<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
BRC HOLDINGS, INC.
(Name of Subject Company)
------------------------
ACS ACQUISITION CORPORATION
AFFILIATED COMPUTER SERVICES, INC.
(Bidders)
------------------------
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
------------------------
227174-10-9
(CUSIP Number of Class of Securities)
DAVID W. BLACK
ACS ACQUISITION CORPORATION
2828 NORTH HASKELL
DALLAS, TEXAS 75204
(214) 841-6152
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
DAVID G. LUTHER, JR., ESQ.
HUGHES & LUCE, L.L.P.
1717 MAIN STREET
SUITE 2800
DALLAS, TEXAS 75201
(214) 939-5500
------------------------
CALCULATION OF FILING FEE:
<TABLE>
<CAPTION>
TRANSACTION VALUATION(1) AMOUNT OF FILING FEE(2)
<S> <C>
$165,380,522.00 $33,076.11
</TABLE>
(1) Calculated by multiplying $19.00, the per share tender offer price, by
8,704,238 shares of Common Stock.
(2) 1/50 of 1% of Transaction Value.
/ / 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>
Amount Previously Paid: None. Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
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Page 1 of 8 Pages
<PAGE>
14D-1
CUSIP No. 227174-10-9 Page 2 of 8 Pages
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1 NAME OF REPORTING PERSONS: ACS ACQUISITION CORPORATION
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 75-2786693
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
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4 SOURCES OF FUNDS
AF and SC
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5 CHECK 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:
DELAWARE
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
NOT APPLICABLE
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8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
/ /
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
NOT APPLICABLE
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10 TYPE OF REPORTING PERSON:
CO
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<PAGE>
14D-1
CUSIP NO. 227174-10-9 Page 3 of 8 Pages
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1 NAME OF REPORTING PERSONS: AFFILIATED COMPUTER SERVICES, INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 51-0310342
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS
BK, WC and SC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e)
or 2(f)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
DELAWARE
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
NOT APPLICABLE
- --------------------------------------------------------------------------------
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
/ /
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
NOT APPLICABLE
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10 TYPE OF REPORTING PERSON:
HC
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<PAGE>
Page 4 of 8 Pages
This Tender Offer Statement on Schedule 14D-1 (the "Statement") relates to a
tender offer by ACS Acquisition Corporation, a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Affiliated Computer Services,
Inc., a Delaware corporation ("Parent"), to purchase 8,704,238 shares of common
stock, par value $.10 per share of BRC Holdings, Inc., a Delaware corporation
(the "Company"), at a purchase price of $19.00 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated October 23, 1998 (the "Offer to Purchase"), and
the related Letter of Transmittal, copies of which are filed as Exhibits 1 and 2
hereto, respectively, and which are incorporated herein by reference. The
outstanding shares of the Company's common stock, par value $.10 per share, are
referred to herein collectively as "Shares" and individually as "Share."
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is BRC Holdings, Inc., which has its
principal executive offices at 1111 West Mockingbird Lane, Suite 1400, Dallas,
Texas 75247.
(b) This Statement relates to the offer by the Purchaser to purchase
8,704,238 Shares (approximately 51% of the outstanding Shares on a fully diluted
basis), at a price of $19.00 per Share, net to the seller in cash, without
interest (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
Offer). Information concerning the number of outstanding Shares is set forth in
Introduction of the Offer to Purchase and is incorporated herein by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of the Shares in such principal market
for each quarterly period during the past two years is set forth in Section 6
(Price Range of the Shares; Dividends on the Shares) of the Offer to Purchase
and is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is being filed by the Purchaser and Parent.
Information concerning the principal business and the address of the principal
offices of the Purchaser and Parent is set forth in Section 9 (Certain
Information Concerning the Purchaser and Parent) of the Offer to Purchase and is
incorporated herein by reference. The names, business addresses, present
principal occupations or employment, material occupations, positions, offices or
employment during the last five years and citizenship of the directors and
executive officers of the Purchaser and Parent are set forth in Schedule I of
the Offer to Purchase and are incorporated herein by reference.
(e) and (f) The information set forth in Section 9 (Certain Information
Concerning the Purchaser and Parent) and Section 15 (Certain Legal Matters;
Regulatory Approvals) of the Offer to Purchase is incorporated herein by
reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction and Section 11
(Contacts with the Company; Background of the Offer), Section 12 (The Merger
Agreement and The Stock Tender Agreement) and Section 9 (Certain Information
Concerning the Purchaser and Parent) of the Offer to Purchase is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in the Introduction and Section 10
(Source and Amount of Funds) of the Offer to Purchase is incorporated herein by
reference.
<PAGE>
Page 5 of 8 Pages
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in Section 12 (Purpose of the Offer; The
Merger Agreement and The Stock Tender Agreement) of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 7 (Effect of the Offer on
the Market for the Shares; Stock Exchange Listing; Registration Under the
Exchange Act) of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction, Section 9
(Certain Information Concerning the Purchaser and Parent) and Section 12
(Purpose of the Offer; The Merger Agreement and The Stock Tender Agreement) of
the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Introduction and in Section 9 (Certain
Information Concerning the Purchaser and Parent), Section 11 (Contacts with the
Company; Background of the Offer) and Section 12 (Purpose of the Offer; The
Merger Agreement and The Stock Tender Agreement) of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and 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 the
Purchaser and Parent) of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 12 (Purpose of the Offer; The
Merger Agreement and The Stock Tender Agreement) of the Offer to Purchase is
incorporated herein by reference.
(b) and (c) The information set forth in Section 15 (Certain Legal Matters
and Regulatory Approvals) 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 Shares; Stock Exchange Listing and Registration Under the
Exchange Act) and Section 15 (Certain Legal Matters and Regulatory Approvals) of
the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase (Exhibit 1 hereto),
the Letter of Transmittal (Exhibit 2 hereto), the Agreement and Plan of Merger
dated as of October 19, 1998 among the Purchaser, Parent and the Company
(Exhibit (c)(1) hereto), the Stock Tender Agreement dated as of October 19, 1998
among Parent, and the Purchaser, on one side, and Kathryn A. Esping,
individually and as Independent Executor of the Estate of P.E. Esping, and as
Director of the Esping Family Foundation, and Paul Stoffel, on the other side
(Exhibit 11 hereto), and the Confidential Disclosure Agreement dated as of June
15, 1998 between Parent and the Company (Exhibit 12 hereto) is incorporated
herein by reference.
<PAGE>
Page 6 of 8 Pages
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a) Exhibit 1 Offer to Purchase.
Exhibit 2 Letter of Transmittal.
Exhibit 3 Notice of Guaranteed Delivery.
Exhibit 4 Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
Exhibit 5 Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
Exhibit 6 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Exhibit 7 Form of Summary Advertisement, dated October 23, 1998.
Exhibit 8 Text of Press Release, dated October 19, 1998, issued by Parent.
Exhibit 9 Text of Press Release, dated October 19, 1998, issued by the Company.
(c) Exhibit Agreement and Plan of Merger, dated as of October 19, 1998, among the
10 Purchaser, Parent and the Company. (Schedules to the Merger Agreement
have been omitted from this filing. The content of such Schedules are
apparent from the references to them in the Merger Agreement, and Parent
and Purchaser commit to provide copies of the Schedules to the Securities
and Exchange Commission upon request.)
Exhibit Stock Tender Agreement, dated as of October 19, 1998, among Parent, the
11 Purchaser, Kathryn A. Esping, individually and as Independent Executor of
the Estate of P. E. Esping and as Director of the Esping Family
Foundation, and Paul Stoffel.
Exhibit Confidential Disclosure Agreement, dated as of June 15, 1998, between
12 Parent and the Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
<PAGE>
Page 7 of 8 Pages
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: October 23, 1998
<TABLE>
<S> <C> <C>
ACS ACQUISITION CORPORATION
By: /s/ MARK A. KING
------------------------------------------
Mark A. King
VICE PRESIDENT
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ MARK A. KING
------------------------------------------
Mark A. King
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
</TABLE>
<PAGE>
Page 8 of 8 Pages
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- --------- --------------------------------------------------------------------------------------------------------
<S> <C>
1 Offer to Purchase.
2 Letter of Transmittal.
3 Notice of Guaranteed Delivery.
4 Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
5 Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.
6 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
7 Form of Summary Advertisement, dated October 23, 1998.
8 Text of Press Release, dated October 19, 1998, issued by Parent.
9 Text of Press Release, dated October 19, 1998, issued by the Company.
10 Agreement and Plan of Merger, dated as of October 19, 1998, among the Purchaser, Parent and the Company.
11 Stock Tender Agreement, dated as of October 19, 1998, among Parent, the Purchaser, Kathryn A. Esping,
individually and as Independent Executor of the Estate of P. E. Esping and as Director of the Esping
Family Foundation, and Paul Stoffel.
12 Confidential Disclosure Agreement, dated as of June 15, 1998, between Parent and the Company.
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
8,704,238 SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
AT
$19.00 NET PER SHARE
BY
ACS ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
AFFILIATED COMPUTER SERVICES, INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 20, 1998, UNLESS THE
OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 8,704,238 SHARES
(APPROXIMATELY 51% OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS) AND (II)
THE EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS.
THE BOARD OF DIRECTORS OF BRC HOLDINGS, INC. (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN AND DETERMINED THAT THE
OFFER AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock, par value $.10 per share of the Company ("Shares")
should either (i) complete and sign the Letter of Transmittal or a facsimile
copy thereof in accordance with the instructions in the Letter of Transmittal,
have such stockholder's signature thereon guaranteed if required by Instruction
1 to the Letter of Transmittal, mail or deliver the Letter of Transmittal or
such facsimile and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the Letter
of Transmittal or facsimile or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in Section 2 or (ii) request such stockholder's
broker, dealer, bank, trust company or other nominee to effect the transaction
for such stockholder. A stockholder having Shares registered in the name of a
broker, dealer, bank, trust company or other nominee must contact such broker,
dealer, bank, trust company or other nominee if such stockholder desires to
tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedure for book-entry transfer, or who cannot deliver all required
documents to the Depositary prior to the expiration of the Offer, may tender
such Shares by following the procedure for guaranteed delivery set forth in
Section 2, including the Notice of Guaranteed Delivery.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent at the address and telephone number set
forth on the back cover of this Offer to Purchase.
October 23, 1998
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
Introduction................................................................................................ 1
1. Terms of the Offer............................................................................... 2
2. Procedure for Tendering Shares................................................................... 4
3. Withdrawal Rights................................................................................ 7
4. Acceptance for Payment and Payment for Shares.................................................... 7
5. Certain United States Federal Income Tax Consequences............................................ 8
6. Price Range of the Shares; Dividends on the Shares............................................... 9
7. Effect of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the
Exchange Act................................................................................... 10
8. Certain Information Concerning the Company....................................................... 11
9. Certain Information Concerning the Purchaser and Parent.......................................... 13
10. Source and Amount of Funds....................................................................... 15
11. Contacts with the Company; Background of the Offer............................................... 15
12. Purpose of the Offer; the Merger Agreement; the Stock Tender Agreement........................... 17
13. Dividends and Distributions...................................................................... 25
14. Certain Conditions of the Offer.................................................................. 25
15. Certain Legal Matters; Regulatory Matters........................................................ 27
16. Fees and Expenses................................................................................ 29
17. Miscellaneous.................................................................................... 30
Schedule I Directors and Executive Officers of Parent and the Purchaser...................................... 31
</TABLE>
i
<PAGE>
To the Holders of Common Stock of BRC Holdings, Inc.:
INTRODUCTION
ACS Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Affiliated Computer Services, Inc., a Delaware
corporation ("Parent"), hereby offers to purchase 8,704,238 shares of common
stock, par value $.10 per share, of BRC Holdings, Inc., a Delaware corporation
(the "Company"), at $19.00 per share (the "Offer Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). The outstanding shares of the Company's common stock,
par value $.10 per share, are referred to herein collectively as "Shares" and
individually as a "Share."
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of tendered Shares pursuant to the
Offer. The Purchaser will pay all fees and expenses of First City Transfer
Company, which is acting as the Depositary (the "Depositary"), and D.F. King &
Co., Inc. which is acting as Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER (AS DEFINED BELOW) AND DETERMINED THAT THE OFFER AND
THE MERGER, TAKEN TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Donaldson, Lufkin & Jenrette Securities Corporation, the Company's financial
advisor ("DLJ"), has delivered to the Board of Directors of the Company its
written opinion to the effect that, as of the date of such opinion, the $19.00
in cash to be offered to the holders of the Shares in each of the Offer and the
Merger is fair to such holders, from a financial point of view. Such opinion,
which sets forth the factors considered and the assumptions made by DLJ, is set
forth in full as an exhibit to the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to
stockholders of the Company herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 8,704,238 SHARES
(THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTIONS 1 AND 14 HEREOF.
If more than 8,704,238 Shares are validly tendered prior to the Expiration
Date and not withdrawn, the Purchaser will, upon the terms and subject to the
conditions of the Offer, accept such tendered Shares for payment on a pro rata
basis. See Section 1.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of October 19, 1998 (the "Merger Agreement"), among Parent, the Purchaser and
the Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company, with the Company surviving the merger (as such, the
"Surviving Corporation") as a wholly owned subsidiary of Parent (the "Merger").
In the Merger, each outstanding Share (other than Shares owned by (i) Parent,
the Purchaser, the Company, or any direct or indirect subsidiary of Parent or
the Company or (ii) stockholders, if any, who are entitled to and who properly
exercise dissenters' rights under Delaware law) will be converted into the right
to receive the per Share price paid in the Offer in cash, without interest (the
"Merger Consideration"). See Section 12.
In connection with the execution of the Merger Agreement, Parent and
Purchaser entered into a Stock Tender Agreement, dated as of October 19, 1998
(the "Stock Tender Agreement"), with Kathryn A.
1
<PAGE>
Esping, individually and as Independent Executor of the Estate of P.E. Esping
and as Director of the Esping Family Foundation, and with Paul Stoffel
(collectively, the "Stock Tender Parties"). The Stock Tender Parties
collectively own 2,968,350 Shares (not including 324,000 Shares issuable under
presently exercisable options) or approximately 17.4% of the outstanding Shares
on a fully diluted basis as of September 30, 1998. Pursuant to the Stock Tender
Agreement, the Stock Tender Parties have agreed, so long as Parent, the
Purchaser or the Company has not terminated the Merger Agreement in accordance
with its terms, to validly tender pursuant to the Offer, and not withdraw, all
Shares which are owned of record or beneficially by them prior to the Expiration
Date (as defined herein). The Stock Tender Agreement is more fully described in
Section 12.
The Merger Agreement provides that effective upon purchase and payment for
the tendered Shares by the Purchaser, the Purchaser shall be entitled to
designate the number of directors, rounded up to the next whole number, on the
Company's Board of Directors that equals the product of (i) the total number of
directors on the Board of Directors (giving effect to the election of any
additional directors pursuant to this paragraph) and (ii) the percentage that
the number of Shares owned by the Purchaser (including tendered Shares accepted
for payment) bears to the total number of Shares outstanding on a fully diluted
basis, and the Company shall take all action necessary to cause the Purchaser's
designees to be elected or appointed to the Board of Directors, including,
without limitation, increasing the number of directors, and seeking and
accepting resignations of its incumbent directors. See Section 12.
The Company has represented to the Purchaser and Parent that, as of
September 30, 1998, there were 13,738,144 Shares issued and outstanding and
3,328,989 Shares reserved for issuance upon the exercise of outstanding stock
options. If the Minimum Condition is satisfied and the Purchaser accepts for
payment Shares tendered pursuant to the Offer, the Purchaser will be able to
elect a majority of the members of the Company's Board of Directors and to
effect the Merger without the affirmative vote of any other stockholders of the
Company.
The Merger Agreement and the Stock Tender Agreement are more fully described
in Section 12. Certain federal income tax consequences of the sale of Shares
pursuant to the Offer and the exchange of Shares for the Merger Consideration
pursuant to the Merger are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for 8,704,238 Shares validly tendered prior to
the Expiration Date and not theretofore withdrawn in accordance with Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday,
November 20, 1998, unless and until the Purchaser shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire.
The Offer is subject to certain conditions set forth in Section 14,
including satisfaction of the Minimum Condition and the expiration or
termination of the waiting period applicable to the Purchaser's acquisition of
tendered Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). See Section 14.
In the event that more than 8,704,238 Shares (approximately 51% of the
outstanding Shares on a fully diluted basis) are validly tendered prior to the
Expiration Date and not withdrawn, the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept such Shares for payment on a pro
rata basis, with adjustments to avoid purchase of fractional Shares, based upon
the number of Shares validly tendered prior to the Expiration Date and not
withdrawn.
2
<PAGE>
Because of the difficulty of determining precisely the number of Shares
validly tendered and not withdrawn, if proration is required, the Purchaser
would not expect to announce the final results of proration until approximately
three Nasdaq National Market trading days after the Expiration Date. The
Purchaser will announce the preliminary results of proration by press release as
promptly as practicable after the Expiration Date. Holders of Shares may obtain
such preliminary information from the Depositary or the Information Agent, and
also may be able to obtain such preliminary information from their brokers.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission ("Commission") and the Merger Agreement, the Purchaser
reserves the right to waive any other condition to the Offer in whole or in part
in its sole discretion. In addition, subject to the applicable rules and
regulations of the Commission, the Purchaser expressly reserves the right at any
time and from time to time to modify or amend the terms of the Offer; provided
that under the Merger Agreement the Purchaser has agreed that it will not,
without the prior written consent of the Company, (1) decrease or change the
form of consideration payable in the Offer, (2) decrease the number of Shares
sought pursuant to the Offer, (3) impose additional conditions to the Offer, or
(4) change the conditions of the Offer (provided that Parent or the Purchaser in
its sole discretion may waive any conditions to the Offer).
