<PAGE>
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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
AND
SCHEDULE 13D/A
(AMENDMENT NO. 2)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
CHOCK FULL O'NUTS CORPORATION
(Name of Subject Company)
CFN ACQUISITION CORPORATION
SARA LEE CORPORATION
(Bidders)
COMMON STOCK, PAR VALUE $.25 PER SHARE
7% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE APRIL 1, 2012
8% CONVERTIBLE SUBORDINATED DEBENTURES DUE SEPTEMBER 15, 2006
(Title of Class of Securities)
170268
170268AC0
170268AB2
(CUSIP Numbers of Class of Securities)
--------------------------
JANET LANGFORD KELLY, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
SARA LEE CORPORATION
THREE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60602
TELEPHONE: (312) 726-2600
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
CHARLES W. MULANEY, JR., ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 WEST WACKER DRIVE, SUITE 2300
CHICAGO, ILLINOIS 60606-1285
TELEPHONE: (312) 407-0700
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
<S> <C>
$227,230,568 $45,447
</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only.
This amount assumes the purchase in cash of (i) 10,830,922 shares of common
stock, $.25 par value (the "Shares") (and the associated Common Stock
Purchase Rights), of Chock Full O'Nuts, a New York corporation (the
"Company"), at a price of $10.50 per Share, (ii) 401,000 unexercised
outstanding options to acquire Shares under various employee stock option
plans, at a price of $10.50 per Share, (iii) $51,693,000 aggregate principal
amount of the Company's 7% Convertible Senior Subordinated Debentures due
April 1, 2012 (the "7% Debentures"), at a price of $1,275.82 per $1,000
principal amount, and (iv) $32,240,000 aggregate principal amount of the
Company's 8% Convertible Subordinated Debentures due September 15, 2006 (the
"8% Debentures" and, together with the 7% Debentures, the "Convertible
Debentures"), at a price of $1,344.43 per $1,000 principal amount. Such
number of Shares represents all of the Shares outstanding as of March 12,
1999 based on the Company's Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999, and such number of options and such outstanding
aggregate principal amount of Convertible Debentures represents all of the
options and Convertible Debentures outstanding as of July 31, 1998 based on
the Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1998 (except that with respect to the 8% Debentures, the Company has
reported that it has subsequently redeemed $5,000,000 aggregate principal
amount of such debentures). The amount of the filing fee calculated in
accordance with Rule 0-11 of the Securities Exchange Act of 1934, as
amended, equals 1/50th of one percent of the value of the transaction.
/ / 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.
<TABLE>
<S> <C> <C> <C>
Form or
Registration
Amount Previously Paid: Not applicable. No.: Not applicable.
Filing Party: Not applicable. Date Filed: Not applicable.
</TABLE>
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<PAGE>
14D-1
CUSIP NOS. 170268
170268AC0
170268AB2
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1 NAME OF REPORTING PERSONS CFN Acquisition Corporation
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF (See Item 10 of the Offer to Purchase)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) or 2(f)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
/ /
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.0%
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10 TYPE OF REPORTING PERSON
CO
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<PAGE>
14D-1
CUSIP NOS. 170268
170268AC0
170268AB2
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1 NAME OF REPORTING PERSONS Sara Lee Corporation
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS 36-208-9049
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC (See Item 10 of the Offer to Purchase)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) or 2(f)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
598,328
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
/ /
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)*
5.29%
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10 TYPE OF REPORTING PERSON
CO
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<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by CFN Acquisition Corporation, a New York corporation ("Purchaser")
and a wholly owned subsidiary of Sara Lee Corporation, a Maryland corporation
("Sara Lee"), to purchase (i) all of the outstanding shares of common stock, par
value $.25 per share, and the associated common stock purchase rights (the
"Rights") issued pursuant to the Amended and Restated Rights Agreement, dated as
of December 30, 1997, by and between Chock Full O'Nuts Corporation, a New York
corporation (the "Company"), and the American Stock Transfer & Trust Company, as
Rights Agent (such shares of common stock and the associated Rights,
collectively, the "Shares"), at a price of $10.50 per Share, (ii) all of the
outstanding 7% Convertible Senior Subordinated Debentures due April 1, 2012 (the
"7% Debentures"), at a price of $1,275.82 per $1,000 principal amount, and (iii)
all of the outstanding 8% Convertible Subordinated Debentures due September 15,
2006 (the "8% Debentures" and, together with the 7% Debentures, the "Convertible
Debentures"), at a price of $1,344,43 per $1,000 principal amount, of the
Company, the respective offer prices being net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 7, 1999 (the "Offer to Purchase"), a copy of which
is attached hereto as Exhibit 1, and in the applicable Letters of Transmittal,
copies of which are attached hereto as Exhibits 2(a), 2(b) and 2(c) (which, as
they may be amended or supplemented from time to time, together constitute the
"Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Chock Full O'Nuts Corporation, and
the address of its principal executive offices is 370 Lexington Avenue, New
York, New York 10017.
(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--Price Range of the Shares;
Dividends on the Shares; Price Range of the Convertible Debentures" of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Purchaser and Sara Lee. The
information set forth in the "Introduction" and "Section 9--Certain Information
Concerning Sara Lee and Purchaser" of the Offer to Purchase and Schedule II
thereto is incorporated herein by reference.
(e)-(f) During the last five years neither Purchaser nor Sara Lee nor, to
the best knowledge of Purchaser and Sara Lee, any of the persons listed in
Schedule II of the Offer to Purchase have been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which any such person was or is 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.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Sara Lee nor, to the best knowledge of Purchaser and Sara Lee, any
of the persons listed in Schedule II of the Offer to Purchase has entered into
any transaction with the Company, or any of the Company's affiliates which are
corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Sara Lee nor, to the best knowledge of Purchaser and Sara Lee, any
of the persons listed in Schedule II of the Offer to Purchase has entered into
any transaction since the commencement of the Company's third full fiscal year
preceding the date of this Statement, with the executive officers, directors or
affiliates of the Company which are not corporations, in which the aggregate
amount involved in such transaction or in a series of similar transactions,
including all periodic installments in the case of any lease or other agreement
providing for periodic payments or installments, exceeded $40,000.
(b) The information set forth in the "Introduction," "Section 9--Certain
Information Concerning Sara Lee and Purchaser," "Section 11--Background of the
Offer; Contacts with the Company" and "Section 12--Purpose of the Offer and the
Merger; Plans for the Company" of the Offer to Purchase is incorporated herein
by reference.
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 10--Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the "Introduction," "Section
11--Background of the Offer; Contacts with the Company" and "Section 12--Purpose
of the Offer and the Merger; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in "Section 7--Effect of the Offer on the
Market for the Securities; Exchange Listings; Exchange Act Registration; Margin
Regulations" 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 "Section 9--Certain Information
Concerning Sara Lee and Purchaser" and "Section 11--Background of the Offer;
Contacts with the Company" of the Offer to Purchase and Schedule I thereto 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 10--Source and
Amount of Funds," "Section 11-- Background of the Offer, Contacts with the
Company," "Section 12--Purpose of the Offer and the Merger; Plans for the
Company" and "Section 16--Fees and Expenses" of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 16--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 Sara
Lee and Purchaser" of the Offer to Purchase, including the financial statements
and related notes thereto incorporated by reference in Section 9, is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser or Sara Lee, or to the best knowledge of Purchaser and Sara
Lee, any of the persons listed in Schedule II of the Offer to Purchase, and the
Company, or any of its executive officers, directors, controlling persons or
subsidiaries.
(b)-(c) The information set forth in the "Introduction," "Section
14--Conditions to the Offer" and "Section 15--Certain Legal Matters; Regulatory
Approval" of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in "Section 7--Effect of the Offer on the
Market for the Securities; Exchange Listings; Exchange Act Registration; Margin
Regulations" and "Section 15--Certain Legal Matters; Regulatory Approval" of the
Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letters
of Transmittal, copies of which are attached hereto as Exhibits 1 and 2(a), 2(b)
and 2(c), respectively, to the extent not otherwise incorporated herein by
reference, is incorporated herein by reference.
<PAGE>
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated May 7, 1999.
(a)(2)(a) Letter of Transmittal--Shares.
(a)(2)(b) Letter of Transmittal--7% Debentures.
(a)(2)(c) Letter of Transmittal--8% Debentures.
(a)(3)(a) Notice of Guaranteed Delivery--Shares.
(a)(3)(b) Notice of Guaranteed Delivery--7% Debentures.
(a)(3)(c) Notice of Guaranteed Delivery--8% Debentures.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement dated May 7, 1999.
(a)(8) Press Release of Sara Lee dated May 4, 1999.
(a)(9) Press Release of Sara Lee dated May 7, 1999.
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C> <C>
Date: May 7, 1999 CFN ACQUISITION CORPORATION
By: /s/ R. HENRY KLEEMAN
-------------------------------------------
Name: R. Henry Kleeman
Title: Vice President and Assistant Secretary
SARA LEE CORPORATION
By: /s/ ANN E. ZEIGLER
-------------------------------------------
Name: Ann E. Ziegler
Title: Vice President--Corporate Development
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
1 Offer to Purchase dated May 7, 1999.
2(a) Letter of Transmittal--Shares.
2(b) Letter of Transmittal--7% Debentures.
2(c) Letter of Transmittal--8% Debentures.
(3)(a) Noice of Guaranteed Delivery--Shares.
(3)(b) Notice of Guaranteed Delivery--7% Debentures.
(3)(c) Notice of Guaranteed Delivery--8% Debentures.
4 Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
5 Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
6 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
7 Summary Advertisement dated May 7, 1999.
8 Press Release of Sara Lee dated May 4, 1999.
9 Press Release of Sara Lee dated May 7, 1999.
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AT $10.50 NET PER SHARE
AND
ALL OF THE OUTSTANDING 7% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES
DUE 2012 AT $1,275.82 NET PER $1,000 PRINCIPAL AMOUNT
AND
ALL OF THE OUTSTANDING 8% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2006 AT $1,344.43 NET PER $1,000 PRINCIPAL AMOUNT
OF
CHOCK FULL O'NUTS CORPORATION
BY
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SARA LEE 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 OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SECURITIES (AS DEFINED HEREIN) WHICH, TOGETHER WITH THE SECURITIES THEN OWNED BY
CFN ACQUISITION CORPORATION, A NEW YORK CORPORATION ("PURCHASER"), AND SARA LEE,
REPRESENTS 66 2/3% OF THE SHARES (AS DEFINED HEREIN) OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"), (2) THE RIGHTS (AS DEFINED HEREIN)
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF CHOCK FULL O'NUTS CORPORATION,
A NEW YORK CORPORATION (THE "COMPANY"), OR PURCHASER, BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT THE RIGHTS ARE INVALID OR ARE OTHERWISE INAPPLICABLE TO
THE OFFER (THE "RIGHTS CONDITION"), (3) PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE PROVISIONS OF SECTION 912 OF THE NEW YORK BUSINESS
CORPORATION LAW, AS AMENDED, ARE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER (THE "BUSINESS COMBINATION CONDITION"), (4) THE COMPANY NOT HAVING
ENTERED INTO OR EFFECTUATED ANY AGREEMENT OR TRANSACTION WITH ANY PERSON OR
ENTITY HAVING THE EFFECT OF IMPAIRING PURCHASER'S ABILITY TO ACQUIRE THE COMPANY
OR OTHERWISE DIMINISHING THE EXPECTED ECONOMIC VALUE TO PURCHASER OF THE
ACQUISITION OF THE COMPANY (THE "DEFENSIVE ACTION CONDITION") AND (5) ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION
OF THE OFFER (THE "HSR CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE SECTION 14.
------------------
IMPORTANT
Any securityholder who desires to tender all or any portion of such
securityholder's Securities should either (i) complete and sign the appropriate
Letter of Transmittal (or facsimile thereof) in accordance with the instructions
to such Letter of Transmittal, mail or deliver it and any other required
documents to the Depositary and either deliver the certificates for such
Securities to the Depositary or tender such Securities pursuant to the
procedures for book-entry transfer set forth in Section 3 hereof prior to the
expiration of the Offer or (ii) request such securityholder's broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such securityholder. Any securityholder whose Securities 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 securityholder desires to tender such Securities.
Any securityholder who desires to tender Securities and whose certificates
representing such Securities are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Securities by following the procedures for guaranteed delivery set forth in
Section 3 hereof.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letters of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may be directed to the
Information Agent.
------------------
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
---------
The date of this Offer to Purchase is May 7, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
INTRODUCTION................................................................................. 1
THE OFFER.................................................................................... 6
1. Terms of the Offer; Expiration Date............................................... 6
2. Acceptance for Payment and Payment................................................ 7
3. Procedure for Tendering Securities................................................ 8
4. Withdrawal Rights................................................................. 11
5. Certain Federal Income Tax Consequences........................................... 12
6. Price Range of the Shares; Dividends on the Shares; Price Range of the Convertible
Debentures........................................................................ 14
7. Effect of the Offer on the Market for the Securities; Exchange Listings; Exchange
Act Registration; Margin Regulations.............................................. 16
8. Certain Information Concerning the Company........................................ 17
9. Certain Information Concerning Sara Lee and Purchaser............................. 19
10. Source and Amount of Funds........................................................ 19
11. Background of the Offer; Contacts with the Company................................ 20
12. Purpose of the Offer and the Merger; Plans for the Company........................ 21
13. Dividends and Distributions....................................................... 24
14. Conditions to the Offer........................................................... 24
15. Certain Legal Matters; Regulatory Approvals....................................... 28
16. Fees and Expenses................................................................. 30
17. Miscellaneous..................................................................... 31
</TABLE>
<TABLE>
<S> <C> <C>
SCHEDULE I Transactions in Stock of Company During Past 60 Days Effected by Sara 32
Lee, Purchaser or Those Persons Listed on Schedule II Hereto
SCHEDULE II Information Concerning Directors and Executive Officers of Sara Lee and 33
Purchaser
</TABLE>
i
<PAGE>
To the Holders of Common Stock and Convertible Debentures of
CHOCK FULL O'NUTS CORPORATION:
INTRODUCTION
CFN Acquisition Corporation, a New York corporation ("Purchaser"), and a
wholly owned subsidiary of Sara Lee Corporation, a Maryland corporation ("Sara
Lee"), hereby offers to purchase (i) all of the outstanding shares of common
stock, par value $.25 per share, and the associated common stock purchase rights
(the "Rights") issued pursuant to the Amended and Restated Rights Agreement,
dated as of December 30, 1997, by and between Chock Full O'Nuts Corporation, a
New York corporation (the "Company"), and the American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agreement") (such shares of common stock
and the associated Rights, collectively, the "Shares"), at a price of $10.50 per
Share (the "Share Offer Price"), (ii) all of the outstanding 7% Convertible
Senior Subordinated Debentures due April 1, 2012 (the "7% Debentures"), at a
price of $1,275.82 per $1,000 principal amount of the 7% Debentures (the "7%
Debenture Offer Price"), and (iii) all of the outstanding 8% Convertible
Subordinated Debentures due September 15, 2006 (the "8% Debentures" and,
together with the 7% Debentures, the "Convertible Debentures"), at a price of
$1,344.43 per $1,000 principal amount of the 8% Debentures (the "8% Debenture
Offer Price" and, together with the Share Offer Price and the 7% Debenture Offer
Price, the "Offer Prices" and each an "Offer Price"), of the Company, the
respective Offer Prices being net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the applicable Letters of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). The Shares and the Convertible Debentures are collectively referred to
herein as the "Securities."
Tendering securityholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letters of
Transmittal, transfer taxes on the sale of Securities pursuant to the Offer.
Purchaser will pay all fees and expenses of Goldman, Sachs & Co., as Dealer
Manager (the "Dealer Manager"), Morrow & Co., Inc., as Information Agent (the
"Information Agent"), and Harris Trust Company of New York, as Depositary (the
"Depositary"), incurred in connection with the Offer. See Section 16.
According to publicly available information, a certain number of outstanding
Shares are owned of record by a trustee designated pursuant to a Trust Agreement
(the "ESOP Trustee") under the Company's Amended and Restated Employee Stock
Ownership Plan (the "ESOP"). Pursuant to the terms of the ESOP, in order to
effect a valid tender, each participant in the ESOP must direct the ESOP Trustee
to tender Shares which are allocated to such participant's account.
The purpose of the Offer and the proposed second-step merger is to enable
Sara Lee to acquire control of, and ultimately the entire equity interest in,
the Company. The Offer, as the first step in the acquisition of the Company, is
intended to facilitate the acquisition of all of the outstanding Shares not
owned by Sara Lee or its affiliates. As soon as practicable after consummation
of the Offer, Sara Lee will propose and seek to consummate a merger (the
"Proposed Merger") with Purchaser or another direct or indirect subsidiary of
Sara Lee, pursuant to which Purchaser or such subsidiary would be merged with
and into the Company. In the Proposed Merger, the Company would be the surviving
corporation and would continue as a wholly owned subsidiary of Sara Lee. See
Section 10. Upon the consummation of the Proposed Merger, each then outstanding
Share (other than Shares held by Sara Lee, Purchaser or any wholly owned
subsidiary of Sara Lee, Shares held in the treasury of the Company and Shares
held by shareholders who properly exercise appraisal rights under the New York
Business Corporation Law, as amended ("NYBCL")), would be converted into the
right to receive in cash the Share Offer Price paid by Purchaser pursuant to the
Offer and the Company would become a wholly owned subsidiary of Sara Lee.
Outstanding Convertible Debentures at the time of the Proposed Merger would,
upon effectiveness of the Proposed Merger, become convertible into the right to
receive the 7% Debenture Offer Price or the
1
<PAGE>
8% Debenture Offer Price per $1,000 principal amount of Convertible Debenture,
as applicable. Pursuant to the Proposed Merger, the officers and directors of
Purchaser would be the officers and directors of the Company following the
effective time of the Proposed Merger.
Although Purchaser will seek to have the Company consummate the Proposed
Merger as soon as practicable after consummation of the Offer, if the Board of
Directors of the Company opposes the Offer and/or the Proposed Merger, certain
terms of the Rights and certain provisions of the NYBCL, the Company's
Certificate of Incorporation, as amended (the "Charter"), and the Company's
Amended and Restated By-Laws (the "By-Laws") may affect the ability of Purchaser
to obtain control of the Company and to effect the Proposed Merger (even if the
Offer is consummated). Depending on the Company's response to the Offer and the
Proposed Merger, Sara Lee may take such further actions as it deems appropriate
to achieve its objective of acquiring the Company, including conducting a proxy
contest at the next annual meeting of shareholders of the Company. Because the
Company has a classified board of directors, and such directors may only be
removed for cause, it may require two successive meetings of the Company's
shareholders at which directors are elected for Sara Lee to acquire control of
the Board. See Section 12. Sara Lee has not yet made any determination whether
to take any further actions. Accordingly, the timing and final terms of the
Proposed Merger will depend on a variety of factors and legal requirements, the
actions of the Board of Directors of the Company and the number of Securities
acquired by Purchaser pursuant to the Offer. For a discussion of certain
appraisal rights that will be available to shareholders upon consummation of the
Proposed Merger, see Section 12.
Sara Lee reserves the right to acquire additional Securities, after
expiration or termination of the Offer, through open market purchases, privately
negotiated transactions, a tender offer or exchange offer or otherwise, upon
such terms and at such prices as it may determine, which may be more or less
than the applicable Offer Price to be paid per Security in the Offer and could
be for cash or other consideration.
The Offer does not constitute a solicitation of proxies for any meeting of
the Company's shareholders, nor does this Offer constitute a solicitation of
consents. Any such solicitation which Sara Lee or Purchaser might make would
only be pursuant to separate proxy or consent materials, as the case may be, in
compliance with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In addition, the Offer does not constitute an
offer to sell or a solicitation of an offer to buy any securities of Sara Lee.
Such an offer may be made only pursuant to a prospectus pursuant to the
Securities Act of 1933, as amended (the "Securities Act").
CERTAIN CONDITIONS TO THE OFFER
The Offer is subject to the fulfillment of certain conditions, including the
following:
THE MINIMUM CONDITION. THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON
THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER THAT NUMBER OF SECURITIES WHICH, TOGETHER WITH ANY SECURITIES OWNED BY
SARA LEE AND PURCHASER, REPRESENTS 66 2/3% OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS (I.E., AS THOUGH ALL OPTIONS OR OTHER SECURITIES (OTHER THAN THE
RIGHTS), INCLUDING THE CONVERTIBLE DEBENTURES, CONVERTIBLE INTO OR EXERCISABLE
OR EXCHANGEABLE FOR SHARES HAD BEEN SO CONVERTED, EXERCISED OR EXCHANGED) (THE
"MINIMUM CONDITION").
According to the Company's Quarterly Report on Form 10-Q for the six months
ended January 31, 1999 (the "Company Second Quarter 10-Q"), as of March 12,
1999, there were 10,830,922 Shares issued and outstanding. According to the
Company's Annual Report on Form 10-K for the year ended July 31, 1998 (the
"Company 1998 10-K"), there were (1) 401,000 unexercised outstanding options to
acquire Shares under various employee stock option plans, (2) 6,281,045 Shares
into which the aggregate principal amount outstanding of the 7% Debentures is
convertible and (3) 4,768,246 Shares into which the aggregate principal amount
outstanding of the 8% Debentures is convertible. In the Company
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Second Quarter 10-Q it was also reported that the Company redeemed $5,000,000
principal amount of the 8% Debentures, which reduced the number of Shares into
which the aggregate principal amount outstanding of the 8% Debentures is
convertible to 4,128,041 Shares.
Based on the foregoing, and assuming that no options were granted after July
31, 1998 and no options have been exercised or Convertible Debentures redeemed
(other than the redemption of $5,000,000 principal amount of the 8% Debentures
reported in the Company Second Quarter 10-Q) since July 31, 1998, Purchaser
believes that there are approximately 21,641,008 Shares outstanding on a fully
diluted basis. Accordingly, Purchaser believes that the Minimum Condition would
be satisfied if Securities representing approximately 14,427,339 Shares are
either validly tendered pursuant to the Offer or beneficially owned by Sara Lee.
However, the actual number of Securities required to be validly tendered
pursuant to the Offer to satisfy the Minimum Condition will depend on the facts
as they exist on the date of purchase. Sara Lee currently beneficially owns
111,200 Shares directly and Convertible Debentures which are convertible into
487,128 Shares for a total ownership of 598,328 Shares on a fully diluted basis.
All Shares and Convertible Debentures were acquired by Sara Lee in open market
purchases.
THE RIGHTS CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
RIGHTS HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS ARE INVALID OR
OTHERWISE INAPPLICABLE TO THE OFFER (THE "RIGHTS CONDITION").
The following summary is based upon the Company's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission (the "SEC") on
January 15, 1988, as amended by Amendment No.1 dated January 20, 1988 and as
amended and restated on December 30, 1997 (the "Form 8-A").
On December 30, 1987, the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each outstanding Share
pursuant to the original Rights Agreement dated as of December 30, 1987. This
rights agreement was subsequently amended and restated by the Rights Agreement.
Under the current Rights Agreement, each Right entitles the holder to purchase
one Share at an exercise price of $28.00, subject to adjustment.
Under the Rights Agreement, until the close of business on the Distribution
Date (which is defined as the earlier of (i) 10 days following a public
announcement that, without the Company's prior consent, a person or group of
affiliated or associated persons has acquired or obtained the right to acquire
(after December 30, 1987) beneficial ownership of securities having 20% or more
of the voting power of all outstanding voting securities of the Company or a
person or group of affiliated persons that, on December 30, 1987, beneficially
owned securities having 20% or more of the Company's voting power, has acquired
or obtained the right to acquire (after December 30, 1987) beneficial ownership
of securities representing an additional 2% of the Company's voting power (any
such person or group being an "Acquiring Person") or (ii) 10 business days (or
such later date as the Company's Board of Directors shall determine) following
the commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any person or group of related
persons becoming an Acquiring Person without the prior consent of the Company),
the Rights will be evidenced by the certificates evidencing Shares and will be
transferred with and only with share certificates. As soon as practicable after
the Distribution Date, certificates evidencing the Rights (the "Rights
Certificates") will be mailed to holders of record of the Shares as of the close
of business on the Distribution Date, and thereafter the separate Rights
Certificates alone will evidence the Rights.
