _______________________________________________________
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Blue Sea Florida Acquisition Inc., a
Florida corporation (the "Purchaser"), and an indirect wholly owned subsidiary
of Airtours plc, a company organized under the laws of England ("Parent"), the
above-described shares of common stock, $.01 par value per share, including
associated common share purchase rights (the "Shares"), pursuant to the
Purchaser's offer to purchase all outstanding Shares at a price of $26.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated February 29, 2000 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Offer to Purchase and any amendments or
supplements hereto or thereto, constitute the "Offer"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole or in part from time to time, to any direct or indirect wholly owned
subsidiary of Parent, the right to purchase Shares tendered pursuant to the
Offer.
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), effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to, or upon the order of the Purchaser, all right, title and interest in and to
all the Shares that are being tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof (collectively,
"Distributions")), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (a) deliver certificates for such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by the Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares and all Distributions for cancellation and transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and all Distributions and that, when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary or the Purchaser to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and all
Distributions. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the account of the Purchaser any such Distributions issued to
the undersigned, in respect of the tendered Shares, accompanied by documentation
of transfer, and pending such remittance or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and, subject to the terms of the Merger Agreement (as defined in
the Offer to Purchase), may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser,
in its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints James S. Jennings and
Christopher A.L. Mottershead and each of them, and any other designees of the
Purchaser, the attorneys and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's shareholders or otherwise act in such manner as each such attorney and
proxy or his or her substitute shall in his or her sole discretion deem proper
and to otherwise act with respect to all the Shares tendered hereby which have
been accepted for payment by the Purchaser prior to the time any such vote or
action is taken (and any and all Distributions issued or issuable in respect
thereof) and with respect to which the undersigned is entitled to vote. This
appointment is effective when, and only to the extent that, the Purchaser
accepts for payment such Shares as provided in the Offer to Purchase.
This power of attorney and proxy is coupled with an interest in the
tendered Shares, is irrevocable and is granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Such acceptance for payment shall revoke all prior powers of attorney and
proxies given by the undersigned at any time with respect to such
3
<PAGE>
Shares and no subsequent powers of attorney or proxies may be given by the
undersigned (and, if given, will not be deemed effective). The Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting and other rights with
respect to such Shares, including voting at any shareholders meeting then
scheduled.
The undersigned understands that the valid tender of Shares to the
Purchaser pursuant to any one of the procedures described in Section 3 of the
Offer to Purchase and in the instructions hereto will constitute a binding
agreement between the undersigned and the Purchaser upon the terms and subject
to the conditions of the Offer. The undersigned recognizes that under certain
circumstances set forth in the Offer to Purchase, the Purchaser may not be
required to accept for payment any of the tendered Shares. The Purchaser's
acceptance for payment of Shares pursuant to the Offer will constitute a binding
agreement between the undersigned and the Purchaser upon the terms and subject
to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased, and/or
return any certificates for Shares not tendered or accepted for payment, in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased, and/or any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate), to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price of any
Shares purchased, and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and mail said check and/or any
certificates to, the person or persons so indicated. In the case of a book-entry
delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility indicated above with any Shares not accepted for payment. The
undersigned recognizes that the Purchaser has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned.
Issue check and/or certificate(s) to:
Name ___________________________________________________________________________
(PLEASE PRINT)
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned, or to the undersigned at an
address other than that shown under "Description of Shares Tendered."
Mail check and/or certificate(s) to:
Name ___________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
5
<PAGE>
IMPORTANT
SHAREHOLDER(S): SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
________________________________________________________________________________
________________________________________________________________________________
SIGNATURE(S) OF SHAREHOLDER(S)
Dated: ______________________________, 2000
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing or by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s): _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: ______________________________________________________________________
________________________________________________________________________________
(PLEASE PROVIDE FULL TITLE)
Address: _______________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Telephone No.: _________________________________________________________________
(INCLUDE AREA CODE)
Taxpayer Identification or
Social Security Number: ________________________________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
Title: _________________________________________________________________________
Telephone No.: _________________________________________________________________
(INCLUDE AREA CODE)
Dated: ______________________________ , 2000
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each an "Eligible Institution,"
and collectively, "Eligible Institutions"). No signature guarantee is required
on this Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" in this Letter
of Transmittal or (ii) if such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed by shareholders either
if Share Certificates are to be forwarded herewith or if a tender of Shares is
to be made pursuant to the procedures for delivery by book-entry transfer set
forth in Section 3 of the Offer to Purchase. For Shares to be validly tendered
pursuant to the Offer, either (i) a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), together with any required signature
guarantees, or in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase), and any other required documents, must be
received by the Depositary at one of the Depositary's addresses set forth herein
prior to the Expiration Date (as defined in the Offer to Purchase) and either
certificates for tendered Shares must be received by the Depositary at one of
such addresses or such Shares must be delivered pursuant to the procedures for
book-entry transfer (and a Book Entry Confirmation received by the Depositary),
in each case, prior to the Expiration Date, or (ii) the tendering shareholder
must comply with the guaranteed delivery procedure set forth below.
Shareholders whose Share Certificates are not immediately available or who
cannot complete the procedures for book-entry transfer on a timely basis, or
time will not permit all required documents to reach the Depositary prior to the
Expiration Date, may tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such
procedures, (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Offeror (or facsimile thereof), must
be received by the Depositary prior to the Expiration Date and (iii) the
certificates for (or a Book-Entry Confirmation with respect to) such Shares,
together with this properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the case
of a book-entry transfer, an Agent's Message, and any other required documents
are received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of
the Offer to Purchase. A "trading day" is any day on which the National
Association of Securities Dealers Automated Quotation System, Inc. is open for
business. The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
SHARE CERTIFICATES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers and/or the number
of Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule attached hereto.
4. Partial Tenders. If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such case, new Share Certificate(s) for the remainder of the
Shares that were evidenced by the Share Certificate(s) delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless
7
<PAGE>
otherwise provided in the box entitled "Special Delivery Instructions" on the
reverse hereof, as soon as practicable after the expiration or termination of
the Offer. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificate(s) evidencing such shares without any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal or any Share Certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and tendered hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of a person other than the registered holder(s), in which case the
Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) or stock powers must be guaranteed by an
Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificates. Signatures on such Share
Certificate(s) or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the
Purchaser will pay, or cause to be paid, any stock transfer taxes with respect
to the transfer and sale of Shares to it or its assignee pursuant to the Offer.
If, however, payment of the purchase price for any Shares is to be made to, or
if Share Certificates evidencing Shares not tendered or accepted for payment are
to be issued in the name of, a person other than the registered holder(s), or if
tendered Share Certificates are registered in the name of a person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such person or
otherwise) payable on the account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to the Purchaser of the payment of such taxes, or exemption
therefrom, is submitted. Except as provided in this Instruction 6, it will not
be necessary for transfer tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of and/or Share Certificates not accepted for payment are to be
returned to a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such Share Certificates are to be returned to a
person other than the signer of this Letter of Transmittal or to an address
other than that shown in the box entitled "Description of Shares Tendered" on
the reverse hereof, the appropriate boxes on the reverse side of this Letter of
Transmittal should be completed. Any shareholder tendering Shares by book-entry
transfer will have any Shares not accepted for payment returned by crediting the
account maintained by such shareholder at the Book-Entry Transfer Facility from
which such transfer was made.
8. Waiver of Conditions. Except as otherwise provided in the Offer to
Purchase, the Purchaser reserves the absolute right, in its sole discretion, to
waive any of the conditions of the Offer or any defect or irregularity in the
tender of any Shares of any particular shareholder, whether or not similar
defects or irregularities are waived in the case of other shareholders.
9. Taxpayer Identification Number and Backup Withholding. U.S. federal
income tax law generally requires that a shareholder tendering Shares pursuant
to the Offer must provide the Depositary (the "Payor") with his correct Taxpayer
Identification Number ("TIN"), which, in the case of a shareholder who is an
individual, is his social security number. If the Payor is not provided with the
correct TIN or an adequate basis for an exemption, such shareholder may be
subject to a $50 penalty imposed by the Internal Revenue Service and backup
withholding at the rate of 31% may be imposed upon the gross proceeds of any
payment received hereunder. If withholding results in an overpayment of taxes, a
refund may be obtained.
8
<PAGE>
To prevent backup withholding, each tendering shareholder must provide his
correct TIN by completing the "Substitute Form W-9" set forth herein, which
requires such shareholder to certify that the TIN provided is correct (or that
such shareholder is awaiting a TIN) and that (i) the shareholder has not been
notified by the Internal Revenue Service that he is subject to backup
withholding as a result of a failure to report all interest or dividends or (ii)
the Internal Revenue Service has notified the shareholder that he is no longer
subject to backup withholding.
Exempt shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt
shareholder must enter its correct TIN in Part 1 of Substitute Form W-9, write
"Exempt" in Part 2 of such form, and sign and date the form. See the enclosed
Guidelines for Certification of Taxpayer Identification Number of Substitute
Form W-9 (the "W-9 Guidelines") for additional instructions. In order for a
nonresident alien or foreign entity to qualify as exempt, such person must
submit a completed Form W-8, "Certificate of Foreign Status" signed under
penalties of perjury attesting to such exempt status. Such forms may be obtained
from the Payor.
If Shares are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which TIN to report.
If you do not have a TIN, consult the W-9 Guidelines for instructions on
applying for a TIN, write "Applied For" in the space for the TIN in Part 1 of
the Substitute Form W-9, and sign and date the Substitute Form W-9 and the
Certificate of Awaiting Taxpayer Identification Number set forth herein. If you
do not provide your TIN to the Payor within 60 days, backup withholding will
begin and continue until you furnish your TIN to the Payor. NOTE: WRITING
"APPLIED FOR" ON THE FORM MEANS THAT YOU HAVE ALREADY APPLIED FOR A TIN OR THAT
YOU INTEND TO APPLY FOR ONE IN THE NEAR FUTURE.
10. Lost or Destroyed Certificates. If any Share Certificate has been lost
or destroyed, the shareholder should check the appropriate box on the reverse
side of the Letter of Transmittal. The Company's stock transfer agent will then
instruct such shareholder as to the procedure to be followed in order to replace
the Share Certificate. The shareholder will have to post a surety bond of
approximately 2% of the current market value of the stock. This Letter of
Transmittal and related documents cannot be processed until procedures for
replacing lost or destroyed Share Certificates have been followed.
11. Requests for Assistance or Additional Copies. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at the locations and telephone numbers set
forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF),
TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND SHARE CERTIFICATES, OR A BOOK-ENTRY
CONFIRMATION, FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY (OR A FACSIMILE COPY
THEREOF) MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN THE OFFER TO PURCHASE).
9
<PAGE>
<TABLE>
<CAPTION>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, AS DEPOSITARY
<S> <C> <C>
SUBSTITUTE PART I -- Taxpayer Identification Number--For All Accounts
-----------------------------
FORM W-9 ENTER YOUR TIN IN THE BOX AT RIGHT. (For most individuals, Social Security Number
this is your social security number. If you do not have a OR
DEPARTMENT OF THE TREASURY TIN, see Obtaining a Number in the enclosed Guidelines).
INTERNAL REVENUE SERVICE ------------------------------
CERTIFY BY SIGNING AND DATING BELOW. Employer Identification Number
PAYER'S REQUEST FOR NOTE: If the account is in more than one name, see the chart (If awaiting TIN, write "Applied For")
TAXPAYER in the enclosed Guidelines to determine which number to give
IDENTIFICATION the payer.
NUMBER (TIN)
PART II -- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and
complete as instructed therein.
PART III -- CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me); and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been
notified by the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
SIGNATURE _______________________________________________________________ DATE ___________________________ , 2000
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within 60 days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
SIGNATURE ________________________________ DATE ________________________, 2000
10
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Dealer Manager and the Information Agent at the locations and telephone
numbers set forth below:
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 PARK AVENUE, 5TH FLOOR
NEW YORK, NEW YORK 10022
CALL COLLECT (212) 754-8000
BANKS AND BROKERAGE FIRMS, PLEASE CALL:
(800) 662-5200
SHAREHOLDERS PLEASE CALL: (800) 566-9061
THE DEALER MANAGER FOR THE OFFER IS:
DEUTSCHE BANC ALEX. BROWN
DEUTSCHE BANK SECURITIES INC.
130 LIBERTY STREET, 33RD FLOOR
NEW YORK, NEW YORK 10006
(212) 250-6000 (CALL COLLECT)
OR
CALL TOLL-FREE (877) 305-4920
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 29, 2000
TO
BLUE SEA FLORIDA ACQUISITION INC.
A
WHOLLY OWNED SUBSIDIARY OF
AIRTOURS PLC
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing shares of common stock, $.01 par value per share (the "Common
Stock"), including associated common share purchase rights (the "Shares"), of
Travel Services International, Inc., a Florida corporation (the "Company"), are
not immediately available or time will not permit all required documents to
reach ChaseMellon Shareholder Services L.L.C., as Depositary (the "Depositary"),
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase
(as defined below)) or the procedure for delivery by book-entry transfer cannot
be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or transmitted by telegram, facsimile transmission or mail to
the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CHASE MELLON
SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight:
REORGANIZATION DEPARTMENT REORGANIZATION DEPARTMENT REORGANIZATION DEPARTMENT
P.O. BOX 3301 120 BROADWAY 85 CHALLENGER ROAD
SOUTH HACKENSACK, NJ 07606 13TH FLOOR MAIL STOP--REORG
NEW YORK, NY 10271 RIDGEFIELD PARK, NJ 07660
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions only)
(201) 296-4293
Confirm Receipt by Telephone:
(201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, AND TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
SHARES MAY NOT BE TENDERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Blue Sea Florida Acquisition Inc., a
Florida corporation and an indirect wholly owned subsidiary of Airtours plc, a
company organized under the laws of England, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 29, 2000 (the
"Offer to Purchase"), and the related Letter of Transmittal (which as amended or
supplemented from time to time, together constitute the "Offer"), receipt of
each of which is hereby acknowledged, the number of Shares specified below
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase.
Series and Certificate Nos. of Shares (if available):
<TABLE>
<S> <C>
Common Stock Name(s) of Record Holder(s)
Certificate Nos.
------------------------------------- -------------------------------------------------
------------------------------------- -------------------------------------------------
PLEASE TYPE OR PRINT
-------------------------------------
Number of Shares
Tendered Address(es):
---------------------------------------------- -------------------------------------------------
If Share(s) will be delivered by book- entry transfer,
check this box / /
-------------------------------------------------
ZIP CODE
Account number: Area Code and Tel. No.:
--------------------------------------- --------------------------
Signature(s):
------------------------------------
Dated:
-------------------------------------------
</TABLE>
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR THE SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as defined in the Offer to
Purchase), hereby guarantees delivery to the Depositary, at one of its addresses
set forth above, certificates ("Share Certificates") evidencing the Shares
tendered hereby, in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, in each case with delivery of a Letter of Transmittal (or facsimile
thereof) properly completed and duly executed, or an Agent's Message (as defined
in the Offer to Purchase) in the case of a book-entry delivery, and any other
required documents, all within three days on which the National Association of
Securities Dealers Automated Quotation System, Inc. is open for business after
the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period set forth above. Failure
to do so could result in a financial loss to such Eligible Institution.
Name of Firm: __________________________________________________________________
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: _________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(CITY, STATE, ZIP CODE)
Area Code and Telephone Number: ________________________________________________
Dated: _______________, 2000
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
Trust Companies and Other Nominees
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
AT
$26.00 NET PER SHARE
BY
BLUE SEA FLORIDA ACQUISITION INC.
A
WHOLLY OWNED SUBSIDIARY OF
AIRTOURS plc
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 27, 2000 (THE "INITIAL EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 29, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Blue Sea Florida Acquisition Inc., a Florida
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Airtours plc, a company organized under the laws of England ("Parent"), to act
as Dealer Manager in connection with the Purchaser's offer to purchase all
outstanding shares of common stock, $.01 par value (the "Common Stock"),
including associated common share purchase rights (the "Shares") of Travel
Services International, Inc., a Florida corporation (the "Company"), at a price
of $26.00 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase, dated
February 29, 2000 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer") enclosed herewith. The Offer is being made in connection
with the Agreement and Plan of Merger, dated as of February 21, 2000, by and
among Parent, the Purchaser and the Company. Please furnish copies of the
enclosed materials to those of your clients for whose accounts you hold Shares
registered in your name or in the name of your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
copies of the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A letter to the shareholders of the Company from Joseph V.
Vittoria, Chairman and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company.
1
<PAGE>
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope addressed to ChaseMellon Shareholder Services
L.L.C. (the "Depositary").
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, MARCH 27, 2000, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for the Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing such Shares or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities (as defined in the Offer to Purchase), (ii) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery, and
(iii) any other documents required by the Letter of Transmittal.
If holders of Shares wish to tender Shares, but cannot deliver such
holders' certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender may be effected by following the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker, dealer or other person (other than Deutsche Bank Securities Inc. (the
"Dealer Manager") and Morrow & Co., Inc. (the "Information Agent")) for
soliciting tenders of Shares pursuant to the Offer. However, upon request, the
Purchaser will reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable with
respect to the transfer of Shares to it, except as otherwise provided in the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent or to the Dealer Manager, at the respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
DEUTSCHE BANK SECURITIES INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHOR-IZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF PARENT, THE
PURCHASER, THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
AT
$26.00 NET PER SHARE
BY
BLUE SEA FLORIDA ACQUISITION INC.
A
WHOLLY OWNED SUBSIDIARY OF
AIRTOURS PLC
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 27, 2000 (THE "INITIAL EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 29, 2000
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated February
29, 2000 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
as amended or supplemented from time to time, together constitute the "Offer")
relating to the offer by Blue Sea Florida Acquisition Inc., a Florida
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Airtours plc, a company organized under the laws of England ("Parent"), to
purchase all outstanding shares of common stock, $.01 par value per share (the
"Common Stock"), including associated common share purchase rights (the
"Shares") of Travel Services International, Inc., a Florida corporation (the
"Company"), at a price of $26.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer. The Offer is being
made in connection with the Agreement and Plan of Merger, dated as of
February 21, 2000, by and among Parent, the Purchaser and the Company (the
"Merger Agreement"). Also enclosed is the Letter to Shareholders of the Company
from Joseph V. Vittoria, Chairman and Chief Executive Officer of the Company,
together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed
with the Securities and Exchange Commission by the Company.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us (or our nominee) for
your account, upon the terms and subject to the conditions set forth in the
Offer.
Your attention is invited to the following:
1. The tender price is $26.00 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has determined that each of
the Merger Agreement, the Offer and the Merger is fair to and in the best
interests of the shareholders of the Company and recommends that the
shareholders of the Company accept the Offer and tender their Shares to the
Offeror pursuant to the Offer.
1
<PAGE>
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Monday, March 27, 2000, unless the Offer is extended.
5. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
the Purchaser pursuant to the Offer. However, U.S. federal income tax
backup withholding at a rate of 31% may be required, unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to us
is enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by Deutsche Bank Securities Inc. or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
TRAVEL SERVICES INTERNATIONAL, INC.
BY
BLUE SEA FLORIDA ACQUISITION INC.
A
WHOLLY OWNED SUBSIDIARY OF
AIRTOURS PLC
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated February 29, 2000, and the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer") in connection with the offer by Blue Sea Florida
Acquisition Inc., a Florida corporation and an indirect wholly owned subsidiary
of Airtours plc, a company organized under the laws of England, to purchase all
outstanding shares of common stock, $.01 par value per share (the "Common
Stock"), including associated common share purchase rights (the "Shares") of
Travel Services International, Inc., a Florida corporation (the "Company").
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Date: , 2000 SIGN HERE
---------------------
-----------------------------------------
Signature(s) of Holder(s)
----------------------------------------
Name(s) of Holder(s)
----------------------------------------
Number of shares to be Tendered: Please Type or Print
_______________ shares of Common Stock*
----------------------------------------
Address
----------------------------------------
Zip Code
----------------------------------------
Area Code and Telephone Number
----------------------------------------
Taxpayer Identification or
Social Security Number
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens, e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, e.g., 00-0000000. The table below will help determine the number to
give the payer.
- -----------------------------------------------------------------
GIVE THE SOCIAL SECURITY NUMBER FOR
THIS TYPE OF ACCOUNT: NUMBER OF
- -----------------------------------------------------------------
1. An individual's account The individual account
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first individual
on the account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint funds,
either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7.a. A revocable savings trust The grantor-trustee(1)
account (in which grantor is
also trustee)
b. Any "trust" account that is
not a legal or valid trust
under State law
- -----------------------------------------------------------------
GIVE THE EMPLOYER IDENTIFICATION
NUMBER FOR THIS TYPE OF ACCOUNT: NUMBER OF
- -----------------------------------------------------------------
8. Sole proprietorship The owner(4)
9. A valid trust, estate, or The legal entity (do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
organization or educational
account
12. Partnership account The partnership held in the
name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity (such as a
of Agriculture in the name State or local government,
of the actual owner(1) school district, or prison)
that receives agricultural
program payments
- -----------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
resident individuals), Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), for Form W-7 for International Taxpayer
Identification Number (for alien individuals required to file U.S. tax returns),
at an office of the Social Security Administration or the Internal Revenue
Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester.
Generally, you will then have 60 days to obtain a taxpayer identification number
and furnish it to the requester. If the requester does not receive your taxpayer
identification number within 60 days, backup withholding, if applicable, will
begin and will continue until you furnish your taxpayer identification number to
the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING PENALTIES
Payees specifically exempted from backup withholding on ALL payments include the
following:*
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
o A foreign government or a political subdivision, agency or instrumentality
thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An entity registered at all times during the tax year under the Investment
Company Act of 1940.
o A foreign central bank of issue.
Exempt payees described above should file a substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to non-resident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if (i) this interest is $600 or more, (ii) the
interest is paid in the course of the payer's trade or business and (iii) you
have not provided your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(b)(5) to non-resident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. --If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING. --If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. --If you falsify certifications
or affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends and patronage dividends that are
not subject to information reporting are also not subject to backup withholding.
For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICES. Section 6109 requires most recipients of dividends,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
- ------------------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulation
promulgated thereunder.
<PAGE>
EXHIBIT (a)(1)(G)
AIRTOURS plc COMMENCES TENDER OFFER
FOR SHARES OF TRAVEL SERVICES INTERNATIONAL, INC.
NEW YORK, NY Airtours plc announced today that its wholly-owned
subsidiary, Blue Sea Florida Acquisition Inc. has commenced its previously
announced tender offer for all of the outstanding shares of Travel Services
International, Inc. (NASDAQ:TRVL) for $26.00 per share in cash. The tender offer
is being conducted pursuant to a Merger Agreement dated as of February 21, 2000.
The tender offer is scheduled to expire at 12:00 midnight, New York City time,
on Monday, March 27, 2000, unless extended.
The Special Committee of the Board of Directors, and the Board of
Directors of Travel Services International have each unanimously approved the
Merger Agreement and recommended that shareholders of Travel Services
International accept the tender offer and tender their shares pursuant to the
tender offer.
The tender offer is conditioned upon, among other things, there being
validly tendered and not withdrawn that number of Travel Services International
shares which represents more than 50% of the outstanding Travel Services
International shares on a fully diluted basis, termination or expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and satisfaction of certain other conditions. The complete terms and
conditions of the offer are set forth in the Offer to Purchase, Letter of
Transmittal and other related materials being filed today with the Securities
and Exchange Commission. Copies of the Offer to Purchase and the Travel Services
International Solicitation/Recommendation Statement on Schedule 14D-9, also
filed today with the SEC, are available from Morrow & Co., Inc., the information
agent for the tender offer. ChaseMellon Shareholders Services is acting as
depositary for the tender offer.
The Airtours group is the largest air inclusive tour operator in the
world, carrying 10 million passengers per annum. The group's earnings derive
from tour operations in the U.K., Ireland, Scandinavia, the U. S., Canada,
Poland, Belgium, France, Holland and, through its associate FTi, in Germany,
Austria, and Switzerland. In addition, Airtours operates aircraft, retail travel
agencies, hotels, cruise ships, and vacation ownership developments. Shares of
Airtours are listed on the London Stock Exchange.
Travel Services International is a leading specialized distributor of
travel products, including cruise vacations, vacation packages, domestic and
international airline tickets and European auto rentals, and is a leading
provider of travel services, such as electronic hotel reservation services,
specialized hotel programs and services and incentive travel programs. Travel
Services International provides its services to both travel agents and
travelers, offering a unique combination of specialized expertise, the ability
to compare options from multiple travel providers and competitive prices. More
information about Travel Services International can be found at
www.mytravelco.com.
Contacts:
For Airtours:
Jon Coles/Fiona Antcliffe, Brunswick Group 011-44-171-404-5959
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase, dated February 29, 2000 (the "Offer to Purchase"), and
the related Letter of Transmittal and is being made to all holders of Shares.
The Offer is not being made to (nor will tenders be accepted from or on behalf
of) holders of Shares in any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction or any administrative or judicial action pursuant thereto. In any
jurisdiction where securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser (as defined below) by Deutsche Bank Securities Inc.
(the "Dealer Manager") or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Common Share Purchase Rights)
of
Travel Services International, Inc.
at
$26 Net Per Share
by
Blue Sea Florida Acquisition Inc.
a wholly owned subsidiary of
Airtours plc
Blue Sea Florida Acquisition Inc., a Florida corporation (the "Purchaser") and a
wholly owned subsidiary of Airtours plc, a company organized under the laws of
England ("Parent"), is offering to purchase all of the issued and outstanding
shares (including the associated common share purchase rights, the "Shares") of
common stock, par value $.01 per share (the "Common Stock"), of Travel Services
International, Inc., a Florida corporation (the "Company"), for $26 per Share,
net to the seller in cash (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Shareholders who tender shares registered
in their own name to the Depositary (as defined below) will not be obligated to
pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the tender of Shares pursuant to
the Offer. The Purchaser is offering to acquire all Shares as a first step in
acquiring the entire equity interest in the Company. Following consummation of
the Offer, the Purchaser intends to effect the merger described below.
<PAGE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, MARCH 27, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
February 21, 2000 (the "Merger Agreement"), by and among Parent, the Purchaser
and the Company, pursuant to which, as soon as practicable after the completion
of the Offer and satisfaction or waiver of all conditions to the Merger (as
defined below), the Purchaser will be merged with and into the Company and the
separate corporate existence of the Purchaser will thereupon cease. The merger,
as effected pursuant to the immediately preceding sentence, is referred to
herein as the "Merger," and the Company as the surviving corporation of the
Merger is sometimes herein referred to as the "Surviving Corporation." At the
effective time of the Merger (the "Effective Time"), each Share then outstanding
(other than Shares held by Parent or the Purchaser and other than Shares held by
shareholders who have properly exercised dissenters' rights, if any, in
accordance with Florida law) will be canceled and extinguished and converted
into the right to receive the Offer Price in cash, payable to the holder
thereof, without interest.
The Board of Directors of the Company (I) has approved the Merger Agreement and
the transactions contemplated thereby, including the Offer and the Merger, (II)
has determined that the Offer and the Merger are advisable, fair and in the best
interests of the Company's shareholders and (III) unanimously recommends that
the Company's shareholders accept the Offer and tender their Shares pursuant to
the Offer.
The Offer is conditioned upon, among other things, there being validly tendered
and not withdrawn prior to the expiration of the Offer, that number of Shares
which represents more than 50% of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"). The Purchaser will not be required to accept
for payment or pay for any tendered Shares until the expiration or termination
of all applicable waiting periods under the Hart- Scott-Rodino Antitrust
Improvements Act of 1976, as amended. The Offer is also subject to other terms
and conditions described in Section 15 of the Offer to Purchase. As used herein
"fully diluted basis" takes into account the conversion or exercise of all
outstanding convertible securities, options and other rights and securities
exercisable or convertible into shares of Common Stock.
Certain directors (the "Shareholders"), who have voting power and
dispositive power with respect to an aggregate of 1,872,057 Shares directly, and
hold stock options to purchase an aggregate of 80,000 Shares (which Shares and
options represent approximately 11.6% and less than one percent, respectively,
of the Company's outstanding Shares on a fully diluted basis) following the
execution and delivery of the Merger Agreement entered into a Stock Voting and
Tender Agreement, dated as of February 27, 2000 (the "Shareholders Agreement"),
with Parent and the Purchaser. Pursuant to the Shareholders Agreement, the
Shareholders have agreed, among other things, to (i) validly tender the Shares
held by them into the Offer and (ii) grant the Purchaser an irrevocable proxy
with respect to the voting of such Shares in favor of the Merger and against any
action, transaction or agreement that would impede, interfere
<PAGE>
with, delay or materially adversely affect the Merger. With certain exceptions,
all of the rights and obligations of the parties under the Shareholders
Agreement will terminate upon the termination of the Merger Agreement in
accordance with its terms.
For the purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as of and when the Purchaser gives oral or written notice to
ChaseMellon Shareholder Services L.L.C. (the "Depositary") of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purposes
of receiving payment from the Purchaser and transmitting payment to tendering
shareholders. 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 for such Shares (or a timely Book-Entry Confirmation (as defined in
the Offer to Purchase) with respect thereto), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) and (iii) any other documents
required by the Letter of Transmittal. The per share consideration paid to any
holder of a Share pursuant to the Offer will be the highest per share
consideration paid to any other holder of Shares pursuant to the Offer. Under no
circumstances will interest be paid on the Offer Price, regardless of any
extension of the Offer or any delay in making such payment. Except as otherwise
provided in the Offer to Purchase, tenders of Shares are irrevocable. Shares
tendered pursuant to the Offer may be withdrawn pursuant to the procedures set
forth below at any time prior to the Expiration Date (as defined in the Offer to
Purchase) and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after April
28, 2000, as described in Section 4 of the Offer to Purchase.
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 set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the 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 (as defined in Section 3 of the Offer to Purchase), the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer as
set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase) to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be tendered again
<PAGE>
by following one of the procedures described in Section 3 of the Offer to
Purchase any time prior to the Expiration Date.
The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on
Monday, March 27, 2000, unless and until the Purchaser, in accordance with the
terms of the Offer, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Purchaser, shall expire.
All questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Purchaser, in its sole discretion, which
determination will be final and binding. None of the Purchaser, Parent, the
Depositary, Morrow & Co., Inc. (the "Information Agent"), the Dealer Manager 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.
Subject to the terms of the Merger Agreement, the Purchaser expressly reserves
the right, in its sole discretion, at any time or from time to time, to extend
the period of time during which the Offer is open and thereby delay acceptance
for payment of, and the payment for, any Shares, by giving oral or written
notice of such extension to the Depositary and by making a public announcement
of such extension by no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date. During any such
extension, all Shares previously tendered and not withdrawn will remain subject
to the Offer, subject to the right of a tendering shareholder to withdraw such
shareholder's Shares.
The information required to be disclosed by paragraph (d)(l) of Rule 14d-6 under
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's shareholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
relevant documents will be mailed by the Purchaser to record holders of Shares,
and will be furnished by the Purchaser to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information and should be read in their entirety before any decision is made
with respect to the Offer.
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer documents may be directed
to the Information Agent or the Dealer Manager at the respective addresses and
telephone numbers set forth below, and copies will be furnished at the
Purchaser's expense. The Purchaser will not pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager) for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, NY 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
<PAGE>
Shareholders Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
Deutsche Banc Alex. Brown
Deutsche Bank Securities Inc.
130 Liberty Street
New York, NY 10006
(212) 250-6000 (Call Collect)
or
Call Toll-Free (877)
305-4920
February 29, 2000
<PAGE>
Execution Copy
================================================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AIRTOURS plc,
BLUE SEA FLORIDA ACQUISITION INC.
AND
TRAVEL SERVICES INTERNATIONAL, INC.
Dated as of February 21, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I THE OFFER......................................................2
1.01 The Offer........................................................2
1.02 Company Actions..................................................3
1.03 Composition of the Board of Directors............................5
ARTICLE II THE MERGER AND RELATED MATTERS.................................6
2.01 The Merger.......................................................6
2.02 Closing..........................................................6
2.03 Effective Time...................................................6
2.04 Effect of Merger.................................................6
2.05 Directors and Officers of the Surviving Corporation..............6
2.06 Conversion of Stock..............................................7
2.07 Dissenting Stock.................................................7
2.08 Surrender of Certificates........................................8
2.09 Payment..........................................................8
2.10 No Further Rights of Transfers...................................9
2.11 Stock Option and Other Plans.....................................9
2.12 Articles of Incorporation of the Surviving Corporation..........10
2.13 By-Laws of the Surviving Corporation............................10
ARTICLE III REPRESENTATIONS AND WARRANTIES................................10
3.01 Representations and Warranties of the Company...................10
(a) Due Organization, Good Standing and Corporate Power.......10
(b) Authorization and Validity of Agreement...................11
(c) Capitalization............................................11
(d) Consents and Approvals; No Violations.....................12
(e) Company Reports and Financial Statements..................13
(f) Absence of Certain Changes................................13
(g) Compliance with Laws......................................13
(h) Litigation................................................14
(i) Employee Benefit Plans....................................14
(j) Taxes.....................................................15
(k) Intellectual Properties...................................16
(l) Proxy Statement and Schedule 14D-9........................16
(m) Broker's or Finder's Fee..................................16
(n) Environmental Laws and Regulations........................17
(o) State Takeover Statutes ..................................18
(p) Opinion of Financial Advisor..............................18
(i)
<PAGE>
Page
----
(q) Rights Agreement..........................................18
3.02 Representations and Warranties of Parent and Purchaser..........19
(a) Due Organization; Good Standing and Corporate Power.......19
(b) Authorization and Validity of Agreement...................19
(c) Consents and Approvals; No Violations.....................20
(d) Broker's or Finder's Fee..................................20
(e) Parent Not an Affiliated Shareholder......................20
(f) Financing.................................................20
ARTICLE IV TRANSACTIONS PRIOR TO EFFECTIVE DATE..........................21
4.01 Access to Information Concerning Properties and Records.........21
4.02 Confidentiality.................................................21
4.03 Conduct of the Business of the Company Pending the Effective
Date............................................................21
4.04 Proxy Statement.................................................22
4.05 Shareholder Approval............................................23
4.06 Reasonable Efforts..............................................23
4.07 No Solicitation of Other Offers.................................24
4.08 Notification....................................................26
4.09 HSR Act.........................................................26
4.10 Employee Benefits...............................................26
4.11 Indemnification of Directors and Officers of the Company........27
ARTICLE V CONDITIONS PRECEDENT TO MERGER................................28
5.01 Conditions Precedent to Obligations of Parent, Purchaser and
the Company.....................................................28
(a) Approval of Company's Shareholders........................29
(b) HSR Act...................................................29
(c) Injunction................................................29
(d) Statutes..................................................29
(e) Payment for Common Stock..................................29
ARTICLE VI TERMINATION AND ABANDONMENT...................................29
6.01 Termination.....................................................29
6.02 Effect of Termination...........................................31
ARTICLE VII MISCELLANEOUS.................................................31
7.01 Fees and Expenses...............................................31
7.02 Representations and Warranties..................................32
7.03 Extension; Waiver...............................................32
7.04 Public Announcements............................................32
7.05 Notices.........................................................32
7.06 Entire Agreement................................................34
7.07 Binding Effect; Benefit; Assignment.............................34
7.08 Governing Law And Venue; Waiver Of Jury Trial...................34
7.09 Amendment and Modification......................................35
(ii)
<PAGE>
7.10 Further Actions.................................................35
7.11 Headings........................................................35
7.12 Counterparts....................................................35
7.13 Severability....................................................35
7.14 Certain Definitions.............................................35
7.15 Transfer Taxes..................................................36
EXHIBIT A Voting and Tender Agreement...................................A
(iii)
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of February 21, 2000 (this
"Agreement"), by and among AIRTOURS plc, a corporation organized under the laws
of the United Kingdom ("Parent"), BLUE SEA FLORIDA ACQUISITION INC., a Florida
corporation and an indirect wholly-owned subsidiary of Parent ("Purchaser"), and
TRAVEL SERVICES INTERNATIONAL, INC., a Florida corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have approved the acquisition of the Company by Purchaser on the
terms and conditions set forth herein;
WHEREAS, in contemplation thereof Parent will cause Purchaser to
make a tender offer (as it may be amended from time to time as permitted under
this Agreement, the "Offer") to purchase all the issued and outstanding shares
of common stock, $0.01 par value, of the Company ("Common Stock") and the
associated common share purchase rights (the "Rights", and together with the
Common Stock, the "Shares") issued pursuant to the Shareholders Rights
Agreement, dated as of January 28, 1999, by and between the Company and American
Stock Transfer & Trust Company (as amended from time to time, the "Rights
Agreement"), subject to the terms and conditions of this Agreement, at a price
of $26 per Share, net to the seller in cash, without interest thereon (such
price, or any such higher price per Share as may be paid to any holder of Shares
in the Offer, being referred to herein as the "Offer Price");
WHEREAS, to complete such acquisition, the respective Boards of
Directors of Parent, Purchaser and the Company have approved and adopted this
Agreement, and have determined advisable, the merger of Purchaser with and into
the Company, with the Company being the surviving corporation (the "Merger"),
pursuant to and subject to the terms and conditions of this Agreement;
WHEREAS, the Board of Directors of the Company, based on the
unanimous recommendation of the Special Committee of the Board of Directors of
the Company (the "Special Committee"), has, in light of and subject to the terms
and conditions set forth herein: (i) determined that (A) the consideration to be
paid for each Share held by the shareholders in the Merger is fair to such
shareholders of the Company, and (B) the Merger is otherwise in the best
interests of the Company and its shareholders, and (ii) resolved to approve and
adopt this Agreement and the transactions contemplated hereby and to recommend
approval and adoption by the shareholders of the Company of this Agreement;
WHEREAS, certain shareholders of the Company have indicated their
intention to execute and deliver a Voting and Tender Agreement, in the form
attached hereto as Exhibit A (the "Voting and Tender Agreement"), pursuant to
which, subject to the terms and conditions contained therein, such shareholders
shall tender all Shares owned by them into the Offer and vote their shares of
Common Stock in favor of the transactions contemplated by this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.01 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VI hereof and so long as none of the events set forth in
Annex A hereto (the "Tender Offer Conditions") shall have occurred and are
continuing, as promptly as practicable, but in no event later than the seventh
Business Day after the date of this Agreement, Parent shall cause Purchaser to,
and Purchaser shall, commence (within the meaning of Rule 14d-2 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) the
Offer. The obligations of Purchaser to accept for payment and to pay for any
Shares tendered shall be subject only to the Tender Offer Conditions, any of
which may be waived by Purchaser; provided, that the Minimum Condition (as
defined in Annex A hereto) may not be waived by Purchaser without the prior
written consent of the Company. Purchaser expressly reserves the right to modify
the terms of the Offer; provided, that without the consent of the Company,
Purchaser shall not (i) reduce the number of Shares sought to be purchased in
the Offer, (ii) reduce the Offer Price, (iii) add to the Tender Offer
Conditions, (iv) modify the Tender Offer Conditions or any other term or
condition of the Offer in a manner that is adverse to the holders of Common
Stock, (v) change the form of consideration payable in the Offer or (vi) except
as provided in the last two sentences of this subsection (a) or as required by
law, extend the Offer beyond any scheduled expiration date. Purchaser covenants
and agrees that, subject to the terms and conditions of this Agreement,
including, but not limited to, the Tender Offer Conditions and the last sentence
of this Section 1.01(a), unless the Company otherwise consents in writing it
will accept for payment and pay for the Shares as soon as it is permitted to do
so under applicable law (but in any event, in the case of accepting for payment,
within one Business Day after the Offer terminates). Purchaser agrees that if it
is unable to consummate the Offer on the initial scheduled expiration date due
to the failure of the Tender Offer Conditions set forth in Annex A to be
satisfied or waived, Purchaser shall, unless this Agreement has been terminated
in accordance with its terms, extend the Offer and set a subsequent scheduled
expiration date, and shall continue to so extend the Offer and set subsequent
scheduled expiration dates, until the termination of this Agreement in
accordance with its terms; provided, that any such extended expiration date
shall not be later than the earlier of (x) ten Business Days following the
previously scheduled expiration date and (y) the date on which Purchaser
reasonably believes that all Tender Offer Conditions will be satisfied or
waived. Notwithstanding anything in this subsection (a) to the contrary,
Purchaser may extend the Offer, without the Company's consent, on one or more
occasions, for any reason, up to a maximum of three Business Days in the
aggregate, notwithstanding the prior satisfaction of the Tender Offer Conditions
so long as Purchaser irrevocably waives the continued satisfaction of any of the
Tender Offer Conditions.
