<PAGE>
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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. 1)
U.S. FRANCHISE SYSTEMS, INC.
(Name of Subject Company (Issuer))
USFS ACQUISITION CO.
SDI, INC.
HSA PROPERTIES, INC.
MERIDIAN ASSOCIATES, L.P.
MICHAEL LEVEN
ANDREA LEVEN
JONATHAN LEVEN
ROBERT LEVEN
ADAM LEVEN
STEVEN ROMANIELLO
U.S. FRANCHISE SYSTEMS, INC.
(Names of Filing Persons (Offerors))
------------------------------
CLASS A COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
902956309
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C>
HAROLD S. HANDELSMAN STEPHEN D. ARONSON, ESQ.
SDI, INC. U.S. FRANCHISE SYSTEMS, INC.
200 WEST MADISON STREET, SUITE 3800 13 CORPORATE SQUARE, SUITE 250
CHICAGO, ILLINOIS 60606 ATLANTA, GEORGIA 30329
(312) 750-8102 (404) 235-7463
</TABLE>
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
------------------------------
<TABLE>
<S> <C>
COPIES TO:
BRUCE G. WILSON, ESQ. ROBERT B. SCHUMER, ESQ.
ADAM R. KLEIN, ESQ. PAUL D. GINSBERG, ESQ.
KATTEN MUCHIN ZAVIS PAUL, WEISS, RIFKIND, WHARTON & GARRISON
525 WEST MONROE STREET, SUITE 1600 1285 AVENUE OF THE AMERICAS
CHICAGO, ILLINOIS 60661 NEW YORK, NEW YORK 10019-6064
(312) 902-5200 (212) 373-3000
</TABLE>
/ / 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.
/X/ 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>
INTRODUCTORY STATEMENT
This Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule TO (the "Schedule TO") filed with the Securities and Exchange
Commission on October 3, 2000, relating to the third-party tender offer by USFS
Acquisition Co., a Delaware corporation and wholly owned subsidiary of Pritzker
family business interests, to purchase all of the issued and outstanding shares
of Class A Common Stock, par value $.01 per share, and Class B Common Stock, par
value $0.01 per share, of U.S. Franchise Systems, Inc., a Delaware corporation,
at a price of $5.00 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 October 3, 2000 (the "Offer to Purchase") and in the related
Letter of Transmittal, which together and as amended or supplemented from time
to time, constitute the "Offer."
All capitalized terms not otherwise defined herein shall have the meanings
given to them in the Offer to Purchase.
ITEM 1. SUMMARY TERM SHEET.
Item 1 of the Schedule TO is hereby amended as follows:
(a) The paragraph under the question entitled "How Many Shares Are You Offering
To Purchase?" under the section of the Offer to Purchase entitled "Summary
Term Sheet" is hereby amended to insert the following sentence after the
first sentence:
"All of the Class B Common Stock is held by Michael A. Leven,
USFS' chairman of the board and chief executive officer,
Mr. Leven's spouse and Neal K. Aronson, USFS' current chief
financial officer."
(b) The second paragraph under the question entitled "Can The Offer Be Extended
And Under What Circumstances?" under the section of the Offer to Purchase
entitled "Summary Term Sheet" is hereby amended and restated as follows:
"Following the satisfaction of all the conditions to the offer
and the acceptance of, and payment for, all the shares tendered
during the offering period, we may elect to provide for a
subsequent offering period, which would be an additional period of
time during which remaining stockholders may tender their shares
for the offer price. If we provide for a subsequent offering
period, it will not, even if we extend it, last more than 20
business days in total. See 'The Tender Offer--Terms of the
Offer.' "
(c) The tenth paragraph under the section of the Offer to Purchase entitled
"Introduction" is hereby amended to insert the following sentence after the
first sentence:
"All of the outstanding shares of Class B Common Stock are
held by Mr. and Mrs. Leven and Mr. Aronson."