In the event that a person becomes an Acquiring Person (unless pursuant to a
tender or exchange offer for all outstanding Shares at a price and on terms
determined by at least a majority of the members of the Board of Directors, who
are not an Acquiring Person or an affiliate or associate of an Acquiring Person
to be both adequate and otherwise in the best interests of the Company and its
various
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constituents, including, without limitation, both the long term and short term
interests of the Company and its shareholders, a "Permitted Offer"), each holder
of a Right (other than Rights owned by an Acquiring Person, which become void)
will for a 60-day period thereafter have the right to receive, upon exercise
thereof, that number of Shares having a market value of two times the then
current exercise price of the Right, subject to the availability of a sufficient
number of authorized but unissued shares.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the earliest of (i) December 30, 2007, (ii) consummation of a merger
transaction in connection with a Permitted Offer or (iii) the Rights are earlier
redeemed by the Company. At any time prior to there being an Acquiring Person or
the expiration of the Rights, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). Upon the
action of the Company's Board of Directors ordering redemption of the Rights,
the Rights will terminate and the only right to which the holders of Rights will
be entitled will be the right to receive the Redemption Price.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the Company's
voting power and prior to the acquisition by any such person or group of 50% or
more of the Company's voting power, the Board of Directors of the Company may,
at its option, exchange all or part of the then outstanding Rights (other than
Rights owned by such person or group, which become void) for Shares at an
exchange ratio of one Share per Right (subject to adjustment).
Based on publicly available information, Purchaser believes that, as of the
date of the Offer, the Rights were not exercisable, Rights Certificates have not
been issued and the Rights were evidenced by the certificates evidencing the
Shares. Purchaser also believes that, as a result of Purchaser's public
announcement of its intention to make the Offer, the Distribution Date will be
no later than May 18, 1999 unless prior to such date the Company's Board of
Directors redeems the Rights or delays the Distribution Date.
Shareholders are required to tender one Right for each Share tendered in
order to effect a valid tender of such Share. If the Distribution Date does not
occur prior to the Expiration Date, a tender of Shares will automatically
constitute a tender of the associated Rights. See Section 3.
THE BUSINESS COMBINATION CONDITION. CONSUMMATION OF THE OFFER IS
CONDITIONED UPON PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PROVISIONS OF SECTION 912 OF THE NYBCL HAVE BEEN COMPLIED WITH OR ARE INVALID OR
OTHERWISE INAPPLICABLE TO THE OFFER (THE "BUSINESS COMBINATION CONDITION").
The acquisition by Sara Lee of beneficial ownership of 20% or more of the
outstanding voting stock of the Company pursuant to the Offer, the Proposed
Merger or otherwise, including the timing and details thereof, are subject to,
among other things, the provisions of the NYBCL, including Section 912 thereof.
In general, Section 912 purports to prohibit a New York corporation from
engaging in a "Business Combination" (defined as any of a variety of
transactions including mergers) with an "Interested Shareholder" (defined
generally as a person beneficially owning capital stock entitled to cast at
least 20% of the voting power of a corporation) for a period of five years
following the date such person became an Interested Shareholder, unless, before
such person became an Interested Shareholder, the corporation's board of
directors approved either the Business Combination or the transaction in which
the shareholder became an Interested Shareholder.
The Business Combination Condition would be satisfied if, prior to the
acquisition of beneficial ownership of 20% or more of the Shares pursuant to the
Offer or otherwise, (i) the Company's Board of Directors approves either the
Proposed Merger or the purchase of Shares pursuant to the Offer, or (ii)
Purchaser, in its sole discretion, were satisfied that Section 912 was invalid
or otherwise inapplicable to the Proposed Merger for any reason, including,
without limitation, those specified in Section 912.
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THE DEFENSIVE ACTION CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY AGREEMENT OR
TRANSACTION WITH ANY PERSON OR ENTITY HAVING THE EFFECT OF IMPAIRING PURCHASER'S
ABILITY TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE EXPECTED ECONOMIC
VALUE TO PURCHASER OF THE ACQUISITION OF THE COMPANY (THE "DEFENSIVE ACTION
CONDITION").
THE HSR CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
EXPIRATION OR TERMINATION, PRIOR TO THE EXPIRATION DATE, OF THE WAITING PERIOD
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "HSR ACT"), APPLICABLE TO
THE ACQUISITION OF SECURITIES PURSUANT TO THE OFFER (THE "HSR CONDITION").
On May 4, 1999, Sara Lee filed with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Premerger Notification and Report Form under the HSR Act with
respect to the Offer. Accordingly, the waiting period under the HSR Act
applicable to the Offer will expire at 11:59 p.m., New York City time, on May
19, 1999, unless prior to the expiration or termination of the waiting period
the FTC or the Antitrust Division extends the waiting period by requesting
additional information or documentary material from Sara Lee. If such a request
is made, the waiting period applicable to the Offer will expire on the tenth
calendar day after the date of substantial compliance by Sara Lee with such
request. Thereafter, the waiting period may be extended by court order or by
consent of Sara Lee. The waiting period under the HSR Act may be terminated by
the FTC and the Antitrust Division prior to its expiration. See Section 15.
Certain other conditions to the consummation of the Offer are described in
Section 14. Purchaser expressly reserves the right, in its sole discretion, to
waive any one or more of the conditions to the Offer. See Section 14.
THIS OFFER TO PURCHASE AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
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THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
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 extension or
amendment), Purchaser will accept for payment and pay for all Securities validly
tendered prior to the Expiration Date (as hereinafter defined) and not withdrawn
in accordance with Section 4 of this Offer to Purchase. The term "Expiration
Date" means 12:00 Midnight, New York City time, on Friday, June 4, 1999, unless
and until Purchaser, in its sole discretion, 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
Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION, THE
DEFENSIVE ACTION CONDITION AND THE HSR CONDITION. IF ANY OR ALL OF SUCH
CONDITIONS ARE NOT SATISFIED OR IF ANY OF THE OTHER EVENTS SET FORTH IN SECTION
14 SHALL HAVE OCCURRED PRIOR TO THE EXPIRATION DATE, PURCHASER RESERVES THE
RIGHT (BUT SHALL NOT BE OBLIGATED) TO (I) DECLINE TO PURCHASE ANY OF THE
SECURITIES TENDERED AND TO TERMINATE THE OFFER AND RETURN ALL TENDERED
SECURITIES TO THE TENDERING SECURITYHOLDERS, (II) WAIVE OR REDUCE THE MINIMUM
CONDITION OR WAIVE OR AMEND ANY OR ALL OF THE CONDITIONS TO THE OFFER TO THE
EXTENT PERMITTED BY APPLICABLE LAW, AND, SUBJECT TO COMPLYING WITH APPLICABLE
RULES AND REGULATIONS OF THE SEC, PURCHASE ALL SECURITIES VALIDLY TENDERED, OR
(III) EXTEND THE OFFER AND RETAIN THE SECURITIES WHICH WILL HAVE BEEN TENDERED
DURING THE PERIOD OR PERIODS FOR WHICH THE OFFER IS OPEN OR EXTENDED, SUBJECT TO
THE RIGHT OF SECURITYHOLDERS TO WITHDRAW SECURITIES UNTIL THE EXPIRATION DATE.
Purchaser expressly reserves the right, in its sole discretion, at any time
or from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay the acceptance for payment of, and payment for, any
Securities by giving oral or written notice of such extension to the Depositary
and (ii) subject to applicable rules and regulations of the SEC, to amend the
Offer in any respect (including, without limitation, by decreasing or increasing
the Offer Prices and/or by decreasing the number of Securities being sought in
the Offer) by giving oral or written notice of such amendment to the Depositary.
The rights reserved by Purchaser in this paragraph are in addition to
Purchaser's rights to terminate the Offer as described in Section 14. Any
extension, amendment or termination will be followed as promptly as practicable
by public announcement thereof, the announcement in the case of an extension to
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Without
limiting the obligation of Purchaser under such Rule or the manner in which
Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Jones News
Service. Under no circumstances will interest be paid on the Offer Prices to be
paid by Purchaser for the Securities, regardless of any extension of the Offer
or any delay in making such payment.
If Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Securities) is delayed in its purchase of, or payment
for, Securities or is unable to pay for Securities pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may retain tendered Securities on behalf of Purchaser, and such
Securities may not be withdrawn except to the extent tendering securityholders
are entitled to withdrawal rights as described in Section 4. However, the
ability of Purchaser to delay the payment for Securities which 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.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer
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materials and extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the
Offer must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in prices, will depend
upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In a public release, the SEC
has stated that in its view an offer must remain open for a minimum period of
time following a material change in the terms of the Offer and that waiver of a
material condition, such as the Minimum Condition, is a material change in the
terms of the Offer. The release states that an offer should remain open for a
minimum of five (5) business days from the date a material change is first
published, sent or given to securityholders. With respect to a material change
in price or percentage of securities sought , a minimum of ten (10) business
days may be required to allow adequate dissemination and investor response. The
requirement to extend the Offer will not apply to the extent that the number of
business days remaining between the occurrence of the change and the then-
scheduled Expiration Date equals or exceeds the minimum extension period that
would be required because of such amendment. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
Requests are being made to the Company pursuant to Rule 14d-5 under the
Exchange Act for the use of the Company's securityholders lists and security
position listings for the purpose of disseminating the Offer to holders of
Securities. This Offer to Purchase, the applicable Letter of Transmittal and
other relevant materials will be mailed to record holders of Securities and will
be furnished by Purchaser to brokers, dealers, banks and similar persons whose
names, or the names of whose nominees, appear on the securityholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Securities
by Purchaser following receipt of such lists or listings from the Company, or by
the Company if it so elects.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will purchase, by accepting for payment, and will pay for,
promptly after the Expiration Date, all Securities validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 4. All
determinations concerning the satisfaction of such terms and conditions will be
within Purchaser's sole discretion, which determinations will be final and
binding. See Sections 1 and 14. Purchaser expressly reserves the right, in its
sole discretion, to delay acceptance for payment of, or payment for, Securities
in order to comply in whole or in part with any applicable law, including,
without limitation, the HSR Act. Any such delays will be effected in compliance
with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to
pay the consideration offered or return the securities deposited by or on behalf
of holders of securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Securities accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Securities (or a timely Book-Entry Confirmation (as
defined below) with respect thereto), (ii) the applicable 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 transfer, an
Agent's Message (as defined below), and (iii) any other documents required by
the applicable Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Securities properly tendered to Purchaser and
not withdrawn, if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Securities. Payment for
Securities accepted for payment pursuant to the Offer will be made by deposit of
the applicable Offer Price therefor with the Depositary, which will act as agent
for tendering securityholders
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for the purpose of receiving payment from Purchaser and transmitting payment to
tendering securityholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
OFFER PRICES TO BE PAID BY PURCHASER FOR THE SECURITIES, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Upon deposit of funds with the Depositary for the purpose of making payments
to tendering securityholders, Purchaser's obligation to make such payment shall
be satisfied, and tendering securityholders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance for
payment of the Securities pursuant to the Offer. Purchaser will pay any stock or
other transfer taxes incident to the transfer to it of validly tendered
Securities, except as otherwise provided in Instruction 6 of the Letters of
Transmittal, as well as any charges and expenses of the Depositary and the
Information Agent incurred in connection with the Offer and pursuant to Sara
Lee's or Purchaser's agreements therewith.
If Purchaser is delayed in its acceptance for payment of, or payment for,
Securities or is unable to accept for payment, or pay for, Securities tendered
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer (including such rights as are set forth in Sections 1 and
14) (but subject to compliance with Rule 14e-1(c) under the Exchange Act), the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered
Securities, and such Securities may not be withdrawn except to the extent
tendering securityholders are entitled to exercise, and duly exercise,
withdrawal rights as described in Section 4.
If any tendered Securities are not accepted for payment pursuant to the
Offer for any reason or if certificates are submitted evidencing more Securities
than are tendered, certificates for any such Securities will be returned,
without expense to the tendering securityholder (or, in the case of Securities
delivered by book-entry transfer of such Securities into the Depositary's
account at the Book-Entry Transfer Facility (as defined below) pursuant to the
procedures set forth in Section 3, such Securities will be credited to an
account maintained at the Book-Entry Transfer Facility), as promptly as
practicable after the expiration or termination of the Offer.
If, prior to the Expiration Date, Purchaser increases the Offer Price to be
paid per Share or with respect to the Convertible Debentures pursuant to the
Offer, Purchaser will pay such increased Offer Prices for all Securities of the
same class purchased pursuant to the Offer, whether or not such Securities were
tendered prior to such increase in the applicable Offer Price.
Purchaser reserves the right to transfer or assign, in whole at any time, or
in part from time to time, to Sara Lee or one or more direct or indirect wholly
owned subsidiaries of Sara Lee, the right to purchase all or any portion of the
Securities tendered pursuant to the Offer; provided, that any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering securityholders to receive
payment for Securities validly tendered and accepted for payment pursuant to the
Offer.
3. PROCEDURE FOR TENDERING SECURITIES.
VALID TENDER. For Securities to be validly tendered pursuant to the Offer,
either (i) the applicable, properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message), and
any other documents required by such 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 prior to the Expiration Date and either certificates for tendered
Securities must be received by the Depositary at one of such addresses or such
Securities must be delivered pursuant to the procedures for book-entry transfer
set forth below (and a Book-Entry Confirmation (as defined below) must be
received by the Depositary), in each case prior to the Expiration Date, or (ii)
the tendering securityholder must comply with the guaranteed delivery procedures
described below.
BOOK-ENTRY TRANSFER. The Depositary will establish a separate account with
respect to each of the Shares, the 7% Debentures and the 8% Debentures at The
Depositary Trust Company (the "Book-Entry
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Transfer Facility") for purposes of the Offer within two (2) business days after
the date of this Offer to Purchase. Any financial institution that is a
participant in the Book-Entry Transfer Facility's systems may make book-entry
delivery of Securities by causing the Book-Entry Transfer Facility to transfer
such Securities into the applicable account of the Depositary in accordance with
the Book-Entry Transfer Facility's procedure for such transfer. However,
although delivery of Securities may be effected through book-entry transfer into
the Depositary's accounts at the Book-Entry Transfer Facility, the applicable
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message in
connection with a book-entry delivery of Securities, and any other required
documents must, in any case, be transmitted to, and received by, the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or the tendering securityholder must comply with
the guaranteed delivery procedures described below. The confirmation of a
book-entry transfer of Securities into the Depositary's accounts at the
Book-Entry Transfer Facility as described above is referred to herein as a
"Book-Entry Confirmation." Delivery of documents to the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Securities that such participant has received
and agrees to be bound by the terms of the applicable Letter of Transmittal and
that Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SECURITIES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SECURITYHOLDER.
SECURITIES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on a Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Securities) of Securities tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Securities are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to each Letter of Transmittal.
If the certificates for Securities are registered in the name of a person
other than the signer of the applicable Letter of Transmittal, or if payment is
to be made, or certificates for Securities not tendered or not accepted for
payment are to be returned, to a person other than the registered holder of the
certificates surrendered, then the tendered certificates for such Securities
must be endorsed or accompanied by appropriate stock powers, in either case,
signed exactly as the name or names of the registered holders or owners appear
on the certificates, with the signatures on the certificates or stock powers
guaranteed as described above. See Instruction 5 to the Letters of Transmittal.
GUARANTEED DELIVERY. If a securityholder desires to tender Securities
pursuant to the Offer and such securityholder's certificates for Securities are
not immediately available or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach
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the Depositary prior to the Expiration Date, such securityholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect to)
such Securities, together with the applicable, properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other required
documents are received by the Depositary within three NYSE trading
days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Securities accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Securities, (ii) the applicable Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and (iii) any other documents required by such Letter of
Transmittal. Accordingly, tendering securityholders may be paid at different
times depending upon when certificates for Securities or Book-Entry
Confirmations with respect to Securities are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICES TO
BE PAID BY PURCHASER FOR THE SECURITIES, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Securities pursuant to one of the procedures described
above will constitute a binding agreement between the tendering securityholder
and Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT OF PROXIES. By executing the applicable Letter of Transmittal
as set forth above, the tendering securityholder will irrevocably appoint
designees of Purchaser as such securityholder's attorneys-in-fact and proxies,
in the manner set forth in such Letter of Transmittal, each with full power of
substitution, to the full extent of such securityholder's rights with respect to
the Securities tendered by such securityholder and accepted for payment by
Purchaser (and any and all non-cash dividends, distributions, rights or other
securities issued or issuable in respect of such Securities on or after the date
of this Offer to Purchase (collectively, "Distributions")). All such proxies
will be considered coupled with an interest in the tendered Securities. Such
appointment will be effective when, and only to the extent that, Purchaser
accepts for payment Securities tendered by such securityholder as provided
herein. Upon such appointment, all prior powers of attorney, proxies and
consents given by such securityholder with respect to such Securities or other
securities or rights will, without further action, be revoked, and no subsequent
powers of attorney, proxies, consents or revocations may be given by such
securityholder (and, if given, will not be deemed effective). The designees of
Purchaser will be empowered to exercise all voting and other rights with respect
to such Securities and any Distributions, including, without limitation, in
respect of any annual, special, adjourned or postponed meeting of the Company's
shareholders, actions by written consent in lieu of any such meeting or
otherwise, as they, in their sole discretion, deem proper. Purchaser reserves
the right to require that, in order for Securities to be deemed validly
tendered, immediately upon Purchaser's acceptance for payment of such
Securities, Purchaser must be able to exercise full voting, consent and other
rights with respect to such Securities and any Distributions, including, with
respect to Shares, voting at any meeting of shareholders.
10
<PAGE>
DISTRIBUTION OF RIGHTS. Holders of Shares will be required to tender one
Right for each Share tendered to effect a valid tender of such Share. Unless and
until the Distribution Date occurs, the Rights are represented by and
transferred with the Shares. Accordingly, if the Distribution Date does not
occur prior to the Expiration Date, a tender of Shares will constitute a tender
of the associated Rights. If a Distribution Date has occurred, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered must be delivered to the Depositary in order for such Shares to be
validly tendered. If a Distribution Date has occurred, a tender of Shares
without Rights constitutes an agreement by the tendering shareholder to deliver
certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within three NYSE trading days
after the date such certificates are distributed. Purchaser reserves the right
to require that it receive such certificates prior to accepting Shares for
payment. If a Distribution Date has occurred, unless the Rights are redeemed
prior to the Expiration Date, shareholders who sell their Rights separately from
their Shares and do not otherwise acquire Rights may not be able to satisfy the
requirements of the Offer for the tender of Shares. Purchaser will not pay any
additional consideration for the Rights tendered pursuant to the Offer.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of
Securities will be determined by Purchaser, in its sole discretion, which
determination will be final and binding. Purchaser reserves the absolute right
to reject any or all tenders of any Securities determined by it not to be in
proper form or the acceptance for payment of, or payment for which may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its sole discretion, to waive any of the conditions of the
Offer or any defect or irregularity in the tender of any Securities of any
particular securityholder, whether or not similar defects or irregularities are
waived in the case of other securityholders. No tender of Securities will be
deemed to have been validly made until all defects or irregularities relating
thereto have been cured or waived.
Purchaser's interpretation of the terms and conditions of the Offer
(including the Letters of Transmittal and the instructions thereto) will be
final and binding. None of Purchaser, Sara Lee, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
BACKUP WITHHOLDING. Under the "backup withholding" provisions of federal
income tax law, unless a tendering registered holder, or his assignee (in either
case, the "Payee"), satisfies the conditions described in Instruction 10 of the
Letter of Transmittal or is otherwise exempt, the cash payable as a result of
the Offer may be subject to backup withholding tax. To prevent backup
withholding, each Payee should provide the Depositary with such securityholder's
correct Taxpayer Identification Number and certify that such securityholder is
not subject to backup withholding by completing and signing the Substitute Form
W-9 included in the applicable Letter of Transmittal. See Instruction 10 of the
Letters of Transmittal.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Securities made
pursuant to the Offer are irrevocable. Securities tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior to
the Expiration Date and, unless theretofore accepted for payment and paid for by
Purchaser pursuant to the Offer, may also be withdrawn at any time after July 5,
1999 (or such other date as may apply in the event the Offer is extended).
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Securities or is unable to accept Securities for payment pursuant to the Offer
for any reason, then, without prejudice to Purchaser's rights set forth in this
Offer to Purchase, the Depositary may, nevertheless, on behalf of Purchaser,
retain tendered Securities, and such Securities may not be withdrawn except to
the extent
11
<PAGE>
that the tendering securityholder is entitled to and duly exercises withdrawal
rights as described in this Section 4. Any such delay will be an extension of
the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Securities to be
withdrawn, the number of Securities to be withdrawn and the name of the
registered holder of the Securities to be withdrawn, if different from the name
of the person who tendered the Securities. If certificates for Securities have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Securities
have been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Securities have
been delivered pursuant to the procedures for book-entry transfer as set forth
in Section 3, any notice of withdrawal must also specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Securities and otherwise comply with the Book-Entry Transfer
Facility's procedures.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Sara Lee, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Withdrawals of tenders of Securities may not be rescinded, and any
Securities properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Securities may be retendered by again
following one of the procedures described in Section 3 any time prior to the
Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Proposed Merger to securityholders of the
Company whose Securities are tendered and accepted for payment pursuant to the
Offer or whose Securities are converted to cash pursuant to the Proposed Merger.
The discussion is for general information only and does not purport to consider
all aspects of federal income taxation that might be relevant to securityholders
of the Company. The discussion is based on current law which is subject to
change, possibly with retroactive effect. The discussion applies only to
securityholders who hold Securities as capital assets and may not apply to
Securities received pursuant to the exercise of employee stock options or
otherwise as compensation, or to certain types of securityholders (such as
insurance companies, tax-exempt organizations, financial institutions, foreign
taxpayers and broker-dealers) who may be subject to special rules. This
discussion does not discuss the federal income tax consequences to any
securityholder of the Company who, for United States federal income tax
purposes, is a non-resident alien individual, foreign corporation, foreign
partnership or foreign estate or trust, and does not address any aspect of
state, local or foreign tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH SECURITYHOLDER SHOULD
CONSULT SUCH SECURITYHOLDER'S TAX ADVISOR REGARDING THE APPLICABILITY OF THE
RULES DISCUSSED BELOW TO SUCH SECURITYHOLDER AND THE PARTICULAR TAX EFFECTS TO
SUCH SECURITYHOLDER OF THE OFFER AND THE PROPOSED MERGER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
The receipt of cash for Securities pursuant to the Offer or the Proposed
Merger will be a taxable transaction for United States federal income tax
purposes. In general, except as described below, a securityholder who exchanges
Securities pursuant to the Offer or surrenders Securities for cash pursuant to
the Proposed Merger will recognize gain or loss for United States federal income
tax purposes equal to the difference, if any, between the amount of cash
received and the securityholder's adjusted tax basis in the Securities exchanged
pursuant to the Offer or surrendered for cash pursuant to the Proposed Merger.
Gain or loss will be determined separately for each block of Securities (i.e.,
Securities
12
<PAGE>
acquired at the same cost in a single transaction) exchanged pursuant to the
Offer or surrendered for cash pursuant to the Proposed Merger. Such gain or loss
will be long-term capital gain or loss provided that a securityholder's holding
period for such Securities is more than 12 months at the time of consummation of
the Offer or the Proposed Merger, as the case may be. Capital gain recognized by
individuals (and certain estates and trusts) upon a disposition of a Security
that has been held for more than one year generally will be subject to a maximum
tax rate of 20% or, in the case of a Security that has been held for one year or
less, will be subject to tax at ordinary income tax rates. Certain limitations
apply to the use of capital losses, including that they generally may only
offset up to $3,000 of ordinary income for a married taxpayer, filing jointly.
The payment of interest or dividends (or amounts treated as interest or
dividends for tax purposes) with respect to a Security generally will be treated
as ordinary income.
An exception to the capital gain treatment described above applies to a
holder who holds a Convertible Debenture with a "market discount." Market
discount is the amount by which the holder's basis in the Convertible Debenture
immediately after its acquisition is exceeded by the stated redemption price of
the Convertible Debenture at maturity. (However, a Convertible Debenture will be
considered to have no market discount if such excess is less than 1/4 of 1% of
the stated redemption price of the Convertible Debenture at maturity multiplied
by the number of complete years from the holder's acquisition date of the
Convertible Debenture to its maturity date.) The gain realized by the holder of
a market discount Convertible Debenture on its purchase by the Purchaser will be
treated as ordinary income to the extent that market discount has accrued (on a
straight line basis or, at the election of the holder, on a constant interest
basis) from the holder's acquisition date to the date of sale, unless the holder
has elected to include market discount in income currently as it accrues. Gain
in excess of such accrued market discount will be subject to the capital gains
rules described above.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES; PRICE RANGE OF THE
CONVERTIBLE DEBENTURES
THE SHARES. The Shares are traded on the NYSE under the symbol "CHF." The
following table sets forth, for each period indicated, the high and low sales
prices per Share on the NYSE.
