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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
ABR INFORMATION SERVICES, INC.
(Name of Subject Company)
SPRING ACQUISITION CORP.
CERIDIAN CORPORATION
(Bidders)
VOTING COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
00077R 10 8
(CUSIP Number of Class of Securities)
GARY M. NELSON
CERIDIAN CORPORATION
8100 34TH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55425
(612) 853-4291
(Name, Address and Telephone Numbers of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
Copies to:
TIMOTHY J. SCALLEN
THOMAS C. THOMAS
OPPENHEIMER WOLFF & DONNELLY LLP
PLAZA VII BUILDING
45 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
(612) 607-7000
---------------------------------------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION (1) AMOUNT OF FILING FEE (2)
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$768,039,549 $153,608
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(1) Determined in accordance with Rule 0-11(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). This Transaction Valuation
assumes, solely for purposes of calculating the filing fee for this
Schedule 14D-1, the purchase of 30,119,198 shares of voting common stock,
par value $0.01 per share (the "Shares"), of ABR Information Services, Inc.
at $25.50 per Share, net to seller in cash. Such number of shares
represents the sum of all of the Shares outstanding as of April 30, 1999
and all of the Shares issuable upon exercise of options outstanding as of
April 30, 1999 with an exercise price greater than $25.50.
(2) Calculated in accordance with Rule 0-11(d) of the Exchange Act and equals
1/50 of 1% of the Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: None. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
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EXPLANATORY NOTE
This Tender Offer Statement on Schedule 14D-1 relates to an offer by Spring
Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned
subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), to
purchase all of the outstanding shares of the voting common stock, par value
$0.01 per share (collectively, the "Shares"), of ABR Information Services, Inc.,
a Florida corporation (the "Company"), at $25.50 per Share, net to seller in
cash without interest, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and in the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively (collectively, the "Offer"). The Offer is made
pursuant to the Agreement and Plan of Merger dated as of April 30, 1999 among
Parent, the Purchaser and the Company (the "Merger Agreement"), a copy of which
is attached hereto as Exhibit (c)(1).
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is ABR Information Services,
Inc., a Florida corporation, and the address of its principal
executive office is 34125 U.S. Highway 19 North, Palm Harbor,
Florida 34684-2141.
(b) The information set forth in the Introduction of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Market Prices of Shares;
Dividends") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) The information set forth in the Introduction, Section 9
("Certain Information Concerning the Purchaser and Parent") and
Schedule A of the Offer to Purchase is incorporated herein by
reference.
(e)-(f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9
("Certain Information Concerning the Purchaser and Parent"),
Section 10 ("Background of the Offer"), Section 11 ("Purpose of
the Offer and Merger; Plans for the Company; the Merger
Agreement") and Section 13 ("Certain Conditions of the Offer and
the Merger") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 12 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by
reference.
(c) Not applicable.
2
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer"), Section 11 ("Purpose of the Offer
and Merger; Plans for the Company; the Merger Agreement") and
Section 13 ("Certain Conditions of the Offer and the Merger") of
the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Certain Effects of the
Offer") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 8
("Certain Information Concerning the Company"), Section 9
("Certain Information Concerning the Purchaser and Parent"),
Section 10 ("Background of the Offer") and Section 11 ("Purpose
of the Offer and Merger; Plans for the Company; the Merger
Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 10 ("Background of
the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans for the
Company; the Merger Agreement") and Section 13 ("Certain Conditions of the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Certain
Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b)-(c) The information set forth in Section 2 ("Acceptance of and
Payment for Shares") and Section 15 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the
Offer") of the Offer to Purchase is incorporated herein by
reference.
(e) None.
3
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(f) The information set forth in the Offer to Purchase and the
related Letter of Transmittal and the Merger Agreement, copies of
which are attached hereto as Exhibits (a)(1), (a)(2), and (c)(1),
respectively, is incorporated herein in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated May 7, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(6) Text of Joint Press Release issued by Parent and the Company on
May 3, 1999.
(a)(7) Form of Summary Advertisement dated May 7, 1999.
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b)(1) Amended and Restated Credit Agreement dated as of December 12,
1995, as amended and restated as of July 31, 1997, among Parent,
Bank of America National Trust and Savings Association, as Agent,
and the Financial Institutions Parties Thereto.
(b)(2) Waiver and First Amendment to Credit Agreement, dated as of
December 2, 1997, among Parent, Bank of America National Trust
and Savings Association as Agent, and the Financial Institutions
Parties Thereto.
(b)(3) Commitment Letter dated May 4, 1999, from Bank of America
National Trust and Savings Association and Nationsbanc Montgomery
Securities LLC to Parent.
(c)(1) Agreement and Plan of Merger dated as of April 30, 1999 among
Parent, the Purchaser and the Company.
(c)(2) Confidentiality Agreement dated as of February 4, 1999 between
Parent and Goldman, Sachs & Co., on behalf of the Company.
(d)-(f) Not applicable.
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SIGNATURES
After due inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 7, 1999 CERIDIAN CORPORATION
By: /s/ Gary M. Nelson
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Gary M. Nelson
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SPRING ACQUISITION CORP.
By: /s/ Gary M. Nelson
-------------------------------------
Gary M. Nelson
PRESIDENT AND CHIEF EXECUTIVE OFFICER
5
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SCHEDULE 14D-1
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
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<S> <C> <C>
(a)(1) Offer to Purchase dated May 7, 1999. Filed herewith
electronically.
(a)(2) Letter of Transmittal Filed herewith
electronically.
(a)(3) Notice of Guaranteed Delivery. Filed herewith
electronically.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Filed herewith
Nominees. electronically.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Filed herewith
Trust Companies and Nominees. electronically.
(a)(6) Text of Joint Press Release issued by Parent and the Company on Filed herewith
May 3, 1999. electronically.
(a)(7) Form of Summary Advertisement dated May 7, 1999. Filed herewith
electronically.
(a)(8) Guidelines for Certification of Taxpayer Identification Number on Filed herewith
Substitute Form W-9. electronically.
(b)(1) Amended and Restated Credit Agreement dated as of December 12, Incorporated by
1995, as amended and restated as of July 31, 1997, among Parent, reference to Exhibit
Bank of America National Trust and Savings Association, as Agent, 10.1 to Parent's
and the Financial Institutions Parties Thereto. Quarterly Report on
Form 10-Q for the
quarter ended June 30,
1997 (File No. 1-1969)
6
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(b)(2) Waiver and First Amendment to Credit Agreement, dated as of Incorporated by
December 2, 1997, among Parent, Bank of America National Trust reference to Exhibit
and Savings Association as Agent, and the Financial Institutions 10.25 to Parent's
Parties Thereto. Annual Report on Form
10-K for the year
ended December 31,
1997 (File No. 1-1969)
(b)(3) Commitment Letter dated May 4, 1999, from Bank of America Filed herewith
National Trust and Savings Association and Nationsbanc electronically.
Montgomery Securities LLC to Parent.
(c)(1) Agreement and Plan of Merger dated as of April 30, 1999 among Filed herewith
Parent, the Purchaser and the Company. electronically.
(c)(2) Confidentiality Agreement dated as of February 4, 1999 between Filed herewith
Parent and Goldman, Sachs & Co., on behalf of the Company. electronically.
</TABLE>
7
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
AT
$25.50 NET PER SHARE
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF ABR INFORMATION SERVICES, INC. HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE STOCKHOLDERS OF ABR INFORMATION SERVICES, INC. AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS
HEREINAFTER DEFINED) PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE A NUMBER OF SHARES OF ABR
INFORMATION SERVICES, INC. WHICH, TOGETHER WITH ANY SHARES OWNED BY CERIDIAN
CORPORATION, SPRING ACQUISITION CORP. AND/OR OTHER SUBSIDIARIES OF CERIDIAN
CORPORATION, REPRESENTS MORE THAN 50% OF THE TOTAL NUMBER OF SHARES THEN
OUTSTANDING ON A FULLY DILUTED BASIS. THE PURCHASER ESTIMATES THAT APPROXIMATELY
15,399,404 SHARES WILL NEED TO BE VALIDLY TENDERED (AND NOT WITHDRAWN) TO
SATISFY THIS MINIMUM CONDITION (AS HEREINAFTER DEFINED). THE OFFER IS SUBJECT TO
CERTAIN OTHER CONDITIONS. SEE SECTIONS 1, 13 AND 16.
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IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR A PORTION OF SUCH STOCKHOLDER'S
SHARES (AS HEREINAFTER DEFINED) SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER
OF TRANSMITTAL (OR A FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN
THE LETTER OF TRANSMITTAL AND MAIL OR DELIVER THE LETTER OF TRANSMITTAL TOGETHER
WITH THE CERTIFICATE(S) EVIDENCING SUCH SHARES, AND ANY OTHER REQUIRED
DOCUMENTS, TO THE DEPOSITARY (AS HEREINAFTER DEFINED) AT ONE OF THE ADDRESSES
SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE OR TENDER SUCH SHARES
PURSUANT TO THE PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 4, OR (2)
REQUEST HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO EFFECT THE TRANSACTION FOR SUCH STOCKHOLDER. A STOCKHOLDER WHOSE
SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE IF SUCH STOCKHOLDER DESIRES TO TENDER SUCH
SHARES.
A STOCKHOLDER 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 PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN SECTION
4.
QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT OR TO THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE
NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE. ADDITIONAL COPIES
OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED
DELIVERY AND OTHER RELATED MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT OR
THE DEALER MANAGER.
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The Dealer Manager for the Offer is:
[LOGO OF BEAR, STEARNS & CO. INC.]
May 7, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
INTRODUCTION............................................................................................... 1
THE TENDER OFFER........................................................................................... 3
1. Terms of the Offer; Expiration Date..................................................................... 3
2. Acceptance of and Payment for Shares.................................................................... 3
3. Withdrawal Rights....................................................................................... 4
4. Procedures for Accepting the Offer and Tendering Shares................................................. 5
5. Certain Income Tax Consequences......................................................................... 7
6. Market Prices of Shares; Dividends...................................................................... 7
7. Certain Effects of the Offer............................................................................ 8
8. Certain Information Concerning the Company.............................................................. 9
9. Certain Information Concerning the Purchaser and Parent................................................. 12
10. Background of the Offer................................................................................ 15
11. Purpose of the Offer and the Merger; Plans for the Company; the Merger Agreement....................... 18
12. Source and Amount of Funds............................................................................. 23
13. Certain Conditions of the Offer........................................................................ 26
14. Dividends and Distributions............................................................................ 27
15. Certain Legal Matters.................................................................................. 28
16. Extension of Tender Period, Termination and Amendments................................................. 31
17. Certain Fees and Expenses.............................................................................. 33
18. Miscellaneous.......................................................................................... 33
Schedule A--Directors and Executive Officers of Parent and the Purchaser................................... A-1
</TABLE>
i
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TO THE HOLDERS OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC.:
INTRODUCTION
Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a
wholly owned subsidiary of Ceridian Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of the voting
common stock, par value $0.01 per share (the "Shares"), of ABR Information
Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net
to the seller in cash, without any interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). Tendering stockholders will
not be obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to
the purchase of Shares pursuant to the Offer. The Purchaser will pay all
relevant charges and expenses incurred in connection with the Offer by Bear,
Stearns & Co. Inc. ("Bear Stearns"), which is acting as the Dealer Manager for
the Offer (in such capacity, the "Dealer Manager"), The Bank of New York, which
is acting as the Depositary (the "Depositary"), and Georgeson & Company Inc.,
which is acting as the Information Agent (the "Information Agent"). See Section
17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES WHICH TOGETHER WITH ANY SHARES
OWNED BY PARENT, PURCHASER OR ANY OF THE PARENT COMPANIES (AS DEFINED IN THE
MERGER AGREEMENT) REPRESENTS MORE THAN 50% OF THE OUTSTANDING SHARES ON A FULLY
DILUTED BASIS AT THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"). SEE
SECTION 13.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of April 30, 1999, by and among the Company, Parent and the Purchaser (the
"Merger Agreement"). The Merger Agreement provides that, subject to the terms
and conditions of the Merger Agreement at the effective time (the "Effective
Time") of the Merger (as hereinafter defined), the Purchaser will be merged with
and into the Company (the "Merger"), and the Company will survive and become a
wholly owned subsidiary of Parent (the "Surviving Corporation"). At the
Effective Time, each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, the Purchaser or any other
direct or indirect subsidiary of Parent or Shares that are owned by the Company
or any of its direct or indirect subsidiaries and in each case not held on
behalf of third parties, or Shares ("Dissenting Shares") held by stockholders
who properly exercise and perfect dissenters' rights, if any, under the Florida
Business Corporation Act (the "FBCA")) will be canceled, extinguished and
converted into the right to receive, without interest, an amount in cash equal
to $25.50 per Share or such higher price per Share as shall have been paid in
the Offer (the "Merger Consideration"). The Merger Agreement is more fully
described in Section 11.
Stockholders of the Company do not have dissenters' rights as a result of
the Offer. In addition, stockholders of the Company will not have dissenters'
rights in connection with the Merger if on the record date fixed to determine
the stockholders entitled to vote on or consent to the Merger, the Shares are
listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. ("NASD") or are held of record by 2,000 or more
stockholders. If, however, the Shares are not so listed or designated and are
not held of record by at least 2,000 stockholders, then holders of Shares who do
not vote or consent in favor of the Merger will have dissenters' rights. See
Section 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
The consummation of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required by applicable law, the approval of
the Merger Agreement by the stockholders of the Company. If the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power to
1
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approve the Merger without the vote of any other stockholder of the Company.
Under the Merger Agreement, Parent and the Purchaser have agreed to vote all
Shares acquired in the Offer in favor of the Merger. If at least 80% of the
outstanding Shares are purchased in the Offer, the Purchaser will be able to
effect a "short-form merger" under the FBCA without the approval of any
stockholder of the Company. See Section 11.
Based on information provided by the Company, as of April 29, 1999, there
were 28,762,983 Shares issued and outstanding and 2,035,823 Shares subject to
issuance upon the exercise of outstanding options to purchase Shares of voting
common stock (the "Options") granted under the Company's 1987 Amended and
Restated Stock Option Plan, 1993 Amended and Restated Stock Option Plan, 1995
Non-Employee Director Stock Option Plan, 1996 Non-Employee Director Stock Option
Plan and 1997 Stock Option Plan (together, the "Option Plans").
Based on the foregoing, and assuming the number of Shares on a fully diluted
basis at expiration of the Offer would be 30,798,806, the Purchaser would need
to purchase 15,399,404 Shares for the Minimum Condition to be satisfied. Subject
to the consent of the Company and the rules and regulations of the Securities
and Exchange Commission (the "Commission"), the Purchaser reserves the right
(but is not obligated) to waive or amend the Minimum Condition and to purchase
pursuant to the Offer fewer than the number of Shares necessary to satisfy the
Minimum Condition. See Section 1.
The Merger Agreement is more fully described in Section 11 of this Offer to
Purchase. Stockholders are encouraged to read that Section carefully, together
with all other terms and conditions of the Offer, before deciding whether to
tender their Shares.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE
4, 1999, UNLESS THE OFFER IS EXTENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
2
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), the Purchaser
will accept for payment and will pay for all Shares validly tendered on or prior
to the Expiration Date and not withdrawn in accordance with Section 3 of this
Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New York
City time, on Friday, June 4, 1999, unless the Purchaser 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. Pursuant to the terms of the Merger Agreement, the
Purchaser may extend the Offer as described in Section 16.
The Offer is subject to certain conditions set forth in Section 13,
including satisfaction of the Minimum Condition and the expiration or
termination of the waiting period applicable to the Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"). Subject to the terms of the Merger
Agreement, if any condition to the Purchaser's obligation to purchase Shares is
not satisfied prior to the acceptance for payment for any such Shares, the
Purchaser may (i) at a scheduled expiration date of the Offer terminate the
Offer, (ii) extend the Offer and, subject to withdrawal rights as set forth in
Section 3, retain all such Shares until the expiration of the Offer as so
extended, (iii) waive such condition (other than the Minimum Condition) and,
subject to any requirement to extend the period of time during which the Offer
is open, purchase all Shares validly tendered by the Expiration Date and not
withdrawn, or (iv) delay acceptance for payment of Shares until satisfaction or
waiver of the conditions of the Offer. Subject to the consent of the Company and
the rules and regulations of the Commission, the Purchaser reserves the right
(but is not obligated) to waive or amend the Minimum Condition and to purchase
pursuant to the Offer fewer than the number of Shares necessary to satisfy the
Minimum Condition.
The Merger Agreement provides that, unless previously approved in writing by
the Company, and subject to certain rights of the Purchaser to extend the Offer,
the Purchaser will not decrease the price per Share offered in the Offer, change
the form of consideration offered or payable in the Offer, decrease the number
of Shares sought in the Offer, change the conditions to the Offer, impose
additional conditions to the Offer, amend any term of the Offer in a manner
adverse to the holders of Shares, or waive the Minimum Condition. For a
description of the Purchaser's right and obligation to extend the period of time
during which the Offer is open, and to amend, delay or terminate the Offer, see
Section 16.
The Company has provided the Purchaser with the Company's stockholder list
for the purpose of disseminating the Offer to holders of Shares. This Offer to
Purchase and the related Letter of Transmittal will be mailed to record holders
of Shares and will be furnished to brokers, dealers, banks and similar persons
whose names, or the names of whose nominees, appear on the stockholder list 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 OF AND PAYMENT FOR SHARES. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, any and all Shares validly
tendered and not withdrawn following the later of (i) the expiration or
termination of all waiting periods under the HSR Act that are applicable to the
purchase of Shares pursuant to the Offer, and (ii) the Expiration Date. See
Section 15. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares or timely confirmation of book-entry transfer (a "Book-Entry
Confirmation") of such Shares into the Depositary's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 4, a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal.
3
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For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares as, if and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment pursuant to the Offer. Payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payments to
tendering stockholders. The Purchaser will not, under any circumstances, pay any
interest on the purchase price, regardless of any delay in making such payment.
If any tendered Shares are not purchased pursuant to the Offer, or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of book-entry transfer within the Book-Entry
Transfer Facility, such Shares will be credited to an account maintained within
the Book-Entry Transfer Facility), as promptly as practicable after the
expiration or termination of the Offer.
The Purchaser will pay all stock transfer taxes, if any, payable with
respect to the transfer to it of Shares purchased pursuant to the Offer.
If, prior to the Expiration Date, the Purchaser shall decide, in its sole
discretion and subject to the terms of the Merger Agreement, to increase the
consideration offered to stockholders pursuant to the Offer, such increased
consideration shall be paid to all holders of Shares accepted for payment and
paid for pursuant to the Offer.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date and, unless previously paid for, may also be withdrawn after
July 5, 1999. If the Purchaser is delayed in its acceptance or purchase of or
payment for Shares or is unable to purchase or pay for Shares for any reason,
then, without prejudice to the Purchaser's rights under Sections 1, 13 and 16,
tendered Shares may be retained by the Depositary on behalf of the Purchaser and
may not be withdrawn except as permitted by this Section 3 and subject to Rule
14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). See Section 16.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
specified on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and, if certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name(s) in which such certificate(s) is (are) registered, if
different from the name of the person tendering such Shares. If certificates
have been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates evidencing such
Shares and the signature on the notice of withdrawal must be guaranteed by a
member firm of a registered national securities exchange, a member of the NASD,
a commercial bank or trust company having an office, branch or agency in the
United States or any other institution that is a member of the Medallion
Signature Guaranty Program (each being referred to herein as an "Eligible
Institution"). If Shares have been tendered pursuant to the procedure for
book-entry tender as set forth in Section 4, the notice of withdrawal must
specify the name and account number(s) of the account(s) at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph. None of
Parent, the Purchaser, the Dealer Manager, the Depositary or the Information
Agent will be obligated to give notice of any defects or irregularities in any
notice of withdrawal, nor shall any of them incur any liability for failure to
give any such notice. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding.
Withdrawals of Shares tendered may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Withdrawn Shares, however, may be
4
<PAGE>
retendered by following one of the procedures described in Section 4 at any time
prior to the Expiration Date.
4. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER. In order for a holder of Shares to validly tender Shares
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), together with any required
signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase, on or prior to the Expiration
Date. Either (i) the certificates for such Shares must be delivered to the
Depositary or (ii) such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below and a Book-Entry Confirmation must be
received by the Depositary (including an Agent's Message (as defined below), if
the tendering stockholder has not delivered a Letter of Transmittal), in each
case on or prior to the Expiration Date. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Depositary. Alternatively,
the tendering stockholder may comply with the guaranteed delivery procedure set
forth below. 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 the Book-Entry Transfer
Facility has received an express acknowledgment from a participant in the system
established by the Book-Entry Transfer Facility tendering the Shares which are
the subject of such Book-Entry Confirmation 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 Letter of Transmittal against such participant.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry transfer of the 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. Even if delivery of Shares is to be effected through book-entry
transfer at the Book-Entry Transfer Facility, the Letter of Transmittal (or a
manually signed facsimile thereof) along with any required signature guarantees
and any other required documents, or an Agent's Message, must be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover page of this Offer to Purchase on or prior to the Expiration Date, or the
stockholder must comply with the guaranteed delivery procedure set forth below.
SIGNATURE GUARANTEES. If the Letter of Transmittal is signed by the
registered holder of the Shares tendered therewith and payment is to be made
directly to such registered holder, or if Shares are tendered for the account of
an Eligible Institution, no signature guarantee is required. In all other cases,
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. If certificates 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 accepted for payment or not tendered are to be
returned to a person other than the registered holder, then certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or the names of the registered owner or owners appear on
certificates, with the signature(s) on the certificates or stock powers
guaranteed as aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such holder's certificates are not immediately available, or time
will not permit all required documents to reach the Depositary on or prior to
the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following conditions are met:
(i) such tenders are made by or through an Eligible Institution;
5
<PAGE>
(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 on or prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for transfer
(or a Book-Entry Confirmation), together with a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile
thereof) with any required signature guarantee and any other documents
required by the Letter of Transmittal, or an Agent's Message, are
received by the Depositary within three Nasdaq Stock Market ("Nasdaq")
trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by facsimile transmission, or by mail, to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of certificates
for such Shares (or a timely Book-Entry Confirmation), a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof), or
an Agent's Message, and any other documents required by the Letter of
Transmittal.
OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Purchaser
as such stockholder's proxies, in the manner set forth in the Letter of
Transmittal, to the full extent of such stockholder's rights with respect to the
Shares tendered by such stockholder and purchased by the Purchaser (and any and
all other Shares and other securities issued or issuable in respect thereof on
or after May 7, 1999) prior to the time of any stockholder vote or other action.
All such proxies shall be irrevocable and coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts such Shares for payment. Upon such appointment, all
prior proxies given by such stockholder with respect to such purchased Shares or
other securities will be revoked and no subsequent proxies may be given. The
designees of the Purchaser will, with respect to such Shares and other
securities, be empowered to exercise all voting and other rights of such
stockholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the Company's stockholders, by written consent
or otherwise. The Purchaser reserves the right to require that, in order for
Shares to be validly tendered, immediately upon the acceptance for payment of
such Shares, the Purchaser be able to exercise full voting and other rights of a
record and beneficial holder, including rights in respect of acting by written
consent, with respect to such Shares (and any and all other securities as set
forth above).
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS TO BE BY MAIL, INSURED REGISTERED MAIL, RETURN
RECEIPT REQUESTED IS RECOMMENDED. AMPLE TIME SHOULD BE ALLOWED FOR SUCH
DOCUMENTS TO REACH THE DEPOSITARY. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION
4, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the federal income tax laws,
the Depositary will be required to withhold 31% of the amount of any payments
made to certain stockholders pursuant to the Offer. To prevent such backup
federal income tax withholding, each such stockholder must provide the
Depositary with his or her correct taxpayer identification number and certify
that such stockholder is not subject to such backup withholding by completing
the Substitute Form W-9 included in the Letter of Transmittal.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser and Parent, in their sole
discretion, whose determination will be final and binding. The Purchaser and
Parent reserve the absolute right to reject any or all tenders determined by
them not to be in proper form or the acceptance of or payment for which may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser and
6
<PAGE>
Parent also reserve the absolute right to waive any of the conditions of the
Offer or any defect in any tender with respect to any particular Shares or any
particular stockholder. No tender of Shares will be deemed to have been validly
made until all defects and irregularities relating thereto have been cured or
waived. None of Parent, the Purchaser, the Dealer Manager, the Depositary or the
Information Agent will be obligated to give notice of any defects or
irregularities in tenders, nor shall any of them incur any liability for failure
to give any such notice. The Purchaser's and Parent's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and
instructions thereto) will be final and binding.
5. CERTAIN INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or for Shares pursuant to the Merger will be taxable for
federal income tax purposes and may be taxable under applicable state, local,
foreign and other tax laws. The tax consequences of such receipt may vary
depending upon, among other things, the particular circumstances of the
stockholder. In general, a stockholder will recognize gain or loss equal to the
difference between the amount of cash received and his or her tax basis in his
or her Shares. Such gain or loss will generally be capital gain or loss provided
that such stockholder held his or her Shares as a capital asset, and will be
long-term capital gain or loss if, on the date of sale, such Shares were held
for more than one year. Long-term capital gain of a non-corporate stockholder is
generally taxed at a maximum rate of 20%.
The foregoing may not be applicable to stockholders who acquired their
Shares pursuant to the exercise of employee stock options or otherwise as
compensation, who are not citizens or residents of the United States or who are
otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended (the "Code") (such as life insurance companies, tax exempt
entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX
ADVISORS TO DETERMINE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
SUCH STOCKHOLDER, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS.
6. MARKET PRICES OF SHARES; DIVIDENDS. The Shares are traded in the
over-the-counter market and are quoted on the Nasdaq National Market System
under the symbol "ABRX". The following table sets forth, for the periods
indicated, the range of high and low sales prices per Share as reported on the
Nasdaq National Market System for such periods, in each case as reported by
published financial sources and restated for the two-for-one stock split
completed on February 19, 1997. The Company has not declared or paid any cash
dividends on the Shares for the periods presented below.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL YEAR ENDED JULY 31, 1997
First Fiscal Quarter................................................... $37 3/4 $25 1/2
Second Fiscal Quarter.................................................. $33 1/2 $19 11/16
Third Fiscal Quarter................................................... $24 3/8 $16 11/16
Fourth Fiscal Quarter.................................................. $32 3/4 $20 5/8
FISCAL YEAR ENDED JULY 31, 1998
First Fiscal Quarter................................................... $29 5/8 $22
Second Fiscal Quarter.................................................. $26 5/16 $21 11/32
Third Fiscal Quarter................................................... $31 5/8 $24 1/4
Fourth Fiscal Quarter.................................................. $27 3/4 $17 1/2
FISCAL YEAR ENDED JULY 31, 1999..........................................
First Fiscal Quarter................................................... $20 5/8 $ 8 1/2
Second Fiscal Quarter.................................................. $23 5/8 $13 3/4
Third Fiscal Quarter................................................... $24 1/2 $13
Fourth Fiscal Quarter (through May 6, 1999)............................ $25 15/32 $24 13/16
</TABLE>
7
<PAGE>
On April 30, 1999, the last full day of trading prior to the public
announcement of the Merger Agreement, the last reported sale price for the
Shares, as reported by the Nasdaq National Market System, was $17.50 per Share,
according to published sources. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
PRICES FOR THE SHARES.
7. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may also be expected to reduce the number of holders of Shares. Such reductions
could adversely affect the liquidity and market value of the remaining Shares
held by the public, if any.
STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in the Nasdaq National Market System. According to Nasdaq's published
guidelines, the Shares would not be eligible to be included for continued
listing if, among other things (i) the number of publicly held Shares falls
below 750,000, (ii) the number of holders of at least 100 Shares ("round lot
holders") falls below 400, (iii) the aggregate market value of publicly held
Shares falls below $5.0 million, or (iv) there are not at least two registered
and active market makers. If the foregoing standards are not met, the Shares
might continue to be listed on The Nasdaq SmallCap Market, Inc., but if (i) the
number of round lot holders falls below 300, (ii) the number of publicly held
Shares falls below 500,000, (iii) the aggregate market value of such publicly
held Shares falls below $1.0 million, or (iv) there are not at least two
registered and active market makers, Nasdaq rules provide that the Shares would
no longer qualify for inclusion in Nasdaq, and Nasdaq would cease to provide any
quotations. Shares held directly or indirectly by an officer or director of the
Company or by a beneficial owner of more than 10% of the Shares will ordinarily
not be considered as being publicly held for purposes of these standards. If, as
a result of the purchase of Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of Nasdaq for continued inclusion and the
Shares are no longer eligible for Nasdaq quotation, the market for the Shares
could be adversely affected.
If the Shares are no longer eligible for Nasdaq quotation, quotations might
still be available from other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of holders of Shares remaining at such time, the interests in maintaining
a market in the Shares on the part of securities firms, the possible termination
of registration of the Shares under the Exchange Act, as described below, and
other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of Shares. Termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and the
Commission, and would make certain provisions of the Exchange Act (such as the
short-swing profit recovery provisions of Section 16(b) and the requirement of
furnishing a proxy or information statement in connection with stockholders'
meetings pursuant to Section 14(a) or (c) and the related requirement of an
annual report) 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, with respect to certain persons, eliminated. If, as a result
of purchases pursuant to the Offer or otherwise, the Company is no longer
required to maintain registration of the Shares under the Exchange Act, the
Purchaser intends to cause the Company to apply for termination of such
registration.
MARGIN REGULATIONS. The Shares are presently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such securities for the purpose of buying,
carrying or trading in securities ("Purpose Loans"). In the event that the
Shares were no longer quoted on Nasdaq (which depends on factors such as the
number of holders of the Shares and the number
8
<PAGE>
and market value of publicly held Shares (see "Stock Quotation" above)), it is
possible the Shares may no longer constitute "margin securities" for purposes of
the Federal Reserve Board's margin regulations and, therefore, could no longer
be used as collateral for Purpose Loans made by brokers. In addition, if the
Shares were deregistered under the Exchange Act, the Shares would no longer
constitute "margin securities."
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act,
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or other transactions
following the purchase of Shares pursuant to the Offer in which the Purchaser
seeks to acquire the remaining Shares not held by it. However, Rule 13e-3 would
be inapplicable if (i) the Shares are deregistered under the Exchange Act prior
to the Merger or other transactions or (ii) the Merger or another business
combination is consummated within one year after the purchase of the Shares
pursuant to the Offer and the amount paid per Share for each class of Shares in
the Merger or other business combination is at least equal to the amount paid
per Share for such class of Shares in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the Commission and disclosed to
stockholders prior to the consummation of the transaction.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Florida
corporation with its principal executive offices located at 34125 U.S. Highway
19 North, Palm Harbor, Florida 34684-2141, telephone (727) 785-2819. According
to information filed by the Company with the Commission, the Company is
primarily engaged in comprehensive benefits administration, payroll and human
resource services to employers seeking to outsource these functions.
9
<PAGE>
Set forth below is a summary of certain selected financial information with
respect to the Company and its subsidiaries for the fiscal years ended July 31,
1998, 1997 and 1996 and for the six-month periods ended January 31, 1999 and
1998, which has been excerpted or derived from the audited consolidated
financial statements contained in the Company's Annual Reports on Form 10-K for
the fiscal years ended July 31, 1998, 1997 and 1996, and from unaudited
consolidated financial statements contained in the Company's Quarterly Report on
Form 10-Q for the quarterly period ended January 31, 1999. More comprehensive
financial information is included in such reports and other documents filed by
the Company with the Commission, and the following summary is qualified in its
entirety by reference to such documents and all of the financial statements and
related notes contained therein.
ABR INFORMATION SERVICES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JANUARY 31, FISCAL YEAR ENDED JULY 31,
-------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996
--------- --------- --------- --------- ---------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenue.................................................. $ 54,148 $ 31,946 $ 74,592 $ 50,079 $ 31,162
Cost of services......................................... 29,855 18,177 42,387 28,179 17,864
Operating income(1)(2)................................... 64 7,780 7,346 12,135 6,362
Lease revenue, net....................................... 187 1,140 2,817 -- --
Income before provision for income taxes................. 2,581 11,724 15,527 19,216 9,234
Income tax provision..................................... 980 4,072 8,800 6,987 3,560
Net income............................................... 1,601 7,652 6,727 12,229 5,674
Per share data (diluted):
Net income per share................................... .06 .28 .24 .44 .25
Adjusted weighted average shares outstanding
(diluted)............................................ 29,096 27,880 28,194 27,892 23,031
</TABLE>
<TABLE>
<CAPTION>
AS OF JANUARY 31, AS OF JULY 31,
--------------------- ----------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996
--------- ---------- ---------- ---------- ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................................... $ 84,026 $ 125,823 $ 122,170 $ 127,839 $ 145,825
Total assets........................................ 271,939 237,506 273,191 222,017 202,574
Total long-term debt................................ -- -- -- -- --
Total shareholders' equity.......................... 232,375 201,838 230,615 194,096 181,150
</TABLE>
- ------------------------
(1) Includes approximately $11 million of acquired research and development that
was expensed in the third quarter of fiscal 1998. See Note N to the Notes to
Consolidated Financial Statements in the Company's Annual Report on Form
10-K for the fiscal year ended July 31, 1998.