-2-
<PAGE>
(b) As soon as practicable on the date that the Offer is commenced,
Parent and Purchaser, together with such other Persons as shall be required to
be included as parties to such filings, shall file, with the Securities and
Exchange Commission (the "Commission") a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "Schedule TO") with
respect to the Offer. The Schedule TO shall contain (included as an exhibit) or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and a form of the related letter of transmittal (the "Letter of Transmittal"),
as well as all other information and exhibits required by law (which Schedule
TO, Offer to Purchase, Letter of Transmittal and such other information and
exhibits, together with any supplements or amendments thereto, are referred to
herein collectively as the "Offer Documents"). The Company and its counsel shall
be given the opportunity to review and comment upon the Offer Documents prior to
their filing with the Commission. The Offer Documents will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the Commission and the date first published, sent or
given to the Company's shareholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by Parent or Purchaser with respect to any information
supplied by the Company or its officers, directors or affiliates in writing for
inclusion in the Offer Documents or any amendment or supplement thereto. If, at
any time prior to the expiration or termination of the Offer, any event occurs
that should be described in an amendment or supplement to the Offer Documents,
Parent and Purchaser will, and Parent will cause Purchaser to, file and
disseminate, as required, an amendment or supplement which complies in all
material respects with the Exchange Act and the rules and regulations thereunder
and any other applicable laws. Prior to its filing with the Commission, the
amendment or supplement shall be delivered to the Company and its counsel and
the Company and its counsel shall be given the opportunity to comment thereon.
The written information supplied or to be supplied by Parent and Purchaser for
inclusion in the Proxy Statement and the Schedule 14D-9 (as defined in Section
1.02 hereof) of the Company will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not
misleading. Each of Parent and Purchaser agrees to provide the Company and its
counsel with copies of any written comments Parent and Purchaser or their
counsel may receive from the Commission or its staff with respect to the Offer
Documents promptly after the receipt of such comments and shall provide the
Company and its counsel an opportunity to participate, including by way of
discussions with the Commission or its staff, in the response of Parent and
Purchaser to such comments.
(c) Parent shall provide or cause to be provided to Purchaser on a
timely basis the funds necessary to accept for payment, and pay for any Shares
that Purchaser becomes obligated to accept for payment, and pay for, pursuant to
the Offer.
1.02 Company Actions.
(a) The Company hereby approves of and consents to the Offer
and the Merger and represents that:
-3-
<PAGE>
(I) its Board of Directors, based on the unanimous recommendation of
the Special Committee (at a meeting duly called and held) has (i) determined
that each of the Agreement, Offer and the Merger is fair to, and in the best
interest of, the holders of Shares, (ii) approved this Agreement, the Offer, the
Merger and the Voting and Tender Agreement and approved and adopted this
Agreement, and the transactions contemplated hereby, in accordance with the
provisions of the Florida Business Corporation Act (the "FBCA"), (iii) taken the
actions contemplated by Section 3.01(q) of this Agreement, and (iv) recommended
the acceptance of the Offer and the approval and adoption of this Agreement and
the Merger by the shareholders of the Company; provided, however, that such
recommendation may be withdrawn, modified or amended as provided in Section
4.07; and (II) Allen & Company Incorporated has delivered to the Board of
Directors of the Company its opinion that the consideration to be received by
the holders of Common Stock (other than Parent and Purchaser) pursuant to the
Offer and the Merger is fair to the holders of Common Stock from a financial
point of view, subject to the assumptions and qualifications contained in such
opinion.
(b) The Company shall file with the Commission, as soon as
practicable after the commencement of the Offer, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") containing the recommendations referred to in
subsection 1.02(a) hereof and shall disseminate the Schedule 14D-9 as required
by Rule 14d-9 under the Exchange Act, and shall mail, or cause to be mailed,
such Schedule 14D-9 to the shareholders of the Company, to the extent
practicable, at the same time the Offer Documents are first mailed to the
shareholders of the Company, together with such Offer Documents; provided,
however, that nothing contained in this Agreement shall restrict the Board of
Directors of the Company from withdrawing, modifying or amending such
recommendation or other action in accordance with Section 4.07. Parent and
Purchaser and their counsel shall be given the opportunity to review and comment
on the Schedule 14D-9 prior to its filing with the Commission. The Schedule
14D-9 will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the Commission and on the
date first published, sent or given to the Company's shareholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Parent or Purchaser or their officers, directors or
affiliates in writing for inclusion in the Schedule 14D-9. If at any time prior
to the expiration or termination of the Offer, any event occurs which should be
described in an amendment or supplement to the Schedule 14D-9 or any amendment
or supplement thereto, the Company will file and disseminate, as required, an
amendment or supplement which complies in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. Prior to its filing with the Commission, the amendment or supplement shall
be delivered to Parent and its counsel and Parent and its counsel shall be given
an opportunity to comment thereon. The written information supplied or to be
supplied by the Company for inclusion in the Offer Documents will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they are made, not misleading. The Company agrees to provide Parent
and its counsel with any comments the Company or its counsel may receive from
the Commission or its staff
-4-
<PAGE>
with respect to the Schedule 14D-9 promptly after the receipt of such comments
and shall provide Parent and its counsel an opportunity to participate,
including by way of discussions with the Commission or its staff, in the
response of the Company to such comments.
(c) In connection with the Offer, the Company will promptly furnish
Purchaser with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of the Common Stock as of the most recent practicable date and shall
furnish Purchaser with such additional information (including, but not limited
to, updated lists of holders of Common Stock and their addresses, mailing labels
and lists of security positions) and such other assistance as Purchaser or its
agents may reasonably request in communicating the Offer to the Company's
shareholders. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Parent, Purchaser and their
respective affiliates, associates, agents, and advisors, shall keep confidential
and use the information contained in any such labels, listings and files only in
connection with the Offer and the Merger and, if this Agreement shall be
terminated, will deliver to the Company all copies of such information then in
their possession.
1.03 Composition of the Board of Directors. Promptly upon the
acceptance for payment of, and payment by Purchaser in accordance with the Offer
for, any Shares, and from time to time thereafter as Shares are acquired by
Purchaser, Purchaser shall be entitled to designate such number of directors on
the Board of Directors of the Company, rounded up to the next whole number, as
will give Purchaser, subject to compliance with Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, representation on such Board of
Directors equal to at least that number of directors which equals the product of
the total number of directors on the Board of Directors (giving effect to the
directors elected pursuant to this sentence) multiplied by a fraction, the
numerator of which shall be the number of Shares so accepted for payment and
paid for or otherwise acquired or owned by Parent or Purchaser and the
denominator of which shall be the number of shares of Common Stock then issued
and outstanding, and the Company and its Board of Directors shall, at such time,
use its reasonable efforts to cause Purchaser's designees to be appointed to the
Company's Board of Directors. In no event shall there be less than two
Independent Directors (as hereinafter defined) on the Company's Board of
Directors. Subject to applicable law, the Company shall take all action
requested by Parent which is reasonably necessary to effect any such election,
including mailing to its shareholders an information statement containing the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, and the Company agrees to make such mailing with the
mailing of the Schedule 14D-9, so long as Purchaser shall have provided to the
Company on a timely basis all information required to be included in an
information statement with respect to Purchaser's designees. In furtherance
thereof, the Company will increase the size of the Company's Board of Directors,
or use its reasonable efforts to secure the resignation of directors, or both,
as is necessary to permit Purchaser's designees to be elected to the Company's
Board of Directors. Following the election of any Purchaser's designees pursuant
to this Section 1.03 and prior to the Effective Time, any amendment of this
Agreement or the Articles of Incorporation or By-Laws of the Company, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of
Purchaser or waiver of any of the Company's rights hereunder shall
-5-
<PAGE>
require the concurrence of a majority of the directors of the Company then in
office who neither are Parent nor Purchaser's designees nor are employees of the
Company or any of its Subsidiaries (the "Independent Directors"). The
Independent Directors shall have the authority to retain such counsel and other
advisors at the expense of the Company as are reasonably appropriate to the
exercise of their duties in connection with this Agreement. In addition, the
Independent Directors shall have the authority to institute any action, on
behalf of the Company, to enforce performance of this Agreement.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. On the terms and subject to the conditions of this
Agreement and in accordance with the applicable provisions of the FBCA, at the
Effective Time (as defined below), Purchaser shall be merged with and into the
Company and the separate corporate existence of Purchaser shall cease, and the
Company shall continue as the surviving corporation under the laws of the State
of Florida under the name of "Travel Services International, Inc." (the
"Surviving Corporation").
2.02 Closing. The closing of the Merger (the "Closing") shall take
place at the offices of White & Case LLP, at 200 South Biscayne Boulevard,
Miami, Florida, at 10:00 a.m., local time, on a date to be specified by the
parties hereto, which shall be no later than the second Business Day after
satisfaction or waiver of all the conditions set forth in Article V hereof,
unless another date or place is agreed to in writing by the parties hereto.
2.03 Effective Time. As soon as practicable on or after the Closing,
Purchaser and the Company will cause articles of merger (the "Articles of
Merger") to be filed with the Department of State of the State of Florida in the
manner required by Section 607.1105 of the FBCA, and the parties shall take such
other and further actions as may be required by law to make the Merger
effective. The Merger shall become effective at the time when the Articles of
Merger have been duly filed with the Department of State of the State of
Florida. The time the Merger becomes effective in accordance with applicable law
is referred to as the "Effective Time" and the date on which the Merger become
effective in accordance with applicable law is referred to as the Effective
Date.
2.04 Effect of Merger. From and after the Effective Time, the Merger
shall have the effects set forth in Section 607.1106 of the FBCA.
2.05 Directors and Officers of the Surviving Corporation. At the
Effective Time, the directors of Purchaser immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, each of such directors
to hold office, subject to the applicable provisions of the Articles of
Incorporation and By-Laws of the Surviving Corporation, until the next annual
shareholders' meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At the Effective
Time, the officers of the Company immediately prior to the Effective Time shall,
subject to the applicable provisions of the Articles of Incorporation and
By-Laws of the Surviving Corporation, be the officers of the
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Surviving Corporation until their respective successors shall be duly elected or
appointed and qualified.
2.06 Conversion of Stock. At the Effective Time:
(a) Each Share then issued and outstanding (other than (i) any
Shares then held by Purchaser or Parent, all of which shall be cancelled and
none of which shall receive any payment with respect thereto and (ii) Shares
held by Dissenting Shareholders (as defined in Section 2.07 hereof) shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and represent the right to receive an amount in cash, without
interest, equal to the price paid for each Share pursuant to the Offer (the
"Merger Consideration") upon surrender, in the manner provided in Section 2.08
hereof, of the certificate that formerly evidenced such Share; and
(b) Each share of common stock, par value $.01 per share, of
Purchaser then issued and outstanding shall, by virtue of the Merger and without
any action on the part of the holder thereof, become one fully paid and
nonassessable share of common stock, $.01 par value, of the Surviving
Corporation.
2.07 Dissenting Stock. Notwithstanding anything in this Agreement to
the contrary (including, without limitation, Section 2.06 hereof) but only to
the extent required by the FBCA, Shares that are issued and outstanding
immediately prior to the Effective Time and are held by holders of Shares who
comply with all the provisions of the FBCA concerning the right of holders of
Common Stock to dissent from the Merger and require an appraisal of their shares
of Common Stock (the "Dissenting Shareholders") shall not be converted into the
right to receive the Merger Consideration but shall become the right to receive
such consideration as may be determined to be due such Dissenting Shareholder
pursuant to Section 607.1320 of the FBCA; provided, that (i) if any Dissenting
Shareholder shall subsequently deliver a written withdrawal of his or her demand
for appraisal (with the written approval of the Surviving Corporation, to the
extent permitted by the FBCA), or (ii) if any Dissenting Shareholder fails to
establish and perfect, or shall have effectively withdrawn or lost, his or her
entitlement to appraisal rights as provided by applicable law or (iii) to the
extent permitted by the FBCA, if within the time period prescribed by the FBCA
neither any Dissenting Shareholder nor the Surviving Corporation has filed a
petition demanding a determination of the value of the shares of common stock
outstanding at the Effective Time and held by Dissenting Shareholders, in
accordance with applicable law, then such Dissenting Shareholder or
Shareholders, as the case may be, shall forfeit the right to appraisal of such
shares and such shares shall thereupon be deemed to have been converted into the
right to receive, as of the Effective Time, the Merger Consideration, without
interest. The Company shall give Parent and Purchaser (A) notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
related instruments received by the Company and (B) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal. The
Company will not voluntarily make any payment with respect to any demands for
appraisal and will not, except with the prior written consent of Parent, settle
or offer to settle any demand.
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2.08 Surrender of Certificates.
(a) Concurrently with or prior to the Effective Time, Parent shall
designate a bank or trust company located in the United States and reasonably
acceptable to the Company to act as paying agent (the "Paying Agent") for
purposes of making the cash payments contemplated by Section 2.06(a). As soon as
practicable after the Effective Time, Parent shall or shall cause the Paying
Agent to mail and/or make available to each holder of a certificate theretofore
evidencing shares of Common Stock a notice and letter of transmittal advising
such holder of the effectiveness of the Merger and the procedure for
surrendering to the Paying Agent such certificate or certificates which
immediately prior to the Effective Time represented outstanding Common Stock
(the "Certificates") in exchange for the Merger Consideration deliverable in
respect thereof pursuant to this Article II. Upon the surrender for cancellation
to the Paying Agent of such Certificates, together with a letter of transmittal,
duly executed and completed in accordance with the instructions thereon, and any
other items specified by the letter of transmittal, the Paying Agent shall
promptly pay to the Person (as defined in Section 7.14 hereof) entitled thereto
the Merger Consideration deliverable in respect thereof. Until so surrendered,
each Certificate shall be deemed, for all corporate purposes, to evidence only
the right to receive upon such surrender the Merger Consideration deliverable in
respect thereof to which such Person is entitled pursuant to this Article II. No
interest shall be paid or accrued in respect of such cash payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article II;
provided, that, the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.
2.09 Payment. Concurrently with or immediately prior to the
Effective Time, Parent shall cause Purchaser to, and Purchaser shall, deposit in
trust with the Paying Agent cash in United States dollars in an aggregate amount
equal to the aggregate Merger Consideration to which holders of shares of Common
Stock upon consummation of the Merger are entitled (such amount being
hereinafter referred to as the "Payment Fund"). The Payment Fund shall be
invested by the Paying Agent as directed by Parent in direct obligations of the
United States,
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obligations for which the full faith and credit of the United States is pledged
to provide for the payment of principal and interest, commercial paper rated of
the highest quality by Moody's Investors Services, Inc. or Standard & Poor's
Ratings Group or certificates of deposit, bank repurchase agreements or bankers'
acceptances of a commercial bank having at least $1,000,000,000 in assets
(collectively the "Permitted Investments") or in money market funds which are
invested in Permitted Investments, and any net earnings with respect thereto
shall be paid to Parent as and when requested by Parent. The Paying Agent shall,
pursuant to irrevocable instructions, make the payments referred to in Section
2.06 hereof out of the Payment Fund. The Payment Fund shall not be used for any
other purpose except as otherwise agreed to by Parent. Promptly following the
date which is six months after the Effective Time, the Paying Agent shall return
to the Surviving Corporation all cash, certificates and other instruments in its
possession that constitute any portion of the Payment Fund, and the Paying
Agent's duties shall terminate. Thereafter, each holder of a Certificate may
surrender such Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration, without interest, but shall have no greater
rights against the Surviving Corporation or Purchaser than may be accorded to
general creditors of the Surviving Corporation or Parent under applicable law.
Notwithstanding the foregoing, neither the Paying Agent nor any party hereto
shall be liable to a holder of shares of Common Stock for any Merger
Consideration delivered to a public official pursuant to applicable abandoned
property, escheat and similar laws.