(d) The fourteenth paragraph under the section of the Offer to Purchase entitled
"Introduction" is amended by deleting the final two sentences of the
paragraph.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
Item 3 of the Schedule TO is hereby amended as follows:
Schedule I is amended and restated as follows:
SCHEDULE I
(1) The name, present principal occupation or employment and material
occupation, positions, offices or employment for the past five years of each
director and each executive officer of SDI is set
<PAGE>
forth below. Unless otherwise indicated, the business address of each person
listed below is 200 West Madison Street, Suite 3800, Chicago, Illinois 60606.
Each person is a citizen of the United States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Thomas J. Pritzker............ Director and President of SDI for at least the last five
years. Chairman of the Board, President and Chief Executive
Officer of Hyatt Corporation, a diversified company
primarily engaged in real estate and hotel management
activities, for at least the last five years. Chairman of
the Board and President of The Pritzker Organization, LLC, a
private investment firm, since 1998.
Harold S. Handelsman.......... Director and Vice President, Secretary and Treasurer of SDI
for at least the last five years. Senior executive officer
of Hyatt Corporation since 1978 and Senior Vice President,
General Counsel and Secretary of Hyatt Corporation since
1983; Director, Executive Vice President, Secretary and
General Counsel of The Pritzker Organization, LLC, since
1998; director of a number of private corporations.
Paul A. Bible................. Director and Vice President of SDI for at least the last
five years. Attorney at Bible, Hoy & Trachok for at least
the last five years. Business address is 201 West Liberty
Street, Reno, NV 89501.
Kirk Rose..................... Vice President of SDI since September 1999. Vice
President-Finance of Hyatt Hotels Corporation since
September 1999. Director of Tax Planning for Sears Robuck
and Co. since 1990.
</TABLE>
(2) The name, present principal occupation or employment and material
occupations, positions, offices or employments for the past five years of each
director and each executive officer of the Purchaser is set forth below. Unless
otherwise indicated, the business address of each person listed below is 200
West Madison Street, Suite 3800, Chicago, Illinois 60606. Each person is a
citizen of the United States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Douglas G. Geoga.............. Director and President of the Purchaser since its inception
in September 2000. President of Hospitality Investment Fund,
L.L.C. since 2000. President of Hyatt Hotels Corporation
from 1994 to 1999.
Harold S. Handelsman.......... Director and Vice President and Secretary of the Purchaser
since its inception. Senior executive officer of Hyatt
Corporation since 1978 and Senior Vice President, General
Counsel and Secretary of Hyatt Corporation since 1983;
Director, Executive Vice President, Secretary and General
Counsel of The Pritzker Organization, LLC since 1998;
director of a number of private corporations.
Glen Miller................... Director and Vice President and Treasurer of the Purchaser
since its inception. President and Chief Executive Officer
of Diversified Financial Management Corp. for at least the
last five years.
</TABLE>
<PAGE>
(3) The name, present principal occupation or employment and material
occupations, positions, offices or employments for the past five years of each
director and each executive officer of HSA is set forth below. Unless otherwise
indicated, the business address of each person listed below is 200 West Madison
Street, Suite 3800, Chicago, Illinois 60606. Each person is a citizen of the
United States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Nicholas J. Pritzker.......... Director and President since its date of incorporation in
March 1996. Chairman of the Board and President of Hyatt
Development Corporation for at least the last five years.
Glen Miller................... Director and Vice President, Treasurer and Assistant
Secretary of HSA since its date of incorporation in March
1996. President and Chief Executive Officer of Diversified
Financial Management Corp. for at least the last five years.
Thomas J. Pritzker............ Director and Vice President and Secretary of HSA since its
date of incorporation in March 1996. Chairman of the Board,
President and Chief Executive Officer of Hyatt Corporation
for at least the last five years. Chairman of the Board and
President of The Pritzker Organization, LLC, since 1999.
John Kevin Poorman............ Director and Vice President of HSA since its date of
incorporation in March 1996. Executive Vice President and
General Counsel of Pritzker Realty Group for at least the
last five years.
Harold S. Handelsman.......... Vice President of HSA since June 2000. Senior executive
officer of Hyatt Corporation since 1978 and Senior Vice
President, General Counsel and Secretary since 1983;
Director, Executive Vice President, Secretary and General
Counsel of The Pritzker Organization, LLC since 1998;
director of a number of private corporations.