<TABLE>
<CAPTION>
PRICE
--------------------
HIGH LOW
--------- ---------
<S> <C> <C>
Fiscal Year Ended July 31, 1997
First Quarter.................................................................................... 5 3/8 4 1/2
Second Quarter................................................................................... 5 1/4 4 5/8
Third Quarter.................................................................................... 6 1/4 5
Fourth Quarter................................................................................... 7 7/8 5 3/8
Fiscal Year Ended July 31, 1998
First Quarter.................................................................................... 8 3/4 6 1/4
Second Quarter................................................................................... 7 5/8 6
Third Quarter.................................................................................... 8 1/8 6 5/8
Fourth Quarter................................................................................... 8 5/8 6 1/4
Fiscal Year Ending July 31, 1999
First Quarter.................................................................................... 7 1/2 4 3/4
Second Quarter................................................................................... 7 7/8 5 1/16
Third Quarter.................................................................................... 9 15/16 4 13/16
Fourth Quarter (through May 6, 1999)............................................................. 10 13/16 9 3/8
</TABLE>
13
<PAGE>
On March 10, 1999, the day Sara Lee offered in writing to acquire the
Company for $9.50 per Share, the last reported sales price was $5.00 per Share.
On April 21, 1999, the last full trading day prior to Sara Lee filing its
Schedule 13D with the SEC announcing its intention to acquire the Company, the
last reported sales price was $6.00 per share. On May 3, 1999, the last full
trading day prior to the announcement of the Offer, the last reported sales
price of the Shares on the NYSE Composite Tape was $9 7/16 per Share.
Shareholders are urged to obtain a current market quotation for the Shares.
Since August 1, 1997, the Company has not declared or paid any cash
dividends on the Shares. The Company 1998 10-K indicates that the Company is
effectively restricted by the terms of its credit facilities from paying cash
dividends on the Shares.
THE 7% DEBENTURES. The 7% Debentures trade on the NYSE under the symbol
"ChckFul 7s12". Publicly available historical price information for the 7%
Debentures is limited. The following table sets forth, for each period
indicated, the high ask and low bid per $1,000 principal amount of the 7%
Debentures on the NYSE.
<TABLE>
<CAPTION>
PRICE
----------------------
HIGH/ASK LOW/BID
---------- ----------
<S> <C> <C>
Fiscal Year Ended July 31, 1997
First Quarter............................................................................ 880.00 815.00
Second Quarter........................................................................... 900.00 825.00
Third Quarter............................................................................ 930.00 847.50
Fourth Quarter........................................................................... 1,030.00 910.00
Fiscal Year Ended July 31, 1998
First Quarter............................................................................ 1,100.00 985.00
Second Quarter........................................................................... 1,040.00 970.00
Third Quarter............................................................................ 1,070.00 990.00
Fourth Quarter........................................................................... 1,061.25 970.00
Fiscal Year Ending July 31, 1999
First Quarter............................................................................ 1,050.00 896.25
Second Quarter........................................................................... 1,000.00 906.25
Third Quarter............................................................................ 1,205.00 888.75
Fourth Quarter (through May 6, 1999)..................................................... 1,288.75 1,165.00
</TABLE>
On April 21, 1999, the last full trading day prior to Sara Lee filing its
Schedule 13D with the SEC announcing its intention to acquire the Company, the
last reported sales price of the 7% Debentures was $955.00 per $1,000 principal
amount. On May 3, 1999, the last full trading day prior to the announcement of
the Offer, the last reported sales price of the 7% Debentures on the NYSE was
$1,165.00 per $1,000 principal amount. Securityholders are urged to obtain a
current market quotation for the 7% Debentures.
14
<PAGE>
THE 8% DEBENTURES. The 8% Debentures trade on the AMEX under the symbol
"ChckFul 8s06". Publicly available historical price information for the 8%
Debentures is limited. The following table sets forth, for each period
indicated, the high ask and low bid per $1,000 principal amount of the 8%
Debentures on the AMEX.
<TABLE>
<CAPTION>
PRICE
----------------------
HIGH/ASK LOW/BID
---------- ----------
<S> <C> <C>
Fiscal Year Ended July 31, 1997
First Quarter............................................................................ 990.00 900.00
Second Quarter........................................................................... 975.00 920.00
Third Quarter............................................................................ 1,005.00 945.00
Fourth Quarter........................................................................... 1,066.25 990.00
Fiscal Year Ended July 31, 1998
First Quarter............................................................................ 1,100.00 1,020.00
Second Quarter........................................................................... 1,080.00 1,005.00
Third Quarter............................................................................ 1,100.00 1,025.00
Fourth Quarter........................................................................... 1,077.50 995.00
Fiscal Year Ending July 31, 1999
First Quarter............................................................................ 1,030.00 930.00
Second Quarter........................................................................... 1,043.75 980.00
Third Quarter............................................................................ 1,235.00 962.50
Fourth Quarter (through May 6, 1999)..................................................... 1,370.00 1,190.00
</TABLE>
On April 21, 1999, the last full trading day prior to Sara Lee filing its
Schedule 13D with the SEC announcing its intention to acquire the Company, the
last reported sales price of the 8% Debentures was $1,002.50 per $1,000
principal amount. On May 3, 1999, the last full trading day prior to the
announcement of the Offer, the last reported sales price of the 8% Debentures on
the AMEX was $1,200.00 per $1,000 principal amount. Securityholders are urged to
obtain a current market quotation for the 8% Debentures.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SECURITIES; EXCHANGE LISTINGS;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
MARKET FOR THE SECURITIES. The purchase of Securities by Purchaser pursuant
to the Offer will reduce the number of Securities that might otherwise trade
publicly and will reduce the number of holders of Securities, which, depending
upon the number of Securities so purchased, could adversely affect the liquidity
and market value of the remaining Securities held by the public. Purchaser
cannot predict whether the reduction in the number of Securities that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Securities or whether it would cause
future market prices to be greater or lesser than the respective Offer Prices.
EXCHANGE LISTINGS.
NYSE LISTING OF SHARES. According to the NYSE's published guidelines,
the NYSE would consider delisting the Shares if, among other things, the number
of record holders of at least 100 Shares should fall below 1,200, the number of
publicly held Shares (exclusive of holdings of officers, directors and their
families and other concentrated holdings of 10% or more (the "NYSE Excluded
Holdings")) should fall below 600,000 or the aggregate market value of publicly
held Shares (exclusive of NYSE Excluded Holdings) should fall below $5,000,000.
If, as a result of the purchase of Shares pursuant to the Offer or otherwise,
the Shares no longer meet the requirements of the NYSE for continued listing and
the listing of the Shares is discontinued, the market for the Shares could be
adversely affected.
15
<PAGE>
NYSE LISTING OF 7% DEBENTURES. According to the NYSE's published
guidelines, the NYSE would consider delisting the 7% Debentures if, among other
things, the aggregate principal value of the 7% Debentures falls below
$5,000,000 or if the underlying Shares are not subject to real-time last sale
reporting in the United States. Thus, if the Shares were to be delisted by the
NYSE, then the 7% Debentures would also be subject to delisting by the NYSE. If,
as a result of the purchase of Shares and/ or 7% Debentures pursuant to the
Offer or otherwise, the 7% Debentures no longer meet the requirements of the
NYSE for continued listing and the listing of the 7% Debentures is discontinued,
the market for the 7% Debentures could be adversely affected.
AMEX LISTING OF 8% DEBENTURES. According to the AMEX's published
guidelines, the AMEX would consider delisting the 8% Debentures if, among other
things, the aggregate principal value of the 8% Debentures falls below
$5,000,000 or if the underlying Shares are not subject to current last sale
reporting in the United States. Thus, if the Shares were to be delisted by the
NYSE and were no longer subject to current last sale reporting, then the 8%
Debentures would be subject to delisting by the AMEX. If, as a result of the
purchase of Shares and/or 8% Debentures pursuant to the Offer or otherwise, the
8% Debentures no longer meet the requirements of the AMEX for continued listing
and the listing of the 8% Debentures is discontinued, the market for the 8%
Debentures could be adversely affected.
If the NYSE or the AMEX, as applicable, were to delist the Securities, it is
possible that the Securities would continue to trade on another securities
exchange or in the over-the-counter market and that price or other quotations
would be reported by such exchange or through the Nasdaq National Market or
through other sources. The extent of the public market for such Securities and
the availability of such quotations would depend, however, upon such factors as
the number of securityholders and/or the aggregate market value of such
securities remaining at such time, the interest in maintaining a market in the
Securities on the part of securities firms, the possible termination of
registration under the Exchange Act as described below, and other factors.
EXCHANGE ACT REGISTRATION. The Securities are currently registered under
the Exchange Act. Registration of the Shares, the 7% Debentures and the 8%
Debentures may be terminated upon application of the Company to the SEC if the
Shares, the 7% Debentures or the 8% Debentures are neither listed on a national
securities exchange nor held by 300 or more holders of record. The termination
of registration of the Securities under the Exchange Act would substantially
reduce the information required to be furnished by the Company to its
securityholders and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement pursuant to Section 14(a) in
connection with shareholders' meetings and the related requirement of furnishing
an annual report to shareholders (and to furnish an annual report and other
reports filed with the SEC to holders of the Convertible Debentures pursuant to
the Exchange Act and to the applicable Indenture relating to each of the
Convertible Debentures) and the requirements of Rule 13e-3 under the Exchange
Act with respect to "going private" transactions, no longer applicable to the
Company. Furthermore, the ability of "affiliates" of the Company and persons
holding "restricted securities" of the Company to dispose of such securities
pursuant to Rule 144 or Rule 144A promulgated under the Securities Act may be
impaired or eliminated. If registration of the Securities under the Exchange Act
were terminated, such Securities would no longer be eligible for continued
listing on any stock or bond exchange.
MARGIN REGULATIONS. The Securities presently are "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Securities
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
16
<PAGE>
as collateral for loans made by brokers. In addition, if registration of the
Securities under the Exchange Act were terminated, the Securities would no
longer constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. The information concerning the Company contained in this Offer to
Purchase, including financial information, has been taken from or based upon the
Company 1998 10-K, the Company Second Quarter 10-Q and other publicly available
documents and records on file with the SEC and other public sources. None of
Sara Lee, Purchaser, the Dealer Manager, the Depositary or the Information Agent
assumes responsibility for the accuracy or completeness of the information
concerning the Company contained in such documents and records or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any such information.
According to information filed by the Company with the SEC, the Company is a
New York corporation whose principal executive offices are located at 370
Lexington Avenue, New York, New York 10017, and the telephone number of the
Company at such address is (212) 532-0300. The Company is the fourth largest
roaster, packer and marketer of coffee in the United States based upon coffee
pounds sold by the Company. Its broad range of regular and decaffeinated, ground
roast, instant and specialty coffees for the Foodservice and Retail Grocery
Industries are sold regionally throughout the United States and Canada under
various well known trademarks, including Chock Full O'Nuts, La Touraine and
Cain's. The Company is also one of the largest marketers of foodservice and
private label coffees. The balance of the Company's business is derived from its
developing Quikava outlets and from real estate operations.
17
<PAGE>
SELECTED FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial information with respect to the Company, excerpted or
derived from the audited consolidated financial statements of the Company
contained in the Company 1998 10-K and from the unaudited consolidated financial
statements of the Company contained in the Company Second Quarter 10-Q and in
the Company's Quarterly Report on Form 10-Q for the six months ended January 31,
1998, filed by the Company with the SEC pursuant to the Exchange Act. More
comprehensive financial information is included in such reports and in other
documents filed by the Company with the SEC. The following summary is qualified
in its entirety by reference to such reports and other documents and all of the
financial information (including any related notes) contained therein. Such
reports and other documents may be inspected and copies may be obtained from the
SEC in the manner set forth below.
CHOCK FULL O'NUTS CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------
YEAR ENDED JULY 31, (UNAUDITED)
----------------------------------------------------- JANUARY 31, JANUARY 31,
1994 1995 1996 1997 1998 1999 1998
--------- --------- --------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales......................... $ 263,511 $ 326,141 $ 321,135 $ 364,204 $ 394,357 $ 184,214 $ 210,399
Income from continuing
operations...................... 8,243 6,738 4,631 7,914 5,499 2,614 4,253
Working capital................... 81,590 89,612 87,053 99,086 92,229 91,245 99,707
Working capital ratio............. 3.6 to 1 4.3 to 1 4.7 to 1 4.5 to 1 5.9 to 1 -- --
Total assets...................... 208,807 207,005 199,435 217,330 201,184 206,545 212,705
Long term debt.................... 110,427 106,569 105,235 106,066 92,247 90,089 97,037
Stockholders' equity.............. 58,262 64,937 63,487 71,881 77,555 80,332 75,392
PER COMMON SHARE(1):
Income from continuing operations:
Basic........................... .80 .65 .45 .76 .53 .25 .41
Diluted......................... .57 .51 .41 .55 .45 .22 .29
Stock dividends distributed....... 3% 3% -- -- -- -- --
Stockholders' equity.............. 5.43 6.05 5.91 6.70 7.16 -- --
</TABLE>
- --------------
(1) Per share data has been retroactively adjusted for a 3% stock dividend in
July 1995 and 1994.
AVAILABLE INFORMATION. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's shareholders and filed with the SEC. Such reports, proxy statements
and other information are available for inspection at the public reference
facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at Seven World Trade Center, Suite 1300,
New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such information are obtainable by mail, upon payment of the SEC's
customary charges, by writing to the SEC's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
filed electronically by the Company. The Shares and the 7% Debentures are listed
on the NYSE, and reports, proxy statements and other information concerning the
Company are also available at the offices of the NYSE located at 20 Broad
Street, New York, NY 10005. The 8% Debentures are listed on the AMEX and such
reports and other information concerning the Company are also available at the
offices of the AMEX located at 86 Trinity Place, New York, NY 10006.
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9. CERTAIN INFORMATION CONCERNING SARA LEE AND PURCHASER.
PURCHASER. Purchaser is a newly incorporated New York corporation organized
in connection with the Offer and the Proposed Merger and has not carried on any
activities other than in connection with the Offer and the Proposed Merger. The
principal offices of Purchaser are located at Three First National Plaza,
Chicago, Illinois 60602. The telephone number of Purchaser at such location is
(312) 726-2600. All of the outstanding capital stock of Purchaser is owned
directly by Sara Lee. Until immediately prior to the time Purchaser purchases
the Securities pursuant to the Offer, it is not anticipated that 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 and the Proposed Merger.
SARA LEE. Sara Lee is a global food and consumer products company which
markets a variety of products under leading brand names, including Hanes, Coach,
L'eggs, Dim, Bali, Playtex, Champion, Kiwi, Hillshire Farm, Ball Park, Jimmy
Dean, Douwe Egberts and Sara Lee. Sara Lee has operations in more than 40
countries and markets branded products in more than 140 countries. Sara Lee is
organized into five lines of business: Sara Lee Foods, Coffee and Tea, Branded
Apparel, Household and Body Care and Foodservice. Sara Lee is a Maryland
corporation with its principal executive offices located at Three First National
Plaza, Chicago, Illinois 60602. The telephone number of Sara Lee at such
location is (312) 726-2600.
Financial information with respect to Sara Lee and its subsidiaries is
included in Sara Lee's Annual Report on Form 10-K for the fiscal year ended June
27, 1998 and Sara Lee's Quarterly Report on Form 10-Q for the six months ended
December 27, 1998, which are incorporated herein by reference, and other
documents filed by Sara Lee with the SEC. Such reports and other documents are
available for inspection and copies thereof are obtainable in the manner set
forth under "Available Information."
AVAILABLE INFORMATION. Sara Lee is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Information as of
particular dates concerning Sara Lee's directors and officers, their
remuneration, options granted to them, the principal holders of Sara Lee's
securities and any material interests of such persons in transactions with Sara
Lee is required to be disclosed in proxy statements distributed to Sara Lee's
stockholders and filed with the SEC. Such reports, proxy statements and other
information are available for inspection at the public reference facilities of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the SEC located at Seven World Trade Center, Suite 1300, New York, NY
10048 and 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information are obtainable by mail, upon payment of the SEC's customary charges,
by writing to the SEC's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The SEC also maintains a website at http://www.sec.gov that contains
reports, proxy statements and other information filed electronically by Sara
Lee. Sara Lee's common stock is listed on the NYSE, the Pacific Stock Exchange
and the Chicago Stock Exchange, and reports, proxy statements and other
information concerning Sara Lee are also available at the offices of the NYSE
located at 20 Broad Street, New York, NY 10005, the offices of the Pacific Stock
Exchange located at 301 Pine Street, San Francisco, CA 94104 and the offices of
the Chicago Stock Exchange at One Financial Place, 440 S. LaSalle Street,
Chicago, IL 60605.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Purchaser and Sara Lee are set forth in Schedule II hereto.
10. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase all
Securities validly tendered pursuant to the Offer, consummate the Proposed
Merger and pay all costs and expenses incurred in connection with the Offer and
the Proposed Merger is approximately $231 million. See
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Section 16. Purchaser intends to obtain such funds through a capital
contribution or loan from Sara Lee. Such capital contribution or loan to
Purchaser will be funded from working capital of Sara Lee.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
Prior to July 8, 1998, representatives of Sara Lee and the Company from time
to time discussed the possibility of a business combination involving the two
companies. In a letter dated August 15, 1997, Sara Lee formally invited the
Company to negotiate a business combination acceptable to both companies and
their respective shareholders. On August 20, 1997, the Company indicated that it
was not interested in pursuing such negotiations. From time to time thereafter,
representatives of Sara Lee approached representatives of the Company regarding
a possible transaction. On July 8, 1998, Sara Lee submitted a written proposal
to the Board of Directors of the Company proposing that Sara Lee acquire the
Company. The proposed purchase price of $9.50 per Share in cash or shares of
common stock of Sara Lee ("Sara Lee Common Stock") represented a 46% premium
over the closing Share price on June 25, 1998 (the day Sara Lee's financial
advisors met with management of the Company to discuss a possible transaction).
Having received no response from the Board of Directors of the Company, on July
29, 1998, Sara Lee submitted another letter reiterating its offer. On August 12,
1998, the Board of Directors of the Company responded that it was reviewing and
evaluating the proposal with the assistance of its financial advisor.
On September 15, 1998, representatives of both companies and their financial
advisors met. At this meeting, the proposal and related matters were discussed.
Several telephone conversations between representatives of Sara Lee and the
Company regarding the proposal occurred during September and October 1998. On
October 2, 1998, the Company and Sara Lee entered into a Confidentiality
Agreement. Based upon its discussions with the Company and its representatives,
in a letter to the Board of Directors of the Company delivered on October 16,
1998, Sara Lee increased its proposal to $10.50 per Share in cash or shares of
Sara Lee Common Stock, representing a 79% premium over the then current price of
the Shares. On October 23, 1998, the Company's Board of Directors, through its
financial advisors, rejected this second proposal.
On March 8, 1999, Norman Alexander, the Chairman of the Board of Directors
of the Company, and a company controlled by him filed a Schedule 13D disclosing
purchases of an aggregate of 533,000 Shares at $5.00 per share on February 24,
1999 as a result of which (based on such Schedule 13D) he beneficially owns
5.348% of the Company's outstanding Shares.
In a letter to the Board of Directors of the Company dated March 10, 1999,
Sara Lee reiterated its interest in acquiring the Company. In light of the
Company's unfavorable operating performance, stock price decline and potential
increased severance expenses resulting from the adoption of employment
agreements for certain senior management of the Company (which were disclosed in
the Company's Annual Proxy Statement dated October 26, 1998 and filed with the
Securities and Exchange Commission as exhibits to the Company's Annual Report on
Form 10-K filed on October 27, 1998), Sara Lee offered to acquire the Company
for $9.50 per Share. This represented a 90% premium over the then current market
price of the Shares and an 85% premium over the average closing price of the
Shares for the prior 20 trading days. On March 22, 1999, the Company rejected
this proposal as inadequate.
On April 12, 1999, representatives of Sara Lee informed the Company's
financial advisors that, as of that day, Sara Lee had acquired (directly and
through the ownership of Convertible Debentures) beneficial ownership of more
than 5% of the Company's Common Stock. Representatives of the parties had
further discussions during the week of April 12 regarding a possible meeting
between the parties and, on April 16, 1999, Sara Lee's legal advisors delivered
to the Company's financial advisors a proposed form of merger agreement with
respect to the acquisition of the Company by Sara Lee. On April 19, 1999,
representatives of Sara Lee and its financial advisors met with representatives
of the Company and its financial advisors to discuss the recent performance of
the Company, a possible
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transaction between the parties and related matters. Sara Lee invited
representatives of the Company to engage in constructive negotiations regarding
the price and terms of a transaction between the parties and indicated that it
was willing to increase its offer above $10.00 per Share in connection with such
negotiations. The Company's representatives indicated that they were not
authorized to engage in such negotiations.
On April 20, 1999, Sara Lee increased its offer to $10.50 per Share in cash.
On April 21, 1999, the Company's financial advisors made a counter-proposal to
Sara Lee of $12.50 per Share in Sara Lee Common Stock. Later that day, in a
letter to the Board of Directors of the Company, Sara Lee proposed to acquire
the Company at a price of $10.50 per Share with the consideration to be paid in
the form of Sara Lee Common Stock. In the same letter, Sara Lee offered to amend
the terms of such proposal to include structural elements which the Company's
advisors had indicated would have value to the Company's shareholders. Through a
press release issued on April 22, 1999, the Company also rejected this proposal
as inadequate and characterized the price as unfair. The Company claimed that in
the course of previous discussions Sara Lee had indicated, through its financial
advisors, the possibility of a transaction at a price of $11.00 per Share. Sara
Lee has never made an offer at greater than $10.50 per Share.
On April 22, 1999, Sara Lee filed a Schedule 13D with the SEC, which
disclosed its acquisition of Shares and Convertible Debentures representing
5.29% of the outstanding Shares of the Company and its intent to acquire the
Company.
On May 4, 1999, Sara Lee issued a press release announcing that it would
commence a tender offer to acquire all of the outstanding Securities of the
Company not owned by Sara Lee and filed an amendment to its Schedule 13D with
the SEC disclosing such plans.
Since August 1997, from time to time, representatives of Sara Lee and the
Company's financial advisors have had, and may continue to have, conversations
regarding the possibility of negotiating a transaction.
Except as described in this Offer to Purchase or in Schedule I hereto, none
of Purchaser, Sara Lee, or to the best knowledge of Purchaser or Sara Lee any of
the persons listed on Schedule II hereto, or any associate, or majority owned
subsidiary of Sara Lee, Purchaser or any of the persons so listed, beneficially
owns any equity security of the Company, and none of Sara Lee, Purchaser or, to
the best knowledge of Purchaser or Sara Lee any of the persons referred to
above, or any of the respective directors, executive officers or subsidiaries of
any of the foregoing, has effected any transaction in any equity security of the
Company during the past 60 days.
Except as set forth in this Offer to Purchase, none of Purchaser, Sara Lee
or, to the best knowledge of Purchaser or Sara Lee, any of the persons listed on
Schedule II hereto, has had, since August 1, 1995, any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates which would require reporting under the SEC rules. During that
period, from time to time, subsidiaries of Sara Lee have sold immaterial amounts
of coffee to the Company in arms-length commercial transactions.
Except as set forth in this Offer to Purchase, none of Purchaser or Sara Lee
or, to the best knowledge of Purchaser or Sara Lee, any of the persons listed on
Schedule II hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangement, puts or calls, guarantees of loans,
guarantees against loss, or the giving or withholding of proxies.
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12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer and the
Proposed Merger is to enable Sara Lee to acquire control of, and the entire
equity interest in, the Company.
Sara Lee and Purchaser currently intend, as soon as practicable following
completion of the Offer, to seek to consummate the Proposed Merger. Sara Lee and
Purchaser intend that upon effectiveness of the Proposed Merger, each then
outstanding Share (other than Shares owned by Sara Lee, Purchaser or any of
their wholly owned subsidiaries and Shares held in the treasury of the Company)
would be converted into the right to receive the Share Offer Price in cash and
the Convertible Debentures then outstanding (other than Convertible Debentures
owned by Sara Lee, Purchaser or any of their wholly owned subsidiaries) would be
convertible into the right to receive the 7% Debenture Offer Price or the 8%
Debenture Offer Price per $1,000 principal amount of Convertible Debentures as
applicable, each Offer Price without interest thereon. Pursuant to the NYBCL,
consummation of the Proposed Merger would require the adoption of a resolution
by the Company's Board of Directors approving the Proposed Merger and the
affirmative vote of the holders of two-thirds of all of the Shares entitled to
vote. Accordingly, the timing and final terms of the Proposed Merger will depend
on a variety of factors and legal requirements, the actions of the Board of
Directors of the Company, the number of Securities acquired by Purchaser
pursuant to the Offer and whether the Business Combination Condition and the
Rights Condition have been satisfied.