2.10 No Further Rights of Transfers. At and after the Effective
Time, each holder of a Certificate shall cease to have any rights as a
shareholder of the Company, except for, in the case of a holder of a Certificate
(other than shares to be canceled pursuant to Section 2.06(a) hereof, and other
than shares held by Dissenting Shareholders) the right to surrender his or her
Certificate in exchange for payment of the Merger Consideration, or in the case
of a Dissenting Shareholder, to perfect his or her right to receive payment for
his or her shares pursuant to the FBCA if such holder has validly perfected and
not withdrawn his or her right to receive payment for his or her shares, and no
transfer of Shares shall be made on the stock transfer books of the Surviving
Corporation. Certificates presented to the Surviving Corporation after the
Effective Time shall be canceled and exchanged for cash as provided in this
Article II. At the close of business on the day of the Effective Time the stock
ledger of the Company with respect to Common Stock shall be closed.
2.11 Stock Option and Other Plans. Prior to the Effective Time, the
Board of Directors of the Company (or, if appropriate, any committee thereof)
shall adopt appropriate resolutions and use its reasonable efforts to take all
other actions necessary to provide for the cancellation, effective at the
Effective Time, of all the outstanding stock options to purchase Common Stock
(the "Options") heretofore granted under any stock option plan of the Company
(the "Stock Plans"). Immediately prior to the Effective Time, the Company shall
use its reasonable efforts to ensure that each Option, whether or not then
vested or exercisable, shall no longer be exercisable for the purchase of shares
of Common Stock but shall entitle each holder thereof, in cancellation and
settlement therefor, to payments in cash (subject to any applicable withholding
taxes, the "Cash Payment"), at the Effective Time, equal to the product of (x)
the total number of shares of Common Stock subject to such Option whether or not
then vested or exercisable and (y) the excess of the Merger Consideration over
the exercise price per share of
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Common Stock subject to such Option, each such Cash Payment to be paid to each
holder of an outstanding Option at the Effective Time. As provided herein, the
Company shall use its reasonable efforts to ensure that the Stock Plans shall
terminate as of the Effective Time and the provisions of any Employee Benefit
Plan (as defined in Section 3.01(i)) providing for the issuance or grant of
shares of the capital stock of the Company shall be deleted as of the Effective
Time. The Company will take all reasonable steps to ensure that neither the
Company nor any of its Subsidiaries is or will be bound by any Options, other
options, warrants, rights or agreements which would entitle any Person, other
than Parent or its affiliates, to own or purchase any capital stock of the
Surviving Corporation or any of its subsidiaries. The Company will use its
reasonable efforts to obtain any necessary consents to ensure that after the
Effective Time, the only rights of the holders of Options to purchase shares of
Common Stock in respect of such Options will be to receive the Cash Payment in
cancellation and settlement thereof.
2.12 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter duly amended as provided by law and such Articles
of Incorporation, provided, that, such Articles of Incorporation shall at all
times be in accordance with the provisions of Section 4.11 hereof.
2.13 By-Laws of the Surviving Corporation. The By-Laws of the
Company, as in effect immediately prior to the Effective Time, shall be the
By-Laws of the Surviving Corporation until thereafter duly amended as provided
by law and such By-Laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. The Company
hereby represents and warrants to Parent and Purchaser that, except as disclosed
in the Commission Filings or (subject to the proviso below) the disclosure
letter delivered by the Company to the Parent and Purchaser upon execution of
this Agreement (the "Company Disclosure Letter"), provided that items disclosed
in one section of the Company Disclosure Letter shall be deemed disclosed on
each other section of the Company Disclosure Letter to the extent that such
matter would reasonably be expected to be pertinent to such other section in
light of the disclosure made on the first section:
(a) Due Organization, Good Standing and Corporate Power. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
each such corporation has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Each of the Company and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
such failure to be so qualified or licensed and in good standing would not, and
would not be reasonably likely to, have a Material Adverse Effect. As used in
this Agreement, "Material Adverse Effect" means any material adverse effect on
the business,
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results of operation or financial condition of the Company and its Subsidiaries,
taken as a whole, but shall not include any changes, events, effects or
circumstances (i) arising in connection with the consideration, announcement or
performance of the transactions contemplated by this Agreement, (ii) affecting
the economy generally or affecting generally any industry in which the Company
or any of its Subsidiaries operates, or (iii) affecting the securities markets
generally.
(b) Authorization and Validity of Agreement. The Company has the
corporate power and authority to execute and deliver this Agreement and, subject
to obtaining shareholder approval as required by Section 607.1103 of the FBCA,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by the Company, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby (other than (i) any
required approval by the Company's shareholders in connection with the
consummation of the Merger, (ii) the filing and recordation of appropriate
merger documents as required by the FBCA and (iii) the other items set forth in
Section 3.01(d)). This Agreement has been duly executed and delivered by the
Company and, subject to obtaining shareholder approval and assuming the due and
valid authorization, execution and delivery hereof by Parent and Purchaser, is a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(c) Capitalization. (i) The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, 1,900,331 shares of which are
designated as restricted voting stock, and 1,000,000 shares of preferred stock.
As of February 17, 2000, (1) 13,985,086 shares of Common Stock were issued and
outstanding, of which 1,340,205 shares were designated restricted voting stock,
(2) 2,717,315 shares of Common Stock were reserved for issuance pursuant to
outstanding Options granted under the Stock Plans, (3) no shares of preferred
stock were issued and outstanding, and (4) no shares of Common Stock and no
shares of preferred stock were held, in the aggregate, by the Company's
Subsidiaries. All issued and outstanding shares of Common Stock have been duly
authorized, validly issued and are fully paid and nonassessable and are not
subject to, nor were they issued in violation of, any preemptive rights. Except
as set forth in Section 3.01(c) there are not as of the date hereof, and at the
Effective Time there will not be, any outstanding or authorized shares of
capital stock of the Company, options, warrants, rights, subscriptions, claims
of any character, agreements, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to Common
Stock or any other shares of capital stock of the Company, pursuant to which the
Company is or may become obligated to issue shares of Common Stock, any other
shares of its capital stock or any securities convertible into, exchangeable
for, or evidencing the right to subscribe for, any shares of the capital stock
of the Company.
(ii) The Company Disclosure Letter lists all of the Company's
Subsidiaries. All of the outstanding shares of capital stock or other equity
interests of each of the Company's Subsidiaries have been duly authorized and
validly issued, are fully paid and
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nonassessable, are not subject to, nor were they issued in violation of, any
preemptive rights, and are owned, of record and beneficially, by the Company or
one of its direct or indirect wholly owned Subsidiaries, and except for liens
held by Bank of America in connection with the Existing Credit Facility (as
defined in Section 4.03(b)), free and clear of all liens, encumbrances, options
or claims whatsoever. No shares of capital stock of any of the Company's
Subsidiaries are reserved for issuance and there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to the
capital stock of any Subsidiary, pursuant to which such Subsidiary is or may
become obligated to issue any shares of capital stock of such Subsidiary or any
securities convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of such Subsidiary. Except for restrictions under
applicable law, there are no restrictions of any kind which prevent the payment
of dividends by any of the Company's Subsidiaries to the Company. The Company
does not own, directly or indirectly, any capital stock, equity or ownership
interest in any Person (other than the Subsidiaries listed on the Disclosure
Schedule) that has any material assets or liabilities and neither the Company
nor any of its Subsidiaries is subject to any obligation or requirement to
provide material funds for or to make any material investment (in the form of a
loan or capital contribution) to or in any Person.
(d) Consents and Approvals; No Violations. In the event (i) the
filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), are made and any applicable waiting period
thereunder has been terminated or has expired, (ii) the requirements of the
Exchange Act relating to the Proxy Statement and the Offer, the Securities Act
and the various "blue sky laws" are met, (iii) the filing of the Articles of
Merger and other appropriate merger documents, if any, as required by the FBCA
are properly made, (iv) any required approval by the Company's shareholders in
connection with the consummation of the Merger is received, and (v) filings with
the Nasdaq National Market are properly made, the execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not: (1) violate any provision of the Articles of
Incorporation or By-Laws of the Company or the comparable governing documents of
any of its Subsidiaries, in each case, as amended; (2) violate any law, statute,
ordinance, rule, regulation, order or decree of any court or of any governmental
or regulatory body, agency or authority applicable to the Company or any of its
Subsidiaries or by which any of their respective properties or assets may be
bound; (3) require on the part of the Company any filing with, or permit,
consent or approval of, or the giving of any notice to, any governmental or
regulatory body, agency or authority; or (4) result in a violation or breach of,
conflict with, constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, amendment, cancellation,
payment or acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance (each an "Encumbrance") upon any of the
properties or assets of the Company or any of its Subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party, or by
which it or any of their respective properties or assets are bound except, in
the case of clauses (2), (3) and (4) above, for any such filing, permit,
consent, approval, the failure to obtain or make which, and except for any
breach,
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violation or Encumbrance which, would not have and would not be reasonably
likely to have a Material Adverse Effect on the Company or would not prevent or
materially delay, and would not be reasonably likely to prevent or materially
delay, the consummation of the transactions contemplated by this Agreement.
(e) Company Reports and Financial Statements. Since January 1, 1998,
the Company has filed all forms, reports, schedules and documents, with the
Commission required to be filed by it pursuant to the federal securities laws
and the Commission rules and regulations thereunder (as such reports have been
amended since the date of their filing, collectively, the "Commission Filings").
Except to the extent amended or superseded by a subsequent filing with the
Commission made prior to the date hereof, as of their respective dates, the
Commission Filings (a) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the Commission thereunder.
None of the Company's Subsidiaries is required to file any forms, reports,
schedules or other documents with the Commission under the Exchange Act or the
Securities Act. The financial statements of the Company included in the
Commission Filings (collectively, the "Financial Statements"), complied, as of
the respective dates of filing with the Commission, in all material respects
with applicable accounting requirements and the published rules and regulations
of the Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles ("GAAP") (as in effect from time to
time) applied on a consistent basis in all material respects, (except as may be
indicated therein or in the notes or schedules thereto and except, in the case
of unaudited interim statements, as may be permitted under the Exchange Act or
the Securities Act) and fairly present, in all material respects, the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the results of their operations and changes in cash
flows for the periods then ended (subject, in the case of the unaudited
financial statements, to the absence of notes and normal recurring year-end
audit adjustments).
(f) Absence of Certain Changes. Except as otherwise contemplated by
this Agreement, since December 31, 1999, (i) the Company and its Subsidiaries
have, in all material respects, conducted their respective businesses only in
the ordinary course, (ii) neither the Company nor any of its Subsidiaries has
taken any of the actions restricted by Sections 4.03(b)(i), (ii), (iii), (iv),
(v), (viii), (ix), (xi), (xii) and (xiv) or (c), and (iii) the Company and its
Subsidiaries have not suffered any change constituting a Material Adverse Effect
or that would be reasonably likely to have a Material Adverse Effect.
(g) Compliance with Laws. The Company and its Subsidiaries are in
compliance with all applicable laws, regulations, orders, judgments and decrees
(other than with respect to taxes, Environmental Laws, employee benefits and
federal securities laws, which are the subject of specific representations
contained in this Agreement) except where the failure to so comply would not
have, and would not reasonably be expected to have, a Material Adverse Effect on
the Company and would not, and would not be reasonably likely to, prevent or
materially delay consummation of the transactions contemplated by this Agreement
and no
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written notice or claim has been received by the Company or to the Company's
knowledge, has been filed, commenced or, threatened against the Company alleging
or investigating any violation or potential violation of any of the foregoing,
except alleged violations that individually or in the aggregate, would not have,
and would not be reasonably likely to have a Material Adverse Effect. All
licenses, permits and approvals required under such laws, rules and regulations
are in full force and effect except where the failure to be in full force and
effect would not have, and would not be reasonably likely to have, a Material
Adverse Effect.
(h) Litigation. There is no action, suit, proceeding at law or in
equity, or any arbitration or any administrative or other proceeding by or
before (or to the knowledge of the Company any investigation by) any
governmental or other instrumentality or agency, pending against the Company or
any of its Subsidiaries, or any of their properties or rights which would have,
or would reasonably be expected to have, a Material Adverse Effect on the
Company or would, or would be reasonably likely to, prevent or materially delay
consummation of the transactions contemplated by this Agreement. Neither the
Company nor any of its Subsidiaries (nor any of their respective assets) is
subject to any judgment, order, decree or settlement agreement entered in any
lawsuit, proceeding or investigation which would, or would be reasonably likely
to, have a Material Adverse Effect on the Company or would, or would be
reasonably likely to, prevent or materially delay consummation of the
transactions contemplated by this Agreement.
(i) Employee Benefit Plans. Section 3.01(i) of the Company
Disclosure Letter contains a true and complete list of any material bonus,
incentive compensation, deferred compensation, pension, profit sharing,
retirement, stock purchase, stock option, stock ownership, stock appreciation
rights, phantom stock, cafeteria, life insurance, health, accident, disability,
or other insurance, severance, separation or other employee benefit plan, or
policy, including, but not limited to, any "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), contributed to, maintained or sponsored by the Company or
any of its Subsidiaries, or with respect to which the Company or any of its
Subsidiaries has any liability or potential liability, and under which any
employee or former employee, or director or independent agent or independent
contractor of the Company or any of its Subsidiaries or any beneficiary thereof
is covered, is eligible for coverage or has benefits (each, an "Employee Benefit
Plan"). Except to the extent that any breach of the representations set forth in
this sentence, individually or in the aggregate, would not have, and would not
reasonably be expected to have, a Material Adverse Effect on the Company: (i)
each Employee Benefit Plan is in compliance with applicable law and has at all
times been administered and operated in all respects in accordance with its
terms; (ii) each Employee Benefit Plan which is intended to be "qualified"
within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), has received a favorable determination letter regarding
its tax-qualified status, from the Internal Revenue Service and, to the
knowledge of the Company , no event has occurred and no condition exists which
would result in the revocation of any such determination, (iii) no Employee
Benefit Plan is subject to Section 412 of the Code or Section 302 of ERISA or
covered by Title IV of ERISA; (iv) neither the Company or any Person, who is, or
at any time within the six-year period ending on the date hereof was, a member
of a controlled group (within the meaning of Section 412(n)(6) of the Code) that
includes, or at any time within the six-year period ending on the date hereof
included, the Company or any
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Subsidiary or any predecessor of the foregoing, has incurred, and no
circumstances exist pursuant to which they would reasonably expect to incur, any
unsatisfied liability under (A) Title IV of ERISA, (B) Chapter 43 of the Code or
(C) Section 502(i) or (l) of ERISA; (v) except as described in Section 3.01(i)
of the Company Disclosure Letter, no benefit under any Employee Benefit Plan,
including, without limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested or payable by
reason of any transaction contemplated under this Agreement; (vi) no tax has
been incurred under Section 511 of the Code with respect to any Employee Benefit
Plan (or trust or other funding vehicle pursuant thereto); (vii) no Employee
Benefit Plan provides welfare benefit coverage beyond the termination of an
employee's employment, except as required by Part 6 of Subtitle B of Title I of
ERISA or Section 4980B of the Code ("COBRA") or any State laws requiring
continuation of benefits coverage following termination of employment; (viii) no
liability, claim, action or litigation, has been made, commenced or, to the
Company's knowledge, threatened with respect to any Employee Benefit Plan (other
than routine claims for benefits payable in the ordinary course, and appeals of
denied such claims); and (ix) all contributions to Employee Benefit Plans that
were required to be made on or before the date hereof under such Employee
Benefit Plans have been made, and all benefits accrued under any unfunded
Employee Benefit Plan that is a deferred compensation plan or pension plan
within the meaning of Section 3(2) of ERISA have been paid, accrued or otherwise
adequately reserved in accordance with GAAP, all of which accruals under such
unfunded Employee Benefit Plans are as disclosed in Section 3.01(i) of the
Company Disclosure Letter.
(j) Taxes. (a) Except to the extent that the failure to do so would
not have, and would not be reasonably expected to have, a Material Adverse
Effect on the Company, each of the Company and its Subsidiaries has properly
filed or caused to be properly filed all federal, state, local and foreign tax
returns and tax reports which are required to be filed by, or with respect to,
each of the Company and its Subsidiaries on or prior to the Effective Date
(taking into account any extension of time to file granted to or on behalf of
the Company or such Subsidiary) (collectively, the "Returns"). Except to the
extent that the failure to be would not have, and would not be reasonably
expected to have, a Material Adverse Effect on the Company, all such Returns are
true, correct and complete. Except to the extent that the failure to do so would
not, and would not be reasonably likely to, have a Material Adverse Effect on
the Company, all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property, withholding, excise
and other taxes, duties or assessments of any nature whatsoever (together with
all interest, penalties and additions imposed with respect to such amounts)
("Taxes") due and payable by the Company including all amounts shown to be due
on any Return have been properly paid or fully provided for on the books and
records of the Company in accordance with GAAP, and except to the extent that
the following would not have, and would not reasonably be expected to have, a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole:
(i) there are no written waivers in effect of the applicable statutory period of
limitation for Taxes of the Company for any taxable period, (ii) no deficiency
assessment or proposed adjustment with respect to any tax liability of the
Company for any taxable period is pending or, to the knowledge of the Company,
threatened, (iii) there are no outstanding requests by the Company or any of its
Subsidiaries for any ruling of the U.S. Internal Revenue Service ("IRS"); (iv)
there are no liens for Taxes (other than for current Taxes not yet
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due and payable for which adequate reserves have been established in accordance
with GAAP) on the assets of the Company or any of its Subsidiaries; (v) neither
the Company nor any of its Subsidiaries is a party to or bound by any agreement
providing for the allocation or sharing of Taxes with any entity which is not,
either directly or indirectly, a Subsidiary of the Company; and (vi) neither the
Company nor any of its Subsidiaries has been a member of any "affiliated group"
(as defined in section 1504(a) of the Code) or has any liability for Taxes of
any Person other than the Company or any Subsidiary as a transferee or
successor, by Contract, or otherwise.
(k) Intellectual Properties. Except as would not have, and would not
reasonably be expected to have, a Material Adverse Effect on the Company , the
Company and its Subsidiaries own free and clear of all liens or have valid,
binding and enforceable rights to use all U.S. and foreign patents, trademarks,
trade names, service marks, service names, domain names, URLs, copyrights,
registrations and applications therefor and licenses or other rights in respect
thereof, computer technology (including all computer hardware, software,
databases, systems and embedded chips, (collectively, "Computer Technology"))
trade secrets, proprietary information, inventions, know-how, processes and
procedures ("Intellectual Property") necessary to carry on the business of the
Company or its Subsidiaries, without any known conflict with the rights of
others. To the knowledge of the Company, the conduct of the business of the
Company and its Subsidiaries, and the use by them of the Intellectual Property,
do not infringe any rights of any Person that would have, or would reasonably be
expected to have, a Material Adverse Effect on the Company and neither the
Company nor any of its Subsidiaries has received any notice in writing from any
other person pertaining to or challenging the right of the Company or any of its
Subsidiaries to own or use any Intellectual Property, except with respect to
rights the loss of which, individually or in the aggregate, would not have, and
would not reasonably be likely to have, a Material Adverse Effect on the
Company.