(2) During fiscal 1999, the Company recorded a non-cash pre-tax software
write-off of approximately $13.8 million. See Note C to Notes to
Consolidated Financial Statements in the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1999.
The information concerning the Company contained in this Offer to Purchase
or incorporated herein by reference has been taken from or based upon
publicly-available documents and records on file with the Commission and other
public sources or was provided by the Company. Although the Purchaser has no
knowledge that would indicate that any statements contained herein based on such
documents and records are untrue, neither Parent nor the Purchaser can take
responsibility for the accuracy or completeness of
10
<PAGE>
the information 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 which are unknown to Parent or
the Purchaser.
In the course of discussions giving rise to the Merger Agreement,
representatives of the Company furnished representatives of Parent with certain
business and financial information that was not publicly available, including
certain financial projections for its fiscal years ending July 31, 1999, 2000
and 2001 set forth below (the "Company Projections"). The Company Projections
were prepared solely for the Company's internal purposes and were not prepared
for publication or with a view to complying with the published guidelines of the
Commission regarding projections or with the American Institute of Certified
Public Accountants Guide for Prospective Financial Statements, and such
information is being included in this Offer to Purchase solely because it was
furnished to Parent in connection with the discussions giving rise to the Merger
Agreement.
The Company Projections set forth below reflect numerous assumptions with
respect to general business and economic conditions and other matters, many of
which are inherently uncertain or beyond the Company's or Parent's control.
There can be no assurance that the actual results will not be materially higher
or lower than those contained in the Company Projections. The inclusion of the
Company Projections should not be regarded as an indication that the Company,
Parent or anyone else who received this information considered it an accurate
predictor of future events, and the Company Projections should not be relied on
as such. None of Parent, the Purchaser, the Company or any of their respective
representatives assumes any responsibility for the accuracy of the Company
Projections, and the Company has made no representation to Parent or the
Purchaser regarding such information.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING JULY 31,
-------------------------------
1999 2000 2001
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Revenue.............................................................................. $ 120.1 $ 168.2 $ 220.4
Earnings Before Interest and Taxes................................................... 30.7 43.9 55.6
Net Income(1)........................................................................ 22.1 29.2 36.5
</TABLE>
- ------------------------
(1) Excludes a 1999 pre-tax software write-off of approximately $13.8 million.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning the Company's
business, principal physical properties, capital structure, material pending
legal proceedings, operating results, financial condition, the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities, any material interests of such
persons in transactions with the Company and other matters, is required to be
disclosed in proxy statements and annual reports distributed to the Company's
stockholders and filed with the Commission. Such reports, proxy statements and
other information may be inspected at the Commission's public reference
facilities at 450 Fifth Street, N.W., Washington, D.C. 20549, and should also be
available for inspection at the following regional offices of the Commission: 7
World Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and copies may be obtained, by
mail, for prescribed rates from the principal office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains an
Internet site on the World Wide Web at http://www.sec.gov that contains reports,
proxy statements and other information. Such information should also be
available for inspection at the offices of the Nasdaq Stock Market, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
11
<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser
is a newly incorporated Florida corporation and a wholly owned subsidiary of
Parent. To date, the Purchaser has engaged in no activities other than those in
connection with the Offer. The principal executive offices of the Purchaser are
located at 8100 34th Avenue South, Minneapolis, Minnesota 55425, telephone (612)
853-4291. The principal executive offices of Parent are located at 8100 34th
Avenue South, Minneapolis, Minnesota 55425, telephone (612) 853-8100.
The name, business address, citizenship, present principal employment or
occupation and employment history for the past five years of each of the
directors and executive officers of the Purchaser and Parent are set forth in
Schedule A to this Offer to Purchase.
Parent, a Delaware corporation, was founded in 1957. Parent's information
services businesses, which consist of its Human Resource Services businesses,
its Comdata subsidiary and its Arbitron division, provide products and services
to customers in the human resources, transportation and media information
markets.
Except as set forth in this paragraph or elsewhere in this Offer to
Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge,
any of the persons listed in Schedule A hereto nor any associate or majority
owned subsidiary of any of the foregoing, beneficially owns or has a right to
acquire any equity securities of the Company, and neither the Purchaser nor
Parent nor, to the best of their knowledge, any of the persons or entities
referred to above, nor any director, executive officer or subsidiary of any of
the foregoing, has effected any transaction in such equity securities during the
past 60 days. Lawrence Perlman, Chairman and Chief Executive Officer of Parent,
and John R. Eickhoff, Executive Vice President and Chief Financial Officer of
Parent, own 2,000 and 500 Shares of the Company, respectively (together
constituting less than one percent of the Shares).
Except as set forth in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the best of their knowledge, any of the persons listed in
Schedule A hereto, has any contract, arrangement, understanding or relationship
(whether or not legally enforceable) 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 of such securities, 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, there
have been no contacts, negotiations or transactions which have occurred since
August 1, 1995, between Parent, the Purchaser, or any of Parent's other
subsidiaries or, to the best of the knowledge of Parent and the Purchaser, any
of the persons listed in Schedule A hereto, on the one hand, and the Company or
its affiliates, on the other hand, concerning: a merger, consolidation or
acquisition; a tender offer or other acquisition of securities; an election of
directors; or a sale or other transfer of a material amount of assets. Except as
described in this Offer to Purchase, neither the Purchaser nor Parent nor, to
the best of their knowledge, any of the persons listed in Schedule A hereto, has
since August 1, 1995, had any transaction with the Company or any of its
executive officers, directors or affiliates which would require disclosure under
the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, during the last five years,
neither the Purchaser nor Parent nor, to their best knowledge, have any of the
persons listed on Schedule A (i) been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding been or become subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
Until immediately prior to the time the Purchaser purchases the Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer. Because
12
<PAGE>
the Purchaser is a newly formed corporation and has minimal assets and
capitalization, no meaningful financial information regarding the Purchaser is
available.
Parent is subject to the information and reporting 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 Parent's business, principal physical properties, capital structure,
material pending legal proceedings, operating results, financial condition,
directors and executive officers, their remuneration, stock options and
restricted stock granted to them, the principal holders of Parent's securities
and any material interest of such persons in transactions with Parent and other
matters is required to be disclosed in proxy statements and annual reports
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information may be examined, and copies may
be obtained from the Commission in the same manner set forth in Section 8 with
respect to information concerning the Company. Certain reports and other
information concerning Parent may also be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
13
<PAGE>
Set forth below is a summary of certain selected financial information of
Parent and its subsidiaries for the fiscal years ended December 31, 1998, 1997
and 1996 and for the three-month periods ended March 31, 1999 and 1998, which
has been excerpted or derived from the audited consolidated financial statements
contained in Parent's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1998, 1997 and 1996. Amounts as of, and for the period ended, March
31, 1999 will be reflected in Parent's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1999, which is expected to be filed no later
than May 17, 1999. More comprehensive financial information is included in such
reports and other documents filed by Parent with the Commission, and the
following summary is qualified in its entirety by reference to such documents
and all of the financial statements and related notes contained therein.
CERIDIAN CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, FISCAL YEAR ENDED DECEMBER 31,
-------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996
--------- --------- --------- --------- ---------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenue................................................. $ 321.4 $ 282.3 $ 1,162.1 $ 1,078.8 $ 942.6
Earnings from continuing operations(1).................. 164.4 35.4 135.5 59.2 64.6
Gain and earnings from discontinued operations(2)....... 25.4 437.0 46.4 38.3 33.1
Net earnings............................................ 41.8 35.8 189.8 472.4 181.9
Basic earnings per common share:
Continuing operations................................. 0.29 0.25 1.14 0.23 0.90
Net earnings.......................................... 0.29 0.25 1.32 3.01 1.24
Diluted earnings per common share:
Continuing operations................................. 0.28 0.24 1.11 0.22 0.84
Net earnings.......................................... 0.28 0.24 1.29 2.96 1.12
Shares used in calculations (in thousands)
Basic................................................. 144,086 144,110 144,070 156,835 135,841
Diluted............................................... 149,111 147,195 147,597 159,481 161,938
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, AS OF DECEMBER 31,
-------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996
--------- --------- --------- --------- ---------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................................... $ 1,314.6 $ 1,289.7 $ 1,289.7 $ 1,243.3 $ 1,016.6
Debt obligations...................................... 51.9 54.5 54.5 3.0 138.2
Stockholders' equity.................................. 1,314.6 1,289.7 650.6 588.3 346.3
</TABLE>
- ------------------------
(1) Includes 1998 unusual gains of $24.3 million, 1997 FAS 109 income tax
benefit of $175.0 million and 1997 unusual losses of $307.6 million. See
Notes B and D to Notes to Consolidated Financial Statements in Parent's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
(2) Includes gain from the December 1997 sale of Computing Devices International
and earnings from its operations prior to the sale. See Note B to Notes to
Consolidated Financial Statements in Parent's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998.
14
<PAGE>
10. BACKGROUND OF THE OFFER. During the fourth quarter of 1998, members of
senior management of Parent and the Company had several discussions concerning a
possible business relationship.
On October 8, 1998, Ronald L. Turner, President and Chief Operating Officer
of Parent, and Carl Keil, Vice President of Parent and President of Ceridian
Employer Services, met with James MacDougald, Chairman, Chief Executive Officer
and President of the Company, to discuss possible business relationships between
the two companies, including possible alliances or joint ventures.
On October 22, 1998, Mr. Turner discussed with Parent's Board of Directors
at a regularly scheduled board meeting his meeting with Mr. MacDougald on
October 8, 1998 and the possibility of a business relationship between the two
parties.
On November 19, 1998, Lawrence Perlman, Chairman and Chief Executive Officer
of Parent, and Mr. Turner met with Mr. MacDougald to further explore possible
business relationships. At such time, Messrs. Perlman and Turner asked whether
the Company had any interest in being acquired by Parent, and were advised that
the Company was not interested in entering into a transaction with Parent at
that time. Messrs. Turner and MacDougald had several follow-up telephone
conversations in December 1998, during which they discussed mutual cross selling
opportunities, including the possibility that Parent provide payroll services to
some of the Company's larger customers. No business relationship was explored at
that time.
In early February 1999, Mr. Perlman was telephoned by representatives of
Goldman, Sachs & Co. ("Goldman Sachs") and advised that Goldman Sachs was
representing the Company in connection with a possible transaction involving the
Company. Mr. Perlman was asked if Parent would be interested in reviewing due
diligence materials relating to the Company and possibly submitting an initial
indication of interest relating to a potential acquisition of the Company. Mr.
Perlman advised Goldman Sachs that Parent would be interested in reviewing the
due diligence materials relating to the Company. On February 3, 1999, Mr. Turner
telephoned Mr. MacDougald and confirmed Parent's interest in exploring a
possible transaction.
On February 3, 1999, at a regularly scheduled meeting, Parent's Board of
Directors was advised by Parent's senior management of the opportunity to engage
in a transaction with the Company. Management of Parent and Parent's Board of
Directors had a detailed discussion of the Company and the strategic rationale
for a transaction with the Company at this meeting.
On February 4, 1999, Parent and Goldman Sachs, on behalf of the Company,
executed a confidentiality agreement. Parent contacted Bear Stearns to advise
Parent in connection with a possible transaction with the Company. On February
5, 1999, Parent received a confidential memorandum from Goldman Sachs with
respect to the Company and began reviewing the information contained therein.
On February 19, 1999, Parent received a letter from Goldman Sachs requesting
a written, preliminary and non-binding indication of interest for a transaction
with the Company. Goldman Sachs requested that the indication of interest be
submitted no later than February 26, 1999.
On February 26, 1999, Parent provided Goldman Sachs and the Company with a
preliminary indication of interest, based on the confidential memorandum
previously provided, to acquire the Company in a potential stock for stock
transaction at a price of $26.00 to $30.00 per Share, assuming pooling of
interests accounting treatment. Goldman Sachs thereafter advised Parent that,
based on its preliminary indication of interest, Parent would be permitted to
conduct additional due diligence concerning the Company.
On the evening of March 16, 1999, Messrs. Turner, Keil and John R. Eickhoff,
Executive Vice President and Chief Financial Officer of Parent, met various
members of the Company's management and a representative of Goldman Sachs for
dinner and discussed various due diligence items.
15
<PAGE>
On March 17, 1999, various representatives of Parent and Bear Stearns
participated in management presentations given by members of the Company's
management. Representatives of Parent also conducted a review of various due
diligence documents and materials relating to the Company on March 17 and 18,
1999, and visited the Company's operations in Palm Harbor and St. Petersburg,
Florida. From this time, through and including April 30, 1999, Parent and Bear
Stearns had conversations with the Company's management and Goldman Sachs,
relating to a potential transaction with the Company.
On March 26, 1999, Messrs. Perlman and Turner met, at Mr. Turner's request,
with Mr. MacDougald in Palm Harbor, Florida to discuss the results of Parent's
due diligence investigation and Parent's continued interest in acquiring the
Company. During these discussions, the parties discussed the potential pricing
uncertainty of a bid by Parent for the Company in a stock for stock transaction,
as a pooling of interests, due to Parent's repurchase of its own securities
during the previous two years and the need for Parent to sell a large quantity
of its common stock to become eligible for pooling of interests accounting
treatment. Mr. Perlman suggested to Mr. MacDougald that the parties might
consider a business alliance in lieu of an acquisition.
In a letter dated March 31, 1999, Parent received a request from Goldman
Sachs for a definitive proposal by April 16, 1999 in connection with a
transaction with the Company. Enclosed with the letter was a draft agreement for
Parent's consideration.
On April 5, 1999, Messrs. Perlman and Turner met with Mr. MacDougald to
discuss Parent's continued interest in acquiring the Company. Messrs. Perlman
and Turner again raised the possibility of a business alliance between the
Company and Parent.
On April 15, 1999, at its regularly scheduled board meeting, Parent's Board
of Directors discussed the Company and the acquisition opportunity. Management
of Parent advised the Board of Directors of Parent that at that time it did not
recommend a stock for stock acquisition of the Company, but instead recommended
the submission of an alternative proposal that would contemplate a business
alliance and joint venture relationship in lieu of an acquisition. Parent's
Board of Directors agreed to this recommendation.
On April 16, 1999, Parent advised the Company and Goldman Sachs that it
would not be submitting an acquisition bid, but instead proposed a business
alliance and a joint venture relationship as a means for the two companies to
conduct joint marketing and development efforts.
On April 20, 1999, Goldman Sachs advised Parent that Parent's proposed
business alliance and joint venture relationship proposal had not been accepted
by the Company, and that the Company's Board of Directors intended to continue
to engage in the process in which Parent had been invited to participate.
Goldman Sachs advised Parent that if it wished to submit an acquisition
proposal, it needed to do so by the close of business on April 23, 1999.
On April 23, 1999, Parent submitted a proposal to Goldman Sachs to acquire
all Shares of the Company at a price of $24.00 per Share in cash, subject to the
approval of Parent's Board of Directors and additional due diligence by Parent
as to certain technology matters, and requested a response by the close of
business on April 27, 1999. Following receipt of the proposal, representatives
of Goldman Sachs requested that Parent provide by April 26th any proposed
modifications to the draft acquisition agreement Goldman Sachs had previously
provided to Parent.
On April 26, 1999, Parent submitted proposed modifications to the draft
acquisition agreement previously provided.
16
<PAGE>
On the evening of April 27, 1999, representatives of Goldman Sachs advised
Bear Stearns that the Company's Board of Directors had met and requested that
Parent withdraw several of its requested modifications to the draft merger
agreement and also consider increasing its bid price. After discussions between
Bear Stearns and Messrs. Perlman and Turner, Parent agreed to withdraw several
of its requested modifications to the draft merger agreement and to increase its
bid price to $25.00 per Share in cash, subject to approval of Parent's Board of
Directors.
On April 28, 1999, Mr. Turner and other representatives of Parent flew to
Palm Harbor to conduct additional due diligence on various technology matters.
In the early afternoon of April 29, 1999, and prior to the meeting of the
Board of Directors of Parent on that day, Mr. MacDougald advised Mr. Turner by
telephone that he did not believe that Parent's proposal would receive the
support of the Board of Directors of the Company unless Parent increased its
offer.
On the afternoon of April 29, 1999, the Board of Directors of Parent met in
a special telephonic meeting to consider whether to approve the offer to acquire
all outstanding Shares of the Company. At this meeting, Bear Stearns made a
presentation to the Board of Directors of Parent and delivered its oral opinion
(which was subsequently confirmed in writing) that, subject to the matters set
forth in its opinion, a bid price of $25.50 per Share would be fair from a
financial point of view to Parent. After discussion of the strategic rationale
for the acquisition of the Company by Parent, consideration of the financial
analysis of the acquisition, the receipt of the oral opinion of Bear Stearns
described above and the likely terms of the debt that Parent would need to
secure to finance the acquisition and the costs and expenses relating thereto,
the members of Parent's Board of Directors in attendance unanimously approved
the offer and authorized Parent's senior management to proceed in its
discretion.
Following Parent's Board of Directors meeting on April 29, 1999, Parent's
management advised Goldman Sachs that it would be submitting further
modifications to the proposed merger agreement and a bid that would be open
until 1:00 a.m., New York City time, on April 30, 1999. Parent thereafter
submitted to the Company its modifications to the proposed merger agreement.
Later that evening, representatives of Parent also reiterated that they would
not increase the per Share price to an amount greater than $25.00 per Share.
Prior to the expiration of Parent's deadline, Mr. MacDougald advised Mr.
Turner that Parent's bid had not been accepted and would not be unless Parent
increased its price per Share. It was suggested, however, that several members
of the Company's senior management would agree to not have their Options
accelerated upon a change of control if Parent increased its Offer. Mr. Turner
advised Mr. MacDougald that Parent would not increase its bid price at that
time. Mr. Turner and Mr. MacDougald, however, agreed to discuss the matter the
next morning and each advised their respective legal counsel to continue to
negotiate the terms of the Merger Agreement which they did through the early
morning hours of April 30, 1999.
On the morning of April 30, 1999, Mr. Turner and Mr. MacDougald discussed
the matter again. Following this discussion, Parent authorized representatives
of Bear Stearns to advise Goldman Sachs that Parent was increasing its offer to
$25.50 per Share in cash. Mr. Turner also advised Mr. MacDougald of the
increased bid price. Mr. MacDougald advised Mr. Turner that the increased bid
price would be submitted to the Company's Board of Directors. Counsel for Parent
and the Company continued to discuss issues relating to the Merger Agreement.
In the afternoon of April 30, 1999, Mr. MacDougald advised Messrs. Perlman
and Turner that the Company's Board of Directors had approved the Merger
Agreement, subject to the Company's senior management, upon the advice of
counsel, being able to resolve all remaining issues relating to the Merger
Agreement. Thereafter, in the early evening of April 30, 1999, the Merger
Agreement was finalized and executed.
17
<PAGE>
11. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT. The purpose of the Offer and the Merger is for Parent to acquire
control of, and ownership of the entire equity interest in, the Company. The
Offer is intended to permit Parent to acquire control of the Company at the
earliest practicable date. The purpose of the Merger is to acquire all
outstanding Shares not purchased pursuant to the Offer.
Except as indicated in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals which relate to or would result in
an extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of a material amount
of assets, involving the Company or any of its subsidiaries, or any material
changes in the Company's capitalization, dividend policy, corporate structure or
business or the composition of its management or personnel.
THE MERGER AGREEMENT. The Merger Agreement provides for the commencement of
the Offer as soon as reasonably practicable, and in any event within five
business days, after the first public announcement of the Merger Agreement. The
obligations of the Purchaser to consummate the Offer and accept for payment or
pay for any Shares tendered pursuant to the Offer is subject only to the
satisfaction of certain conditions, including the satisfaction of the Minimum
Condition, which are described in Section 13.
The Merger Agreement provides that, subject to the terms and conditions of
the Merger Agreement at the Effective Time, the Purchaser will be merged with
and into the Company, and the Company will survive and become a wholly owned
subsidiary of Parent. At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Parent, the
Purchaser or any other direct or indirect subsidiary of Parent or Shares that
are owned by the Company or any of its subsidiaries and in each case not held on
behalf of third parties or Dissenting Shares) will be canceled, extinguished and
converted into the right to receive, without interest, an amount in cash equal
to $25.50 per Share or such higher price per Share as shall have been paid in
the Offer.
The Merger Agreement requires the Company to take all necessary actions to
cause prior to the Effective Time each Option that had not vested immediately
prior to such time to become vested and fully exercisable. Certain executive
officers of the Company, however, have waived all vesting rights that they may
have pursuant to the terms of the Merger Agreement with respect to all Options
beneficially owned by them and issued pursuant to the Option Plans. In addition,
the Company is obligated to use its reasonable best efforts to cause each then
outstanding Option, whether vested or unvested, to be canceled, with the holder
thereof being entitled to receive, following the Effective Time, an amount equal
to the difference, if any, between $25.50 (or such higher price per Share as
shall have been paid in the Offer) and the exercise price of each such Option.
Any Options that are not exercised in full or surrendered for cancellation
("Remaining Options") will, at the Effective Time, in accordance with the terms
of the Option Plan pursuant to which such Option was issued, be deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such Remaining Option immediately prior to the Effective Time,
(A) a number of shares of Parent's common stock, par value $.01 per share
("Parent Common Stock"), equal to the product (rounded up to the nearest whole
number) obtained by multiplying (x) the number of Shares the holder of such
Remaining Option would have been entitled to receive immediately prior to the
Effective Time had such holder exercised such Remaining Option in full
immediately prior to the Effective Time and (y) the quotient obtained by
dividing $25.50 (or such higher price as shall have been paid in the Offer) by
the average of the closing prices per share of Parent Common Stock on the New
York Stock Exchange Composite Transactions tape for the five trading days
immediately preceding the date of the Effective Time, as reported in the Wall
Street Journal, New York City edition, and (B) at a price per share of Parent
Common Stock (rounded down to the nearest whole cent) equal to (x) the aggregate
exercise price for the Shares otherwise purchasable pursuant to such Remaining
Option (assuming for such purposes that such Remaining Option was fully
exercisable at such time) divided by (y) the number of full shares of Parent
Common Stock deemed purchasable pursuant to such Remaining Option in accordance
with clause (A) above. Parent has agreed that at the Effective Time it will file
a registration statement on Form S-8, or, if unavailable, a registration
statement on Form S-3 (or any successor forms), or another
18
<PAGE>
appropriate form with respect to the Parent Common Stock subject to Remaining
Options, and has agreed to use its best efforts to cause such registration
statement to become and remain effective, as well as comply with any applicable
state securities or "blue sky" laws, for so long as any Remaining Options remain
outstanding. In addition, prior to the Effective Time, the Board of Directors of
Parent agreed to use reasonable efforts to take all actions necessary to ensure
that the options to purchase Parent Common Stock (resulting from Remaining
Options) held by the officers and directors of the Company shall be exempt for
purposes of Rule 16b-3 under the Exchange Act.
The Merger Agreement contains representations and warranties by the Company
regarding, among other things, its organization, its capitalization, its
authority relative to the Merger Agreement, consents and approvals necessary for
the Offer and the Merger, the Company's filings and reports with and to the
Commission, the absence of certain changes in its business, the absence of
litigation, certain employee matters, compliance with laws, inapplicability of
takeover statutes, environmental matters, taxes, labor matters, intellectual
property, brokers and finders, and year 2000, and by each of Parent and the
Purchaser regarding, among other things, its organization, its authority
relative to the Merger Agreement and the Offer, and consents and approvals
necessary for the Offer and the Merger.
The obligations of the parties to effect the Merger are subject to the
satisfaction or waiver of the following conditions: (i) the Merger Agreement and
the plan of merger having been approved by the requisite vote of the holders of
the Shares; (ii) any waiting period applicable to the consummation of the Merger
under the HSR Act having expired or been earlier terminated; (iii) no court or
governmental entity of competent jurisdiction having enacted, issued,
promulgated, enforced or entered any statute, law, ordinance, rule, regulation,
judgment, decree, injunction or other order ("Order") that is in effect and
permanently enjoins or otherwise prohibits consummation of the Merger; and (iv)
the Purchaser shall have purchased Shares in the Offer.
The Company has agreed that, prior to the Effective Time, the Company and
its subsidiaries will each conduct its operations in the ordinary and usual
course, and to the extent consistent therewith, will each use their respective
best reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, employees and business associates. The Company
further agreed that with respect to itself and its subsidiaries prior to the
Effective Time: (i) it shall not (A) issue, sell, pledge, dispose of or encumber
any capital stock owned by it in any of its subsidiaries; (B) amend its articles
of incorporation or bylaws or the comparable governing instruments of any of its
subsidiaries; (C) split, combine or reclassify its outstanding shares of capital
stock; (D) declare, set aside or pay any dividend payable in cash, stock or
property in respect of any capital stock other than dividends from its direct or
indirect wholly owned subsidiaries to it or a wholly owned subsidiary; or (E)
repurchase, redeem or otherwise acquire any shares of its capital stock or any
securities convertible into or exchangeable or exercisable for any shares of its
capital stock, except, in connection with its Option Plans, or permit any of its
subsidiaries to purchase or otherwise acquire, any shares of its capital stock
or any securities convertible into or exchangeable or exercisable for any shares
of its capital stock; (ii) neither it nor any of its subsidiaries shall (A)
issue, sell, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its capital
stock of any class or any voting debt or any other property or assets (other
than Shares issuable pursuant to options (whether or not vested) currently
outstanding under the Company's Option Plans); (B) other than in the ordinary
and usual course of business, transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or encumber any other property or assets (including
capital stock of any of its subsidiaries) or incur or modify any material
indebtedness for borrowed money or guarantee any such indebtedness; or (C) by
any means, make any significant acquisition of, or investment in, assets or
stock (whether by way of merger, consolidation, tender offer, share exchange or
other activity); (iii) neither it nor any of its subsidiaries shall terminate,
establish, adopt, enter into, make any new grants or awards under, amend or
otherwise modify, any compensation and benefit plans, or increase the salary,
wage, bonus or other compensation of any employees except for
19
<PAGE>
grants or awards or increases under existing compensation and benefit plans
occurring in the ordinary and usual course of business (which shall include
normal periodic performance reviews and related compensation and benefit
increases), annual reestablishment of compensation and benefit plans and the
provision of individual compensation or benefit plans and agreements for newly
hired or appointed officers and employees of the Company and its subsidiaries or
except for actions necessary to satisfy existing contractual obligations under
existing compensation and benefit plans or agreements; and (iv) neither it nor
any of its subsidiaries will authorize or enter into an agreement to do anything
prohibited by the foregoing.
The Company has also agreed that neither it nor any of its subsidiaries nor
any of its or its subsidiaries' officers and directors shall, and that it shall
direct and cause its and its subsidiaries' employees, agents and other
representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, tender offer, reorganization,
share exchange, consolidation or similar transaction involving, or any purchase
of all or substantially all of the assets or any equity securities of, it or any
of its subsidiaries (any such proposal or offer being referred to as an
"Acquisition Proposal"). The Company has further agreed that, except as
otherwise provided in the Merger Agreement, neither it nor any of its
subsidiaries nor any of its or its subsidiaries' officers and directors shall,
and that it shall direct and cause its and its subsidiaries' employees, agents
and representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal.
Notwithstanding any of the foregoing, the Company, its representatives and its
Board of Directors have the right to (i) comply with Rule 14e-2 under the
Exchange Act with regard to an Acquisition Proposal or otherwise comply with the
Exchange Act; (ii) provide information in response to a request therefor by a
person who has made an unsolicited Acquisition Proposal; (iii) engage in any
negotiations or discussions with any person who has made an unsolicited
Acquisition Proposal or otherwise facilitate any effort or attempt to implement
an Acquisition Proposal; and (iv) approve and recommend to its stockholders an
Acquisition Proposal. The Board of Directors may take the action specified in
(ii), (iii) and (iv) above only if and to the extent that it determines either
(i) upon advice of outside legal counsel that the failure to take such action
would constitute a breach of the directors' fiduciary duties under applicable
law or (ii) that such Acquisition Proposal contains terms such that if an
agreement relating to such Acquisition Proposal were entered into, it would be,
in the aggregate, more favorable to the Company than the transactions
contemplated by the Merger Agreement (any such more favorable Acquisition
Proposal being referred to as a "Superior Proposal"), taking into account, at
the sole discretion of the Board of Directors of the Company, any of the matters
described in Section 4.5 of the articles of incorporation of the Company. The
Company also has agreed to notify Parent within 48 hours of receipt of an
Acquisition Proposal that would be reasonably likely to result in a Superior
Proposal (including the terms thereof and the identity of the offeror) and to
keep Parent reasonably informed of the status of any such proposal.
Parent has agreed that all rights to indemnification now existing in favor
of the directors, officers, employees and agents of the Company as provided in
the Company's articles of incorporation or bylaws or otherwise in effect on the
date of the Merger Agreement shall survive the Merger and continue in full force
and effect for a period of six years after the Effective Time. Parent has also
agreed to maintain in effect for a period of six years after the Effective Time
the current policies of directors' and officers' liability insurance maintained
by the Company (provided that Parent may substitute policies on materially
similar terms) so long as the annual premium for such insurance is not in excess
of 250% of the most recent annual premium paid (the "Current Premium"). If,
however, the current policies of directors' and officers' liability insurance is
terminated or canceled during such six-year period, Parent has agreed to use its
best efforts to obtain as much insurance as can be obtained for the remainder of
such period for a premium not in excess (on an annualized basis) of 250% of the
Current Premium and indemnify the directors and officers for any costs not
covered by such insurance.
20
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The Merger Agreement provides that, if required by applicable law, the
Company will promptly call a meeting of its stockholders for the purpose of
voting upon the Merger Agreement. In connection therewith, except as otherwise
expressly permitted by the Merger Agreement, the Company will, through its Board
of Directors, recommend to its stockholders approval of such matters and take
all lawful action to solicit such approval, including, without limitation,
preparing and filing a proxy statement or information statement under the
Exchange Act.
The parties have also agreed to use their best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable on its part under the Merger Agreement and applicable laws
and regulations to consummate the Offer and make effective the Merger and the
other transactions contemplated by the Merger Agreement as soon as practicable.
Pursuant to the Merger Agreement, Parent has agreed to maintain for a period
of one year after the Effective Time for the benefit of the employees of the
Company benefits under employee benefit plans that are no less favorable in the
aggregate than those provided under the Company's current benefit plans;
provided, however, that Parent will not be required to maintain any "change of
control" or similar plans with respect to any change of control occurring after
the Effective Time and excluding benefits provided pursuant to any plan covering
one or a select group of current or former employees. Each employee of the
Company as of the Effective Time will, for purposes of determining eligibility
and vesting under any benefit plan of Parent, be given credit for all service
with the Company prior to the Effective Time. In addition, Parent will cause to
be waived any pre-existing condition limitations under the benefit plans of
Parent and its subsidiaries in which the Company's and its subsidiaries'
employees participate and cause to be credited to any deductible or
out-of-pocket expense of Parent's benefit plans any deductibles or out-of-pocket
expenses incurred by such employees and their beneficiaries and dependents
during the portion of the calendar year prior to participation in the benefit
plans provided by Parent. Parent has also agreed to cause the Company to honor
all of the Company's existing employee benefit obligations to current and former
employees under the compensation and benefit plans and all employee severance
plans (or policies) and all employment or severance agreements previously
disclosed to Parent.
The Merger Agreement provides that, if requested by Parent, the Company will
to the extent permissible, promptly following the purchase by the Purchaser of
Shares pursuant to the Offer in accordance with the terms of the Merger
Agreement, take all actions necessary (including calling a special meeting of
the Board of Directors of the Company or the stockholders of the Company for
this purpose) to cause natural persons designated by Parent to become directors
of the Company (including mailing to the Company's stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder) so that the total number of such natural persons equals that number
of directors, rounded up to the next whole number, which represents the product
of the total number of directors on the Board of Directors multiplied by the
percentage that such number of Shares so accepted for payment plus any Shares
beneficially owned by Parent or its affiliates on the date of the Merger
Agreement bears to the total number of Shares outstanding at the time of such
acceptance for payment. At such time, the Company shall also cause persons
designated by Parent to constitute the same percentage (rounded up to the next
whole number) as is on the Company's Board of Directors of (i) each committee of
the Company's Board of Directors; (ii) each board of directors (or similar body)
of each subsidiary of the Company; and (iii) each committee (or similar body) of
each such board. To implement the foregoing, the Company has agreed to increase
the size of the Board of Directors or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Parent's designees
to be elected to the Board of Directors of the Company; provided, however, that
prior to the Effective Time there shall be at least three members of the Board
of Directors of the Company who are neither officers of Parent nor designees,
stockholders or affiliates of Parent ("Parent Insiders"). In the event that
Parent's designees are elected to the Board of Directors of the Company after
the acceptance for payment of Shares pursuant to the Offer and prior to the
Effective Time, the affirmative vote of at least a majority of the directors of
the Company who are not Parent Insiders will be required to (a) amend or
terminate the Merger Agreement by the Company, (b) exercise or waive any of the
Company's rights, benefits or remedies under the Merger
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Agreement, (c) extend the time for performance of Parent's and the Purchaser's
respective obligations under the Merger Agreement, or (d) take any other action
by the Company's Board of Directors under or in connection with the Merger
Agreement which would adversely affect the ability of the Company's stockholders
to receive the Merger Consideration.