Shareholders do not have statutory appraisal rights as a result of the
Offer. However, if the Proposed Merger is consummated, shareholders of the
Company at the time of the Proposed Merger will have certain rights to dissent
and demand appraisal of their Shares under the NYBCL. Dissenting shareholders
who comply with the requisite statutory procedures in accordance with Section
623 of the NYBCL will be entitled to a judicial determination and payment of the
"fair value" of their Shares as of the close of business on the day prior to the
date of shareholder authorization of the Proposed Merger, together with interest
thereon, at such rate as the court finds equitable, from the date the Proposed
Merger is consummated until the day of payment. Under the NYBCL, in fixing the
fair value of the Shares, a court would consider the nature of the transaction
giving rise to the shareholders' right to receive payment for Shares and its
effects on the Company and its shareholders, the concepts and methods then
customary in the relevant securities and financial markets for determining fair
value of shares of a corporation engaging in a similar transaction under
comparable circumstances, and all other relevant factors. The value so
determined could be more or less than the purchase price offered pursuant to the
Offer or the Proposed Merger.
Purchaser reserves the right to purchase, following consummation,
termination or withdrawal of the Offer, additional Securities in the open
market, in privately negotiated transactions, in another tender offer or
exchange offer or otherwise. In addition, in the event that Purchaser decides
not to propose the Proposed Merger, to propose a merger on terms other than
those described above, or to withdraw any merger previously proposed, Purchaser
will evaluate its other alternatives. These alternatives could include
purchasing Securities in the open market, in privately negotiated transactions,
in another tender offer or exchange offer or otherwise, or taking no further
action to acquire Securities. Any additional purchases of Securities could be at
a price greater or less than the applicable Offer Price to be paid for the
Securities in the Offer and could be for cash or other consideration.
Alternatively, Purchaser and Sara Lee may sell or otherwise dispose of any or
all Securities acquired pursuant to the Offer or otherwise. Such transactions
may be effected on terms and at prices then determined by Purchaser and Sara
Lee, which may vary from the proposed Offer Prices.
Sara Lee is prepared to enter into negotiations with the Company with
respect to the Proposed Merger. However, there can be no assurance that such
negotiations will occur, or, if such negotiations occur, as to the outcome
thereof. Purchaser reserves the right to amend the Offer (including amending the
amount of Securities to be purchased, the Offer Prices and the Proposed Merger
consideration) in
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connection with entering into a merger agreement with respect to the Proposed
Merger or otherwise or to negotiate a merger agreement with the Company not
involving a tender offer pursuant to which Purchaser would terminate the Offer
and the Shares would, upon consummation of such merger, be converted into cash,
Sara Lee Common Stock and/or other securities in such amounts as may be
negotiated by Sara Lee and the Company.
This Offer does not constitute a solicitation of proxies for any meeting of
the Company's shareholders, nor does this Offer constitute a solicitation of
consents. Any such solicitation which Sara Lee or Purchaser might make would be
made only pursuant to separate proxy or consent materials, as the case may be,
in compliance with the requirements of the Exchange Act. In addition, the Offer
does not constitute an offer to sell or solicitation of an offer to buy any
securities of Sara Lee. Such an offer may be made only pursuant to the
Securities Act.
PLANS FOR THE COMPANY. In connection with the Offer, Sara Lee and Purchaser
have reviewed and will continue to review, based on publicly available
information, various possible business strategies they might consider in the
event Sara Lee acquires control of the Company, whether pursuant to the Offer,
the Proposed Merger or otherwise. In addition, if and to the extent Sara Lee
acquires control of the Company or otherwise obtains access to the books and
records of the Company, Sara Lee and Purchaser intend to conduct a detailed
review of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
to consider and determine what, if any, changes would be desirable in light of
the circumstances which then exist.
Except as stated in this Offer to Purchase, neither Sara Lee nor Purchaser
has any present plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries or any material change in the Company's capitalization or dividend
policy or any other material changes in the Company's corporate structure or
business, or the composition of the Company's Board of Directors or management.
THE CHARTER AND THE BY-LAWS. The Charter and the By-laws contain several
provisions that may delay a change in control of the Company following the
purchase of Securities by Purchaser pursuant to the Offer, including, among
other things, (i) a provision which provides for the Board of Directors to serve
in three equal classes, with overlapping terms, so that only one-third of all
directors have terms which expire in any year, (ii) a provision requiring
advance notice to the Company of any shareholder nominations for directors at
any meeting of shareholders called for the purpose of electing one or more
directors, and (iii) a provision that special meetings of shareholders may be
called only by the Chief Executive Officer of the Company, the Chairman of the
Company's Board of Directors or by a majority of the members of the Company's
Board of Directors.
"GOING PRIVATE" TRANSACTIONS. The SEC 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 Proposed Merger or
another business combination following the purchase of Securities pursuant to
the Offer in which Purchaser seeks to acquire the remaining Securities not held
by it. Rule 13e-3 should not be applicable to the Proposed Merger if the
Proposed Merger is consummated within one year after the expiration or
termination of the Offer and the price paid in the Proposed Merger is not less
than the applicable Offer Prices. However, in the event that Purchaser is deemed
to have acquired control of the Company pursuant to the Offer and if the
Proposed Merger is consummated more than one year after completion of the Offer
or an alternative acquisition transaction is effected whereby securityholders of
the Company receive consideration less than the applicable Offer Prices, in
either case at a time when the Securities are still registered under the
Exchange Act, Purchaser may be required to comply with Rule 13e-3 under the
Exchange Act. If Rule 13e-3 were applicable to the Proposed Merger, it would
require, among other things, that certain financial information concerning the
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Company, and certain information relating to the fairness of the Proposed Merger
or such alternative transaction and the consideration offered to the
securityholders of the Company other than Purchaser, Sara Lee and their
affiliates in the Proposed Merger or such alternative transaction, be filed with
the SEC and disclosed to securityholders prior to consummation of the Proposed
Merger or such alternative transaction. If registration of the Securities under
the Exchange Act were terminated, Rule 13e-3 would be inapplicable to any such
transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
If, on or after the date of this Offer to Purchase, the Company should (i)
split, combine or otherwise change the Shares or its capitalization, (ii) issue
or sell any additional securities of the Company or otherwise cause an increase
in the number of outstanding securities of the Company or (iii) acquire or
redeem currently outstanding Securities or otherwise cause a reduction in the
number of outstanding Securities, then, without prejudice to Purchaser's rights
under Sections 1 and 14, Purchaser, in its sole discretion, may make such
adjustments as it deems appropriate in the Offer Prices and other terms of the
Offer, including, without limitation, the amount and type of securities offered
to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any dividend on the Shares or make any distribution (including,
without limitation, the issuance of additional Shares pursuant to a stock
dividend or stock split, the issuance of other securities or the issuance of
rights for the purchase of any securities) with respect to the Shares that is
payable or distributable to shareholders of record on a date prior to the
transfer to the name of Purchaser or its nominee or transferee on the Company's
stock transfer records of the Shares purchased pursuant to the Offer, then,
without prejudice to Purchaser's rights under Sections 1 and 14, (i) the Offer
Prices payable by Purchaser pursuant to the Offer will be adjusted to take
account of the amount of any such cash dividend or cash distribution and (ii)
any such non-cash dividend, distribution or right to be received by the
tendering shareholders will be received and held by such tendering shareholders
for the account of Purchaser and will be required to be promptly remitted and
transferred by each such tendering shareholder to the Depositary for the account
of Purchaser, accompanied by appropriate documentation of transfer. Pending such
remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner of any such non-cash dividend, distribution or
right and may withhold the entire purchase price or deduct from the purchase
price the amount of the value thereof, as determined by Purchaser in its sole
discretion.
14. CONDITIONS TO THE OFFER.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion, Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Securities promptly after termination
or withdrawal of the Offer), pay for, and may delay the acceptance for payment
of or, subject to the restriction referred to above, the payment for, any
tendered Securities, and may terminate the Offer as to any Securities not then
paid for, if, in the sole judgment of Purchaser (1) at or prior to the
expiration of the Offer any one or more of the Minimum Condition, the Rights
Condition, the Business Combination Condition, the Defensive Action Condition,
or the HSR Condition, has not been satisfied, or (2) at any time on or after May
7, 1999 and prior to the acceptance for payment of Securities, any of the
following events shall occur or shall be determined by Purchaser to have
occurred:
(a) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim before any court, governmental,
regulatory or administrative agency or commission, authority or tribunal,
domestic, foreign or supranational, by any government, governmental
authority or other regulatory or administrative agency or commission,
domestic, foreign or supranational, or by any other person, domestic or
foreign (whether brought by the Company,
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an affiliate of the Company or any other person), which (i) challenges or
seeks to challenge the acquisition by Sara Lee or Purchaser or any
affiliate of either of them of the Securities, restrains, delays or
prohibits or seeks to restrain, delay or prohibit the making of the Offer
or the Proposed Merger, consummation of the transactions contemplated by
the Offer or any other subsequent business combination with the Company
or obtains or seeks to obtain any material damages as a result thereof or
otherwise directly or indirectly relating to the transactions
contemplated by the Offer, the Proposed Merger or any other subsequent
business combination with the Company, (ii) prohibits or limits or seeks
to prohibit or limit Sara Lee's or Purchaser's ownership or operation of
all or any portion of their or the Company's business or assets
(including without limitation the business or assets of their respective
affiliates and subsidiaries) or to compel or seeks to compel Sara Lee or
Purchaser or any other affiliates of Sara Lee to dispose of or hold
separate all or any portion of their own or the Company's business or
assets (including without limitation the business or assets of their
respective affiliates and subsidiaries) or imposes or seeks to impose any
limitation on the ability of Sara Lee, Purchaser or any affiliate of
either of them to conduct its own business or own such assets as a result
of the transactions contemplated by the Offer, Proposed Merger or any
other subsequent business combination with the Company, (iii) makes or
seeks to make the acceptance for payment, purchase of, or payment for,
some or all of the Securities pursuant to the Offer or the Proposed
Merger illegal or results in a delay in, or restricts, the ability of
Sara Lee or Purchaser, or renders Sara Lee or Purchaser unable, to accept
for payment, purchase or pay for some or all of the Securities or to
consummate the Proposed Merger, (iv) imposes or seeks to impose
limitations on the ability of Sara Lee or Purchaser or any affiliate of
either of them effectively to acquire or hold or to exercise full rights
of ownership of the Securities, including, without limitation, the right
to vote the Shares purchased by them or issuable upon conversion of the
Convertible Debentures on an equal basis with all other Shares on all
matters properly presented to the shareholders of the Company, (v) seeks
to require divestiture by Sara Lee, Purchaser or any other affiliates of
Sara Lee of any Securities, (vi) in the sole judgment of Sara Lee or
Purchaser, might materially adversely affect the business, properties,
assets, liabilities, capitalization, shareholders' equity, condition
(financial or other), operations, license or franchises, results of
operations or prospects of the Company or any of its subsidiaries, (vii)
in the sole judgment of Sara Lee or Purchaser, might materially adversely
affect Sara Lee, Purchaser or any other affiliates of Sara Lee, (viii) in
the sole judgment of Sara Lee or Purchaser, might result in a diminution
in the value of the Securities or the benefits expected to be derived by
Sara Lee or Purchaser as a result of the transactions contemplated by the
Offer or the Proposed Merger, or (ix) in the sole judgment of Sara Lee or
Purchaser, imposes or seeks to impose any material condition to the Offer
unacceptable to Sara Lee or Purchaser; or
(b) there shall be any action taken, or any statute, rule, regulation,
judgment, order or injunction shall be sought, proposed, enacted,
promulgated, entered, enforced, issued or deemed to become applicable to
the Offer, the Proposed Merger or other subsequent business combination
between Purchaser or any affiliate of Purchaser and the Company or any
affiliate of the Company or any other action shall have been taken,
proposed or threatened, by any government, governmental authority or
other regulatory or administrative agency or commission or court,
domestic, foreign or supranational, other than the routine application of
the waiting period provisions of the HSR Act to the Offer, that, in the
sole judgment of Sara Lee or Purchaser, might directly or indirectly
result in any of the consequences referred to in clauses (i) through (ix)
of paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the
business, properties, assets, liabilities, capitalization, shareholders'
equity, condition (financial or otherwise), operations, licenses,
franchises, permits, permit applications, results of operations, cash
flows or prospects of the Company or any of its
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subsidiaries or affiliates which, in the sole judgment of Sara Lee or
Purchaser, is or may be materially adverse to the Company or any of its
subsidiaries or affiliates, or Sara Lee or Purchaser shall have become
aware of any fact which, in the sole judgment of Sara Lee or Purchaser,
has or may have material adverse significance with respect to either the
value of the Company or any of its subsidiaries or the value of the
Securities to Sara Lee or Purchaser; or
(d) there shall have occurred or been threatened (i) any general suspension
of trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, any decline in
either the Dow Jones Industrial Average or the Standard & Poors Index of
500 Industrial Companies by an amount in excess of 10% measured from the
close of business on May 6, 1999, the last trading day before the Offer,
or any material adverse change in prices generally of shares on the NYSE,
(ii) a declaration of a banking moratorium or any suspension of payments
in respect of banks by federal or state authorities in the United States
(whether or not mandatory), (iii) any limitation (whether or not
mandatory) by any governmental authority or agency on, or other event
which, in the sole judgment of Sara Lee or Purchaser, might affect the
extension of credit by banks or other lending institutions, (iv) a
commencement or escalation of a war, armed hostilities or other national
or international crisis directly or indirectly involving the United
States, (v) any significant change in United States or any other currency
exchange rates or any suspension of, or limitation on, the markets
therefor (whether or not mandatory), or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof; or
(e) a tender or exchange offer for some or all of the Securities shall have
been publicly proposed to be made or shall have been made by another
person (including the Company or any of its subsidiaries or affiliates),
or it shall have been publicly disclosed or Purchaser shall have
otherwise learned that (i) any person, entity (including the Company or
any of its subsidiaries or affiliates) or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to
acquire beneficial ownership of more than 5% of any class or series of
capital stock of the Company (including the Securities) through the
acquisition of stock, the formation of a group or otherwise, or shall
have been granted any option, right or warrant, conditional or otherwise,
to acquire beneficial ownership of more than 5% of any class or series of
capital stock of the Company (including the Securities), other than
acquisitions for bona fide arbitrage purposes only and other than as
disclosed in a Schedule 13D or 13G on file with the SEC prior to the date
of this Offer to Purchase, (ii) any such person, entity or group which,
prior to such date, had filed such a Schedule 13D or 13G with the SEC,
shall have acquired or proposed to acquire, through the acquisition of
stock, the formation of a group or otherwise, beneficial ownership of
additional shares of any class or series of capital stock of the Company
(including the Securities) constituting 2% or more of any such class or
series, or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of shares of
any class or series of capital stock of the Company (including the
Shares) constituting 2% or more of any such class or series, (iii) any
person, entity or group shall have entered into a definitive agreement or
an agreement in principle or made a proposal with respect to a tender or
exchange offer for some or all the Shares, or (iv) any person, entity or
group shall have filed a Notification and Report Form under the HSR Act
or made a public announcement reflecting an intent to acquire the Company
or any of its subsidiaries or any assets or securities of the Company or
any of its subsidiaries; or
(f) the Company or any subsidiary of the Company shall have (i) issued,
distributed, pledged, sold or authorized, proposed or announced the
issuance of or sale, distribution or pledge to any person of (A) any
shares of its capital stock (other than sales or issuances pursuant to
options outstanding on May 3, 1999 in accordance with their terms as
disclosed on such date) of any class (including without limitation the
Shares) or securities convertible into any such shares of
26
<PAGE>
capital stock (other than sales or issuances pursuant to conversion of
outstanding Convertible Debentures on May 3, 1999), or any rights,
warrants or options to acquire any such shares or convertible securities
or any other securities of the Company, or (B) any other securities in
respect of, in lieu of, or in substitution for, Securities outstanding on
May 3, 1999, (ii) purchased, acquired or otherwise caused a reduction in
the number of, or proposed or offered to purchase, acquire or otherwise
reduce the number of, any outstanding Securities, or other securities,
(iii) declared, paid or proposed to declare or pay any dividend or
distribution on any Shares or on any other security or issued,
authorized, recommended or proposed the issuance or payment of any other
distribution in respect of the Shares, whether payable in cash,
securities or other property, (iv) altered or proposed to alter any
material term of any outstanding security, (v) incurred any debt other
than in the ordinary course of business and consistent with past practice
or any debt containing burdensome covenants, (vi) issued, sold or
authorized or announced or proposed the issuance of or sale to any person
of any debt securities or any securities convertible into or exchangeable
for debt securities or any rights, warrants or options entitling the
holder thereof to purchase or otherwise acquire any debt securities or
incurred or announced its intention to incur any debt other than in the
ordinary course of business and consistent with past practice, (vii)
split, combined or otherwise changed, or authorized or proposed the
split, combination or other change of the Shares or its capitalization,
(viii) authorized, recommended, proposed or entered into or publicly
announced its intent to enter into any merger, consolidation,
liquidation, dissolution, business combination, acquisition or
disposition of a material amount of assets or securities, any material
change in its capitalization, any waiver, release or relinquishment of
any material contract rights or comparable right of the Company or any of
its subsidiaries or any agreement contemplating any of the foregoing or
any comparable event not in the ordinary course of business, or taken any
action to implement any such transaction previously authorized,
recommended, proposed or publicly announced, (ix) transferred into escrow
any amounts required to fund any existing benefit, employment or
severance agreements with any of its employees, entered into any
employment agreement or arrangement with any of its employees other than
in the ordinary course of business and consistent with past practice,
entered into any severance or similar agreement, arrangement or plan with
any of its employees or entered into or amended any agreements,
arrangements or plans so as to provide for increased benefits to any
officers, directors or employees as a result of or in connection with the
transactions contemplated by the Offer or the Proposed Merger or any
other change in control of the Company, (x) except as may be required by
law, taken any action to terminate or amend any employee benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended) of the Company or any of its subsidiaries or Sara Lee
or Purchaser shall have become aware of any such action which was not
previously disclosed in publicly available filings, (xi) amended or
proposed or authorized any amendment to the Charter or the By-Laws or
similar organizational documents, (xii) authorized, recommended, proposed
or entered into any other transaction that in the sole judgment of Sara
Lee or Purchaser could, individually or in the aggregate, adversely
affect the value of the Securities to Sara Lee or Purchaser or (xiii)
agreed in writing or otherwise to take any of the foregoing actions or
Sara Lee or Purchaser shall have learned about any such action which has
not previously been publicly disclosed by the Company and also set forth
in filings with the SEC; or
(g) the Company and Sara Lee or Purchaser shall have reached an agreement or
understanding providing for the termination or amendment of the Offer; or
(h) Sara Lee or Purchaser shall become aware (i) that any material
contractual right of the Company or any of its subsidiaries or affiliates
shall be impaired or otherwise adversely affected or that any material
amount of indebtedness of the Company or any of its subsidiaries shall
become accelerated or otherwise become due prior to its stated due date,
in either case with or
27
<PAGE>
without notice or the lapse of time or both, as a result of the
transactions contemplated by the Offer or the Proposed Merger, or (ii) of
any covenant, term or condition in any of the Company's or any of its
subsidiaries' instruments or agreements that are or may be materially
adverse to the value of the Securities in the hands of Purchaser or any
other affiliate of Sara Lee (including, but not limited to, any event of
default that may ensue as a result of the consummation of the Offer,
consummation of the Proposed Merger or any other business combination or
the acquisition of control of the Company); or
(i) Sara Lee or Purchaser shall not have obtained any waiver, consent,
extension, approval, action or non-action from any governmental authority
or agency which is necessary to consummate the Offer;
which, in the sole judgment of Sara Lee or Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Sara Lee or
Purchaser or any of their affiliates), giving rise to any such condition, makes
it inadvisable to proceed with the Offer and/or with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of Sara Lee and Purchaser
and may be asserted by Sara Lee or Purchaser in their sole discretion regardless
of the circumstances (including any action or omission by Sara Lee or Purchaser)
giving rise to any such conditions or may be waived by Sara Lee or Purchaser in
their sole discretion in whole or in part at any time and from time to time. The
failure by Sara Lee or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by Sara Lee or Purchaser concerning any condition or
event described in this Section 14 shall be final and binding upon all parties.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Except as described in this Offer to Purchase, based on a review
of publicly available information, neither Purchaser nor Sara Lee is aware of
any license or regulatory permit that appears to be material to the business of
the Company and its subsidiaries, taken as a whole, that is likely to be
adversely affected by Purchaser's acquisition of the Securities as contemplated
herein or of any approval or other action by a domestic or foreign governmental,
administrative or regulatory agency or authority that would be required for the
acquisition and ownership of the Securities by Purchaser as contemplated herein.
Should any such approval or other action be required, Purchaser and Sara Lee
presently contemplate that such approval or other action will be sought, except
as described below under "State Antitakeover Statutes." While, except as
otherwise described in this Offer to Purchase, Purchaser does not presently
intend to delay the acceptance for payment of, or payment for, the Securities
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to the Company's business or that certain parts of the business of the
Company or Sara Lee might not have to be disposed of, or other substantial
conditions complied with, in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, Purchaser could decline to accept for payment, or pay
for, any Securities tendered. See Section 14 for certain conditions to the
Offer, including conditions with respect to governmental actions.
28
<PAGE>
STATE ANTITAKEOVER STATUTES.
NEW YORK ANTITAKEOVER STATUTE. The Company is incorporated under the
laws of New York. In general, Section 912 of the NYBCL prohibits a New York
corporation from engaging in a "Business Combination" (defined as any of a
variety of transactions including mergers) with an "Interested Shareholder"
(defined generally as a person beneficially owning capital stock entitled to
cast at least 20% of the voting power of a corporation) for a period of five
years following the date such person became an Interested Shareholder, unless,
before such person became an Interested Shareholder, the corporation's board of
directors approved either the Business Combination or the transaction in which
the shareholder became an Interested Shareholder. Article 16 of the NYBCL also
requires certain disclosure to be made in a registration statement filed with
the attorney general of the State of New York in connection with a tender offer.
Without conceding the constitutionality or applicability of Article 16 or
otherwise prejudicing their rights to challenge the constitutionality or
applicability of such Article, Sara Lee and Purchaser will file a registration
statement pursuant to such Article.
OTHER STATE ANTITAKEOVER STATUTES. A number of other states have
adopted laws and regulations that purport to apply to attempts to acquire
corporations that are incorporated in such states, or whose business operations
have substantial economic effects in such states, or which have substantial
assets, securityholders, employees, principal executive offices or principal
places of business in such states. In EDGAR V. MITE CORP., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
presenting stockholders. The state law before the Supreme Court of the United
States was by its terms applicable only to corporations that had a substantial
number of stockholders in the state and were incorporated there. Subsequently,
in TLX ACQUISITION V. TELEX CORP., a Federal district court in Oklahoma ruled
that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma and that they would subject such
corporations to inconsistent regulations. Similarly, in TYSON FOODS, INC. V.
MCREYNOLDS, a Federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit. In December 1988, a Federal district court in
Florida held in GRAND METROPOLITAN PLC V. BUTTERWORTH that the provisions of the
Florida Affiliated Transactions Act and the Florida Control Share Acquisition
Act were unconstitutional as applied to corporations incorporated outside of
Florida.