(l) Proxy Statement and Schedule 14D-9. The definitive proxy
statement and related materials, if any (or any amendment thereof or supplement
thereto), to be furnished to the holders of Common Stock in connection with the
Merger pursuant to Section 4.04 hereof (the "Proxy Statement") will comply in
all material respects with the Exchange Act and the rules and regulations
thereunder and any other applicable laws. If at any time prior to the Effective
Time any event occurs which should be described in an amendment or supplement to
the Proxy Statement, the Company will file and disseminate, as required, an
amendment or supplement which complies in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. Prior to its filing with the Commission, the amendment or supplement shall
be delivered to Parent and its counsel. None of the information supplied by the
Company in writing for inclusion in the Proxy Statement, will, at the date such
information is mailed to the Company's shareholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein in order to make the statements made therein, in light of the
circumstance under which they are made, not misleading.
(m) Broker's or Finder's Fee. Except for Allen & Company
Incorporated (whose fees and expenses will be paid by the Company in accordance
with the Company's agreement with such firm, a copy of which has been delivered
to Parent), no agent, broker, Person or firm acting on behalf of the Company is,
or will be, entitled to any broker's, financial advisor's, finder's fees or
similar fee from any of the parties hereto, or from any Person
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controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(n) Environmental Laws and Regulations. Except as would not,
and would not reasonably be likely to, have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole:
(i) Hazardous Materials have not been generated, used,
treated or stored on any Company Property by the Company, except for
quantities used or stored at such Company Property in compliance
with Environmental Laws and required in connection with the normal
operations and maintenance of such Company Property.
(ii) Hazardous Materials have not been Released or
disposed of on any Company Property by the Company, except for
quantities released or disposed of on such Company Property in
compliance with Environmental Laws and required in connection with
the normal operation and maintenance of such Company Property.
(iii) The Company and its Subsidiaries are in compliance
with Environmental Laws and the requirements of permits issued under
such Environmental Laws with respect to any Company Property.
(iv) There are no pending or, to the knowledge of the
Company, threatened Environmental Claims against the Company, any of
its Subsidiaries or, any Company Property.
(v) To the best knowledge of the Company, there are no
underground storage tanks located on any Company Property.
As used in this Section 3.01(n), the following terms shall have the
meanings set forth below:
(i) "Company Property" means any real property and
improvements owned, leased (as lessee or lessor), operated or
occupied by the Company or any of its Subsidiaries at any time.
(ii) "Hazardous Materials" means (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that
is friable, urea formaldehyde foam insulation, polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous substances," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," or words of similar import, under
any applicable Environmental Law and (c) any other substance
prohibited or regulated pursuant to the provisions of any
Environmental Law.
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(iii) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code, policy or
rule of common law in effect and in each case as amended as of
the Effective Date, and any judicial or administrative
interpretation thereof as of the Effective Date, including any
judicial or administrative order, consent decree or judgment,
relating to the environment, health, safety or Hazardous
Materials, including the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C.ss.
9601 et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.ss. 6901 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C.ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C.ss. 2601 et seq.; the Clean Air
Act, 42 U.S.C.ss.7401 et seq.; the Occupational Safety and Health
Act, 29 U.S.C.ss. 651 et seq.; the Safe Drinking Water Act, 42
U.S.C.ss. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C.ss.
2701 et seq.; and their state and local counterparts and
equivalents.
(iv) "Environmental Claims" means administrative,
regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of non-compliance or violation,
investigations or proceedings relating in any way to any
Environmental Law or any permit issued under any such Law (hereafter
"Claims"), including (a) Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental
Law, and (b) Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment.
(v) "Release" means disposing, discharging, injecting,
spilling, leaking, leaching, dumping, emitting, escaping, emptying,
seeping, placing and the like, into or upon any land or water or
air, or otherwise entering into the environment.
(o) State Takeover Statutes . Assuming the accuracy of the
representations of the Purchaser contained in Section 3.02(e) of this Agreement,
the Board of Directors of the Company has approved the Offer, the Merger, the
Voting and Tender Agreement and this Agreement and Sections 607.0901 and
607.0902 of the FBCA are inapplicable to the Offer, the Merger, this Agreement,
the Voting and Tender Agreement and the other transactions contemplated by this
Agreement and the Voting and Tender Agreement. In the event the Special Meeting
is required to approve the Merger and the adoption of this Agreement, the
approval of the holders of a majority of the outstanding shares of Common Stock
is the only vote required to approve the Merger and the adoption of this
Agreement.
(p) Opinion of Financial Advisor. The Company has received the
opinion of Allen & Company Incorporated, to the effect that, as of the date of
this Agreement, the consideration to be received in the Offer and the Merger by
the Company's shareholders (other than Purchaser and Parent) is fair to the
Company's shareholders from a financial point of view and a copy of such opinion
has been, or will be, delivered to Parent and Purchaser.
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(q) Rights Agreement. The Board of Directors of the Company has
taken all necessary action to authorize, and the Company has taken, or will take
promptly, and notwithstanding any other provision of this Agreement will
continue to take promptly, all necessary action to (i) render the Rights
Agreement inapplicable with respect to the Offer, the Voting and Tender
Agreement and the Merger and (ii) ensure that (A) neither Purchaser nor any of
its Affiliates (as defined in the Rights Agreement) or Associates (as defined in
the Rights Agreement) is considered to be an Acquiring Person (as defined in the
Rights Agreement) and (B) provisions of the Rights Agreement, including the
occurrence of a Distribution Date (as defined in the Rights Agreement), are not
and shall not be triggered by reason of the announcement or consummation of the
Offer, the Voting and Tender Agreement or the Merger.
(r) Material Contracts. There exists no default on the part of the
Company or any of its Subsidiaries under any material contract or agreement to
which the Company or any of its Subsidiaries is a party, except for such default
which would not, and would be reasonably likely not to, have a Material Adverse
Effect on the Company.
3.02 Representations and Warranties of Parent and Purchaser.
Each of Parent and Purchaser represents and warrants to the Company as
follows:
(a) Due Organization; Good Standing and Corporate Power. Each of
Parent and Purchaser is a corporation duly organized, validly existing and, to
the extent applicable, in good standing under the laws of its jurisdiction of
incorporation. Each of Parent and Purchaser has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted except where the failure to have such power and
authority, individually or in the aggregate, would not prevent or materially
delay the consummation of the transactions contemplated by this Agreement.
Purchaser was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and
has conducted its operations only as contemplated hereby. Purchaser has
previously delivered to the Company correct and complete copies of the articles
of incorporation and by-laws (or other comparable charter or organizational
documents) of Purchaser.
(b) Authorization and Validity of Agreement. Each of Parent and
Purchaser has the corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Purchaser, and the consummation by each of them of
the transactions contemplated hereby, have been duly authorized by the Board of
Directors of Parent and the Board of Directors and sole shareholder of
Purchaser. No other corporate action on the part of either Parent or Purchaser
is necessary to authorize the execution, delivery and performance of this
Agreement by each of Parent and Purchaser and the consummation by each of them
of the transactions contemplated hereby (other than, in the case of Purchaser,
the filing and recordation of appropriate merger documents as required by the
FBCA). This Agreement has been duly executed and delivered by Parent and
Purchaser and is a valid and binding obligation of each of Parent and Purchaser,
enforceable against each of Parent and Purchaser in accordance with its terms,
except that such enforcement may be limited by
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applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, and general equitable principles.
(c) Consents and Approvals; No Violations. In the event (i) the
filings required under the HSR Act are made and any applicable waiting period
thereunder has been terminated or has expired, (ii) the requirements of the
Exchange Act relating to the Proxy Statement and the Offer and the various "blue
sky laws" are met, and (iii) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the FBCA, the execution and
delivery of this Agreement by Parent and Purchaser and the consummation by
Parent and Purchaser of the transactions contemplated hereby will not: (1)
violate any provision of the charter documents of Parent or the Articles of
Incorporation or By-Laws of Purchaser; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to Parent or Purchaser or by which either
of their respective properties or assets may be bound; (3) require any filing
with, or permit, consent or approval of, or the giving of any notice to any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of Parent or Purchaser or any
of their subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement, lease or
other instrument or obligation to which Parent or Purchaser or any of their
subsidiaries is a party, or by which they or their respective properties or
assets may be bound except, in the cases of clauses (2), (3) and (4) above, for
any such filing, permit, consent, approval, the failure to obtain or make which,
and except for any breach, violation or Encumbrance which, would not prevent or
materially delay consummation of the transactions contemplated by this
Agreement.
(d) Broker's or Finder's Fee. Except for Deutsche Bank Securities
Inc. (whose fees and expenses as financial advisor to Parent and Purchaser will
be paid by Parent or Purchaser), no agent, broker, Person or firm acting on
behalf of Parent or Purchaser is, or will be, entitled to any fee, commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(e) Parent Not an Affiliated Shareholder. As of the date hereof, (i)
neither Parent nor any of its affiliates is, with respect to the Company, an
"interested shareholder" as such term is defined in Section 607.0901 of the FBCA
and (ii) Parent and its subsidiaries collectively hold directly or indirectly
less than 1% of the outstanding voting shares of the Company.
(f) Financing. Parent will provide, or cause to be provided, to
Purchaser sufficient funds to consummate the Offer and the Merger in accordance
with this Agreement and to make all other necessary payments of fees and
expenses required to be paid by Parent and Purchaser to consummate the
transactions contemplated hereby.
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ARTICLE IV
TRANSACTIONS PRIOR TO EFFECTIVE DATE
4.01 Access to Information Concerning Properties and Records. (a)
During the period commencing on the date hereof and ending on the Effective
Date, the Company shall, and shall cause each of its Subsidiaries to, upon
reasonable notice, afford Parent, Purchaser, and their officers, employees,
counsel, accountants, consultants and other authorized representatives,
reasonable access during normal business hours to the properties, books,
contracts, commitments and records of the Company and its Subsidiaries. The
Company shall, and shall cause each of its Subsidiaries to, furnish promptly to
Parent and Purchaser (a) a copy of each report, schedule, registration statement
and other document filed by it or any of its Subsidiaries during such period
pursuant to the requirements of Federal or state securities laws and (b) all
other information concerning its or its Subsidiaries' business, properties and
personnel as Purchaser may reasonably request.
4.02 Confidentiality. Unless otherwise required by law or regulation
(including stock exchange rules) and until the Appointment Date, information
obtained by Parent and Purchaser and their respective officers, employees,
counsel, accountants, consultants and other authorized representatives pursuant
to Section 4.01 hereof shall be subject to the provisions of the Confidentiality
Agreement between the Company and Parent dated January 11, 2000 (the
"Confidentiality Agreement").
4.03 Conduct of the Business of the Company Pending the Effective
Date. The Company agrees that, except as permitted, required or contemplated by,
or otherwise described in this Agreement or otherwise consented to or approved
by Parent in writing (which consent or approval shall not be unreasonably
withheld, conditioned or delayed), during the period commencing on the date
hereof and ending on the earlier of (x) the date of termination of this
Agreement in accordance with Article VI hereof and (y) the time the designees of
Parent have been elected to, and shall constitute a majority of, the Board of
Directors of the Company pursuant to Section 1.03 hereof (the "Appointment
Date"):
(a) the Company and each of its Subsidiaries will conduct their
respective operations only according to their ordinary course of business
consistent with past practice, or current plans, and will use their commercially
reasonable efforts to preserve in all material respects their business
organizations, keep available the services of their officers and key employees
and maintain their existing relationships with material customers, suppliers,
distributors, licensors, clients and others having business relationships with
them;
(b) except as permitted, required or contemplated by this Agreement,
neither the Company nor any of its Subsidiaries shall: (i) make any change in or
amendment to its Articles of Incorporation or By-Laws (or comparable governing
documents); (ii) authorize for issuance, issue, sell or deliver (or agree or
commit to issue, sell or deliver), whether pursuant to the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase or
otherwise, any shares of its capital stock (other than in connection with the
exercise of Options outstanding on the date hereof); (iii) sell or pledge or
agree to sell or pledge any stock owned by
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it in any of its Subsidiaries or any other entity in which it has an equity
interest; (iv) acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any material corporation, partnership or other business or
division thereof; (v) except in the ordinary course of business and except to
the extent required under existing employee and director benefit plans,
agreements or arrangements as in effect on the date of this Agreement, (a)
increase the compensation or fringe benefits of any of its directors, officers
or employees, (b) grant any severance or termination pay not currently required
to be paid under existing severance plans, (c) enter into any employment,
consulting or severance agreement or arrangement with any present or former
director, officer or employee of the Company or any of its Subsidiaries, or (d)
establish, adopt, enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees; (vi) except in the ordinary course of
business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose
of, encumber or subject to any lien, any material assets or incur or modify any
indebtedness for borrowed money (other than indebtedness incurred under the
Amended and Restated Credit Agreement, dated as of July 30, 1999, between the
Company and Bank of America (the "Existing Credit Facility")); (vii) make any
material tax election or settle or compromise any material tax liability; (viii)
except as required by applicable law or generally accepted accounting
principles, make any change in its method of accounting; (ix) adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its Subsidiaries not constituting an inactive Subsidiary (other than the
Merger); (x) make any material loans, advances or capital contributions to, or
investment in, any other Person other than to any Subsidiary of the Company;
(xi) declare, set aside or pay any dividends on, or make or cause to be made any
other distributions in respect of, any of its capital stock or other equity
securities or any interest in any Person other than dividends and distributions
by a direct or indirect Subsidiary of the Company to its parent; (xii) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock; (xiii) enter into any agreement providing for
the acceleration of payment or performance or other consequences as a result of
the transactions contemplated hereby or any other change of control of the
Company except to the extent permitted under Section 4.07; (xiv) purchase,
redeem or otherwise acquire any shares of capital stock of the Company or any
Subsidiary or any rights, warrants or options to acquire any such shares or
other securities; (xv) enter into any contract or commitment with respect to
capital expenditures (individually or in the aggregate) in an amount in excess
of $2 million over the aggregate budgeted amount for all capital expenditures of
the Company and its Subsidiaries taken as a whole, (xvi) other than in the
ordinary course of business, cancel, amend or modify, in any material respect,
any material contract or agreement to which the Company or any of its
Subsidiaries is a party or enter into any material contract, or (xvii) agree, in
writing or otherwise, to take any of the foregoing actions.
(c) The Company shall not, and shall not permit any of its
Subsidiaries to purchase or acquire, or offer to purchase or acquire, any shares
of capital stock of the Company.
4.04 Proxy Statement. If shareholder approval of the Merger is
required by law, as promptly as practicable after the purchase of shares of
Common Stock pursuant to the
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Offer, the Company will prepare and file a preliminary Proxy Statement with the
Commission and will use its reasonable efforts to respond to the comments of the
Commission in connection therewith and to furnish all information required to
prepare the definitive Proxy Statement (including, without limitation, financial
statements and supporting schedules and certificates and reports of independent
public accountants). Purchaser and the Company will cooperate with each other in
connection with the preparation of the Proxy Statement. Without limiting the
generality of the foregoing, Parent and Purchaser will furnish to the Company
the information relating to it required by the Exchange Act to be set forth in
the Proxy Statement. Promptly after the purchase of shares of Common Stock
pursuant to the Offer, if required by the FBCA to consummate the Merger, the
Company will cause the definitive Proxy Statement to be mailed to the
shareholders of the Company and, if necessary, after the definitive Proxy
Statement shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy material and, if required in connection therewith, resolicit
proxies.
4.05 Shareholder Approval.
(a) Promptly after the purchase of shares of Common Stock pursuant
to the Offer, if required by the FBCA to consummate the Merger, the Company,
acting through its Board of Directors, shall, in accordance with applicable law,
duly call, convene and hold a special meeting of the holders of Common Stock
(the "Special Meeting") for the purpose of voting upon this Agreement and the
Merger and the Company agrees that this Agreement and the Merger shall be
submitted at such special meeting. The Company shall use its reasonable efforts
to solicit from its shareholders proxies, and, subject always to the fiduciary
obligations of the Company's directors under applicable law as determined in
good faith by them after consulting with outside counsel, shall take all other
action necessary and advisable, to secure the vote of shareholders required by
applicable law to obtain the approval for this Agreement and the Merger. Subject
to the fiduciary obligations of the Company's directors under applicable law as
determined in good faith by them after consulting with outside counsel, the
Company agrees that it will include in the Proxy Statement the recommendation of
its Board of Directors that holders of Common Stock approve and adopt this
Agreement and approve the Merger. Parent and Purchaser will cause all shares of
Common Stock owned by them and their affiliates to be voted in favor of the
Merger.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 80% of the outstanding Company Common Stock pursuant to the
Offer, the Company agrees, at the request of Purchaser, subject to Article V, 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 shareholders, in accordance with Section 607.1104 of
the FBCA.
4.06 Reasonable Efforts. (a) Subject to the terms and conditions
provided herein, each of the Company and Parent and Purchaser shall, and the
Company shall cause each of its Subsidiaries to, cooperate and use their
respective commercially reasonable efforts to take, or cause to be taken, all
appropriate action, and to make, or cause to be made, all filings necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, their
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respective reasonable efforts to obtain, prior to the Effective Date, all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
its Subsidiaries as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Offer and
the Merger.
(b) Prior to the Closing, each party shall promptly consult with the
other parties hereto with respect to and, subject to such confidentiality
agreements as may be reasonably necessary or requested, will provide any
necessary information with respect to and provide the other (or its counsel)
copies of, all filings made by such party with any governmental authority or any
other information supplied by such party to a governmental authority in
connection with this Agreement and the transactions contemplated by this
Agreement. Each party hereto shall promptly inform the other of any
communication from any governmental authority regarding any of the transactions
contemplated by this Agreement unless otherwise prohibited by law. If any party
hereto or affiliate thereof receives a request for additional information or
documentary material from any such governmental authority with respect to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response in compliance
with such request. To the extent that transfers of permits are required as a
result of execution of this Agreement or consummation of the transactions
contemplated hereby, the Company shall use its commercially reasonable efforts
to effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement shall
be deemed to require Parent, Purchaser or the Company to defend against any
litigation brought by any governmental authority seeking to prevent the
consummation of the transactions contemplated hereby.
4.07 No Solicitation of Other Offers.
(a) The Company will notify Parent and Purchaser promptly, and in
any event within one Business Day following the date of receipt thereof by the
Company (or if received, or requested or initiated or continued with someone
other than the Company when knowledge thereof is actually obtained by the
Company), if, on or after the date of this Agreement, any proposals are received
by, any information is requested from, or any negotiations or discussions are
sought to be initiated or continued with the Company or any of its officers,
directors, employees, investment bankers, attorneys, accountants or other
agents, in each case in connection with any Acquisition Proposal (as hereinafter
defined) or the possibility or consideration of making an Acquisition Proposal
("Acquisition Proposal Interest") indicating, in connection with such notice,
the name of the Person making such Acquisition Proposal or indicating such
Acquisition Proposal Interest and the material terms and conditions of any
proposals or offers. Subject to Sections 4.07(b), (c) and (d), the Company
agrees that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposal or Acquisition Proposal Interest. The
Company agrees that it shall keep Parent and Purchaser informed, on a current
basis, of the status and material terms of any Acquisition Proposal or
Acquisition Proposal Interest.