The Surviving Corporation will use its best efforts to cause the Shares to
be removed from quotation on the Nasdaq National Market System and deregistered
under the Exchange Act as soon as practicable following the Effective Time.
Unless required by the rules of the NASD, subsequent to the Purchaser's payment
for Shares and prior to the Effective Time, the Company has agreed not to take
any action to cause the Shares to be removed from quotation on the Nasdaq
National Market System and deregistered under the Exchange Act.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company of the Merger Agreement: (a) by mutual written consent of the Boards
of Directors of Parent, the Purchaser and the Company; (b) by either the Company
or Parent if any Order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall have become final and
non-appealable after the parties have used their respective best efforts to have
such order removed, repealed or overturned; or (c) by the Company if (i) the
Company's Board of Directors withdraws or adversely modifies its adoption of the
Merger Agreement, its recommendation of the Offer or its recommendation that the
Company's stockholders approve the Merger Agreement (including, without
limitation, taking no position in response to a tender offer by a person other
than Parent), (ii) there has been a material breach by Parent or the Purchaser
of any material covenant or agreement contained in the Merger Agreement that is
not curable or, if curable, is not cured prior to the earlier of (x) 30 days
after written notice of such breach is given by the Company to the party
committing such breach or (y) two business days prior to any date on which the
Offer is scheduled to expire (so long as at such time specified in clause (y)
neither the Company nor Parent has indicated that it intends to request (and has
the right under the Merger Agreement to have such request honored) that the
Offer be extended in accordance with the terms of the Merger Agreement),
provided that Parent shall have been given notice of such breach at least two
business days prior to termination, or (iii) the Purchaser (or any of the Parent
Companies) shall have (x) terminated the Offer, or (y) failed to pay for Shares
pursuant to the Offer on a timely basis following the expiration of the Offer,
if the Offer has not been extended in accordance with the terms of the Merger
Agreement.
The Merger Agreement may be terminated by Parent (a) at any time prior to
the Effective Time, by action of the Board of Directors of Parent if due to an
occurrence or circumstance which resulted in a failure to satisfy any of the
Offer Conditions (as hereinafter defined), and the Purchaser shall have
terminated the Offer in accordance with the terms of the Merger Agreement
(including, without limitation, taking no position in response to a tender offer
by a person other than Parent, the Purchaser or any of their affiliates), (b)
prior to the purchase of Shares by the Purchaser pursuant to the Offer if (i)
the Company's Board of Directors withdraws or adversely modifies its adoption of
the Merger Agreement, its recommendation of the Offer or its recommendation that
the Company's stockholders approve the Merger Agreement (including, without
limitation, taking no position in response to a tender offer by a person other
than Parent, the Purchaser or any of their affiliates), (ii) there has been a
material breach by the Company of any material covenant or agreement contained
in the Merger Agreement that is not curable or, if curable, is not cured prior
to the earlier of (x) 30 days after written notice of such breach is given by
Parent to the party committing such breach or (y) two business days prior to any
date on which the Offer is scheduled to expire; provided, however, that at such
time specified in this clause (y) neither the Company nor Parent has indicated
that it intends to request (and has the right under the Merger Agreement to have
such request honored) that the Offer be extended in accordance with the terms of
the Merger Agreement (provided that the Company shall have been given notice of
such breach at least two business days prior to termination), or (iii) the
Minimum Condition shall not have been satisfied by the expiration of the Offer
(as it may have been extended from time to time), and at or prior to such time
any person (other than Parent or the Purchaser)
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shall have made a public announcement with respect to a bona fide Acquisition
Proposal that contemplates a per Share consideration in excess of the Merger
Consideration (a "Third Party Offer").
TERMINATION FEES. In the event the Merger Agreement is terminated in
accordance with the terms of the Merger Agreement by Parent as a result of a
material breach by the Company of any material covenant or agreement contained
in the Merger Agreement, then the Company shall promptly, but in no event later
than two days after the date of such termination, pay Parent a termination fee
of $29.4 million (the "Termination Fee"). In the event that (i) (a) an
Acquisition Proposal shall have been made to the Company or any person (other
than Parent, the Purchaser or any of their affiliates) shall have publicly
announced an intention to make an Acquisition Proposal with respect to the
Company and thereafter the Merger Agreement is terminated (x) by the Company as
a result of the termination of the Offer by the Purchaser or (y) by Parent due
to an occurrence or circumstance which resulted in a failure to satisfy any of
the Offer Conditions under circumstances that would have permitted Parent to
terminate the Merger Agreement as a result of a material breach by the Company
or (b) the Merger Agreement is terminated (x) by the Company or Parent as a
result of the Company's Board of Directors withdrawing or adversely modifying
its adoption of the Merger Agreement, its recommendation of the Offer or its
recommendation that the stockholders of the Company approve the Merger Agreement
or (y) by Parent as a result of the Minimum Condition not having been satisfied
by the Expiration Date and at or prior to such time the public announcement of a
Third Party Offer and (ii) (a) the person making the Third Party Offer (the
"Acquiring Party") has acquired, by purchase, merger, consolidation, sale,
assignment, lease, transfer or otherwise, in one transaction or any related
series of transactions within 12 months after a termination of the Merger
Agreement, a majority of the voting power of the outstanding securities of the
Company or all or substantially all of the assets of the Company or (b) there
has been consummated a merger, consolidation or similar business combination
between the Company or one of its subsidiaries and the Acquiring Party within 12
months after the relevant termination of the Merger Agreement, then the Company
shall pay Parent the Termination Fee.
The preceding description of the terms and provisions of the Merger
Agreement is qualified in its entirety by reference to the text of the Merger
Agreement, which is an exhibit to the Tender Offer Statement on Schedule 14D-1
filed by the Purchaser and Parent with the Commission and is available for
inspection and copying at the principal office of the Commission or may be
viewed and printed from the Commission web site at http://www.sec.gov in the
manner set forth in Section 9.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all of the outstanding Shares pursuant to the Offer and to
pay fees and expenses related to the Offer and the Merger is expected to be
approximately $763 million. The Offer and Merger are not conditioned on the
ability of the Purchaser or Parent to obtain financing. The Purchaser plans to
obtain all funds needed for the Offer and the Merger through a capital
contribution which will be made by Parent. Parent plans to obtain the funds for
such capital contribution from a combination of cash on hand, funds available to
Parent under its existing Amended and Restated Credit Agreement dated as of
December 12, 1995, as amended and restated as of July 31, 1997, among Parent and
the various lenders specified therein (the "Credit Agreement") and pursuant to a
financing commitment letter (the "Commitment"), dated May 4, 1999, from Bank of
America National Trust and Savings Association ("BA"), and NationsBanc
Montgomery Securities LLC ("NM Securities") (collectively, the "Commitment
Lenders").
As of March 31, 1999, Parent had approximately $110.3 of cash and cash
equivalents available to it without borrowings. The lenders under the Credit
Agreement are committed to loan Parent up to $250 million minus (a) the
aggregate principal amount of all outstanding committed loans under the Credit
Agreement, (b) the aggregate undrawn face amount under all outstanding letters
available under the Credit Agreement, plus (c) the amount of all unreimbursed
drawings under all outstanding letters of credit available under the Credit
Agreement (the "Credit Agreement Facility"). As of March 31, 1999, because no
loans were outstanding under the Credit Agreement, and letters of credit in the
aggregate undrawn face of amount of approximately $4.9 million were outstanding,
Parent had the ability to borrow up to $245.1 million under the Credit Agreement
Facility.
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Pursuant to the Commitment, BA has agreed to provide a $450 million
unsecured term loan to use solely for the purpose of capitalizing the Purchaser
to enable it to make any payment required to acquire the Shares in accordance
with the Merger Agreement, to pay transaction fees and expenses required in
connection with the Offer and to invest in cash equivalents until payment for
the foregoing purposes is made. NM Securities has agreed to act as lead arranger
and book manager for the facility available under the Commitment (the
"Commitment Facility"), and if necessary to form a syndicate of financial
institutions for the Commitment Facility.
THE CREDIT AGREEMENT. The parties to the Credit Agreement include Parent
(as borrower), BA as Agent (in such capacity, the "Agent"), BancAmerica
Securities, Inc., as Arranger (the "Arranger"), the Bank of New York and First
Bank National Association, as Co-Agents (the "Co-Agents"), and various other
financial institutions as parties thereto (the "Banks"). The following is a
summary of certain portions of the Credit Agreement, which is qualified in its
entirety by reference to the text of the Credit Agreement, which is an exhibit
to the Tender Offer Statement on Schedule 14D-1 filed by the Purchaser and
Parent with the Commission and is available for inspection and copying at the
principal office of the Commission or may be viewed and printed from the
Commission's web site at http://www.sec.gov in the manner set forth in Section
9.
The Credit Agreement provides that the borrowings thereunder are subject to
certain conditions precedent, including, among other things: (i) there not
having been a material adverse change in the business or financial condition of
Parent and its subsidiaries taken as a whole, since December 31, 1996; (ii) the
representations and warranties made by Parent in the Credit Agreement being true
and correct on and as of the date any loan thereunder is made as if made on such
date (unless expressly referring to an earlier date, in which case they shall be
true and correct as of such earlier date); and (iii) there not being a Default
or Event of Default (as each term is defined in the Credit Agreement) in
existence or which shall exist from making any loan under the Credit Agreement.
The Credit Agreement provides for customary representations and warranties,
including representations and warranties as to: (i) the due incorporation and
organization of Parent and its subsidiaries and their power to own assets and
carry on their businesses as they are currently being conducted; (ii) Parent's
power to enter into and perform its obligations under the Credit Agreement;
(iii) the enforceability of the Credit Agreement; (iv) the absence of conflicts
related to the execution of and performance by Parent of the Credit Agreement;
(v) the absence of defaults under the Credit Agreement or other material
agreements to which Parent is a party; (vi) any required regulatory approvals
and third party consents; (vii) the audited consolidated financial statements of
Parent; (viii) pending litigation; (ix) obligations under ERISA; (x) compliance
with certain laws of the United States, including those relating to tax and
environmental matters; (xi) the title of Parent and its subsidiaries to their
assets; (xii) whether Parent or any of its affiliates engage in any highly
regulated business activities; (xiii) insurance; (xiv) whether Parent or any of
its subsidiaries are subject to any burdensome contractual or organizational
activities; (xv) labor matters; and (xvi) intellectual property matters.
The Credit Agreement imposes various covenants on Parent, including
covenants as to: (i) reporting of financial information and other notices and
events; (ii) preserving the corporate existence of Parent and its subsidiaries;
(iii) maintaining the properties of Parent and its subsidiaries; (iv) insurance;
(v) payment of the obligations of Parent and its subsidiaries; (vi) compliance
with various laws including those relating to environmental matters; (vii)
inspection rights of the Banks; (viii) liens on assets of Parent or its
subsidiaries; (ix) mergers, consolidations, dispositions and investments; (x)
indebtedness, contingent and lease obligations; and (xi) financial covenants
relating to cash flow and leverage of Parent.
The Credit Agreement provides for various usual and customary events of
default.
The interest rate applicable to borrowings under the Credit Agreement
Facility is determined at Parent's option, at the rate in the offshore interbank
market for U.S. dollars for specified maturities, plus a
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margin tied to Parent's credit ratings, or a rate equal to the higher of BA's
prime rate, or the applicable federal funds rate plus .50% (the "Base Rate").
Borrowings may be made by written notice from Parent to the Agent not later
than 9:30 a.m. (Chicago time) two (2) business days prior to the date of
borrowing in the case of offshore rate borrowings, or before 10:30 a.m. (Chicago
time) on the business day of the borrowing in the case of Base Rate borrowings.
The loans under the Credit Agreement Facility are due on July 31, 2002, or
earlier upon exercise of the Banks' default remedies, or if Parent determines to
prepay the loans and terminate the commitment under the Credit Agreement
Facility.
THE COMMITMENT. The following is a summary of certain provisions of the
Commitment, which is qualified in its entirety by reference to the text of the
Commitment, which is an exhibit to the Tender Offer Statement on Schedule 14D-1
filed by the Purchaser and Parent with the Commission and is available for
inspection and copying at the principal office of the Commission or may be
viewed and printed from the Commission's web site at http://www.sec.gov in the
manner set forth in Section 9.
The Commitment is subject to usual and customary conditions for transactions
of this type including: (i) the completion of due diligence with respect to the
Company and Parent satisfactory to the Commitment Lenders; (ii) the negotiation,
execution and delivery of definitive credit documentation satisfactory to the
Commitment Lenders; (iii) the satisfactory review by the Commitment Lenders of
the Merger Agreement and their approval of any changes thereto; (iv)
satisfaction of the Commitment Lenders with Parent's proposed capital and
ownership structure after giving effect to the Merger; (v) receipt and approval
by the Commitment Lenders of the Company's financial statements; (vi) the
absence of any material adverse change in the business, assets, operation,
condition (financial or otherwise) or prospects since December 31, 1998 in the
case of Parent and its subsidiaries, or since January 31, 1999 in the case of
the Company; (vii) satisfactory opinions from Parent's counsel; (viii) receipt
of all governmental and third party consents necessary to consummate the Merger
and the Commitment Facility; (ix) no adverse litigation during the Offer; (x)
Parent and its subsidiaries (including the Company) shall be in compliance with
all existing financial obligations (after giving effect to the Merger); (xi) the
Commitment Lenders determine that Parent shall have sufficient cash and
financing to meet the ongoing financing needs of Parent and its subsidiaries
after giving effect to the Merger; (xii) there not having occurred and be
continuing a material adverse change in financial, banking or capital markets
since May 4, 1999 that in the reasonable judgment of the Commitment Lenders
would have a material adverse effect on the syndication of the Commitment
Facility; and (xiii) the satisfaction of the Commitment Lenders that prior to
and during the syndication of the Commitment Facility, Parent and its
subsidiaries shall not have offered, placed or arranged to be in the process of
offering, placing or arranging any competing issues of debt securities or bank
financing (other than amounts available under the Credit Agreement or the term
financing described below).
Interest rates under the facility will be at Borrower's option: (a) the
London interbank offered rate for specified maturities, plus a margin of 1.00%;
or (b) the Base Rate plus a margin of 0.75% through the 90th day after the
closing of the Commitment Facility, 0.875% through the 120th day after the
closing of the Commitment Facility and 1.00% thereafter.
The definitive agreement entered into pursuant to the Commitment Facility
will contain customary representations and warranties and events of default and
will incorporate by reference the covenants contained in the Credit Agreement.
The definitive agreement will also contain covenants relating to year 2000
compliance and a requirement that the Purchaser merge with the Company by
October 29, 1999.
Parent has agreed to pay BA customary commitment and underwriting fees as
well as certain of the fees and expenses of the Commitment Lenders and their
affiliates arising in connection with the Commitment, the financing thereunder
and any syndication thereof. In addition, Parent has agreed to indemnify each of
BA and NM Securities and certain related persons against certain damages and
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expenses arising out of investigations or litigation relating to the Commitment
Facility and the use of the proceeds of the Commitment Facility.
Parent may borrow funds under the Commitment Facility in not more than three
borrowings within a period after the Commitment Facility is closed to be
specified coincident with the consummation of the transaction.
The Commitment Facility terminates, and all amounts owing thereunder will be
due and payable not later than six months after closing of the Commitment
Facility. Parent is required to prepay the Commitment Facility with 100% of the
net proceeds of the contemplated three to ten year term financing described
below, any equity issuance (other than pursuant to employee stock option
exercises), or of certain to be specified asset dispositions. Optional
prepayments of the Commitment Facility will be permitted.
TERM FINANCING. Parent expects to raise additional funds through the
issuance of long-term debt securities in one or more transactions. Parent has
entered into an engagement letter with NM Securities relating to the issuance of
approximately $450 million of the Company's debt securities with a contemplated
term of three to ten years to be privately placed pursuant to Rule 144A or
pursuant to a registered public offering under the Securities Act of 1933, as
amended.
ALTERNATIVE ARRANGEMENTS. If the above debt securities term financing is
not obtained, Parent believes it will be able to obtain necessary financing from
other sources on terms satisfactory to it.
13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer, but subject to the terms of the Merger Agreement, the Purchaser
will not be required to accept for payment or, subject to any applicable rules
or regulations of the Commission, pay for any Shares, and may terminate the
Offer (i) if by the expiration of the Offer (or, if extended, by the expiration
of the Offer, as so extended) the Minimum Condition shall not have been
satisfied, (ii) if all applicable waiting periods under the HSR Act shall not
have expired or been terminated, or (iii) if on or after April 30, 1999, and at
any time prior to acceptance for payment for any such Shares, any of the
following events (together with the foregoing events, the "Offer Conditions")
shall occur; provided, that in each such case, the Purchaser shall not be
permitted to terminate the Offer (except pursuant to the condition specified in
paragraph (g) below) if prior to the then scheduled expiration of the Offer, the
Offer shall have been extended:
(a) there shall have occurred (i) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States
(whether or not mandatory), (ii) a formal declaration of war or national
or international calamity directly or indirectly involving the United
States (other than any declaration of war resulting from the current
conflict in Yugoslavia), (iii) any limitation (whether or not mandatory)
by any United States governmental authority on the extension of credit by
banks or other financial institutions that materially affects the
extension of credit by banks or other lending institutions, (iv) any
general suspension of, or limitation on prices for, trading in securities
on the Nasdaq National Market or the over the counter market, or (v) in
the case of any of the foregoing existing at the time of the commencement
of the Offer, a material acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform any of its material
obligations, covenants or agreements under the Merger Agreement in a
manner permitting Parent to terminate the Merger Agreement or any
representation or warranty of the Company set forth in the Merger
Agreement shall not be true and correct, provided that such
representations and warranties shall be deemed to be true and correct
unless the failure of such representations and warranties to be so true
and correct would have a Material Adverse Effect (as defined in the
Merger Agreement) or would prevent the Company from consummating the
transactions contemplated by the Merger Agreement in each case as if such
representations and warranties were made at the time of such termination;
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(c) there shall be instituted or pending any action, litigation, proceeding,
investigation or other application (hereinafter, an "Action") before any
court or other governmental entity: (i) challenging the acquisition by
the Purchaser of Shares, or seeking to restrain or prohibit the
consummation of the transactions contemplated by the Merger Agreement;
(ii) seeking to prohibit, or impose any limitations on, Parent's or the
Purchaser's ownership or operation of all or any portion of their or the
Company's business or assets (including the business or assets of their
respective affiliates and subsidiaries); (iii) seeking to make the
acceptance for payment, purchase of, or payment for, some or all of the
Shares illegal; (iv) seeking to impose limitations on the ability of
Parent or the Purchaser effectively to acquire or hold or to exercise
full rights of ownership of the Shares including, without limitation, the
right to vote the Shares purchased by them on an equal basis with all
other Shares on all matters properly presented to the stockholders; or
(v) that, in any event, would have a Material Adverse Effect on the
Company;
(d) any statute, rule, regulation, order or injunction shall be enacted,
promulgated, entered, enforced or become applicable to the Offer or the
Merger, or any other action shall have been taken by any court or other
governmental entity other than the application to the Offer or the Merger
of the waiting period under the HSR Act, that would result in any of the
effects of, or have any of the consequences sought to be obtained or
achieved in any Action referred to in clauses (i) through (v) of
paragraph (c) above;
(e) any person (as such term is defined in Section 13(d)(3) of the Exchange
Act (other than Parent or any of its affiliates)) commences a tender or
exchange offer for a majority or more of the outstanding Shares at a
price per Share greater than the Merger Consideration, or any such person
shall have become the beneficial owner of more than 20% of the
outstanding Shares (other than for bona fide arbitrage purposes), or any
such person shall have entered into a definitive agreement to acquire all
or substantially all of the Shares or to effect a merger, consolidation
or other business combination with or involving the Company;
(f) there shall have occurred an event which has caused a Material Adverse
Effect;
(g) the Board of Directors of the Company shall have amended, modified or
withdrawn its recommendation of the Offer or the Merger in a manner
adverse to Parent, or shall have endorsed, approved or recommended any
other Acquisition Proposal, or shall have resolved to do any of the
foregoing; or
(h) the Merger Agreement shall have been terminated by the Company or Parent
in accordance with its terms;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such conditions, makes it reasonably
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions, other than the Minimum Condition, are for the sole
benefit of Parent and may be asserted by Parent or the Purchaser regardless of
the circumstances giving rise to such condition or may be waived by Parent,
other than the Minimum Condition, by express and specific action to that effect,
in whole or in part at any time and from time to time in its sole discretion.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
14. DIVIDENDS AND DISTRIBUTIONS. Under the Merger Agreement, the Company
has agreed not to (i) declare, set aside or pay any dividend payable in cash,
stock or property in respect of any capital stock other than dividends from its
direct or indirect wholly owned subsidiaries to it or a wholly owned subsidiary;
(ii) split, combine or reclassify its outstanding shares of capital stock; (iii)
issue, sell, pledge,
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dispose of or encumber any capital stock owned by it in any of its subsidiaries;
or (iv) repurchase, redeem or otherwise acquire any shares of its capital stock
or any securities convertible into or exchangeable or exercisable for any shares
of its capital stock, except, in connection with the Option Plans, or permit any
of its subsidiaries to purchase or otherwise acquire, any shares of its capital
stock or any securities convertible into or exchangeable or exercisable for any
shares of its capital stock. In the event that the Company changes the number of
Shares or securities convertible or exchangeable into or exercisable for Shares
issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction, the Merger Consideration will be equitably
adjusted.
If, on or after May 7, 1999, the Company should declare or pay any cash or
stock dividend or other distribution or issue any rights with respect to the
Shares, payable or distributable to stockholders of record on a date prior to
the transfer to the name of the Purchaser or its nominee or transferee on the
Company's stock transfer records of the Shares accepted for payment pursuant to
the Offer, then, without prejudice to the Purchaser's rights under Sections 1
and 13 and without limiting the rights of the Purchaser described in the
preceding paragraph of this Section 14, any such dividend, distribution or right
to be received by the tendering stockholders will be received and held by the
tendering stockholder for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation and transfer. Pending such remittance, the Purchaser will be
entitled to all rights and privileges as owner of any such dividend,
distribution or right and 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.
15. CERTAIN LEGAL MATTERS. Except as set forth in this Section 15, based
on a review of publicly available filings by the Company with the Commission and
other information concerning the Company provided to Parent, the Purchaser is
not aware of any license or other regulatory permit which appears to be material
to the business of the Company that might be adversely affected by the
Purchaser's acquisition of Shares pursuant to the Offer (and the indirect
acquisition of the stock of the Company's subsidiaries), or of any approval or
other action by any domestic or foreign governmental or administrative agency
that would be required prior to the acquisition of Shares by the Purchaser
pursuant to the Offer. Should any such approval or other action be required, it
is the Purchaser's present intention that such additional approval or action
would be sought. While the Purchaser does not presently intend to delay the
purchase of Shares tendered pursuant to the Offer pending receipt of any such
additional approval or the taking of any such action, there can be no assurance
that any such additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Company's or Parent's business, or that certain parts of the Company's or
Parent's business might not be required to be disposed of or held separate or
other substantial conditions complied with in order to obtain such approval or
action or in the event that such approvals were not obtained or such actions
were not taken. The Purchaser's obligation to purchase and pay for Shares is
subject to certain conditions relating to the legal matters discussed in this
Section 15. See Section 13.
28
<PAGE>
ANTITRUST. Under the HSR Act, 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 Federal
Trade Commission ("FTC") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer and the Merger
Agreement is subject to such requirements. On or about May 7, 1999, Parent
expects to file with the Antitrust Division and the FTC a Notification and
Report Form with respect to the Offer and the Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated prior to the expiration of a
15-calendar day waiting period following the filing by Parent, unless earlier
terminated. Accordingly, Parent expects the waiting period applicable to the
Offer will expire at 11:59 p.m., New York City time, on or about May 22, 1999,
unless Parent receives a request from either the FTC or the Antitrust Division
for additional information or documentary material, or the Antitrust Division
and the FTC terminate the waiting period prior thereto. If, within such 15-day
waiting period either the Antitrust Division or the FTC requests additional
information or material from Parent concerning the Offer, the waiting period
will be extended and would expire at 11:59 p.m., New York City time, on the 10th
calendar day after the date of substantial compliance by Parent with such
request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of the Purchaser. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. Although the
Company is required to file certain information and documentary material with
the Antitrust Division and the FTC in connection with the Offer and the Merger,
neither the Company's failure to make such filings nor a request made to the
Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the Offer period with respect to the purchase
of Shares pursuant to the Offer and the Merger Agreement. The Purchaser will not
accept for payment Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 13.
If the acquisition of Shares is delayed pursuant to a request by the FTC or
the Antitrust Division for additional information or documentary material
pursuant to the HSR Act, the Offer may, at the discretion of the Purchaser, be
extended (for a period not to exceed 10 business days for any particular
extension) and, in any event, the purchase of and payment for Shares will be
deferred until 10 days after the request is substantially complied with by
Parent, unless the 10-day extended period expires on or before the date when the
initial waiting period would otherwise have expired or unless the waiting period
is sooner terminated by the FTC and the Antitrust Division. See Section 2.
Unless the Offer is extended, any extension of the waiting period will not give
rise to any additional withdrawal rights. See Section 3.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any time before or after the
Purchaser's purchase of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares pursuant
to the Offer and the Merger or seeking divestiture of Shares purchased
thereunder or the divestiture of assets of the Company, the Purchaser, Parent or
any of their respective subsidiaries or affiliates. Private parties as well as
state attorneys general may also bring legal actions under the antitrust laws
under certain circumstances. If any such action by the FTC, the Antitrust
Division or any other person should be instituted, the Purchaser could decline
to accept for payment any Shares tendered. See Section 11 and 13 for certain
conditions to the Offer. Based upon an examination of information relating to
the businesses in which Parent and the Company are engaged,
29
<PAGE>
Parent believes that the consummation of the Offer would not violate any
antitrust laws. However, there can be no assurance that a challenge to the Offer
on antitrust grounds will not be made or, if a challenge is made, what the
result will be.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Florida. The FBCA contains provisions that are intended to defer
hostile takeovers of Florida-based corporations and are informally known as the
"Affiliated Transactions Statute" and the "Control-Share Acquisition Statute."
In general, the Affiliated Transactions Statute requires that any "affiliated
transaction" between a corporation with more than 300 shareholders and any
person who is the beneficial owner of more than 10% of the corporation's
outstanding voting shares (an "interested shareholder"), or any affiliate or
associate of an interested person, must be approved by the holders of two-thirds
of the voting shares of the corporation other than the shares beneficially owned
by the interested shareholder. Absent approval by disinterested shareholders or
an exception, the statute requires that a "fair price" be paid to shareholders
in the transaction. An "affiliated transaction" includes a merger, a sale,
exchange or other transfer of assets or shares of the corporation, and the
benefit of loans, advances, pledges, guarantees, or other financial assistance
or tax credits or advances provided by or through the corporation. The
Affiliated Transaction Statute does not apply to an affiliated transaction if
the transaction is approved in advance by a majority of the corporation's
directors who are not affiliated or associated with the interested shareholder.
Under the Control-Share Acquisition Statute, "control shares" of certain
corporations that are acquired in a "control-share acquisition" will retain
their voting rights only to the extent granted by a resolution that is approved
by a majority of each class of voting securities of the corporation. A "control-
share acquisition" is a direct or indirect acquisition by a person of the
ownership or power to direct the exercise of the voting rights of "control
shares," which is defined as shares that entitle a person to exercise more than
specified proportions of the voting power of a corporation that is subject to
the Control-Share Acquisition Statute (commencing with the acquisition of 20% or
more of the voting shares of such corporation). An acquisition of shares does
not constitute a "control-share acquisition" if the acquisition has been
approved by the board of directors of the issuing corporation or if the
acquisition occurs pursuant to a merger effected in compliance with the FBCA and
the issuing corporation is a party to the agreement of merger or certain other
statutory conditions have been met.
At a meeting held on April 30, 1999, the Company's Board of Directors, none
of whom are affiliated or associated with the Purchaser or Parent, unanimously
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and determined that each of the Offer and
Merger are fair to and in the best interests of the holders of the Company's
Shares. Accordingly, the Affiliated Transaction Statute and Control-Share
Acquisition Statute will not apply to Parent and the Purchaser in connection
with the Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger.
A number of states have adopted takeover laws which purport, to varying
degrees, to be applicable to attempts to acquire securities of corporations
which are incorporated in such states or which have substantial assets, security
holders, principal executive offices or principal places of business therein. To
the extent that certain provisions of certain of these state takeover statutes
purport to apply to the Offer or the Merger, the Purchaser believes that such
laws conflict with federal law and constitute an unconstitutional burden on
interstate commerce. In 1982, the Supreme Court of the United States, in EDGAR
V. MITE CORP., held that the Illinois Business Takeovers Statute, which as a
matter of state securities law made takeovers of corporations meeting certain
requirements more difficult, imposed a substantial burden on interstate commerce
and therefore was unconstitutional. In 1987, however, in CTS CORP. V. DYNAMICS
CORP. OF
30
<PAGE>
AMERICA, the Supreme Court of the United States held that the State of Indiana
could, as a matter of corporate law and, in particular, those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of stockholders in the state and were incorporated therein. Subsequently, a
number of federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
Except as described herein, the Purchaser does not know whether the Offer is
subject to any state takeover statutes and neither Parent nor the Purchaser has
attempted to comply with any state takeover statutes in connection with the
Offer other than as indicated above. Should any person seek to apply any such
statute to the Offer, Parent and the Purchaser reserve the right to challenge
the validity or applicability of any state law allegedly applicable to the Offer
and nothing in this Offer to Purchase nor any action taken in connection
herewith is intended as a waiver of that right. In the event that any additional
state takeover statute is found applicable to the Offer and an appropriate court
does not determine that such laws are inapplicable or invalid as applied to the
Offer, the Purchaser may be required to file certain information with, or
receive approvals from, the relevant state authorities, or the Purchaser might
be unable to purchase and accept for payment or pay for Shares tendered pursuant
to the Offer or be delayed in continuing or consummating the Offer. In the
circumstances described above, the Purchaser may not be obligated to accept for
purchase and payment or pay for any Shares tendered.
DISSENTERS' RIGHTS. Stockholders of the Company do not have dissenters'
rights as a result of the Offer. In addition, stockholders of the Company will
not have dissenters' rights in connection with the Merger if, on the record date
fixed to determine the stockholders entitled to vote on or consent to the
Merger, the Shares are listed on a national securities exchange or designated as
a national market system security on an interdealer quotation system by the NASD
or are held of record by 2,000 or more stockholders. If, however, the Shares are
not so listed or designated and are not held of record by at least 2,000
stockholders, then holders of Shares who do not vote in favor of the Merger will
have certain rights pursuant to the provisions of Sections 607.1301, 607.1302
and 607.1320 of the FBCA to dissent and demand determination and payment of the
fair value of their Shares. If the statutory procedures are complied with, such
rights could lead to a judicial determination of the fair value required to be
paid to such dissenting holders for their Shares. The fair value of Shares
determined for the purpose of dissenters' rights could be more or less than the
Merger Consideration. Section 607.1301(2) of the FBCA defines "fair value" to
exclude any appreciation or depreciation in anticipation of the transaction
giving rise to dissenters' rights, unless such exclusion would be inequitable.
The Shares of any stockholder who asserts dissenters' rights under the FBCA,
but fails to perfect, or effectively withdraws or loses, his or her dissenters'
rights, as provided in the FBCA, will be converted into the right to receive the
Merger Consideration in accordance with the Merger Agreement. A stockholder may
withdraw his or her notice of election to dissent by delivery to the Company of
a written withdrawal of his or her notice of election to dissent.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS
DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. FAILURE TO FOLLOW THE STEPS
REQUIRED BY THE FBCA FOR PERFECTING DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF
THOSE RIGHTS.