In the Merger Agreement, the Purchaser has agreed, subject to the conditions
in Section 14 and its rights under the Offer, to accept for payment tendered
Shares as soon as practicable after the latest of (1) the date on which the
waiting period under the HSR Act has expired or been terminated, (2) the date on
which the conditions in Section 14 are fulfilled and there is no right to
terminate the Offer under Section 14 (subject to Purchaser's rights to extend
the Offer) and (3) the earliest date on which the Offer can expire under federal
law. For a description of the Purchaser's right to extend the period of time
during which the Offer is open, and to amend, delay or terminate the Offer, see
Section 12.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer (other than as required by the Merger Agreement). Any
extension, waiver, amendment or termination will be followed as promptly as
practicable by public announcement. In the case of an extension, Rule 14e-1(d)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that the announcement 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(d) under the
Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Exchange Act, which require that any material change in the
information published, sent or given to stockholders in connection with the
Offer be promptly disseminated to stockholders in a manner reasonably designed
to inform stockholders of such change), and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser will not
have any obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of tendered Shares) is delayed in its
acceptance for payment of or payment for tendered Shares or it is unable to pay
for tendered Shares pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Depositary may retain
tendered Shares on behalf of the Purchaser, and such tendered Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described in Section 3. However, the ability of the Purchaser to delay
the payment for tendered Shares that the Purchaser has accepted for payment is
limited by Rule 14e-1 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 such
bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including a waiver of the Minimum Condition), the Purchaser will disseminate
additional tender offer 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 an offer
3
<PAGE>
must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, a minimum period of 10 business days is
generally required to allow for adequate dissemination to stockholders.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, either (1) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or an
Agent's Message (as defined below) in connection with a book-entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase and either certificates for tendered Shares must be
received by the Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedure for book-entry transfer set forth below (and
a Book-Entry Confirmation (as defined below) received by the Depositary), in
each case prior to the Expiration Date, or (2) the tendering stockholder must
comply with the guaranteed delivery procedure set forth below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Shares may be effected through book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, 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 stockholder must comply with the guaranteed delivery procedure
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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
4
<PAGE>
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares, which are
subject to such Book-Entry Confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (1) the Letter of Transmittal is signed by the registered holder
of Shares (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) 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 (2) such Shares are tendered for the account of a firm that is
a member of the Medallion Signature Guaranty Program or by any other "eligible
guaranty institution" as such term is defined in Rule 17Ad-15 under the Exchange
Act (each of the foregoing being referred to as an "Eligible Institution"). In
all other cases, all signatures on the Letters of Transmittal must be guaranteed
by an Eligible Institution. See Instructions 1 and 5 to the Letter of
Transmittal. If the certificates for Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Shares not tendered or not accepted for payment are
to be issued to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instruction 5
to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(1) such tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser is received by the
Depositary, as provided below, prior to the Expiration Date; and
(3) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal, are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the New York Stock Exchange,
Inc. (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for tendered Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (1) certificates for (or a timely Book-Entry
Confirmation with respect to) such tendered Shares, (2) a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or Agent's Message in connection with a book-entry
transfer, and (3) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for tendered Shares or Book-Entry Confirmations are
actually received
5
<PAGE>
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE TENDERED SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser as
such stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after October 19, 1998. All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such stockholder as provided herein. Upon such
acceptance for payment, all prior powers of attorney and proxies given by such
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney and
proxies may be given (and, if given, will not be deemed effective). The
designees of the Purchaser will thereby be empowered to exercise voting and
other rights with respect to such Shares or other securities or rights in
respect of any annual, special or adjourned meeting of the Company's
stockholders, or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such tendered Shares, the Purchaser must be able to exercise voting and other
rights with respect to such tendered Shares and other securities or rights,
including voting at any meeting of stockholders then scheduled.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in any tender with respect to any particular Shares,
whether or not similar defects or irregularities are waived in the case of other
Shares. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or waived. None of
the Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must provide the Depositary with such stockholder's correct
taxpayer identification number ("TIN") on a Substitute Form W-9 and certify
under penalties of perjury that such TIN is correct and that such stockholder is
not subject to backup withholding. Certain stockholders (including, among
others, all corporations and certain foreign individuals and entities) are not
subject to backup withholding. If a stockholder does not provide its correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service ("IRS") may impose a penalty on such stockholder and payment of cash to
such stockholder pursuant to the Offer may be subject to backup withholding of
31%. All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Purchaser and the
6
<PAGE>
Depositary). Non-corporate foreign stockholders 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 Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. Withdrawals of tenders of Shares may not be rescinded, and
any Shares properly withdrawn will thereafter be deemed not validly tendered for
any purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 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 the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent, or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and will pay for 8,704,238
Shares validly tendered prior to the Expiration Date and not properly withdrawn
in accordance with Section 3 as soon as practicable after the later of (1) the
Expiration Date and (2) the satisfaction or waiver of the conditions set forth
in Section 14. For a description of the Purchaser's right to terminate the Offer
and not accept for payment or pay for tendered Shares or to delay acceptance for
payment or payment for tendered Shares, see Section 14.
In all cases, payment for tendered Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (1)
certificates for such tendered Shares (or timely Book-Entry Confirmation of a
transfer of such tendered Shares as described in Section 2), (2) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and (3) any other documents required by the Letter of
Transmittal. The per Share consideration paid to any stockholder pursuant to the
Offer will be the highest per Share consideration paid to any other stockholder
pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such tendered Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE
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<PAGE>
TENDERED SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
tendered Shares or is unable to accept for payment or pay for tendered Shares
pursuant to the Offer for any reason, then, without prejudice to the Purchaser's
rights under the Offer (but subject to compliance with Rule 14e-1(c) under the
Exchange Act, which requires that a tender offeror pay the consideration offered
or return the tendered securities promptly after the termination or withdrawal
of a tender offer), the Depositary may, nevertheless, on behalf of the
Purchaser, retain tendered Shares, any such Shares may not be withdrawn except
to the extent tendering stockholders are entitled to exercise, and duly
exercise, withdrawal rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender, proration or otherwise, certificates for any such Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedure set forth
in Section 2, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable after the expiration
or termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer, but any such transfer or assignment will not relieve the Purchaser of
its obligations under the Offer and will in no way prejudice the rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
Sales of Shares pursuant to the Offer (and the receipt of the right to
receive cash by stockholders of the Company pursuant to the Merger) will be
taxable transactions for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be taxable transactions
under applicable state, local, foreign and other tax laws. For federal income
tax purposes, a tendering stockholder will generally recognize gain or loss
equal to the difference between the amount of cash received by the stockholder
pursuant to the Offer (or to be received pursuant to the Merger) and the
aggregate tax basis in the Shares tendered by the stockholder and purchased
pursuant to the Offer (or canceled pursuant to the Merger). Gain or loss will be
calculated separately for each block of Shares tendered and purchased pursuant
to the Offer (or canceled pursuant to the Merger).
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
stockholder's holding period for the Shares exceeds one year. Under present law,
long-term capital gains recognized by a tendering individual stockholder will
generally be taxed at a maximum federal marginal tax rate of 20%.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Shares
may be subject to 31% backup withholding unless the stockholder provides its TIN
and certifies that such number is correct or properly certifies that it is
awaiting a TIN. A stockholder that does not furnish its TIN may be subject to a
penalty imposed by the IRS. Each stockholder should complete and sign the
Substitute From W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional 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
8
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results in an overpayment of tax, a refund can be obtained by the stockholder
upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX
TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A
HOLDER OF SHARES IN LIGHT OF ITS INDIVIDUAL CIRCUMSTANCES. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are listed and traded on The Nasdaq National Market under the
symbol "BRCP." The following table sets forth, for each of the periods
indicated, the high and low last reported sales prices as published in financial
sources. All prices have been adjusted for a one hundred percent stock dividend
paid April 6, 1998 to stockholders of record as of March 20, 1998.
<TABLE>
<CAPTION>
SALES PRICE
------------------
HIGH LOW
------- -------
<S> <C> <C>
1996
First Quarter......................... $19 3/4 $17 3/4
Second Quarter........................ 19 1/2 16 1/2
Third Quarter......................... 18 1/2 14 3/4
Fourth Quarter........................ 26 7/8 17
1997
First Quarter......................... $24 1/4 $16 1/2
Second Quarter........................ 18 1/2 13
Third Quarter......................... 19 3/4 17 1/4
Fourth Quarter........................ 21 7/8 17
1998
First Quarter......................... $21 5/8 $18 1/4
Second Quarter........................ 20 7/8 16 1/4
Third Quarter......................... 20 1/2 14 1/2
Fourth Quarter (through October 22,
1998)............................... 18 17/32 14 1/2
</TABLE>
On October 16, 1998, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the reported closing sale
price of the Shares was $16 1/4 per Share. On October 22, 1998, the last full
day of trading before the commencement of the Offer, the reported closing sale
price of the Shares was $18 7/16 per Share. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has not paid cash dividends on the Shares since its inception
and has no present plans to pay cash dividends on the Shares.
Pursuant to the Merger Agreement, the Company has agreed not to declare, set
aside, make or pay any dividend or distribution on the Shares.
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7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE LISTING;
REGISTRATION UNDER THE EXCHANGE ACT
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of holders
of Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the stockholders other than the Purchaser. The
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Offer Price.
Depending upon the Shares purchased pursuant to the Offer, the Shares may no
longer meet the requirements of The Nasdaq National Market for continued listing
and may, therefore, be delisted from such exchange, which requires that an
issuer have at least 200,000 publicly held shares with a market value of $1
million held by at least 400 stockholders (or 300 stockholders holding round
lots) and having net tangible assets of at least $1 million, $2 million or $4
million depending on profitability levels during the issuer's four most recent
fiscal years. If these standards are not met, the Shares might nevertheless
continue to be included in the National Securities Dealers, Inc. (the "NASD")
Nasdaq National Market with quotations published in The Nasdaq "additional list"
or in one of the "local lists." However, if the number of holders of Shares
falls below 300, or if the number of publicly held Shares falls below 100,000,
or if there are not at least two market makers for Shares, NASD rules provide
that the Shares would no longer be "qualified" for Nasdaq Stock Market
reporting, and The Nasdaq Stock Market would cease to provide any quotations.
Shares held directly or indirectly by an officer or director of the Company, or
by any beneficial owner of more than 10% of the Shares, ordinarily will not be
considered as being publicly held for this purpose. According to the Company, as
of September 30, 1998, there were 13,738,144 Shares outstanding held of record
by 1,814 holders (not including beneficial holders of Shares in street name).
In the event the Shares no longer meet the requirements of the NASD for
inclusion in any tier of The Nasdaq Stock Market, quotations might still be
available from other sources. The extent of the public market for the Shares and
availability of such quotations would depend, however, upon the number of
holders of the Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares. Depending upon factors similar to those
described above regarding listing and market quotations, the Shares might no
longer constitute "margin securities" for the purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as collateral
for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated if the Shares are not listed on a national
securities exchange and there are less than 300 holders of record. Termination
of the registration of the Shares under the Exchange Act would substantially
reduce the information required to be furnished by the Company to holders of
Shares and to the Commission and would make certain of the provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy or information statement in
connection with stockholder action and the related requirement of an annual
report to stockholders and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). If registration of the Shares under the Exchange
Act were terminated, the Shares would no longer be "margin securities" or
eligible for listing on a securities exchange or Nasdaq reporting.
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<PAGE>
It is the current intention of Parent to deregister and delist the Shares
after consummation of the Offer and the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
GENERAL. The Company is a Delaware corporation with its principal executive
offices at 1111 West Mockingbird Lane, Suite 1400, Dallas, Texas 75247.
According to the Company's Form 10-K for the fiscal year ended December 31, 1997
(the "Company Form 10-K"), the Company provides specialized information
technology services primarily to local governments and healthcare institutions
through three wholly owned subsidiaries: Business Records Corporation, Inc.
("BRC"), BRC Health Care, Inc. ("BRC Health Care") and The Pace Group ("The Pace
Group"). Also according to the Company Form 10-K, the Company's products and
services can be classified into four major categories: information systems and
services, government records management, consulting services and millennium
technology services.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information with respect to the Company and its subsidiaries excerpted
or derived from the information contained in the Company Form 10-K, as well as
the Company's Quarterly Report on Form 10-Q for the six months ended June 30,
1998, which are incorporated by reference herein. More comprehensive financial
information is included in such reports and other documents filed by the Company
with the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "Available Information."
11
<PAGE>
BRC HOLDINGS, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------------
1998 1997 1997 1996 1995
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT:
Revenues............................................. $ 59,369 $ 53,134 $ 107,487 $ 100,248 $ 103,567
Income (loss) from continuing operations............. 5,643 4,632 2,566 (5,612) 11,032
Discontinued operations, net:
Income (loss) from operations...................... 984 (781) (655) 4,246 (337)
Gain on sale....................................... -- -- 18,339 -- --
Net Income (loss)................................ $ 6,627 $ 3,851 $ 20,250 $ (1,366) $ 10,695
Basic EPS:
Income (loss) before discontinued
operations....................................... $ 0.40 $ 0.33 $ 0.37 $ (0.85) $ 1.74
Income (loss) from discontinued
operations....................................... 0.07 (0.06) 2.53(a) 0.64 (0.05)
Diluted EPS:
Income (loss) before discontinued
operations....................................... $ 0.39 $ 0.32 $ 0.36 $ (0.85) $ 1.68
Income (loss) from discontinued
operations....................................... 0.07 (0.05) 2.49(a) 0.64 (0.05)
</TABLE>
- ------------------------
(a) Includes the gain on sale of the election business of $2.62 (Basic EPS) and
$2.58 (Diluted EPS).
<TABLE>
<CAPTION>
AT JUNE
30, AT DECEMBER 31,
---------- ----------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET (AT END OF PERIOD):
Working capital............................................................ $ 83,192 $ 34,851 $ 60,361
Total assets............................................................... 204,851 202,110 $ 175,240
Total long-term debt....................................................... 39 144 14
Total shareholders' equity................................................. 179,131 167,428 154,196
</TABLE>
AVAILABLE INFORMATION. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning the
Company's directors and officers, their remuneration, the principal holders of
the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission located at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located in the Northwestern Atrium Center, 500 West Madison Street
(Suite 1400), Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor,
New York, New York 10048. Copies should be obtainable, by mail, upon payment of
the Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, and can be obtained
electronically on the Commission's website at http://www.sec.gov. Such
information should also be on file at The Nasdaq National Market, 1735 K Street,
N.W., Washington, D.C. 20006.
12
<PAGE>
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser and Parent do not have any
knowledge that any such information is untrue, neither the Purchaser nor Parent
takes any responsibility for the accuracy or completeness of such information or
for any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
PURCHASER. The Purchaser, a Delaware corporation and a wholly owned
subsidiary of Parent, was organized to acquire the Company and has not conducted
any unrelated activities since its organization. The principal offices of the
Purchaser are located at 2828 North Haskell, Dallas, Texas 75204. All
outstanding shares of capital stock of the Purchaser are owned by Parent.
PARENT. Parent, based at 2828 North Haskell, Dallas, Texas 75204, with
offices throughout the United States and in Europe and Mexico, is a nationwide
provider of information technology services and electronic commerce solutions.
Parent's information technology services include data processing outsourcing,
business process outsourcing and professional services and system integration.
Parent provides services to customers with time-critical, transaction-intensive
information processing needs.
Parent provides data processing outsourcing services to a variety of
customers nationwide, including retailers, healthcare providers,
telecommunications companies, wholesale distributors, manufacturers, utilities,
financial institutions and insurance companies. Parent's business process
outsourcing services include complementary services such as conversion of data
to suitable electronic or micro-graphic media, data storage and retrieval, high
speed data capture, equipment and supply sales and marketing support. Its
professional services include consulting, contract programming and technical
support and network design and installation services. Parent's electronic
commerce business consists primarily of the operation of a proprietary automated
teller machine ("ATM") network consisting of ACS-owned ATMs as well as ATMs
owned by third parties.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information with respect to Parent excerpted or derived from the
information contained in Parent's Form 10-K for the year ended June 30, 1998,
which is incorporated by reference herein. More comprehensive financial
information is included in such reports and other documents filed by Parent with
the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "Available Information."
13
<PAGE>
AFFILIATED COMPUTER SERVICES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------------
1998 1997 1996
--------------- ---------- ----------
<S> <C> <C> <C>
INCOME STATEMENT:
Revenues.............................................................. $ 1,189,123 $ 928,925 $ 647,608
Earnings from continuing operations................................... 54,422(1) 49,666 33,525
Earnings per common share-basic....................................... 1.14(1) 1.08 $ 0.88
Earnings per common share-assuming dilution........................... $ 1.11(1) $ 1.05 $ 0.85
Weighted average shares outstanding-basic............................. 47,599 46,136 38,228
Weighted average shares outstanding-assuming dilution................. 50,487 47,452 39,320
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30,
----------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET (AT END OF PERIOD):
Working capital............................................................ $ 198,118 $ 110,866 $ 79,929
Total assets............................................................... 949,798 761,477 636,098
Total long-term debt (less current portion)................................ 234,848 130,680 57,208
Cumulative redeemable preferred stock...................................... -- -- 1,100
Stockholders' equity....................................................... 503,670 427,481 363,204
</TABLE>
- ------------------------
(1) Includes $12,974,000, $8,880,000 net of tax, or $.19 and $.18 per basic and
diluted share, respectively, of merger costs incurred by Parent in
connection with the merger of a wholly owned subsidiary of Parent with and
into ACS Government Solutions Group, Inc. in December 1997.
Except as described in this Offer to Purchase, neither the Purchaser nor
Parent (together, the "Corporate Entities") or, to the best knowledge of the
Corporate Entities, any of the persons listed in Schedule I or any associate or
majority-owned subsidiary of the Corporate Entities or any of the persons so
listed, beneficially owns any equity security of the Company, and none of the
Corporate Entities, any of the other 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 described in this Offer to Purchase, (1) there have not been any
contracts, transactions or negotiations between the Corporate Entities, any of
their respective subsidiaries or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I, on the one hand, and the
Company or any to its directors, officers or affiliates, on the other hand, that
are required to be disclosed pursuant to the rules and regulations of the
Commission and (2) none of the Corporate Entities or, to the best knowledge of
the Corporate Entities, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
During the last five years none of the Corporate Entities or, to the best
knowledge of the Corporate Entities, any of the persons listed in Schedule I (a)
has been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or (b) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree of final order enjoining future
violations of, or prohibiting activities subject to, Federal or state securities
laws or finding any violation of such laws. The name, business address, present
principal occupation or employment, five-year employment history and citizenship
of each of the directors and executive officers of the Purchaser and Parent are
set forth in Schedule I.
AVAILABLE INFORMATION. Parent is subject to the information filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
14
<PAGE>
concerning Parent's directors and officers, their remuneration, options granted
to them, the principal holders of Parent's securities and any material interest
of such persons in transactions with Parent is disclosed in proxy statements
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the Commission, and copies thereof should be obtainable from the
Commission, in the same manner as set forth with respect to information
concerning the Company in Section 8. Such material should also be available for
inspection at the library of the NYSE, 20 Broad Street, New York, New York
10005.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to acquire the tendered
Shares pursuant to the Offer, consummate the Merger and to pay fees and expenses
related to the Offer and the Merger is estimated to be approximately $274
million. The Purchaser expects to obtain the funds required to consummate the
Offer with funds provided through capital contributions or advances made by
Parent, and the Merger through the use of cash and marketable securities held by
the Company and, to the extent necessary, additional capital contributions or
advances made by Parent.
Parent expects to fund any necessary capital contributions or advances to
the Purchaser through the use of a combination of (i) internally generated funds
and (ii) borrowings under its existing bank credit facility.
Pursuant to a $200 million Restated Credit Agreement dated June 30, 1996,
among Parent, Wells Fargo Bank (Texas) N.A., as Agent, Bank One, Texas, N.A., as
Co-Agent, and the other lenders that are parties thereto, as amended (the
"Credit Agreement"), Parent may borrow up to an aggregate of $200 million for
general corporate purposes on a revolving basis. As of September 30, 1998,
Parent had $14 million in indebtedness outstanding under the Credit Agreement.
The Credit Agreement expires in July 2000, and loans under the Credit Agreement
bear interest at LIBOR plus 0.625%.
It is anticipated that the indebtedness incurred by Parent in connection
with the Offer and the Merger will be repaid from funds generated internally by
Parent and its subsidiaries (including, after the Merger, if consummated, funds
generated by the Surviving Corporation and its subsidiaries) and through other
sources which may include the proceeds of future bank financings, the public or
private sale of debt or equity securities or a combination thereof. No decisions
have been made, however, concerning the method Parent will employ to repay such
indebtedness. Such decisions, when made, will be based on Parent's review from
time to time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER
Parent has followed the business activities of the Company for some time,
and at various times over the past few years senior executives of Parent have
had discussions with the Company's senior executives regarding Parent's interest
in exploring a possible business combination with the Company. In addition,
Parent understands that, from time to time in the past, representatives of the
Company, including Paul Stoffel and the late P.E. Esping, the former Chairman
and CEO of the Company, contacted or were contacted by third parties and engaged
in general, but limited, discussions regarding the possibility of a material
business transaction involving the Company or a substantial portion of its
assets. In some of these cases the Company entered into customary
confidentiality and nondisclosure agreements with these third parties and
provided some nonpublic information regarding the Company, its assets, financial
condition and prospects. None of these discussions led to a proposal regarding
the price, terms and structure of a transaction involving the Shares.