</TABLE>
(4) The name, present principal occupation or employment and material
occupations, positions, offices or employments for the past five years of each
director and each executive officer of Meridian Investments, Inc., the general
partner of Meridian, is set forth below. Unless otherwise indicated, the
business address of each person listed below is 200 West Madison Street, Suite
3800, Chicago, Illinois 60606. Each person is a citizen of the United States of
America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Nicholas J. Pritzker.......... Director and President of Meridian Investments, Inc. for at
least the last five years. Chairman of the Board and
President of Hyatt Development Corporation for at least the
last five years.
Thomas J. Pritzker............ Director and Vice President and Secretary of Meridian
Investments, Inc. for at least the last five years. Chairman
of the Board, President and Chief Executive Officer of Hyatt
Corporation for at least the last five years. Chairman of
the Board and President of The Pritzker Organization, LLC,
since 1999.
Glen Miller................... Director and Vice President, Treasurer and Assistant
Secretary of Meridian Investments, Inc. for at least the
last five years. President and Chief Executive Officer of
Diversified Financial Management Corporation for at least
the last five years.
John Kevin Poorman............ Vice President of Meridian Investments, Inc. for at least
the last five years. Executive Vice President and General
Counsel of Pritzker Realty Group for at least the last five
years.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Harold S. Handelsman.......... Vice President of Meridian Investments, Inc. since August
2000. Senior executive officer of Hyatt Corporation since
1978 and Senior Vice President, General Counsel and
Secretary of Hyatt Corporation since 1983; Director,
Executive Vice President, Secretary and General Counsel of
The Pritzker Organization, LLC since 1998; director of a
number of private corporations.
</TABLE>
(5) The name, present principal occupation or employment and material
occupations, positions, offices or employments for the past five years of each
director and each executive officer of H Group Holdings, Inc. is set forth
below. Unless otherwise indicated, the business address of each person listed
below is 200 West Madison Street, Suite 3800, Chicago, Illinois 60606. Each
person is a citizen of the United States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------------ ------------------------------------------------------------
<S> <C>
Nicholas J. Pritzker.......... Director of H Group Holdings, Inc. for at least the last
five years. Chairman of the Board and President of Hyatt
Development Corporation for at least the last five years.
Thomas J. Pritzker............ Director and Chairman and President of H Group Holdings,
Inc. for at least the last five years. Chairman of the
Board, President and Chief Executive Officer of Hyatt
Corporation for at least the last five years. Chairman of
the Board and President of The Pritzker Organization, LLC,
since 1999.
Harold S. Handelsman.......... Director and Vice President, Secretary and Treasurer of H
Group Holdings, Inc. for at least the last five years.
Senior executive officer of Hyatt Corporation since 1978 and
Senior Vice President, General Counsel and Secretary of
Hyatt Corporation since 1983; Director, Executive Vice
President, Secretary and General Counsel of The Pritzker
Organization, LLC since 1998; director of a number of
private corporations.
</TABLE>
<PAGE>
The biography for Stephen Aronson which appears on Schedule II is amended
and restated as follows:
<TABLE>
<S> <C>
"Stephen D. Aronson........... Vice President, General Counsel and Secretary of the Company
since October 1999. From October 1997 through October 1999,
the Company's Associate General Counsel and Secretary.
Manager of Legal Services for the Company from January 1997
through October 1997 and Manager of Business Development
from August 1996 through December 1996. From October 1995
through August 1996, legal assistant at Sills Cummis
Zuckerman Radin Tischman Epstein & Gross. President of
Metropolitan Memorabilia from April 1995 through October
1995."
</TABLE>
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Item 8 of the Schedule TO is hereby amended as follows:
The table under the section of the Offer to Purchase entitled "Special
Factors--Beneficial Ownership of Shares" is amended by deleting the reference to
David E. Shaw, Sr., the 95,749 Shares reported as beneficially owned by him and
the related footnote disclosure. In addition, the statement in the sixth
sentence of the tenth paragraph under the section of the Offer to Purchase
entitled "Introduction" regarding the number of additional Shares required to be
tendered in order to satisfy the Minimum Condition is hereby amended by
increasing such number of Shares by 64,862, the number of unrestricted Shares
held by Mr. Shaw.