16. EXTENSION OF TENDER PERIOD, TERMINATION AND AMENDMENTS. The Merger
Agreement provides that (i) if any of the Offer Conditions exists at the time of
the scheduled Expiration Date of the Offer, the Purchaser may extend and
reextend the Offer on one or more occasions for periods of time (not to exceed
10 business days for any particular extension) so that the expiration date of
the Offer (as so extended) is as
31
<PAGE>
soon as reasonably practicable or advisable after the date on which the
particular Offer Condition no longer exists, and (ii) the Purchaser may extend
or reextend the Offer on one or more occasions for periods of time (not to
exceed 10 business days for any particular extension) for an aggregate period
not to exceed 20 business days if on such expiration date there shall not have
been validly tendered and not withdrawn at least the number of Shares necessary
to permit the Merger to be effected without a meeting of the Company's
stockholders, and, provided, further, that all extensions of the Offer made by
the Purchaser (other than at the request of the Company) shall not extend the
Offer beyond September 5, 1999. Parent and the Purchaser have agreed that until
September 5, 1999 the Purchaser shall from time to time extend the Offer at such
times as the Company may request for five business days for each extension, but
shall in no event extend the Offer beyond September 5, 1999. The Purchaser may
not, without the prior written consent of the Company, decrease the price per
Share offered in the Offer, change the form of consideration offered or payable
in the Offer, decrease the number of Shares sought in the Offer, change the
conditions to the Offer, impose additional conditions to the Offer, amend any
term of the Offer in any manner adverse to the holders of Shares or waive the
Minimum Condition. If the Purchaser shall decide, in its sole discretion, to
increase the consideration offered in the Offer to holders of Shares or make any
other material change in the terms of the Offer to the extent permitted by the
Merger Agreement or the information concerning the Offer to the extent permitted
by the Merger Agreement, the Purchaser will disseminate additional tender offer
materials and extend the Offer to the extent required by Rules 14d-4(c) and
14d-6(d) 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, including the
relative materiality of the terms or information. With respect to a change in
price or a change in percentage of securities sought, a minimum 10-business day
period from the date of announcement thereof is required under the Exchange Act.
If, prior to the Expiration Date, the Purchaser should decide to increase the
price per Share being offered in the Offer, such increase will be applicable to
all stockholders whose Shares are accepted for payment pursuant to the Offer. As
used in this Offer to Purchase, "business day" has the meaning set forth in Rule
14d-1 under the Exchange Act.
The Purchaser also expressly reserves the right (i) to the extent permitted
by the Merger Agreement to delay payment for any Shares, regardless of whether
such Shares were theretofore accepted for payment, or to terminate the Offer and
not accept for payment or pay for any Shares not theretofore accepted or paid
for, upon the occurrence of any of the conditions specified in Section 13 by
giving oral notice thereof to the Depositary; and (ii) subject to the
restrictions set forth in the Merger Agreement, at any time or from time to
time, to amend the Offer in any respect. See Section 13. Any extension, delay,
termination, waiver or amendment of the Offer will be followed, as soon as
practicable, by public announcement thereof; and such announcement in the case
of an extension will be made in accordance with Rule 14e-1(d) no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date. Without limiting the manner in which the Purchaser
may choose to make any public announcement, the Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to either the Dow Jones or Reuters
News Services and making any appropriate filings with the Commission.
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 stockholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(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 the Offer.
32
<PAGE>
17. CERTAIN FEES AND EXPENSES. Bear Stearns is acting as Dealer Manager
for the Offer and as financial advisor to Parent in connection with the
transactions described in this Offer to Purchase. Pursuant to an engagement
letter dated April 29, 1999 and a Dealer Manager Agreement dated as of May 7,
1999, Parent has agreed to pay Bear Stearns an aggregate amount of $5.0 million
upon consummation of the Offer and the satisfaction of the Minimum Condition.
Bear Stearns became entitled to a cash fee of $1.5 million upon the rendering to
the Board of Directors of Parent of its opinion as to the fairness from a
financial point of view to Parent of the Offer price which fee will be credited
against the $5.0 million fee referred to in the prior sentence. Parent has
further agreed to reimburse Bear Stearns for its reasonable out-of-pocket
expenses, including fees and disbursements of Bear Stearns' legal counsel,
whether or not an acquisition of the Company is consummated, and has agreed to
indemnify Bear Stearns against certain liabilities and expenses in connection
with its engagement, including certain liabilities under the federal securities
laws.
The Purchaser has retained Georgeson & Company Inc. to act as Information
Agent and The Bank of New York to act as Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telex, telegraph and personal interview and may request brokers, dealers and
other nominee stockholders to forward material relating to the Offer to
beneficial owners. The Information Agent and the Depositary will each receive
reasonable and customary compensation for services relating to the Offer in
addition to reimbursement of reasonable out-of-pocket expenses. The Purchaser
has agreed to indemnify each of the Information Agent and the Depositary against
certain liabilities and expenses in connection with the Offer including certain
liabilities under the federal securities laws.
Neither Parent nor the Purchaser will pay any fees or commissions to any
broker, dealer or other person (other than the above-described fees to Bear
Stearns) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by the Purchaser for reasonable and necessary costs and expenses incurred by
them in forwarding materials to their customers.
18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. 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 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, holders of Shares residing in any
jurisdiction in which the making of the Offer or acceptance thereof would not be
in compliance with the securities, blue sky or other laws of such jurisdiction.
In any jurisdiction in which the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Purchaser by the Dealer Manager or by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Tender Offer Statement and any amendments thereto, including
exhibits, may be obtained in the manner described in Section 8 with respect to
information concerning the Company, except that such information will not be
available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
SPRING ACQUISITION CORP.
33
<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The names, ages, present
principal occupation or employment and five-year employment history of each
director and executive officer of Parent are set forth below. Unless otherwise
indicated, all persons have held their current occupation or employment for at
least the last five years. The business address of each such person is 8100 34th
Avenue South, Minneapolis, Minnesota 55425. All persons listed below are
citizens of the United States of America.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED AS AN
EXECUTIVE OFFICER
OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR
NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
EXECUTIVE OFFICERS:
Lawrence Perlman (61).......... 1980 Chairman and Chief Executive Officer of Parent.
Ronald L. Turner (52).......... 1993 President and Chief Operating Officer of Parent. Mr. Turner
has been President and Chief Operating Officer of Parent
since April 1998. He was Executive Vice President of
Operations of Parent from March 1997 to April 1998; an
Executive Vice President of Parent and President and Chief
Executive Officer of Parent's Computing Devices International
division from January 1996 to March 1997; and Vice President
of Parent and President of Computing Devices International
from January 1993 to January 1996.
John R. Eickhoff (59).......... 1989 Executive Vice President and Chief Financial Officer of
Parent. Mr. Eickhoff has been Executive Vice President and
Chief Financial Officer of Parent since May 1995, and was
Vice President and Chief Financial Officer of Parent from
June 1993 to May 1995. Mr. Eickhoff was Vice President and
Corporate Controller of Parent from July 1989 to June 1993.
Loren D. Gross (53)............ 1993 Vice President and Corporate Controller of Parent
Tony G. Holcombe (43).......... 1997 Vice President, and President of Comdata, a subsidiary of
Parent. Mr. Holcombe has been Vice President of Parent and
President of Comdata since May 1997. Mr. Holcombe was
President and Chief Executive Officer of National Processing,
Inc., which provides transaction processing services and
customized processing solutions, from October 1994 to March
1997, and was Executive Vice President, Corporate Services
for National Processing from 1991 through 1994.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED AS AN
EXECUTIVE OFFICER
OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR
NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
Shirley J. Hughes (53)......... 1998 Senior Vice President of Human Resources of Parent. Ms.
Hughes has been Senior Vice President of Human Resources of
Parent since June 1998. Ms. Hughes was Vice President of
Human Resources of Mercy Health Services from October 1994 to
June 1998. From 1992 to 1994, she served as Vice President of
Human Resources and Administrative Services of Parent, and
from 1991 to 1992, she served as Vice President of Human
Resources for the Information Services Group of Parent.
Carl O. Keil (57).............. 1997 Vice President, and President of Ceridian Employer Services,
a division of Parent. Mr. Keil has been Vice President of
Parent and President of Ceridian Employer Services since
April 1997. Mr. Keil was President and Chief Executive
Officer of EduServ Technologies, Inc., which originates,
services and securitizes student loans, from March 1992 to
January 1997
Stephen B. Morris (55)......... 1992 Executive Vice President, and President of Arbitron, a
division of Parent. Mr. Morris has been Executive Vice
President of Parent and President of Arbitron since January
1996. Mr. Morris was Vice President of Parent and President
of Arbitron from December 1992 to January 1996.
Gary M. Nelson (47)............ 1997 Vice President, General Counsel and Secretary of Parent. Mr.
Nelson has been Vice President and General Counsel of Parent
since July 1997 and Secretary of Parent since October 1998.
From 1983 to July 1997, Mr. Nelson was a partner in the
Oppenheimer Wolff & Donnelly LLP law firm.
Linda Hall Whitman (50)........ 1998 Vice President, and President of Ceridian Performance
Partners, a division of Parent. Ms. Whitman has been Vice
President of Parent since October 1998 and President of
Ceridian Performance Partners since April 1996. From October
1995 to March 1996, she was Vice President of Business
Integration of Parent. Prior to joining Parent, Ms. Whitman
spent 15 years at Honeywell, Inc., serving most recently as
Vice President of the Home and Building Control consumer
business group from 1993 to September 1995.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED AS AN
EXECUTIVE OFFICER
OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR
NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
DIRECTORS:
Bruce R. Bond (52)............. 1998 President and Chief Executive Officer of PictureTel
Corporation, a company that develops, manufactures and
markets video and audio conferencing solutions, since
February 1998. Prior to joining PictureTel, Mr. Bond served
as Chief Executive Officer of ANS Communications, the
networking subsidiary of America Online, Inc., from July 1996
to February 1998. Prior to ANS, Mr. Bond spent seven years
with British Telecom PLC, where he was Managing Director of
British Telecom's national business communications division.
Nicholas D. Chabraja (56)...... 1998 Chairman and Chief Executive Officer of General Dynamics
Corporation. Mr. Chabraja was elected Chairman and Chief
Executive Officer in June 1997. Mr. Chabraja served as Vice
Chairman of General Dynamics from December 1996 to June 1997,
Executive Vice President from 1994 to December 1996, and
Senior Vice President and General Counsel from 1993 to 1994.
Ruth M. Davis (70)............. 1984 President and Chief Executive Officer of the Pymatuning
Group, Inc.
Robert H. Ewald (51)........... 1998 President and Chief Executive Officer of E-Stamp Corporation.
Mr. Ewald was elected President and Chief Executive Officer
in March 1999. From October 1997 to July 1998, Mr. Ewald
served as Executive Vice President and Chief Operating
Officer of Silicon Graphics, Inc., a provider of high
performance workstations, servers and super computers. He was
Executive Vice President, Computer Systems for Silicon
Graphics from April 1997 to October 1997. Prior to the merger
of Cray Research, Inc. with Silicon Graphics, Mr. Ewald
served as President and Chief Operating Officer of Cray from
December 1994 to March 1997; Chief Operating Officer, Super
Computer Operations from January 1994 to December 1994; and
as Executive Vice President and General Manager of Super
Computer Operations from January 1993 to January 1994.
Richard G. Lareau (70)......... 1971 Partner in the law firm of Oppenheimer Wolff & Donnelly LLP.
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED AS AN
EXECUTIVE OFFICER
OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR
NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
Ronald T. LeMay (53)........... 1997 President and Chief Operating Officer of Sprint Corporation,
a global communications company. Mr. LeMay returned to this
position in October 1997 after having served as Chairman,
President and Chief Executive Officer of Waste Management,
Inc., a provider of waste management services, from July 1997
to October 1997. Mr. LeMay was President and Chief Operating
Officer of Sprint from February 1996 to July 1997; Vice
Chairman of Sprint from April 1995 to April 1996; President
of Sprint's Long Distance Division from 1989 to March 1995.
George R. Lewis (58)........... 1994 President and Chief Executive Officer of Philip Morris
Capital Corporation, a subsidiary of Philip Morris Companies,
Inc., a consumer packaged goods company. Prior to assuming
his current position in May 1997, Mr. Lewis served as Vice
President and Treasurer of Philip Morris Companies Inc. since
1984.
Charles Marshall (70).......... 1989 Former Vice Chairman of American Telephone and Telegraph
Company, a telecommunications company. Mr. Marshall served as
Vice Chairman from 1985 until his retirement in April 1989.
Ronald A. Matricaria (56)...... 1998 Chairman of St. Jude Medical, Inc., a provider of medical
devices for the cardiovascular market. Mr. Matricaria has
served as Chairman since January 1995 and served as Chief
Executive Officer from April 1993 to May 5, 1999. Prior to
joining St. Jude, Mr. Matricaria was employed by Eli Lilly
and Company, Inc., a pharmaceutical company, for 23 years,
with his last position having been Executive Vice President
of Lilly's Pharmaceutical Division and President of its North
American operations.
Lawrence Perlman (61).......... 1985 Chairman and Chief Executive Officer of Parent.
Ronald L. Turner (52).......... 1998 President and Chief Operating Officer of Parent. Mr. Turner
has been President and Chief Operating Officer of Parent
since April 1998. He was Executive Vice President of
Operations of Parent from March 1997 to April 1998; an
Executive Vice President of Parent and President and Chief
Executive Officer of Parent's Computing Devices International
division from January 1996 to March 1997; and Vice President
of Parent and President of Computing Devices International
from January 1993 to January 1996.
</TABLE>
A-4
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED AS AN
EXECUTIVE OFFICER
OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR
NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
Carole J. Uhrich (55).......... 1994 Former Executive Vice President and Assistant Chief Operating
Officer of Polaroid Corporation. Ms. Uhrich was employed by
Polaroid from 1966 to 1999, and was Executive Vice President
and Assistant Chief Operating Officer from September 1998 to
April 1999. She was Executive Vice President of Commercial
Imaging from March 1997 to September 1998; Executive Vice
President, Global Products Supply from February 1996 to March
1997; Vice President, Manufacturing and Product Development
from 1992 to February 1996, and prior to that time, served in
a series of manufacturing, corporate quality and market
research positions at Polaroid.
Richard W. Vieser (71)......... 1988 Former Chairman, President and Chief Executive Officer of
Lear Siegler, Inc. Mr. Vieser served as Chairman, President
and Chief Executive Officer from March 1987 until his
retirement in 1989.
Paul S. Walsh (43)............. 1991 Chief Executive Officer of The Pillsbury Company.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The names, ages,
present principal occupation or employment and five-year employment history of
each director and executive officer of the Purchaser are set forth below. Unless
otherwise indicated, all persons have held their current occupation or
employment for at least the last five years. The business address of each such
person is 8100 34th Avenue South, Minneapolis, Minnesota 55425. All persons
listed below are citizens of the United States of America.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
OR APPOINTED AS
AN
EXECUTIVE OFFICER PRESENT PRINCIPAL OCCUPATION OR
NAME AND AGE OR DIRECTOR EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
Gary M. Nelson (47)............ 1999 President, Chief Executive Officer and a Director of the
Purchaser and Vice President, General Counsel and Secretary
of Parent. Mr. Nelson has been President, Secretary and a
Director of the Purchaser since April 1999 and Vice President
and General Counsel of Parent since July 1997 and Secretary
of Parent since October 1998. From 1983 to July 1997, Mr.
Nelson was a partner in the Oppenheimer Wolff & Donnelly LLP
law firm.
</TABLE>
A-5
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
OR APPOINTED AS
AN
EXECUTIVE OFFICER PRESENT PRINCIPAL OCCUPATION OR
NAME AND AGE OR DIRECTOR EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------- ----------------- -------------------------------------------------------------
<S> <C> <C>
A. Reid Shaw (42).............. 1999 Vice President and Secretary of the Purchaser and Vice
President, Associate General Counsel and Assistant Secretary
of Parent. Mr. Shaw has been Vice President and Assistant
Secretary of the Purchaser since April 1999 and Vice
President of Parent since 1994, Assistant Secretary since
1993 and Associate General Counsel since 1991.
John H. Grierson (52).......... 1999 Vice President and Treasurer of the Purchaser and Vice
President and Treasurer of Parent. Mr. Grierson has been Vice
President and Treasurer of the Purchaser since April 1999 and
Vice President and Treasurer of Parent since 1994.
James R. Burkle (55)........... 1999 Vice President of the Purchaser and Vice President of Parent.
Mr. Burkle has been Vice President of the Purchaser since
April 1999 and Vice President of Parent since 1991.
</TABLE>
A-6
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
------------------
<TABLE>
<S> <C> <C>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS
BY MAIL: ONLY) BY HAND OR OVERNIGHT COURIER:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 CONFIRM FACSIMILE BY 101 Barclay Street
Church Street Station TELEPHONE: Receive and Deliver Window
New York, NY 10286-1248 (800) 507-9357 New York, NY 10286
</TABLE>
------------------------
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, commercial bank or trust company or
nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO OF GEORGESON & COMPANY INC.]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
or
ALL OTHERS CALL TOLL FREE:
(800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO OF BEAR, STEARNS & CO. INC.]
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 225-1793
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 7, 1999
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
- -----------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (FOR ELIGIBLE INSTITUTIONS Tender & Exchange Department
P.O. Box 11248 ONLY) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, NY 10286-1248 CONFIRM FACSIMILE BY New York, NY 10286
TELEPHONE:
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of ABR
Information Services, Inc. (the "Company") if certificates for Shares (as
defined below) are to be forwarded herewith or, unless an Agent's Message (as
defined in Section 4 of the Offer to Purchase) is utilized, if delivery of
Shares is to be made by book-entry transfer to the accounts maintained by The
Bank of New York, as Depositary (the "Depositary"), at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures set
forth in Section 4 of the Offer to Purchase. Holders of Shares whose
certificates for Shares are not immediately available, or who are unable to
deliver their Shares or confirmation of the book-entry tender of their Shares
into the Depositary's account at the Book-Entry Transfer Facility ("Book Entry
Confirmation") and all other documents required by this Letter of Transmittal to
the Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase), must tender their Shares according to the guaranteed delivery
procedure set forth in Section 4 of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN 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. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Owner(s)______________________________________________
Window Ticket Number (if any)_______________________________________________
Date of Execution of Notice of Guaranteed Delivery__________________________
Name of Institution which Guaranteed Delivery_______________________________
Account Number______________________________________________________________
Transaction Code Number_____________________________________________________
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
DESCRIPTION OF TENDERED SHARES
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON STOCK CERTIFICATE(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
REPRESENTED NUMBER
CERTIFICATE BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES:
- -------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered
to the Depositary are being Tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The name(s) and address(es) of the registered holder(s) should be printed,
if not already printed above, exactly as they appear on the certificate(s)
representing the Shares tendered hereby. The certificates and number of Shares
that the undersigned wishes to tender should be indicated in the appropriate
box.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Spring Acquisition Corp., a Florida
corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian
Corporation, a Delaware corporation ("Parent"), the above-described shares of
voting common stock, par value $0.01 per share (the "Shares"), of ABR
Information Services, Inc., a Florida corporation (the "Company"), pursuant to
the Purchaser's offer to purchase all outstanding Shares at a price of $25.50
per Share, net to the seller in cash, without any interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 7, 1999
(the "Offer to Purchase") and in this Letter of Transmittal (which together
constitute the "Offer"), receipt of which are hereby acknowledged. The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or in part from time to time, to Parent or one or more of its
other direct or indirect wholly owned subsidiaries, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer, the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby (and any and all other Shares and other
securities and property issued or issuable or distributed or distributable in
respect thereof on or after May 7, 1999 and prior to the transfer to the name of
the Purchaser or nominee or transferee of the Purchaser on the Company's stock
transfer records of the Shares tendered herewith (collectively, a
"Distribution")), 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 any Distribution) with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest)
to: (i) deliver certificates for such Shares (and any Distribution), or transfer
ownership of such Shares (and any Distribution) 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
<PAGE>
appropriate, as provided in the Offer to Purchase); (ii) present such Shares
(and any Distribution) for transfer on the books of the Company; and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and any Distribution), all in accordance with the terms and
subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints the Purchaser, its officers and
its designees, and each of them and any other designees of the Purchaser, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to exercise all voting and other rights of the undersigned in such
manner as each such attorney-in-fact and proxy or the substitute for any such
attorney-in-fact and proxy shall in the sole discretion of each such
attorney-in-fact and proxy or his or her substitutes deem proper, and otherwise
act (including pursuant to written consent) with respect to all of the Shares
tendered hereby (and any Distribution) which have been accepted for payment by
the Purchaser prior to the time of such vote or other action and which the
undersigned is entitled to vote at any meeting of stockholders (whether annual
or special and whether or not an adjourned meeting), or consent in lieu of any
such meeting, or otherwise. This Proxy will be irrevocable and coupled with an
interest and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney and/or proxy given by the undersigned at any
time with respect to such Shares (and any distribution) and no subsequent power
of attorney or proxy may be given (and if given will not be effective) with
respect thereto by the undersigned. The undersigned understands that the
Purchaser expressly reserves the right to require that, in order for Shares to
be validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares (and any Distribution), the Purchaser is able to exercise full
voting rights and other rights of a record and beneficial holder thereof,
including rights in respect of acting by written consent with respect to such
Shares (and any Distribution) or voting at any meeting of stockholders.
The undersigned hereby represents and warrants that: (i) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distribution) and (ii) when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto (and any Distribution), free and clear of all liens,
restrictions, charges, claims and encumbrances, except as created hereby, and
the same will not be subject to any adverse claim. The undersigned, upon
request, will execute and deliver any additional documents reasonably deemed by
the Depositary, the Purchaser or Parent to be reasonably necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby (and
any Distribution). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser the whole of any
Distribution issued to the undersigned on or after May 7, 1999, in respect of
the Shares tendered hereby, accompanied by appropriate documentation of
transfer. Pending such remittance, the Purchaser shall be entitled to all rights
and privileges as owner of any such Distribution and may, subject to the terms
of the Merger Agreement, 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 herein conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 4 of the Offer to Purchase and in the
instructions hereto will constitute the tendering stockholder's acceptance of
the terms and conditions of the Offer, as well as the tendering stockholder's
representation and warranty that such stockholder has the full power and
authority to tender and assign the Shares tendered (and any Distribution), as
specified in this Letter of Transmittal. The Purchaser's acceptance for payment
of Shares pursuant to the Offer will constitute a binding agreement between the
tendering stockholder 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 and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature. In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
such certificates to, the person or persons so indicated. Unless otherwise
indicated in the box entitled "Special Payment Instructions", please credit any
Shares tendered hereby and delivered by book-entry transfer which are not
purchased by crediting the account at the Book-Entry Transfer Facility. 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 thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
<PAGE>
/ / Check here if any of the certificates representing Shares that you own have
been lost, destroyed or stolen and see Instruction 11.
- --------------------------------------------------------------------------------
- -----------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to
be issued in the name of someone other than the undersigned and/or Shares
tendered hereby and delivered by book-entry transfer that are not accepted
for payment are to be returned by credit to an account maintained at a
Book-Entry Transfer Facility other than the account indicated above.
Issue / / check / / certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit Shares delivered by book-entry transfer and not purchased to the
Book-Entry Transfer Facility Account
____________________________________________________________________________
(ACCOUNT NUMBER)
____________________________________________________________________________
____________________________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to
be sent to someone other than the undersigned, or to the undersigned at an
address other than that shown above.
Mail / / check / / certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
__________________________________________________________________________
__________________________________________________________________________
IMPORTANT
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9)
__________________________________________________________________________
__________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Dated: _______, 1999
(Must be signed by registered owner(s) exactly as name(s) appear(s) on
certificate(s) for Shares or on a security position listing or by person(s)
authorized to become registered owner(s) by certificates and documents
transmitted herewith. If signature is (are) by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity,
please provide the following information. See Instruction 5.)
Name(s) ____________________________________________________________________
Name of Firm _______________________________________________________________
(PLEASE PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Numbers ( )_______________________________________
Taxpayer Identification or Social Security No. _____________________________
(SEE SUBSTITUTE FORM W-9)
____________________________________________________________________________
____________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED; SEE INSTRUCTIONS 1 AND 5)
Name(s) ____________________________________________________________________
(Please Print)
Authorized Signature _______________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Telephone Number _____________________________________________
Dated: ________________________________, 1999
- --------------------------------------------------------------------------------
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE ------------------------
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security
DATING BELOW. OR ------------------------
Employer Identification Number
-------------------------------------------------------------------------
Department of the Treasury, Part 2 - Certification - Under Penalties Part 3 --
Internal Revenue Service of Perjury, I certify that:
Payer's Request for Taxpayer (1) The number shown on this form is my Awaiting
Identification Number (TIN) correct Taxpayer Identification Number TIN / /
(or I am waiting for a number to be
issued to me and have checked the box in
Part 3) 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.
- ------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS - You must cross out item (2) above if you
have been notified by the IRS that you are currently 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 such
item (2).
SIGNATURE: ---------------------------- DATE
-------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I
have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near
future. I understand that if I do not provide a Taxpayer Identification Number by the time of payment, 31% of all
reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
- --------------------------------------------- ----------------------------------------, 1999
SIGNATURE DATE
<CAPTION>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near
future. I understand that if I do not provide a Taxpayer Identification Number by the time of payment, 31% of all
reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
- --------------------------------------------- ----------------------------------------, 1999
SIGNATURE DATE
<CAPTION>
I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I
</TABLE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) 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 Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a member firm of a registered
national securities exchange, a member of the NASD, a commercial bank or trust
company having an office, branch or agency in the United States or other
institution that is a member of the Medallion Signature Guaranty Program (an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if Share certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 4 of the Offer
to Purchase. Certificates for tendered Shares, or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page of this Letter of Transmittal prior to the Expiration
Date. Stockholders whose certificates are not immediately available or who
cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer prior to the Expiration Date may tender their
Shares by properly completing and duly executing
<PAGE>
a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure
set forth in Section 4 of the Offer to Purchase. Pursuant to such procedure: (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 made available by the Purchaser, must be received by the Depositary prior
to the Expiration Date; and (iii) the certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer, in
each case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed with any required signature guarantees (or,
in the case of a book-entry delivery, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day on
which the Nasdaq National Market operated by the National Association of
Securities Dealers is open for business. If certificates are forwarded
separately to the Depositary, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery.
The method of delivery of certificates for Shares and all other required
documents, including delivery through any Book-Entry Transfer Facility, is at
the option and risk of the tendering stockholder. Delivery will be deemed made
only when actually received by the Depositary. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased (unless you are tendering all of the Shares
you own). All tendering stockholders, by execution of this Letter of Transmittal
(or a facsimile hereof), waive any right to receive any notice of the acceptance
of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate number(s) and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS. (Not Applicable to stockholders who tender by
book-entry transfer.) If fewer than all of the Shares evidenced by any
certificate delivered to the Depositary 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 a case, new stock certificate(s) for the Shares that were
evidenced by your old Share certificate(s), but were not tendered by you, will
be sent to you (unless otherwise provided in the appropriate box on this Letter
of Transmittal) as soon as practicable after the Expiration Date or termination
of the Offer. All Shares represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or 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 tendered Shares 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 certificates.
If this Letter of Transmittal or any 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 their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates 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 certificate(s) listed, the certificate(s) 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 the
certificate(s) for such Shares. Signatures on such certificates or stock powers
must be guaranteed by an Eligible Institution. See Instruction 1.
6. STOCK TRANSFER TAXES. Except as otherwise provided 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 order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificate(s) for Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder(s), if a
transfer tax is imposed for any reason other than the sale or transfer of Shares
to Purchaser pursuant to the Offer, or if tendered certificate(s) are registered
in the name of any 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) or such person) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes or an exemption therefrom is submitted.
Except as otherwise provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the certificate(s) listed in this
Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal, or if the check and/or any certificates for
Shares not tendered or not purchased are to be mailed to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal at an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Stockholders tendering
Shares by book-entry transfer may request that Shares not purchased be credited
to such account at the Book-Entry Transfer Facility as such stockholder may
designate under "Special Payment Instructions." If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer.
8. WAIVER OF CONDITIONS; IRREGULARITIES. Except as otherwise provided in
the Offer to Purchase, the Purchaser also reserves the absolute right to waive
any defect or irregularity in any tender of Shares. All questions as to the form
of documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Purchaser, in its sole discretion, which determination shall be final and
binding. The Purchaser reserves the absolute right to reject any or all tenders
of Shares determined by it not to be in proper form or the acceptance for
payment of or payment for tenders of Shares which may,
<PAGE>
in the opinion of the Purchaser's counsel, be unlawful. No tender of Shares will
be deemed to have been properly made until all defects and irregularities
relating thereto have been cured or waived. The Purchaser's interpretation of
the terms and conditions of the Offer in this regard will be final and binding.
None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
9. SUBSTITUTE FORM W-9. Under U.S. federal income tax law, a stockholder
whose tendered Shares are accepted for payment is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN"), generally the
stockholder's social security or federal employer identification number, with
certain other information, on the above Substitute Form W-9. Failure to provide
the information on the form may subject the tendering stockholder or other payee
to a $50 penalty. In addition, payments that are made to such stockholder or
other payee with respect to Shares purchased pursuant to the Offer may be
subject to 31% federal income tax withholding on the payment of the purchase
price.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to these backup withholding
and reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the stockholder must submit the appropriate version of Form
W-8, signed under penalties of perjury, attesting to that individual's exempt
status. The appropriate version of Form W-8 can be obtained from the Depositary.
See the enclosed "Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9" for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld, provided that the
requested information is given to the Internal Revenue Service. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the Substitute Form W-9 certifying (i) that the TIN provided on the
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and
(ii) that (a) such stockholder has not been notified by the Internal Revenue
Service that such stockholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (b) the Internal Revenue Service
has notified such stockholder that such stockholder is no longer subject to
backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, if the stockholder or
other payee does not provide a properly certified TIN to the Depositary within
60 days, the Depositary will withhold 31% of all payments made prior to the time
a properly certified TIN is provided to the Depositary. However, such amounts
will be refunded to such stockholder if a TIN is provided to the Depositary
within 60 days.
The stockholder is required to give the Depositary the TIN (e.g. social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Share certificates. If the Shares are in more than one name or
are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at its
address and telephone numbers set forth below. Additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
also be obtained from the Information Agent or the Dealer Manager or from
brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate evidencing
Shares has been lost, destroyed or stolen, the tendering stockholder should
promptly notify the Company's transfer agent. The tendering stockholder will
then be instructed as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR
TO THE EXPIRATION DATE.
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(FOR ELIGIBLE INSTITUTIONS ONLY)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 CONFIRM FACSIMILE BY TELEPHONE: 101 Barclay Street
Church Street Station (800) 507-9357 Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers listed
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and other tender offer materials may be obtained from the Information Agent or
the Dealer Manager as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
or
All Others Call Toll Free: (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 225-1793
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
TO
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
This Notice of Guaranteed Delivery or one substantially in the form hereof
must be used to accept the Offer (as defined below) if certificates representing
shares of voting common stock, par value $0.01 per share (the "Shares"), of ABR
Information Services, Inc., a Florida corporation (the "Company"), are not
immediately available or all required documents cannot be delivered to The Bank
of New York (the "Depositary"), on or prior to the Expiration Date (as defined
in the Offer to Purchase (as defined below)), or the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or facsimile transmission (for
Eligible Institutions only) or mail to the Depositary and must include a
guarantee by an Eligible Institution (as defined in the Offer to Purchase). See
Section 4 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT
BY MAIL: (FOR ELIGIBLE INSTITUTIONS COURIER:
ONLY)
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 CONFIRM FACSIMILE BY 101 Barclay Street
Church Street Station TELEPHONE: Receive and Deliver Window
New York, NY 10286-1248 (800) 507-9357 New York, NY 10286
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery 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.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Spring Acquisition Corp., a Florida
corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian
Corporation, a Delaware corporation ("Parent"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated May 7, 1999 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares indicated below pursuant to the guaranteed delivery procedure
set forth in Section 4 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares .......................... Name(s) of Record Holder(s) ...............
Certificate No(s). (if available): ........ Address(es): ..............................
........................................... ............................................
Area Code and Telephone Number(s):
............................................
If Share(s) will be tendered by book entry transfer, check box below
/ / The Depository Trust Company
Account Number ............................ Signature(s): .............................
Date ......................................
</TABLE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange,
a member of the NASD, a commercial bank or trust company having an office,
branch or agency in the United States or other institution that is a member of
the Medallion Signature Guaranty Program (an "Eligible Institution"), hereby (a)
represents that the tender of Shares effected hereby complies with Rule 14e-4
under the Securities Exchange Act of 1934, as amended and (b) guarantees to
deliver to the Depositary, at one of its addresses set forth above, either the
certificates representing all tendered shares, in proper form for transfer, a
Book-Entry Confirmation (as defined in the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or, in the case of
book-entry delivery of Shares, an Agent's Message (as defined in the Offer to
Purchase), and any other documents required by the Letter of Transmittal within
three National Association of Securities Dealers, Inc. Automated Quotation
System trading days after the date of execution of this Notice of Guaranteed
Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal (unless
an Agent's Message is utilized) and certificates for Shares to the Depositary
within the time period shown herein. Failure to do so could result in a
financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm: ............................. ............................................