During the period of July and August 1996, Parent and the Company discussed
the possibility of a business combination. These discussions were terminated in
September 1996 prior to any discussions regarding price or structure.
15
<PAGE>
No further discussions occurred between the parties until May 1998 when Paul
Stoffel, a director of the Company, contacted Jeffrey A. Rich, President and
Chief Operating Officer of Parent, regarding a possible meeting between the
parties. Subsequently, Messrs. Stoffel and Rich met at Parent's offices where
Messrs. Rich and Stoffel discussed the Company's business and the possibility of
entering into a business combination. At the conclusion of the meeting, Mr.
Stoffel suggested that Mr. Rich meet with Perry E. Esping, then Chairman and
Chief Executive Officer of the Company.
In late May 1998, Messrs. Esping, Stoffel and Rich met at Parent's offices.
During the meeting, Mr. Esping discussed the Company's business and operations.
Although no specific terms of a business combination were discussed during this
meeting, it was agreed that Parent and the Company would enter into a
Non-Disclosure Agreement and that the Company would provide Parent with various
financial information regarding the Company.
On June 15, 1998, Parent and the Company executed a Non-Disclosure
Agreement. On June 17, 1998, Mr. Stoffel, Thomas E. Kiraly, Chief Financial
Officer of the Company, and several representatives of Parent met at Parent's
offices to review and discuss the Company's business and financial information.
Over the next few weeks, Messrs. Rich and Stoffel had various telephone
discussions regarding a possible business combination between Parent and the
Company. During these conversations, Messrs. Rich and Stoffel generally
discussed the continuing financial performance of the Company, management of the
Company and various potential structures for a transaction.
On July 6, 1998, representatives of Parent met with representatives of the
Company, including several of the Company's operating managers to initiate due
diligence. On July 9, 1998, Messrs. Rich and Stoffel held a meeting at Parent's
offices at which Mr. Rich advised Mr. Stoffel that, based upon Parent's initial
due diligence review, Parent was not interested in pursuing a transaction with
the Company at that particular point. Thereafter, discussions between the
parties ceased.
On September 21, 1998, Mr. Stoffel, then Chairman of the Company, called Mr.
Rich to arrange a meeting. On September 24, 1998, Messrs. Stoffel and Rich and
John H. Rexford, Senior Vice President of Parent, met at Parent's offices. At
the meeting, Mr. Stoffel suggested to Messrs. Rich and Rexford that Parent
should reevaluate a potential acquisition of the Company. Mr. Stoffel briefly
updated Messrs. Rich and Rexford on the Company's business and affairs, and at
that meeting, Mr. Rich indicated that he would reevaluate the potential for a
transaction.
On October 1, 1998, Messrs. Rich and Rexford contacted Mr. Stoffel and
proposed a cash purchase of $16.00 per share. Mr. Stoffel immediately rejected
this proposal, and indicated that the Company would not be interested in
pursuing a transaction at that price.
On October 6, 1998, at the request of the Parent, Mr. Kiraly and several
representatives of Parent met at Parent's offices to review and discuss the
financial results and business prospects of the Company. Mr. Kiraly gave
Parent's representatives an update on the financial performance of the Company,
which included a detailed discussion of the operating results of each of the
Company's divisions.
On the afternoon of October 7, 1998, Mr. Rich asked to meet with Mr.
Stoffel. At a meeting that evening, Mr. Rich proposed an offer of $18.00 per
share and later, following negotiation, that offer was increased to $19.00 per
share. Mr. Stoffel then agreed to submit the $19.00 per share proposal to the
Company's Board of Directors. The next morning, following informal discussion
with the Company's Board of Directors, Mr. Stoffel called Mr. Rexford and
indicated that the Company's Board of Directors would support a cash purchase
price of $19.00 per share subject to the negotiation of a definitive merger
agreement.
On October 9, 1998, Parent's counsel distributed a draft of the Merger
Agreement to the Company's counsel. On October 12-14, 1998, meetings among the
representatives of the Company and Parent, were held during which negotiations
on the Merger Agreement were conducted and additional legal and financial due
diligence regarding the Company was conducted by Parent. Negotiations with
respect to the Merger Agreement addressed, among other things, the number of
Shares to be purchased in the Offer,
16
<PAGE>
circumstances under which the termination fee would be payable, the amount of
the termination fee, provisions imposing restrictions on the Company's ability
to enter into a competing transaction, representations and warranties and
conditions of the Offer.
After these negotiations, Parent's counsel circulated a revised draft of the
Merger Agreement on the evening of October 14, 1998, and on October 15, 1998,
the negotiation of the Merger Agreement continued.
On October 15, 1998, Parent's Board of Directors held a special meeting to
discuss the proposed transaction. At the meeting, Parent's representatives
reviewed the status of the proposed transaction, the results of Parent's due
diligence review and the proposed terms of the Merger Agreement. At the
conclusion of the meeting, Parent's Board of Directors unanimously approved the
Offer, the Merger and the Merger Agreement and gave authority to Parent's
representatives to finalize negotiations of the Merger Agreement.
On October 16, 1998, the parties concluded their negotiations regarding the
Merger Agreement, and over the weekend of October 17-18, 1998, finalized the
Merger Agreement and the Stock Tender Agreement.
On October 18, 1998, the Company's Board of Directors held a special meeting
and discussed the terms of the Offer, the Merger and the Merger Agreement. At
this meeting, DLJ delivered to the Company's Board of Directors its written
opinion dated October 18, 1998 to the effect that, based upon and subject to the
assumptions and limitations set forth therein, the consideration to be received
by the holders of the Shares in each of the Offer and the Merger was fair to
such holders from a financial point of view. The Company's Board of Directors
then unanimously approved the Offer, the Merger and the Merger Agreement
(subject to modifications by the appropriate officers of the Company), and
determined that the terms of the Offer, the Merger and the Merger Agreement are
fair to, and in the best interests of the stockholders of the Company. In
addition, the Board of Directors of the Company determined to recommend that
stockholders of the Company accept the proposed Offer and tender their Shares
pursuant to the Offer.
On October 19, 1998, Parent, the Purchaser, and the Company entered into the
Merger Agreement, and Parent, the Purchaser and the Stock Tender Parties entered
into the Stock Tender Agreement. Separate press releases announcing the
transaction were issued by Parent and the Company before the opening of the U.S.
stock markets on the morning of October 19, 1998.
On October 23, 1998, Parent and the Purchaser commenced the Offer.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE STOCK TENDER AGREEMENT
PURPOSE OF THE OFFER
PURPOSE. The purpose of the Offer, the Merger and the Merger Agreement is
to acquire control of and the entire equity interest in the Company. Following
the Offer, the Purchaser and Parent intend to acquire any remaining equity
interest in the Company not acquired in the Offer by consummating the Merger.
Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Parent. Accordingly, the Shares will cease to be publicly traded
and will no longer be quoted on The Nasdaq National Market.
PLANS FOR THE COMPANY. It is expected that, initially following the Merger,
the business and operations of the Company will continue without substantial
change. Parent intends to conduct a detailed review of the Company and its
assets, corporate structure, dividend policy, capitalization, operations,
properties, policies, management and personnel and to consider, subject to the
terms of the Merger Agreement, what, if any, changes would be desirable in light
of the circumstances then existing, and reserves the right to take such actions
or effect such changes as it deems desirable. Such changes could include changes
in the Company's business, corporate structure, capitalization, management or
dividend policy.
17
<PAGE>
Except as otherwise described in this Offer to Purchase, the Purchaser and
Parent have no current, definite plans or proposals that would relate to, or
result in, any extraordinary corporate transaction involving the Company, 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, any change in the Company's capitalization or
dividend policy or any other material change in the Company's business,
corporate structure or personnel.
The Merger Agreement provides that, commencing upon the purchase of the
tendered Shares pursuant to the Offer, and from time to time thereafter, Parent
will be entitled to designate directors to serve on the Board of Directors of
the Company as described below under "The Merger Agreement-Board of Directors."
The Merger Agreement also provides that the directors of the Purchaser at the
effective time of the Merger will be the initial directors of the Company after
the Merger.
THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement, a
copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule
14D-1 filed by the Purchaser and Parent with the Commission in connection with
the Offer (the "Tender Offer Statement") and is incorporated herein by
reference. Such summary is qualified in its entirety by reference to the Merger
Agreement.
THE OFFER. The Merger Agreement provides for the making of the Offer by the
Purchaser. The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 14. The
Purchaser has agreed that, without the written consent of the Company, no change
in the Offer may be made which changes the form of consideration to be paid or
decreases the price per Share or the amount of Shares sought in the Offer or
which imposes conditions to the Offer in addition to the Minimum Condition and
those conditions described in Section 14.
THE MERGER. The Merger Agreement provides that, following the purchase of
tendered Shares pursuant to the Offer, the approval of the Merger Agreement by
the stockholders of the Company and the satisfaction or waiver of the other
conditions to the Merger, the Purchaser will be merged with and into the
Company. The Merger shall become effective at such time as a certificate of
merger or certificate of ownership and merger is filed with the Delaware
Secretary of State or at such later time as is specified in such certificate of
merger (the "Effective Time"). As a result of the Merger, all of the properties,
rights, privileges and franchises of the Company and the Purchaser shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
At the Effective Time, (i) each issued and outstanding Share owned or held
by Parent, the Purchaser, the Company or any direct or indirect subsidiary of
Parent or the Company shall be canceled, and no payment shall be made with
respect thereto; (ii) each share of common stock of the Purchaser then
outstanding shall be converted into and become one share of common stock of the
Surviving Corporation; and (iii) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in (i) above and except for
Shares held by any holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares ("Dissenting
Shares") in accordance with Section 262 of the Delaware General Corporation Law
(the "DGCL"), be converted into the right to receive $19.00 in cash or any
higher price per Share that may be paid pursuant to the Offer, without interest,
less any required withholding taxes.
The Merger Agreement provides that the certificate of incorporation of the
Company and the bylaws of the Purchaser at the Effective Time will be the
certificate of incorporation of the Surviving Corporation. The Merger Agreement
also provides that the directors of the Purchaser at the Effective Time will be
the directors of the Surviving Corporation and the officers of the Company at
the Effective Time will be the officers of the Surviving Corporation.
18
<PAGE>
RECOMMENDATION. The Merger Agreement states that the Board of Directors has
(i) determined that the Offer and the Merger, taken together, are fair to the
holders of the Shares as well as fair to and in the best interests of the
Company and its stockholders, (ii) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger and (iii)
resolved to recommend acceptance of the Offer and approval and adoption of the
Merger Agreement and the Merger by the Company's stockholders.
INTERIM AGREEMENTS OF PARENT, THE PURCHASER AND THE COMPANY. Pursuant to
the Merger Agreement, the Company has covenanted and agreed that, during the
period from the date of the Merger Agreement to the Effective Time, the Company
and its subsidiaries will each conduct its operations according to its ordinary
and usual course of business consistent with past practice; that neither the
Company nor any of its subsidiaries will intentionally take or willfully omit to
take any actions that results in or could reasonably be expected to result in, a
Company Material Adverse Effect (as defined in the Merger Agreement); that the
Company will use its reasonable best efforts to preserve intact the business
organization of the Company and each of its subsidiaries, to keep available the
services of its and their present officers and key employees and consultants,
and to maintain satisfactory relationships with customers, agents, suppliers,
and other persons having business relationships with the Company or its
subsidiaries. Pursuant to the Merger Agreement, without limiting the generality
of the foregoing, and except as otherwise expressly provided in the Merger
Agreement, neither the Company nor any of its subsidiaries will (a) issue, sell,
or dispose of additional shares of capital stock of any class (including the
Shares) of the Company or any of its subsidiaries, or securities convertible
into or exchangeable for any such shares or securities, or any rights, warrants,
or options to acquire any such shares or securities, other than Shares issued
upon exercise of options disclosed pursuant to the Merger Agreement, in each
case in accordance with the terms so disclosed; (b) redeem, purchase, or
otherwise acquire, or propose to redeem, purchase, or otherwise acquire, any of
its outstanding capital stock, or other securities of the Company or any of its
subsidiaries; (c) split, combine, subdivide, or reclassify any of its capital
stock or declare, set aside, make, or pay any dividend or distribution on any
shares of its capital stock; (d) sell, pledge, dispose of, or encumber any of
its assets, except for sales, pledges, dispositions, or encumbrances in the
ordinary course of business consistent with past practices; (e) incur or modify
any indebtedness or issue or sell any debt securities, or assume, guarantee,
endorse, or otherwise as an accommodation become absolutely or contingently
responsible for obligations of any other person, or make any loans or advances,
other than in the ordinary course of business consistent with past practices;
(f) adopt or amend any bonus, profit sharing, compensation, severance,
termination, stock option, pension, retirement, deferred compensation,
employment or other employee benefit agreements, trusts, plans, funds, or other
arrangements for the benefit or welfare of any director, officer, or employee,
or (except for normal increases in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company) increase
in any manner the compensation or fringe benefits of any director, officer, or
employee or pay any benefit not required by any existing plan or arrangement
(including, without limitation, the granting or vesting of stock options or
stock appreciation rights) or take any action or grant any benefit not expressly
required under the terms of any existing agreements, trusts, plans, funds, or
other such arrangements or enter into any contract, agreement, commitment, or
arrangement to do any of the foregoing or make or agree to make any payments to
any directors, officers, agents, contractors, or employees relating to a change
or potential change in control of the Company; (g) acquire by merger,
consolidation, or acquisition of stock or assets any corporation, partnership,
or other business organization or division or make any investment either by
purchase of stock or securities, contributions to capital (other than to wholly
owned subsidiaries), property transfer, or purchase of any material amount of
property or assets, in any other person; (h) adopt any amendments to their
respective charters or bylaws or equivalent organizational documents, except as
required by the Merger Agreement; (i) take any action other than in the ordinary
course of business and consistent with past practices, to pay, discharge,
settle, or satisfy any claim, liability, or obligation (absolute or contingent,
accrued or unaccrued, asserted or unasserted, or otherwise); (j) change any
method of accounting or accounting practice used by the
19
<PAGE>
Company or any of its subsidiaries, except for any change required by reason of
a concurrent change in generally accepted accounting principles; (k) revalue in
any respect any of its assets, including, without limitation, writing down the
value of its portfolio or writing off notes or accounts receivable other than in
the ordinary course of business consistent with past practices; (l) authorize
any new capital expenditure; (m) make any tax election, settle or compromise any
federal, state, or local tax liability or consent to the extension of time for
the assessment or collection of any federal, state, or local tax; (n) settle or
compromise any pending or threatened suit, action, or claim material to the
Company and its subsidiaries taken as a whole or relevant to the transactions
contemplated by this Agreement; (o) enter into any agreement, arrangement, or
understanding to do any of the foregoing actions; (p) voluntarily take any
action or willfully omit to take any action that could make any representation
or warranty of the Company in the Merger Agreement untrue or incorrect in any
material respect at any time, including as of the date of the Merger Agreement
and as of the time of consummation of the Offer and the Effective Time, as if
made as of such time.
CONFIDENTIALITY. Pursuant to the Merger Agreement, Parent and the Purchaser
will each hold and will each cause its consultants and advisors to hold in
confidence, unless compelled to disclose by judicial or administrative process
or, in the written opinion of its legal counsel, by other requirements of law,
all documents and information concerning the Company and its subsidiaries
furnished to Parent or the Purchaser in connection with the transactions
contemplated by the Merger Agreement (except to the extent that such information
can be shown to have been (i) previously known by Parent or the Purchaser from
sources other than the Company, or its directors, officers, representatives or
affiliates, (ii) in the public domain through no fault of Parent or the
Purchaser or (iii) later lawfully acquired by Parent or the Purchaser from other
sources who are not known by Parent or the Purchaser to be bound by a
confidentiality agreement or otherwise prohibited from transmitting the
information to Parent or the Purchaser by a contractual, legal or fiduciary
obligation) and will not release or disclose such information to any other
person, except its auditors, attorneys, financial advisors and other consultants
and advisors in connection with the Merger Agreement and the transactions
contemplated thereby. Parent and the Purchaser will each be deemed to have
satisfied its obligation to hold such information confidential if it exercises
the same care as it takes to preserve confidentiality for its own similar
information.
NONSOLICITATION. The Merger Agreement provides that the Company shall not,
directly or indirectly, through any officer, director, employee, representative
or agent of the Company or any of its subsidiaries, solicit or encourage
(including by way of furnishing information) the initiation of any inquiries or
proposals (each an "Acquisition Proposal") regarding a Third Party Acquisition
(as defined below). Provided that nothing in the Merger Agreement shall prevent
the Board of Directors if it determines in good faith, after consultation with,
and the receipt of advice from, outside counsel, that it is required to do so in
order to discharge properly its fiduciary duties, from considering, negotiating,
approving and recommending to the stockholders of the Company an unsolicited
bona fide written Acquisition Proposal which the Board of Directors determines
in good faith (after consultation with its financial advisors and legal counsel)
would result in a transaction more favorable to the Company's stockholders than
the transaction contemplated by the Merger Agreement (any Acquisition Proposal
meeting such criterion, being referred to as a "Superior Proposal"). Provided
further that nothing in the Merger Agreement shall prohibit the Company from
complying with Rules 14d-9 and 14e-2 under the Exchange Act with respect to any
other tender offers. The Company must promptly, but in no event later than 24
hours, notify Parent after receipt of any Acquisition Proposal or any request
for nonpublic information relating to the Company or any of its subsidiaries in
connection with an Acquisition Proposal or for access to the properties, books
or records of the Company or any subsidiary by any person or entity that informs
the Board of Directors that it is considering making, or has made, an
Acquisition Proposal. Such notice to Parent has to be made orally and in writing
and must indicate in reasonable detail the identity of the offeror and the terms
and conditions of such proposal, inquiry or contact. If the Board of Directors
receives a request for material nonpublic information by a party who makes an
unsolicited bona fide Acquisition Proposal and the Board of Directors determines
that such proposal, if consummated pursuant to its terms would be a Superior
Proposal, then the Company
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may, subject to the execution of a confidentiality agreement substantially
similar to that then in effect between the Company and Parent, provide such
party with access to information regarding the Company. The Merger Agreement
requires that the Company immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than Parent and the
Purchaser) conducted before the date of the Merger Agreement with respect to any
Acquisition Proposal, and the Company agreed not to release any third party from
any confidentiality or standstill agreement to which the Company is a party. The
Company also agreed to ensure that the officers, directors and employees of the
Company and its subsidiaries and any investment banker or other advisor or
representative retained by the Company are aware of these restrictions; and be
responsible for any breach of this restriction by such bankers, advisors and
representatives.
ACCESS TO INFORMATION. Between the date hereof and the Effective Time, the
Company will give Parent and the Purchaser and their authorized representatives
reasonable access to all employees, plants, offices, warehouses and other
facilities and to all books and records of the Company and its subsidiaries,
will permit Parent and the Purchaser to make such inspections as Parent and the
Purchaser may reasonably require and will cause the Company's officers and those
of its subsidiaries to furnish Parent and the Purchaser with such financial and
operating data and other information with respect to the business and properties
of the Company and any of its subsidiaries as Parent or the Purchaser may from
time to time reasonably request.