Except for Article 16 of the NYBCL, neither Sara Lee nor Purchaser has
attempted to comply with any state antitakeover statute or regulation. Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer or the Proposed Merger and nothing in this
Offer to Purchase or any action taken in connection with the Offer or the
Proposed Merger is intended as a waiver of such right. If it is asserted that
any state antitakeover statute is applicable to the Offer and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and Purchaser might be
unable to accept for payment or pay for Securities tendered pursuant to the
Offer or may be delayed in consummating the Offer. In such case, Purchaser may
not be obligated to accept for payment, or pay for, any Securities tendered
pursuant to the Offer. See Section 14.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless a Premerger Notification and Report Form has filed with the Antitrust
Division and the FTC and certain waiting period requirements have been
29
<PAGE>
satisfied. Sara Lee filed such information on May 4, 1999. Under the provisions
of the HSR Act applicable to the Offer, the purchase of Securities pursuant to
the Offer may not be consummated until the expiration of a 15-calendar day
waiting period following the filing by Sara Lee, unless the Antitrust Division
and the FTC terminate the waiting period prior thereto. Accordingly, if Sara Lee
makes such filing on the date hereof, the waiting period under the HSR Act
applicable to the Offer will expire at 11:59 p.m., New York City time, on May
19, 1999, unless, prior to the expiration or termination of the waiting period,
the FTC or the Antitrust Division extends the waiting period by requesting
additional information or documentary material from Sara Lee. If such a request
is made, the waiting period will be extended and would expire at 11:59 p.m., New
York City time, on the tenth calendar day after the date of substantial
compliance by Sara Lee with such request. Only one extension of the waiting
period pursuant to a request for additional information is authorized by the HSR
Act. Thereafter, such waiting period may be extended only by court order or with
the consent of Sara Lee. Purchaser will not accept for payment Securities
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 14.
The Proposed Merger may not be consummated until 30 calendar days after
receipt by the Antitrust Division and the FTC of the Notification and Report
Forms of both Sara Lee and the Company unless Purchaser acquires 50% of more of
the outstanding Securities pursuant to the Offer or the 30-day period is earlier
terminated by the Antitrust Division and the FTC.
The FTC and the Antitrust Division frequently scrutinize the legality under
the Antitrust Laws of transactions such as Purchaser's acquisition of Securities
pursuant to the Offer and the Proposed Merger. At any time before or after
Purchaser's acquisition of Securities, the Antitrust Division or the FTC could
take such action under the Antitrust Laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the acquisition of Securities
pursuant to the Offer or otherwise or seeking divestiture of Securities acquired
by Purchaser or divestiture of substantial assets of Sara Lee or its
subsidiaries. Private parties and state attorneys general may also bring legal
action under the Antitrust Laws under certain circumstances.
Based upon an examination of publicly available information relating to the
businesses in which Sara Lee and the Company are engaged, Sara Lee and Purchaser
believe that the acquisition of Securities by Purchaser pursuant to the Offer or
the Proposed Merger will not violate the Antitrust Laws. Nevertheless, there can
be no assurance that a challenge to the Offer or other acquisition of Securities
by Purchaser on antitrust grounds will not be made or, if such a challenge is
made, of the result. See Section 14 for certain conditions to the Offer,
including conditions with respect to litigation and certain governmental
actions.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
16. FEES AND EXPENSES.
Sara Lee has entered into an engagement letter with Goldman, Sachs & Co.
("Goldman") pursuant to which Sara Lee has agreed to pay to Goldman compensation
for financial advisory services of up to $4.0 million, a significant portion of
which is contingent upon the consummation of an acquisition of the Company. Sara
Lee has also agreed to indemnify Goldman against certain liabilities and
expenses in connection with the Offer and the Proposed Merger, including certain
liabilities under the federal securities laws.
Sara Lee has also entered into a Dealer Manager Agreement with Goldman
pursuant to which Goldman will receive no additional compensation for its
services as Dealer Manager. Sara Lee has
30
<PAGE>
agreed to reimburse Goldman for its reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its legal counsel, plus any sales, use or
similar taxes (including additions to such taxes, if any), incurred in
connection with its engagement.
Goldman has rendered various investment banking services and other advisory
services to Sara Lee and its affiliates in the past and is expected to continue
to render such services, for which they have received and will continue to
receive customary compensation from Sara Lee and its affiliates. In the ordinary
course of business, Goldman and its affiliates may actively trade securities of
the Company and Sara Lee for their own account or for the account of customers
and, accordingly, may at any time hold a long or short position in such
securities. Goldman has advised Sara Lee that, as of the date of this Offer to
Purchase, Goldman and its affiliates do not own any Securities for their own
account.
Sara Lee has retained Morrow & Co., Inc. to act as the Information Agent and
Harris Trust Company of New York to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Securities by mail,
telephone, telex, telegraph, other method of electronic communication and
personal interview and may request brokers, dealers, commercial banks, trust
companies and other nominees to forward the Offer materials to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their services. Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities in connection with their
services, including certain liabilities under federal securities laws.
Neither Sara Lee nor Purchaser will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent) for making solicitations or recommendations in connection
with the Offer. Brokers, dealers, banks and trust companies will be reimbursed
by Purchaser for customary mailing and handling expenses incurred by them in
forwarding materials to their customers.
17. MISCELLANEOUS.
Purchaser is not aware of any jurisdiction in which the making of the Offer
is prohibited by any administrative or judicial action pursuant to any valid
state statute. If Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of the Securities pursuant thereto,
Purchaser will make a good faith effort to comply with such state statute. If,
after such good faith effort, Purchaser cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Securities residing in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Sara Lee or Purchaser not contained herein or in the
Letters of Transmittal and, if given or made, such information or representation
must not be relied upon as having been authorized.
Purchaser and Sara Lee have filed with the SEC the 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. The Schedule 14D-1 and any amendments thereto, including exhibits, may be
examined and copies may be obtained at the same places and in the same manner
set forth in Section 9 of this Offer to Purchase (except that they will not be
available at the regional offices of the SEC).
CFN ACQUISITION CORPORATION
SARA LEE CORPORATION
May 7, 1999
31
<PAGE>
SCHEDULE I
TRANSACTIONS IN STOCK OF COMPANY DURING PAST 60 DAYS EFFECTED BY SARA LEE,
PURCHASER OR THOSE PERSONS LISTED ON SCHEDULE II HERETO
<TABLE>
<CAPTION>
AGGREGATE NUMBER
OF SHARES OF
DATE COMMON STOCK PRICE PER SHARE
- --------------- --------------------- -----------------
<S> <C> <C>
4/7/99 3,100 $ 6.25
4/7/99 1,100 $ 6.13
4/8/99 9,000 $ 6.50
4/8/99 4,500 $ 6.63
4/8/99 12,300 $ 6.75
4/8/99 700 $ 6.69
4/8/99 1,000 $ 6.38
4/9/99 23,500 $ 7.00
4/9/99 10,000 $ 7.06
4/12/99 5,900 $ 6.50
4/12/99 12,100 $ 6.56
4/12/99 2,000 $ 6.44
4/13/99 2,500 $ 6.63
4/13/99 1,000 $ 6.75
4/13/99 500 $ 6.56
4/15/99 2,100 $ 6.50
4/15/99 1,000 $ 6.38
4/15/99 5,300 $ 6.75
4/16/99 10,000 $ 6.75
4/16/99 3,500 $ 6.69
</TABLE>
All transactions were effected through open market transactions.
32
<PAGE>
SCHEDULE II
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF SARA LEE AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF SARA LEE.
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years, of each director and executive officer of Sara Lee. Each such
person is a citizen of the United States of America and, unless otherwise
indicated, the business address of each such person is c/o Sara Lee Corporation,
Three First National Plaza, Chicago, Illinois 60602. The position set forth
opposite each individual's name refers to employment with Sara Lee or a
directorship with Sara Lee. Each executive officer has served Sara Lee or its
subsidiaries in various executive capacities for the past five years. The
present occupation and employment history of each director is summarized in the
paragraphs below the table relating to each such director.
<TABLE>
<CAPTION>
NAME OFFICES AND POSITIONS HELD
- ------------------------ ------------------------------------------------------------------
<S> <C>
John H. Bryan........... Chairman of the Board, Chief Executive Officer and Director
C. Steven McMillan...... President, Chief Operating Officer and Director
Frank L. Meysman........ Executive Vice President and Director
Judith A. Sprieser...... Executive Vice President, Chief Financial Officer and Director
James R. Carlson........ Senior Vice President
Gary C. Grom............ Senior Vice President--Human Resources
Janet Langford Kelly.... Senior Vice President, Secretary and General Counsel
Mark J. McCarville...... Senior Vice President--Corporate Development
Paul A. Allaire......... Director
Frans H.J.J. Director
Andriessen..............
Duane L. Burnham........ Director
Charles W. Coker........ Director
James S. Crown.......... Director
Willie D. Davis......... Director
Vernon E. Jordan, Jr.... Director
James L. Ketelsen....... Director
Hans B. van Liemt....... Director
Joan D. Manley.......... Director
Rozanne L. Ridgway...... Director
Richard L. Thomas....... Director
John D. Zeglis.......... Director
</TABLE>
PAUL A. ALLAIRE Chairman of the Board of Xerox Corporation (information
processing). Mr. Allaire's current business address, 800 Long Ridge Road,
Stamford, CT 06904. Mr. Allaire became a director of Sara Lee in 1989. He is a
director of Lucent Technologies, J.P. Morgan & Co. Inc., priceline.com, and
SmithKline Beecham plc and a trustee of Carnegie-Mellon University and Worcester
Polytechnic Institute. Mr. Allaire is also a director of the Ford Foundation, a
member of the board of the Council on Foreign Relations and the Council on
Competitiveness. He is a member of The Business Council and the Business
Roundtable.
FRANS H.J.J. ANDRIESSEN Professor, European Integration, University of Utrecht,
the Netherlands. Mr. Andriessen's current business address is c/o KPMG European
Headquarters, Avenue Louise 54, B-1050, Brussels, Belgium. Mr. Andriessen is a
former Minister of Finance of the Netherlands. He became a member of the
Commission of the European Communities in 1981, and was first Vice
33
<PAGE>
President of the Commission from 1989 until 1993. He is a member of the board of
SHV (Steenkool en Handelsvereniging), DHV Beheer BV, DELA Cooperatie and Robeco.
He is special advisor to KPMG Netherlands. He became a director of Sara Lee in
1993. Mr. Andriessen is a member of the Supervisory Board of Sara Lee/DE N.V., a
subsidiary of Sara Lee. Mr. Andriessen is a citizen of the Netherlands.
JOHN H. BRYAN Chairman of the Board and Chief Executive Officer of Sara Lee
Corporation. Mr. Bryan became a director of Sara Lee in 1974. He is a director
of BP Amoco, Bank One Corporation and General Motors Corporation. Mr. Bryan is a
past Chairman and a director of the Grocery Manufacturers of America, Inc., a
member of The Business Council, and the Business Roundtable and a director and
past national Chairman of the Business Committee for the Arts. He is the past
Chairman of Catalyst and a trustee of the University of Chicago, Vice Chairman
of the Board of Trustees of The Art Institute of Chicago and former Chairman of
the Chicago Council on Foreign Relations.
DUANE L. BURNHAM Retired Chairman and Chief Executive Officer of Abbott
Laboratories (health care products and services). Mr. Burnham's current business
address is 100 Abbott Park Road, Abbott Park, IL 60064. He became a director of
Sara Lee in 1991. Mr. Burham is also a director of Northern Trust Corporation.
He is also a member of the boards of the Healthcare Leadership Council, Evanston
Northwestern Healthcare Corporation (Evanston, IL), the Lyric Opera (Chicago)
and Chairman of the Chicago Council on Foreign Relations. Mr. Burnham is a
trustee of Northwestern University and a member of the Advisory Board of the
J.L. Kellogg Graduate School of Management at Northwestern University.
CHARLES W. COKER Chairman of the Board of Sonoco Products Company (packaging
products manufacturer). Mr. Coker's current business address is North 2nd
Street, Hartsville, SC 29550. He became a director of Sara Lee in 1986. Mr.
Coker is also a director of BankAmerica Corporation, Springs Industries, Inc.
and Carolina Power and Light Company. He is Chairman of the Board of Hollings
Cancer Center.
JAMES S. CROWN General Partner of Henry Crown and Company (Not Incorporated)
(diversified investments). Mr. Crown's current business address is 222 N.
LaSalle Street, Suite 2000, Chicago, IL 60601. He became a director of Sara Lee
in 1998. Mr. Crown is also a director of General Dynamics Corporation and Bank
One Corporation.
WILLIE D. DAVIS President of All-Pro Broadcasting, Inc. (radio stations), a
privately owned company. Mr. Davis' current business address is 161 North La
Brea Avenue, Inglewood, CA 90301. Mr. Davis became a director of Sara Lee in
1983. He is also a director of The Dow Chemical Company, Kmart Corporation,
Alliance Bank (Culver City, California), Johnson Controls Inc., MGM Grand, Inc.,
Strong Fund, Rally's Hamburgers, Inc., Bassett Furniture, MGM Inc. and WICOR,
Inc. Mr. Davis is a trustee of the University of Chicago and Marquette
University.
VERNON E. JORDAN, JR. Senior partner of the Washington D.C. law firm of Akin,
Gump, Strauss, Hauer & Feld L.L.P. Mr. Jordan's current business address is 1333
New Hampshire Avenue, N.W., Suite 400, Washington, D.C. 20036. Mr. Jordan became
a director of Sara Lee in 1989. He served as President of the National Urban
League, Inc. from 1972 to 1982. Mr. Jordan is a director of American Express
Company, Bankers Trust New York Corporation and its subsidiary, Bankers Trust
Company, Dow Jones & Company, Inc., J.C. Penny Company, Inc., Revlon Group,
Ryder System, Inc., Union Carbide Corporation, Callaway Golf Company and Xerox
Corporation. He is also a trustee of the Ford Foundation. Mr. Jordan is a
trustee of Howard University and a governor of the Joint Center for Political
and Economic Studies.
JAMES L. KETELSEN Retired Chairman of the Board and Chief Executive Officer of
Tenneco Inc. (diversified industrial corporation). He was Chairman of the Board
and Chief Executive Officer of Tenneco Inc. from 1978 to 1992. Mr. Ketelsen
became a director of Sara Lee in 1982. He is also a director of GTE Corporation
and J.P. Morgan & Co. Inc. and its subsidiary, Morgan Guaranty Trust Co.
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<PAGE>
HANS B. VAN LIEMT Retired Chairman of the Board of Management of DSM NV
(chemicals). Mr. van Liemt served as Chairman of the Board of Management of DSM
NV from 1984 to 1993. Mr. van Liemt became a director of Sara Lee in 1994. He is
Chairman of the Supervisory Board of Sara Lee/De N.V., a subsidiary of Sara Lee.
Mr. van Liemt is Chairman of the Supervisory Boards of Gamma Holding NV and
Oce-Van der Grinten NV. He is also a member of the Supervisory Boards of
ABN-AMRO Holding NV, Van Leer Group Foundation, Artiemsche Holding NV and
Stienstra Holding BV. Mr. van Liemt is a trustee of the Foundation of the
Catholic University of Nijmegen and the Lucas-Franciscus Foundation for
Revalidation. He is active on the boards of the Preference Shares Foundation of
Koninklijke PTT NV, the Preference Shares Foundation of Phillips NV and of the
Preference Shares Foundation of EVC International.
JOAN D. MANLEY Retired Group Vice President and retired director of Time
Incorporated (communications). Mrs. Manley became a director of Sara Lee in
1982. She is also a director of BFP Holdings, Inc. and Founders Fund.
C. STEVEN MCMILLAN President and Chief Operating Officer of Sara Lee
Corporation since 1997, Executive Vice President from 1993 to 1997 and Senior
Vice President from 1986 to 1993. Mr. McMillan became a director of Sara Lee in
1993. He is also a director of Illinova Corporation and Pharmacia & Upjohn and
Delta Galil Industries in Israel. Mr. McMillan is a member of the Advisory
Boards of the Stedman Nutrition Center of the Duke University Medical School,
the J.L. Kellogg Graduate School of Management at Northwestern University and
the Productivity Council of the Grocery Manufacturers of America, Inc. He is a
member of the Supervisory Board of Sara Lee/DE N.V., a subsidiary of Sara Lee.
He is Chairman of the Board of the Joffrey Ballet and is a trustee of the Museum
of Contemporary Art in Chicago and the Chicago Symphony Orchestra. He is also on
the board of the Executive Club of Chicago, the Chicago Council on Foreign
Relations and Commercial Club of Chicago.
FRANK L. MEYSMAN Executive Vice President of Sara Lee Corporation since 1997,
Senior Vice President from 1994 to 1997 and Vice President from 1992 to 1994.
Mr. Meysman has also been Chairman of the Board of Management of Sara Lee/DE,
N.V., a subsidiary of Sara Lee, since 1994. Mr. Meysman became a director of
Sara Lee in March, 1997. In addition to his management responsibility for Sara
Lee's Coffee and Tea and Household and Body Care lines of business, Mr. Meysman
manages Sara Lee's businesses in the Asia-Pacific region. He is a member of the
Supervisory Board of VNU, a Dutch-based publishing company, and a director of
the Zeneca Group, a U.K.-based pharmaceutical company.
ROZANNE L. RIDGWAY Former Ambassador and Assistant Secretary of State for
European and Canadian Affairs (1985-1989) and, since July, 1994, Chair
(non-executive) of the Baltic American Enterprise Fund. She became a director
Sara Lee in 1992. Ambassador Ridgway served in the U.S. Foreign Service from
1957 until her retirement in 1989, including assignments as Ambassador for
Oceans and Fisheries Affairs; Ambassador to Finland; Counselor of the Department
of State; and Ambassador to the German Democratic Republic. Ambassador Ridgway
is a director of Bell Atlantic Corporation, The Boeing Company, Emerson Electric
Company, Minnesota Mining & Manufacturing Company, RJR Nabisco, Inc. and Union
Carbide Corporation. She serves on the International Advisory Board of the New
Perspective Fund. Ambassador Ridgway is also a director of the Center for Naval
Analysis, a trustee of the National Geographic Society and Hamline University, a
member of the American Academy of Diplomacy and a Fellow of the National Academy
of Public Administration. She also served as President (1989-1993) and Co-Chair
(1993-1996) of the Atlantic Council of the United States.
JUDITH A. SPRIESER Executive Vice President and Chief Financial Officer of Sara
Lee Corporation. Ms. Spieser became a director and Executive Vice President of
Sara Lee in 1998. Ms. Sprieser has been with Sara Lee since 1987. From 1994 to
1998 she served as Senior Vice President and Chief Financial Officer of Sara Lee
Corporation. Prior to that, she served as President and Chief Executive Officer
of Sara Lee Bakery, North America. She is a director of USG Corporation and a
member of the board of trustees of Northwestern University. She is also a member
of the Young Presidents Organization, the Economic
35
<PAGE>
Club and the American Institute of Certified Public Accountants. Ms. Sprieser is
also a member of the Supervisory Board of Sara Lee/DE N.V., a subsidiary of Sara
Lee.
RICHARD L. THOMAS Retired Chairman of First Chicago NBD Corporation and The
First National Bank of Chicago. Mr. Thomas became a director of Sara Lee in
1976. He is also a director of The PMI Group, Inc., The Sabre Holdings Group,
Inc., Scotsman Industries, Inc., Unicom Corporation and IMC Global, Inc. Mr.
Thomas is a life trustee of the Chicago Symphony Orchestra, a trustee of Rush-
Presbyterian-St. Luke's Medical Center (Chicago), Northwestern University and
Kenyon College.
JOHN D. ZEGLIS President and a director of AT&T Corporation since 1997. Mr.
Zeglis' current business address is 295 North Maple Avenue, Basking Ridge, NJ
07920. Mr. Zeglis joined AT&T in 1984 and prior to becoming President he served
in a number of senior executive positions at AT&T. Mr. Zeglis became a director
of Sara Lee in 1998. Mr. Zeglis is also a director of Illinova Corporation and
Helmerich & Payne, Inc. He is also Chairman of the Board of Trustees of George
Washington University and a trustee of the Brookings Institute, Culver
Educational Foundation and United Way of Tri-State. Mr. Zeglis is also on the
Board of Trustees for the United Negro College Fund, and a member of the Kellogg
Advisory Board of the J.L. Kellogg Graduate School of Management at Northwestern
University and a member of the University of Illinois Business Advisory Council.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER.
The following table sets forth the name and position of each director and
executive officer of Purchaser. Unless otherwise indicated, the business address
of each such person is c/o Sara Lee Corporation, Three First National Plaza,
Chicago, Illinois 60602. The present principal occupation or employment and
material occupation, position, offices or employment of each such person for the
past five years is set forth in the table above under "Directors and Executive
Officers of Sara Lee" or is summarized in the paragraphs below this table. Each
such person is a citizen of the United States unless otherwise indicated in such
tables.
<TABLE>
<CAPTION>
NAME POSITIONS
- --------------------------------------- --------------------------------------------
<S> <C>
C. Steven McMillan President
Janet Langford Kelly Vice President, Secretary and Director
Robert W. Oberrender Treasurer
R. Henry Kleeman Vice President, Assistant Secretary and
Director
</TABLE>
ROBERT W. OBERRENDER Vice President and Treasurer of Sara Lee Corporation. Mr.
Oberrender joined Sara Lee in December 1998 after serving as Senior Vice
President and Chief Financial Officer of Metris Companies, Inc. ("Metris"), a
direct marketer of consumer financial services located at 600 Highway 169S,
Minneapolis, Minnesota 55426. Mr. Oberrender was Vice President and Treasurer of
Fingerhut Companies, Inc. ("Fingerhut"), a direct marketer of consumer products
and services, from 1994 until 1996 when he joined Metris when Metris became an
independent public company from Fingerhut. Fingerhut is located as 4400 Baker
Road, Minnetonka, Minnesota 55343.
R. HENRY KLEEMAN Chief Counsel--Corporate & Securities & Assistant Secretary
for Sara Lee Corporation. Mr. Kleeman is also Secretary to the Audit Committee
of Sara Lee's Board of Directors and Secretary to the Business Practices
Committee. Mr. Kleeman is responsible for the day-to-day administration of
corporate legal affairs; all securities law compliance matters and filings;
domestic and international merger and acquisition transactions; and various
corporate finance matters. Prior to joining Sara Lee in 1995, Mr. Kleeman was a
partner at Wildman, Harrold, Allen & Dixon.
36
<PAGE>
Facsimile copies of the Letters of Transmittal, properly completed and duly
executed, will be accepted. The Letters of Transmittal, certificates for
Securities and any other required documents should be sent or delivered by each
securityholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary, at one of the addresses set forth
below:
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 701-7636
Confirm by Telephone:
(212) 701-7624
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letters of Transmittal, the Notice of Guaranteed Delivery and
the Guidelines for Certification of Taxpayer Identification on Substitute Form
W-9 may be directed to the Information Agent at the address and telephone
numbers set forth below. Securityholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
445 Park Avenue
5th Floor
New York, New York 10022
(212) 754-8000 (Call Collect)
(800) 662-5200 (Banks and Brokers)
(800) 566-9061 (All Others Call Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
37
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CHOCK FULL O'NUTS CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 7, 1999
OF
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE 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:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by shareholders of Chock Full
O'Nuts Corporation if certificates for Shares (as such term is defined below)
are to be forwarded herewith or, unless an Agent's Message (as defined in
Instruction 2 below) is utilized, if delivery of Shares is to be made by
book-entry transfer to an account maintained by the Depositary at a Book-Entry
Transfer Facility (as defined in and pursuant to the procedures set forth in
Section 3 of the Offer to Purchase). Shareholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Shareholders," and
other shareholders who deliver Shares are referred to herein as "Certificate
Shareholders."
Shareholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 3 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S
ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES 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:
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
If delivered by Book-Entry Transfer, Account Number
Transaction Code Number
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
- ------------------------------------------------------------------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------
(1) NEED NOT BE COMPLETED BY BOOK-ENTRY SHAREHOLDERS.
(2) UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES REPRESENTED BY SHARE CERTIFICATES
DELIVERED TO THE DEPOSITARY ARE BEING
TENDERED HEREBY. SEE INSTRUCTION 4.
--------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation ("Parent"), the above-described shares of common stock,
par value $.25 per share, and the associated common stock purchase rights (the
"Rights") issued pursuant to the Amended and Restated Rights Agreement, dated as
of December 30, 1997, by and between Chock Full O'Nuts Corporation, a New York
corporation (the "Company"), and the American Stock Transfer & Trust Company, as
Rights Agent (such shares of Common Stock and the associated Rights,
collectively, the "Shares"), of the Company, pursuant to Purchaser's offer to
purchase all of the outstanding Shares at a price of $10.50 per Share, net to
the seller in cash, without interest thereon (the "Offer Price"), 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 with any amendments or supplements thereto or hereto, collectively
constitute the "Offer"). The undersigned understands that Purchaser reserves the
right to transfer or assign, in whole at any time, or in part from time to time,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, but any such transfer or assignment
will not relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer. Receipt of the
Offer is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after May 7,
1999 (collectively, "Distributions")) and irrevocably constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all Distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares (and any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares (and any and all Distributions) 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 and all Distributions), all in accordance with
the terms of the Offer.