ITEMS 8 AND 13. INTEREST IN SECURITIES OF THE SUBJECT COMPANY AND INFORMATION
REQUIRED BY SCHEDULE 13E-3.
SDI owns a controlling interest in Star Investors, G.P. ("Star Investors"),
an entity that holds an aggregate of 54,241 Shares, which represents less than
1% of the Shares outstanding. Star Investors received these Shares in 1999
through a stock distribution in connection with its investment in Starwood
Opportunity Fund II, a private equity fund. Star Investors does not intend to
tender these Shares in the Offer, but instead expects to receive the Purchase
Price for the Shares upon consummation of the Merger. Because SDI may be deemed
to beneficially own the Shares held by Star Investors, such Shares should be
included in any reference in the Offer to Purchase to the number of Shares owned
by SDI or Pritzker family business interests. The calculation of the number of
Shares held by unaffiliated stockholders required to satisfy the Minimum
Condition should also be correspondingly reduced by 54,241 Shares.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
Item 9 of the Schedule TO is hereby amended as follows:
(a) The fifth full paragraph under the section of the Offer to Purchase
entitled "Special Factors--Opinion of the Financial Advisor to the
Company--Overview" is amended by deleting the last sentence.
(b) The sixth full paragraph under the section of the Offer to Purchase
entitled "Special Factors--Opinion of the Financial Advisor to the
Company--Discounted Cash Flow Analysis" is supplemented by adding the
following two sentences after the current second sentence:
"Banc of America Securities and its affiliates have
provided, and expect to continue to provide in the future,
financial services to various Pritzker family business
interests and have received significant fees for providing
such services. In particular, H Group Holding, Inc.,
together with its principal direct and indirect
subsidiaries, including each of the entities that comprise
the Investor Group and the Purchaser, estimate that they
have paid fees to Banc of America Securities and its
affiliates in an amount that
<PAGE>
did not exceed $1,500,000 in the aggregate over the two
year period ending June 2000."
(c) The opinion of the financial advisor incorporated by reference to
Schedule TO as Exhibit (c)(1) and attached as Annex A to the Offer to
Purchase is amended by deleting the word "solely" from the first sentence
of the next to last paragraph of the opinion.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Item 13 of the Schedule TO is hereby amended as follows:
(a) The last sentence of the second paragraph under the section of the Offer to
Purchase entitled "Special Factors--Recommendation of the Independent
Directors of the Board of Directors of USFS; Fairness of the Offer and the
Merger--USFS Board of Directors" is hereby amended and restated as follows:
"In addition, although the Board did not retain an
unaffiliated representative to act on behalf of the Company's
unaffiliated stockholders for purposes of negotiating the
transaction or structure the transaction so as to require approval
of the unaffiliated stockholders, the Board believes that the
Offer and the Merger are procedurally fair to the Company's
unaffiliated stockholders because of (1) the independence and the
experience of the Independent Directors; (2) retention by the
Board of Banc of America Securities; and (3) the fact that the use
of independent directors, even though not completely unaffiliated
with USFS, is a mechanism well recognized under Delaware law to
ensure fairness in transactions of this type."
(b) The third paragraph under the section of the Offer to Purchase entitled
"Special Factors--Recommendation of the Independent Directors of the Board
of Directors of USFS; Fairness of the Offer and the Merger--USFS Board of
Directors" is hereby amended and restated as follows:
"The Board did not consider the liquidation of the Company's
assets to be a viable course of action because it believed that
the principal assets of the Company (primarily the Hawthorn, Best
Inns and Microtel brands and associated contract rights) would
realize less value if sold in a manner other than as a going
concern. Therefore, no appraisal of liquidation values was sought
for purposes of evaluating the Offer and the Merger. Net book
value of the Company was not deemed to be a relevant factor
because net book value only reflects the accounting history
expressed in nominal dollars and not the potential of a going
concern. The Board did not consider the Company's going concern
value (generally regarded as the excess of market value over book
value) as material to its determination as to the fairness of the
Offer and the Merger because the Purchase Price is greater than
both the Company's market value (as indicated by the recent
trading prices of the Company's Class A Common Stock) as well as
the Company's net book value. The Board did, however, consider the
financial analyses of the Company performed by Banc of America
Securities in connection with the rendering of its opinion and as
presented by Banc of America Securities in its presentation to the
Independent Directors and the Board on September 18, 2000. See
"Special Factors--Opinion of the Financial Advisor to the
Company."