BOARD OF DIRECTORS. The Merger Agreement provides that effective upon
purchase and payment for any tendered Shares by the Purchaser, the Purchaser
shall be entitled to designate the number of directors, rounded up to the next
whole number, on the Company's Board of Directors that equals the product of (i)
the total number of directors on the Board of Directors (giving effect to the
election of any additional directors pursuant to this paragraph) and (ii) the
percentage that the number of Shares owned by the Purchaser (including tendered
Shares accepted for payment) bears to the total number of Shares outstanding on
a fully diluted basis, and the Company shall take all action necessary to cause
the Purchaser's designees to be elected or appointed to the Board of Directors,
including, without limitation, increasing the number of directors, and seeking
and accepting resignations of its incumbent directors. Notwithstanding the
foregoing, the Company has the right to have at least two of the current members
of the Board of Directors remain members of the Board until the Effective Time.
Pursuant to the Merger Agreement, the Company is mailing contemporaneously with
this Offer to Purchase to its stockholders an Information Statement containing
the information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder regarding the proposed change in the composition of the
Company's Board of Directors.
STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company shall
cause a meeting of its stockholders (the "Company Stockholder Meeting") to be
duly called and held for the purposes of voting on the approval and adoption of
the Merger Agreement and the Merger. The Merger Agreement provides that the
Company and Parent will cooperate and use all reasonable efforts to prepare, and
the Company and Parent will file with the Commission, as soon as reasonably
practical after completion of the Offer, a proxy statement or information
statement relating to the Company Stockholder Meeting, if required (the "Proxy
Statement"). The Company has agreed, subject to the fiduciary duties of its
Board of Directors, to use all reasonable efforts to obtain the necessary
approvals by its stockholders of the Merger Agreement and the transactions
contemplated thereby. Parent has agreed to vote and to cause its affiliates
(including, without limitation, the Purchaser) to vote all Shares owned by them
in favor of adoption of the Merger Agreement.
INDEMNIFICATION AND INSURANCE. Parent, the Purchaser and the Company have
each agreed that all rights to indemnification or exculpation now existing in
favor of the directors, officers, employees and agents of the Company and its
subsidiaries as provided in their respective charters or bylaws or other
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contracts scheduled in the Merger Agreement shall, to the extent such rights are
in accordance with applicable law, survive the Merger and stay in effect in
accordance with their respective terms.
The Merger Agreement also provides that the Surviving Corporation shall,
until the third anniversary of the Effective Time, cause to be maintained in
effect policies of directors' and officers' liability insurance for director and
officers of the Company on terms no less favorable than the existing coverage
maintained by the Company as of the date of the Merger Agreement, in each case
including for claims arising from facts or events that occurred at or before the
consummation of the Offer; provided, however, that the Surviving Corporation
shall not be required in order to maintain or procure such coverage to pay an
annual premium in excess of 200% of the current annual premium paid by the
Company for its existing coverage (the "Cap"); and provided, further, that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of the Cap, the Surviving Corporation shall only be
required to obtain as much coverage as can be obtained by paying an annual
premium equal to the Cap.
BEST EFFORTS. The Merger Agreement provides that the Company, the Purchaser
and Parent will each use all reasonable best efforts to consummate the
transactions contemplated by the Merger Agreement.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations by the Company as to corporate power and
authority to execute, deliver and consummate the Merger Agreement, undisclosed
liabilities, certain changes or events concerning its businesses, compliance
with applicable law, employee benefit plans, litigation, environmental
liabilities, intellectual property rights and material contracts.
CONDITIONS TO THE MERGER. The obligations of each of Parent, the Purchaser
and the Company to effect the Merger are subject to the satisfaction of certain
conditions, including: (a) the Merger Agreement shall have been adopted by the
affirmative vote of the stockholders of the Company by the requisite vote or
consent in accordance with the charter and bylaws of the Company and with
applicable law; (b) no statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or enforced
by any U.S. court or U.S. governmental authority which prohibits, restrains,
enjoins or restricts the consummation of the Merger or which imposes any
material limitation on the ability of Parent or the Purchaser to exercise rights
of ownership of the Shares provided that the parties will use their respective
reasonable best efforts to have any such injunction, decree or order lifted; (c)
any waiting period applicable to the Merger under the HSR Act shall have
terminated or expired and all required filings, consents, approvals, permits and
authorizations with or for governmental authorities have been made or obtained
(without what the Purchaser deems to be a materially burdensome condition); and
(d) the Purchaser shall have purchased tendered Shares pursuant to the Offer.
TERMINATION. The Merger Agreement may be terminated: (a) by mutual written
consent of Parent, the Purchaser and the Company; (b) by Parent and the
Purchaser or the Company if any court of competent jurisdiction in the United
States or other United States governmental body shall have issued a final order,
decree or ruling or taken any other final action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable; (c) by Parent and the Purchaser if
due to an occurrence or circumstance which would result in a failure to satisfy
any of the conditions set forth in Section 14 hereto, the Purchaser shall have
(i) failed to commence the Offer within five days following the initial public
announcement of the Offer, (ii) terminated the Offer or (iii) failed to pay for
tendered Shares pursuant to the Offer; (d) by the Company if (i) there shall not
have been a breach of any material representation, warranty, covenant or
agreement on the part of the Company and the Purchaser shall have (A) failed to
commence the Offer within five days following the initial public announcement of
the Offer, (B) terminated the Offer or (C) by January 31, 1999 (provided,
however, that any termination pursuant to this clause C must be made by
irrevocable written notice delivered to the Purchaser and Parent by noon, Dallas
time, on January 31, 1999), or (ii) prior to the purchase of tendered Shares
pursuant to the Offer, a person or group shall have made a bona fide offer that
the Board of Directors by a majority vote determines in its good faith judgment
and in the exercise of
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its fiduciary duties, after consultation with its financial advisors and based
as to legal matters on the written opinion of legal counsel, is obligated by its
fiduciary duties under applicable law to terminate the Merger Agreement,
provided that such termination under this clause (ii) shall not be effective
until payment of the Termination Fee (as defined below); (e) by Parent and the
Purchaser prior to the purchase of tendered Shares pursuant to the Offer if (i)
there shall have been a breach (not cured or curable within certain time limits)
of any representation or warranty on the part of the Company having a Company
Material Adverse Effect or materially adversely affecting (or materially
delaying) the consummation of the Offer, (ii) there shall have been a breach
(not cured or curable within certain time limits) of any covenant or agreement
on the part of the Company resulting in a Company Material Adverse Effect or
materially adversely affecting (or materially delaying) the consummation of the
Offer, (iii) the Company shall engage in negotiations with any entity or group
(other than Parent or the Purchaser) that has proposed a Third Party Acquisition
(with certain exceptions), (iv) the Company enters into an agreement, letter of
intent or arrangement with respect to a Third Party Acquisition, (v) the Board
of Directors shall have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger or shall have
recommended another offer, or shall have adopted any resolution to effect any of
the foregoing or (vi) the Minimum Condition shall not have been satisfied by the
expiration date of the Offer and (A) on such date an entity or group (other than
Parent or the Purchaser) shall have made and not withdrawn a proposal with
respect to a Third Party Acquisition or (B) any person or group (including the
Company or any of its affiliates other than Parent or the Purchaser) has become
the beneficial owner of 19.9% (except in bona fide arbitrage transactions) or
more of the Shares; or (f) by the Company if (i) there shall have been a breach
(not cured or curable with certain time limits) of any representation or
warranty on the part of Parent or the Purchaser which materially adversely
affects (or materially delays) the consummation of the Offer or (ii) there shall
have been a material breach (not cured or curable with certain time limits) of
any covenant or agreement on the part of Parent or the Purchaser and which
materially adversely affects (or materially delays) the consummation of the
Offer.
TERMINATION FEE. Pursuant to the Merger Agreement, in the event Parent and
the Purchaser terminate the Merger Agreement pursuant to clause (e)(i) through
(v) of the preceding paragraph or the Company terminates the Merger Agreement
pursuant to clause (d)(ii) or (d)(i)(C) of the preceding paragraph, then the
Company shall pay to Parent, the Purchaser and their affiliates all
out-of-pocket fees and expenses actually incurred in connection with the Offer
and Merger and the proposed consummation of all the transactions contemplated by
the Merger Agreement not in excess of $3,000,000. If, (i) Parent and the
Purchaser terminate the Merger Agreement pursuant to clause (e)(i) through (v)
of the preceding paragraph or if the Company terminates the Merger Agreement
pursuant to (d)(i)(C) of the preceding paragraph and, within four months
thereafter the Company enters into an agreement, letter of intent or arrangement
with respect to a Third Party Acquisition, or a Third Party Acquisition occurs
(or within nine months after such termination if the Third Party Acquisition
that occurs or with respect to which an agreement, letter of intent or binding
arrangement has been entered into is or is reasonably expected to be a
transaction more favorable to the Company's stockholders than the transactions
contemplated by the Merger Agreement); or (ii) the Company terminates the Merger
Agreement pursuant to clause (d)(ii) of the preceding paragraph, then the
Company shall pay to Parent and the Purchaser, within one business day following
the execution and delivery of such agreement or letter of intent or entering
into such arrangement or such occurrence, as the case may be, or simultaneously
with such termination pursuant to clause (d)(ii) of the preceding paragraph, a
fee, in cash, of $10,000,000 plus all out-of-pocket fees and expenses incurred
by Parent and the Purchaser in connection with the Offer and Merger and the
proposed consummation of all the transactions contemplated by the Merger
Agreement, not in excess of $3,000,000 (the "Termination Fee").
"Third Party Acquisition" means the occurrence of any of the following
events (i) the acquisition of the Company by merger or otherwise by any person
or entity other than Parent, the Purchaser or any affiliate thereof (a "Third
Party"); (ii) the acquisition by Third Party of more than 19.9% of the total
assets
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of the Company and its subsidiaries, taken as a whole; (iii) the acquisition by
Third Party of 19.9% or more of the outstanding Shares that results in a change
of control of the Company; (iv) the adoption by the Company of a plan of
liquidation or the declaration or payment of an extraordinary dividend; or (v)
the acquisition by the Company or any of its subsidiaries of more than 19.9% of
the outstanding Shares.
Pursuant to the Merger Agreement, in the event of the termination and
abandonment of the Merger Agreement, the Merger Agreement will become void and
have no effect, without any liability on the part of any party or its directors,
officers or stockholders, other than certain provisions of the Merger Agreement
relating to the termination fee, expenses of the parties and confidentiality of
information, provided, that any party will not be relieved from liability for
any breach of the Merger Agreement.
COSTS AND EXPENSES. Except as discussed above, the Merger Agreement
provides that all costs and expenses incurred in connection with the
transactions contemplated by the Merger Agreement shall be paid by the party
incurring such costs and expenses.
APPRAISAL RIGHTS. Holders of Shares do not have dissenters' rights as a
result of the Offer. However, if the Merger is consummated, holders of Shares
will have certain rights pursuant to the provisions of Section 262 of the DGCL
to dissent and demand appraisal of, and to receive payment in cash of the fair
value of, their Shares. If the statutory procedures were complied with, such
rights could lead to a judicial determination of the fair value required to be
paid in cash to such dissenting holders for their shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than or in addition to the Offer Price or the market value of the Shares,
including asset values and the investment value of the Shares. The value so
determined could be more or less than the Offer Price or the Merger
Consideration.
If any holder of Shares who demands appraisal under Section 262 of the DGCL
fails to perfect, or effectively withdraws or loses the right to appraisal, as
provided in the DGCL, the Shares of such stockholder will be converted into the
Merger Consideration in accordance with the Merger Agreement. A stockholder may
withdraw his demand for appraisal by delivery to Parent of a written withdrawal
of his demand for appraisal and acceptance of the Merger.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR
PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS.
GOING PRIVATE TRANSACTIONS. The Merger will have to comply with any
applicable Federal law operative at the time of its consummation. Rule 13e-3
under the Exchange Act is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information concerning the Company and certain information relating to
the fairness of the Merger and the consideration offered to minority
stockholders be filed with the Commission and disclosed to minority stockholders
prior to consummation of the Merger.
THE STOCK TENDER AGREEMENT
The following is a summary of certain provisions of the Stock Tender
Agreement, which is filed as an Exhibit to the Tender Offer Statement and is
incorporated herein by reference. Such summary is qualified in its entirety by
reference to the Stock Tender Agreement.
Pursuant to the Stock Tender Agreement, so long as Parent, the Purchaser or
the Company has not terminated the Merger Agreement, the Stock Tender Parties
have agreed to validly tender (and not thereafter withdraw) the Shares owned by
them pursuant to and in accordance with the terms of the Offer. The Stock Tender
Parties collectively own a total of 2,968,350 Shares (not including 324,000
Shares
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issuable under presently exercisable options), representing approximately 17.4%
of the outstanding Shares on a fully diluted basis as of September 30, 1998.
In connection with the Stock Tender Agreement, the Stock Tender Parties have
made certain customary representations, warranties and covenants, including with
respect to (i) ownership of the Shares, (ii) the Stock Tender Parties' authority
to enter into and perform their respective obligations under the Stock Tender
Agreement, (iii) the ability of the Stock Tender Parties to enter into the Stock
Tender Agreement without violating other agreements to which they are a party,
(iv) the absence of liens and encumbrances on and in respect of the Stock Tender
Parties' Shares and (v) restrictions on the transfer of the Stock Tender
Parties' Shares. The obligations of the Stock Tender Parties under the Stock
Tender Agreement are several and not joint.
13. DIVIDENDS AND DISTRIBUTIONS
If on or after the date of the Merger Agreement, 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 (except for Shares
issuable upon the exercise of employee stock options outstanding on the date of
the Merger Agreement) or (iii) acquire currently outstanding Shares or otherwise
cause a reduction in the number of outstanding Shares, then, without prejudice
to the Purchaser's rights under Section 1 and 14, the Purchaser in its sole
discretion, subject to the terms of the Merger Agreement, may make such
adjustments as it deems appropriate in the purchase price and other terms of the
Offer.
If, on or after the date of the Merger Agreement, the Company should declare
or pay any dividend on the Shares or make any distribution (including, without
limitation, cash dividends, 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 stockholders of record on a date prior to the
transfer to the name of the Purchaser or its nominee or transferee on the
Company's stock transfer records of the Shares purchased pursuant to the Offer,
then, without prejudice to the Purchaser's rights under Section 1 and 14, any
such dividend, distribution or right to be received by the tendering
stockholders will be received and held by the tendering stockholder at the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, the Purchaser will be entitled to all rights and privileges as owner of any
such dividend, distribution or right and may withhold the entire purchase price
or deduct from the purchase price the amount or value thereof, as determined by
the Purchaser in its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two preceding paragraphs and
nothing herein shall constitute a waiver by the Purchaser or Parent of any of
their rights under the Merger Agreement or a limitation of remedies available to
the Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser will not be
required to accept for payment or (subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) relating to the
obligation of the Purchaser to pay for or return tendered Shares promptly after
the termination or withdrawal of the Offer) to pay for tendered Shares, or may
terminate or amend the Offer as provided in the Agreement, or may postpone the
acceptance for payment of, or payment for, tendered Shares (whether or not any
other tendered Shares have been accepted for payment or paid for pursuant to the
Offer) if prior to the expiration of the Offer (i) the Minimum Condition has not
been satisfied; (ii) the waiting period under the HSR Act has not expired or
been terminated with respect to purchase of the
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tendered Shares; or (iii) if at any time on or after the date of the Merger
Agreement, and at any time before the time of acceptance for payment of any such
tendered Shares, any of the following occurs:
(a) any of the representations or warranties of the Company contained in
the Merger Agreement is not true and correct at and as of any date prior to
the expiration date of the Offer as if made at and as of such time, except
for (i) failures (other than the Company's investment in MatriDigm) to be
true and correct as are not, individually or in the aggregate, reasonably
expected to result in a Company Material Adverse Effect; or (ii) failures to
comply as are capable of being and are cured prior to the earlier of (A) 10
days after written notice from the Purchaser to the Company of such failure
or (B) two business days prior to the expiration date of the Offer;
(b) the Company has failed to comply with any of its obligations under
the Merger Agreement, except for (i) failures to so comply as are not,
individually or in the aggregate, reasonably expected to result in a Company
Material Adverse Effect; and (ii) failures to comply as are capable of being
and are cured prior to the earlier of (A) 10 days after written notice from
the Purchaser to the Company of such failure or (B) two business days prior
to the expiration date of the Offer;
(c) the Board of Directors of the Company has withdrawn or modified in
any respect adverse to Parent or the Purchaser its recommendation of the
Offer or taken any position inconsistent with such, recommendation;
(d) the Merger Agreement has been terminated in accordance with its
terms;
(e) the Company has reached an agreement with Parent or the Purchaser
that the Offer or the Merger be terminated or amended;
(f) any state, federal, or foreign government or governmental authority
has taken any action, or proposed, sought, promulgated, or enacted, or any
state, federal, or foreign government or governmental authority or court has
entered, enforced, or deemed applicable to the Offer or the Merger, any
statute, rule, regulation, judgment, order, or injunction that is reasonably
likely to (i) make the acceptance for payment of, the payment for, or the
purchase of, some or all of the tendered Shares illegal or otherwise
restrict, materially delay, prohibit consummation of, or make materially
more costly, the Offer or the Merger, (ii) result in a material delay in or
restrict the ability of the Purchaser, or render the Purchaser unable, to
accept for payment, pay for or purchase some or all of the tendered Shares
in the Offer or the Merger, (iii) require the divestiture by Parent, the
Purchaser, or the Company or any of their respective subsidiaries or
affiliates of all or any material portion of the business, assets, or
property of any of them or any Shares, or impose any material limitation on
the ability of any of them to conduct their business and own such assets,
properties, and Shares, (iv) impose material limitations on the ability of
Parent or the Purchaser to acquire or hold or to exercise effectively all
rights of ownership of the Shares, including the right to vote any Shares
acquired by either of them on all matters properly presented to the
stockholders of the Company or (v) impose any limitations on the ability of
Parent, the Purchaser, or any of their respective subsidiaries or affiliates
effectively to control in any material respect the business or operations of
the Company, Parent, the Purchaser, or any of their respective subsidiaries
or affiliates;
(g) any change (or any condition, event or development involving a
prospective change) has occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
financial condition, operations, licenses or franchises results of
operations, or prospects of the Company or any of its subsidiaries, that is
reasonably expected to result in a Company Material Adverse Effect;
(h) there has occurred (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 or quotations for shares traded thereon as
reported by the Nasdaq or otherwise, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not
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mandatory), (iii) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States other than as a participant in police actions sponsored by
international organizations, (iv) any limitation (whether or not mandatory)
by any governmental authority on the extension of credit by banks or other
financial institutions, (v) after the date of the Merger Agreement, an
aggregate decline of at least 25% in the Dow Jones Industrial Average or
Standard & Poor's 500 Index or a decline in either such index of 12 1/2% in
any 24-hour period, or (vi) in the case of any of the occurrences referred
to in clauses (i) through (iv) existing at the time of the commencement of
the Offer, in the reasonable judgment of the Purchaser, a material
acceleration or worsening thereof;
(i) any person or group other than Parent or the Purchaser and their
affiliates has entered into a definitive agreement or an agreement in
principle with the Company with respect to a tender offer or exchange offer
for any Shares or a merger, consolidation, or other business combination or
acquisition with or involving the Company or any of its subsidiaries; or
(j) any material approval, permit, authorization, consent, or waiting
period of any domestic or foreign, governmental, administrative, or
regulatory entity (federal, state, local, provincial or otherwise) has not
been obtained or satisfied on terms satisfactory to the Purchaser in its
sole discretion;
that, in the good faith judgment of the Purchaser, makes it inadvisable to
proceed with the Offer or with such acceptance for payment of, or payment for,
tendered Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to any
such condition or may be waived by the Purchaser in whole or in part at any time
and from time to time in its sole discretion (subject to the terms of the Merger
Agreement). The failure by the Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and circumstances will not be
deemed a waiver with respect to any other facts or circumstances, and each such
right will be deemed an ongoing right that may be asserted at any time and from
time to time.