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"Acquisition Proposal" shall mean any proposal or offer from any
Person or group relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its Subsidiaries or of all
or any portion of any class of equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any Person beneficially owning all or any portion of any class of
equity securities of the Company or any of its Subsidiaries, any merger,
consolidation, business combination, recapitalization, liquidation or
dissolution involving the Company or any of its Subsidiaries or any transaction
or series of transactions having similar economic effect, other than the
transactions contemplated by this Agreement.
(b) Except as provided in Section 4.07(c), the Company, from the
date of this Agreement until the earlier of the termination of this Agreement
and the Effective Time, will not, nor shall it authorize or permit its officers,
directors, employees, to (and the Company will use commercially reasonable
efforts to ensure that such persons and the Company's investment bankers,
attorneys, accountants and other agents do not), directly or indirectly (i)
initiate, solicit or knowingly encourage, or knowingly take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, (ii) enter into any
agreement with respect to any Acquisition Proposal, or (iii) in the event of an
unsolicited Acquisition Proposal for the Company, engage in negotiations or
discussions with, or provide any information or data to, any Person (other than
Parent, any of its affiliates or representatives) relating to any Acquisition
Proposal; provided, however that nothing contained in this Section 4.07 shall
prohibit the Company or the Board of Directors from (A) taking and disclosing to
the Company's shareholders its position with respect to an offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, (B)
making such disclosure to the Company's shareholders as the Board of Directors
determines in good faith, after receipt of advice from outside legal counsel, is
required under applicable law or (C) otherwise complying with their fiduciary
duties to shareholders.
(c) Notwithstanding the foregoing, the Company may furnish
information concerning its business, properties or assets to any Person pursuant
to a confidentiality agreement with terms no less favorable to the Company than
those contained in the Confidentiality Agreement (as from time to time amended
or waived) and may negotiate and participate in discussions and negotiations
with such Person concerning an Acquisition Proposal if (x) such entity or group
has on an unsolicited basis submitted a bona fide written proposal to the
Company relating to any such transaction which the Board of Directors determines
in good faith, after receiving advice from a nationally recognized investment
banking firm, is (or could result in) a transaction superior to the Offer and
the Merger and (y) in the good faith opinion of the Board of Directors, after
consultation with outside legal counsel, providing such information or access or
engaging in such discussions or negotiations is in the best interests of the
Company and its shareholders and failure to provide such information or access
or engage in such discussion or negotiations is inconsistent with the exercise
of the fiduciary duties of the Board under applicable law (an Acquisition
Proposal which satisfies clauses (x) (without regard to the phrase in
parentheses) and (y) being referred to herein as a "Superior Proposal"). The
Company shall promptly, and in any event within one Business Day following
receipt of a Superior Proposal, notify Parent of the receipt thereof. The
Company shall promptly provide to Parent any material
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non-public information regarding the Company provided to any other party which
was not previously provided to Parent.
(d) Except as set forth herein, neither the Board of Directors nor
any committee thereof permitted by law to do so shall (i) withdraw or modify, or
propose (publicly or to a third party) to withdraw or modify, in any manner
adverse to Parent or Purchaser, the approval or recommendation by such Board of
Directors or any such committee of the Offer, this Agreement or the Merger, (ii)
approve or recommend or propose (publicly or to a third party) to approve or
recommend, any Acquisition Proposal or (iii) enter into any acquisition
agreement with respect to, or any other agreement which would approve, adopt or
effect, any Acquisition Proposal (other than a confidentiality agreement as
contemplated by Section 4.07(c)). Notwithstanding the foregoing, the Board of
Directors may (I) withdraw or modify its approval or recommendation of the
Offer, this Agreement or the Merger to the extent where not to do so would be
inconsistent with the Board's fiduciary duties under applicable law and (II)
approve or recommend a Superior Proposal, or enter into an acquisition agreement
with respect to, or any other agreement which would approve, adopt or effect, a
Superior Proposal, in the case of either clause (I) or (II), at any time after
the third business day following the Company's delivery to Parent of written
notice advising Parent that the Board of Directors intends to enter into an
agreement with respect to a Superior Proposal.
4.08 Notification. The Company shall give prompt notice to Parent
and Parent shall give prompt notice to the Company, of (a) the occurrence (or
non-occurrence) of any event the occurrence (or non-occurrence) of which would,
or would reasonably be expected to, cause either (i) any representation or
warranty of such party contained in this Agreement to be untrue or inaccurate in
any material respect at any time from the date hereof to the Effective Time or
(ii) any condition set forth in Annex A to be unsatisfied in any material
respect at any time from the date hereof to the date Purchaser purchases Shares
pursuant to the Offer (except to the extent any such condition refers to a
specific date) and (b) any material failure of the Company, Purchaser or Parent,
as the case may be, or any officer, director, employee or agent thereof, to
comply with any covenant, condition or agreement to be complied with, satisfied
or performed by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 4.08 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice or the representations
and warranties of the parties or the conditions to the obligations of the
parties hereto.
4.09 HSR Act. The Company and Purchaser shall, as soon as
practicable and in any event within five business days from the date of this
Agreement, file Notification and Report Forms under the HSR Act with the Federal
Trade Commission (the "FTC") and the Antitrust Division of the Department of
Justice (the "Antitrust Division") and shall use their best efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division, including without limitation a request for additional
information or documentation.
4.10 Employee Benefits.
(a) Until December 31, 2000, Purchaser and its affiliates shall
ensure that all employees and officers of the Company and its Subsidiaries
receive (i) the salary or wage level
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and bonus opportunity, to the extent applicable, at least equal to that in
effect immediately prior to the date hereof, and (ii) benefits and other terms
and conditions of employment that are substantially comparable in the aggregate
to the benefits and terms and conditions received by such individuals
immediately prior to the date hereof. Subject to the preceding sentence, nothing
contained in this Agreement shall require Purchaser and its affiliates to
provide comparable awards of equity-based compensation. Notwithstanding the
foregoing, following the Effective Time, the Purchaser may terminate the
employment of any employee (subject, for any such termination prior to January
1, 2001, to the payment of severance benefits payable to the employee in
connection with such termination under any plan, practice or policy of the
Company or any of its Subsidiaries and full payment and satisfaction of the
employee's rights under any employment agreement). Until December 31, 2000,
Purchaser and its affiliates shall keep in effect all severance and retention
plans, practices and policies that are applicable to employees and officers of
the Company and its Subsidiaries immediately prior to the date hereof.
(b) Following the Effective Time, each employee benefit plan or
policy, including without limitation, vacation, floating holiday, sickness, paid
time off, retirement, severance and welfare plans sponsored by Purchaser or its
affiliates shall credit, for purposes of eligibility to participate and vesting
but not benefit accrual, all continuous service immediately prior to the
Effective Time of employees and officers of the Company and its Subsidiaries
with the Company and its Subsidiaries and their respective predecessors.
4.11 Indemnification of Directors and Officers of the Company.
(a) From and after the Effective Time, the Surviving Corporation
shall indemnify, defend and hold harmless any person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the Effective Time,
an officer or director (the "Indemnified Party") of the Company or any of its
Subsidiaries against all losses, claims, damages, liabilities, costs and
expenses (including reasonable attorney's fees and expenses), judgments, fines,
losses, and amounts paid in settlement (provided that any such settlement is
effected with the written consent of Parent or the Surviving Corporation, which
consent shall not be unreasonably withheld) in connection with any actual or
threatened action, suit, claim, proceeding or investigation (whether arising
before or after the Effective Time) (each a "Claim") to the extent that any such
Claim is based on, or arises out of, (i) the fact that such person is or was a
director or officer of the Company or any of its Subsidiaries or is or was
serving at the request of the Company or any of its Subsidiaries as a director
or officer of another corporation, partnership, joint venture, trust or other
enterprise, or (ii) this Agreement, or any of the transactions contemplated
hereby, in each case to the extent that any such Claim pertains to any matter or
fact arising, existing, or occurring prior to or at the Effective Time,
regardless of whether such Claim is asserted or claimed prior to, at or after
the Effective Time, to the full extent permitted under applicable law or the
Company's Articles of Incorporation, By-Laws or indemnification agreements in
effect at the date hereof, including provisions relating to advancement of
expenses incurred in the defense of any action or suit. Without limiting the
foregoing, in the event any Indemnified Party becomes involved in any capacity
in any Claim, then from and after the Effective Date, the Surviving Corporation
shall periodically advance to such Indemnified Party its reasonable legal and
other expenses (including the cost of any investigation and preparation incurred
in connection therewith), subject to the provision by such Indemnified Party of
an
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undertaking to reimburse the amounts so advanced in the event of a final
non-appealable determination by a court of competent jurisdiction that such
Indemnified Party is not entitled thereto.
(b) All rights to indemnification and all limitations on liability
existing in favor of an Indemnified Party as provided in the Company's Articles
of Incorporation, By-Laws or indemnification agreements as in effect as of the
date hereof shall survive the Merger and shall continue in full force and
effect, without any amendment thereto, for a period of six years from the
Effective Date to the extent such rights are consistent with applicable law;
provided, that in the event any claim or claims are asserted or made within such
six-year period, all rights to indemnification in respect of any such claim or
claims shall continue until disposition of any and all such claims; provided,
further, that any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under Florida
law, the Company's Article of Incorporation or By-Laws or such agreements, as
the case may be, shall be made by independent legal counsel selected by the
Indemnified Party and reasonably acceptable to the Surviving Corporation; and
provided, further, that nothing in this Section 4.11 shall impair any rights or
obligations of any present or former directors or officers of the Company.
(c) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the surviving corporation or entity of such consolidation or merger
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary to
effectuate the purposes of this Section 4.11, proper provision shall be made so
that the successors and assigns of the Surviving Corporation, as the case may
be, assume the obligations set forth in this Section 4.11 and none of the
actions described in the foregoing clauses (i) or (ii) shall be taken until such
provision is made.
(d) For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect, without any lapses
in coverage, policies of directors' and officers' liability insurance (or a
"tail" policy), for the benefit of those persons who are covered by the
Company's directors' and officers' liability insurance policies as of the date
hereof, providing coverage with respect to matters occurring prior to the
Effective Time that is at least equal to the coverage provided under the
Company's current directors' and officers' liability insurance policies (copies
of which have heretofore been delivered to Parent), to the extent that such
liability insurance can be maintained at an annual cost to the Surviving
Corporation of not greater than 200 percent of the premium for the current
Company directors' and officers' liability insurance, provided that if such
insurance (or "tail" policy) cannot be so maintained at such cost, the Surviving
Corporation shall maintain as much of such insurance as can be so maintained at
a cost equal to 200 percent of the current annual premiums of the Company for
such insurance.
(e) This Section 4.11 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on Parent and the Surviving Corporation
and their successors and assigns.
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ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of Parent, Purchaser and
the Company. The respective obligations of Parent and Purchaser, on the one
hand, and the Company, on the other hand, to effect the Merger are subject to
the satisfaction at or prior to the Effective Time of each of the following
conditions, any and all of which may be waived in whole or in part by,
respectively, the Company, on the one hand, and Parent, on the other hand, to
the extent permitted by applicable law:
(a) Approval of Company's Shareholders. To the extent required by
applicable law, this Agreement and the Merger shall have been approved and
adopted by holders of a majority of the outstanding shares of the Common Stock
of the Company entitled to vote in accordance with applicable law (if required
by applicable law) and the Company's Articles of Incorporation and By-Laws;
(b) HSR Act. Any applicable waiting period (and any extension
thereof) under the HSR Act applicable to the Merger shall have expired or been
terminated;
(c) Injunction. No preliminary or permanent injunction or other
order shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits the consummation of the Merger and the
transactions contemplated by this Agreement and which is in effect at the
Effective Time; provided, however, that, in the case of a decree, injunction or
other order, any party asserting this condition shall have used its reasonable
efforts to prevent the entry of any such decree, injunction or other order and
to appeal as promptly as possible any decree, injunction or other order that may
be entered;
(d) Statutes. No statute, rule, regulation, executive order, decree
or order of any kind shall have been enacted, entered, promulgated or enforced
by any United States or United Kingdom court or governmental authority which
prohibits the consummation of the Merger; and
(e) Payment for Common Stock. Purchaser shall have accepted for
payment and paid for the Shares validly tendered and not withdrawn pursuant to
the Offer; provided, that the foregoing shall not be a condition to Purchaser's
obligation to consummate the Merger if Purchaser's failure to purchase any
Shares violates the terms of the Offer.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by the Company's
shareholders:
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(a) by mutual written consent of the Company, on the one hand,
and of Parent, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Common Stock pursuant to the Offer or the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Parent, on the one hand, or the Company, on the other hand,
if Purchaser has not purchased all shares of Common Stock tendered pursuant to
the Offer within 90 days after commencement of the Offer (the "Outside Date"),
unless such purchase shall not have occurred because of a material breach of any
representation, warranty, obligation, covenant or agreement set forth in this
Agreement on the part of the party seeking to terminate this Agreement;
(d) by Parent if the Offer is terminated or expires in accordance
with its terms without Purchaser having purchased any Common Stock thereunder
due to an occurrence which would result in a failure to satisfy any of the
conditions set forth on Annex A hereto, unless any such failure shall have been
caused by or resulted from the material breach by Purchaser or Parent of any
representation, warranty, obligation, covenant or agreement contained in this
Agreement;
(e) by Parent, if, prior to the purchase of shares of Common Stock
in the Offer, the representations and warranties of the Company set forth in
this Agreement which are not qualified by "Material Adverse Effect" shall not be
true and correct and the fact, matter or circumstance giving rise to such
untruth or incorrectness would have, or would reasonably likely to have a
Material Adverse Effect, and the representations and warranties that are
qualified by "Material Adverse Effect" shall not be true in any respect, at any
time after the date hereof (except for those representations and warranties that
address matters only as of a particular date or only with respect to a specific
period of time which need only be true and accurate as of such date or with
respect to such period), or the Company shall have breached or failed to perform
or comply in any material respect with any obligation, agreement or covenant
required by this Agreement to be performed or complied with by it, and, with
respect to any such breach or failure to perform that is reasonably capable of
being remedied within the time periods set forth below, the breach or failure to
perform is not remedied prior to the earlier of (x) 10 days after Parent or
Purchaser has furnished the Company with written notice of such breach or
failure to perform or (y) two business days prior to the date on which the Offer
expires; provided, however, that Parent shall not be entitled to terminate this
Agreement pursuant to this Section 6.01(e) if it or Purchaser is in material
breach of its representations and warranties, covenants or other obligations
under this Agreement;
(f) by the Company to allow the Company to enter into an agreement
in accordance with Section 4.07(d) with respect to a Superior Proposal which the
Board of Directors has determined is more favorable to the shareholders of the
Company than the transactions contemplated hereby; provided, however, that the
Company shall have complied in
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all material respects with Section 4.07, including the notice provision, and
that it makes simultaneous payment of the Termination Fee;
(g) by Purchaser, if the Board of Directors of the Company or any
committee thereof, shall have (i) withdrawn, modified or changed in a manner
adverse to Parent or Purchaser its approval or recommendation of the Offer, the
Merger or this Agreement or (ii) approved, taken a neutral position with respect
to, or recommended to the shareholders of the Company any alternative
Acquisition Proposal;
(h) by the Company, if prior to purchase of shares in the Offer
there shall have been a breach or failure to perform on the part of Purchaser or
Parent of any of its representations, warranties, covenants or agreements
contained in this Agreement and such breach or failure to perform has a material
adverse effect on the ability of Purchaser or Parent to consummate the Offer or
the Merger, and, with respect to any such breach or failure to perform that is
reasonably capable of being remedied within the time periods set forth below,
the breach or failure to perform is not remedied prior to the earlier of (x) 10
days after the Company has furnished Parent with written notice of such breach
or failure to perform or (y) two business days prior to the date on which the
Offer expires unless such failure shall have been caused by the failure of the
Company to satisfy the conditions set forth in paragraph (c) or (d) of Annex A;
(i) by the Company, if Purchaser shall have (i) failed to commence
the Offer within seven Business Days following the date of this Agreement, or
(ii) terminated the Offer or the Offer shall have expired without Purchaser
having purchased any Shares thereunder unless such failure shall have been
caused by the failure of the Company to satisfy the conditions set forth in
paragraph (c) or (d) of Annex A.
6.02 Effect of Termination. (a) In the event of the termination of
this Agreement pursuant to Section 6.01 hereof by Purchaser, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent,
Purchaser or the Company, except (i) as set forth in Sections 4.02, 7.01 and
this Section 6.02 hereof, which shall survive any termination of this Agreement,
and (ii) nothing in this Section 6.02 shall relieve any party to this Agreement
of liability for breach of this Agreement.
(b) If the Company shall have terminated this Agreement pursuant to
Section 6.01(f), then the Company shall pay simultaneously with such termination
a fee (the "Termination Fee") of $13.5 million which amount shall be payable by
wire transfer to such account as Parent may designate in writing to the Company.
(c) If the Purchaser shall have terminated this Agreement pursuant
to Section 6.01(g), then the Company shall pay within two Business Days
following such termination to Parent the Termination Fee which shall be payable
by wire transfer to such account as Parent may designate in writing to the
Company.
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ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. Except as otherwise provided in Section
6.02, all costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
7.02 Representations and Warranties. The respective representations
and warranties of the Company, on the one hand, and Purchaser, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing Date shall not be deemed waived or otherwise affected by
any investigation made by any party. Each and every such representation and
warranty shall expire with, and be terminated and extinguished by, the Effective
Time and thereafter none of the Company or Purchaser shall be under any
liability whatsoever with respect to any such representation or warranty. This
Section 7.02 shall have no effect upon any other obligation of the parties
hereto, whether to be performed before or after the Effective Time.
7.03 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company or Purchaser, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
7.04 Public Announcements. The Company, on the one hand, and
Purchaser, on the other hand, agree to consult promptly with each other prior to
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated hereby, and shall not issue any such press
release or make any such public statement prior to such consultation and review
by the other party of a copy of such release or statement. To the extent, if
any, that the Confidentiality Agreement is inconsistent with this Section 7.04,
the Confidentiality Agreement is hereby amended.
7.05 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
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(a) if to the Company, to it at:
Travel Services International, Inc.
220 Congress Park Drive
Delray Beach, FL 33445
Telecopier: (561) 266-6186
Attention: Suzanne Bell, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
Telecopier: (212) 354-8113
Attention: John M. Reiss, Esq.
Jorge L. Freeland, Esq.
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(b) if to Purchaser or Parent, to it at:
Airtours plc
Parkway One, Parkway Business Centre
300 Princess Road
Manchester M 147QU
United Kingdom
Telecopier: 011-44-161-232-6562
Attention: James Jennings, Esq.