(Authorized Signature)
Address: .................................. Name: .....................................
(Please Type or Print)
........................................... Title: ....................................
(Zip Code)
Area Code
and Telephone Number(s): .................. Date: .....................................
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
AT
$25.50 NET PER SHARE
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED.
May 7, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Spring Acquisition Corp., a Florida corporation
(the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a
Delaware corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of voting common stock, par
value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a
Florida corporation (the "Company"), at $25.50 per Share, net to the seller in
cash, without any interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and
the related Letter of Transmittal (which together constitute the "Offer"),
copies of which are enclosed herewith. Please furnish copies of the enclosed
materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated May 7, 1999.
2. Letter of Transmittal, to be used by stockholders of the Company in
accepting the Offer.
3. Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares and all other required documents are not
immediately available or cannot be delivered to The Bank of New York, (the
"Depositary") by the Expiration Date (as defined in the Offer to Purchase)
or if the procedures for book-entry transfer cannot be completed by the
Expiration Date.
4. A form of 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.
5. Guidelines of the Internal Revenue Service for certification of
Taxpayer Identification Number on Substitute Form W-9.
6. Return envelope addressed to the Depositary.
7. The letter to stockholders of the Company from the Chairman of the
Board of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
shareholders of the Company.
<PAGE>
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS
THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn by the Expiration Date a number of Shares of the
Company which, together with any Shares owned by Parent, the Purchaser and/or
other subsidiaries of Parent, represents more than 50% of the total number of
Shares then outstanding on a fully diluted basis, and (ii) the expiration of all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder. The Offer is also subject
to other terms and conditions contained in the Offer to Purchase. See the
Introduction and Sections 1, 3 and 16.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer of
Shares, and any other required documents should be sent to the Depositary, and
either certificates representing tendered Shares should be delivered to the
Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at The Depository Trust Company (the "Book-Entry
Transfer Facility"), all in accordance with the instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for reasonable 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 on the transfer of
the Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at their respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
The offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
Very truly yours,
BEAR, STEARNS & CO. INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, ANY AFFILIATE OF THE
FOREGOING, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
AT
$25.50 NET PER SHARE
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED.
May 7, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May 7, 1999
(the "Offer to Purchase") and the related Letter of Transmittal (which together
constitute the "Offer") and other materials relating to the offer by Spring
Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned
subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), to
purchase all outstanding shares of voting common stock, par value $0.01 per
Share (the "Shares"), of ABR Information Services, Inc., a Florida corporation
(the "Company"), at $25.50 per Share, net to the seller in cash, without any
interest, upon the terms and subject to the conditions set forth in the Offer.
Also enclosed is the letter to stockholders from the Company accompanied by the
Solicitation/Recommendation on Schedule 14D-9 of the Company. Holders of Shares
whose certificates for such Shares are not immediately available, or who cannot
deliver their certificates and all other required documents to The Bank of New
York (the "Depositary"), on or prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must, if they want to tender in the Offer, tender
their Shares according to the guaranteed delivery procedures set forth in
Section 4 of the Offer to Purchase.
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 such Shares held by us for your account,
pursuant to the terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offered price is $25.50 per Share, net to you in cash, without
any interest thereon, upon the terms and subject to the conditions set forth
in the Offer.
2. The Offer is being made for all outstanding Shares.
3. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER AND THE MERGER AGREEMENT (AS DEFINED IN THE OFFER TO PURCHASE), HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER (AS DEFINED IN THE
OFFER TO PURCHASE) ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS
OF
<PAGE>
THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, June 4, 1999, unless the Offer is extended.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
6. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn by the Expiration Date a number of Shares
of the Company which, together with any Shares owned by Parent, the
Purchaser and/or other subsidiaries of Parent, represents more than 50% of
the total number of Shares then outstanding on a fully diluted basis, and
(ii) the expiration of all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder. The Offer is also subject to other terms and
conditions contained in the Offer to Purchase. See the Introduction and
Sections 1, 3 and 16.
7. Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by the Depositary of (a) certificates for
tendered Shares or timely confirmation of the book-entry transfer of such
Shares into the account maintained by the Depositary at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures set
forth in Section 4 of the Offer to Purchase, (b) the Letter of Transmittal
or a 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 (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending upon
when certificates for or confirmations of book-entry transfer of such Shares
into the Depositary's account at the Book-Entry Transfer Facility are
actually received by the Depositary.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of Shares 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 is being made on
behalf of the Purchaser by Bear, Stearns & Co. Inc., the Dealer Manager for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
If you wish to have us tender any or all of your Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. An envelope to return your
instructions to us is enclosed. PLEASE FORWARD YOUR INSTRUCTIONS TO US IN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION
DATE. The enclosed Letter of Transmittal is furnished to you as an example and
should not be used to tender Shares. IF YOU AUTHORIZE THE TENDER OF YOUR SHARES,
ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED ON THE INSTRUCTION
FORM SET FORTH BELOW.
<PAGE>
INSTRUCTIONS WITH RESPECT TO:
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
AT
$25.50 NET PER SHARE
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated May 7, 1999 (the "Offer to Purchase") and the related Letter
of Transmittal (which together constitute the "Offer") in connection with the
offer by Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a
wholly owned subsidiary of Ceridian Corporation, a Delaware corporation to
purchase all outstanding shares of voting common stock, par value $0.01 per
Share (the "Shares"), of ABR Information Services, Inc, a Florida corporation
(the "Company"), at a purchase price of $25.50 per Share, net to the seller in
cash, without any interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: ___________________ Shares*
SIGN HERE
Signature(s): __________________________________________________________________
Signature(s): __________________________________________________________________
(Print Name(s)): _______________________________________________________________
(Print Address(es)): ___________________________________________________________
(Area Code and Telephone Number(s)): ___________________________________________
(Taxpayer Identification or Social Security Number(s)): ________________________
Dated:____________________, 1999
________________________
* Unless otherwise indicated, it will be assumed that you instruct us to
tender all Shares held by us for your account.
<PAGE>
NEWS RELEASE
TRISH SCORPIO
CERIDIAN CORPORATION
612/853-4717
JAMES P. O'DROBINAK
ABR INFORMATION SERVICES
727/785-2819, X7207
CERIDIAN TO ACQUIRE ABR INFORMATION SERVICES
IN $750 MILLION CASH TRANSACTION
ACQUISITION POSITIONS CERIDIAN AS THE LEADING SINGLE SOURCE PROVIDER
OF A FULL COMPLEMENT OF HUMAN RESOURCE SERVICES
CERIDIAN TO LAUNCH CASH TENDER OFFER FOR ABR
MINNEAPOLIS/PALM HARBOR, FL, May 3, 1999 - Ceridian Corporation (NYSE: CEN) and
ABR Information Services, Inc. (NASDAQ: ABRX) jointly announced today that they
have entered into a definitive agreement providing for Ceridian's acquisition of
ABR at a price of $25.50 in cash per share in a transaction valued at
approximately $750 million. ABR is a provider of comprehensive benefits
administration, payroll, and human resource services to employers of all sizes.
The cash for the transaction is expected to come from existing Ceridian cash and
borrowings. While the transaction is expected to be slightly dilutive before
synergies to Ceridian's projected earnings per share in 1999 and 2000, it will
be immediately accretive to cash flow and is expected to significantly increase
the growth rate of Ceridian's Human Resource business.
Under the terms of the agreement, which was unanimously approved by the boards
of directors of both companies, Ceridian will commence an all-cash tender offer
for all outstanding shares of ABR at a price of $25.50 per share. The offer is
conditioned upon, among other things, there having been validly tendered, and
not withdrawn prior to the expiration of the tender offer, a number of ABR
shares which equals a majority of the shares outstanding on a fully diluted
basis and the receipt of all necessary regulatory approvals. The transaction is
expected to be completed in the second quarter.
ABR (www.abr.com) is the nation's largest COBRA (Consolidated Omnibus Budget
Reconciliation Act) compliance administrator and is a leading third party
provider of open enrollment services, flexible spending account administration,
and 401(k) and pension plan administration. The company also provides payroll
and human resource information services to small businesses.
ABR, which has achieved revenue growth in excess of 30 percent for 20
consecutive quarters, is expected to generate approximately $120 million of
revenue for its 1999 fiscal year. The company serves more than 50,000 customers,
a number of them Fortune 500 companies, and it employs approximately 1,500
people. Based in the Tampa/St. Petersburg area, ABR operates marketing/service
centers in Florida, New Jersey, Pennsylvania, Virginia, Maryland, Wisconsin,
Colorado, Arizona and California.
Ceridian, which had total revenue of $1.2 billion in 1998, provides information
services to customers in a number of markets, including human resources (HR).
Its HR business generated $700 million of revenue in 1998; the business includes
Ceridian Employer Services, a leading provider of HR information systems (HRIS)
and outsourced payroll and tax filing services.
<PAGE>
"The addition of ABR builds on the solid base we have been creating since 1992
by expanding further into the fastest growing segments of the HR services
market, including business process outsourcing, employee advisory services and
retirement services," said Lawrence Perlman, chairman and chief executive
officer of Ceridian.
"The combined forces of Ceridian and ABR will create a powerful, agile and
capable team to achieve the leadership position in HR outsourcing," said Ronald
L. Turner, president and chief operating officer of Ceridian. "We will
immediately be able to offer customers a combined payroll, tax filing, HRIS and
benefits outsourcing solution, creating significant advantages for them, as well
as for both enterprises. Both companies' business strategies, products sets,
distribution channels, customer mixes and infrastructures are highly
complementary.
"Upon completion of the transaction, we will leverage the distribution channels
of the two organizations to provide ABR's offerings into Ceridian's prospect and
customer base, and vice versa," Turner said. "The combination of the two
companies should create a logical, beneficial cross-selling opportunity.
"Ceridian's new, feature-rich Source 500 HR information system and ABR's
powerful new Maximilian benefits outsourcing system will combine to provide the
strongest and most technically advanced product offering available today,"
Turner added.
"ABR has grown rapidly due to the extraordinary efforts of a wonderful group of
employees," said James E. MacDougald, ABR's founder, chairman and chief
executive officer, who will continue to lead the business. "Given Ceridian's
strong resources and product set, this new partnership will allow ABR to grow
even faster in the future, and I look forward to being part of Ceridian. The
transaction will be beneficial to ABR's customers and employees, and provide a
significant premium to its shareholders."
Bear, Stearns & Co. is financial advisor to Ceridian and dealer manager for the
tender offer. The tender offer will be made only pursuant to definitive offering
documents to be filed with the Securities and Exchange Commission. Goldman,
Sachs & Co. is financial advisor to ABR.
Ceridian Corporation (www.ceridian.com) is a leading information services
company that serves the human resources, transportation and media information
markets. Ceridian's human resources businesses, in addition to Ceridian
Employer Services, include Ceridian Performance Partners, a provider of fully
integrated workplace effectiveness solutions; Centrefile, a provider of
payroll and human resources management solutions in the United Kingdom; and
Usertech, a provider of computer user training and performance support
programs. Ceridian's other businesses include Comdata, a provider of
transaction processing and information services to the transportation
industry, and Arbitron, a research company serving the media industry.
ABR Information Services, Inc. provides comprehensive benefits administration,
payroll and human resource services to employers seeking to outsource functions
such as COBRA, HIPAA, payroll and tax deposit filings, flexible spending
accounts, qualified plans and other services. ABR provides services to employers
ranging in size from 20 to over 200,000 employees. ABR provides portability
(primarily COBRA and HIPAA) services through the trade name CobraServ-Registered
Trademark- and payroll and tax deposit filing services through the trade name
PayAmerica-Registered Trademark-.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE STATEMENTS REGARDING
CERIDIAN CORPORATION CONTAINED IN THIS RELEASE THAT ARE NOT HISTORICAL IN
NATURE, PARTICULARLY THOSE THAT UTILIZE TERMINOLOGY SUCH AS "MAY," "WILL,"
"SHOULD," "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES," OR "PLANS," OR
COMPARABLE TERMINOLOGY, ARE FORWARD-LOOKING STATEMENTS BASED ON CURRENT
EXPECTATIONS AND ASSUMPTIONS, AND ENTAIL VARIOUS RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE SUCH MATERIAL
DIFFERENCES INCLUDE CHANGES IN INTEREST RATES; THE ABILITY TO INCREASE REVENUE
FROM CROSS-SELLING EFFORTS AND NEW PRODUCTS; SUCCESSFUL INTEGRATION OF THE
PRODUCTS, TECHNOLOGIES AND OPERATIONS OF ABR; ACHIEVEMENT OF SATISFACTORY
CUSTOMER RETENTION RATES; THE ABILITY TO EXPAND THE LOCAL FUELING MARKET
BUSINESS; THE ABILITY TO IMPROVE OPERATING MARGINS IN THE HUMAN RESOURCE
SERVICES BUSINESS; SUCCESSFUL IMPLEMENTATION OF SYSTEM UPGRADES AND CONVERSIONS;
AND OTHER FACTORS THAT ARE DESCRIBED ON PAGE 15 OF CERIDIAN'S 1998 ANNUAL
<PAGE>
REPORT. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON INFORMATION AVAILABLE TO
CERIDIAN ON THE DATE HEREOF, AND IT ASSUMES NO OBLIGATION TO UPDATE ANY SUCH
FORWARD-LOOKING STATEMENTS.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS ABOUT ABR THAT INVOLVE
RISKS AND UNCERTAINTIES INCLUDING, BUT NOT LIMITED TO, RISKS SUCH AS: (i)
POTENTIAL FOR UNFAVORABLE INTERPRETATION OF GOVERNMENT REGULATIONS OR NEW
GOVERNMENT LEGISLATION; (ii) THE ABILITY TO ATTRACT AND RETAIN QUALIFIED SALES,
INFORMATION SERVICES AND MANAGEMENT PERSONNEL; (iii) POTENTIAL INCREASES IN
ABR'S COSTS; (iv) POTENTIAL LOSS OF ANY MATERIAL CUSTOMER; (v) THE FINANCIAL
CONDITION OF ITS CLIENTS; (vi) THE IMPACT OF COMPETITION FROM EXISTING AND NEW
ORGANIZATIONS; (vii) THE FAILURE TO MANAGE GROWTH AND SUCCESSFULLY INTEGRATE
WITH CERIDIAN; AND (viii) OTHER FACTORS WHICH ARE DESCRIBED IN FURTHER DETAIL IN
ABR'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON INFORMATION AVAILABLE TO ABR ON THE DATE HEREOF, AND IT
ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.
<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 May 7, 1999, and the related
Letter of Transmittal and is being made to all holders of Shares. The
Purchaser (as defined below) is not aware of any jurisdiction where the
making of the Offer is prohibited by the laws of such jurisdiction. If the
Purchaser becomes aware of any jurisdiction the laws of which prohibit the
making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with such laws. If after
such good faith effort, the Purchaser cannot comply with such laws, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares 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 Bear, Stearns & Co. Inc. 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 VOTING COMMON STOCK
OF
ABR INFORMATION SERVICES, INC.
AT
$25.50 NET PER SHARE
BY
SPRING ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CERIDIAN CORPORATION
Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a
wholly owned subsidiary of Ceridian Corporation, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of the voting
common stock, par value $0.01 per share (the "Shares"), of ABR Information
Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share,
net to the seller in cash, without any interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated May 7, 1999 (the
"Offer to Purchase") and in the related Letter of Transmittal (which together
constitute the "Offer"). Following the Offer, the Purchaser intends to effect
the Merger (as described below).
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE (AS DEFINED BELOW) A NUMBER
OF SHARES OF THE COMPANY WHICH, TOGETHER WITH ANY SHARES BENEFICIALLY OWNED
BY PARENT, THE PURCHASER AND/OR OTHER SUBSIDIARIES OF PARENT, REPRESENTS MORE
THAN 50% OF THE TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED
BASIS (THE "MINIMUM CONDITION"). THE PURCHASER ESTIMATES THAT APPROXIMATELY
15,399,404 SHARES WILL NEED TO BE VALIDLY TENDERED (AND NOT WITHDRAWN) TO
SATISFY THE MINIMUM CONDITION. SEE SECTION 13 OF THE OFFER TO PURCHASE.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of April 30, 1999, by and among the Company, Parent and the
Purchaser (the "Merger Agreement"). The Merger Agreement provides that,
subject to the terms and conditions of the Merger Agreement, at the effective
time of the Merger (the "Effective Time"), the Purchaser will be merged with
and into the Company, and the Company will survive and become a wholly owned
subsidiary of Parent. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than Shares owned
by Parent, the Purchaser or any other direct or indirect subsidiary of Parent
or Shares that are owned by the Company or any of its direct or indirect
subsidiaries and in each case not held on behalf of third parties, or Shares
held by stockholders who properly exercise and perfect dissenters' rights, if
any, under the Florida Business Corporation Act will be canceled,
extinguished and converted into
<PAGE>
the right to receive, without interest, an amount in cash equal to $25.50 per
Share or such higher price per Share as shall have been paid in the Offer.
Stockholders of the Company do not have dissenters' rights as a result
of the Offer. In addition, stockholders of the Company will not have
dissenters' rights in connection with the Merger if on the record date fixed
to determine the stockholders entitled to vote on or consent to the Merger,
the Shares are listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. ("NASD") or are held of
record by 2,000 or more of such stockholders. If, however, the Shares are not
so listed or designated and are not held of record by at least 2,000
stockholders, then holders of Shares who do not vote or consent in favor of
the Merger will have dissenters' rights. See Section 15 of the Offer to
Purchase. The Merger Agreement is more fully described in Section 11 of the
Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE
COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Subject to the terms of the Merger Agreement, if any condition to the
Purchaser's obligation to purchase Shares is not satisfied prior to the
acceptance for payment for any such Shares, the Purchaser may (i) at a
scheduled expiration date, terminate the Offer and return all tendered Shares
to the tendering stockholders, (ii) extend the Offer and, subject to
withdrawal rights as set forth in Section 3 of the Offer to Purchase, retain
all such Shares until the expiration of the Offer as so extended, (iii) waive
such condition (other than the Minimum Condition) and, subject to any
requirement to extend the period of time during which the Offer is open,
purchase all Shares validly tendered by the Expiration Date and not
withdrawn; or (iv) delay acceptance for payment of Shares until satisfaction
or waiver of the conditions of the Offer.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares as, if and when the
Purchaser gives oral or written notice to the The Bank of New York (the
"Depositary") of the Purchaser's acceptance of such Shares for payment pursuant
to the Offer. Payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payments to tendering stockholders. The Purchaser will not,
under any circumstances, pay interest on the purchase price, regardless of any
delay in making such payment. In all cases, payment for Shares purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing the Shares or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to
the procedures set forth in the Offer to Purchase, (ii) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase), and (iii) any other documents required by the Letter of
Transmittal.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration
Date and, unless previously accepted for payment, may also be withdrawn after
July 5, 1999. The term "Expiration Date" means 12:00 midnight, New York City
time, on Friday, June 4, 1999, unless the Purchaser 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. If the Purchaser is delayed in
its acceptance or purchase of or payment for Shares or is unable to purchase
or pay for Shares for any reason, then, without prejudice to the Purchaser's
rights, tendered Shares may be retained by the Depositary on behalf of the
Purchaser and may not be withdrawn except as described in the Offer to
Purchase and subject to Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
<PAGE>
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses specified on the back cover of the Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and, if
certificates representing such Shares have been delivered or otherwise
identified to the Depositary, the name(s) in which such certificate(s) is
(are) registered, if different from the name of the person tendering such
Shares. If certificates have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
tendering stockholder must also submit the serial numbers shown on the
particular certificates evidencing such Shares and the signature on the
notice of withdrawal must be guaranteed by a member firm of a registered
national securities exchange, a member of the NASD, a commercial bank or
trust company having an office, branch or agency in the United States or any
other institution that is a member of the Medallion Signature Guaranty
Program (an "Eligible Institution"), unless such Shares have been tendered by
an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry tender as set forth in Section 4 of the Offer of
Purchase, the notice of withdrawal must specify the name and account
number(s) of the account(s) at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares, in which case a notice of withdrawal will
be effective if delivered to the Depositary by any method of delivery
described in the first sentence of this paragraph. None of Parent, the
Purchaser, the Dealer Manager, the Depositary or the Information Agent will
be obligated to give notice of any defects or irregularities in any notice of
withdrawal, nor shall any of them incur any liability for failure to give any
such notice. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding.
The Purchaser reserves the right, from time to time, to extend the period
of time during which the Offer is open (but subject to the terms and conditions
of the Merger Agreement) by giving oral or written notice of such extension to
the Depositary. Any such extension will be followed, as soon as practicable, by
public announcement thereof, no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Exchange Act is contained in the Offer
to Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder
list for the purpose of disseminating the Offer to holders of Shares. The
Offer to Purchase and the related Letter of Transmittal will be mailed to
record holders of Shares and will be furnished to brokers, dealers, banks and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list 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 RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager at
their respective telephone numbers and locations as set forth below, and copies
will be furnished promptly at the Purchaser's expense. The Purchaser will not
pay any fees or commissions to any broker or dealer or any other person (other
than the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[INSERT LOGO OF GEORGESON & COMPANY INC. HERE]
Wall Street Plaza
New York, New York 100005
Banks and Brokers Call Collect: (212) 440-9800
or
All Others Call Toll Free: (800) 223-2064
<PAGE>
THE DEALER MANAGER FOR THE OFFER IS:
[INSERT LOGO OF BEAR, STEARNS & CO. INC. HERE]
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 225-1793
May 7, 1999
<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: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------------
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
<C> <S> <C>
- -------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)(6)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, the first
individual on the
account(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3)
for a designated ward,
minor, or incompetent
person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
8. Sole proprietorship The owner(4)
account
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: EMPLOYER INDENTIFICATION
NUMBER OF--
<C> <S> <C>
- -------------------------------------------------------------
9. A valid trust, estate, The legal entity (do not
or 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
or educational
organization account
12. Partnership account The partnership
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity (such
as a State or local
government, school
district, or prison)
that receives
agricultural program
payments
- -------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(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 individual name of the owner, but you may also enter your business
or "doing business as" name. You may use either your social security number
or employee identification number (if you have one).
(5) List first and circle the name of the legal trust, estate or pension trust.
(6) If joint foreign payees, every foreign payee must provide an applicable
version of Form W-8, certifying their foreign status, or a joint payee who
has not established foreign status must provide a taxpayer identification
number on Form W-9, which number must be used for purposes of backup
withholding and information reporting.
Note: If no name is circled when there is more than one name listed, 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 don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for Social Security Number Card or Form
SS-4, Application for Employer Identification Number at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number. Certain resident aliens may request an individual taxpayer
identification number on Form W-7.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- An organization exempt from tax under Section 501(a) or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
Other payees that may be exempt from backup withholding depending on the type of
payment include the following:
- A corporation.
- A financial institution.
- A dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A futures commission merchant registered with the Commodity Futures Trading
Commission.
- A common trust fund operated by a bank under Section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
- A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc. Nominee List.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) distributions made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE FORM W-9 WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE EXEMPT ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, BROKER PAYMENTS OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
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 Code sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest,
or other payments to give taxpayer identification numbers to payers who must
report the payments to IRS. IRS uses the numbers for identification purposes.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE>
May 4, 1999
Mr. Jack Eickhoff
Chief Financial Officer
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Re: $450,000,000 SENIOR CREDIT FACILITY
Dear Jack:
Bank of America National Trust and Savings Association ("Bank of America") is
pleased to offer its commitment to lend $450,000,000 (the "Facility"), upon and
subject to the terms and conditions of this letter and the Summary of Terms and
Conditions attached hereto (the "Summary of Terms"). NationsBanc Montgomery
Securities LLC ("NMS") is pleased to advise you of its willingness to act as
sole and exclusive Lead Arranger and Book Manager for the Facility and if
required to form a syndicate of financial institutions (the "Lenders")
reasonably acceptable to you for the Facility.
If the Facility is syndicated, Bank of America will act as sole and exclusive
Administrative Agent for the Facility and NMS will act as sole and exclusive
Lead Arranger and Book Manager for the Facility. No additional agents, co-agents
or arrangers will be appointed and no other titles will be awarded without our
prior written approval.
At Bank of America's option, NMS may commence syndication efforts, and you agree
to actively assist NMS in achieving a syndication of the Facility that is
satisfactory to it. Such assistance shall include (a) your providing and causing
your advisors to provide us and the other Lenders upon request with all
information reasonably deemed necessary by us to complete syndication; (b)
assistance in the preparation of an Offering Memorandum to be used in connection
with the syndication; (c) your using commercially reasonable efforts to ensure
that the syndication efforts benefit materially from your existing lending
relationships; and (d) otherwise assisting us in our syndication efforts,
including by making senior management and advisors of the Borrower and its
subsidiaries available from time to time to attend and make presentations
regarding the business and prospects of the Borrower and its subsidiaries, as
appropriate, at one or more meetings of prospective Lenders.
It is understood and agreed that Bank of America and NMS, after consultation
with you, will manage and control all aspects of the syndication, including
decisions as to the selection of proposed Lenders and any titles offered to
proposed Lenders, when commitments will be accepted and the final allocations of
the commitments among the Lenders. It is understood that no Lender participating
in the Facility will receive compensation from you in order to obtain its
commitment, except on the terms contained herein and in the Summary of Terms. It
is also understood and agreed that the amount and distribution of the fees among
the Lenders will be at our sole discretion and that any syndication prior to
execution of the definitive documentation for the Facility will reduce the
commitment of Bank of America.
<PAGE>
Ceridian Corporation
May 4, 1999
Page 2
The commitment of Bank of America hereunder and the agreement of NMS to provide
the services described herein are subject to the agreement in the preceding
paragraph and the satisfaction of each of the following conditions precedent in
a manner acceptable to us in our reasonable judgment: (a) each of the terms and
conditions set forth herein and in the Summary of Terms; (b) the completion of
all due diligence with respect to the Borrower and its subsidiaries and any
entity proposed to be acquired with the proceeds of the Facility ("Target
Company") in scope and determination satisfactory to us in our reasonable
judgment; (c) our satisfaction that prior to and during the syndication of the
Facility there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of the Borrower other than the
amount available under the existing Amended and Restated Credit Agreement and
the amount obtained under the proposed $450,000,000 debt offering; (d) the
negotiation, execution and delivery of definitive documentation for the Facility
consistent with the Summary of Terms and otherwise satisfactory to us; (e) no
change, occurrence or development that could, in our reasonable opinion, have a
material adverse effect on the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or prospects of the
Borrower and its subsidiaries taken as a whole, or Target Company and its
subsidiaries taken as a whole, shall have occurred or become known to us; and
(f) our not becoming aware after the date hereof of any information or other
matter which in our reasonable judgment is inconsistent in a material and
adverse manner with any information or other matter relating to the Borrower,
the Target Company or the contemplated transaction with the Target Company
disclosed to us prior to the date hereof (in which case we may, in our
reasonable judgment, suggest alternative financing amounts or structures that
ensure adequate protection for us, or for the Lenders, or terminate this letter
and any commitment or undertaking hereunder).
You hereby represent, warrant and covenant that (a) all information, other than
Projections (defined below), which has been or is hereafter made available to us
or the Lenders by you or any of your representatives in connection with the
transactions contemplated hereby (the "Information") is and will be complete and
correct in all material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein not misleading, and (b) all financial
projections concerning the Borrower and its subsidiaries, or Target Company and
its subsidiaries, that have been or are hereafter made available to us or the
Lenders by you or any of your representatives (the "Projections") have been or
will be prepared in good faith based upon assumptions you believe to be
reasonable. You agree to furnish us with such Information and Projections as we
may reasonably request and to supplement the Information and the Projections
from time to time until the closing date for the Facility so that the
representation, warranty and covenant in the preceding sentence is correct on
such closing date. You understand that in arranging and syndicating the
Facility, Bank of America and NMS will be using and relying on the Information
and the Projections without independent verification thereof.
By acceptance of this offer, the Borrower agrees to pay all reasonable
out-of-pocket fees and expenses (including reasonable attorneys' fees and
expenses, the allocated cost of internal counsel and due diligence expenses)
incurred before or after the date hereof by us in connection with the Facility
and any syndication thereof.
You agree to indemnify and hold harmless Bank of America, NMS, each Lender and
each of their affiliates and their directors, officers, employees, advisors and
agents (each, an "Indemnified Party") from and against (and will reimburse each
Indemnified Party as the same are incurred) any and all losses, claims, damages,
liabilities, and expenses (including, without limitation, the reasonable fees
and expenses of counsel and the allocated cost of internal counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) any matters contemplated by
this letter, any related transaction, the Facility or any use made or proposed
to be made with the proceeds thereof unless and only to the extent that, as to
any Indemnified Party, it shall be determined in a final, nonappealable judgment
by a court of competent jurisdiction that such losses, claims, damages,
liabilities or expenses resulted primarily from the gross negligence or willful
misconduct of such
<PAGE>
Ceridian Corporation
May 4, 1999
Page 3
Indemnified Party. No Indemnified Party shall be liable for any damages
arising from the use by others of Information or other materials obtained
through internet, Intralinks or other similar information transmission
systems in connection with the Facility. You agree that no Indemnified Party
shall have any liability for any indirect or consequential damages in
connection with its activities related to the Facility.
The terms of this letter, the Summary of Terms and the fee letter between Bank
of America and you (the "Fee Letter") are confidential and, except for
disclosure on a confidential basis to your accountants, attorneys and other
professional advisors retained by you in connection with the Facility or as may
be required by law, may not be disclosed in whole or in part to any other person
or entity without our prior written consent. We hereby specifically consent to
the disclosure of this letter and the Summary of Terms (but NOT the Fee Letter)
to Target Company and its stockholders and their respective attorneys, financial
advisors, and accountants in connection with the tender offer with respect to
Target Company (the "Transaction"), in any filing with the Securities and
Exchange Commission or any other federal or state regulatory body in connection
with the Transaction to the extent required by law, in a press release and other
disclosure to the extent necessary to comply with applicable securities laws, at
any time following (i) your signed acceptance hereof and (ii) the payment of the
fees set forth in the Fee Letter to be paid upon your acceptance of this letter.
Without limiting the foregoing, in the event that you disclose the contents of
this letter or the Summary of Terms in contravention of the preceding sentence,
you shall be deemed to have accepted the terms of this letter. Notwithstanding
any such disclosure to any other person or entity, this letter sets forth the
understanding among the parties hereto and may not be relied upon by any other
person or entity (other than the Indemnified Parties).
The provisions of the immediately preceding three paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Facility shall be executed and notwithstanding the termination of this letter or
any commitment or undertaking hereunder.
This letter and the Fee Letter shall be governed by laws of the State of
California. This letter, together with the Summary of Terms and the Fee Letter,
are the only agreements that have been entered into among us with respect to the
Facility and set forth the entire understanding of the parties with respect
thereto. This letter may be modified or amended only by the written agreement of
all of us. This letter is not assignable by the Borrower without our prior
written consent and is intended to be solely for the benefit of the parties
hereto and the Indemnified Parties.
This offer will expire at 5:00 p.m. Pacific standard time on May 6, 1999 unless
you execute this letter and the Fee Letter and return them to us prior to that
time (which may be by facsimile transmission), whereupon this letter and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, this undertaking and commitment will expire on
June 15, 1999 unless definitive documentation for the Facility is executed and
delivered prior to such date.
THIS WRITTEN AGREEMENT (WHICH INCLUDES THE SUMMARY OF TERMS AND CONDITIONS) AND
THE FEE LETTER REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
<PAGE>
Ceridian Corporation
May 4, 1999
Page 4
We are pleased to have the opportunity to work with you in connection with
this important financing.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Name Illegible
---------------------------------
Title: Vice President
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Name Illegible
---------------------------------
Title: Vice President
Accepted and Agreed to as of May 6, 1999:
CERIDIAN CORPORATION
By: /s/ John H. Grierson
---------------------------------
Title: Vice President and Treasurer
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
SUMMARY OF TERMS AND CONDITIONS
CERIDIAN CORPORATION
$450,000,000 SENIOR CREDIT FACILITY
BORROWER: A wholly-owned subsidiary (the "Purchaser")
of Ceridian Corporation (the "Borrower") will
acquire by tender offer all (or in any event
not less than the minimum amount necessary to
permit a Purchaser to prevail in a vote for a
merger between Purchaser and Acquired
Company) of the outstanding shares ("Shares")
of ABR Information Services (the "Acquired
Company") at a per share price not to exceed
$25.50 per share (the "Transaction").
LENDER: Bank of America National Trust and Savings
Association ("Bank of America" or the
"Bank").
INTERIM TERM LOAN: An unsecured, non-revolving term loan
facility in the principal amount of
$450,000,000 ("Facility") will be available
upon the terms and conditions hereinafter set
forth.
PURPOSE: The proceeds of the Facility shall be used
solely to capitalize the Purchaser in order
to enable it to make any required payment for
Shares in accordance with the Purchase
Agreement (as defined below), to enable
Borrower and the Purchaser to pay transaction
fees and expenses required for the
Transaction and to invest in cash equivalents
until payment for the foregoing purposes is
made.