15. CERTAIN LEGAL MATTERS; REGULATORY MATTERS
Based on a review of publicly available filings made by the Company with the
Commission and other publicly available information concerning the Company,
neither the Purchaser nor Parent 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 might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action,
except as otherwise described in this Section 15, by any governmental entity
that would be required for the acquisition or ownership of Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser and Parent currently contemplate that such approval or
other action will be sought. While, except as otherwise expressly described in
this Section 15, the Purchaser does not presently intend to delay the acceptance
for payment of or payment for Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of if
such approvals were not obtained or such other actions were not taken. Because
of the failure of such approvals or other actions or because of conditions to be
imposed in connection with such approvals or other actions, the Purchaser could
decline to accept for payment or pay for any Shares tendered. See Section 14 for
certain conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
Edgar v. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover
27
<PAGE>
Act, which involved state securities laws that made the takeover of certain
corporations more difficult, imposed a substantial burden on interstate commerce
and therefore was unconstitutional. In CTS Corp. v. Dynamics Corp. of America,
however, the Supreme Court of the United States held that a state may, as a
matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
stockholders, provided that such laws were applicable only under certain
conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined as any
beneficial owner of 15% or more of the outstanding voting stock of the
corporation) unless, among other things, the corporation's board of directors
has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." The Company's Board of Directors has approved the Merger Agreement
and the Purchaser's acquisition of tendered Shares pursuant to the Offer and,
therefore, Section 203 of DGCL is inapplicable to the Merger.
Based on information supplied by the Company, the Purchaser does not believe
that any state takeover statutes purport to apply to the Offer or the Merger.
Neither the Purchaser nor Parent has currently complied with any state takeover
statute or regulation. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer or
the Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, the Purchaser might be
required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer or the Merger. In such case, the Purchaser may not be
obliged to accept for payment or pay for any Shares tendered pursuant to the
Offer.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
purchase of tendered Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by Parent of
a Notification and Report Form with respect to the Offer, unless Parent receives
a request for additional information or documentary material from the Antitrust
Division or the FTC or unless early termination of the waiting period is
granted. Parent is in the process of making such filing. If, within the initial
15-day waiting period, either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or the
FTC raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's purchase of tendered
Shares pursuant to the Offer, the Antitrust Division or FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of tendered Shares pursuant
to the Offer or the consummation of the
28
<PAGE>
Merger or seeking the divestiture of Shares acquired by the Purchaser or the
divestiture of substantial assets of Parent or its subsidiaries, or the Company
or its subsidiaries. Private parties may also bring legal action under the
antitrust laws under certain circumstances. There can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, of the results thereof.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under Delaware law to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Such rights to dissent, if
the statutory procedures are complied with, could lead to a judicial
determination of the fair value of the Shares, as of the day prior to the date
on which the stockholders vote was taken approving the Merger or similar
business combination (excluding any element of value arising from the
accomplishment or expectation of the Merger), required to be paid in cash to
such dissenting holders for their Shares. In addition, such dissenting
stockholders would be entitled to receive payment of a fair rate of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, the
court is required to take into account all relevant factors. Accordingly, such
determination could be based upon considerations other than, or in addition to,
the market value of the Shares, including, among other things, asset values and
earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated,
among other things, that proof of value by any techniques or methods which are
generally considered acceptable in the financial community and otherwise
admissible in court should be considered in an appraisal proceeding. Therefore,
the value so determined in any appraisal proceeding could be the same, more or
less than the purchase price per Share in the Offer or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders which requires that the merger be fair to
such other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of consideration to be received by the stockholders and whether there was
fair dealing among the parties. The Delaware Supreme Court stated in Weinberger
and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy ordinarily available
to minority stockholders in a cash-out merger is the right to appraisal
described above. However, a damage remedy or injunctive relief may be available
if a merger is found to be the product of procedural unfairness, including
fraud, misrepresentation or other misconduct.
"GOING PRIVATE" TRANSACTIONS. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger. Rule
13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
MARGIN CREDIT REGULATIONS. It is possible that, following the Offer, the
Shares would no longer constitute "margin securities" for the purposes of the
margin regulations of the Federal Reserve Board and therefore could no longer be
used as collateral for loans made by brokers. See Section 7.
16. FEES AND EXPENSES
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and First City Transfer Company to act as the Depositary in connection
with the Offer. The Information Agent and the Depositary each will receive
reasonable and customary compensation for their services, be reimbursed for
29
<PAGE>
certain reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
under the federal securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser
upon request for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in
which the making of the Offer or the tender of Shares in connection therewith
would not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Parent becomes aware of any state law that would limit the class of
offerees in the Offer, the Purchaser will amend the Offer and, depending on the
timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to holders of Shares prior to the expiration
of the Offer. In any jurisdiction the securities, blue sky or other laws of
which require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Parent have filed with the Commission the Tender Offer
Statement pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer. In addition, the Company has
filed with the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the
Exchange Act, setting forth its recommendation with respect to the Offer and the
reasons for such recommendation and furnishing certain additional related
information. Such statements and schedules and any amendments thereto, including
exhibits, should be available for inspection and copies should be obtainable in
the manner set forth in Sections 8 and 9 (except that they will not be available
at the regional offices of the Commission).
ACS ACQUISITION CORPORATION
30
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and five-year employment history of
each of the directors and executive officers of Parent are set forth below.
Unless otherwise indicated, the business address of each such director and each
such executive officer is 2828 North Haskell, Dallas, Texas 75204. Unless
otherwise indicated below, each occupation set forth opposite an individual's
name refers to employment with Parent. Parenthetical years indicate the year the
individual was elected or appointed to the position or office or his or her
tenure therein. All directors and executive officers listed below are citizens
of the United States.
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY; OUTSIDE DIRECTORSHIPS
- -------------------------------------- --------------------------------------------------------------------------
<S> <C>
Darwin Deason......................... Mr. Deason, age 58, has served as Chairman of the Board and Chief
Executive Officer of Parent since its formation in 1988. Prior to the
formation of Parent, Mr. Deason spent 20 years with MTech Corp. ("MTech"),
a data processing subsidiary of MCorp, a bank holding corporation based in
Dallas, Texas ("MCorp"), serving as MTech's Chief Executive Officer and
Chairman of the Board from 1978 until April 1988, and served on the board
of various subsidiaries of MTech and MCorp. Prior to that, Mr. Deason was
employed in the data processing department of Gulf Oil in Tulsa, Oklahoma.
Mr. Deason has over 30 years of experience in the information technology
industry. Mr. Deason is also a director of Precept Business Services,
Inc., an affiliate of Parent and a publicly traded company, where he is
Chairman of the Executive Committee of the Board and has voting control.
Jeffrey A. Rich....................... Mr. Rich, age 38, has served as President and Chief Operating Officer of
Parent since April 1995 and as a director since August 1991. Mr. Rich
joined Parent in 1989 as Senior Vice President and Chief Financial Officer
and was named Executive Vice President in 1991. Mr. Rich is also the
President and a director of the Purchaser. Prior to joining Parent, Mr.
Rich served as a Vice President of Citibank N.A. from March 1986 through
June 1989, and also served as an Assistant Vice President of InterFirst
Bank Dallas, N.A. from 1982 until March 1986.
Mark A. King.......................... Mr. King, age 41, has served as Executive Vice President and Chief
Financial Officer since May 1995 and as a director since May 1996. Mr.
King joined Parent in November 1988 as Chief Financial Officer of various
Parent subsidiaries. Mr. King also serves as Vice President of Purchaser.
Prior to joining Parent, Mr. King was Vice President and Assistant
Controller of MTech. Mr. King has over 19 years of finance and accounting
experience, including over 10 years of experience with the data processing
industry.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY; OUTSIDE DIRECTORSHIPS
- -------------------------------------- --------------------------------------------------------------------------
<S> <C>
David W. Black........................ Mr. Black, age 36, has served as Executive Vice President, Secretary and
General Counsel and as a director of Parent since May 1995. Mr. Black
joined Parent in February 1995 as Associate General Counsel. Mr. Black is
also the Secretary and a director of the Purchaser. Prior to joining
Parent, Mr. Black was an attorney engaged in private practice in Dallas
from 1986 through January 1995.
Henry G. Hortenstine.................. Mr. Hortenstine, age 54, has served as Executive Vice President of Parent
since March 1995, as Group President of ACS Technology Solutions Group
since April 1998 and as a director since September 1996. Mr. Hortenstine
is also a director of the Purchaser. Prior to that time, he served as
Senior Vice President--Business Development from July 1993 to March 1995.
Mr. Hortenstine was engaged by Parent as a consultant providing various
business and corporate development services from 1990 to July 1993. Prior
to that, he was Senior Executive Vice President of Lomas Mortgage USA, a
subsidiary of Lomas Financial Corporation, from 1987 to 1989.
Peter A. Bracken...................... Mr. Bracken, age 57, joined Computer Data Solutions, Inc. (now known as
ACS Government Solutions, Inc. ("Government Solutions")), a subsidiary of
Parent, in May 1996 as Chief Executive Officer and President and has
served as Group President of Government Solutions since April 1998. From
1986 to 1996, Mr. Bracken was employed by Martin Marietta Corporation (now
Lockheed Martin Corporation), most recently as President of the
Information Sciences Group. Before joining Martin Marietta in 1986, Mr.
Bracken served as Director of Mission Operation and Data Systems for
NASA's Goddard Space Flight Center. At the time of the acquisition by
Parent of Government Solutions by a merger in December 1997 ("Government
Solutions Merger"), Mr. Bracken became an Executive Vice President and
director of Parent.
Joseph P. O'Neill..................... Mr. O'Neill, age 51, has served as a director of Parent since November
1994 and also serves as a consultant to Parent. Mr. O'Neill has served as
President and Chief Executive Officer of Public Strategies Washington,
Inc., a public affairs and consulting firm, since March 1991, and from
1985 through February 1991, served as President of the National Retail
Federation, a national association representing United States retailers.
Mr. O'Neill also is a director of Careerstaff, Inc.
Frank A. Rossi........................ Mr. Rossi, age 61, has served as a director of Parent since November 1994
and also serves as a consultant to Parent. Mr. Rossi has served as
Chairman of FAR Holdings Parent, L.L.C., a private investment firm, since
February 1994, and before that was employed by Arthur Andersen & Co. for
over 35 years. Mr. Rossi served in a variety of capacities for Arthur
Andersen since 1959, including Managing Partner/Chief Operating Officer
and as a member of the firm's Board of Partners and Executive Committee.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY; OUTSIDE DIRECTORSHIPS
- -------------------------------------- --------------------------------------------------------------------------
<S> <C>
Clifford M. Kendall................... Mr. Kendall, age 67, had been with Government Solutions since the founding
of its predecessor in 1968 until the Government Solutions Merger and is
currently Chairman of Government Solutions' Advisory Board of Directors.
At the time of the Government Solutions Merger in December 1997, Mr.
Kendall became an director of Parent. From 1970 to 1988, Mr. Kendall
served as Chairman of the Board, President and Chief Executive Officer of
Government Solutions. He served as Government Solutions' Chairman and
Chief Executive Officer from 1988 to 1991 and as Chairman from 1991 until
the Government Solutions Merger in 1997. Mr. Kendall also currently serves
as the Chairman of the Board of Objective Communications, Inc.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, business
address, present principal occupation or employment and five-year employment
history of each of the directors and executive officers of the Purchaser are set
forth below. The business address of each such director and executive officer is
2828 North Haskell, Dallas, Texas 75204. Unless otherwise indicated below, each
occupation set forth opposite an individual's name refers to employment with
Parent. All such directors and executive officers listed below are citizens of
the United States.
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER; PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY; OUTSIDE DIRECTORSHIPS
- -------------------------------------- --------------------------------------------------------------------------
<S> <C>
Jeffrey A. Rich....................... See above.
David W. Black........................ See above.
Henry G. Hortenstine.................. See above.
</TABLE>
33
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CITY TRANSFER COMPANY
<TABLE>
<S> <C>
BY HAND/OVERNIGHT COURIER: BY MAIL:
First City Trust Company First City Trust Company
505 Thornall Street P. O. Box 170
Suite 303 Iselin, New Jersey 08830-0170
Edison, New Jersey 08837
</TABLE>
BY FACSIMILE
(732) 906-9269
FOR INFORMATION:
Call collect (732) 906-9227
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent at the telephone numbers and location
listed below. You may also contact your broker, dealer, bank, trust company or
other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 848-3051
34
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 23, 1998
BY
ACS ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
AFFILIATED COMPUTER SERVICES, INC.
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT
NEW YORK CITY TIME ON FRIDAY, NOVEMBER 20, 1998, UNLESS EXTENDED
- --------------------------------------------------------------------------------
THE DEPOSITARY:
FIRST CITY TRANSFER COMPANY
<TABLE>
<S> <C>
BY HAND/OVERNIGHT COURIER: BY MAIL:
First City Trust Company First City Trust Company
505 Thornall Street P. O. Box 170
Suite 303 Iselin, New Jersey 08830-0170
Edison, New Jersey 08837
</TABLE>
BY FACSIMILE:
(732) 906-9269
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION
OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the
Offer to Purchase) is utilized, if delivery of Shares (as defined below) is to
be made by book-entry transfer to an account maintained by the Depositary at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 2 of the Offer to Purchase. Stockholders who
deliver Shares by book-entry transfer are referred to herein as "Book-Entry
Stockholders" and other stockholders are referred to herein as "Certificate
Stockholders." Stockholders 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 2 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 in accordance with the guaranteed delivery procedures set
forth in Section 2 of the Offer to Purchase. See Instruction 2.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
1
<PAGE>
Name(s) of Registered Owner(s) _____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution That Guaranteed Delivery _______________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described above are being
tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to ACS Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Affiliated
Computer Services, Inc., a Delaware corporation ("Parent"), the above-described
shares of common stock, par value $.10 per share (collectively, the "Shares"),
of BRC Holdings, Inc., a Delaware corporation (the "Company"), pursuant to the
Purchaser's offer to purchase 8,704,238 Shares at a price of $19.00 per Share,
net to the seller in cash, without interest, in accordance with the terms and
conditions of the Purchaser's Offer to Purchase dated October 23, 1998 (the
"Offer to Purchase"), and this Letter of Transmittal (which, together with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer (including, if the Offer is extended or amended, the terms or
conditions of any such extension or amendment), the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to all the Shares that are being tendered hereby (and any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after October 19, 1998) and irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any such other Shares or securities
or rights), with full power of substitution (such power of attorney being deemed
to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and any such other Shares or securities or rights)
or transfer ownership of such Shares (and any such other Shares or securities or
rights) on the account books maintained by the Book-Entry Transfer Facility
together, in any such case, with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Purchaser, (b) present such Shares
(and any such other Shares or securities or rights) for transfer on the
Company's books and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares (and any such other Shares or securities
or rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all Shares or other securities or rights issued or issuable in
respect of such Shares on or after October 19, 1998), and, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances. The
2
<PAGE>
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares (and any such other Shares or
other securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned hereby irrevocably appoints Jeffrey A. Rich and David W.
Black, in their respective capacities as officers of Parent, and any individual
who shall hereafter succeed to any such office of Parent, and each of them, and
any other designees of the Purchaser, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote at any annual,
special or adjourned meeting of the Company's stockholders or otherwise in such
manner as each such attorney 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 and proxy or his substitute shall in
his sole discretion deem proper with respect to, and to otherwise act as each
such attorney and proxy or his substitute shall in his sole discretion deem
proper with respect to, all the Shares tendered hereby that have been accepted
for payment by the Purchaser prior to the time any such action is taken and with
respect to which the undersigned is entitled to vote (and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after October 19, 1998). This appointment is effective
when, and only to the extent that, the Purchaser accepts for payment such Shares
as provided in the Offer to Purchase. This power of attorney and proxy 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 all prior powers of attorney and
proxies appointed by the undersigned at any time with respect to such Shares
(and any such other Shares or securities or rights) and no subsequent powers of
attorney or proxies will be appointed by the undersigned, or be effective, with
respect thereto.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned understands that if more than 8,704,238 Shares
(approximately 51% of the outstanding Shares on a fully diluted basis) are
validly tendered prior to expiration of the Offer and not validly withdrawn in
accordance with Section 3 of the Offer to Purchase, Shares so tendered and not
validly withdrawn shall be accepted for payment on a pro rata basis, with
adjustments to avoid purchases of fractional shares, based upon the number of
Shares validly tendered and not withdrawn by the Expiration Date.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and any accompanying documents, as appropriate) in the
name of, and deliver such check and/or return such certificates (and any
accompanying documents, as appropriate) to, the person or persons so indicated.
The undersigned recognizes that the Purchaser has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
3
<PAGE>
- ------------------------------------------------
SPECIAL PAYMENT 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 are to be issued in the name of someone other than the
undersigned, or if Shares delivered by book-entry transfer that are not
accepted for payment are to be returned by credit to an account maintained
at the Book-Entry Transfer Facility other than the account indicated above.
Issue check and/or certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- ------------------------------------------------------------
- ------------------------------------------------------------
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 are to be sent to someone other than the undersigned or
to the undersigned at an address other than that indicated above.
Issue check and/or certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- -----------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: _____________, 1998
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares 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 trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ________________________________________________
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name: ______________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ________________________________________________
Dated: _____________, 1998
- --------------------------------------------------------------------------------
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a bank, broker,
dealer, credit union, savings association or other entity that is a member in
good standing of a recognized Medallion Program approved by The Securities
Transfer Association Inc. (each such entity an "Eligible Institution"). No
signature guarantee is required on this Letter of Transmittal (a) if this Letter
of Transmittal is signed by the registered holder(s) (which term, for purposes
of this document, shall include any participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of
Shares) of Shares tendered herewith, unless such holder(s) has completed either
the box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the reverse hereof, or (b) if such Shares are tendered
for the account of an Eligible Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if delivery of Shares is to be made pursuant to
the procedures for book-entry transfer set forth in Section 2 of the Offer to
Purchase. For a stockholder 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) 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 a Book-Entry Confirmation must be received by the Depositary prior to
the Expiration Date or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below and in Section 2 of the Offer to
Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedures, (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser must be received by the
Depositary prior to the Expiration Date and (c) the certificates for all
physically delivered Shares or a Book-Entry Confirmation with respect to all
tendered Shares, as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange, Inc. trading days after the
date of execution of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. 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 stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
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 certificate(s) 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 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 LETTERS OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
6
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or accepted for payment are to be issued to
a person other than the registered holder(s). Signatures on such 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 certificates listed, the certificates must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any persons 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 person) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes or 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 CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such 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.
8. WAIVER OF CONDITIONS. Subject to the terms of the Offer, the Purchaser
reserves the absolute right in its sole discretion to waive any of the specified
conditions of the Offer, in whole or in part, in the case of any Shares
tendered.