Greg McMahon
with copies to:
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Telecopier: (212) 309-6273
Attention: John Whitehead, Esq.
and
Addleshaw Booth & Co.
100 Barbirolli Square
Manchester M2 3AB England
Telecopier: 011-44-161-934-6060
Attention: Paul Devitt
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third Business Day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.06 Entire Agreement. This Agreement and the annex, schedules and
other documents referred to herein or delivered pursuant hereto, collectively
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto.
7.07 Binding Effect; Benefit; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and, with respect to
the provisions of Sections 4.10 or 4.11 hereof, shall inure to the benefit of
the Persons benefiting from the provisions thereof who are intended to be third
party beneficiaries thereof, and, in each such case, their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
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interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties. Except as
specified in the previous sentence, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
7.08 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN, AND IN ALL RESPECT
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS
OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS TO BE PERFORMED WHOLLY IN SUCH
STATE. The parties hereby irrevocably submit to the jurisdiction of the federal
courts of the United States of America located in the State of Florida and the
state courts of the State of Florida, solely in respect of the interpretation
and enforcement of the provisions of this Agreement and in respect of the
transactions contemplated hereby and hereby waive, and agree not to assert, as a
defense in any action, suit or proceeding for the interpretation or enforcement
hereof, that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in said courts or that the venue
thereof may not be appropriate or that this Agreement may not be enforced in or
by such courts, and the parties irrevocably agree that all claims with respect
to such action or proceeding shall be heard and determined in such a court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 7.05, or in such other manner as
may be permitted by law, shall be valid and sufficient service thereof.
(b) IN ANY CIVIL ACTION, COUNTERCLAIM OR PROCEEDING, WHETHER AT LAW
OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, AND
ANY AND ALL TRANSACTIONS CONTEMPLATED HEREUNDER, THE PERFORMANCE HEREOF, OR THE
RELATIONSHIP CREATED HEREBY, WHETHER SOUNDING IN CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, TRIAL WILL BE TO A COURT OF COMPETENT JURISDICTION AND
NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR
RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE
ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT
OF THIS JURY WAIVER PROVISION.
7.09 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
shareholder approval), by action taken by the respective Boards of Directors of
Purchaser and the Company or by the respective officers authorized by such
Boards of Directors; provided, however, that after any such shareholder
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approval, no amendment shall be made which by law requires further approval by
such shareholders without such further approval.
7.10 Further Actions. Each of the parties hereto agrees that,
subject to its legal obligations, it will use its best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.11 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
7.12 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
7.13 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.14 Certain Definitions.
(a) "Business Day" shall mean any day, other than a Saturday, Sunday
or a day on which banks located in New York, New York shall be authorized or
required by law to close.
(b) "Knowledge" Defined. When any representation or warranty
contained in this Agreement or in the Company Disclosure Letter is expressly
qualified by the knowledge of the Company, such knowledge shall mean the
actual knowledge of Messrs. Joseph Vittoria and John Balson.
(c) "Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, a limited liability company, an
unincorporated organization, a group and a government or other department or
agency thereof.
(d) "Subsidiary" with respect to the Company, shall mean and include
(x) any partnership of which the Company or any Subsidiary is a general partner
or (y) any other entity in which the Company or any of its Subsidiaries owns or
has the power to vote 50% or more of the equity interests in such entity having
general voting power to participate in the election of the governing body of
such entity.
7.15 Transfer Taxes. All stamp, transfer, documentary, sales, use,
registration and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement and the transactions
contemplated hereby (collectively, the "Transfer Taxes") shall be paid by
Purchaser, and Purchaser shall, at its own expense, procure any stock transfer
-36-
<PAGE>
stamps required by, and properly file on a timely basis all necessary tax
returns and other documentation with respect to, any Transfer Tax and provide to
the Company evidence of payment of all Transfer Taxes.
[SIGNATURE PAGE FOLLOWS]
-37-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Purchaser and the Company have caused
this Agreement and Plan of Merger to be executed by their respective officers
thereunto duly authorized, all as of the date first above written.
AIRTOURS plc
By /s/ James S. Jennings
--------------------------------------
Name: James S. Jennings
Title: Director of Corporate Development
BLUE SEA FLORIDA ACQUISITION INC.
By /s/ James S. Jennings
--------------------------------------
Name: James S. Jennings
Title: Vice President
TRAVEL SERVICES INTERNATIONAL, INC.
By /s/ Suzanne B. Bell
--------------------------------------
Name: Suzanne B. Bell
Title: Senior Vice President, General
Counsel and Secretary
-38-
<PAGE>
ANNEX A
-------
The capitalized terms used in this Annex A shall have the meanings
set forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex A is
appended.
- --------------------------------------------------------------------------------
Notwithstanding any other provision of the Offer, and in addition to
(and not in limitation of) Purchaser's right to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act, pay for any Shares validly tendered pursuant to the
Offer and may postpone the acceptance of and, subject to the restrictions
referred to above, payment for, Shares tendered pursuant to the Offer, (i) if
any applicable waiting period under the HSR Act shall not have expired or been
terminated or (ii) there shall not have been validly tendered and not properly
withdrawn prior to the expiration of the Offer that number of Shares
representing more than 50% of all Shares outstanding (calculated on a fully
diluted basis, which shall mean, as of any date, the number of Shares that are
actually issued and outstanding plus the number of Shares that the Company is
required to issue pursuant to obligations outstanding under convertible
securities, Options and otherwise on the date of purchase) (the "Minimum
Condition"). Additionally and without limiting the foregoing, notwithstanding
any other provision of the Offer but only in accordance with the provisions of
Section 1.01(a) of the Merger Agreement, Purchaser shall not be required to
accept for payment or, subject to the restrictions referred to above, pay for
any Shares, and may terminate or amend the Offer and may postpone the acceptance
of, subject to the restrictions referred to above, payment for Shares, if at any
time on or after the date of the Merger Agreement and at or before the time of
payment for any such Shares (whether or not any Shares have theretofore been
accepted for payment or paid for pursuant to the Offer) any of the following
events shall occur:
(a) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction enacted, entered, enforced,
promulgated, amended, issued, or
<PAGE>
Annex A
Page 2
applied by, any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign, other
than the routine application of the waiting period provisions of the HSR Act to
the Offer or to the Merger, which is in effect and would, or would be reasonably
likely to: (i) make illegal or otherwise directly or indirectly prohibit the
Offer or the Merger, (ii) prohibit or materially limit the ownership or
operation by Parent or Purchaser of all or any material portion of the business
or assets of the Company and its Subsidiaries taken as a whole or of Parent or
to compel Purchaser or Parent to dispose of or hold separately all or any
material portion of the business or assets of Parent, the Company and their
respective Subsidiaries, in each case taken as a whole, or seeking to impose any
material limitation on the ability of Purchaser to conduct its business or own
such assets, (iii) impose material limitations on the ability of Purchaser or
render the Purchaser unable, to accept, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, or (iv) seek to impose material
limitation on the ability of Purchaser or Parent effectively to exercise rights
of ownership of the shares of Common Stock, including, without limitation, the
right to vote any shares of Common Stock acquired or owned by Purchaser on all
matters properly presented to the Company's shareholders, or require divestiture
by Purchaser of any shares of Common Stock;
(b) there shall be threatened in writing or pending any suit, action
or proceeding by any United States or United Kingdom governmental authority
against the Purchaser, Parent, the Company or any Subsidiary of the Company that
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a) above;
(c) any of the representations or warranties made by the Company in
the Merger Agreement that are qualified by Material Adverse Effect shall be
untrue or incorrect, or any such representation and warranty that is not so
qualified shall be untrue or incorrect to the extent that such inaccuracy would,
in each case as of the date of the final scheduled expiration of the Offer
result in a Material Adverse Effect, except (i) for changes specifically
permitted by this Agreement and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and
correct, as of such date;
(d) the Company shall have failed in a material respect to perform
or to comply with any agreement or covenant of the Company to be performed or
complied with by it under this Agreement and, with respect to any such breach or
failure to perform that is reasonably capable of being remedied within the time
periods set forth below, the breach or failure to perform is not remedied prior
to the earlier of (x) 10 days after the Purchaser has furnished the Company with
written notice of such breach or failure to perform or (y) two business days
prior to the date on which the Offer expires;
(e) the Merger Agreement shall have been terminated in accordance
with its terms; or
(f) since the date of this Agreement, there shall have occurred any
change (or any development that would be reasonably likely to result in any
change) that constitutes a Material Adverse Effect on the Company;
<PAGE>
Annex A
Page 3
(g) the Board of Directors of the Company or any committee thereof
shall have withdrawn, modified or changed in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any Acquisition Proposal or the Company
shall have entered into any acquisition agreement with respect to, or any other
agreement that would approve, adopt or effect, any Superior Proposal in
accordance with Section 4.07(d) of this Agreement; or
(h) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the London Stock Exchange, the
New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market
for a period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges not
related to market conditions), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the United
Kingdom (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States or the United Kingdom that constitutes a Company
Material Adverse Effect or materially adversely affects or delays the
consummation of the Offer, or (iv) any material limitation (whether or not
mandatory) by any United States or United Kingdom governmental authority on the
extension of credit generally by banks or other financial institutions;
which, in the good faith judgment of Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, make it
inadvisable to proceed with the Offer and/or with such acceptance or payment or
payments for shares of Common Stock.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and, subject to the provisions of the Agreement may be asserted by Parent or
Purchaser regardless of the circumstances giving rise to such condition and may
be waived by Parent or Purchaser in whole or in part. The failure by Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any right, and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
<PAGE>
EXECUTION COPY
==============================================================================
STOCK VOTING AND TENDER AGREEMENT
BY AND AMONG
AIRTOURS plc,
BLUE SEA FLORIDA ACQUISITION INC.
AND
THE INDIVIDUALS NAMED HEREIN
Dated as of February 27, 2000
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
1. Tender of Shares.......................................................1
2. Provisions Concerning the Securities...................................2
(a) Agreement to Vote the Securities.................................2
(b) Grant of Proxy...................................................2
(c) Other Proxies Revoked............................................3
3. Representations and Warranties of each Shareholder.....................3
(a) Authority, etc...................................................3
(b) Ownership of Securities..........................................3
(c) No Conflicts.....................................................3
(d) No Finder's Fees.................................................3
(e) No Encumbrances..................................................4
(f) Reliance by Parent and Purchaser.................................4
4. Representations and Warranties of Parent and Purchaser.................4
(a) Due Organization, etc............................................4
(b) No Conflicts.....................................................4
(c) Investment Intent................................................4
5. Covenants of each Shareholder..........................................5
(a) Restriction on Transfer, Proxies and Non-Interference............5
(b) Stop Transfer; Changes in Subject Shares.........................5
6. Fiduciary Duties.......................................................5
7. Certain Other Agreements...............................................5
8. Miscellaneous..........................................................6
(a) Further Assurances...............................................6
(b) Entire Agreement.................................................6
(c) Assignment.......................................................6
(d) Amendments, Waivers, Etc.........................................6
(e) Notices..........................................................6
(f) Severability.....................................................7
<PAGE>
(g) Specific Performance.............................................8
(h) Remedies Cumulative..............................................8
(i) No Waiver........................................................8
(j) No Third Party Beneficiaries.....................................8
(k) Governing Law....................................................8
(l) Submission to Jurisdiction; Waiver of Jury Trial.................8
(m) Descriptive Headings.............................................9
(n) Counterparts.....................................................9
9. Termination............................................................9
<PAGE>
STOCK VOTING AND TENDER AGREEMENT
STOCK VOTING AND TENDER AGREEMENT (this "Agreement") dated as of
February 27, 2000, by and among Airtours plc, a corporation organized under the
laws of the United Kingdon ("Parent"), Blue Sea Florida Acquisition Inc., a
Florida corporation and an indirect wholly-owned subsidiary of Parent (the
"Purchaser"), and the individuals listed on Schedule I hereto (each a
"Shareholder," and collectively, the "Shareholders").
WHEREAS, prior to entering into this Agreement, Parent, Purchaser
and Travel Services International, Inc., a Florida corporation (the "Company"),
entered into an Agreement and Plan of Merger, dated as of February 21, 2000 (the
"Merger Agreement"), pursuant to which the Purchaser (i) will make a tender
offer for all of the outstanding shares of common stock of the Company and the
associated common stock purchase rights (the "Rights") issued pursuant to the
Shareholders Rights Agreement, dated as of January 28, 1999, by and between the
Company and American Stock Transfer & Trust Company (as amended on February 21,
2000, the "Rights Agreement"), subject to the terms and conditions of the Merger
Agreement (such offer as it may be amended from time to time as permitted under
the Merger Agreement, the "Offer"), and (ii) the Purchaser will be merged with
and into the Company (the "Merger");
WHEREAS, each Shareholder has agreed that such Shareholder shall
tender all Shares beneficially owned by such Shareholder in the Offer as set
forth herein; and
WHEREAS, terms defined in the Merger Agreement shall, unless this
Agreement or the context requires otherwise, have the same meanings in this
Agreement as in the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Tender of Shares.
(a) Each Shareholder hereby agrees to validly tender (and not to
withdraw) pursuant to and in accordance with the terms of the Offer (provided
that the Offer is not amended in a manner prohibited by the Merger Agreement),
in a timely manner for acceptance by Purchaser in the Offer, all shares of
Common Stock and the associated Rights (collectively, the "Shares") owned by
such Shareholder as of the date hereof and any Shares hereafter acquired (all
securities owned as of the date hereof and all securities hereinafter acquired,
the "Securities"). Each Shareholder hereby acknowledges and agrees that the
Purchaser's obligation to accept for payment and pay for the Shares in the
Offer, including the Securities, is subject to the terms and conditions of the
Offer.
(b) Each Shareholder hereby agrees to permit the Purchaser to
publish and disclose in the Offer Documents (and any other press release or
announcement which may be issued in accordance with the terms of the Merger
Agreement) and, if approval of the
<PAGE>
shareholders of the Company is required under applicable law, the Proxy
Statement (including all documents and schedules filed with the SEC) his
identity and intent in the Securities and the nature of his commitments,
arrangements and understandings under this Agreement.
2. Provisions Concerning the Securities.
(a) Agreement to Vote the Securities. Each Shareholder hereby agrees
that during the period commencing on the date hereof and continuing until the
Effective Time (such period, the "Voting Period"), at any meeting of the holders
of any class or classes of the capital stock of the Company, however called, or
in connection with any written consent of the holders of any class or classes of
the capital stock of the Company, such Shareholder shall vote (or cause to be
voted) the Securities (i) in favor of the Merger, and the approval of the terms
of the Merger Agreement and each of the other transactions contemplated by the
Merger Agreement and this Agreement and any actions required or desirable in
furtherance thereof, (ii) against any action, transaction or agreement that
would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or this Agreement, and (iii) except as otherwise agreed to in writing
in advance by Purchaser, against the following actions (other than the Merger
and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or any of its subsidiaries; (B) a
sale, lease or transfer of a material amount of assets of the Company or any of
its subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or any of its subsidiaries; (C) (I) any change in a
majority of the Persons who constitute the board of directors of the Company;
(II) any change in the present capitalization of the Company or any amendment of
the Company's Articles of Incorporation or By-laws; (III) any other material
change in the Company's corporate structure or business; or (IV) any other
action involving the Company or any of its subsidiaries which is intended, or
could reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the Merger or any of the transactions contemplated
by this Agreement or the Merger Agreement. Each Shareholder hereby agrees that
such Shareholder shall not enter into any agreement or understanding with any
Person the effect of which would be to violate the provisions and agreements
contained in this Section 2.
(b) Grant of Proxy. Each Shareholder hereby appoints Purchaser and
any designee of Purchaser, each of them individually, such Shareholder's proxy
and attorney-in-fact pursuant to the provisions of Section 607.0722 of the
Florida Business Corporation Act, with full power of substitution and
resubstitution, to vote or act by written consent during the Voting Period with
respect to the Securities in accordance with paragraph (a) of this Section. This
proxy is given to secure the performance of the duties of each Shareholder under
this Agreement. Each Shareholder affirms that this proxy is coupled with an
interest and shall be irrevocable. Each Shareholder shall take such further
action or execute such other instruments as may be necessary or desirable to
effectuate the intent of this proxy. THE AUTHORITY GRANTED HEREUNDER (THE
"PROXY") SHALL BE IRREVOCABLE UNTIL THE EARLIER OF (X) THE EFFECTIVE TIME AND
(Y) THE DATE ON WHICH THIS AGREEMENT IS TERMINATED AND DEEMED TO BE COUPLED WITH
AN INTEREST SUFFICIENT IN
-2-
<PAGE>
LAW AS REQUIRED BY SECTION 607.0722 OF THE FLORIDA BUSINESS CORPORATION ACT.
(c) Other Proxies Revoked. Each Shareholder represents and warrants
that any proxies heretofore given in respect of such Shareholder's Securities
are not irrevocable, and that all such proxies have been or are hereby revoked.
3. Representations and Warranties of each Shareholder. Each
Shareholder hereby severally, and not jointly, represents and warrants to Parent
and Purchaser (as to such Shareholder) as follows:
(a) Authority, etc. Such Shareholder has all necessary power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by such Shareholder
have been duly authorized by all necessary action on the part of such
Shareholder and, assuming the due authorization, execution and delivery by
Parent and Purchaser, constitutes a legal, valid and binding obligation of such
Shareholder, enforceable against such Shareholder in accordance with its terms.
(b) Ownership of Securities. Such Shareholder is the beneficial
owner of the Securities listed beside such Shareholder's name on Schedule I
attached hereto. Such Shareholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 1 and 2 hereof,
sole power of disposition, sole power of conversion, sole power to agree to all
of the matters set forth in this Agreement, in each case with respect to all of
the Securities, with no limitations, qualifications or restrictions on such
rights, subject only to applicable securities laws and the terms of this
Agreement.
(c) No Conflicts. (i) No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Shareholder and the
consummation by such Shareholder of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by such Shareholder,
the consummation by such Shareholder of the transactions contemplated hereby or
compliance by such Shareholder with any of the provisions hereof shall (A)
conflict with or result in any breach of any applicable documents to which such
Shareholder is a party, (B) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
such Shareholder is a party or by which such Shareholder or any of such
Shareholder's properties or assets may be bound, or (C) violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable to
such Shareholder or any of such Shareholder's properties or assets.
(d) No Finder's Fees. Except as disclosed pursuant to the Merger
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the
-3-
<PAGE>
transactions contemplated hereby based upon arrangements made by or on behalf of
such Shareholder.
(e) No Encumbrances. The Securities listed beside such Shareholder's
name on Schedule I attached hereto and the certificates representing such
Securities are now, and at all times during the term hereof will be, held by
such Shareholder, or by a nominee or custodian for the benefit of such
Shareholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder. The transfer by such Shareholder of such Securities to Purchaser
hereunder shall pass to and unconditionally vest in Purchaser good and valid
title to all the Securities, free and clear of all claims, liens, restrictions,
security interests, pledges, limitations and encumbrances whatsoever, other than
any such encumbrances created by Purchaser.