INTEREST RATES: As set forth in Addendum I.
FEES/EXPENSES: As set forth in Addendum I and the Fee
Letter.
MATURITY: The Facility shall terminate and all amounts
shall be due and payable 6 months from
Closing.
CLOSING: The date of execution of definitive loan
documents. To occur on or before June 15,
1999.
AVAILABILITY: Loans made under the Facility shall be
available in not more than three borrowings
within a period after Closing to be specified
(coincident with the consummation of the
Transaction), subject to conditions precedent
as outlined below and the specified use of
proceeds described above.
MANDATORY PREPAYMENTS
AND COMMITMENT
REDUCTIONS: This Facility shall be repaid and the
commitment shall be reduced by 100% of the
net proceeds of the planned $450,000,000 debt
issuance, by the net proceeds of any equity
issuance (other than pursuant to employee
stock option exercise), or by the net
proceeds of certain asset dispositions, in
each case, by Borrower or Acquired Company.
Optional prepayments will be permitted.
- -------------------------------------------------------------------------------
Page 1
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
CONDITIONS PRECEDENT: Usual and customary for a transaction of this
type, including but not limited to
satisfactory results in all material respects
from the following:
(i) The completion of all due diligence,
including receipt of combined
projections, with respect to the
Acquired Company in scope and
determination satisfactory to Bank of
America in its reasonable discretion.
(ii) The negotiation, execution and
delivery of definitive documentation
for the Facility satisfactory to Bank
of America, which shall include,
without being limited to:
(a) satisfactory opinions of counsel
to the Borrower (which shall cover,
among other things, authority,
legality, validity, binding effect
and enforceability of the documents
for the Facility and
non-contravention of laws and other
contracts in relation to the facility
and the Transaction) and of local
counsel, (b) such corporate
resolutions, certificates and other
documents as Bank of America shall
reasonably require, and (c) such
other customary closing documents as
Bank of America shall reasonably
request.
(iii) Bank of America's satisfactory review
of the purchase agreement (including
all schedules exhibits thereto)
regarding the Acquired Company (the
"Purchase Agreement"). The Purchase
Agreement shall have been consummated
in accordance with the terms thereof
and in compliance with applicable law
and regulatory approvals. The
Purchase Agreement shall not be
altered, amended or otherwise changed
or supplemented or any condition
therein waived, without the prior
written consent of Bank of America.
(iv) The proposed corporate capital and
ownership structure (including
articles of incorporation and
by-laws), shareholders agreements and
management of the Borrower and its
subsidiaries (after giving effect to
the Transaction), shall be
satisfactory to Bank of America.
(v) Bank of America shall have received
and, in each case, approved the
consolidated financial statements of
the Acquired Company and its
subsidiaries for a period to be
determined, including balance sheets,
income and cash flow statements
audited by independent public
accountants of recognized national
standing and prepared in conformity
with GAAP, a pro forma balance sheet
of the Borrower and its subsidiaries
as of the Closing Date giving effect
to the Transaction and the
transactions contemplated hereby and
reflecting estimated purchase price
accounting adjustments, reviewed by
independent public accountants of
recognized national standing, and
such other information relating to
the Transaction as Bank of America
may require.
- -------------------------------------------------------------------------------
Page 2
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
(vi) There shall not have occurred a
material adverse change since
December 31, 1998 for the Borrower,
or since January 31, 1999 for the
Acquired Company, in the business,
assets, operations, condition
(financial or otherwise) or prospects
of the Borrower and its subsidiaries
or the Acquired Company or in the
facts and information regarding such
entities as represented to date.
(vii) Receipt of all governmental,
shareholder and third party consents
(including Hart-Scott Rodino
clearance) and approvals necessary
or, in the opinion of Bank of
America, desirable in connection with
the consummation of the Transaction
and the related financings and other
transactions contemplated hereby and
expiration of all applicable waiting
periods without any action being
taken by any authority that could
restrain, prevent or impose any
material adverse conditions on the
Transaction or such other
transactions or that could seek or
threaten any of the foregoing, and no
law or regulation shall be applicable
which in the judgment of Bank of
America could have such effect;
compliance with margin regulations.
(viii) No adverse litigation concerning the
Transaction.
(ix) The Borrower and its subsidiaries
(including the Acquired Company)
shall be in compliance with all
existing financial obligations (after
giving effect to the Transaction).
(x) Receipt and review, with results
satisfactory to the Administrative
Agent and its counsel, of information
regarding litigation, tax,
accounting, labor, insurance, pension
liabilities (actual or contingent),
real estate leases, material
contracts, debt agreements, property
ownership, and contingent liabilities
relative to the Acquired Company, the
Borrower, and their respective
subsidiaries.
(xi) Bank of America shall have received
all fees and expenses required to be
paid on or before Closing.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for financings of this
type, including, but not limited to, the
following: (i) corporate existence and
status; (ii) corporate power and
authority/enforceability; (iii) no violation
of law or contracts or organizational
documents; (iv) no material litigation
(except as previously discussed in writing);
(v) correctness of specified financial
statements and other information and no
material adverse change; (vi) no required
governmental or third party approvals;
(vii) use of proceeds/compliance with margin
regulations; (viii) status under Investment
Company Act; (ix) ERISA matters;
(x) environmental matters; (xi) payment of
taxes; (xii) accuracy of disclosure;
(xiii) Year 2000 preparedness; and
(xiv) consummation of the Transaction.
- -------------------------------------------------------------------------------
Page 3
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
COVENANTS: The covenants from the Amended and Restated
Credit Agreement dated December 12, 1995
("Syndicated Facility") among Ceridian
Corporation, Bank of America NT & SA as
Agent, and The Financial Institutions a Party
Thereto shall be restated, with such
exceptions as Bank of America may agree.
These covenants shall apply to the Facility
even if the Amended and Restated Facility is
terminated.
The covenants may also include terms or
conditions that are usual and customary for
financings of this type generally and for
this transaction in particular as determined
by the Bank in its sole discretion,
including, but not limited to, the following:
(i) delivery of financial statements and
other reports; (ii) delivery of compliance
certificates; (iii) delivery of notices of
default, material litigation and material
governmental and environmental proceedings;
(iv) compliance with laws (including
environmental laws and ERISA matters) and
material contractual obligations; (v) payment
of taxes; (vi) maintenance of insurance;
(vii) limitation on liens and negative
pledges; (viii) limitation on mergers,
consolidations and sales of assets;
(ix) limitation on investments (including
loans and advances) and acquisitions;
(xi) limitation on transactions with
affiliates; (xii) Year 2000 compliance; and
(xiii) Purchaser shall merge with the
Acquired Company by October 29, 1999.
EVENTS OF DEFAULT: Usual and customary for financings of this
type generally and for this transaction in
particular, including, but not limited to,
the following: (i) nonpayment of principal,
interest, fees or other amounts,
(ii) violation of covenants, (iii) inaccuracy
of representations and warranties,
(iv) cross-default to other material
agreements and indebtedness, (v) bankruptcy
and other insolvency events, (vi) material
judgments, (vii) ERISA matters, (viii) actual
or asserted invalidity of any loan
documentation or security interests, or
(ix) change of control.
ASSIGNMENTS AND
PARTICIPATIONS;
SYNDICATION: The Bank will be permitted to make
assignments in acceptable minimum amounts to
other financial institutions approved by the
Borrower, which approval shall not be
unreasonably withheld (so long as no event of
default under the Facility or incipient
default has occurred and is continuing). The
Bank will be permitted to sell participations
with voting rights limited to significant,
"money" matters. Such documentation shall
contain representations and warranties,
covenants and events of default that as the
same those set forth in the initial,
bilateral documentation. The cost of such
additional documentation (including fees and
expenses of counsel to Bank of America and to
the Administrative Agent, NationsBanc
Montgomery Securities LLC) shall be
Borrower's responsibility.
INDEMNIFICATION: The Borrower shall indemnify Bank of America
and its affiliates from and against all
losses, liabilities, claims, damages or
expenses arising out of or relating to the
Transaction, the Facility, the Borrower's use
of loan proceeds or the commitments,
including, but not limited to, reasonable
attorneys' fees (including the allocated cost
of internal counsel) and settlement costs.
This indemnification shall survive and
- -------------------------------------------------------------------------------
Page 4
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
continue for the benefit of the indemnitees
at all times after the Borrower's acceptance
of Bank of America's commitment for the
Facility, notwithstanding any failure of the
Facility to close.
GOVERNING LAW: State of Illinois.
- -------------------------------------------------------------------------------
Page 5
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
THIS SUMMARY OF TERMS AND CONDITIONS (THE "TERM SHEET") IS NOT MEANT TO BE, NOR
SHALL IT BE CONSTRUED AS, AN ATTEMPT TO DESCRIBE ALL TERMS AND CONDITIONS THAT
WOULD PERTAIN TO THE FACILITY, NOR DO ITS TERMS SUGGEST THE SPECIFIC PHRASING OF
DOCUMENTATION CLAUSES. INSTEAD, IT IS INTENDED TO OUTLINE CERTAIN BASIC POINTS
OF BUSINESS UNDERSTANDING AROUND WHICH THE FACILITY COULD BE STRUCTURED AND IS
SUBJECT TO REVIEW OF LEGAL AND TAX ISSUES.
- -------------------------------------------------------------------------------
Page 6
<PAGE>
Confidential CERIDIAN CORPORATION
- -------------------------------------------------------------------------------
ADDENDUM I
FEES AND EXPENSES
COMMITMENT
FEE: The Borrower will pay a fee (the "Commitment
Fee"), as set forth in the Fee Letter.
INTEREST RATES: The Facility shall bear interest at a rate
equal to LIBOR plus the Applicable Margin or
the Alternate Base Rate (to be defined as the
higher of (i) the Bank of America prime rate
or (ii) the Federal Funds rate plus .50%).
Such right of reimbursement shall be in
addition to and not in limitation of
customary cost and yield protections. The
Applicable Margin shall be 75 basis points
through day 90 (after Closing), 87.5 basis
points through day 120 (after Closing) and
100 basis points thereafter, assuming
maintenance at all times of investment grade
senior unsecured debt ratings from Moody's
and S&P; such margin may be subject to change
under the loan agreement, based upon changes
in such ratings.
The Borrower may select interest periods of
1, 2, or 3 months (or such other periods
acceptable to the Bank) for LIBOR loans,
subject to availability. Interest shall be
payable at the end of the selected interest
period, but no less frequently than
quarterly.
A default rate shall apply on all loans in
the event of default under the Facility at a
rate per annum of 2% above the applicable
interest rate.
CALCULATION OF
INTEREST AND FEES: Other than calculations in respect of
interest at the Alternate Base Rate (which
shall be made on the basis of actual number
of days elapsed in a 365/366 day year), all
calculations of interest and fees shall be
made on the basis of actual number of days
elapsed in a 360 day year.
COST AND YIELD PROTECTION: Customary for transactions and Facility of
this type, including, without limitation, in
respect of breakage or redeployment costs
incurred in connection with prepayments,
changes in capital adequacy and capital
requirements or their interpretation,
illegality, unavailability, reserves without
proration or offset and payments free and
clear of withholding or other taxes.
EXPENSES: The Borrower will pay all reasonable costs
and expenses associated with the preparation,
due diligence, administration, syndication
and enforcement of all documentation executed
in connection with the Facility, including,
without limitation, the legal fees of counsel
to Bank of America (including the allocated
cost of internal counsel), regardless of
whether or not the Facility is closed. The
Borrower will also pay the expenses of Bank,
the Administrative Agent, if any, and the
Syndicate Banks in connection with the
enforcement of any loan documentation for the
Facility.
- -------------------------------------------------------------------------------
Page 7
<PAGE>
Exhibit 99 (c)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
ABR INFORMATION SERVICES, INC.
CERIDIAN CORPORATION
AND
SPRING ACQUISITION CORP.
DATED AS OF APRIL 30, 1999
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"),
dated as of April 30, 1999, among ABR Information Services, Inc., a Florida
corporation (the "COMPANY"), Ceridian Corporation, a Delaware corporation
("PARENT"), and Spring Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved this Agreement and adopted the plan of merger
set forth herein whereby Merger Sub will merge with and into the Company upon
the terms and subject to the conditions set forth in this Agreement (the
"MERGER");
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE
1.
THE TENDER OFFER
1.1. TENDER OFFER. (a) Provided that this Agreement shall not have been
terminated in accordance with Article IX hereof and none of the events set forth
in paragraphs (a) through (g) of Annex A hereto shall have occurred or be
existing and the other conditions to the Offer specified in Annex A shall have
been satisfied (together with such events, the "Offer Conditions"), as soon as
reasonably practicable, and in any event within five Business Days after public
announcement of this Agreement, Merger Sub will commence a tender offer (the
"OFFER") for all of the outstanding Shares (as defined below) at a price of
$25.50 per Share in cash, net to the seller, and, subject only to and in
accordance with the terms and conditions of the Offer, accept for payment Shares
that are validly tendered and not withdrawn immediately following (unless the
Offer shall have been extended in accordance with the terms hereof) the later of
(i) the date on which the waiting period under the HSR Act has expired or has
been terminated and (ii) the twentieth Business Day after the commencement of
the Offer; PROVIDED, HOWEVER, and notwithstanding anything to the contrary in
the foregoing, it is understood and agreed that (A) if any of the Offer
Conditions specified in paragraphs (a) through (h) of Annex A exists at the time
of the scheduled expiration date of the Offer or if, the applicable waiting
periods under the HSR Act have not expired or been earlier terminated, Merger
Sub may extend and reextend the Offer on one or more occasions for periods of
time (not to exceed ten Business Days for any particular extension) so that the
expiration date of the Offer (as so extended) is as soon as reasonably
practicable or advisable after the date on which the particular Offer Condition
no longer exists, and (B) Merger Sub may extend and reextend the Offer on one or
more occasions for periods of time (not to exceed ten Business Days for any
particular extension) for an aggregate period not to exceed twenty Business Days
if on such expiration date there shall not have been validly tendered and not
withdrawn at least the number of Shares necessary to permit the Merger to be
effected without a meeting of the Company's
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stockholders, and; PROVIDED, FURTHER, that all extensions of the Offer made by
Merger Sub (other than at the request of the Company) shall not extend the Offer
beyond September 5, 1999. Parent and Merger Sub agree that until September 5,
1999 Merger Sub shall from time to time extend the Offer at such times as the
Company may request for five Business Days for each extension, but shall in no
event extend the Offer beyond September 5, 1999. Merger Sub shall not, without
the prior written consent of the Company, decrease the price per Share offered
in the Offer, change the form of consideration offered or payable in the Offer,
decrease the numbers of Shares sought in the Offer, change the conditions to the
Offer, impose additional conditions to the Offer, amend any term of the Offer in
any manner adverse to the holders of Shares or waive the Minimum Conditions (as
defined in Annex A).
(b) As soon as reasonably practicable on the date the Offer is
commenced, Merger Sub shall file a Tender Offer Statement on Schedule 14D-1 (the
"SCHEDULE 14D-1") with the SEC with respect to the Offer. The Schedule 14D-1
shall contain an Offer to Purchase and forms of the related letter of
transmittal and other documents relating to the Merger (which Schedule 14D-1,
Offer to Purchase, letter of transmittal and other documents, together with any
supplements or amendments thereto, are referred to herein collectively as the
"OFFER DOCUMENTS"). Parent and Merger Sub agree that the Company and its counsel
shall be given an opportunity to review the Schedule 14D-1 before it is filed
with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents that shall have
become false or misleading in any material respect, and Parent and Merger Sub
further agree to take all steps necessary to cause the Schedule 14D-1 as so
corrected to be filed with the SEC and the other Offer Documents as so corrected
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and Merger Sub also agree
that the Offer Documents shall comply with the requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations
thereunder.
(c) The Company's Board of Directors shall recommend
acceptance of the Offer to its stockholders in a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "SCHEDULE 14D-9") to be filed with the
Securities and Exchange Commission (the "SEC") substantially contemporaneously
with the filing of the Schedule 14D-1; PROVIDED, HOWEVER, that if the Company's
Board of Directors determines consistent with its fiduciary duties to amend or
withdraw such recommendation, such amendment or withdrawal shall not constitute
a breach of this Agreement. Merger Sub and its counsel shall be given an
opportunity to review the Schedule 14D-9 before it is filed with the SEC.
Parent, Merger Sub and the Company each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 that shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected to be
disseminated to holders of shares, in each case as and to the extent required by
the applicable federal securities laws. The Company also agrees that the
Schedule 14D-9 shall comply with the requirements of the Exchange Act and the
rules and regulations thereunder.
(d) In connection with the Offer, if requested by Parent, the
Company will promptly notify its Transfer Agent to furnish to Merger Sub a list,
as of a recent date, of the names and addresses of the record holders of Shares
and a copy of the names and addresses of participants identified in the most
recent security position listing of any clearing agency which is within the
access of the Company. If Merger Sub needs to disseminate amendments to the
Offer Documents, the Company, if requested by Parent, shall furnish Merger Sub
with updated names and addresses of record holders of Shares not previously
furnished to Merger Sub which is within the access of the Company. For purposes
of this Agreement, the term "Business Day" means any day other than Saturday,
Sunday or a federal holiday.
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ARTICLE
2.
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time, Merger Sub shall be merged with and
into the Company and the separate corporate existence of Merger Sub shall
thereupon cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "SURVIVING CORPORATION"), and the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in Article III. The Merger shall have the effects specified
in the Florida Business Corporation Act (the "FBCA").
2.2. CLOSING. The closing of the Merger (the "CLOSING") shall take
place (i) at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York at 10:00 A.M. on the business day on which the last to be satisfied or
waived of the conditions set forth in Article VIII hereof shall be satisfied or
waived in accordance with this Agreement or (ii) at such other place and time
and/or on such other date as the Company and Parent may agree in writing (the
"CLOSING DATE").
2.3. EFFECTIVE TIME. As soon as practicable following the Closing, the
Company and Parent will cause Articles of Merger reflecting the provisions set
forth in this Agreement (the "ARTICLES OF MERGER") to be executed (by the
Company and Merger Sub) and delivered for filing to the Department of State of
the State of Florida (the "DEPARTMENT") as provided in Section 607.1105 of the
FBCA. The Merger shall become effective at the time when the Articles of Merger
have been duly filed with the Department or at such later time agreed by the
parties in writing and provided in the Articles of Merger (the "EFFECTIVE
TIME").
ARTICLE
3.
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
3.1. THE ARTICLES OF INCORPORATION. 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 (the "ARTICLES"), until
duly amended as provided therein or by applicable law, except that Article III
of the articles of incorporation of the Company shall be amended in its entirety
to read as follows: "The total number of shares of all classes of capital stock
that the Corporation shall have authority to issue shall be 1,000 shares of
Common Stock, par value $.01 per share." and Article IV of the articles of
incorporation of the Company shall be amended in its entirety to read as
follows: "The total number of directors of the Corporation shall be fixed from
time to time pursuant to the by-laws of the Corporation."
3.2. THE BY-LAWS. The by-laws of the Company in effect at the Effective
Time shall be the by-laws of the Surviving Corporation (the "BY-LAWS"), until
thereafter amended as provided therein or by applicable law.
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ARTICLE
4.
OFFICERS AND DIRECTORS OF THE COMPANY
AND THE SURVIVING CORPORATION
4.1. DIRECTORS. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Articles and the By-Laws as in effect from time to time.
4.2. OFFICERS. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Articles and the By-Laws.
4.3. BOARD OF DIRECTORS. If requested by Parent, the Company shall to
the extent permissible, promptly following the purchase by Merger Sub of Shares
pursuant to the Offer in accordance with the terms hereunder, take all actions
necessary (including calling a special meeting of the Board of Directors of the
Company or the stockholders of the Company for this purpose) to cause natural
Persons designated by Parent to become directors of the Company so that the
total number of such natural Persons equals that number of directors, rounded up
to the next whole number, which represents the product of (x) the total number
of directors on the board of directors of the Company multiplied by (y) the
percentage that the number of Shares so accepted for payment plus and shares
beneficially owned by Parent or its affiliates on the date hereof bears to the
number of Shares outstanding at the time of such acceptance for payment. At such
time, the Company shall also cause persons designated by Parent to constitute
the same percentage (rounded up to the next whole number) as is on the Company's
Board of Directors of (i) each committee of the Company's Board of Directors;
(ii) each board of directors (or similar body) of each Subsidiary of the
Company, and (iii) each committee (or similar body) of each such board. In
furtherance thereof, the Company will increase the size of the board of
directors of the Company, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Parent's designees
to be elected to the board of directors of the Company; PROVIDED, HOWEVER, that
prior to the Effective Time, the board of directors of the Company shall always
have at least three members who are neither officers of Parent nor designees,
stockholders or affiliates of Parent ("Parent Insiders"). The Company's
obligations to appoint designees to the board of directors of the Company now
shall be subject to Section 14(f) of the Exchange Act and Rule 14(f)-l
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section 4.3
and shall include in the Schedule 14D-9 such information as is required under
such Section and Schedule. Parent agrees to furnish to the Company all
information concerning Parent's designees which may be necessary to comply with
the foregoing and agrees that such information will comply with the Exchange Act
and the rules and regulations thereunder and other applicable laws.
Notwithstanding anything in this Agreement to the contrary, in the event that
Parent's designees are elected to the Board of Directors of the Company after
the acceptance for payment of Shares pursuant to the Offer and prior to the
Effective Time, the affirmative vote of at least a majority of the directors of
the Company who are not Parent Insiders shall be required to (a) amend or
terminate this Agreement by the Company, (b) exercise or waive any of the
Company's rights, benefits or remedies hereunder, (c) extend the time for
performance of Parent's and Merger Sub's respective obligations hereunder, or
(d) take any other action by the Company's Board of Directors under or in
connection with this Agreement which would adversely affect the ability of the
stockholders of the Company to receive the Merger Consideration.
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ARTICLE
5.
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
5.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
the Company:
(a) MERGER CONSIDERATION. Each share of the voting Common
Stock, par value $0.01 per share, of the Company (a "SHARE" and, collectively,
the "SHARES") issued and outstanding immediately prior to the Effective Time
(other than Shares owned by Parent, Merger Sub or any other direct or indirect
Subsidiary of Parent (collectively, the "PARENT COMPANIES"), Shares that are
owned by the Company or any direct or indirect Subsidiary of the Company and in
each case not held on behalf of third parties or Shares that are owned by
Dissenting Stockholders (collectively, "EXCLUDED SHARES")) shall be cancelled,
extinguished and converted into the right to receive, without an interest, an
amount in cash equal to $25.50 per Share (the "Merger Consideration") or such
greater amount which may be paid pursuant to the Offer. At the Effective Time,
all Shares shall no longer be outstanding and shall be cancelled and retired and
shall cease to exist, and each certificate (a "CERTIFICATE") formerly
representing any of such Shares (other than Excluded Shares) shall thereafter
represent only the right to the Merger Consideration for each Share upon the
surrender of such Certificate in accordance with Section 5.2 or the right, if
any, to receive payment from the Surviving Corporation of the "fair value" of
such Shares as determined in accordance with Section 607.1302 of the FBCA.
(b) CANCELLATION OF SHARES. Each Excluded Share shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be cancelled and retired without payment of any
consideration therefor and shall cease to exist.
(c) MERGER SUB. At the Effective Time, each share of Common
Stock, par value $.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of the Surviving Corporation.
5.2. SURRENDER OF CERTIFICATES. (a) PAYING AGENT. Immediately prior to
the Effective Time, Parent shall deposit, or shall cause to be deposited, with a
paying agent (the "PAYING AGENT"), selected by Parent (within 15 days after the
date hereof) with the Company's prior approval for the benefit of the holders of
Shares, an amount in cash sufficient in the aggregate to provide all funds
necessary for the Paying Agent to make payments of the Merger Consideration to
all holders of Shares, (such cash being hereinafter referred to as the "EXCHANGE
FUND"). To the extent not required within five Business Days for payment with
respect to surrendered Shares, proceeds in the Exchange Fund shall be invested
by the Paying Agent, as directed by Parent (as long as such investments do not
impair the rights of holders of Shares) in direct obligations of the United
States of America, obligations for which the faith and credit of the United
States of America is pledged to provide for the payment of principal and
interest, or certificates of deposit issued by a commercial bank having at least
$10 billion in assets, and any net earnings with respect thereto shall be paid
to Parent as and when requested by the Parent; provided that at no time may the
amount of the Exchange Fund be reduced below an amount necessary to make
payments of the Merger Consideration to all Shares not theretofore submitted.
(b) EXCHANGE PROCEDURES. At the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail to each holder of record of
Shares at the Effective Time (other than holders of Excluded Shares) (i) a
letter of transmittal specifying that delivery of the Certificates shall be
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effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates (or affidavits of loss in lieu thereof) to the
Paying Agent, such letter of transmittal to be in such form and have such other
provisions as Parent and the Company may reasonably agree, and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
amounts of cash payable hereunder to a Person other than the Person in whose
name the surrendered Certificate is registered on the transfer books of the
Company). Subject to Section 5.2(e), upon surrender of a Certificate for
cancellation to the Paying Agent together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a check in an amount equal to (after giving effect to any
required tax withholdings) the Merger Consideration multiplied by the number of
Shares formerly represented by such Certificate and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on
any amount payable upon due surrender of the Certificates. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, a check in the amount payable hereunder, upon due surrender of
the Certificate, may be paid to such a transferee if the Certificate formerly
representing such Shares is presented to the Paying Agent, accompanied by all
documents required to evidence and effect such transfer.
For the purposes of this Agreement, the term "PERSON" shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.
(c) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. From and after the
Effective Time, the holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for herein or by
applicable law.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund that remains unclaimed by the stockholders of the Company for one year
after the Effective Time shall be returned to Parent. Any stockholders of the
Company who have not theretofore complied with this Article V shall thereafter
look only to Parent for payment of the Merger Consideration upon due surrender
of their Certificates (or affidavits of loss in lieu thereof), in each case,
without any interest thereon.
(e) LOST, STOLEN OR DESTROYED CERTIFICATES. 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 and, if required by Parent, the posting by such Person of a
bond in customary amount as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent will issue in exchange for
such lost, stolen or destroyed Certificate the amount of cash such Persons are
entitled to hereunder upon due surrender of the Shares represented by such
Certificate pursuant to this Agreement.
5.3. DISSENTERS' RIGHTS. Notwithstanding anything in this Agreement to
the contrary, if available under the FBCA, Shares that are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders ("Dissenting Stockholders") who have not voted in favor of or
consented to the Merger and in the manner provided in Section 607.1320 of the
FBCA shall have delivered a written notice of intent to demand payment for such
Shares if the Merger is effectuated in the time and manner provided in FBCA and
shall not have failed to perfect or shall not have effectively withdrawn or lost
their rights to appraisal and payment under the FBCA shall not be converted into
the right to receive the Merger Consideration, but shall, in lieu thereof, be
entitled to receive the consideration as shall be determined pursuant to
Sections 607.1301 through 607.1320 of the FBCA;
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PROVIDED, HOWEVER, that any such holder who shall have failed to perfect or
shall have effectively withdrawn or lost his, her or its right to appraisal and
payment under the FBCA, shall thereupon be deemed to have had such Person's
Shares converted, at the Effective Time, into the right to receive the Merger
Consideration set forth herein, without any interest thereon.
5.4. ADJUSTMENTS TO PREVENT DILUTION. In the event that the Company
changes the number of Shares or securities convertible or exchangeable into or
exercisable for Shares, issued and outstanding prior to the Effective Time as a
result of a reclassification, stock split (including a reverse split), stock
dividend or distribution, recapitalization, merger, subdivision, issuer tender
or exchange offer, or other similar transaction, the Merger Consideration shall
be equitably adjusted.
ARTICLE
6.
REPRESENTATIONS AND WARRANTIES
6.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in the disclosure letter delivered to Parent by the Company on or prior to
entering into this Agreement (the "COMPANY DISCLOSURE LETTER"), the Company
hereby represents and warrants to Parent and Merger Sub that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing or of active status, as applicable, under the laws of its
respective jurisdiction of organization and has all requisite corporate or
similar power and authority to own and operate its properties and assets and to
carry on its business as presently conducted and is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its properties or conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing would not have a Company Material Adverse Effect. The Company has made
available to Parent complete and correct copies of the Company's and its
Subsidiaries' articles of incorporation and by-laws (or comparable governing
instruments), as amended to the date hereof. The Company's and its Subsidiaries'
articles of incorporation and by-laws (or comparable governing instruments) so
delivered are in full force and effect.
As used in this Agreement, the term "SUBSIDIARY" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one or more of
its respective Subsidiaries.
As used in this Agreement, the term "COMPANY MATERIAL ADVERSE
EFFECT" means a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its Subsidiaries taken as a
whole; PROVIDED, HOWEVER, that any such effect resulting from any change (i) in
law, rule, regulation or generally accepted accounting principles ("GAAP") or
interpretations thereof, (ii) in economic or business conditions generally which
does not have a disproportionate effect on the Company and its Subsidiaries
taken as a whole or (iii) resulting from the execution and delivery of this
Agreement and the contemplated consummation of the transactions contemplated
hereby shall not be considered when determining if a Company Material Adverse
Effect has occurred.
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(b) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 100,000,000 Shares, of which 28,762,983 Shares were
outstanding as of the close of business on April 29, 1999, 250,000 shares of
nonvoting common stock par value $0.01 per share, of the Company, of which no
shares were outstanding as of the date hereof and 2,000,000 shares of Preferred
Stock, par value $0.01 per share (the "PREFERRED SHARES"), of the Company, of
which no shares were outstanding as of the date hereof. All of the issued and
outstanding Shares have been duly authorized and are validly issued, fully paid
and nonassessable. The Company has no Shares reserved for or subject to
issuance, except that, as of April 29, 1999, there were 3,313,104 Shares
reserved in the aggregate for issuance pursuant to the Company 1997 Stock Option
Plan, the Company 1993 Amended and Restated Stock Option Plan, the Company 1987
Amended and Restated Stock Option Plan, the Company 1995 Non-Employee Director
Stock Option Plan and the Company 1996 Non-Employee Director Stock Option Plan
(collectively, the "STOCK PLANS"). Each of the outstanding shares of capital
stock or other securities of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and owned by the
Company or a direct or indirect wholly-owned Subsidiary of the Company, free and
clear of any lien, pledge, security interest, claim or other encumbrance. Except
as set forth above, there are no preemptive or other outstanding rights,
options, warrants, conversion rights, stock appreciation rights, redemption
rights, repurchase rights, agreements, arrangements or commitments to issue or
to sell any shares of capital stock or other securities of the Company or any of
its Subsidiaries or any securities or obligations convertible or exchangeable
into or exercisable for, or giving any Person a right to subscribe for or
acquire, any securities of the Company or any of its Subsidiaries, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The Company does not have outstanding any bonds, debentures, notes
or other obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the
stockholders of the Company on any matter ("VOTING DEBT").
(c) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS.
(i) The Company has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject only to approval of this Agreement by the holders of a majority of the
outstanding Shares, the Merger. This Agreement has been duly executed and
delivered by the Company, and assuming due authorization, execution and delivery
of this Agreement by Parent and Merger Sub, is a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY
EXCEPTION").
(ii) The Board of Directors of the Company (A) has
approved this Agreement and the Offer and adopted the plan of merger set forth
herein and (B) has received the opinion of its financial advisors, Goldman,
Sachs & Co., to the effect that the Merger Consideration and the consideration
to be paid pursuant to the Offer pursuant to this Agreement are fair from a
financial point of view to the holders of Shares.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A)
pursuant to the FBCA, (B) under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR ACT"), and (C) under the Securities Exchange Act
of 1934 (the "EXCHANGE ACT"), no notices, reports or other filings are required
to be made by the Company with, nor are any consents, registrations, approvals,
permits or
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authorizations required to be obtained by the Company from, any governmental or
regulatory authority, agency, commission, body or other governmental entity
(each a "GOVERNMENTAL ENTITY"), in connection with the execution and delivery of
this Agreement by the Company and the consummation by the Company of the Merger
and the other transactions contemplated hereby, except for those that the
failure to make or obtain would not have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated hereby will not, constitute or
result in (A) a breach or violation of, or a default under, either the articles
of incorporation of the Company or by-laws of the Company or the comparable
governing instruments of any of its Subsidiaries, (B) a breach or violation of,
or a default under, the acceleration of any obligations or the creation of a
lien, pledge, security interest or other encumbrance on the assets of the
Company or any of its Subsidiaries (with or without notice, lapse of time or
both) pursuant to, any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation ("CONTRACTS") or any Law or governmental or
non-governmental permit or license to which the Company or any of its
Subsidiaries is subject or (C) any change in the rights or obligations of any
party under any of the Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, creation or change that
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has
made available to Parent each registration statement, report, proxy statement or
information statement filed by it since July 31, 1997 and prior to the date
hereof, including (i) the Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1998, and (ii) the Company's Quarterly Reports on Form 10-Q
for the quarterly periods ended October 31, 1998, and January 31, 1999, each in
the form (including exhibits, annexes and any amendments thereto) filed with the
Securities and Exchange Commission (the "SEC") (collectively, including
amendments of any such reports as amended, the "COMPANY REPORTS"). Each of the
consolidated balance sheets included in or incorporated by reference into the
Company Reports (including the related notes and schedules) fairly presents the
consolidated financial position of the Company and its Subsidiaries as of its
date and each of the consolidated statements of income and of consolidated
statements of cash flow included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents the
results of operations, retained earnings and changes in financial position, as
the case may be, of the Company and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to the absence of notes
and normal year-end audit adjustments), in each case in accordance with GAAP
consistently applied during the periods involved, except as may be noted
therein. None of the Company Reports (in the case of Company Reports filed
pursuant to the Securities Act), as of their effective dates, contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading and none of the
Company Reports (in the case of Company Reports filed pursuant to the Exchange
Act), as of their respective dates contains any statement which, at the time and
in the light of the circumstances under which it was made, was false or
misleading with respect to any material fact, or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since January 1, 1996,
no Subsidiary of the Company has been required to file any forms, reports or
other documents with the SEC.