9. 31% BACKUP WITHHOLDING. Under U.S. Federal income tax law, a
stockholder whose tendered Shares are accepted for payment is required to
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the Depositary is not provided
with the correct TIN, the Internal Revenue Service may subject the stockholder
or other payee to a $50 penalty. In addition, payments that are made to such
stockholder or other payee with respect to Shares purchased pursuant to the
Offer may be subject to a 31% backup withholding.
Certain stockholders (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, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld, provided that the
required information is given to the Internal Revenue Service. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in
7
<PAGE>
order to avoid backup withholding. Even if 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 stockholder if a TIN is provided to the Depositary within 60
days.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the 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.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for 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 should be directed to the
Information Agent at its address set forth below. Questions or requests for
assistance may also be directed to the Information Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY THEREOF (TOGETHER
WITH CERTIFICATES FOR, OR A BOOK-ENTRY CONFIRMATION WITH RESPECT TO, TENDERED
SHARES WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS)
MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN Social Security Number OR
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY Employer Identification Number
BY SIGNING AND DATING BELOW. ------------------------
-----------------------------------------------------------------
PART 2--CERTIFICATION--Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I
am waiting for a number to be issued for me) and
(2) I am not subject to backup withholding either because: (a) I
Department of the Treasury am exempt from backup withholding, or (b) I have not been
Internal Revenue Service notified by the Internal Revenue Service (the IRS) that I am
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) subject to the 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.
-----------------------------------------------------------------
PART 3: Awaiting TIN / /
- ---------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that you are subject to
backup withholding, you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out such item (2).
SIGNATURE ------------------------------- DATE
-------------
- ---------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
8
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature ________________________________ Date _______________________________
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 THIS OFFER IS:
D. F. KING & CO., INC.
77 Water Street
New York, N.Y. 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 848-3051
9
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates representing shares of common stock, par value
$.10 per share (the "Shares"), of BRC Holdings, Inc., a Delaware corporation
(the "Company"), are not immediately available or if the procedures for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase). Such form may be
delivered by hand or transmitted by telegram or facsimile transmission or mailed
to the Depositary and must include a guarantee by an Eligible Institution (as
defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer to
Purchase.
THE DEPOSITARY:
FIRST CITY TRANSFER COMPANY
<TABLE>
<S> <C>
BY HAND/OVERNIGHT COURIER: BY MAIL:
First City Trust Company First City Trust Company
505 Thornall Street P. O. Box 170
Suite 303 Iselin, New Jersey 08830-0170
Edison, New Jersey 08837
</TABLE>
BY FACSIMILE:
(732) 906-9269
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, 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.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ACS Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Affiliated
Computer Services, Inc., a Delaware corporation, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase, dated October 23,
1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, Shares pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: If Shares will be tendered by book-entry
- -------------------------------- transfer,
Names(s) of Record Holder(s): Account Number:
- ------------------------ ---------------------------------
- ---------------------------------------- Signature(s):
(PLEASE --------------------------------------
PRINT) ----------------------------------------
Certificate Nos. (if available): Dated:
- ---------------------------------------- ----------------------------------------
- ----------------------------------------
Address(es):
- --------------------------------------
- ----------------------------------------
CODE ZIP
Area Code and Tel. No.:
- ---------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a commercial bank or trust company or savings institution
having an office or correspondent in the United States or a member firm of a
registered national securities exchange or a member of the National Association
of Securities Dealers, Inc., hereby guarantees to deliver to the Depositary
either the certificates representing the Shares tendered hereby, in proper form
for transfer, or a Book-Entry Confirmation (as defined in Section 2 of the Offer
to Purchase) of a transfer of such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal, or a manually signed
facsimile thereof, with any required signature guarantees or an Agent's Message,
and any other documents required by the Letter of Transmittal within three New
York Stock Exchange, Inc. trading days after the date hereof.
<TABLE>
<S> <C>
Name of Firm: --------------------------------------------
Address: (AUTHORIZED SIGNATURE)
- ----------------------------------------- Title:
- -------------------------------------------- --------------------------------------------
ZIP CODE Dated:
Area Code and Tel. No.: -------------------------------------------
- ---------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
8,704,238 SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
AT
$19.00 NET PER SHARE
BY
ACS ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
AFFILIATED COMPUTER SERVICES, INC.
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 20, 1998, UNLESS
EXTENDED.
- --------------------------------------------------------------------------------
October 23, 1998
To Brokers, Dealers, Banks,
Trust Companies and Other Nominees:
We are enclosing the materials listed below in connection with the offer by
ACS Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Affiliated Computer Services, Inc., a Delaware
corporation ("Parent"), to purchase 8,704,238 shares of common stock, par value
$.10 per share (the "Shares"), of BRC Holdings, Inc., a Delaware corporation
(the "Company"), at $19.00 per Share, net to the Seller in cash, without
interest, upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase dated October 23, 1998 (the "Offer to Purchase"),
and the related Letter of Transmittal (which, together with any supplements or
amendments thereto, collectively constitute the "Offer").
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. The Letter to Stockholders of the Company from the President and
Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with space
provided for obtaining such client's instructions with regard to the Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 20, 1998, UNLESS EXTENDED.
1
<PAGE>
The Board of Directors of the Company has unanimously approved the Offer and
the Merger (as defined below) and determined that the Offer and the Merger,
taken together, are fair to, and in the best interests of, the stockholders of
the Company and recommends that stockholders of the Company accept the Offer and
tender their Shares.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of October 19, 1998 (the "Merger Agreement"), among Parent, the Purchaser and
the Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company, with the Company surviving the merger as a wholly owned
subsidiary of Parent (the "Merger"). In the Merger, each outstanding Share
(other than Shares owned by (i) Parent, the Purchaser, the Company or any direct
or indirect subsidiary of Parent or the Company or (ii) stockholders, if any,
who are entitled to and who properly exercise dissenters' rights under Delaware
law) will be converted into the right to receive $19.00 per Share, without
interest, as set forth in the Merger Agreement and described in the Offer to
Purchase.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
shares, and any other required documents should be sent to the Depositary and
either Share certificates representing the tendered Shares should be delivered
to the Depositary, or such Shares should be tendered by book-entry transfer into
the Depositary's account maintained at the Book-Entry Transfer Facility (as
described in Section 2 of the Offer to Purchase), all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share certificates or other required documents on or prior to the
Expiration Date or comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 2 of the Offer to Purchase.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. You will be reimbursed upon request for customary
mailing and handling expenses incurred by you in forwarding the enclosed
offering materials to your customers.
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent at the addresses and telephone numbers set
forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
AFFILIATED COMPUTER SERVICES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY OR THE
INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
8,704,238 SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
AT
$19.00 NET PER SHARE
BY
ACS ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
AFFILIATED COMPUTER SERVICES, INC.
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 20, 1998, UNLESS
EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated October 23,
1998 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by ACS Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Affiliated
Computer Services, Inc., a Delaware corporation ("Parent"), to purchase
8,704,238 shares of common stock, par value $.10 per share (the "Shares") of BRC
Holdings, Inc., a Delaware corporation (the "Company"), at $19.00 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. Also enclosed is the Letter to Stockholders
of the Company from the Chairman and Chief Executive Officer of the Company
accompanied by the Company's Solicitation/Recommendation Statement on Schedule
14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is invited to the following:
1. The tender price is $19.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
the Offer.
2. The Board of Directors of the Company has unanimously approved the
Offer and the Merger (as defined below) and determined that the Offer and
the Merger, taken together, are fair to, and in the best interests of, the
stockholders of the Company and recommends that the stockholders of the
Company accept the Offer and tender their Shares.
3. The Offer is being made for 8,704,238 Shares (approximately 51% of
the outstanding Shares on a fully diluted basis). Upon the terms and subject
to the conditions of the Offer, if more than 8,704,238 Shares are validly
tendered prior to the expiration of the Offer and not properly withdrawn in
accordance with Section 3 of the Offer to Purchase, such Shares will be
accepted for payment on a pro rata basis (with appropriate adjustments to
avoid the purchase of fractional Shares) according to the number of Shares
validly tendered and not properly withdrawn by the expiration of the Offer.
1
<PAGE>
4. The Offer is being made pursuant to the Agreement and Plan of Merger
dated as of October 19, 1998 (the "Merger Agreement"), among Parent, the
Purchaser and the Company pursuant to which, following the consummation of
the Offer and the satisfaction or waiver of certain conditions, the
Purchaser will be merged with and into the Company, with the Company
surviving the merger as a wholly owned subsidiary of Parent (the "Merger").
In the Merger, each outstanding Share (other than Shares owned by (i)
Parent, the Purchaser, the Company or any direct or indirect subsidiary of
Parent or the Company or (ii) stockholders, if any, who are entitled to and
who properly exercise dissenters' rights under Delaware law) will be
converted into the right to receive $19.00 per Share, without interest, as
set forth in the Merger Agreement and described in the Offer to Purchase.
5. Parent and the Purchaser have entered into a Stock Tender Agreement
dated as of October 19, 1998 (the "Stock Tender Agreement") with certain
stockholders of the Company who beneficially own 2,968,350 Shares in the
aggregate (not including 324,000 Shares issuable under presently exercisable
options), representing approximately 17.4% of the outstanding Shares. Under
the Stock Tender Agreement, those stockholders have agreed to tender their
Shares pursuant to the Offer.
6. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer
8,704,238 Shares.
7. The Offer, Proration Period and withdrawal rights will expire at
12:00 Midnight, New York City time, on Friday, November 20, 1998, unless the
Offer is extended by the Purchaser. In all cases, payment for Shares
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares (or timely
Book-Entry Confirmation of a transfer of such Shares as described in Section
2 of the Offer to Purchase), a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) or an Agent's Message (as defined in
the Offer to Purchase) in connection with a book-entry delivery and any
other documents required by the Letter of Transmittal.
8. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer, except
as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
set forth below. An envelope to return your instructions to us is enclosed. If
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified below. Your instructions to us should be forwarded promptly
to permit us to submit a tender on your behalf prior to the expiration of the
Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
Tear Here Tear Here
- --------------------------------------------------------------------------------
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
8,704,238 SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase dated October 23, 1998, of ACS Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Affiliated Computer Services, Inc.,
a Delaware corporation, and the related Letter of Transmittal, relating to
shares of Common Stock, par value $.10 per share (the "Shares"), of BRC
Holdings, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set forth
in such Offer to Purchase and the related Letter of Transmittal.
Dated: ______________________, 1998
<TABLE>
<S> <C>
- --------------------------------------------
NUMBER OF SHARES TO BE TENDERED*
Shares
- --------------------------------------------
SIGNATURE(S)
PLEASE PRINT NAME(S)
ADDRESS (INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NO.
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NO.
</TABLE>
- ------------------------
*Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens: 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--
- --------------------------------------------- ----------------------------------------
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the account or, if
joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not a The actual owner(1)
legal or valid trust under State law
8. Sole proprietorship account The owner(4)
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------- ----------------------------------------
<S> <C> <C>
9. A valid trust, estate, or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the
legal entity itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of The partnership
the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>
- ------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
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 non-resident 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 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 the regulations under sections 6041, 6041(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 IRS. 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, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications
or affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN
OFFER TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE DATED
OCTOBER 23, 1998 AND THE RELATED LETTER OF TRANSMITTAL AND IS NOT BEING MADE TO
(NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SHARES IN ANY
JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD
NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN ANY JURISDICTION THE
SECURITIES LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED MADE ON BEHALF OF THE PURCHASER BY ONE OR MORE
REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
8,704,238 SHARES OF COMMON STOCK
OF
BRC HOLDINGS, INC.
AT
$19.00 NET PER SHARE
BY
ACS ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
AFFILIATED COMPUTER SERVICES, INC.
ACS Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Affiliated Computer Services, Inc., a Delaware
corporation ("Parent"), is offering to purchase 8,704,238 shares of common
stock, par value $.10 per share (the "Shares"), of BRC Holdings, Inc., a
Delaware corporation (the "Company"), at $19.00 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated October 23, 1998 and in the related Letter of
Transmittal (which together constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 20, 1998, UNLESS
EXTENDED.
- --------------------------------------------------------------------------------
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of October 19, 1998 (the "Merger Agreement"), among Parent, the Purchaser and
the Company pursuant to which, following the consummation of the Offer, the
Purchaser will be merged with and into the Company (the "Merger"). On the
effective date of the Merger, each outstanding Share (other than Shares owned by
(i) Parent, the Purchaser or the Company or any direct or indirect subsidiary of
Parent or the Company or (ii) stockholders, if any, who are entitled to and who
properly exercise dissenters' rights under Delaware law) will be converted into
the right to receive $19.00 in cash, without interest.
The Board of Directors of the Company has unanimously approved the Offer and
the Merger and determined that the Offer and the Merger, taken together, are
fair to, and in the best interests of, the stockholders of the Company, and
recommends that stockholders of the Company accept the Offer and tender their
Shares.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 8,704,238 SHARES
(APPROXIMATELY 51% OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS) (THE
"MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
DESCRIBED IN THE OFFER TO PURCHASE.
1
<PAGE>
Parent and the Purchaser have entered into a Stock Tender Agreement dated as
of October 19, 1998 (the "Stock Tender Agreement") with certain stockholders of
the Company who beneficially own 2,968,350 Shares in the aggregate (not
including 324,000 Shares issuable under presently exercisable options),
representing approximately 17.4% of the outstanding Shares on a fully diluted
basis. Under the Stock Tender Agreement, those stockholders have agreed to
tender their Shares pursuant to the Offer.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Upon
the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Purchaser and transmitting payment
to tendering stockholders. In all cases, payment for Shares purchased pursuant
to the Offer will be made only after timely receipt by the Depositary of (a)
certificates for such Shares or timely confirmation of book-entry transfer of
such Shares into the Depositary's account at a Book-Entry Transfer Facility (as
defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (b) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) and (c) any other documents required by the
Letter of Transmittal. Under no circumstances will interest be paid by the
Purchaser on the purchase price of the Shares, regardless of any delay in making
such payment.
The term "Expiration Date" means 12:00 Midnight, New York City time on
Friday, November 20, 1998, unless and until the Purchaser, in its sole
discretion (but subject to the terms of the Merger Agreement), shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date on which the Offer,
as so extended by the Purchaser, shall expire. The Purchaser expressly reserves
the right, in its sole discretion (but subject to the terms of the Merger
Agreement), at any time or from time to time, and regardless of whether or not
any of the events set forth in Section 14 of the Offer to Purchase shall have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary. The Purchaser
shall not have any obligation to pay interest on the purchase price for tendered
Shares in the event the Purchaser exercises its right to extend the period of
time during which the Offer is open. There can be no assurance that the
Purchaser will exercise its right to extend the Offer (other than as required by
the Merger Agreement). Any such extension will be followed by a public
announcement thereof no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. During any such
extension, all Shares previously tendered and not withdrawn will remain subject
to the Offer, subject to the right of a tendering stockholder to withdraw such
stockholder's Shares.
If more than 8,704,238 Shares are validly tendered prior to the Expiration
Date and not properly withdrawn, the Purchaser will, upon the terms and subject
to the conditions of the Offer, accept such Shares for payment on a pro rata
basis, with adjustments to avoid purchases of fractional Shares, based upon the
number of Shares validly tendered prior to the Expiration Date and not properly
withdrawn. Because of the difficulty of determining precisely the number of
Shares validly tendered and not properly withdrawn, if proration is required,
the Purchaser would not expect to announce the final results of proration
immediately after the Expiration Date. The Purchaser will announce the
preliminary results of proration by press release as promptly as practicable
after the Expiration Date, and expects to be able to announce the final results
of proration approximately three Nasdaq National Market trading days after the
Expiration Date. Holders of Shares may obtain such preliminary information and
final results from the Depositary or the Information Agent, and also may be able
to obtain such information from their brokers.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
12:00 Midnight, New York City time, on Friday,
2
<PAGE>
November 20, 1998, (or, if the Purchaser shall have extended the period of time
during which the Offer is open, the latest time and date at which the Offer, as
so extended by the Purchaser, shall expire). For a withdrawal to be effective, a
written, telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover of the Offer to Purchase and must specify the name of the person having
tendered the Shares to be withdrawn, the number of Shares to be withdrawn, if
different from the name of the person who tendered the Shares. If certificates
for Shares have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown on
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution (as defined in Section 2 of the
Offer to Purchase), the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedures for book-entry transfer as set forth in Section 2 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the appropriate Book-Entry Transfer Facility to be credited with the
withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 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 the Purchaser, in its sole discretion, whose determination will be final and
binding.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase and the Letter of Transmittal
may be directed to the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL-FREE: (800) 848-3051
October 23, 1998
3
<PAGE>
[ACS LOGO] NEWS RELEASE
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
CONTACTS:
Mark A. King
EVP and Chief Financial Officer
ACS
(214) 841-8007
ACS TO ACQUIRE BRC HOLDINGS
DALLAS, TEXAS -- October 19, 1998 -- ACS (Affiliated Computer Services, Inc.)
and BRC Holdings, Inc. (BRC; NASDAQ: BRCP) announced today that they have signed
a definitive agreement under which BRC will be acquired by and merged into a
subsidiary of ACS. ACS intends to commence a cash tender offer for
approximately 51% of the fully diluted shares of BRC within five business days
at a price of $19.00 per share. The merger agreement is subject to certain
conditions, including regulatory approvals and approval of the merger by the
shareholders of BRC. Upon satisfaction of these conditions, ACS will acquire
all of the remaining shares of common stock of BRC at a price of $19.00 per
share in cash.
"We will be very pleased to welcome BRC, its clients and employees to ACS," said
Darwin Deason, chairman and chief executive officer of ACS. "This acquisition
will expand our capabilities in our core business lines of technology
outsourcing, business process outsourcing, and professional services. BRC meets
all of our acquisition criteria and we expect the transaction to be immediately
accretive to earnings."
Based on BRC's approximately 13.7 million outstanding common shares, the gross
transaction value for all shares is approximately $261 million. In addition,
BRC currently has cash and readily marketable securities of approximately $100
million.
BRC Holdings Inc., based in Dallas, Texas, is an information technology services
firm with 30 years experience providing consulting, project management,
technical support and system services that enable its clients to achieve their
strategic and operational objectives. BRC specializes in information technology
outsourcing, consulting, information systems, and document management. BRC is
ITAA*2000 certified. Fore more information about BRC, visit the company's web
site at www.brcp.com.
ACS is based in Dallas, Texas, and has operations primarily in North America, as
well as Central America, South America, Europe and the Middle East. ACS
provides a full range of business services including technology outsourcing,
business process outsourcing, electronic commerce, professional services and
systems integration. The company's Class A common stock trades on
<PAGE>
the New York Stock Exchange under the symbol "AFA." Visit ACS on the
Internet at www.acs-inc.com.
Statements about the company's outlook and all other statements in this release
other than historical facts are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements rely on a number of assumptions, concerning future events and are
subject to a number of uncertainties and factors, many of which are outside ACS'
control, that could cause actual results to differ materially from such
statements. While the Company believes that the assumptions concerning future
events are reasonable, it cautions that there are inherent difficulties in
predicting certain important factors, especially the timing and magnitude of
technological advances; the performance of recently acquired businesses; the
prospects for future acquisitions; the possibility that a current customer could
be acquired or otherwise affected by a future event that would diminish their
information technology requirements; the competition in the information
technology industry and the impact of such competition on pricing, revenues and
margins; the degree to which business entities continue to outsource information
technology and business processes; uncertainties surrounding budget reductions
or changes in funding priorities or existing government programs and the cost of
attracting and retaining highly skilled personnel. These factors, when
applicable, are discussed in the company's prior filings with the Securities and
Exchange Commission, including the most recent Form 10-K, a copy of which may be
obtained through the company without charge. ACS disclaims any intention or
obligation to revise any forward-looking statements whether as a result of new
information, future event, or otherwise.