(f) Reliance by Parent and Purchaser. Such Shareholder understands
and acknowledges that Parent and Purchaser have entered into the Merger
Agreement in reliance upon such Shareholder's execution and delivery of this
Agreement.
4. Representations and Warranties of Parent and Purchaser. Parent
and Purchaser hereby represent and warrant to each Shareholder as follows:
(a) Due Organization, etc. Parent and Purchaser are companies duly
organized and validly existing under the laws of the jurisdiction of their
incorporation or organization. Parent and Purchaser have all necessary power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by Parent and
Purchaser have been duly authorized by all necessary action on the part of
Parent and Purchaser and, assuming its due authorization, execution and delivery
by each Shareholder, constitutes a legal, valid and binding obligation of Parent
and Purchaser, enforceable against Parent and Purchaser in accordance with its
terms.
(b) No Conflicts. Except as set forth in the Merger Agreement (i) no
filing with, and no permit, authorization, consent or approval of, any state or
federal public body or authority is necessary for the execution of this
Agreement by Parent or Purchaser and the consummation by Parent or Purchaser of
the transactions contemplated hereby and (ii) none of the execution and delivery
of this Agreement by Parent or Purchaser, the consummation by Parent or
Purchaser of the transactions contemplated hereby shall (A) conflict with or
result in any breach of the organizational documents of Parent or Purchaser, (B)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Parent or Purchaser is a party or
by which Parent or Purchaser or any of its properties or assets may be bound, or
(C) violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to Parent or Purchaser or any of its properties or
assets.
-4-
<PAGE>
(c) Investment Intent. The purchase of the Securities from each
Shareholder pursuant to this Agreement is for the account of Parent and
Purchaser for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
5. Covenants of each Shareholder. Each Shareholder covenants and
agrees as follows:
(a) Restriction on Transfer, Proxies and Non-Interference. Such
Shareholder shall not (i) directly or indirectly, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
or consent to the offer for sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of the Securities or any interest
therein; (ii) except as contemplated by this Agreement, grant any proxies or
powers of attorney, deposit any of the Securities into a voting trust or enter
into a voting agreement with respect to any of the Securities; or (iii) take any
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling or delaying such Shareholder from performing such Shareholder's
obligations under this Agreement.
(b) Stop Transfer; Changes in Subject Shares. Such Shareholder
agrees with, and covenants to, Parent and Purchaser that such Shareholder shall
not request that the Company register the transfer (book-entry or otherwise) of
any certificate or uncertificated interest representing any of the Securities,
unless such transfer is made in compliance with this Agreement. In the event of
a stock dividend or distribution, or any change in any class of capital stock of
the Company by reason of any stock dividend, split-up, recapitalization,
combination, exchange of shares or the like, the term "Securities" shall be
deemed to refer to and include the Securities as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Securities may be changed or exchanged. Such Shareholder shall be entitled
to receive any cash dividend paid by the Company in respect of the Securities
during the term of this Agreement until the Effective Time.
6. Fiduciary Duties. Notwithstanding anything in this Agreement to
the contrary, the covenants and agreements set forth herein shall not prevent
the Shareholder or any of such Shareholder's designees serving on the Company's
Board of Directors or as any officer or employee of the Company from taking any
action while acting in the capacity of a director, officer or employee of the
Company in satisfying his fiduciary duties.
7. Certain Other Agreements. Each of the Shareholders agrees that it
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal Interest. Such Shareholder agrees that it will not,
directly or indirectly: initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal.
-5-
<PAGE>
8. Miscellaneous.
(a) Further Assurances. From time to time, at any other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
(b) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understanding, both written and oral,
between the parties with respect to the subject matter hereof.
(c) Assignment. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other party, provided
that Parent and Purchaser may assign and transfer, at its sole discretion, its
rights and obligations hereunder to any of their affiliates.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by all of the
relevant parties hereto, provided that Schedule I attached hereto may be
supplemented by Parent or Purchaser by adding the name and other relevant
information concerning any shareholder of the Company who agrees to be bound by
the terms of this Agreement without the agreement of any other party hereto, and
thereafter such added shareholder shall be treated as a "Shareholder" for all
purposes of this Agreement.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the Shareholders: At the address set forth beside each
Shareholders name listed on Schedule I attached hereto
with copies to:
Travel Services International, Inc.
220 Congress Park Drive
Delray Beach, Florida 33445
Telecopier: (561) 266-6186
Attention: Suzanne Bell, Esq.
-6-
<PAGE>
and:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036-2787
Telecopier: (212) 354-8113
Attention: John M. Reiss, Esq.
Jorge L. Freeland, Esq.
If to Parent or Purchaser:
Airtours plc
Parkway One, Parkway Business Centre
300 Princess Road
Manchester, M 147 QU
United Kingdom
Telecopier: 011 44 161 232 0066
Attention: James Jennings, Esq.
Greg McMahon
with copies to:
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Telecopier: (212) 309-6273
Attention: John Whitehead, Esq.
and:
Addleshaw Booth & Co.
100 Barbirolli Square
Manchester M2 3AB
United Kingdon
Telecopier: 011-441-619-346-060
Attention: Paul Devitt
or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under
-7-
<PAGE>
applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of, and shall not be enforceable by, any Person who or which
is not a party hereto.
(k) Governing Law. This Agreement, and the legal relations between
the parties hereto, shall be governed and construed in accordance with the laws
of the State of Florida, applicable to agreements executed and to be performed
solely within such State.
(l) Submission to Jurisdiction; Waiver of Jury Trial. Each of the
parties hereby submit to the jurisdiction of the Federal Courts of the United
States located in the State of Florida and the state courts of the State of
Florida for purposes of all legal proceedings which may arise hereunder or under
any of the other documents entered into in connection herewith. Each of the
parties irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each of the
parties hereby consents to process being served in any such proceeding by the
mailing of a copy thereof by registered or certified mail, postage prepaid, to
their respective addresses specified in Section 7(e) or in any other manner
permitted by law. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
-8-
<PAGE>
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER DOCUMENTS ENTERED INTO IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OF ANY PARTY.
(m) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
9. Termination. This Agreement shall terminate, and neither Parent,
Purchaser nor any Shareholder shall have any rights or obligations hereunder and
this Agreement shall become null and void and have no effect upon the
termination of the Merger Agreement in accordance with its terms, except nothing
in this Section 9 shall relieve any party of liability for breach of this
Agreement.
* * * *
-9-
<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and each Shareholder have
caused this Stock Voting and Tender Agreement to be duly executed as of the day
and year first above written.
AIRTOURS plc
By:
--------------------------------------
Name:
Title:
BLUE SEA FLORIDA ACQUISITION INC.
By:
--------------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Amount and Class of
Securities
Name of Shareholder Owned Options Held Notice Address
- ------------------- ----------------------- ------------ --------------
<S> <C> <C> <C>
Robert G. Falcone 44,349 0 c/o Suzanne Bell
Falcone Enterprises, LP 30,000 0 General Counsel
Judith Falcone 100,000 0 220 Congress Park
Drive
Delray Beach, FL
33445
J&W Heller Corp. 633,334 0 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
33445
Imad Khalidi 350,000 0 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
33445
John W. Przywara 209,445 0 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
</TABLE>
<PAGE>
Page 2
<TABLE>
<CAPTION>
Amount and Class of
Securities Beneficially
Name of Shareholder Owned Options Held Notice Address
- ------------------- ----------------------- ------------ --------------
<S> <C> <C> <C>
33445
Elan J. Blutinger 291,693 20,000 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
33445
D. Fraser Bullock 144,828 20,000 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
33445
Tommaso Zanzotto 0 20,000 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
33445
Leonard A. Potter 68,408 20,000 c/o Suzanne Bell
General Counsel
220 Congress Park
Drive
Delray Beach, FL
</TABLE>
<PAGE>
[LETTERHEAD OF WORLD TRAVEL EXPERT]
January 11, 2000
CONFIDENTIAL
- ------------
Airtours plc
Parkway One
Parkway Business Centre
300 Princess Road
Manchester M14 7QU
United Kingdom
Attention:
Ladies and Gentlemen:
In connection with our mutual consideration of a business relationship or
transaction between Travel Services International, Inc. a Florida corporation
(together with its subsidiaries, "TSI") and/or any of its subsidiaries, and
Airtours plc (together with its subsidiaries, the "Company") and/or any of its
subsidiaries, access will be granted to certain information, including without
limitation business, financial, technology and operating information, strategies
and projections, concerning both TSI and the Company. As a condition to
furnishing such information, (i) we agree to treat any information concerning
the Company (whether prepared, offered or presented by the Company, its
representatives, advisors or otherwise) which is furnished to us by or on behalf
of the Company or which is marked or otherwise identified by the Company as
"Confidential" and (ii) you agree to treat any information concerning
TSI (whether prepared, offered or presented by TSI, its representatives,
advisors or otherwise) which is furnished to you by or on behalf of TSI or which
is marked or otherwise identified by TSI as "Confidential" (all such information
in clauses (i) and (ii) is referred to herein as "Confidential Information",
save as provided in the next following sentence), in accordance with the
provisions of this letter. The term "Confidential Information" as used herein
does not include information which (a) is generally available to the public
other than as a result of a disclosure by the party ("party" being either TSI or
the Company) receiving such information hereby (or such party's directors,
officers, employees, agents or advisors), (b) is already in the possession of
the party receiving such information hereby, provided that such information is
not subject to a confidentiality agreement with or other obligation of secrecy
to the other party, (c) becomes available to the party receiving such
information hereby
<PAGE>
on a non-confidential basis from a source other than the other party, provided
that such source is not bound by a confidentiality agreement with or other
obligation of secrecy to such other party, or (d) is independently developed by
receiving party without reliance on Confidential Information of the other.
Save as may otherwise be required by judicial or administrative or applicable
law, rule or regulation, the Confidential Information will be used solely for
the purpose of evaluating and implementing a possible business relationship or
transaction between TSI and the Company, and all information included in the
Confidential Information will be kept confidential by TSI and the Company and
the respective directors, officers, affiliates, employees, agents, advisors and
representatives of TSI and the Company; provided, however, that (i) any of such
information may be disclosed by a party to its directors, officers, affiliates,
employees, agents, representatives or advisors, who need to know such
information for the purpose of evaluating such relationship or transaction
between TSI and the Company (it being understood that such directors,
affiliates, officers, employees, agents, representatives and advisors shall be
informed by the respective party of the confidential nature of such information
and shall be directed to treat such information confidentially in accordance
with this agreement), and (ii) any disclosure of such information may be made to
which the disclosing party hereunder consents in advance in writing. The
activities of all such directors, officers, affiliates, employees, agents,
advisors and representatives who receive accesss to Confidential Information for
the purpose of ensuring compliance with this agreement shall be monitored for
compliance with this agreement.
TSI and the Company each hereby acknowledge that it is aware, and that it will
advise such directors, officers, affiliates, employees, agents, advisors and
representatives who are informed of the matters which are the subject of this
letter, that (a) the United States securities laws prohibit any person who has
received from an issuer material, non-public information of the type which is
the subject of this letter from purchasing or selling securities of such issuer
or from communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person will purchase or sell
such securities; (b) English Law contains similar prohibitions in relation to
insider dealing and communicating inside information.
In addition, without the prior written consent of the other party, each party
will not, and will direct its directors, officers, affiliates, employees,
agents, advisors and representatives not to, disclose to any person either the
fact that this agreement has been entered into or that information has been
provided under this agreement or that discussions or negotiations are taking or
have taken place concerning a possible relationship or transaction between the
parties, or any of the
2
<PAGE>
terms, conditions or other facts with respect to any such discussions or
possible relationship, including the status thereof save as may otherwise be
required by judicial or administrative or applicable law, rule or regulation.
Each party also acknowledges and agrees that the other is furnishing its
Confidential Information in consideration of this agreement and that neither the
respective receiving party nor its affiliates will (and neither the respective
party nor its affiliates will assist, advise or encourage others to), directly
or indirectly, unless specifically requested in advance in writing by the other
party, solicit, employ, or offer employment to, or conduct or participate in
discussions concerning the employment of, any current officer or senior employee
of the other party (or any subsidiary or division thereof) who was identified in
the course of discussions with respect to this proposed relationship between the
parties; provided, however, that in the event the parties terminate discussions
without consummating a relationship of the type contemplated by this letter,
such agreement with respect to the officers and employees of the other party
shall survive for a period of 6 months and only with respect to the direct
solicitation of such officers and senior employees of the other party.
In the event that the other party is requested in any judicial or administrative
proceeding to disclose any Confidential Information, such party will give the
other party prompt written notice of such request so that such party may seek
an appropriate protective order. If in the absence of a protective order (or
other protective remedy) a party is nonetheless compelled to disclose
Confidential Information, such party may disclose such information without
liability hereunder; provided, however, (i) that the disclosing party give the
other party written notice of the information to be disclosed as far in advance
of its disclosure as is practicable and, upon request, use commercially
reasonable efforts to obtain assurances that confidential treatment will be
accorded to such information; (ii) only that portion of the Confidential
Information which is legally required to be disclosed will be disclosed; and
(iii) the disclosing party may make such disclosure only if it has received the
opinion of counsel that, under the circumstances then existing, such party is
required to make such disclosure under applicable law.
Although each party will endeavor to include in the Confidential Information
information known to it which it believes to be relevant for the purpose of the
other party's investigation and analysis, each party understands and agrees that
neither the other party nor any of its directors, officers, affiliates,
employees, agents, advisors or representatives have made or make any
representation or warranty as to the accuracy or completeness of the
Confidential Information. In particular, and without limitation of the
foregoing, each party understands that any projected or forecasted financial,
operating, performance, strategy or other
3
<PAGE>
information reflects merely the judgment of management of such party at the
time of the preparation of such information, and is based upon a number of
factors and circumstances beyond the control of the party and its management.
Accordingly, there can be no assurance that actual results or performance will
be in line with any such projections or forecasts. Each party agrees that,
except as otherwise specifically agreed to in a definitive written transaction
agreement, neither party nor any of its directors, officers, employees
affiliates, agents, advisors or representatives shall have any liability to the
other party or any of its affiliates or representatives arising out of or
resulting from the use of the Confidential Information (or any of the
information contained therein.)
Upon the request of TSI or the Company, which may be made at any time, all
copies of the Confidential Information and any other written, entered or
recorded material, data or information, to the extent the same contains or
reflects any information in the Confidential Information (whether presented,
offered or prepared by the party, its advisors or otherwise), will be promptly
redelivered, returned or destroyed.
The parties agree that money damages would not be a sufficient remedy for any
breach of this agreement by a party or its directors, officers, affiliates,
employees, agents, advisors or representatives and that, in addition to all
other available remedies, either party shall be entitled to specific performance
and injunctive or other equitable relief as a remedy for any such breach, and
each party further agrees to waive and to use its commercially reasonable
efforts to cause its directors, officers, affiliates, employees, agents,
advisors and representatives to waive, any requirements for the securing or
posting of any bond in connection with such remedy.
Each party agrees that unless and until a definitive written agreement between
TSI and the Company with respect to a relationship or transaction of the type
contemplated by this letter has been executed and delivered by each party
hereto, neither TSI nor the Company will be under any obligation of any kind
whatsoever with respect to such a relationship by virtue of this or any written
or oral expression concerning such a transaction by any of its directors,
officers, affiliates, employees, agents, advisors or representatives except, in
the case of this letter, for the matters specifically agreed to herein. Neither
this paragraph nor any other provision in this agreement may be modified or
waived except by a written agreement between the parties expressly so modifying
or waiving such provision.
Each party further acknowledges and agrees that the other party reserves the
right, in its sole discretion, to reject any and all proposals (or requests to
make one or more proposals) made by the other party or any of its directors,
officers, affiliates,
4
<PAGE>
employees, agents, advisors or representatives with regard to a relationship
between TSI and the Company, and to terminate discussions and negotiations with,
or directly or indirectly involving, such relationship or transaction at any
time.
This agreement sets forth the entire agreement and understanding of the parties
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, arrangements, understandings, promises and
assurances relating thereto. This agreement is for the benefit of the parties
hereto and their respective advisors, directors, officers, employees,
shareholders, owners, affiliates, representatives and agents, and shall be
governed by and construed and enforced in accordance with the laws of the State
of Florida, without giving effect to its conflict of laws, principles or rules.
It is understood and agreed that no failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or future
exercise thereof or the exercise of any other right, power or privilege
hereunder. Any term or provision of this agreement which is prohibited or held
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction
only, be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction. This agreement
may be executed in separate counterparts, each of which counterparts shall be
deemed an original and all of which counterparts shall together constitute one
and the same agreement.
Very truly yours,
TRAVEL SERVICES Accepted and Agreed to as of
INTERNATIONAL, INC. the date first above written;
AIRTOURS plc
By: /s/ Joseph V. Vittoria By: /s/ James Jennings
--------------------------------- -------------------------------
Name: Joseph V. Vittoria Name: James Jennings
Its: Chairman & Chief Executive Its: Director of Corporate
Officer Development
5
<PAGE>
By this POWER OF ATTORNEY given on 18 February 2000 AIRTOURS plc, a Company
registered in England with Company No. 742748 having its registered office at
Parkway One, Parkway Business Centre, 300 Princess Road, Manchester M14 7QU
("the Company"), hereby appoints each of DAVID CROSSLAND, TIMOTHY RUSSELL BYRNE
and JAMES SCOTT JENNINGS, all of business address Parkway One, as above, and
PAUL DEVITT, of business address 100 Barbirolli Square, Manchester M2 3AB,
acting severally or jointly, ("the Attorney") the true and lawful attorney of
the Company to do and execute for and in the name of and on behalf of the
Company all acts matters and things for the purposes of or in connection with or
related to the proposed acquisition by the Company directly or indirectly
through a subsidiary of the Company of all the outstanding shares of common
stock of Travel Services International, Inc. ("the Proposed Acquisition") and in
particular (but without limitation) to approve and/or execute for and on behalf
of the Company any such agreements, instruments, filings, documents or deeds in
connection therewith upon such terms as the Attorney may in his absolute
discretion determine,
AND IT IS HEREBY DECLARED that:
(i) every document, matter and thing which shall be made, approved, executed
or done by the Attorney for the aforesaid purposes shall be as good,
valid and effective as if the same had been made, executed or done by the
Company;
(ii) the Company hereby ratifies and confirms and agrees to ratify and confirm
from time to time and at all times everything that the Attorney shall do
or cause to be done by virtue of and in accordance with this Power of
Attorney; and
(iii) the said appointment and the instructions herein contained shall be
irrevocable from the date hereof until the date that is three months
following the date of this Power of Attorney.
The Power of Attorney shall be governed by and construed in accordance with
English law.
IN WITNESS whereof the Company has duly executed and delivered this Deed the day
and year first before written.
EXECUTED as a DEED by )
AIRTOURS plc )
acting by: ) /s/ Peter Francis Rothwell
----------------------------------
Director
/s/ David Crossland
----------------------------------
Director/Secretary