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(f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
Company Reports or as permitted hereunder, since July 31, 1998 (the "Audit
Date"), the Company and its Subsidiaries taken as a whole have conducted their
business only in, and have not engaged in any material transaction other than
according to, the ordinary and usual course of such business and there has not
been (i) any change in the financial condition, properties, business or results
of operations of the Company and its Subsidiaries that has had a Company
Material Adverse Effect; (ii) any material damage, destruction or other casualty
loss with respect to any material asset or material property owned, leased or
otherwise used by the Company or any of its Subsidiaries, not covered by
insurance; (iii) any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the Company; or (iv) any
change by the Company in accounting principles, practices or methods which is
not required or permitted by GAAP. Since the Audit Date and through the date
hereof, except as provided for herein or as disclosed in the Company Reports,
there has not been any material increase in the compensation payable or that
could become payable by the Company or any of its Subsidiaries to officers or
key employees or any material amendment of any of the Compensation and Benefit
Plans other than increases or amendments in the ordinary course which increases
or amendments have not had a Company Material Adverse Effect.
(g) LITIGATION AND LIABILITIES. Except as disclosed in the
Company Reports, there are no civil, criminal or administrative actions, suits,
claims, hearings, investigations or proceedings pending or, to the knowledge of
the executive officers of the Company, threatened against the Company or any of
its Subsidiaries, except for those that would not have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
Neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether absolute, accrued or contingent)which would
have a Company Material Adverse Effect except (i) liabilities or obligations
that are accrued for or reserved against in the Company's consolidated balance
sheet as of January 31, 1999 and (ii) liabilities or obligations arising since
January 31, 1999 in the ordinary course of business and consistent with past
practice.
(h) EMPLOYEE BENEFITS.
(i) A copy of each bonus, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, employment,
termination, severance, compensation, medical, health, life, disability,
cafeteria, paid time off, perquisites, fringe benefits or other plan, agreement,
policy or arrangement that covers employees or former employees of the Company
and/or its Subsidiaries ("EMPLOYEES"), or directors or former directors of the
Company and/or its Subsidiaries (the "COMPENSATION AND BENEFIT PLANS") and any
trust agreement or insurance contract forming a part of such Compensation and
Benefit Plans has been made available or provided to Parent prior to the date
hereof. The Compensation and Benefit Plans are listed in Section 6.1(h) of the
Company Disclosure Letter and any Compensation and Benefit Plans containing
"change of control" or similar provisions therein are specifically identified in
Section 6.1(h) of the Company Disclosure Letter.
(ii) All Compensation and Benefit Plans covering
Employees (the "PLANS") have been operated in all material respects in
accordance with their terms and in substantial compliance with all applicable
Laws. Each Plan that is an "employee pension benefit plan" within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "PENSION PLAN") and that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (the "IRS") with respect to "TRA" (as defined in
Section 1 of Rev. Proc. 93-39), and none of the executive officers of the
Company has knowledge of any circumstances reasonably likely to result in
revocation of any such favorable
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determination letter. There is no material pending or, to the knowledge of the
executive officers of the Company, threatened litigation relating to the
Compensation and Benefit Plans. Neither the Company nor any of its Subsidiaries
has engaged in a transaction with respect to any Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject the
Company or any of its Subsidiaries to a material tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA.
(iii) No liability under Subtitle C or D of Title IV
of ERISA has been or is expected to be incurred by the Company or any Subsidiary
with respect to any ongoing, frozen or terminated "single-employer plan", within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any of them, or the single-employer plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or Section 414 of the Code
(an "ERISA AFFILIATE"). The Company and its Subsidiaries have not incurred and
do not expect to incur, directly or indirectly, any withdrawal liability with
respect to a multiemployer plan under Subtitle E to Title IV of ERISA. No notice
of a "reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to be
filed for any Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof or will be required to be filed in connection with the
transactions contemplated by this Agreement.
(iv) All contributions and premiums required to be
made under the terms of any Compensation and Benefit Plan as of the date hereof
have been timely made or have been reflected on the most recent consolidated
balance sheet filed or incorporated by reference in the Company Reports. Neither
any Pension Plan nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency," within the meaning of Section 412 of the Code
or Section 302 of ERISA and no ERISA Affiliate has an outstanding funding waiver
(whether or not waived) as of the last day of the most recent plan year ended
prior to the date hereof. Neither the Company nor its Subsidiaries has provided,
or is required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code. No insurance policy or Contract with respect to any Compensation and
Benefit Plans requires or permits retroactive increases in premiums or payments
due thereunder.
(v) Under each Pension Plan which is a single
employer plan, as of the last day of the most recent plan year ended prior to
the date hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined
on the basis of the actuarial assumptions contained in the Pension Plan's most
recent actuarial valuation), did not exceed the then current value of the assets
of such Pension Plan, and there has been no material change in the financial
condition of such Pension Plan since the last day of the most recent plan year.
(vi) Neither the Company nor its Subsidiaries have
any obligations for retiree health and life benefits under any Compensation and
Benefit Plan.
(vii) The consummation of the Merger and the other
transactions contemplated by this Agreement will not (x) entitle any Employees
to severance pay, (y) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Compensation and Benefit Plans or (z) result
in any breach or violation of, or a default under, any of the Compensation and
Benefit Plans. The Company may amend or terminate any Compensation and Benefit
Plan in accordance with its express terms or under applicable Law.
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(viii) Notwithstanding anything to the contrary
contained in this Section 6.1(h), the representations and warranties contained
in this Section 6.1(h) shall be deemed to be true and correct unless such
failures to be true and correct are reasonably likely to have a Company Material
Adverse Effect.
(i) COMPLIANCE WITH LAWS. The business of the Company and its
Subsidiaries is not being conducted in violation of any federal, state, local or
foreign law, statute, ordinance, rule, regulation, judgment, order, injunction,
decree, arbitration award, agency requirement, license or permit of any
Governmental Entity (collectively, "LAWS"), except for violations that would not
have a Company Material Adverse Effect or prevent or materially burden or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. No investigation or review by any Governmental
Entity with respect to the Company or any of its Subsidiaries is pending or, to
the knowledge of the executive officers of the Company, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for those
the outcome of which would not have a Company Material Adverse Effect or prevent
or materially burden or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement. The Company and its
Subsidiaries each has all permits, licenses, franchises, variances, exemptions,
orders and other governmental authorizations, consents and approvals from
Governmental Entities necessary to conduct its business as presently conducted,
except for those the absence of which would not have a Company Material Adverse
Effect or prevent or materially burden or materially impair the ability of the
Company to consummate the Merger and the other transactions contemplated by this
Agreement.
(j) TAKEOVER STATUTES. No "fair price," "moratorium," "control
share acquisition," "interested stockholder" or other similar anti-takeover
statute or regulation (including, without limitation, Sections 607.0901 and
607.0902 of the FBCA) (each a "TAKEOVER STATUTE") or restrictive provision of
any applicable anti-takeover provision in the articles of incorporation of the
Company or by-laws of the Company is, applicable to the Company, the Shares, the
Offer, the Merger or any of the other transactions contemplated by this
Agreement.
(k) ENVIRONMENTAL MATTERS. Except as disclosed in the Company
Reports and except for such matters that would not have a Company Material
Adverse Effect: the Company and its Subsidiaries (i) are in substantial
compliance with all applicable Environmental Laws; (ii) have not received any
notice from any Governmental Entity or any third party alleging any violation
of, or liability under, any applicable Environmental Laws; (iii) are not subject
to any court order, administrative order or decree arising under any
Environmental Law; (iv) to the knowledge of the executive officers of the
Company do not own or operate any property that has been contaminated with any
Hazardous Substance and (v) are not subject to any claims, demands or
notifications concerning liability for any Hazardous Substance disposal or
contamination.
Parent and Merger Sub acknowledge that the representations and
warranties contained in this Section 6.1(k) are the only representations and
warranties being made by the Company with respect to compliance with, or
liability or claims under, Environmental Laws or with respect to permits issued
or required under Environmental Laws, that no other representation by the
Company contained in this Agreement shall apply to any such matters and that no
other representation or warranty, express or implied, is being made with respect
thereto.
As used herein, the term "ENVIRONMENTAL LAW" means any
federal, state, local or foreign statute, law, regulation, order, decree,
permit, authorization, common law or agency requirement as in effect and as
interpreted relating to: (A) the protection, investigation or restoration of the
environment,
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health, safety, or natural resources or (B) the handling, use, presence,
disposal, release or threatened release of, or exposure to, any Hazardous
Substance.
As used herein, the term "HAZARDOUS SUBSTANCE" means any
substance that is listed, classified or regulated pursuant to any Environmental
Law including any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
material or radon.
(l) TAXES. The Company and each of its Subsidiaries (i) have
duly and timely filed (taking into account any extension of time within which to
file) all Tax Returns (as defined below) required to be filed by any of them and
all such filed Tax Returns are complete and accurate in all material respects;
(ii) have paid all Taxes (as defined below) that are shown as due on such filed
Tax Returns or that the Company or any of its Subsidiaries are obligated to
withhold from amounts owing to any employee, creditor or third party, except
with respect to matters contested in good faith and would not have a Company
Material Adverse Effect; and (iii) have not waived any statute of limitations
with respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency, except, in each case, for those failures to file or
pay or those waivers that would not have a Company Material Adverse Effect.
There are not pending or, to the knowledge of the executive officers of the
Company, threatened in writing, any audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters.
As used in this Agreement, (i) the term "TAX" (including, with
correlative meaning, the terms "TAXES", and "TAXABLE") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "TAX RETURN" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority relating to
Taxes.
(m) LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is the subject of any proceeding asserting that the Company or any
of its Subsidiaries has committed an unfair labor practice nor is there pending
or, to the knowledge of the executive officers of the Company, threatened, nor
since January 1, 1996 has there been any labor strike, dispute, walk-out, work
stoppage, slow-down or lockout involving the Company or any of its Subsidiaries,
except in each case for those that would not have a Company Material Adverse
Effect or prevent or materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement.
(n) INTELLECTUAL PROPERTY.
(i) The Company and/or one or more of its
Subsidiaries owns, or is licensed or otherwise possesses valid rights to use,
all patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or materials
that are used in the business of the Company and its Subsidiaries, except for
any such failures to own, be licensed or possess that would not have a Company
Material Adverse Effect, and to the knowledge of the executive officers of the
Company all patents, trademarks, trade names, service marks and copyrights owned
by the Company
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and/or its Subsidiaries are valid and subsisting, except for those that would
not have a Company Material Adverse Effect.
(ii) Except as disclosed in Company Reports or except
as would not have a Company Material Adverse Effect:
(A) the Company is not, nor will it be as a
result of the execution and delivery of this Agreement or the performance of its
obligations hereunder, in violation of any licenses, sublicenses and other
agreements as to which the Company is a party as of the date hereof and pursuant
to which the Company is authorized to use any third-party patents, trademarks,
service marks, copyrights, trade secrets or computer software (collectively,
"THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS");
(B) no claims with respect to (I) the
patents, registered and material unregistered trademarks and service marks,
registered copyrights, trade names, and any applications therefor, trade secrets
or computer software owned by the Company or any of its Subsidiaries
(collectively, the "COMPANY INTELLECTUAL PROPERTY RIGHTS"); or (II) Third-Party
Intellectual Property Rights are currently pending or, to the knowledge of the
executive officers of the Company, are threatened by any Person;
(C) to the knowledge of the executive
officers of the Company there are not any valid grounds for any bona fide claims
(I) to the effect that the sale, licensing or use of any service as used, sold
or licensed by the Company or any of its Subsidiaries, infringes on any
copyright, patent, trademark, service mark or trade secret; (II) against the use
by the Company or any of its Subsidiaries of any Company Intellectual Property
Rights or the Third-Party Intellectual Property Rights used in the business of
the Company or any of its Subsidiaries as currently conducted; (III) challenging
the ownership, validity or enforceability of any of the Company Intellectual
Property Rights; or (IV) challenging the license or legally enforceable right to
use of the Third-Party Intellectual Rights by the Company or any of its
Subsidiaries; and
(D) to the knowledge of the executive
officers of the Company, there is no unauthorized use, infringement or
misappropriation of any of the material Intellectual Property Rights by any
third party, including any employee or former employee of the Company or any of
its Subsidiaries.
(o) BROKERS AND FINDERS. Except for Goldman, Sachs & Co.,
neither the Company nor any of its officers, directors or employees has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Merger or the other
transactions contemplated by this Agreement.
(p) YEAR 2000. The Company has developed a plan which it
reasonably believes is designed to confirm that all computer software and
systems (including hardware, firmware, operating system software, utilities,
embedded processors and application's software) used in and material to the
business of the Company are designed to operate during and after the calendar
year 2000 to accurately process data (including but not limited to calculating,
comparing and sequencing) from, into and between the twentieth and twenty-first
centuries, including leap year calculations and the Company is not aware of any
flaws in any of the computer software and systems owned by it and used in and
material to the business of the Company that would have a Company Material
Adverse Effect.
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(q) WAIVER OF VESTING. The individuals listed in Schedule
6.1(q) of the Company Disclosure Letter have waived all vesting rights that they
may have pursuant to the terms of Section 7.8 hereof with respect to all options
to purchase shares beneficially owned by them and issued pursuant to the Stock
Plans. The Company has provided Parent with copies of each such waiver.
(r) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Section 6.1, neither the
Company nor any other Person makes any other express or implied representation
or warranty on behalf of the Company or any of its Affiliates.
6.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Except as
set forth in the disclosure letter delivered to the Company by Parent on or
prior to entering into this Agreement (the "PARENT DISCLOSURE LETTER"), Parent
and Merger Sub each hereby represent and warrant to the Company that:
(a) CAPITALIZATION OF MERGER SUB. The authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, par value
$.01 per share, of Merger Sub all of which are validly issued and outstanding.
All of the issued and outstanding capital stock of Merger Sub is, and at the
Effective Time will be, owned by Parent, and there are (i) no other shares of
capital stock or voting securities of Merger Sub authorized, (ii) no securities
of Merger Sub convertible into or exchangeable for shares of capital stock or
voting securities of Merger Sub and (iii) no options or other rights to acquire
from Merger Sub, and no obligations of Merger Sub to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Merger Sub. Merger Sub has not conducted any
business prior to the date hereof and has no, and prior to the Effective Time
will have no, assets, liabilities or obligations of any nature other than those
incident to its formation and pursuant to or in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement.
(b) ORGANIZATION, GOOD STANDING AND QUALIFICATION.
Each of Parent and Merger Sub is a corporation duly organized, validly existing
and in good standing (or active status) under the laws of its respective
jurisdiction of organization and has all requisite corporate or similar power
and authority to own and operate its properties and assets and to carry on its
business as presently conducted and is qualified to do business and is in good
standing (or active status) as a foreign corporation in each jurisdiction where
the ownership or operation of its properties or conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing would not have a Parent Material Adverse Effect. Parent has made
available to the Company a complete and correct copy of Parent's and Merger
Sub's certificates of incorporation and by-laws (or comparable governing
instruments), as amended to the date hereof. Parent's and Merger Sub's
certificates of incorporation and by-laws (or comparable governing instruments)
so delivered are in full force and effect.
As used in this Agreement, the term "PARENT MATERIAL ADVERSE
EFFECT" means a material adverse effect on the financial condition, properties,
business or results of operations of Parent and its Subsidiaries taken as a
whole; PROVIDED, HOWEVER, that any such effect resulting from any change in law,
rule, or regulation or GAAP or interpretations thereof shall not be considered
when determining if a Parent Material Adverse Effect has occurred.
(c) CAPITAL STRUCTURE. As of the most recently filed
Quarterly Report on Form 10-Q of Parent, the authorized, issued and outstanding
capital stock of Parent is as stated therein. Each of the outstanding shares of
capital stock or other securities of each of Parent's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and owned by Parent or
a direct or indirect
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wholly-owned Subsidiary of Parent, free and clear of any lien, pledge, security
interest, claim or other encumbrance. Except as set forth in the most recently
filed Quarterly Report on Form 10-Q of Parent and in the ordinary course of
business, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements or commitments to issue or to sell
any shares of capital stock or other securities of Parent or any of its
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire,
any securities of Parent or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. Parent
does not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Parent on any
matter ("PARENT VOTING DEBT").
(d) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS.
(i) No vote of holders of capital stock of Parent is
necessary to approve this Agreement, the Offer and the Merger and the other
transactions contemplated hereby. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement, and to consummate the Merger and the transactions contemplated
hereby. The consummation of the transactions contemplated hereby has been duly
authorized by the respective Boards of Directors of Parent and Merger Sub and no
other corporate proceeding on the part of Parent or Merger Sub is necessary to
authorize the execution and delivery of this Agreement by Parent and Merger Sub
and the consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Parent and Merger Sub and, assuming due
authorization, execution and delivery of this Agreement by the Company, is a
valid and legally binding agreement of Parent and Merger Sub, enforceable
against each of Parent and Merger Sub in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(ii) The Board of Directors of Parent has received
the opinion of its financial advisors, Bear Stearns & Co. Inc., to the effect
that the Merger Consideration and the Consideration to be paid in the Offer are
fair, from a financial point of view, to Parent.
(e) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A)
pursuant to the FBCA, (B) under the HSR Act, and (C) the Exchange Act, no
notices, reports or other filings are required to be made by Parent or Merger
Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent or Merger Sub from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub
of the Merger, the Offer and the other transactions contemplated hereby, except
for those that the failure to make or obtain would not have a Parent Material
Adverse Effect or prevent, materially delay or materially impair the ability of
Parent or Merger Sub to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this
Agreement by Parent and Merger Sub do not, and the consummation by Parent and
Merger Sub of the Offer, the Merger or the other transactions contemplated
hereby will not, constitute or result in (A) a breach or violation of, or a
default under, either the certificate of incorporation or by-laws of Parent and
Merger Sub or the comparable governing instruments of any of Parent's
Subsidiaries, (B) a breach or violation of, or a
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default under, the acceleration of any obligations or the creation of a lien,
pledge, security interest or other encumbrance on the assets of Parent or any of
its Subsidiaries (with or without notice, lapse of time or both) pursuant to,
any Contracts or any Law or governmental or non-governmental permit or license
to which Parent or any of its Subsidiaries is subject or (C) any change in the
rights or obligations of any party under any of the Contracts, except, in the
case of clause (B) or (C) above, for any breach, violation, default,
acceleration, creation or change that would not have a Parent Material Adverse
Effect or prevent, materially delay or materially impair the ability of Parent
or Merger Sub to consummate the transactions contemplated by this Agreement.
(f) LITIGATION AND LIABILITIES. There are no civil, criminal
or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of the executive officers of Parent,
threatened against Parent or any of its Subsidiaries, which would prevent or
materially burden or materially impair the ability of Parent or Merger Sub to
consummate the Offer, the Merger or any of the other transactions contemplated
by this Agreement.
(g) COMPLIANCE WITH LAWS. The business of Parent and its
Subsidiaries taken as a whole is not being conducted in violation of any Laws,
except for violations that would not materially burden or materially impair the
ability of Parent to consummate the transactions contemplated by this Agreement.
As of the date hereof, no investigation or review by any Governmental Entity
with respect to Parent or any of its Subsidiaries is pending or, to the
knowledge of the executive officers of Parent, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for those
the outcome of which would not prevent or materially burden or materially impair
the ability of Parent to consummate the transactions contemplated by this
Agreement. Parent and its Subsidiaries each has all permits, licenses,
franchises, variances, exemptions, orders and other governmental authorizations,
consents and approvals from Governmental Entities necessary to conduct its
business as presently conducted, except for those the absence of which would not
prevent or materially burden or materially impair the ability of Parent or
Merger Sub to consummate the Merger and the other transactions contemplated by
this Agreement.
(h) TAKEOVER STATUTES. No Takeover Statute or restrictive
provision of any applicable anti-takeover provision in the certificate of
incorporation of Parent or by-laws of Parent is, applicable to Parent, Merger
Sub, the Offer, the Merger or any of the other transactions contemplated by this
Agreement.
(i) BROKERS AND FINDERS. Except for Bear Stearns & Co. Inc.,
neither Parent nor any of its officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the Offer, the Merger or the other
transactions contemplated by this Agreement.
(j) FUNDS. Parent and Merger Sub will have the funds necessary
to consummate the Offer and the Merger.
(k) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Section 6.2, neither Parent nor
any other Person makes any other express or implied representation or warranty
on behalf of Parent or any of its Affiliates.
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ARTICLE
7.
COVENANTS
7.1. INTERIM OPERATIONS OF THE COMPANY. From the date hereof through
the Effective Time, the Company covenants and agrees that its business and the
business of its Subsidiaries shall be conducted in the ordinary and usual course
and, to the extent consistent therewith, it and its Subsidiaries shall use their
respective best reasonable efforts to preserve its business organization intact
and maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, employees and business associates. Without
limiting the generality of the foregoing, except as otherwise set forth in
Section 7.1(a) of the Company Disclosure Letter, the Company covenants and
agrees as to itself and its Subsidiaries that, from the date hereof and prior to
the Effective Time (unless Parent shall otherwise approve in writing, which
approval shall not be unreasonably withheld or delayed, and except as otherwise
expressly contemplated by this Agreement or by Law):
(i) it shall not (x) issue, sell, pledge, dispose of
or encumber any capital stock owned by it in any of its Subsidiaries; (y) amend
its articles of incorporation or by-laws or the comparable governing instruments
of any of its Subsidiaries; (z) split, combine or reclassify its outstanding
shares of capital stock; (aa) declare, set aside or pay any dividend payable in
cash, stock or property in respect of any capital stock other than dividends
from its direct or indirect wholly- owned Subsidiaries to it or a wholly-owned
Subsidiary or (bb) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exchangeable or exercisable
for any shares of its capital stock, except, in connection with the Stock Plans,
or permit any of its Subsidiaries to purchase or otherwise acquire, any shares
of its capital stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock;
(ii) neither it nor any of its Subsidiaries shall (x)
issue, sell, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its capital
stock of any class or any Voting Debt or any other property or assets (other
than Shares issuable pursuant to options (whether or not vested) outstanding on
the date hereof under the Stock Plans); (y) other than in the ordinary and usual
course of business, transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of or encumber any other property or assets (including capital stock of
any of its Subsidiaries) or incur or modify any material indebtedness for
borrowed money or guarantee any such indebtedness or (z) by any means, make any
significant acquisition of, or investment in, assets or stock (whether by way of
merger, consolidation, tender offer, share exchange or other activity);
(iii) neither it nor any of its Subsidiaries shall
terminate, establish, adopt, enter into, make any new grants or awards under,
amend or otherwise modify, any Compensation and Benefit Plans, or increase the
salary, wage, bonus or other compensation of any employees except for grants or
awards or increases under existing Compensation and Benefit Plans occurring in
the ordinary and usual course of business (which shall include normal periodic
performance reviews and related compensation and benefit increases), annual
reestablishment of Compensation and Benefit Plans and the provision of
individual compensation or benefit plans and agreements for newly hired or
appointed officers and employees of the Company and its Subsidiaries or except
for actions necessary to satisfy existing contractual obligations under
Compensation and Benefit Plans or agreements existing as of the date hereof; and
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(iv) neither it nor any of its Subsidiaries will
authorize or enter into an agreement to do anything prohibited by the foregoing.
7.2. ACQUISITION PROPOSALS. The Company agrees that neither it nor any
of its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall cause its and its Subsidiaries' employees, agents and
other representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, tender offer, reorganization,
share exchange, consolidation or similar transaction involving, or any purchase
of all or substantially all of the assets or any equity securities of, it or any
of its Subsidiaries (any such proposal or offer being hereinafter referred to as
an "ACQUISITION PROPOSAL"). The Company further agrees that neither it nor any
of its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall cause its and its Subsidiaries' employees, agents and
representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
PROVIDED, HOWEVER, that nothing contained in this Agreement shall prevent either
the Company or any of its representatives or the Board of Directors of the
Company from (A) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal or otherwise complying with the Exchange
Act; (B) providing information in response to a request therefor by a Person who
has made an unsolicited Acquisition Proposal; (C) engaging in any negotiations
or discussions with any Person who has made an unsolicited Acquisition Proposal
or otherwise facilitating any effort or attempt to implement an Acquisition
Proposal; or (D) recommending such an Acquisition Proposal to the stockholders
of the Company, if, and only to the extent that, in each such case referred to
in clause (B), (C) or (D) above, the Board of Directors of the Company
determines either (x) upon advice of outside legal counsel that the failure to
take such action would constitute a breach of the directors' fiduciary duties
under applicable law or (y) that such Acquisition Proposal contains terms such
that if an agreement relating to such Acquisition Proposal were entered into it
would be, in the aggregate, more favorable to the Company, taking into account,
at the sole discretion of the Board of Directors of the Company, any of the
matters described in Section 4.5 of the articles of incorporation of the
Company, than the transactions contemplated by this Agreement (any such more
favorable Acquisition Proposal being referred to as a "SUPERIOR PROPOSAL"). The
Company agrees that it will immediately cease and cause to be terminated any
existing discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal; it being understood that any Acquisition
Proposal made prior to the date hereof may, if made at any time after the date
hereof, be deemed a Superior Proposal, if it would otherwise fulfill the
requirements for being deemed a Superior Proposal hereunder. The Company agrees
that it will take the necessary steps to promptly inform the individuals or
entities referred to in the first sentence hereof of the obligations undertaken
in this Section 7.2. The Company will, within forty-eight hours of receipt of an
Acquisition Proposal that would be reasonably likely to result in a Superior
Proposal, notify Parent of the receipt and terms of such proposal, including the
identity of the offeror, and will keep Parent reasonably informed of the status
of any such Proposal. The Company also agrees that as soon as reasonably
practicable after the date hereof it will request the return of confidential
information from any Person previously receiving such information in connection
with such Person's consideration of a potential Acquisition Proposal.
7.3. MEETINGS OF THE COMPANY'S STOCKHOLDERS. If required following
expiration of the Offer and the purchase of Shares thereunder, the Company will
promptly take, consistent with the FBCA and its articles of incorporation and
By-Laws, all action necessary to convene a meeting of holders of Shares as
promptly as practicable to consider and vote upon the approval of the Merger and
this Agreement.
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Without limiting the generality of the foregoing, if required by applicable law,
the Company and Parent shall immediately following the purchase of Shares
pursuant to the Offer prepare an information or proxy statement (the "PROXY
STATEMENT"), file it with the SEC under the Exchange Act as promptly as
practicable after Merger Sub purchases Shares pursuant to the Offer, and use all
reasonable efforts to have it cleared by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the stockholders of the Company as of the record date for
the stockholders' meeting referred to above. If required under applicable law,
the Company and Parent shall prepare the Schedule 13e-3, file it with the SEC
under the Exchange Act as promptly as practicable after Merger Sub purchases
shares pursuant to the Offer and supplement and amend it as shall be required.
The Company will use its best efforts to obtain and furnish the information
required to be included by it in the Proxy Statement and, after consultation
with Parent, respond promptly to any comments of the SEC relating to the
preliminary proxy or information statement relating to the transactions
contemplated by this Agreement and to cause the definitive Proxy Statement
relating to the transactions contemplated by this Agreement to be mailed to its
stockholders, all at the earliest practical time. Whenever any event occurs
which should be set forth in an amendment or supplement to the Proxy Statement
or any other filing required to be made with the SEC, each party will promptly
inform the other and cooperate in filing with the SEC and/or mailing to
stockholders such amendment or supplement. The Proxy Statement and all
amendments and supplements thereto shall comply with applicable law in all
material respects and be in form and substance satisfactory to Parent. Subject
to fiduciary requirements of applicable Law as advised by outside counsel, the
Board of Directors of the Company shall recommend such approval referral to
which shall be included in the Proxy Statement and the Company shall take all
lawful action to solicit such approval. At any such meeting of the Company all
of the Shares then owned by the Parent Companies will be voted in favor of this
Agreement. The Proxy Statement with respect to such meeting of stockholders, at
the date mailed to stockholders, shall not include an 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; PROVIDED, HOWEVER, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information concerning the Parent Companies
furnished to the Company by Parent for use in the Proxy Statement.
Notwithstanding the foregoing, in the event that Parent or Merger Sub shall
acquire at least 80% of the outstanding shares of each class of capital stock of
the Company pursuant to the Offer, the parties hereto agree, at the request of
Parent, to take all appropriate and necessary action to cause the Merger to
become effective, as soon as practicable after the expiration or termination of
the Offer and the transactions contemplated hereby, without a meeting of
stockholders of the Company, in accordance with the FBCA.
7.4. FILINGS; OTHER ACTIONS; NOTIFICATION. (a) The Company and Parent
shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) their respective best efforts to take or cause to be taken
all actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable Laws to consummate the
Offer and make effective the Merger and the other transactions contemplated by
this Agreement as soon as practicable, including preparing and filing as soon as
practicable all documentation to effect all necessary notices, reports and other
filings and to obtain as soon as practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Entity in order to consummate the Offer,
the Merger or any of the other transactions contemplated by this Agreement.
Subject to applicable Laws relating to the exchange of information, Parent and
the Company shall have the right to review in advance, and to the extent
practicable each will consult the other on, all the information relating to
Parent or the Company, as the case may be, and any of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or
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any Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement. In exercising the foregoing right, each of the
Company and Parent shall act reasonably and as promptly as practicable.
(b) The Company and Parent each shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with any statement, filing,
notice or application made by or on behalf of Parent, the Company or any of
their respective Subsidiaries to any third party and/or any Governmental Entity
in connection with the Offer, the Merger and the transactions contemplated by
this Agreement.
(c) Subject to any confidentiality obligations and the
preservation of any attorney-client privilege, the Company and Parent each shall
keep the other apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other with
copies of notices or other communications received by Parent or the Company, as
the case may be, or any of its Subsidiaries, from any third party and/or any
Governmental Entity with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement.
(d) Without limiting the generality of the undertakings
pursuant to this Section 7.4, each of the Company and Parent agrees to take or
cause to be taken the following actions: (i) provide promptly to any and all
federal, state, local or foreign courts or Government Entity with jurisdiction
over enforcement of any applicable antitrust laws ("GOVERNMENT ANTITRUST
ENTITY") information and documents requested by any Government Antitrust Entity
or necessary, proper or advisable to permit consummation of the Merger and the
transactions contemplated by this Agreement; and (ii) take promptly, in the
event that any permanent or preliminary injunction or other order is entered or
becomes reasonably foreseeable to be entered in any proceeding that would make
consummation of the Merger in accordance with the terms of this Agreement
unlawful or that would prevent or delay consummation of the Offer, the Merger or
any of the other transactions contemplated by this Agreement, any and all steps
(including the appeal thereof or the posting of a bond necessary to vacate,
modify or suspend such injunction or order so as to permit such consummation on
a schedule as close as possible to that contemplated by this Agreement.
7.5. ACCESS. Upon reasonable notice, and except as may otherwise be
required by applicable Law, the Company shall (and shall cause its Subsidiaries
to) afford the other's officers, employees, counsel, accountants and other
authorized representatives ("REPRESENTATIVES") reasonable access, during normal
business hours throughout the period prior to the Effective Time, to its
properties, books, contracts and records and, during such period, each shall
(and shall cause its Subsidiaries to) furnish promptly to Parent all information
concerning its business, properties and personnel as may reasonably be
requested; PROVIDED, that no investigation pursuant to this Section shall affect
or be deemed to modify any representation or warranty made by the Company and;
PROVIDED, FURTHER, that the foregoing shall not require the Company to permit
any inspection, or to disclose any information, that in the reasonable judgment
of the Company would result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality if the
Company shall have used reasonable efforts to obtain the consent of such third
party to such inspection or disclosure. All requests for information made
pursuant to this Section shall be directed to an executive officer of the
Company or such Person as may be designated by either of its executive officers,
as the case may be. All such information shall be governed by the terms of the
Confidentiality Agreement.