<PAGE>
FOR IMMEDIATE RELEASE
Contacts: Paul Stoffel
Chairman
(214) 750-7778
Thomas Kiraly
Chief Financial Officer
(214) 905-2370
BRC SIGNS MERGER AGREEMENT WITH ACS
Dallas, Texas - October 19, 1998 BRC Holdings, Inc. (BRC) (NASDAQ-BRCP)
announced today that it has signed a definitive agreement with Affiliated
Computer Services, Inc. (ACS) under which BRC will be acquired by and merged
into a subsidiary of ACS. ACS intends to commence a cash tender offer for
approximately 51% of the fully-diluted shares of BRC within five business
days at a price of $19.00 per share. The merger agreement is subject to
certain conditions, including regulatory approvals and approval of the merger
by the shareholders of BRC. Upon satisfaction of these conditions, ACS will
acquire all of the remaining shares of common stock of BRC at a price of
$19.00 per share in cash.
Based on BRC's approximately 13.7 million outstanding common shares, the
gross transaction value for all shares is approximately $261 million. In
addition, BRC currently has cash and readily marketable securities of
approximately $100 million.
BRC Holdings, Inc., based in Dallas, Texas, is an information technology
services firm with 30 years experience in providing consulting, project
management, technical support and systems services that enable its clients to
achieve their strategic and operational objectives. BRC specializes in
information technology outsourcing, consulting, information systems and
document management. BRC is ITAA*2000 certified. For more information about
BRC, visit the Company's web site at www.brcp.com.
ACS is based in Dallas, Texas, and has operations primarily in North America,
as well as Central America, South America, Europe and Middle East. ACS
provides a full range of business services including technology outsourcing,
business process outsourcing, electronic commerce, professional services and
systems integration. The Company's Class A common stock trades on the New
York Stock Exchange under the symbol AFA. Visit ACS on the Internet at
www.acs-
<PAGE>
inc.com.
Statements about the Company's outlook and all other statements in this
release other than historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of uncertainties and factors, many of
which are outside BRC's control, that could cause actual results to differ
materially from such statements. While the Company believes that the
assumptions concerning future events are reasonable, it cautions that there
are inherent difficulties in predicting certain important factors, especially
the timing and magnitude of technological advances; market responses to the
Company's product and service offerings, pricing pressures, results from
litigation, the timely development and acceptance of new products and
services, changes in customer preferences, inventory risks due to shifts in
market demand and the successful consummation of the transactions
contemplated in the merger agreement. Consequently, the actual results
realized by the Company could differ materially from the statements made
herein. Shareholders of the Company are cautioned not to place an undue
reliance on the forward-looking statements made herein.
<PAGE>
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AGREEMENT AND PLAN
OF MERGER
AMONG
AFFILIATED COMPUTER SERVICES, INC.,
ACS ACQUISITION CORPORATION,
AND
BRC HOLDINGS, INC.
OCTOBER 19, 1998
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- -------------------------------------------------------------------------------
<PAGE>
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
RECITALS
ARTICLE I The Tender Offer
1.1. The Tender Offer. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2. Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.3. Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II The Merger
2.1. The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2. Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.3. Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . .5
2.4. Certificate of Incorporation. . . . . . . . . . . . . . . . . . . . .5
2.5. Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.6. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.7. Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.8. Conversion of the Shares. . . . . . . . . . . . . . . . . . . . . . .6
2.9. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.10. Conversion of the Common Stock of
the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.11. Payment for Shares. . . . . . . . . . . . . . . . . . . . . . . . . .7
2.12. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE III Representations and Warranties
of the Company
3.1. Organization and Qualification. . . . . . . . . . . . . . . . . . . .8
3.2. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.3. Authorized Capital. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . 10
3.5. Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . 10
3.6. SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . 11
3.7. Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . 11
3.8. Compliance with Applicable Law. . . . . . . . . . . . . . . . . . . 12
3.9. Termination, Severance, and
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . 12
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3.10. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 14
3.14. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . 16
3.15. Finders and Investment Bankers; Transaction Expenses. . . . . . . . 16
3.16. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17. Title to Properties; Entire Business. . . . . . . . . . . . . . . . 16
3.18. Intellectual Property Rights. . . . . . . . . . . . . . . . . . . . 16
3.19 Largest Customers . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Year 2000 Compliance. . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Certain Material Contract . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV Representations and Warranties of the Parent
and the Purchaser
4.1. Organization and Qualification. . . . . . . . . . . . . . . . . . . 17
4.2. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . 18
4.3. Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . 18
4.4. No Prior Activities . . . . . . . . . . . . . . . . . . . . . . . . 18
4.5. Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . 19
4.6. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V Covenants
5.1. Conduct of Business of the Company. . . . . . . . . . . . . . . . . 19
5.2. Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3. Action of Stockholders of the Company;
Voting and Disposition of the Shares. . . . . . . . . . . . . . . . 22
5.4. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . 23
5.5. Notification of Certain Matters . . . . . . . . . . . . . . . . . . 23
5.6. Access to Information . . . . . . . . . . . . . . . . . . . . . . . 23
5.7. Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . 25
5.8. Officers' and Directors' Indemnification. . . . . . . . . . . . . . 25
5.9. Other Actions by the Company. . . . . . . . . . . . . . . . . . . . 25
5.10. Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI Conditions to Consummation of the Merger
6.1. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . 26
6.2. No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.3. Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.4. Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE VII Termination; Amendment; Waiver
7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . 28
7.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.5. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII Miscellaneous
8.1. Survival of Representations, Warranties,
and Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2. Brokerage Fees and Commissions. . . . . . . . . . . . . . . . . . . 30
8.3. Entire Agreement; Assignment. . . . . . . . . . . . . . . . . . . . 31
8.4. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7. Specific Performance. . . . . . . . . . . . . . . . . . . . . . . . 32
8.8. Other Potential Bidders . . . . . . . . . . . . . . . . . . . . . . 33
8.9. Descriptive Headings; References. . . . . . . . . . . . . . . . . . 34
8.10. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . 34
8.11. Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.12. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.13. Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.14. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
Annex A Certain Conditions
Annex B-1 List of Those Signing the Stock Tender Agreement
Annex B-2 Stock Tender Agreement
Schedules [Note: Schedules to this Agreement have been omitted from this
filing but descriptions of such Schedules may be found in the
Agreement where referred to.]
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") dated as of October 19,
1998, by and among AFFILIATED COMPUTER SERVICES, INC., a Delaware corporation
(the "PARENT"), ACS ACQUISITION CORPORATION, a Delaware corporation and a
wholly-owned subsidiary of the Parent (the "PURCHASER"), and BRC HOLDINGS,
INC., a Delaware corporation (the "COMPANY").
RECITALS
The Boards of Directors of the Parent and the Company have unanimously
determined that it is in the best interests of the stockholders of their
respective corporations for the Purchaser to acquire all the outstanding
common stock, par value $.10 per share, of the Company (the "SHARES").
The parties intend to effect such acquisition through a tender offer on
the terms described below, followed by a merger of the Company with the
Purchaser on the terms described below (the "MERGER").
THEREFORE, in consideration of the foregoing, the mutual covenants
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which all parties hereby acknowledge, the parties
agree as follows:
ARTICLE I
THE TENDER OFFER
1.1 THE TENDER OFFER. (a) Provided that this Agreement has not been
terminated in accordance with ARTICLE VII and none of the events referred to
in ANNEX A (other than the events referred to in CLAUSES (i) and (ii) of the
second paragraph of ANNEX A and CLAUSE (j) of ANNEX A) has occurred or is
existing, within five business days of the date of this Agreement, the
Purchaser will commence a tender offer (the "OFFER"), subject to the Minimum
Condition described below, to purchase a total of at least 8,704,238 Shares
(which will represent not less than 51% of the outstanding Shares on a fully
diluted basis) at a price of $19.00 per Share (as such amount may be
increased in accordance with the terms of this Agreement, the "PER SHARE
AMOUNT") net to the seller in cash. The Purchaser agrees to accept for
payment a total of at least 8,704,238 Shares validly tendered pursuant to the
Offer as soon as legally permissible, and to pay for all such Shares as
promptly as practicable, upon the terms and subject to the conditions of the
Offer, as it may be revised as permitted by this Agreement. The obligation
of Purchaser to commence the Offer will be subject only to conditions set
forth in ANNEX A, and the obligation of Purchaser to accept for payment,
purchase, and pay for the Shares tendered pursuant to the Offer will be
subject to such conditions and to the further condition that 8,704,238 Shares
have been validly tendered and not withdrawn prior to the expiration date of
the offer (the "MINIMUM CONDITION"). If the Minimum Condition is not
satisfied on any Expiration Date of the Offer, the Purchaser may, in
Purchaser's discretion, extend the Offer for a period or periods not to
exceed, in the aggregate, ten business days. The Purchaser specifically
reserves the right to increase the price per share payable in the
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<PAGE>
Offer, to extend the expiration date of the Offer (unless, after January 31,
1999, all conditions to the Offer listed on ANNEX A are fulfilled), and to
make any other changes in the terms and conditions of the Offer (provided
that, unless previously approved by the Company in writing, no change may be
made that decreases the price per Share payable in the Offer, that changes
the form of consideration to be paid in the Offer, that reduces the minimum
number of Shares to be purchased in the Offer, that imposes conditions to the
Offer in addition to those set forth in ANNEX A, or that broadens the scope
of such conditions). Notwithstanding the foregoing, Purchaser (i) shall
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC") or the
staff thereof applicable to the Offer, and (ii) may, without the consent of
the Company, extend the Offer for an aggregate period of not more than 10
business days beyond the latest applicable date that would otherwise be
permitted under clause (i) of this sentence if, as of such date, all of the
offer conditions are satisfied or waived by Purchaser, but the number of
Shares validly tendered and not withdrawn pursuant to the Offer is less than
90% of the then outstanding Shares on a fully diluted basis. The parties
agree that the conditions set forth in ANNEX A are for the sole benefit of
the Purchaser and may be asserted by the Purchaser regardless of the
circumstances giving rise to any such condition (including any action or
inaction by the Purchaser or the Parent, if such action or inaction by the
Purchaser or the Parent is not taken knowingly or intentionally for the
purpose of breaking the Minimum Condition or one or more of the conditions
contained in ANNEX A) or may be waived by the Purchaser, in whole or in part,
at any time and from time to time, in its sole discretion. The failure by
the Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any such right, the waiver of any such right with respect
to particular facts and circumstances will not be deemed a waiver with
respect to other facts or circumstances, and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time. Any
good faith determination by the Purchaser with respect to any of the
foregoing conditions (including, without limitation, the satisfaction of such
conditions) will be final and binding on all parties. The Per Share Amount
will be paid net to the seller in cash, less any required withholding taxes,
on the terms and subject to the conditions of the Offer. If at the time of
the Expiration Date (or at the expiration of a proper extension), the Company
is purchasing Shares pursuant to the Offer and if at such time a greater
number of Shares than 8,704,238 Shares has been tendered into the Offer and
not withdrawn, then 8,704,238 Shares will be purchased on a pro rata basis.
The Company agrees that no Shares held by the Company or any of its
subsidiaries will be tendered in the Offer. The Company hereby consents to
the Offer and represents that (a) its Board of Directors, at a meeting duly
called and held (i) determined at such time that the Offer and the Merger,
taken together, are fair to the Company and its stockholders and in the best
interests of the holders of the Shares; (ii) resolved at such time to
recommend acceptance of the Offer and approval and adoption of this
Agreement, the Merger, and the transactions contemplated by this Agreement by
the stockholders of the Company prior to such purchase; and (iii) irrevocably
approved the Offer, the Merger, this Agreement, and the transactions
contemplated by this Agreement for the purposes of Section 203 of the
Delaware General Corporation Law (the "DGCL") and any other state or federal
statute, regulation, or rule that the Purchaser has identified, or that is
known after reasonable inquiry, to the Company requiring prior approval by
the Board of Directors of the Company of this Agreement, the Merger, the
Offer, or the other transactions contemplated by this Agreement and (b)
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), the Company's
financial advisor (the "ADVISOR"), has delivered to the
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<PAGE>
Board of Directors of the Company its opinion that, subject to the
limitations and qualifications set forth in such opinion, the Per Share
Amount is fair from a financial point of view to the holders of the Shares.
(b) As promptly as practicable on the date of the commencement of the
Offer, the Parent and the Purchaser will file with the SEC a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), which will (i) reflect
the execution and delivery of this Agreement; (ii) set forth the Offer as
provided for in this Agreement; and (iii) contain or incorporate by reference
a form of letter of transmittal and summary advertisement.
(c) The Purchaser will promptly disseminate the offer to purchase
referred to in SECTION 1.1(b) (as amended pursuant to this Agreement, the
"OFFER TO PURCHASE" and, collectively with all other schedules and exhibits
required to be filed with the SEC, the "OFFER DOCUMENTS") to the holders of
the Shares, reflecting the terms set forth in this Agreement. The Offer
Documents will contain the recommendation of the Board of Directors of the
Company that the holders of the Shares accept the Offer as described in
SECTION 1.1(a) and may make reference to the opinion of the Advisor referred
to in SECTION 1.1(a) and include or incorporate such opinion. The Purchaser
and the Company, with respect to written information supplied by the Company
specifically for use in the Offer Documents or based upon information
pertaining to the Company in the Company Reports (as defined in SECTION 3.6),
agree promptly to correct any information in the Offer Documents that becomes
false or misleading in any material respect. Subject to SECTION 1.2(b), the
Purchaser further agrees to take all steps to cause the Offer Documents to be
disseminated to the holders of Shares, as and to the extent required by
applicable law. The Company and its counsel will be given an opportunity to
review and comment on the Offer Documents prior to their being filed with the
SEC. The Parent and the Purchaser will promptly provide to the Company any
written comments they receive from the SEC with respect to the Offer
Documents.
1.2 COMPANY ACTIONS. (a) The Company hereby agrees to file with the
SEC as soon as practicable on or after the date of commencement of the Offer,
and promptly mail to its stockholders, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all schedules, amendments, and
supplements, the "SCHEDULE 14D-9") containing the recommendations of the
Board of Directors of the Company referred to in SECTION 1.1 (subject to the
right of the Board of Directors of the Company to withdraw such
recommendations if it is obligated to do so by its fiduciary obligations
under applicable law) and the opinion of the Advisor referred to in SECTION
1.1(a). The Purchaser and its counsel will be given an opportunity to review
and comment on the Schedule 14D-9 prior to its being filed with the SEC. The
Company will promptly provide to the Parent and the Purchaser any written
comments it receives from the SEC with respect to the Schedule 14D-9.
(b) The Company has been advised that the persons named on ANNEX B-1
have entered into the Stock Tender Agreement in the form of ANNEX B-2 (the
"STOCK TENDER AGREEMENT"). The Schedule 14D-9, at the time it is first
published, disseminated, or mailed to the stockholders of the Company, will
not contain any untrue statement of a material fact or omit
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<PAGE>
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The Company agrees
promptly to take all steps necessary to cause the Schedule 14D-9 to be
corrected to the extent requested by the Parent to reflect any change in
information concerning the Parent, the Purchaser, or the Offer, and, as
corrected, to be filed with the SEC and disseminated to the stockholders of
the Company, as and to the extent required by applicable law.
(c) In connection with the Offer, the Company will promptly furnish the
Purchaser with mailing labels, security position listings, and any available
listing or computer files containing the names and addresses of the record
holders of Shares as of the most recent practicable date and will furnish the
Purchaser with such information and assistance (including updated lists of
security position listings and listing or computer files) as the Purchaser or
its agents may reasonably request in order to communicate the Offer to the
record and beneficial holders of Shares. Subject to applicable law and
except for such steps as are necessary to disseminate the Offer Documents,
the Purchaser and its affiliates will hold in confidence the information
contained in any such labels, listings, and files, will use such information
only in connection with the Offer and the Merger, and, if this Agreement is
terminated, will deliver to the Company all copies of such information in its
possession.
1.3 BOARD OF DIRECTORS. (a) Effective upon the payment by the
Purchaser for Shares pursuant to the Offer, the Purchaser will be entitled to
designate that number of directors of the Company, rounded up to the next
whole number, that equals the product of (x) the total number of directors on
the Board of Directors (giving effect to the election or appointment of any
additional directors pursuant to this SECTION 1.3) and (y) the percentage
that the number of Shares on a fully diluted basis owned by the Parent and
the Purchaser (including Shares accepted for payment) bears to the total
number of outstanding Shares. The Board of Directors of the Company will at
all relevant times be composed of a sufficient number of directors so that
the right of the Purchaser under this SECTION 1.3(a) and the right of the
Company under SECTION 1.3(b) to have at least 2 Continuing Directors (as
defined in SECTION 1.3(b)) will not be impaired. The Company will at such
time cause the designees of the Purchaser to be elected to or appointed by
the Board of Directors, including, without limitation, increasing the number
of directors, amending its bylaws, using its reasonable best efforts to
obtain resignations of incumbent directors, and, to the extent necessary,
filing with the SEC and mailing to its stockholders the information required
by Section 14(f) of the Exchange Act and the rules promulgated thereunder, as
promptly as possible. The Parent and the Purchaser will supply any
information with respect to themselves and their respective nominees,
officers, directors, and affiliates required by Section 14(f) of the Exchange
Act and such rules to the Company. Upon written request by the Purchaser,
the Company will use its reasonable best efforts to cause the designees of
the Purchaser to constitute the same percentage of representation as is on
the Board of Directors after giving effect to this SECTION 1.3 on (i) each
committee of the Board of Directors; (ii) the board of directors of each
subsidiary of the Company; and (iii) each committee of such subsidiaries'
boards of directors.
(b) Following the election or appointment of the designees of the
Purchaser pursuant to this SECTION 1.3 and prior to the Effective Time, any
amendment or termination of this Agreement, extension for the performance of
the obligations or other acts of the Parent and the
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Purchaser, or waiver of the rights of the Company under this Agreement, will
(if and to the extent that there are any then serving directors of the type
specified below) require the approval of a majority of the then serving
directors of the Company who are directors on the date of this Agreement (the
"CONTINUING DIRECTORS"). Prior to the Effective Time, there will be no fewer
than 2 Continuing Directors. If, prior to the Effective Time, the number of
Continuing Directors is one, such remaining Continuing Director will be
entitled to appoint directors to fill the vacancies created and such
appointees will be Continuing Directors for the purposes of this Agreement.
The Continuing Directors may not be removed prior to the Effective Time.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions of this
Agreement and in accordance with the DGCL, the Purchaser will be merged with
and into the Company as soon as practicable following the satisfaction or
waiver of the conditions set forth in ARTICLE VI. Following the Merger, the
Company will continue as the surviving corporation (the "SURVIVING
CORPORATION") and the separate corporate existence of the Purchaser will
cease. At the election of the Parent or the Purchaser, any one or more
direct or indirect wholly-owned subsidiaries of the Parent incorporated under
the laws of the State of Delaware may be substituted for the Purchaser as a
constituent corporation in the Merger. As used in this Agreement, the term
"Purchaser" refers to any such substituted corporation.