If, on or after May 7, 1999, the Company should declare or pay any dividend
on the Shares, or make any distribution (including, without limitation, the
issuance of additional Shares pursuant to a stock dividend or a stock split, the
issuance of other securities or the issuance of rights for the purchase of any
securities) with respect to the Shares that is payable or distributable to
shareholders of record on a date prior to the transfer of the Shares purchased
pursuant to the Offer to Purchaser to the name of Purchaser or its nominee or
transferee on the Company's stock transfer records, then (a) the Offer Price
may, in the sole discretion of Purchaser, be reduced by the amount of any such
cash dividend or cash distribution and (b) the whole of any such noncash
dividend, distribution or issuance to be received by the tendering shareholders
will (i) be received and held by the tendering shareholders for the account of
Purchaser and will be required to be promptly remitted and transferred by each
tendering shareholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of Purchaser, be exercised for the benefit of Purchaser, in which case the
proceeds of such exercise will promptly be remitted to Purchaser. Pending such
remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner of any such Distributions or proceeds thereof and
may withhold the entire Offer Price or deduct from the Offer Price the amount or
value thereof, as determined by Purchaser in its sole discretion.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Janet Langford Kelly and R.Henry Kleeman, in their respective
capacities as officers of Purchaser, and any individual who shall thereafter
succeed to any such office of Purchaser, and each of them, the attorneys-in-fact
and proxies of the undersigned, each with full power of substitution, to vote at
any annual or special meeting of the Company's shareholders or any adjournment
or postponement thereof or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper
3
<PAGE>
with respect to, all of the Shares (and any and all Distributions) tendered
hereby and accepted for payment by Purchaser. This appointment will be effective
if and when, and only to the extent that, Purchaser accepts such Shares for
payment pursuant to the Offer. This power of attorney and proxy are irrevocable
and are granted in consideration of the acceptance for payment of such Shares in
accordance with the terms of the Offer. Such acceptance for payment shall,
without further action, revoke any prior powers of attorney and proxies granted
by the undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if given,
will not be deemed effective). Purchaser reserves the right to require that, in
order for Shares or Distributions to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Shares, Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
(and any and all Distributions), including voting at any meeting of the
Company's shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that the undersigned owns the Shares tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that the tender of the
tendered Shares complies with Rule 14e-4 under the Exchange Act, and that when
the same are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances and the same will not
be subject to any adverse claims. The undersigned will, upon request, execute
and deliver any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby or deduct from such purchase price
the amount or value of such Distribution as determined by Purchaser in its sole
discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is extended or amended, the terms or conditions of any such extension
or amendment). Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the Offer, the price to be paid to the
undersigned will be the amended price notwithstanding the fact that a different
price is stated in this Letter of Transmittal. The undersigned recognizes that
under certain circumstances set forth in the Offer to Purchase, Purchaser may
not be required to accept for payment any of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price of all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment (and
any accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered." In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
of all Shares purchased and/or return any certificates evidencing Shares not
tendered or not accepted for payment (and any accompanying documents, as
appropriate) in the name(s) of, and deliver such check and/or return any such
certificates (and any accompanying documents, as appropriate) to, the person(s)
so indicated. The undersigned recognizes that Purchaser has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder thereof if Purchaser does not accept for payment
any of the Shares so tendered.
4
<PAGE>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, DESTROYED OR STOLEN CERTIFICATES: ___
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue check and/or Share certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned or
to the undersigned at an address other than that shown under "Description of
Shares Tendered."
Mail check and/or Share certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF SHAREHOLDER(S))
Dated: _____________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the following
information and see Instruction 5.)
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Capacity (full title) ______________________________________________________
(SEE INSTRUCTION 5)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Taxpayer Identification or Social Security Number __________________________
(SEE
SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
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 Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by shareholders of
the Company either if Share certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if delivery of Shares is to be made by
book-entry transfer pursuant to the procedures set forth herein and in Section 3
of the Offer to Purchase. For a shareholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (in connection with book-entry transfer) and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either (i)
certificates for tendered Shares must be received by the Depositary at one of
such addresses prior to the Expiration Date or (ii) Shares must be delivered
pursuant to the procedures for book-entry transfer set forth herein and in
Section 3 of the Offer to Purchase and a Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Date or (b) the tendering
shareholder must comply with the guaranteed delivery procedures set forth herein
and in Section 3 of the Offer to Purchase.
Shareholders whose certificates for Shares 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 comply with the book-entry
transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Shares, in proper form for transfer (or
a Book-Entry Confirmation with respect to all Shares tendered by book-entry
transfer), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents must be received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A "trading
day" is any day on which the New York Stock Exchange is open for business.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. THE SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering shareholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
7
<PAGE>
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled "Number of
Shares Tendered." In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
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 held 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 Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person 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 Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates 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 Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates 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 other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check
for the purchase price of any Shares accepted for payment is to be issued in the
name of, and/or Share certificates for Shares not accepted for payment or not
tendered are to be issued in the name of and/or returned to, a person other than
the signer of this Letter of Transmittal or if a check is to be sent, and/or
such certificates are to be returned, to a person other than the signer of this
Letter of Transmittal, or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above as
the account from which such Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
8
<PAGE>
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent, at the address or telephone numbers set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive, at any time or from time to time, any of the specified
conditions of the Offer, in whole or in part, in the case of any Shares
tendered.
10. BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 in this Letter of Transmittal and certify, under penalties
of perjury, that such TIN is correct and that such shareholder is not subject to
backup withholding.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the shareholder upon filing an income tax
return.
The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
shareholder 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
shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below 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, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
shareholder if a TIN is provided to the Depositary within 60 days.
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the transfer agent for the Company, American Stock Transfer &
Trust Company, at (800) 937-5449, and check the box immediately preceding the
special payment/special delivery instructions and indicate the number of Shares
lost. The shareholder will then be instructed as to the steps that must be taken
in order to replace the Share certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING SHAREHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
9
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
shareholder's correct taxpayer identification number on Substitute Form W-9
below. If such shareholder is an individual, the taxpayer identification number
is his social security number. If a tendering shareholder is subject to backup
withholding, such shareholder must cross out item (2) of the Certification box
on the Substitute Form W-9. If the Depositary is not provided with the correct
taxpayer identification number, the shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made to
such shareholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain shareholders (including, among others, all corporations, and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that shareholder must submit a statement, signed under penalties of
perjury, attesting to that shareholder's exempt status. Such statements can be
obtained from the Depositary. Exempt shareholders, other than foreign
shareholders, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
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 payments made to the shareholder. 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. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such shareholder is awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. 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.
If the tendering shareholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, such shareholder
should write "Applied For" in the space provided for in the TIN in Part 1, and
sign and date the Substitute Form W-9. If "Applied For" is written in Part I and
the Depositary is not provided with a TIN by the time of payment of the purchase
price, the Depositary will withhold 31% on all payments of the purchase price.
However, such amounts will be refunded to such shareholder if a TIN is provided
to the Depositary within 60 days.
10
<PAGE>
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN ---------------------
THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW (If awaiting TIN write
"Applied For")
OR
---------------------------
</TABLE>
SUBSTITUTE
<TABLE>
<C> <S> <C>
Employer Identification
Number
(If awaiting TIN write
</TABLE>
FORM W-9
<TABLE>
<C> <S> <C>
"Applied For")
-----------------------------------------------------------------
</TABLE>
Department of the Treasury
<TABLE>
<C> <S> <C>
PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
</TABLE>
Internal Revenue Service
<TABLE>
<C> <S> <C>
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued
for me), and
(2) I am not subject to backup withholding because: (a) I
am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
-----------------------------------------------------------------
</TABLE>
Payer's Request for
<TABLE>
<C> <S> <C>
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above
</TABLE>
Taxpayer Identification
<TABLE>
<C> <S> <C>
if you have been notified by the IRS that you are currently
subject to
</TABLE>
Number ("TIN")
<TABLE>
<C> <S> <C>
backup withholding because of under-reporting interest or
dividends on your tax returns. However, if after being notified
by the IRS that you are subject to backup withholding, you
receive another notification from the IRS that you are no longer
subject to backup withholding, do not cross out such item (2).
(Also see instructions in the enclosed Guidelines).
SIGNATURE DATE , 1999
-----------------------------------------------------------------
Part 3--Awaiting TIN
-------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH 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
THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (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 to the Depositary by the time of payment, 31% of
all reportable payments made to me thereafter will be withheld, but that
such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
<TABLE>
<S> <C>
, 1999
Signature Date
</TABLE>
11
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THIS LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT AS SET FORTH BELOW:
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
(212) 754-8000 (Call Collect)
(800) 662-5200 (Banks And Brokers
(800) 566-9061 (All Others Call Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
12
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER 7% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2012
OF
CHOCK FULL O'NUTS CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 7, 1999
OF
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE 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:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by securityholders of Chock Full
O'Nuts Corporation if certificates for Debentures (as such term is defined
below) are to be forwarded herewith or, unless an Agent's Message (as defined in
Instruction 2 below) is utilized, if delivery of Debentures is to be made by
book-entry transfer to an account maintained by the Depositary at a Book-Entry
Transfer Facility (as defined in and pursuant to the procedures set forth in
Section 3 of the Offer to Purchase). Securityholders who deliver Debentures by
book-entry transfer are referred to herein as "Book-Entry Securityholders," and
other securityholders who deliver Debentures are referred to herein as
"Certificate Securityholders."
Securityholders whose certificates for Debentures are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in Section 3 of the Offer to Purchase) with respect to,
their Debentures and all other documents required hereby to the Depositary prior
to the Expiration Date (as defined in Section 1 of the Offer to Purchase) must
tender their Debentures pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS
TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<PAGE>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S
ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER DEBENTURES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
Account Number
Transaction Code Number
/ / CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
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
If delivered by Book-Entry Transfer, Account Number
Transaction Code Number
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF DEBENTURES TENDERED
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) DEBENTURES TENDERED
APPEAR(S) ON DEBENTURE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
AMOUNT AGGREGATE
OF DEBENTURE PRINCIPAL
DEBENTURE REPRESENTED BY AMOUNT
CERTIFICATE DEBENTURE OF DEBENTURES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
- ------------------------------------------------------------------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL
DEBENTURES
- ------------------------------------------------------------------------------------------------------
(1) NEED NOT BE COMPLETED BY BOOK-ENTRY SECURITYHOLDERS.
(2) UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL OF THE AGGREGATE PRINCIPAL AMOUNT OF
DEBENTURES REPRESENTED BY DEBENTURE
CERTIFICATES DELIVERED TO THE DEPOSITARY ARE BEING TENDERED HEREBY. SEE INSTRUCTION 4.
--------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation ("Parent"), the above-described 7% Convertible Senior
Subordinated Debentures due April 1, 2012 (the "Debentures") of Chock Full
O'Nuts Corporation, a New York corporation (the "Company"), pursuant to
Purchaser's offer to purchase all of the outstanding Debentures at a price of
$1,275.82 per $1,000 principal amount, net to the seller in cash, without
interest thereon (the "Offer Price"), 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 with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole at any time, or in part from time to time, to one
or more of its affiliates, the right to purchase all or any portion of the
Debentures tendered pursuant to the Offer, but any such transfer or assignment
will not relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering securityholders to receive payment for
Debentures validly tendered and accepted for payment pursuant to the Offer.
Receipt of the Offer is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the
Debentures tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest in and to all the Debentures that are
being tendered hereby (and any and all distributions, rights or other securities
issued or issuable in respect thereof on or after May 7, 1999 (collectively,
"Distributions")) and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Debentures (and all Distributions), 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 Debentures (and any and all
Distributions), or transfer ownership of such Debentures (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Debentures (and any and all Distributions) for transfer on the books of the
Company, and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Debentures (and any and all Distributions), all in
accordance with the terms of the Offer.
If, on or after May 7, 1999, the Company should declare or pay any dividend
on its common stock, $.25 par value per share (the "Shares"), or make any
distribution (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or a stock split, the issuance of other securities
or the issuance of rights for the purchase of any securities) with respect to
the Shares, the Debentures or the 8% Convertible Subordinated Debentures due
September 15, 2006 (the "8% Debentures" and, together with the Debentures and
the Shares, the "Securities") that is payable or distributable to
securityholders of record on a date prior to the transfer of the Securities
purchased pursuant to the Offer to Purchaser to the name of Purchaser or its
nominee or transferee on the Company's security transfer records, then (a) the
Offer Price may, in the sole discretion of Purchaser, be reduced by the amount
of any such cash dividend or cash distribution and (b) the whole of any such
noncash dividend, distribution or issuance to be received by the tendering
securityholders will (i) be received and held by the tendering securityholders
for the account of Purchaser and will be required to be promptly remitted and
transferred by each tendering securityholder to the Depositary for the account
of Purchaser, accompanied by appropriate documentation of transfer, or (ii) at
the direction of Purchaser, be exercised for the benefit of Purchaser, in which
case the proceeds of such exercise will promptly be remitted to Purchaser.
Pending such remittance and subject to applicable law, Purchaser will be
entitled to all rights and privileges as owner of any such Distributions or
proceeds thereof and may withhold the entire Offer Price or deduct from the
Offer Price the amount or value thereof, as determined by Purchaser in its sole
discretion.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Janet Langford Kelly and R. Henry Kleeman, in their respective
capacities as officers of Purchaser, and any individual who shall thereafter
succeed to any such office of Purchaser, and each of them, the attorneys-in-fact
and proxies of the undersigned, each with full power of substitution, to vote at
any annual or special meeting of the Company's shareholders or any adjournment
or postponement thereof or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper
3
<PAGE>
with respect to, all of the Debentures (and any and all Distributions) tendered
hereby and accepted for payment by Purchaser. This appointment will be effective
if and when, and only to the extent that, Purchaser accepts such Debentures for
payment pursuant to the Offer. This power of attorney and proxy are irrevocable
and are granted in consideration of the acceptance for payment of such
Debentures in accordance with the terms of the Offer. Such acceptance for
payment shall, without further action, revoke any prior powers of attorney and
proxies granted by the undersigned at any time with respect to such Debentures
(and any and all Distributions), and no subsequent powers of attorney, proxies,
consents or revocations may be given by the undersigned with respect thereto
(and, if given, will not be deemed effective). Purchaser reserves the right to
require that, in order for Debentures or Distributions to be deemed validly
tendered, immediately upon Purchaser's acceptance for payment of such
Debentures, Purchaser must be able to exercise full voting, consent and other
rights with respect to such Debentures (and any and all Distributions),
including, upon conversion of the Debentures into Shares, voting at any meeting
of the Company's shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Debentures tendered
hereby and all Distributions, that the undersigned owns the Debentures tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that the tender of the
tendered Debentures complies with Rule 14e-4 under the Exchange Act, and that
when the same are accepted for payment by Purchaser, Purchaser will acquire
good, marketable and unencumbered title thereto and to all Distributions, free
and clear of all liens, restrictions, charges and encumbrances and the same will
not be subject to any adverse claims. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Debentures tendered hereby and all Distributions. In addition,
the undersigned shall remit and transfer promptly to the Depositary for the
account of Purchaser all Distributions in respect of the Debentures tendered
hereby, accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Debentures tendered hereby or deduct
from such purchase price the amount or value of such Distribution as determined
by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Debentures pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and in
the Instructions hereto will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer (and if the Offer is extended or amended, the terms or conditions of any
such extension or amendment). Without limiting the foregoing, if the price to be
paid in the Offer is amended in accordance with the Offer, the price to be paid
to the undersigned will be the amended price notwithstanding the fact that a
different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Debentures
tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Debentures purchased and/or return
any certificates for Debentures not tendered or accepted for payment in the
name(s) of the registered holder(s) appearing above under "Description of
Debentures Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price of all
Debentures purchased and/or return any certificates for Debentures not tendered
or not accepted for payment (and any accompanying documents, as appropriate) to
the address(es) of the registered holder(s) appearing above under "Description
of Debentures Tendered." In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Debentures purchased and/or return
any certificates evidencing Debentures not tendered or not accepted for payment
(and any accompanying documents, as appropriate) in the name(s) of, and deliver
such check and/or return any such certificates (and any accompanying documents,
as appropriate) to, the person(s) so indicated. The undersigned recognizes that
Purchaser has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Debentures from the name of the registered holder thereof if
Purchaser does not accept for payment any of the Debentures so tendered.
4
<PAGE>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING DEBENTURES THAT YOU OWN
HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES REPRESENTED BY LOST, DESTROYED OR
STOLEN CERTIFICATES: _____________________________________________________
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Debentures
accepted for payment is to be issued in name of someone other than the
undersigned, if certificates for Debentures not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue check and/or Debenture certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Debentures not tendered or not
accepted for payment and/or the check for the purchase price of Debentures
accepted for payment is to be sent to someone other than the undersigned or
to the undersigned at an address other than that shown under "Description of
Debentures Tendered."
Mail check and/or Debenture certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF SECURITYHOLDER(S))
Dated: _____________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Debenture certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the following
information and see Instruction 5.)
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Capacity (full title) ______________________________________________________
(SEE INSTRUCTION 5)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Taxpayer Identification or Social Security Number __________________________
(SEE
SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
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 Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Debentures) of Debentures tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Debentures are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND DEBENTURES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by securityholders of
the Company either if Debenture certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if delivery of Debentures is to be made
by book-entry transfer pursuant to the procedures set forth herein and in
Section 3 of the Offer to Purchase. For a securityholder validly to tender
Debentures pursuant to the Offer, either (a) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees or an Agent's Message (in connection with book-
entry transfer) and any other required documents, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and either (i) certificates for tendered Debentures must be received by the
Depositary at one of such addresses prior to the Expiration Date or (ii)
Debentures must be delivered pursuant to the procedures for book-entry transfer
set forth herein and in Section 3 of the Offer to Purchase and a Book-Entry
Confirmation must be received by the Depositary prior to the Expiration Date or
(b) the tendering securityholder must comply with the guaranteed delivery
procedures set forth herein and in Section 3 of the Offer to Purchase.
Securityholders whose certificates for Debentures 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 comply
with the book-entry transfer procedures on a timely basis may tender their
Debentures by properly completing and duly executing the Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth herein and in
Section 3 of the Offer to Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Debentures, in proper form for transfer
(or a Book-Entry Confirmation with respect to all Debentures tendered by
book-entry transfer), together with a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents must be received by the Depositary within three
trading days after the date of execution of such Notice of Guaranteed Delivery.
A "trading day" is any day on which the New York Stock Exchange is open for
business.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Debentures, that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Debentures tendered
hereby.
THE METHOD OF DELIVERY OF THE DEBENTURES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SECURITYHOLDER. THE
DEBENTURES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering securityholders, by executing this Letter of Transmittal (or facsimile
thereof), waive any right to receive any notice of acceptance of their
Debentures for payment.
7
<PAGE>
3. INADEQUATE SPACE. If the space provided herein under "Description of
Debentures Tendered" is inadequate, the aggregate principal amount of Debentures
tendered and the Debenture certificate numbers with respect to such Debentures
should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO SECURITYHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If less than the entire principal amount of the Debentures
evidenced by any Debenture certificate delivered to the Depositary herewith is
to be tendered hereby, fill in the principal amount of Debentures that is to be
tendered in the box entitled "Principal Amount of Debentures Tendered." In any
such case, new certificate(s) for the remainder of the principal amount of
Debentures that was evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. The entire principal amount of Debentures 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
Debentures 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 Debentures tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Debentures 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 Debenture certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Debentures listed and transmitted hereby, no endorsements of Debenture
certificates or separate stock powers are required unless payment or
certificates for Debentures not tendered or not accepted for payment are to be
issued in the name of a person other than the registered holder(s). Signatures
on any such Debenture certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Debentures evidenced by certificates listed and
transmitted hereby, the Debenture certificates 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 Debenture certificates. Signature(s) on
any such Debenture certificates or stock powers must be guaranteed by an
Eligible Institution.
6. TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all transfer taxes with respect to the transfer and sale of
any Debentures to it or its order pursuant to the Offer. If, however, payment of
the purchase price of any Debentures purchased is to be made to, or if
certificates for Debentures not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any transfer taxes
(whether imposed on the registered holder(s) or such other person) payable on
account of the transfer to such other person will be deducted from the purchase
price of such Debentures purchased unless evidence satisfactory to Purchaser of
the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE DEBENTURE CERTIFICATES EVIDENCING THE
DEBENTURES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check
for the purchase price of any Debentures accepted for payment is to be issued in
the name of, and/or Debenture certificates for a principal amount of Debentures
not accepted for payment or not tendered are to be issued in the name of and/or
returned to, a person other than the signer of this Letter of Transmittal or if
a check is to be sent, and/or such certificates are to be returned, to a person
other than the signer of this Letter of Transmittal, or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed. If no such instructions are given, any such principal amount of
Debentures not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated above as the account from which such
Debentures were delivered.
8
<PAGE>
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent, at the address or telephone numbers set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive, at any time or from time to time, any of the specified
conditions of the Offer, in whole or in part, in the case of any Debentures
tendered.
10. BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a securityholder
surrendering Debentures in the Offer must, unless an exemption applies, provide
the Depositary with such securityholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify, under
penalties of perjury, that such TIN is correct and that such securityholder is
not subject to backup withholding.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the securityholder upon filing an income tax
return.
The securityholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Debentures. If the Debentures are held 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
securityholder 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
securityholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below 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, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
securityholder if a TIN is provided to the Depositary within 60 days.
Certain securityholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign securityholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for more instructions.
11. LOST, DESTROYED OR STOLEN DEBENTURE CERTIFICATES. If any
certificate(s) representing Debentures has been lost, destroyed or stolen, the
securityholder should promptly notify the Depositary, and check the box
immediately preceding the special payment/special delivery instructions and
indicate the principal amount of Debentures lost. The securityholder will then
be instructed as to the steps that must be taken in order to replace the
Debenture certificate(s). This Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost, destroyed or stolen
Debenture certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
DEBENTURES MUST BE RECEIVED BY THE DEPOSITARY OR DEBENTURES MUST BE DELIVERED
PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE
EXPIRATION DATE, OR THE TENDERING SECURITYHOLDER MUST COMPLY WITH THE PROCEDURES
FOR GUARANTEED DELIVERY.
9
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax law, a securityholder whose tendered Debentures are
accepted for payment is required to provide the Depositary (as payer) with such
securityholder's correct taxpayer identification number on Substitute Form W-9
below. If such securityholder is an individual, the taxpayer identification
number is his social security number. If a tendering securityholder is subject
to backup withholding, such securityholder must cross out item (2) of the
Certification box on the Substitute Form W-9. If the Depositary is not provided
with the correct taxpayer identification number, the securityholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such securityholder with respect to Debentures
purchased pursuant to the Offer may be subject to backup withholding.
Certain securityholders (including, among others, all corporations, and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that securityholder must submit a statement, signed under
penalties of perjury, attesting to that securityholder's exempt status. Such
statements can be obtained from the Depositary. Exempt securityholders, other
than foreign securityholders, should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9 below, and sign, date and return the Substitute
Form W-9 to 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 payments made to the securityholder. 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. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a securityholder
with respect to Debentures purchased pursuant to the Offer, the securityholder
is required to notify the Depositary of such securityholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such securityholder is awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The securityholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Debentures.
If the Debentures 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. If the tendering securityholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future,
such securityholder should write "Applied For" in the space provided for in the
TIN in Part 1, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment of the purchase price, the Depositary will withhold 31% on all payments
of the purchase price. However, such amounts will be refunded to such
securityholder if a TIN is provided to the Depositary within 60 days.
10
<PAGE>
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN ---------------------
THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW (If awaiting TIN write
"Applied For")
OR
---------------------------
</TABLE>
SUBSTITUTE
<TABLE>
<C> <S> <C>
Employer Identification
Number
(If awaiting TIN write
</TABLE>
FORM W-9
<TABLE>
<C> <S> <C>
"Applied For")
-----------------------------------------------------------------
</TABLE>
Department of the Treasury
<TABLE>
<C> <S> <C>
PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
</TABLE>
Internal Revenue Service
<TABLE>
<C> <S> <C>
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued
for me), and
(2) I am not subject to backup withholding because: (a) I
am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
-----------------------------------------------------------------
</TABLE>
Payer's Request for
<TABLE>
<C> <S> <C>
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above
</TABLE>
Taxpayer Identification
<TABLE>
<C> <S> <C>
if you have been notified by the IRS that you are currently
subject to
</TABLE>
Number ("TIN")
<TABLE>
<C> <S> <C>
backup withholding because of under-reporting interest or
dividends on your tax returns. However, if after being notified
by the IRS that you are subject to backup withholding, you
receive another notification from the IRS that you are no longer
subject to backup withholding, do not cross out such item (2).