<PAGE>
(c) The "Selected Consolidated Financial Data" table and related footnotes under
the section of the Offer to Purchase entitled "The Tender Offer--Certain
Information Concerning the Company" are hereby amended and restated as
follows:
SELECTED CONSOLIDATED FINANCIAL DATA(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, DECEMBER 31,
------------------------- ----------------------------
2000 1999 1999 1998
----------- ----------- -------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
REVENUES:
Royalty and other fee income......... $ 8,269,000 $ 5,015,000 $ 12,689,000 $ 6,177,000
Franchise application fees........... 2,437,000 1,978,000 5,089,000 3,006,000
----------- ----------- ------------ -----------
10,706,000 6,993,000 17,778,000 9,183,000
=========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, DECEMBER 31,
------------------------- ----------------------------
2000 1999 1999 1998
----------- ----------- -------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
EXPENSES:
General and administrative........... 9,186,000 4,196,000 10,596,000 9,824,000
Franchise sales commissions.......... 2,261,000 1,863,000 4,878,000 2,216,000
Depreciation and amortization........ 1,170,000 673,000 1,612,000 1,388,000
Interest income...................... (401,000) (1,534,000) (2,448,000) (2,488,000)
Interest expense..................... -- -- -- 762,000
Bad debt reserves.................... -- -- 17,057,000 --
----------- ----------- ------------ -----------
12,216,000 5,198,000 31,695,000 11,702,000
=========== =========== ============ ===========
INCOME (LOSS)FROM CONTINUING OPERATIONS
BEFORE TAXES......................... (1,510,000) 1,795,000 (13,917,000) (2,519,000)
Income taxes........................... 19,000 86,000 60,000 --
----------- ----------- ------------ -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS........................... (1,529,000) 1,709,000 (13,977,000) (2,519,000)
----------- ----------- ------------ -----------
DISCONTINUED OPERATIONS:
Income (loss) from operations of
discontinued management services
(less income taxes of $0 and
$1,000 for the six months ended
June 30, 2000 and 1999,
respectively, and $2,000 and $0
for the years ended December 31,
1999 and 1998, respectively)..... (1,279,000) 309,000 229,000 (365,000)
Loss on disposal (less income taxes
of $0)........................... (698,000) -- -- --
----------- ----------- ------------ -----------
Net income (after taxes)............... (3,506,000) 2,018,000 (13,748,000) (2,884,000)
----------- ----------- ------------ -----------
Ratio of earnings to fixed
charges(2)........................... N/A N/A N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, DECEMBER 31,
------------------------- ----------------------------
2000 1999 1999 1998
----------- ----------- -------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE DATA
Weighted average number of common
shares outstanding................... 19,944,162 19,877,719 19,886,030 17,670,591
Weighted average number of common
shares outstanding, assuming
dilution............................. -- 20,041,993 19,886,030 17,670,591
Earnings (loss) per share from
continuing operations--Basic......... $ (0.08) $ 0.09 $ (0.70) $ (0.14)
Earnings (loss) per share from
discontinued operations--Basic....... $ (0.10) $ 0.01 $ 0.01 $ (0.02)
Net earnings (loss) per share--Basic... $ (0.18) $ 0.10 $ (0.69) $ (0.16)
Earnings per share from continuing
operations--Diluted.................. $ -- $ 0.09 $ -- $ --
Earnings per share from discontinued
operations--Diluted.................. $ -- $ 0.01 $ -- $ --
Net earnings per share--Diluted........ $ -- $ 0.10 $ -- $ --
Book value per share................... $ 2.70 $ 3.63 $ 2.86 $ 3.94
</TABLE>
------------------------
(1) In the second quarter of 2000, the Company determined to cease providing
management services to hotel properties except with respect to one hotel.