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7.6. STOCK EXCHANGE DE-LISTING. The Surviving Corporation shall use its
best efforts to cause the Shares to be removed from quotation on the NASDAQ
National Market System and de-registered under the Exchange Act as soon as
practicable following the Effective Time. Unless required by the rules of the
National Association of Securities Dealers, subsequent to Merger Sub's payment
for Shares and prior to the Effective Time, the Company shall not take any
action to cause the Shares to be removed from quotation on the NASDAQ National
Market System and de-registered under the Exchange Act.
7.7. PUBLICITY. The initial press release shall be a joint press
release and thereafter the Company and Parent each shall consult with the other
prior to issuing any press releases or otherwise making public announcements
with respect to the Offer, the Merger and the other transactions contemplated by
this Agreement and prior to making any filings with any third party and/or any
Governmental Entity (including any national securities exchange or national
market systems) with respect thereto, except as may be required by law or by
obligations pursuant to any listing agreement with or rules of any national
securities exchange or national market system.
7.8. BENEFITS. (a) STOCK OPTIONS.
(i) The Company shall take all necessary actions to
cause (including plan amendments) prior to the Effective Time each outstanding
option to purchase Shares which had not vested immediately prior to such time to
become vested and fully exercisable.
(ii) Prior to the Effective Time, the Company shall
use its reasonable best efforts to cause each then outstanding option granted
under the Stock Plans to purchase Shares (a "Company Option"), whether vested or
unvested, to be cancelled, with the holder thereof becoming entitled to receive
an amount of cash equal to the product of (x) the amount, if any, by which the
Merger Consideration exceeds the exercise price per Share subject to such
Company Option (whether vested or unvested) and (y) the number of Shares
issuable pursuant to the unexercised portion of such Option, less any required
withholding of taxes (such amount being hereinafter referred to as the "OPTION
CONSIDERATION"). The Option Consideration shall be paid as soon as practicable
following the Effective Time, but in any event within five (5) days following
the Effective Time. The cancellation of a Company Option in exchange for the
Option Consideration shall be deemed a release of any and all rights the holder
had or may have had in respect of such Company Option, and any required consents
received from Company Option holders shall so provide.
(iii) In the event that any Company Options are not
cancelled in accordance with the provisions of Section 7.8(a)(ii), such Company
Options (the "Remaining Options") shall be subject to the following provisions
of this Section 7.8(a)(iii). Each Remaining Option, shall, at the Effective
Time, in accordance with the terms of the Stock Plan pursuant to which such
Company Option was issued, be deemed to constitute an option to acquire, on the
same terms and conditions as were applicable under such Remaining Option
immediately prior to the Effective Time, (A) a number of shares of Parent Common
Stock equal to the product (rounded up to the nearest whole number) obtained by
multiplying (x) the number of Shares the holder of such Remaining Option would
have been entitled to receive immediately prior to the Effective Time had such
holder exercised such Remaining Option in full immediately prior to the
Effective Time and (y) the quotient obtained by dividing the Merger
Consideration by the average of the closing prices per share of Parent Common
Stock on the NYSE Composite Transactions tape for the five trading days
immediately preceding the date of the Effective Time as reported in the Wall
Street Journal, New York City edition, (B) at a price per share of Parent Common
Stock (rounded down to the nearest whole cent) equal to (A) the aggregate
exercise price for the Shares otherwise purchasable pursuant to such Remaining
Option (assuming for such purposes that
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such Remaining Option was fully exercisable at such time) divided by (B) the
number of full shares of Parent Common Stock deemed purchasable pursuant to such
Remaining Option in accordance with the foregoing; PROVIDED, HOWEVER, that any
Remaining Option which is intended to be an "incentive stock option" (as defined
in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424 of the Code.
(iv) At or prior to the Effective Time, the Company
shall make all necessary arrangements with respect to the Stock Plans to permit
the assumption of the Remaining Options by Parent. Effective at the Effective
Time, Parent shall assume each Remaining Option in accordance with the terms of
the Stock Plan under which it was issued and the stock option agreement by which
it is evidenced. At or prior to the Effective Time, Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Parent Common Stock for delivery upon exercise of Remaining Options. At the
Effective Time, Parent shall file a registration statement on Form S-8, or, if
unavailable, a registration statement on Form S-3 (or any successor forms), or
another appropriate form with respect to the Parent Common Stock subject to
Remaining Options, and shall use its best efforts to cause such registration
statement to become and remain effective (and maintain the current status of the
prospectus or prospectuses contained therein), as well as comply with any
applicable state securities or "blue sky" laws, for so long as any Remaining
Options remain outstanding.
(v) Prior to the Effective Time, the Board of
Directors of Parent shall use reasonable efforts to take all actions necessary
to ensure that the options to purchase Parent Common Stock (resulting from
Remaining Options) held by the officers and directors of the Company in
accordance with this Section 7.8(a) shall be exempt for purposes of Rule 16b-3
under the Exchange Act (including, with respect to each officer and director of
the Company, having the full Board of Directors of Parent adopt, prior to the
Effective Time, resolutions providing (i) the name of each such officer and
director, (ii) the number of shares of Parent Common Stock to be subject to each
Remaining Option held by each such officer or director, (iii) any other material
terms of such options and (iv) the fact that such approval is for the purpose of
obtaining an exemption under Rule 16b-3 under the Exchange Act).
(b) EMPLOYEE BENEFITS. Parent agrees that, during the period
commencing at the Effective Time and ending on the first anniversary thereof,
the employees of the Company and its Subsidiaries will continue to be provided
with benefits under employee benefit plans that are no less favorable in the
aggregate than the Plans (excluding "change of control" or similar Plans with
respect to any change of control occurring after the Effective Time and
excluding benefits provided pursuant to any Plan covering one or a select group
of current or former employees) currently provided by the Company and its
Subsidiaries to such employees as disclosed in the Company Disclosure Letter.
Following the Effective Time, Parent shall cause service by employees of the
Company and its Subsidiaries (and any predecessor entities) to be taken into
account for all purposes (including, without limitation, eligibility to
participate, eligibility to commence benefits, vesting, benefit accrual and
severance) under any benefit plans of Parent or its Subsidiaries (including the
Surviving Corporation). From and after the Effective Time, Parent shall (i)
cause to be waived any pre-existing condition limitations under benefit plans of
Parent or its Subsidiaries in which employees of the Company or its Subsidiaries
participate and (ii) cause to be credited to any deductible or out of pocket
expense of Parent's plans any deductibles and out-of-pocket expenses incurred by
such employees and their beneficiaries and dependents during the portion of the
calendar year prior to participation in the benefit plans provided by Parent and
its Subsidiaries. Parent shall cause the Surviving Corporation to, honor all
employee benefit obligations to current and former employees under the
Compensation and Benefit Plans and all employee severance plans and all
employment or severance agreements listed on Schedule 7.8(b) of the Company
Disclosure Letter.
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7.9. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The
Articles of Incorporation and By-laws shall contain the provisions with respect
to indemnification set forth in Section 6.1 of the articles of incorporation of
the Company and Section 10.1 of the by-laws of the Company on the date of this
Agreement and shall provide for indemnification to the fullest extent permitted
by and in accordance with the FBCA, which provisions shall not be amended,
repealed or otherwise modified for a period of six years after the Effective
Time (or, in the case of matters known prior to the Effective Time which have
not been resolved prior to the sixth anniversary of the Effective Time, until
such matters are finally resolved) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement).
(b) Following the Effective Time, Parent shall indemnify and
hold harmless, to the fullest extent permitted under applicable law (and Parent
shall also advance expenses as incurred to the fullest extent permitted under
applicable law), each present and former director, officer and employee of the
Company and its Subsidiaries (collectively, the "INDEMNIFIED PARTIES") against
any costs or expenses (including attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "COSTS") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters existing or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (b) of this Section 7.9, upon receiving written notification of
any such claim, action, suit, proceeding or investigation, shall promptly notify
Parent thereof, but the failure to so notify shall not relieve Parent of any
liability it may have to such Indemnified Party if such failure does not
materially and irreversibly prejudice Parent. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) Parent shall have the right within ten days following the
notification of Parent by the Indemnified Person of such claim, action, suit,
proceeding or investigation to assume the defense thereof and Parent shall not
be liable to such Indemnified Parties for any legal expenses of other counsel
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if Parent elects not to assume such defense, counsel for
the Indemnified Parties advises that there are issues which raise conflicts of
interest between Parent and the Indemnified Parties or the Indemnified Parties
have defenses available to them that are not available to Parent, the
Indemnified Parties may retain counsel satisfactory to them, and Parent shall
pay all fees and expenses of such counsel for the Indemnified Parties. If such
indemnity is not available with respect to any Indemnified Party, then Parent
and the Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect the relative faults and benefits of the
Surviving Corporation (in the case of Parent) and the Indemnified Parties.
(d) The Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance ("D&O INSURANCE") or
coverage on materially similar terms thereof for a period of six years after the
Effective Time so long as the annual premium therefor is not in excess of 250%
of the last annual premium paid prior to the date hereof (the "CURRENT
PREMIUM"); PROVIDED, HOWEVER, that if the existing D&O Insurance is terminated
or cancelled during such six-year period, the Surviving Corporation shall use
its best efforts to obtain as much D&O Insurance as can be obtained for the
remainder of such period for a premium not in excess (on an annualized basis) of
250% of the Current Premium and shall agree to indemnify the directors and
officers for any Costs not covered by such D&O Insurance.
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(e) If Parent or the Surviving Corporation or any of its
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation or
other entity, then, and in each such case, proper provisions shall be made so
that the successors and assigns of Parent or the Surviving Corporation shall
assume all of the obligations set forth in this Section 7.9.
(f) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
7.10. TAKEOVER STATUTE. If any Takeover Statute is or may become
applicable to the Shares, the Offer, the Merger or the other transactions
contemplated by this Agreement, each of Parent and the Company and their
respective Board of Directors shall grant such approvals and take such actions
as are necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions.
7.11. EXPENSES. Parent shall pay all charges and expenses, including
those of the Paying Agent, in connection with the transactions contemplated in
Article V.
Except as otherwise provided in this Section 7.11, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement shall be paid by the party incurring such expense.
ARTICLE
8.
CONDITIONS
8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(a) STOCKHOLDER APPROVAL. If required by the FBCA, the Merger
this Agreement and the plan of merger shall have been duly approved by holders
of a majority of the outstanding Shares in accordance with applicable law and
the articles of incorporation and by-laws of the Company.
(b) HSR. The waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been earlier terminated.
(c) LITIGATION. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, law, ordinance, rule, regulation, judgment, decree, injunction or other
order that is in effect and permanently enjoins or otherwise prohibits
consummation of the Merger (collectively, an "ORDER").
(d) TENDER OFFER. Merger Sub (or one of the Parent Companies)
shall have purchased Shares in the Offer.
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ARTICLE
9.
TERMINATION
9.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by stockholders of the Company referred to in
Section 8.1(a), by mutual written consent of the Company, Merger Sub and Parent
by action of their respective Boards of Directors.
9.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either Parent or the Company if any
Order permanently restraining, enjoining or otherwise prohibiting consummation
of the Merger shall become final and non-appealable after the parties have used
their respective best efforts to have such Order removed, repealed or overturned
(whether before or after the approval by the stockholders of the Company).
9.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, by action
of the Board of Directors of the Company (a) if the Board of Directors of the
Company withdraws or adversely modifies its adoption of this Agreement, its
recommendation of the Offer or its recommendation that the stockholders of the
Company approve this Agreement (including, without limitation, taking no
position in response to a tender offer by a Person other than Parent), (b) if
there has been a material breach by Parent or Merger Sub of any material
covenant or agreement contained in this Agreement that is not curable or, if
curable, is not cured prior to the earlier of (i) 30 days after written notice
of such breach is given by the Company to the party committing such breach or
(ii) two Business Days prior to any date on which the Offer is scheduled to
expire; PROVIDED, however that at such time specified in this clause (ii)
neither the Company nor Parent has indicated that it intends to request (and has
the right under this Agreement to have such request honored) that the Offer be
extended in accordance with the terms hereof (provided that Parent shall have
been given notice of such breach at least two Business Days prior to
termination) or (c) Merger Sub (or any of the Parent Companies) shall have (i)
terminated the Offer or (ii) failed to pay for Shares pursuant to the Offer on a
timely basis following the expiration of the Offer, if the Offer has not been
extended in accordance with the terms hereof.
9.4. TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time (a) prior to the Effective Time by action of
the Board of Directors of Parent if due to an occurrence or circumstance which
resulted in a failure to satisfy any of the Offer Conditions, and Merger Sub
shall have terminated the Offer in accordance with the terms hereof (including,
without limitation, taking no position in response to a tender offer by a Person
other than any of the Parent Companies),
(b) prior to the purchase of Shares by Merger Sub pursuant to
the Offer if (i) the Board of Directors of the Company withdraws or adversely
modifies its adoption of this Agreement, its recommendation of the Offer or its
recommendation that the stockholders of the Company approve this Agreement
(including, without limitation, taking no position in response to a tender offer
by a Person other than any of the Parent Companies), (ii) there has been a
material breach by the Company of any material covenant or agreement contained
in this Agreement that is not curable or, if curable, is not cured prior to the
earlier of (A) 30 days after written notice of such breach is given by Parent to
the party committing such breach or (B) two Business Days prior to any date on
which the Offer is scheduled to expire; PROVIDED, however, that and at such time
specified in this clause (ii) neither the Company nor
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Parent has indicated that it intends to request (and has the right under this
Agreement to have such request honored) that the Offer be extended in accordance
with the terms hereof (provided that the Company shall have been given notice of
such breach at least two Business Days prior to termination) or (iii) the
Minimum Condition shall not have been satisfied by the expiration of the Offer
(as it may have been extended from time to time), and at or prior to such time
any Person (other than Parent or Merger Sub) shall have made a public
announcement with respect to a bona fide Acquisition Proposal that contemplates
a per Share consideration in excess of the Merger Consideration.
9.5. EFFECT OF TERMINATION AND ABANDONMENT. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article IX, this Agreement (other than as set forth in Section 10.1) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, agents, legal and financial
advisors or other representatives); PROVIDED, HOWEVER, that except as otherwise
provided herein, no such termination shall relieve any party hereto of any
liability or damages resulting from any willful breach of this Agreement.
(b) In the event that this Agreement is terminated by Parent
pursuant to Section 9.4(b)(ii), then the Company shall promptly, but in no event
later than two days after the date of such termination, pay Parent a termination
fee (as liquidated damages) of $29,400,000 (the "TERMINATION FEE") by wire
transfer of same day funds to an account previously designated in writing by
Parent to the Company. In the event that (i)(A) an Acquisition Proposal (other
than pursuant to this Agreement) shall have been made to the Company or any
Person (other than Parent or any of its Affiliates) shall have publicly
announced an intention (whether or not conditional) to make an Acquisition
Proposal with respect to the Company and thereafter this Agreement is terminated
by the Company pursuant to Section 9.3(c)(i) or Parent pursuant to Section
9.4(a) under circumstances which would have permitted Parent to terminate
pursuant to Section 9.4(b)(ii) or (B) this Agreement is terminated (x) by the
Company pursuant to Section 9.3(a) or (y) by Parent pursuant to Section
9.4(b)(i) or (iii) and (ii)(A) the Person making the Acquisition Proposal which
was outstanding at the time of the termination (the "ACQUIRING PARTY") has
acquired, by purchase, merger, consolidation, sale, assignment, lease, transfer
or otherwise, in one transaction or any related series of transactions within
twelve months after a termination of this Agreement, a majority of the voting
power of the outstanding securities of the Company or all or substantially all
of the assets of the Company or (B) there has been consummated a merger,
consolidation or similar business combination between the Company or one of its
Subsidiaries and the Acquiring Party within twelve months after the relevant
termination of this Agreement, then the Company shall promptly, but in no event
later than two days after the consummation of the transaction or transactions
with the Acquiring Party, pay Parent the Termination Fee in same day funds to an
account previously designated by Parent to the Company in writing. The Company's
payment of the Termination Fee shall be the sole and exclusive remedy of Parent
and Merger Sub against the Company and any of its Subsidiaries and their
respective directors, officers, employees, agents, advisors or other
representatives in the event this Agreement is terminated and the Termination
Fee is payable whether or not there has been a breach of this Agreement (whether
or not such breach is willful).
ARTICLE
10.
MISCELLANEOUS AND GENERAL
10.1. SURVIVAL. This Article 10 and the agreements of the Company,
Parent and Merger Sub contained in Sections 7.6 (De-listing), 7.8 (Benefits),
7.11 (Expenses) and 7.9 (Indemnification; Directors' and Officers' Insurance)
shall survive the consummation of the Merger. This Article 10, the agreements of
the Company, Parent and Merger Sub contained in Section 7.11 (Expenses), Section
9.5
27
<PAGE>
(Effect of Termination and Abandonment) and the Confidentiality Agreement shall
survive the termination of this Agreement. All other representations,
warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
10.2. MODIFICATION OR AMENDMENT. Subject to the provisions of the
applicable law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties; PROVIDED that, in the case
of the Company any such modification or amendment must be approved by a majority
of the directors who are not Parent Insiders.
10.3. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law; PROVIDED, that, in the case of the Company any such waiver must
be approved by a majority of the directors who are not Parent Insiders.
10.4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
10.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF FLORIDA
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby
irrevocably submit to the jurisdiction of the Federal courts of the United
States of America located in the State of Florida or, if unavailable to the
parties, the courts of the State of Florida solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in 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 or
of any such document, 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 or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a State of Florida or Federal 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 such manner as may be permitted by law shall be valid and
sufficient service thereof.
10.6. NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail or nationally recognized
overnight courier service, postage prepaid, or by facsimile:
IF TO PARENT OR MERGER SUB
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Attention: Ronald L. Turner
Fax: (612) 853-7272
28
<PAGE>
(with a copy to Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Attention: Reid Shaw
Fax: (612) 853-3413)
IF TO THE COMPANY
ABR Information Services, Inc.
34125 U.S. Highway 19 North
Palm Harbor, Florida 34684-2141
Attention: James P. O'Drobinak
Fax: (727) 789-3854
(with a copy to
Francis J. Aquila
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Fax: (212) 558-3588)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10.7. ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This Agreement
(including any exhibits hereto), the Company Disclosure Letter, the Parent
Disclosure Letter and the Confidentiality Agreement, dated February 4, 1999,
between Parent and Goldman, Sachs & Co., on behalf of the Company (the
"CONFIDENTIALITY AGREEMENT") constitute the entire agreement, and supersede all
other prior agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject matter hereof.
EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR
THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH
RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
10.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.9
(Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
10.9. OBLIGATIONS OF PARENT AND OF THE COMPANY. Whenever this Agreement
requires a Subsidiary of Parent to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause such Subsidiary
to take such action. Whenever this Agreement requires a
29
<PAGE>
Subsidiary of the Company to take any action, such requirement shall be deemed
to include an undertaking on the part of the Company to cause such Subsidiary to
take such action and, after the Effective Time, on the part of the Surviving
Corporation to cause such Subsidiary to take such action.
10.10. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
10.11. INTERPRETATION. The table of contents and headings herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
10.12. ASSIGNMENT. This Agreement shall not be assignable by operation
of law or otherwise.
30
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
ABR INFORMATION SERVICES, INC.
By: /s/ James E. MacDougald
----------------------------------
Name: James E. MacDougald
Title: Chairman, President and CEO
CERIDIAN CORPORATION
By: /s/ Ronald L. Turner
----------------------------------
Name: Ronald L. Turner
Title: President and Chief Operating Officer
SPRING ACQUISITION CORP.
By: /s/ Gary M. Nelson
----------------------------------
Name: Gary M. Nelson
Title: President
31
<PAGE>
ANNEX A
CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, but subject to the terms of the Merger Agreement, Merger
Sub shall not be required to accept for payment or, subject to any applicable
rules and regulation of the SEC, pay for any Shares, and may terminate the Offer
(i) if by the expiration of the Offer (or, if extended, by the expiration of the
Offer, as so extended) a number of Shares which together with any Shares owned
by Parent, Merger Sub and the Parent Companies, constitutes more than 50% of the
outstanding Shares (on a fully-diluted basis) at the expiration of Offer (the
"Minimum Conditions") shall not have been validly tendered pursuant to the Offer
and not properly withdrawn, (ii) if all applicable waiting periods under the HSR
Act shall not have expired or been terminated or (iii) if on or after April 30,
1999, and at any time prior to acceptance for payment for any such Shares, any
of the following events shall occur; provided that in each such case Merger Sub
shall not be permitted to terminate the Offer (except pursuant to paragraph (g)
below) if prior to the then scheduled expiration of the Offer the Offer shall
have been extended:
(a) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States (whether
or not mandatory), (ii) a formal declaration of war or national or international
calamity directly or indirectly involving the United States (other than any
declaration of war resulting from the current conflict in Yugoslavia), (iii) any
limitation (whether or not mandatory) by any United States governmental
authority on the extension of credit by banks or other financial institutions
that materially affects the extension of credit by banks or other lending
institutions, (iv) any general suspension of, or limitation on prices for,
trading in securities on the Nasdaq National Market or the over the counter
market, or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform any of its
material obligations, covenants or agreements under the Merger Agreement in a
manner permitting Parent to terminate the Merger Agreement, or any
representation or warranty of the Company set forth in the Merger Agreement
shall not be true and correct, provided that such representations and warranties
shall be deemed to be true and correct unless the failure of such
representations and warranties to be so true and correct would have a Company
Material Adverse Effect or would prevent the Company from consummating the
transactions contemplated by the Merger Agreement, in each case as if such
representations and warranties were made at the time of such termination.
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action") before
any court or other Governmental Entity: (i) challenging the acquisition by the
Purchaser or Merger Sub of Shares, seeking to restrain or prohibit the
consummation of the transactions contemplated by the Merger Agreement; (ii)
seeking to prohibit, or impose any limitations on, Parent's or Merger Sub's
ownership or operation of all or any portion of their or the Company's business
or assets (including the business or assets of their respective affiliates and
subsidiaries); (iii) seeking to make the acceptance for payment, purchase of, or
payment for, some or all of the Shares illegal; (iv) seeking to impose
limitations on the ability of Purchaser or Merger Sub effectively to acquire or
hold or to exercise full rights of ownership of the Shares including, without
limitation, the right to vote the Shares purchased by them on an equal basis
with all other shares on all matters properly presented to the stockholders; or
(v) that, in any event, would have a Company Material Adverse Effect;
<PAGE>
(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or become applicable to the Offer or the
Merger, or any other action shall have been taken by any court or other
Governmental Entity other than the application to the Offer or the Merger of the
waiting period under the HSR Act, that would result in any of the effects of, or
have any of the consequences sought to be obtained or achieved in, any Action
referred to in clauses (i) through (v) of paragraph (b) above;
(e) any person (as such term is defined in Section 13(d)(3) of the
Exchange Act (other than Parent or any of its affiliates)) commences a tender or
exchange offer for a majority or more of the outstanding Shares at a price per
Share greater than the Merger Consideration or any such person shall have become
the beneficial owner of more than 20% of the outstanding Shares (other than for
bona fide arbitrage purposes), or any such person shall have entered into a
definitive agreement to acquire all or substantially all of the Shares or to
effect a merger, consolidation or other business combination with or involving
the Company;
(f) there shall have occurred an event which has caused a Company
Material Adverse Effect;
(g) the Board of Directors of the Company shall have amended, modified
or withdrawn its recommendation of the Offer or the Merger in a manner adverse
to Parent, or shall have endorsed, approved or recommended any other Acquisition
Proposal, or shall have resolved to do any of the foregoing; or
(h) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such conditions, makes it reasonably
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions other than the Minimum Condition are
for the sole benefit of Parent and may be asserted by Parent or Merger Sub
regardless of the circumstances giving rise to such condition or may be waived
by Parent other than the Minimum Condition, by express and specific action to
that effect, in whole or in part at any time and from time to time in its sole
discretion.
<PAGE>
Exhibit 99 (c)(2)
[Goldman, Sachs & Co. Letterhead]
PERSONAL AND CONFIDENTIAL
February 4, 1999
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425
Attention: Lawrence Perlman
Chairman, President and CEO
Gentlemen:
In connection with your consideration of a possible negotiated transaction (a
"Transaction") between you and ABR Information Services, Inc. (the "Company"),
you have requested information concerning the Company. As a condition to your
being furnished such information, you agree for a period of five years from the
date hereof to treat any information concerning the Company (whether prepared by
the Company, its advisors or otherwise) which is furnished to you by or on
behalf of the Company, including any technical, trade secret or other
proprietary information of the Company with which you or your Representatives
(as hereinafter defined) may come into contact in the course of your
investigation, whether before or after the date of this Agreement, together with
any reports, analyses, compilations, records, notes and any other writings
prepared by you or your Representatives which contain, reflect or are based upon
such information (herein collectively referred to as the "Evaluation Material")
in accordance with the provisions of this letter and to take or abstain from
taking certain other actions herein set forth. The term "Evaluation Material"
does not include information which (i) is already in your possession, provided
that such information is not known by you to be subject to another
confidentiality agreement with or other obligation of secrecy to the Company or
another person, or (ii) becomes generally available to the public other than as
a result of a disclosure by you or your Representatives, or (iii) becomes
available to you on a non-confidential basis from a source other than the
Company or its Representatives, provided that such source is not bound by a
confidentiality agreement with or other obligation of secrecy to the Company or
another person.
You hereby agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible Transaction between the Company and you and not
for any other purpose including but not limited to solicitation of the Company's
customers, and that such information will be kept confidential by you and your
Representatives; provided, however, that (i) any of such information may be
disclosed to your directors, officers, employees, counsel, investment bankers
and other representatives of you or your advisors, such persons being generally
referred to herein as "Representatives", who need to know such information for
the purpose of evaluating any
<PAGE>
possible Transaction between the Company and you (it being understood that such
Representatives shall be informed by you of the confidential nature of such
information and any Evaluation Material prepared by them, and shall be directed
by you to treat such information confidentially and in accordance with the terms
hereof), and (ii) any disclosure of such information may be made to which the
Company consents in writing.
You hereby acknowledge that you are aware, and that you will advise your
Representatives who are informed as to the matters which are the subject of this
letter, that the United States securities laws prohibit any person who has
received from an issuer material, non-public information from purchasing or
selling securities of such issuer.
In addition, without the prior written consent of the Company, you will not, and
will direct your Representatives, not to, disclose to any person either the fact
that discussions or negotiations are taking place concerning a possible
Transaction or any of the terms, conditions or other facts with respect to any
such possible Transaction, including the status thereof (collectively,
"Transaction Information"). If you or your Representatives are contacted within
three years by any other person regarding a possible transaction involving the
Company, you agree immediately to notify us of the details of any such contact.
In the event that you or any of your Representatives are required to disclose
any Evaluation Material or Transaction Information (i) in connection with any
judicial or administrative proceedings (by oral questions, interrogatories,
requests for information or documents, subpoena, Civil Investigation Demand or
similar process) or (ii) in order, in the opinion of your outside counsel, to
avoid violating the United States federal securities laws, you will in advance
of such disclosure provide the Company with prompt notice of such
requirement(s). You also agree to the extent legally permissible, to provide the
Company, in advance of any such disclosure, with copies of any Evaluation
Material and descriptions (written or oral) of the Transaction Information you
intend to disclose (and, if applicable, the text of the disclosure language
itself) and to cooperate with the Company to the extent it may seek to limit
such disclosure. If, in the absence of a protective order or the receipt of a
waiver from the Company after a request in writing therefor is made by you (such
request to be made as soon as practicable to allow the Company a reasonable
amount of time to respond thereto), you or your Representatives are legally
required to disclose Evaluation Material or Transaction Information to any
tribunal or in order to comply with the United States federal securities laws,
you may disclose such information without liability hereunder,
Further, without your prior written consent, we will not, and will direct our
Representatives, not to, disclose to any person the fact that discussions or
negotiations are taking place with you concerning a possible Transaction
("Bidder Information"). In the event that we or our Representatives are required
to disclose any Bidder Information (i) in connection with any judicial or
administrative proceedings (by oral questions, interrogatories, requests for
information or documents, subpoena, Civil Investigation Demand or similar
process) or (ii) in order, in the opinion of our outside counsel, to avoid
violating the United States federal securities laws, we will in advance of such
disclosure provide you with prompt notice of such requirement(s).
<PAGE>
You hereby acknowledge that the Evaluation Material is being furnished to you in
consideration of your agreement that you will not and shall cause your
Representatives not to propose to the Company or any other person any
transaction between you and the Company and/or its security holders or involving
any of its securities or security holders unless the Company shall have
requested in writing that you make such a proposal, and that you will not (i)
acquire, or assist, advise or encourage any other persons in acquiring, directly
or indirectly, any of the Company's securities, businesses or assets (including
rights or options to acquire such ownership) for a period of three years from
the date of this letter unless the Company shall have consented in advance in
writing to such acquisition, (ii) seek or propose to influence, advise, change
or control the management, Board of Directors, governing instruments or policies
or affairs of the Company during such three year period or (iii) make any public
disclosure, or take any action which could require the Company to make any
public disclosure (under any law, rule or regulation or rule or regulation of a
national securities exchange), with respect to any of the matters set forth in
this Agreement, or enter into any agreement related to any of the foregoing.
Although the Company has endeavored to include in the Evaluation Material
information known to it which it believes to be relevant for the purpose of your
investigation, you understand that neither the Company nor any of its
Representatives or advisors have made or make any representation or warranty as
to the accuracy or completeness of the Evaluation Material. You agree that
neither the Company nor its Representatives or advisors shall have any liability
to you or any of your affiliates or Representatives resulting from the use of
the Evaluation Material.
At any time, upon written request by the Company, you shall promptly redeliver
to the Company all written Evaluation Material and any other written material
containing or reflecting any information in the Evaluation Material (whether
prepared by the Company, its advisors or otherwise) and will not retain any
copies, extracts or other reproductions in whole or in part of such written
material. All documents, memoranda, notes and other writings whatsoever prepared
by you or your advisors based on the information in the Evaluation Material
prepared by you shall be destroyed, and such destruction shall be certified in
writing to the Company by an authorized officer supervising such destruction.
For a period of two years from the date hereof, you agree that you and your
affiliates will not, directly or indirectly, hire or seek to hire any employees
of the Company whose identity becomes known to you or your Representatives in
connection with evaluating a possible Transaction, provided that nothing herein
shall prevent you from hiring any person who responds to a general media
advertisement or a non-directed search inquiry, or who makes an unsolicited
contact for employment.
It is agreed that no failure or delay by the Company 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 further exercise
thereof or the exercise of any right, power or privilege.
The Company, without prejudice to any rights to judicial relief it may otherwise
have, shall be entitled to seek equitable relief, including injunction, in the
event of any breach or potential breach of the provisions of this Agreement. You
agree that you will not oppose the granting of
<PAGE>
such relief on the basis that the Company has an adequate remedy at law. You
also agree that you will not seek and agree to waive any requirement for the
securing or posting of a bond in connection with the Company's seeking or
obtaining such relief.
You agree that unless and until a definitive agreement between the Company and
you with respect to any Transaction has been executed and delivered, neither the
Company nor you will be under any legal obligation of any kind whatsoever with
respect to such a Transaction by virtue of this or any written or oral
expression with respect to such a Transaction by any of our respective
Representatives thereof except for the matters specifically agreed to herein.
The agreement set forth in this paragraph may be modified or waived only by a
separate writing by the Company and you expressly so modifying or waiving such
agreement
It is understood and agreed that if any provision contained in this Agreement or
the application thereof to you, the Company, or any other person or circumstance
shall be invalid, illegal or unenforceable in any respect under any applicable
law as determined by a court of competent jurisdiction, the validity, legality
and enforceability of the remaining provisions contained in this Agreement, or
the application of such provisions to such persons or circumstances other than
those as to which it has been held invalid or unenforceable, shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby. In the case of any such invalidity, illegality or unenforceability, the
parties hereto shall negotiate in good faith in an effort to agree upon a
suitable and equitable substitute provision to effect the original intent of the
parties.
This Agreement shall benefit and bind your successors and assigns and the
successors and assigns of the Company. Any assignment of this Agreement by you
without prior written consent of the Company shall be void.
This letter shall be governed by, and construed in accordance with, the laws of
the State of New York.
Very truly yours,
ABR INFORMATION SERVICES, INC.
By /s/ Name Illegible
----------------------------------------------
Goldman, Sachs & Co.
on behalf of ABR Information Services, Inc.
Confirmed and Agreed to:
CERIDIAN CORPORATION
By: /s/ A. Reid Shaw, VP
---------------------------------------------
Date: FEBRUARY 4, 1999
-------------------------------------------