(Also see instructions in the enclosed Guidelines).
SIGNATURE DATE , 1999
-----------------------------------------------------------------
Part 3--Awaiting TIN
-------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH 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
THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (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 to the Depositary by the time of payment, 31% of
all reportable payments made to me thereafter will be withheld, but that
such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
<TABLE>
<S> <C>
, 1999
Signature Date
</TABLE>
11
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THIS LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT AS SET FORTH BELOW:
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
(212) 754-8000 (Call Collect)
(800) 662-5200 (Banks And Brokers)
(800) 566-9061 (All Others Call Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
12
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER 8% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
OF
CHOCK FULL O'NUTS CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 7, 1999
OF
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE 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:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by securityholders of Chock Full
O'Nuts Corporation if certificates for Debentures (as such term is defined
below) are to be forwarded herewith or, unless an Agent's Message (as defined in
Instruction 2 below) is utilized, if delivery of Debentures is to be made by
book-entry transfer to an account maintained by the Depositary at a Book-Entry
Transfer Facility (as defined in and pursuant to the procedures set forth in
Section 3 of the Offer to Purchase). Securityholders who deliver Debentures by
book-entry transfer are referred to herein as "Book-Entry Securityholders," and
other securityholders who deliver Debentures are referred to herein as
"Certificate Securityholders."
Securityholders whose certificates for Debentures are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in Section 3 of the Offer to Purchase) with respect to,
their Debentures and all other documents required hereby to the Depositary prior
to the Expiration Date (as defined in Section 1 of the Offer to Purchase) must
tender their Debentures pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS
TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<PAGE>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S
ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER DEBENTURES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
Account Number
Transaction Code Number
/ / CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
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
If delivered by Book-Entry Transfer, Account Number
Transaction Code Number
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF DEBENTURES TENDERED
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) DEBENTURES TENDERED
APPEAR(S) ON DEBENTURE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
AMOUNT AGGREGATE
OF DEBENTURE PRINCIPAL
DEBENTURE REPRESENTED BY AMOUNT
CERTIFICATE DEBENTURE OF DEBENTURES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
- ------------------------------------------------------------------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL
DEBENTURES
- ------------------------------------------------------------------------------------------------------
(1) NEED NOT BE COMPLETED BY BOOK-ENTRY SECURITYHOLDERS.
(2) UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL OF THE AGGREGATE PRINCIPAL AMOUNT OF
DEBENTURES REPRESENTED BY DEBENTURE
CERTIFICATES DELIVERED TO THE DEPOSITARY ARE BEING TENDERED HEREBY. SEE INSTRUCTION 4.
--------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation ("Parent"), the above-described 8% Convertible
Subordinated Debentures due September 15, 2006 (the "Debentures") of Chock Full
O'Nuts Corporation, a New York corporation (the "Company"), pursuant to
Purchaser's offer to purchase all of the outstanding Debentures at a price of
$1,344.43 per $1,000 principal amount, net to the seller in cash, without
interest thereon (the "Offer Price"), 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 with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole at any time, or in part from time to time, to one
or more of its affiliates, the right to purchase all or any portion of the
Debentures tendered pursuant to the Offer, but any such transfer or assignment
will not relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering securityholders to receive payment for
Debentures validly tendered and accepted for payment pursuant to the Offer.
Receipt of the Offer is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the
Debentures tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest in and to all the Debentures that are
being tendered hereby (and any and all distributions, rights or other securities
issued or issuable in respect thereof on or after May 7, 1999 (collectively,
"Distributions")) and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Debentures (and all Distributions), 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 Debentures (and any and all
Distributions), or transfer ownership of such Debentures (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Debentures (and any and all Distributions) for transfer on the books of the
Company, and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Debentures (and any and all Distributions), all in
accordance with the terms of the Offer.
If, on or after May 7, 1999, the Company should declare or pay any dividend
on its common stock, $.25 par value per share (the "Shares"), or make any
distribution (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or a stock split, the issuance of other securities
or the issuance of rights for the purchase of any securities) with respect to
the Shares, the Debentures or the 7% Convertible Senior Subordinated Debentures
due April 1, 2012 (the "7% Debentures" and, together with the Debentures and the
Shares, the "Securities") that is payable or distributable to securityholders of
record on a date prior to the transfer of the Securities purchased pursuant to
the Offer to Purchaser to the name of Purchaser or its nominee or transferee on
the Company's security transfer records, then (a) the Offer Price may, in the
sole discretion of Purchaser, be reduced by the amount of any such cash dividend
or cash distribution and (b) the whole of any such noncash dividend,
distribution or issuance to be received by the tendering securityholders will
(i) be received and held by the tendering securityholders for the account of
Purchaser and will be required to be promptly remitted and transferred by each
tendering securityholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of Purchaser, be exercised for the benefit of Purchaser, in which case the
proceeds of such exercise will promptly be remitted to Purchaser. Pending such
remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner of any such Distributions or proceeds thereof and
may withhold the entire Offer Price or deduct from the Offer Price the amount or
value thereof, as determined by Purchaser in its sole discretion.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Janet Langford Kelly and R. Henry Kleeman, in their respective
capacities as officers of Purchaser, and any individual who shall thereafter
succeed to any such office of Purchaser, and each of them, the attorneys-in-fact
and proxies of the undersigned, each with full power of substitution, to vote at
any annual or special meeting of the Company's shareholders or any adjournment
or postponement thereof or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper
3
<PAGE>
with respect to, all of the Debentures (and any and all Distributions) tendered
hereby and accepted for payment by Purchaser. This appointment will be effective
if and when, and only to the extent that, Purchaser accepts such Debentures for
payment pursuant to the Offer. This power of attorney and proxy are irrevocable
and are granted in consideration of the acceptance for payment of such
Debentures in accordance with the terms of the Offer. Such acceptance for
payment shall, without further action, revoke any prior powers of attorney and
proxies granted by the undersigned at any time with respect to such Debentures
(and any and all Distributions), and no subsequent powers of attorney, proxies,
consents or revocations may be given by the undersigned with respect thereto
(and, if given, will not be deemed effective). Purchaser reserves the right to
require that, in order for Debentures or Distributions to be deemed validly
tendered, immediately upon Purchaser's acceptance for payment of such
Debentures, Purchaser must be able to exercise full voting, consent and other
rights with respect to such Debentures (and any and all Distributions),
including, upon conversion of the Debentures into Shares, voting at any meeting
of the Company's shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Debentures tendered
hereby and all Distributions, that the undersigned owns the Debentures tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that the tender of the
tendered Debentures complies with Rule 14e-4 under the Exchange Act, and that
when the same are accepted for payment by Purchaser, Purchaser will acquire
good, marketable and unencumbered title thereto and to all Distributions, free
and clear of all liens, restrictions, charges and encumbrances and the same will
not be subject to any adverse claims. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Debentures tendered hereby and all Distributions. In addition,
the undersigned shall remit and transfer promptly to the Depositary for the
account of Purchaser all Distributions in respect of the Debentures tendered
hereby, accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Debentures tendered hereby or deduct
from such purchase price the amount or value of such Distribution as determined
by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Debentures pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and in
the Instructions hereto will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer (and if the Offer is extended or amended, the terms or conditions of any
such extension or amendment). Without limiting the foregoing, if the price to be
paid in the Offer is amended in accordance with the Offer, the price to be paid
to the undersigned will be the amended price notwithstanding the fact that a
different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Debentures
tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Debentures purchased and/or return
any certificates for Debentures not tendered or accepted for payment in the
name(s) of the registered holder(s) appearing above under "Description of
Debentures Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price of all
Debentures purchased and/or return any certificates for Debentures not tendered
or not accepted for payment (and any accompanying documents, as appropriate) to
the address(es) of the registered holder(s) appearing above under "Description
of Debentures Tendered." In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Debentures purchased and/or return
any certificates evidencing Debentures not tendered or not accepted for payment
(and any accompanying documents, as appropriate) in the name(s) of, and deliver
such check and/or return any such certificates (and any accompanying documents,
as appropriate) to, the person(s) so indicated. The undersigned recognizes that
Purchaser has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Debentures from the name of the registered holder thereof if
Purchaser does not accept for payment any of the Debentures so tendered.
4
<PAGE>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING DEBENTURES THAT YOU OWN
HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES REPRESENTED BY LOST, DESTROYED OR
STOLEN CERTIFICATES: _____________________________________________________
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Debentures
accepted for payment is to be issued in name of someone other than the
undersigned, if certificates for Debentures not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue check and/or Debenture certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Debentures not tendered or not
accepted for payment and/or the check for the purchase price of Debentures
accepted for payment is to be sent to someone other than the undersigned or
to the undersigned at an address other than that shown under "Description of
Debentures Tendered."
Mail check and/or Debenture certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF SECURITYHOLDER(S))
Dated: _____________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Debenture certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the following
information and see Instruction 5.)
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Capacity (full title) ______________________________________________________
(SEE INSTRUCTION 5)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Taxpayer Identification or Social Security Number __________________________
(SEE
SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
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 Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Debentures) of Debentures tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Debentures are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND DEBENTURES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by securityholders of
the Company either if Debenture certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if delivery of Debentures is to be made
by book-entry transfer pursuant to the procedures set forth herein and in
Section 3 of the Offer to Purchase. For a securityholder validly to tender
Debentures pursuant to the Offer, either (a) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees or an Agent's Message (in connection with book-
entry transfer) and any other required documents, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and either (i) certificates for tendered Debentures must be received by the
Depositary at one of such addresses prior to the Expiration Date or (ii)
Debentures must be delivered pursuant to the procedures for book-entry transfer
set forth herein and in Section 3 of the Offer to Purchase and a Book-Entry
Confirmation must be received by the Depositary prior to the Expiration Date or
(b) the tendering securityholder must comply with the guaranteed delivery
procedures set forth herein and in Section 3 of the Offer to Purchase.
Securityholders whose certificates for Debentures 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 comply
with the book-entry transfer procedures on a timely basis may tender their
Debentures by properly completing and duly executing the Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth herein and in
Section 3 of the Offer to Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Debentures, in proper form for transfer
(or a Book-Entry Confirmation with respect to all Debentures tendered by
book-entry transfer), together with a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents must be received by the Depositary within three
trading days after the date of execution of such Notice of Guaranteed Delivery.
A "trading day" is any day on which the New York Stock Exchange is open for
business.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Debentures, that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Debentures tendered
hereby.
THE METHOD OF DELIVERY OF THE DEBENTURES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SECURITYHOLDER. THE
DEBENTURES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering securityholders, by executing this Letter of Transmittal (or facsimile
thereof), waive any right to receive any notice of acceptance of their
Debentures for payment.
7
<PAGE>
3. INADEQUATE SPACE. If the space provided herein under "Description of
Debentures Tendered" is inadequate, the aggregate principal amount of Debentures
tendered and the Debenture certificate numbers with respect to such Debentures
should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO SECURITYHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If less than the entire principal amount of the Debentures
evidenced by any Debenture certificate delivered to the Depositary herewith is
to be tendered hereby, fill in the principal amount of Debentures that is to be
tendered in the box entitled "Principal Amount of Debentures Tendered." In any
such case, new certificate(s) for the remainder of the principal amount of
Debentures that was evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. The entire principal amount of Debentures 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
Debentures 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 Debentures tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Debentures 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 Debenture certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Debentures listed and transmitted hereby, no endorsements of Debenture
certificates or separate stock powers are required unless payment or
certificates for Debentures not tendered or not accepted for payment are to be
issued in the name of a person other than the registered holder(s). Signatures
on any such Debenture certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Debentures evidenced by certificates listed and
transmitted hereby, the Debenture certificates 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 Debenture certificates. Signature(s) on
any such Debenture certificates or stock powers must be guaranteed by an
Eligible Institution.
6. TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all transfer taxes with respect to the transfer and sale of
any Debentures to it or its order pursuant to the Offer. If, however, payment of
the purchase price of any Debentures purchased is to be made to, or if
certificates for Debentures not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any transfer taxes
(whether imposed on the registered holder(s) or such other person) payable on
account of the transfer to such other person will be deducted from the purchase
price of such Debentures purchased unless evidence satisfactory to Purchaser of
the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE DEBENTURE CERTIFICATES EVIDENCING THE
DEBENTURES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check
for the purchase price of any Debentures accepted for payment is to be issued in
the name of, and/or Debenture certificates for a principal amount of Debentures
not accepted for payment or not tendered are to be issued in the name of and/or
returned to, a person other than the signer of this Letter of Transmittal or if
a check is to be sent, and/or such certificates are to be returned, to a person
other than the signer of this Letter of Transmittal, or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed. If no such instructions are given, any such principal amount of
Debentures not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated above as the account from which such
Debentures were delivered.
8
<PAGE>
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent, at the address or telephone numbers set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive, at any time or from time to time, any of the specified
conditions of the Offer, in whole or in part, in the case of any Debentures
tendered.
10. BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a securityholder
surrendering Debentures in the Offer must, unless an exemption applies, provide
the Depositary with such securityholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify, under
penalties of perjury, that such TIN is correct and that such securityholder is
not subject to backup withholding.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the securityholder upon filing an income tax
return.
The securityholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Debentures. If the Debentures are held 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
securityholder 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
securityholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below 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, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
securityholder if a TIN is provided to the Depositary within 60 days.
Certain securityholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign securityholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for more instructions.
11. LOST, DESTROYED OR STOLEN DEBENTURE CERTIFICATES. If any
certificate(s) representing Debentures has been lost, destroyed or stolen, the
securityholder should promptly notify the Depositary, and check the box
immediately preceding the special payment/special delivery instructions and
indicate the principal amount of Debentures lost. The securityholder will then
be instructed as to the steps that must be taken in order to replace the
Debenture certificate(s). This Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost, destroyed or stolen
Debenture certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
DEBENTURES MUST BE RECEIVED BY THE DEPOSITARY OR DEBENTURES MUST BE DELIVERED
PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE
EXPIRATION DATE, OR THE TENDERING SECURITYHOLDER MUST COMPLY WITH THE PROCEDURES
FOR GUARANTEED DELIVERY.
9
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax law, a securityholder whose tendered Debentures are
accepted for payment is required to provide the Depositary (as payer) with such
securityholder's correct taxpayer identification number on Substitute Form W-9
below. If such securityholder is an individual, the taxpayer identification
number is his social security number. If a tendering securityholder is subject
to backup withholding, such securityholder must cross out item (2) of the
Certification box on the Substitute Form W-9. If the Depositary is not provided
with the correct taxpayer identification number, the securityholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such securityholder with respect to Debentures
purchased pursuant to the Offer may be subject to backup withholding.
Certain securityholders (including, among others, all corporations, and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that securityholder must submit a statement, signed under
penalties of perjury, attesting to that securityholder's exempt status. Such
statements can be obtained from the Depositary. Exempt securityholders, other
than foreign securityholders, should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9 below, and sign, date and return the Substitute
Form W-9 to 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 payments made to the securityholder. 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. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a securityholder
with respect to Debentures purchased pursuant to the Offer, the securityholder
is required to notify the Depositary of such securityholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such securityholder is awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The securityholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Debentures.
If the Debentures 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. If the tendering securityholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future,
such securityholder should write "Applied For" in the space provided for in the
TIN in Part 1, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment of the purchase price, the Depositary will withhold 31% on all payments
of the purchase price. However, such amounts will be refunded to such
securityholder if a TIN is provided to the Depositary within 60 days.
10
<PAGE>
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN ---------------------
THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW (If awaiting TIN write
"Applied For")
OR
---------------------------
</TABLE>
SUBSTITUTE
<TABLE>
<C> <S> <C>
Employer Identification
Number
(If awaiting TIN write
</TABLE>
FORM W-9
<TABLE>
<C> <S> <C>
"Applied For")
-----------------------------------------------------------------
</TABLE>
Department of the Treasury
<TABLE>
<C> <S> <C>
PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
</TABLE>
Internal Revenue Service
<TABLE>
<C> <S> <C>
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued
for me), and
(2) I am not subject to backup withholding because: (a) I
am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
-----------------------------------------------------------------
</TABLE>
Payer's Request for
<TABLE>
<C> <S> <C>
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above
</TABLE>
Taxpayer Identification
<TABLE>
<C> <S> <C>
if you have been notified by the IRS that you are currently
subject to
</TABLE>
Number ("TIN")
<TABLE>
<C> <S> <C>
backup withholding because of under-reporting interest or
dividends on your tax returns. However, if after being notified
by the IRS that you are subject to backup withholding, you
receive another notification from the IRS that you are no longer
subject to backup withholding, do not cross out such item (2).
(Also see instructions in the enclosed Guidelines).
SIGNATURE DATE , 1999
-----------------------------------------------------------------
Part 3--Awaiting TIN
-------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH 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
THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (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 to the Depositary by the time of payment, 31% of
all reportable payments made to me thereafter will be withheld, but that
such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
<TABLE>
<S> <C>
, 1999
Signature Date
</TABLE>
11
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THIS LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT AS SET FORTH BELOW:
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
(212) 754-8000 (Call Collect)
(800) 662-5200 (Banks And Brokers)
(800) 566-9061 (All Others Call Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
12
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
CHOCK FULL O'NUTS CORPORATION
TO
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $.25 per share, and the
associated common stock purchase rights (the "Rights") issued pursuant to the
Amended and Restated Rights Agreement, dated as of December 30, 1997, by and
between Chock Full O'Nuts Corporation, a New York corporation (the "Company"),
and the American Stock Transfer & Trust Company, as Rights Agent (such shares of
Common Stock and the associated Rights, collectively, the "Shares"), of the
Company, are not immediately available, if the procedure for book-entry transfer
cannot be completed prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase), or if time will not permit all required documents to reach
the Depositary prior to the Expiration Date. Such form may be delivered by hand,
transmitted by facsimile transmission or mailed to the Depositary. See Section 3
of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY 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.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation, upon the terms and subject to the conditions set forth
in Purchaser's Offer to Purchase dated May 7, 1999 and the applicable Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
shares set forth below of common stock, par value $.25 per share, and the
associated common stock purchase rights (the "Rights") issued pursuant to the
Amended and Restated Rights Agreement, dated as of December 30, 1997, by and
between Chock Full O'Nuts Corporation, a New York corporation (the "Company"),
and the American Stock Transfer & Trust Company, as Rights Agent (such shares of
Common Stock and the associated Rights, collectively, the "Shares"), of the
Company, pursuant to the guaranteed delivery procedures set forth in Section 3
of the Offer to Purchase.
<TABLE>
<CAPTION>
- ----------------------------------------
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
Certificate Nos. (if available):
Please Print
Book-Entry Transfer Facility Address(es):
Account Number:
Dated: , 1999
Zip Code
Area Code and Tel. No.:
Signature(s):
- -----------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or the
Stock Exchange Medallion Program, guarantees to deliver to the Depositary either
certificates representing the Shares tendered hereby, in proper form for transfer,
or confirmation of book-entry transfer of such Shares into the Depositary's account
at The Depository Trust Company, in each case with delivery of a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message, and any other documents required by the
Letter of Transmittal, within three New York Stock Exchange trading days (as defined
in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the guarantee
to the Depositary and must deliver the Letter of Transmittal and 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>
<TABLE>
<S> <C>
Name of Firm:
Authorized Signature
Address: Name:
Please Print
Title:
Zip Code
Area Code and Tel. No.: Dated: , 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
- -------------------------------------------
</TABLE>
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF 7% CONVERTIBLE
SENIOR SUBORDINATED DEBENTURES DUE 2012
OF
CHOCK FULL O'NUTS CORPORATION
TO
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing 7% Convertible Senior Subordinated Debentures due April 1, 2012
(the "7% Debentures") of Chock Full O'Nuts Corporation, a New York corporation
(the "Company"), are not immediately available, if the procedure for book-entry
transfer cannot be completed prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase), or if time will not permit all required documents
to reach the Depositary prior to the Expiration Date. Such form may be delivered
by hand, transmitted by facsimile transmission or mailed to the Depositary. See
Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY 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.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation, upon the terms and subject to the conditions set forth
in Purchaser's Offer to Purchase dated May 7, 1999 and the applicable Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), receipt of which is hereby acknowledged, the aggregate
principal amount set forth below of 7% Convertible Senior Subordinated
Debentures due April 1, 2012 (the "7% Debentures") of Chock Full O'Nuts
Corporation, a New York corporation (the "Company"), pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
<TABLE>
<CAPTION>
- ----------------------------------------
<S> <C>
Aggregate Principal Amount of 7% Name(s) of Record Holder(s):
Debentures:
Certificate Nos. (if available):
Please Print
Address(es):
Book-Entry Transfer Facility
Account Number:
Dated: , 1999 Zip Code
Area Code and Tel. No.:
Signature(s):
- -----------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or the
Stock Exchange Medallion Program, guarantees to deliver to the Depositary either
certificates representing the 7% Debentures tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such 7% Debentures into the
Depositary's account at The Depository Trust Company, in each case with delivery of
a properly completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or an Agent's Message, and any other
documents required by the Letter of Transmittal, within three New York Stock
Exchange trading days (as defined in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the guarantee
to the Depositary and must deliver the Letter of Transmittal and certificates for 7%
Debentures to the Depositary within the time period shown herein. Failure to do so
could result in a financial loss to such Eligible Institution.
</TABLE>
<TABLE>
<S> <C>
Name of Firm:
Authorized Signature
Address: Name:
Please Print
Title:
Zip Code
Area Code and Tel. No.: Dated: , 1999
NOTE: DO NOT SEND CERTIFICATES FOR 7% DEBENTURES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
- -------------------------------------------
</TABLE>
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF 8% CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2006
OF
CHOCK FULL O'NUTS CORPORATION
TO
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
SARA LEE CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing 8% Convertible Subordinated Debentures due September 15, 2006 (the
"8% Debentures") of Chock Full O'Nuts Corporation, a New York corporation (the
"Company"), are not immediately available, if the procedure for book-entry
transfer cannot be completed prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase), or if time will not permit all required documents
to reach the Depositary prior to the Expiration Date. Such form may be delivered
by hand, transmitted by facsimile transmission or mailed to the Depositary. See
Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
Wall Street Station Receive Window, Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY 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.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation, upon the terms and subject to the conditions set forth
in Purchaser's Offer to Purchase dated May 7, 1999 and the applicable Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), receipt of which is hereby acknowledged, the aggregate
principal amount set forth below of 8% Convertible Subordinated Debentures due
September 15, 2006 (the "8% Debentures") of Chock Full O'Nuts Corporation, a New
York corporation (the "Company"), pursuant to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase.
<TABLE>
<CAPTION>
- ----------------------------------------
<S> <C>
Aggregate Principal Amount of 8% Name(s) of Record Holder(s):
Debentures:
Certificate Nos. (if available):
Please Print
Address(es):
Book-Entry Transfer Facility
Account Number:
Dated: , 1999 Zip Code
Area Code and Tel. No.:
Signature(s):
- -----------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or the
Stock Exchange Medallion Program, guarantees to deliver to the Depositary either
certificates representing the 8% Debentures tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such 8% Debentures into the
Depositary's account at The Depository Trust Company, in each case with delivery of
a properly completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or an Agent's Message, and any other
documents required by the Letter of Transmittal, within three New York Stock
Exchange trading days (as defined in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the guarantee
to the Depositary and must deliver the Letter of Transmittal and certificates for 8%
Debentures to the Depositary within the time period shown herein. Failure to do so
could result in a financial loss to such Eligible Institution.