The Company's twenty other remaining management contracts were terminated in
June 2000 with management of the majority of the properties ceasing as of
June 2, 2000. The management services operations have been classified as
discontinued operations for the six months ended June 30, 2000 and the
statement of operations data for prior periods have been restated.
(2) This is not applicable for each of the periods presented because the Company
had no fixed charges for such periods.
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
-------------- ------------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA
Total current assets..................... $10,368,000 $ 13,535,000
Promissory notes receivable.............. 12,136,000 12,259,000
Property and equipment, net.............. 1,991,000 1,864,000
Franchise rights, net.................... 24,235,000 24,691,000
Deferred commissions..................... 6,088,000 6,525,000
Development subsidies.................... 12,462,000 10,837,000
Net long term assets from discontinued
operations............................. -- 393,000
Other assets, net........................ 1,322,000 491,000
----------- ------------
Total assets............................. $68,602,000 $ 70,595,000
=========== ============
Total current liabilities................ $ 7,884,000 $ 7,187,000
Deferred application fees................ 6,852,000 6,570,000
Total liabilities........................ 14,736,000 13,757,000
Redeemable common stock.................. 324,000 324,000
----------- ------------
Total stockholders' equity............... 53,542,000 56,514,000
----------- ------------
Total liabilities and stockholders'
equity................................. $68,602,000 $ 70,595,000
=========== ============
</TABLE>
(d) The section of the Offer to Purchase entitled "The Tender Offer--Certain
Information Concerning the Company" is hereby supplemented to include the
following new paragraph after the first paragraph after the "Forecasted Free
Cash Flow of the Company" table:
<PAGE>
"Neither the Company's independent auditors, nor any other
independent accountants, have compiled, examined, or performed any
procedures with respect to the prospective financial information
contained herein, nor have they expressed any opinion or any other
form of assurance on such information or its achievability, and
assume no responsibility for, and disclaim any association with,
the prospective financial information."
(e) The first sentence of the last paragraph under the section of the Offer to
Purchase entitled "The Tender Offer--Certain Information Concerning the
Company" is amended by deleting the phrase "under the Private Securities
Litigation Reform Act of 1995."
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this amendment is true, complete and correct.
Dated: October 25, 2000
SCHEDULE TO AND SCHEDULE 13E-3
USFS ACQUISITION CO.
<TABLE>
<S> <C> <C>
By: /s/ DOUGLAS GEOGA
-----------------------------------------
Name Douglas Geoga
Title President
SDI, INC.
By: /s/ HAROLD S. HANDELSMAN
-----------------------------------------
Name Harold S. Handelsman
Title Vice President
HSA PROPERTIES, INC.
By: /s/ HAROLD S. HANDELSMAN
-----------------------------------------
Name Harold S. Handelsman
Title Vice President
MERIDIAN ASSOCIATES, L.P.
By: Meridian Investment, Inc.,
its general partner
By: /s/ HAROLD S. HANDELSMAN
-----------------------------------------
Name Harold S. Handelsman
Title Vice President
/s/ MICHAEL LEVEN
---------------------------------------------
Michael Leven
/s/ ANDREA LEVEN
---------------------------------------------
Andrea Leven
/s/ JONATHAN LEVEN
---------------------------------------------
Jonathan Leven
/s/ ROBERT LEVEN
---------------------------------------------
Robert Leven
/s/ ADAM LEVEN
---------------------------------------------
Adam Leven
/s/ STEVEN ROMANIELLO
---------------------------------------------
Steven Romaniello
</TABLE>
SCHEDULE 13E-3
U.S. FRANCHISE SYSTEMS, INC.
<TABLE>
<S> <C> <C>
By: /s/ STEPHEN D. ARONSON
-----------------------------------------
Name Stephen D. Aronson
Title Vice President, General Counsel
and Secretary
</TABLE>