</TABLE>
<TABLE>
<S> <C>
Name of Firm:
Authorized Signature
Address: Name:
Please Print
Title:
Zip Code
Area Code and Tel. No.: Dated: , 1999
NOTE: DO NOT SEND CERTIFICATES FOR 8% DEBENTURES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
- -------------------------------------------
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AT $10.50 NET PER SHARE
AND
ALL OF THE OUTSTANDING 7% CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES DUE 2012 AT $1,275.82 NET PER $1,000 PRINCIPAL AMOUNT
AND
ALL OF THE OUTSTANDING 8% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2006 AT $1,344.43 NET PER $1,000 PRINCIPAL AMOUNT
OF
CHOCK FULL O'NUTS CORPORATION
BY
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SARA LEE CORPORATION
- ---------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS 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 CFN Acquisition Corporation, a New York
corporation ("Purchaser") and a wholly owned subsidiary of Sara Lee Corporation,
a Maryland corporation ("Parent"), to act as Dealer Manager in connection with
Purchaser's offer to purchase (i) all of the outstanding shares of common stock,
par value $.25 per share, and the associated common stock purchase rights (the
"Rights") issued pursuant to the Amended and Restated Rights Agreement, dated as
of December 30, 1997, by and between Chock Full O'Nuts Corporation, a New York
corporation (the "Company"), and the American Stock Transfer & Trust Company, as
Rights Agent (such shares of Common Stock and the associated Rights,
collectively, the "Shares"), at $10.50 per Share, (ii) all of the outstanding 7%
Convertible Senior Subordinated Debentures due April 1, 2012 (the "7%
Debentures"), at a price of $1,275.82 per $1,000 principal amount of the 7%
Debentures, and (iii) all of the outstanding 8% Convertible Subordinated
Debentures due September 15, 2006 (the "8% Debentures" and, together with the
Shares and the 7% Debentures, the "Securities"), at a price of $1,344.43 per
$1,000 principal amount of the 8% Debentures, of the Company, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 7, 1999 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer") enclosed herewith. Please furnish
copies of the enclosed materials to those of your clients for whose accounts you
hold Securities registered in your name or in the name of your nominee.
Holders of Securities whose certificates evidencing Securities are not
immediately available or who cannot deliver confirmation of the book-entry
transfer of their Securities into the Depositary's account at a Book-Entry
Transfer Facility (as defined in the Offer to Purchase) and all other documents
required hereby to the Depositary on or prior to the Expiration Date (as defined
in Section 1 of the Offer to Purchase) must tender their Securities according to
the guaranteed delivery procedures set forth in Section
<PAGE>
3 of the Offer to Purchase. See Instruction 2 of the Letter of Transmittal.
Delivery of documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
For your information and for forwarding to your clients for whom you hold
Securities registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase, dated May 7, 1999;
2. Letters of Transmittal for your use in accepting the Offer and tendering
Securities and for the information of your clients;
3. Notices of Guaranteed Delivery to be used to accept the Offer if
certificates for Securities and all other required documents cannot be delivered
to the Depositary, or if the procedures for book-entry transfer cannot be
completed, prior to the Expiration Date;
4. A letter which may be sent to your clients for whose accounts you hold
Securities 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 for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to the Depositary.
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), Purchaser will accept for payment and pay for Securities which are
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn when, as and if Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Securities for payment pursuant to
the Offer. Payment for Securities purchased pursuant to the Offer will in all
cases be made only after timely receipt by the Depositary of (i) certificates
for such Securities, or timely confirmation of a book-entry transfer of such
Securities into the Depositary's account at the Book-Entry Transfer Facility,
pursuant to the procedures described in Section 3 of the Offer to Purchase, (ii)
the applicable, properly completed and duly executed Letter of Transmittal (or a
properly completed and manually signed facsimile thereof) or an Agent's Message
(as defined in the Offer to Purchase) in connection with a book-entry transfer
and (iii) all other documents required by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary, the Dealer Managers and the Information
Agent as described in the Offer to Purchase) for soliciting tenders of
Securities pursuant to the Offer. Purchaser will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for customary
mailing and handling costs incurred by them in forwarding the enclosed materials
to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Securities pursuant to the Offer, subject to Instruction 6 of
the Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER EXPIRES AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4,
1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer of Securities, and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Securities should be
delivered or such Securities should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Securities wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
<PAGE>
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 Dealer
Manager or the Information Agent at the respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF PARENT, PURCHASER, THE DEALER MANAGER, THE INFORMATION AGENT, THE
DEPOSITARY; ANY AFFILIATE OF ANY OF THE FOREGOING OR ANY OTHER PERSON, 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 OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AT $10.50 NET PER SHARE
AND
ALL OF THE OUTSTANDING 7% CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES DUE 2012 AT $1,275.82 NET PER $1,000 PRINCIPAL AMOUNT
AND
ALL OF THE OUTSTANDING 8% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2006 AT $1,344.43 NET PER $1,000 PRINCIPAL AMOUNT
OF
CHOCK FULL O'NUTS CORPORATION
BY
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SARA LEE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS 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, and the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the "Offer") in connection with
the offer by CFN Acquisition Corporation, a New York corporation ("Purchaser")
and a wholly owned subsidiary of Sara Lee Corporation, a Maryland corporation
("Parent"), to purchase (i) all of the outstanding shares of common stock, par
value $.25 per share, and the associated common stock purchase rights (the
"Rights") issued pursuant to the Amended and Restated Rights Agreement, dated as
of December 30, 1997, by and between Chock Full O'Nuts Corporation, a New York
corporation (the "Company"), and the American Stock Transfer & Trust Company, as
Rights Agent (such shares of Common Stock and the associated Rights,
collectively, the "Shares"), (ii) all of the outstanding 7% Convertible Senior
Subordinated Debentures due April 1, 2012 (the "7% Debentures"), and (iii) all
of the outstanding 8% Convertible Subordinated Debentures due September 15, 2006
(the "8% Debentures" and, together with the Shares and the 7% Debentures, the
"Securities"), of the Company. We are the holder of record of Securities held
for your account. A tender of such Securities can be made only by us as the
holder of record and pursuant to your instructions. THE ENCLOSED LETTER(S) OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SECURITIES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Securities held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is invited to the following:
1. The offer prices are $10.50 per Share, $1,275.82 per $1,000 principal
amount of the 7% Debentures and $1,344.43 per $1,000 principal amount of the 8%
Debentures, in each case net to you in cash without interest.
2. The Offer is being made for all outstanding Securities.
<PAGE>
3. The Offer and withdrawal rights expire at 12:00 Midnight, New York City
time, on Friday, June 4, 1999, unless the Offer is extended.
4. Any stock transfer taxes applicable to the sale of Securities to
Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. 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 will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Securities, please so
instruct us by completing, executing and returning to us the instruction form
set forth on the reverse side of this letter. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your Securities,
all such Securities will be tendered unless otherwise specified on the reverse
side of this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ALL OUTSTANDING 7% DEBENTURES DUE 2012
AND
ALL OUTSTANDING 8% DEBENTURES DUE 2006
OF
CHOCK FULL O'NUTS CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated May 7, 1999 and the related Letter(s) of Transmittal in
connection with the Offer by CFN Acquisition Corporation, a New York corporation
and a wholly owned subsidiary of Sara Lee Corporation, a Maryland corporation,
to purchase (i) all of the outstanding shares of common stock, par value $.25
per share, and the associated common stock purchase rights (the "Rights") issued
pursuant to the Amended and Restated Rights Agreement, dated as of December 30,
1997, by and between Chock Full O'Nuts Corporation, a New York corporation (the
"Company"), and the American Stock Transfer & Trust Company, as Rights Agent
(such shares of Common Stock and the associated Rights, collectively, the
"Shares"), (ii) all of the outstanding 7% Convertible Senior Subordinated
Debentures due April 1, 2012 (the "7% Debentures") and (iii) all of the
outstanding 8% Convertible Subordinated Debentures due September 15, 2006 (the
"8% Debentures" and, together with the Shares and the 7% Debentures, the
"Securities"), of the Company.
This will instruct you to tender the number of Securities indicated below
(or if no number is indicated below, all Securities) held by you for the account
of the undersigned, upon the terms and subject to the conditions set forth in
the Offer.
<TABLE>
<S> <C>
----------------------------------------------Numbe of Shares to be Tendered:*
Signature(s)
</TABLE>
--------------------------------------------------------------------- Shares
<TABLE>
<S> <C>
----------------------------------------------
</TABLE>
Principal Amount of
<TABLE>
<S> <C>
----------------------------------------------7 Debentures to be Tendered*
----------------------------------------------$
Print name(s)
</TABLE>
Principal Amount of
<TABLE>
<S> <C>
----------------------------------------------
</TABLE>
8% Debentures to be Tendered*
<TABLE>
<S> <C>
----------------------------------------------
</TABLE>
$
---------------------------------------------------------------------
<TABLE>
<S> <C>
Address(s)
----------------------------------------------
Area Code and Telephone Number
</TABLE>
Dated: , 1999
<TABLE>
<S> <C>
----------------------------------------------
Tax ID or Social Security Number
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all Securities held by
us for your account are to be tendered.
<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
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: 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, any one of the
individuals(2)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(2)
4. Custodian account of a The minor(3)
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(4)
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(5)
account
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
GIVE THE EMPLOYER
INDENTIFICATION NUMBER
FOR THIS TYPE OF ACCOUNT: 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)(1)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account held The partnership
in the name of the
business
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 legal trust, estate, or pension trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - A corporation.
- - A financial institution.
- - 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.
- - A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - A real estate investment trust.
- - 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.
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 partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
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.
- - Payments made to a nominee.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, 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 sections 6041, 6041A(a), 6045, and 6050A.
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 the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, 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) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS--If you fail to
properly include any portion of an includible payment for interest, dividends,
or patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) 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.
(4) 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>
THE WALL STREET JOURNAL FRIDAY, MAY 7, 1999 C11
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SECURITIES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE, DATED
MAY 7, 1999, AND THE APPLICABLE LETTERS OF TRANSMITTAL AND IS BEING MADE TO ALL
HOLDERS OF SECURITIES. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE
ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SECURITIES IN ANY JURISDICTION
IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION OR ANY ADMINISTRATIVE OR
JUDICIAL ACTION PURSUANT THERETO. IN ANY JURISDICTION WHERE SECURITIES, BLUE
SKY OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF CFN ACQUISITION
CORPORATION BY GOLDMAN, SACHS & CO. OR ONE OR MORE REGISTERED BROKERS
OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED COMMON
STOCK PURCHASE RIGHTS) AT $10.50 NET PER SHARE
AND
ALL OF THE OUTSTANDING 7%
CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2012 AT $1,275.82 NET PER $1,000
PRINCIPAL AMOUNT
AND
ALL OF THE OUTSTANDING 8% CONVERTIBLE SUBORDINATED
DEBENTURES DUE 2006 AT $1,344.43 NET PER $1,000 PRINCIPAL AMOUNT OF
CHOCK FULL O'NUTS CORPORATION
BY
CFN ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SARA LEE CORPORATION
CFN Acquisition Corporation, a New York corporation ("Purchaser") and a
wholly owned subsidiary of Sara Lee Corporation, a Maryland corporation ("Sara
Lee"), is offering to purchase (i) all of the outstanding shares of Common
Stock, par value $.25 per share, and the associated common stock purchase rights
(the "Rights") issued pursuant to the Amended and Restated Rights Agreement,
dated as of December 30, 1997, by and between Chock Full O'Nuts Corporation, a
New York corporation (the "Company"), and the American Stock Transfer & Trust
Company, as Rights Agent (such shares of common stock and the associated Rights,
collectively, the "Shares") at a price of $10.50 per Share (the "Share Offer
Price"), (ii) all of the outstanding 7% Convertible Senior Subordinated
Debentures due April 1, 2012 (the "7% Debentures"), at a price of $1,275.82 per
$1,000 principal amount of the 7% Debentures (the "7% Debenture Offer Price")
and (iii) all of the outstanding 8% Convertible Subordinated Debentures due
September 15, 2006 (the "8% Debentures" and, together with the 7% Debentures,
the "Convertible Debentures"), at a price of $1,344.43 per $1,000 principal
amount of the 8% Debentures (the "8% Offer Price" and, together with the Share
Offer Price and the 7% Debenture Offer Price, the "Offer Prices" and each an
"Offer Price"), of the Company, the respective Offer Prices being net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 7, 1999 (the "Offer to
Purchase"), and in the applicable Letters of Transmittal (which, together with
any amendments or supplements thereto, collectively constitute the "Offer"). The
Shares and the Convertible Debentures are collectively referred to herein as the
"Securities."
- -------------------------------------------------------------------------------
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, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Securities which, together with the Securities then owned by Purchaser
and Sara Lee, represents 662/3% of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"), (2) the Rights having been redeemed by the
Board of Directors of the Company, or Purchaser being satisfied, in its sole
discretion, that the Rights are invalid or are otherwise inapplicable to the
Offer (the "Rights Condition"), (3) Purchaser being satisfied, in its sole
discretion, that the provisions of Section 912 of the New York Business
Corporation Law, as amended, are inapplicable to the Offer and the Proposed
Merger described in the Offer to Purchase (the "Business Combination
Condition"), (4) the Company not having entered into or effectuated any
agreement or transaction with any person or entity having the effect of
impairing Purchaser's ability to acquire the Company or otherwise diminishing
the expected economic value to Purchaser of the acquisition of the Company (the
"Defensive Action Condition"), and (5) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated prior to the expiration of the Offer (the "HSR Condition").
The Offer is also subject to other terms and conditions set forth in the Offer
to Purchase.
<PAGE>
The purpose of the Offer and the Proposed Merger is to enable Sara Lee
to acquire control of, and ultimately the entire equity interest in, the
Company. The Offer, as the first step in the acquisition of the Company, is
intended to facilitate the acquisition of all of the outstanding Shares not
owned by Sara Lee or Purchaser.
Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Securities, by giving oral or written notice of such extension to Harris
Trust Company of New York (the "Depositary") and (ii) subject to the applicable
rules or regulations of the Securities and Exchange Commission, to amend the
Offer in any respect (including, without limitation, by decreasing or increasing
the Offer Prices and/or by decreasing the number of Securities being sought in
the Offer) by giving oral or written notice of such amendment to the Depositary.
During any such extension, all Securities previously tendered and not withdrawn
will remain subject to the Offer and subject to the right of a tendering
securityholder to withdraw such securityholder's Securities. Purchaser also
expressly reserves the right, in its sole discretion, at any time or from time
to time, (i) to delay acceptance for payment of any Securities, (ii) to
terminate the Offer whether or not any Securities have theretofore been accepted
for payment if any condition referred to in Section 14 of the Offer to Purchase
has not been satisfied or upon the occurrence of any event specified in Section
14, and (iii) to waive any condition or otherwise amend the Offer to Purchase in
any respect, in each case, by giving oral or written notice of such termination,
waiver or amendment to the Depositary and, other than in the case of any such
waiver, by making a public announcement thereof. Any such extension, delay,
termination or amendment will be followed as promptly as practicable by a public
announcement thereof, and such announcement in the case of an extension will be
made no later than 9:00 a.m., New York City time, on the next business day after
the previously scheduled date on which the Offer was to expire.
Tendering securityholders of record who tender Securities directly will
not be obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the applicable Letter of Transmittal, stock or other transfer
taxes on the purchase of Securities by Purchaser pursuant to the Offer.
Securityholders who hold their Securities through a bank or broker should check
with such institution as to whether they charge any service fees. Purchaser will
pay all fees and expenses of the Depositary, Goldman, Sachs & Co., which is
acting as Dealer Manager for the Offer, and Morrow & Co., Inc., which is acting
as the Information Agent for the Offer, incurred in connection with the Offer
and in accordance with the terms of the agreements entered into between
Purchaser and/or Sara Lee and each such person.
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, Securities properly tendered to Purchaser
and not withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Securities. Upon the
terms and subject to the conditions of the Offer, payment for Securities
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering securityholders for the purpose of receiving payment from Purchaser
and transmitting payment to validly tendering securityholders. In all cases,
payment for Securities accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates for such
Securities ("Certificates") or a confirmation of a book-entry transfer of such
Securities into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase), (ii) the applicable Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the applicable Letter of Transmittal. The applicable Offer Price
paid to any securityholder pursuant to the Offer will be the highest Offer Price
paid to any other holder of the same Securities pursuant to the Offer. Under no
circumstances will interest be paid on the Offer Prices to be paid by Purchaser
for such Securities, regardless of any extension of the Offer or any delay in
making such payment.
If, for any reason whatsoever, acceptance for payment of any Securities
tendered pursuant to the Offer is delayed, or if Purchaser is unable to accept
for payment or pay for Securities tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights set forth in the Offer to Purchase, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered
Securities, and such Securities may not be withdrawn except to the extent that
the tendering securityholder is entitled to and duly exercises withdrawal rights
as described in Section 4 of the Offer to Purchase. Any such delay will be an
extension of the Offer to the extent required by law.
If certain events occur, Purchaser will not be required to accept for
payment or pay for any Securities tendered pursuant to the Offer. If any
tendered Securities are not purchased pursuant to the Offer for any reason or
are not paid for because of invalid tender, or if Certificates are submitted
representing more Securities than are tendered, Certificates representing
unpurchased or untendered Securities will be returned to the tendering
securityholder (or, in the case of Securities delivered by book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, such Securities
will be credited to an account maintained within such Book-Entry Transfer
Facility), as soon as practicable following the expiration, termination or
withdrawal of the Offer.
Except as otherwise provided below, tenders of Securities made pursuant
to the Offer are irrevocable. Securities tendered pursuant to the Offer may be
withdrawn at any time prior to 12:00 Midnight, New York City time, on Friday,
June 4, 1999 and, unless theretofore accepted for payment and paid for by
purchaser, pursuant to the Offer, may also be withdrawn at any time after July
5, 1999, or such later time as may apply if the Offer is extended. For a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth in the Offer to Purchase and must specify the name of the
person having tendered the Securities to be withdrawn, the number of Securities
to be withdrawn and the name of the registered holder of the Securities to be
withdrawn, if different from the name of the person who tendered the Securities.
If Certificates for Securities have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Certificates, the
serial numbers shown on such Certificates must be submitted to the Depositary
and, unless such Securities have been tendered by an Eligible Institution (as
defined in the Offer to Purchase), the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution. If Securities have been delivered
pursuant to the procedures for book-entry transfer set forth in Section 3 of the
Offer to Purchase, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Securities and otherwise comply with the Book-Entry Transfer
Facility's procedures. Withdrawals of tenders of Securities may not be
rescinded, and any Securities properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Securities may be
retendered by again following one of the procedures described in Section 3 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is contained in the Offer to Purchase and is
incorporated herein by reference.
Requests are being made to the Company pursuant to Rule 14d-5 under the
Exchange Act for use of the Company's securityholder lists and security position
listings for purposes of disseminating the Offer to holders of Securities. Upon
compliance by the Company with such request, the Offer to Purchase and the
applicable Letter of Transmittal and, if required, other relevant materials will
be mailed to record holders of Securities and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the securityholder lists, or who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Securities.
The Offer to Purchase and the applicable Letters of Transmittal contain
important information and should be read in their entirety before any decision
is made with respect to the Offer.
Questions and requests for assistance may be directed to the
Information Agent or to the Dealer Manager at their respective addresses and
telephone numbers set forth below. Copies of the Offer to Purchase, Letters of
Transmittal and other tender offer materials may be obtained at Purchaser's
expense from the Information Agent or from brokers, dealers, commercial banks
and trust companies. Purchaser will not pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Dealer Manager) for soliciting tenders of Securities pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and Brokerage Firms Call:
(800) 662-5200
Shareholders Please Call:
(800) 566-9061
THE DEALER MANAGER FOR THE OFFER IS:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
May 7, 1999
<PAGE>
Media: Jeffrey Smith, 312.558.8727
Analysts: Janet Bergman, 312.558.8651
SARA LEE CORPORATION TO COMMENCE TENDER OFFER
AT $10.50 PER SHARE FOR CHOCK FULL O'NUTS CORPORATION
CHICAGO (May 4, 1999) - Sara Lee Corporation today announced that it will
commence a cash tender offer to purchase all outstanding shares of Chock full
o'Nuts Corporation for $10.50 per share, all of its outstanding 7%
convertible senior subordinated debentures due 2012 for $1275.82 per $1,000
bond and all of its 8% convertible senior subordinated debentures due 2006
for $1,344.43 per $1,000 bond.
"Because the board of directors has rejected our offers, we now invite the
securityholders of Chock full o'Nuts to tender their securities and to
express their views on the merits of our offer to their board of directors,"
said C. Steven McMillan, president and chief operating officer of Sara Lee
Corporation. "We believe that securityholders will find our offer
attractive, particularly in light of the company's historical operating and
stock price performance."
McMillan added, "Given the company's takeover defenses, the board of
directors of Chock full o'Nuts is standing in the way of its stockholders
receiving $10.50 per share in cash. We continue to be hopeful that the
directors of Chock full o'Nuts will ultimately recognize the benefits of a
transaction on the terms that we have proposed."
The $10.50 tender offer price represents a 65% premium to Chock full o'Nuts'
closing stock price of $6.38 on April 22, 1999, the last trading day prior to
Sara Lee's Schedule 13D filing with the Securities and Exchange Commission.
As of that date, $10.50 represented a 67% premium to the stock's one-year
average price, a 71% premium to its three-year average price, and a 74%
premium to its five-year average price.
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<PAGE>
Page 2
Sara Lee's $10.50 offer price represents a multiple of 27.6x Chock full
o'Nuts latest twelve months reported diluted earnings per share and a
multiple of 18.8x the highest earnings per share reported by the company over
the last five fiscal years.
The tender offer is subject to certain conditions, including the tender of
shares and bonds resulting in Sara Lee holding securities representing 2/3 of
the shares outstanding on a fully diluted basis, the board of Chock full
o'Nuts having redeemed or otherwise rendered its stockholder rights plan
inapplicable, the board having rendered the New York business combination
statute inapplicable to the offer and expiration of the anti-trust waiting
period. The complete terms and conditions of the offer will be set forth in
Sara Lee's Offer to Purchase that will be mailed to Chock full o'Nuts
securityholders beginning next week.
Sara Lee previously disclosed its interest in acquiring Chock full o'Nuts
Corporation in its filing on Schedule 13D with the Securities and Exchange
Commission on April 22, 1999. At that time, Sara Lee indicated that it had
purchased Chock full o'Nuts securities equivalent to 598,328 shares of common
stock. Sara Lee also disclosed that it has made proposals to the board of
directors of Chock full o'Nuts to acquire the company that have been rejected.
Pending the successful completion of this transaction, Chock full o'Nuts
would be managed by Sara Lee's Superior Coffee division. In the U.S.,
Superior Coffee is the nation's leading food service coffee supplier,
servicing independent restaurants and regional and national chains, hotels
hospitals and universities. Superior markets its products under the SUPERIOR,
DOUWE EGBERTS, CONTINENTAL, METROPOLITAN, JAVA COAST, MCGARVEY and PARADISE
TROPICAL TEA brand names. Sara Lee Corporation's Coffee and Tea line of
business is managed by Sara Lee/DE, the Netherlands-based subsidiary of Sara
Lee that also oversees the company's Household and Body Care line of business.
Sara Lee Corporation is a global consumer packaged goods company with more
than $20 million in annual revenues. Its leading brands include SARA LEE,
DOUWE EGBERTS, HILLSHIRE FARM, HANES, COACH, and PLAYTEX.
# # #
<PAGE>
Media: Jeffrey Smith, 312.558.8727
Analysts: Janet Bergman, 312.558.8651
SARA LEE CORPORATION COMMENCES TENDER OFFER
AT $10.50 PER SHARE FOR CHOCK FULL O'NUTS CORPORATION
CHICAGO (May 7, 1999) - Sara Lee Corporation today announced that it has
commenced its previously announced cash tender offer to purchase all
outstanding shares of Chock full o'Nuts Corporation for $10.50 per share, all
of its outstanding 7% convertible senior subordinated debentures due 2012 for
$1275.82 per $1,000 bond and all of its 8% convertible subordinated
debentures due 2006 for $1,344.43 per $1,000 bond.
The tender offer is subject to certain conditions, including the tender of
shares and bonds resulting in Sara Lee holding securities representing
2/3 of the shares outstanding on a fully diluted basis, the board of
Chock full o'Nuts having redeemed or otherwise rendered its stockholder rights
plan inapplicable, the board having rendered the New York business combination
statute inapplicable to the offer and expiration of the anti-trust waiting
period. The complete terms and conditions of the offer are set forth in
Sara Lee's Offer to Purchase, which was filed with the Securities and
Exchange Commission today as an exhibit to Sara Lee's Schedule 14D-1 and will
be mailed to Chock full o'Nuts securityholders beginning next week.
Sara Lee Corporation is a global consumer packaged goods company with more
than $20 billion in annual revenues. Its leading brands include SARA LEE,
DOUWE EGBERTS, HILLSHIRE FARM, HANES, COACH, AND PLAYTEX.
# # #