2.2 EFFECTIVE TIME. The Merger will be consummated by filing with the
Delaware Secretary of State a certificate of merger or certificate of
ownership and merger in accordance with the DGCL (the "CERTIFICATE OF
MERGER") in such form as is required by, and executed in accordance with, the
relevant provisions of the DGCL, and such other documents as may be required
by the provisions of the DGCL. The Merger will be effective at the time of
such filing or at such later time as is specified in the Certificate of
Merger in accordance with the provisions of the DGCL. Such time of
effectiveness is referred to as the "EFFECTIVE TIME."
2.3 EFFECTS OF THE MERGER. The Merger will have the effects set forth
in Section 259 of the DGCL. As of the Effective Time, the Company will be a
wholly-owned direct or indirect subsidiary of the Parent. Without limiting
the foregoing, at the Effective Time, all properties, rights, privileges,
powers, and franchises of the Company and the Purchaser will vest in the
Surviving Corporation and all debts, liabilities, obligations, and duties of
the Company and the Purchaser will become the debts, liabilities,
obligations, and duties of the Surviving Corporation.
2.4 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
the Company as in effect at the Effective Time will be the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with
applicable law, except that at the election of the Purchaser, the Company
will amend its Certificate of Incorporation immediately prior to the
Effective Time to conform as nearly as possible to the Certificate of
Incorporation of the Purchaser.
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2.5 BYLAWS. The Bylaws of the Purchaser as in effect immediately prior
to the Effective Time will be the Bylaws of the Surviving Corporation until
amended in accordance with applicable law.
2.6 DIRECTORS. The directors of the Purchaser at the Effective Time
will be the initial directors of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified.
2.7 OFFICERS. The officers of the Company at the Effective Time will
be the initial officers of the Surviving Corporation and will hold office
from the Effective Time until their respective successors are duly elected or
appointed and qualified.
2.8 CONVERSION OF THE SHARES. At the Effective Time:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than (i) Shares held by the Parent, the Purchaser, the
Company, or any direct or indirect subsidiary of the Parent or the Company
and (ii) any Dissenting Shares (as defined in SECTION 2.9)) will, without
further action by the Parent, the Purchaser, or the Company, automatically be
canceled and extinguished and converted into the right to receive in cash the
Per Share Amount (the "MERGER CONSIDERATION") without interest, less any
required withholding taxes, upon surrender of the certificate formerly
representing such Share in accordance with SECTION 2.11.
(b) Each Share issued and outstanding immediately prior to the
Effective Time that is owned or held by the Parent, the Purchaser, the
Company, or any direct or indirect subsidiary of Parent or the Company will
be canceled and retired and cease to exist, without any conversion, and no
payment will be made with respect to any such Share.
2.9 DISSENTING SHARES. (a) Notwithstanding anything in this Agreement
to the contrary, Shares that are issued and outstanding immediately prior to
the Effective Time and that are held by stockholders that have complied in
all respects with the requirements of the DGCL concerning the right of a
stockholder of the Company to dissent from the Merger and to require an
appraisal of such Shares in the manner provided in the DGCL, if applicable,
and that, as of the Effective Time, have not effectively withdrawn or lost
such right to appraisal (the "DISSENTING SHARES") will not be converted into
or represent a right to receive the Merger Consideration pursuant to SECTION
2.8, but the holders of such Dissenting Shares will be entitled only to such
rights as are granted under Section 262 of the DGCL. Each holder of
Dissenting Shares that becomes entitled to payment for such Shares pursuant
to such section of the DGCL will receive payment for such Dissenting Shares
from the Surviving Corporation in accordance with the DGCL; PROVIDED,
HOWEVER, that to the extent that any holder or holders of Shares have failed
to establish the entitlement to appraisal rights as provided in Section 262
of the DGCL, such holder or holders (as the case may be) will forfeit the
right to appraisal of such Shares and each such Share will thereupon be
deemed to have been converted, as of the Effective Time, into and represent
the right to receive payment from the Surviving Corporation of the Merger
Consideration, without interest, as provided in SECTION 2.8.
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(b) The Company will give the Parent and the Purchaser (i) prompt
notice of any written demands for appraisal, withdrawals of demands for
appraisal, and any other instrument served pursuant to Section 262 of the
DGCL received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
Section 262 of the DGCL. The Company will not, except with the express
written consent of the Parent, voluntarily make any payment with respect to
any demands for appraisal or settle or offer to settle any such demands.
2.10 CONVERSION OF THE COMMON STOCK OF THE PURCHASER. Each share of the
common stock of the Purchaser issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the
part of the holder of such stock, be converted into and represent one validly
issued, fully paid, and nonassessable share of common stock, par value $.10
per share, of the Surviving Corporation.
2.11 PAYMENT FOR SHARES. (a) Prior to the Effective Time, the Purchaser
will appoint a bank or trust company reasonably acceptable to the Company as
agent for the holders of Shares (the "PAYING AGENT") to receive and disburse
the cash to which holders of Shares become entitled pursuant to SECTION 2.8.
At the Effective Time, the Purchaser or the Parent will provide the Paying
Agent with sufficient cash to allow the Merger Consideration to be paid by
the Paying Agent for each Share then entitled to receive the Merger
Consideration (the "PAYMENT FUND").
(b) Promptly after the Effective Time, the Purchaser or the Parent will
cause the Paying Agent to mail to each record holder immediately prior to the
Effective Time of an outstanding certificate or certificates representing
Shares that as of the Effective Time represent the right to receive the
Merger Consideration (the "CERTIFICATES"), a form of letter of transmittal
(which will specify that delivery will be effected, and risk of loss and
title to the Certificates will pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates for payment. Upon surrender to the Paying
Agent of a Certificate, together with such letter of transmittal duly
executed and completed in accordance with its instructions and such other
documents as may be requested, the holder of such Certificate will be
entitled to receive in exchange for such Certificate, subject to any required
withholding of taxes, the Merger Consideration and such Certificate will
forthwith be canceled. No interest will be paid or accrued on the Merger
Consideration upon the surrender of the Certificates. If payment or delivery
is to be made to a person other than the person in whose name the Certificate
surrendered is registered, it will be a condition of payment or delivery
that the Certificate so surrendered be properly endorsed, with signature
properly guaranteed, or otherwise be in proper form for transfer and that the
person requesting such payment or delivery pay any transfer or other taxes
required by reason of the payment or delivery to a person other than the
registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is
not applicable. Until surrendered in accordance with the provisions of this
SECTION 2.11, each Certificate (other than Certificates held by persons
referred to in SECTION 2.8(a)(i) and (ii)) will represent for all purposes
only the right to receive the Merger Consideration, without interest and
subject to any required withholding of taxes. Notwithstanding the foregoing,
neither the Paying Agent nor any party to this Agreement will be
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liable to a holder of Shares for any Merger Consideration delivered to a
public official pursuant to applicable abandoned property, escheat, or
similar laws.
(c) Promptly following the date that is six months after the Effective
Time, the Paying Agent will return to the Surviving Corporation all cash,
certificates, and other property in its possession that constitute any
portion of the Payment Fund, and the duties of the Paying Agent will
terminate. Thereafter, each holder of a Certificate formerly representing a
Share may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat, and similar laws) receive
in exchange therefor the Merger Consideration without any interest. Neither
the Parent, the Purchaser, nor the Surviving Corporation will be liable to
any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property, escheat, or similar laws. If Certificates are
not surrendered prior to midnight on the fourth anniversary of the Effective
Time, unclaimed amounts of the Payment Fund will, to the extent permitted
under applicable law, become the property of the Surviving Corporation.
Notwithstanding the foregoing, the Surviving Corporation will be entitled to
receive from time to time all interest or other amounts earned with respect
to the Payment Fund as such amounts accrue or become available.
(d) Any portion of the Payment Fund for which rights to dissent have
been perfected will be returned to the Surviving Corporation upon demand.
(e) After the Effective Time there will be no registration of transfers
on the stock transfer books of the Surviving Corporation of the Shares that
were outstanding immediately prior to the Effective Time.
2.12 CLOSING. Upon the terms and subject to the conditions of this
Agreement, as soon as practicable after all the conditions to the obligations
of the parties to effect the Merger under ARTICLE VI have been satisfied or
waived, the Company and the Purchaser will (a) file with the Secretary of
State of Delaware the Certificate of Merger and (b) take all such other and
further actions as may be required by law to make the Merger effective.
Contemporaneous with the filing referred to in this SECTION 2.12, a closing
(the "CLOSING") will be held at the offices of Hughes & Luce, L.L.P., 1717
Main Street, Suite 2800, Dallas, Texas or at such other location as the
parties to this Agreement may establish for the purpose of confirming all the
foregoing. The date and the time of such Closing are referred to as the
"CLOSING DATE."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Purchaser that:
3.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has the requisite corporate power and authority and any
necessary governmental authority to own, operate, and lease its properties
and assets and to carry on its business as it is now being conducted, except
for failures to have such power and authority as is not reasonably expected
to
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result in a Company Material Adverse Effect (as defined below). The Company
is duly qualified or licensed to do business and is in good standing in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification or licensing necessary,
except for failures to be so qualified or licensed and in good standing as is
not, individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect. Copies of the Certificate of Incorporation
and Bylaws of the Company, including all amendments, have been delivered to
the Parent and the Purchaser and such copies are accurate and complete. The
Certificate of Incorporation and Bylaws of the Company are in full force and
effect and the Company is not in default of the performance, observation, or
fulfillment of any provision of its Certificate of Incorporation or Bylaws.
For the purposes of this Agreement, "COMPANY MATERIAL ADVERSE EFFECT" means
any change or effect, other than a change or effect involving MatriDigm
Corporation, that, individually or when taken together with all such other
changes or effects, is reasonably expected to be materially adverse to the
condition (financial or other), business, operations, properties, assets,
liabilities, prospects, or results of operations of the Company and its
subsidiaries, taken as a whole.
3.2 SUBSIDIARIES. The Company is, directly or indirectly, the record
and beneficial owner of all the outstanding shares of capital stock of each
of its subsidiaries (other than directors' qualifying shares), there are no
proxies or voting agreements with respect to any such shares, and no equity
security of any of its subsidiaries is or may become required to be issued by
reason of any options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any
subsidiary, and there are no contracts, commitments, understandings, or
arrangements by which any subsidiary is bound to issue additional shares of
its capital stock or securities convertible into or exchangeable for such
shares. All such shares directly or indirectly owned by the Company are
owned by the Company or a wholly owned subsidiary, free and clear of any
claim, lien, encumbrance, or agreement. Each subsidiary of the Company is a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has the requisite corporate
power and authority and any necessary governmental authority to own, operate,
or lease its properties and assets and to carry on its business as it is now
being conducted, except for failures as are not, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect. Each subsidiary of the Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification or licensing necessary, except for failures to be so qualified,
licensed, or in good standing as are not, individually or in the aggregate,
reasonably expected to result in a Company Material Adverse Effect. Copies
of the charter documents, bylaws, or equivalent organizational documents of
each subsidiary of the Company have been delivered to the Parent and are
accurate and complete. Neither the Company nor any subsidiary of the Company
(a) beneficially owns any material equity interests in any entities that are
not subsidiaries of the Company or (b) is party to any material joint
venture, partnership, or similar arrangement other than its joint venture
with Logan Systems, Inc. and its interest in the United Records joint venture.
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3.3 AUTHORIZED CAPITAL. The authorized capital stock of the Company
consists solely of 30,000,000 shares of common stock, $.10 par value per
share, of which 13,738,144 shares were outstanding as of September 30, 1998,
and 2,000,000 shares of preferred stock, $10.00 par value per share, of which
no shares are outstanding. All of the outstanding Shares have been duly
authorized and are validly issued, fully paid, nonassessable, and free of
preemptive rights. There are outstanding options to purchase up to 3,328,989
Shares. Except as set forth above or on SCHEDULE 3.3 and there are no
preemptive rights nor any outstanding subscriptions, options, warrants,
rights, convertible securities, or other agreements or commitments of any
character relating to the issued or unissued capital stock or other
securities of the Company or any of its subsidiaries. There are no voting
trusts or other understandings to which the Company or any of its
subsidiaries is a party with respect to the voting capital stock of the
Company or any of its subsidiaries.
3.4 CORPORATE AUTHORIZATION. The Company has the full corporate power
and authority to execute and deliver this Agreement and, subject to any
necessary stockholder approval of the Merger, to consummate the transactions
contemplated by this Agreement. The execution, delivery, and performance by
the Company of this Agreement and the consummation by the Company of the
Merger and of the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action and, except for
any required approval of the Merger and any adoption of this Agreement by the
stockholders of the Company in connection with the consummation of the
Merger, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
3.5 APPROVALS; NO VIOLATIONS. Except for applicable requirements of
the Exchange Act and the Hart-Scott-Rodino Anti-trust Improvements Act of
1976 (the "HSR ACT") and the filing of the Certificate of Merger as required
by the DGCL, no filing with, and no permit, authorization, consent, or
approval of, any foreign or domestic public body or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement. Except as set forth on SCHEDULE 3.5, the execution and delivery
of this Agreement by the Company, the consummation by the Company of the
transactions contemplated by this Agreement and the compliance by the Company
with any of the provisions of this Agreement will not (a) conflict with or
result in any breach of any provision of the charters of bylaws or equivalent
organizational documents of the Company or any of its subsidiaries; (b)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, or acceleration) under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, license, lease, contract,
agreement, or other instrument or obligation to which the Company or any of
its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to the Company,
any of its subsidiaries or any of their properties or assets; except such
violations, conflicts, breaches, defaults, terminations, or accelerations
referred to in this SECTION 3.5 as are not, individually or in
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the aggregate, reasonably expected to result in a Company Material Adverse
Effect or materially adversely affect the ability of any party to perform its
obligations under this Agreement.
3.6 SEC FILINGS; FINANCIAL STATEMENTS. At least since December 31,
1993, the Company has timely filed with the SEC all forms, reports,
statements, and documents required to be filed by it pursuant to the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT"), and the Exchange Act, and the rules and
regulations promulgated thereunder, together with all amendments thereto
(collectively, and including, when filed, the Schedule 14d-9, the "COMPANY
REPORTS") and has otherwise complied in all material respects with the
requirements of the Securities Act and the Exchange Act. The Company will
promptly deliver to the Purchaser any Company Report filed by the Company
after the date of this Agreement. As of their respective dates, the Company
Reports did not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were or will be made, not misleading. Each of the historical
consolidated balance sheets included in or incorporated by reference into the
Company Reports as of its date and each of the historical consolidated
statements of income and earnings, stockholders' equity, and cash flows
included in or incorporated by reference into the Company Reports (including
any related notes and schedules) fairly presents or will fairly present the
consolidated financial condition, results of operations, stockholders'
equity, and cash flows, as the case may be, of the Company and its
subsidiaries for the periods set forth (subject, in the case of unaudited
statements, to normal year-end audit adjustments), in each case in accordance
with generally accepted accounting principles consistently applied during the
periods involved. The Company maintains a system of internal accounting
controls sufficient to provide that transactions are executed in accordance
with management's general or specific authorization, transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, access to assets is permitted only in accordance
with management's general or specific authorization, and the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the
consolidated balance sheet of the Company as of September 30, 1998, and
except as set forth in the Company Reports, neither the Company nor any of
its subsidiaries has any liabilities or obligations of any nature, whether or
not accrued, contingent, or otherwise, that would be required to be included
on a consolidated balance sheet of the Company and its subsidiaries as of
September 30, 1998 prepared in accordance with generally accepted accounting
principles, and that are, individually or in the aggregate, reasonably
expected to result in a Company Material Adverse Effect. Since September 30,
1998, the Company and its subsidiaries have conducted their respective
businesses in a manner consistent with past practices, and neither the
Company nor any of its subsidiaries has become subject to any liabilities or
obligations that would be required to be included on a consolidated balance
sheet of the Company and its subsidiaries prepared in accordance with
generally accepted accounting principles and that are, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect, other than liabilities or obligations incurred in the ordinary course
of business consistent with past practices or incurred in connection
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with the Offer, this Agreement, or the Merger and disclosed in the Company
Reports or consisting of reasonable legal, printing, accounting, and other
customary fees incurred in connection with the Offer, this Agreement, or the
Merger.
3.8 COMPLIANCE WITH APPLICABLE LAW. The Company and each of its
subsidiaries currently hold and are in compliance with the terms of all
licenses, permits, and authorizations necessary for the lawful conduct of
their respective businesses, and have complied with, and neither the Company
nor any of its subsidiaries is in violation of, or in default under, the
applicable statutes, ordinances, rules, regulations, orders, or decrees of
any federal, state, local, or foreign governmental bodies, agencies, or
authorities having, asserting, or claiming jurisdiction over it or over any
part of its operations or assets, except for violations that would not,
individually or in the aggregate, result in a Company Material Adverse
Effect. The businesses of the Company and its subsidiaries are not being and
have not been conducted in violation of any law, ordinance, or regulation of
any governmental authorities and regulatory agencies except for violations as
are not, individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect. No investigation or review by any
governmental authorities and regulatory agencies with respect to the Company
or any of its subsidiaries is pending or, to the best knowledge of the
Company, threatened, nor, to the best knowledge of the Company, have any
governmental authorities and regulatory agencies indicated an intention to
conduct such an investigation or review, and no fine has been levied against,
or order entered with respect to, the Company or any subsidiary by any
regulatory authority.
3.9 TERMINATION, SEVERANCE, AND EMPLOYMENT AGREEMENTS. Set forth on
SCHEDULE 3.9 is a complete and accurate list of each (a) employment,
severance, or collective bargaining agreement not terminable without
liability or obligation on 60 days' or less notice; (b) agreement with any
director, executive officer, or other key employee, agent, or contractor of
the Company or any subsidiary of the Company (i) the benefits of which are
contingent, or the terms of which are materially altered, on the occurrence
of a transaction involving the Company or any subsidiary of the Company of
the nature of any of the transactions contemplated by this Agreement or
relating to an actual or potential change in control of the Company or any of
its subsidiaries or (ii) providing any term of employment or other
compensation guarantee or extending severance benefits or other benefits
after termination not comparable to benefits available to employees, agents,
or contractors generally; (c) agreement, plan, or arrangement under which any
person may receive payments that may be subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986 (the "CODE") or included in the
determination of such person's "parachute payment" under Section 280G of the
Code; and (d) agreement or plan, including any stock option plan, stock
appreciation right plan, restricted stock plan, or stock purchase plan, any
of the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement; provided that no matter need be described in SCHEDULE 3.9
which is otherwise specifically described or referenced herein or which
involves payments in the aggregate of less than $100,000 by the Company.
Except as disclosed on SCHEDULE 3.9, since December 31, 1995, neither the
Company nor any of its subsidiaries has entered into or amended any
employment or severance agreement with any director, officer, or key
employee, agent, or contractor, or, granted any
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severance or termination pay to any officer, director, or key employee,
agent, or contractor of the Company or any of its subsidiaries.
3.10 EMPLOYEE BENEFITS. No "employee pension benefit plan" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PENSION PLAN") is a "multiemployer plan" (within the
meaning of ERISA), nor has the Company, or any of its subsidiaries or any
other person that, together with the Company, is or has been treated as a
single employer under Section 414(b), (c), (m), or (o) of the Code (each a
"COMMONLY CONTROLLED ENTITY") ever contributed or been required to contribute
to any multiemployer plan. Each Pension Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service that it is so qualified and nothing has occurred
since the date of such letter that is reasonably expected to affect the
qualified status of such Pension Plan. None of the "employee welfare benefit
plans" (as defined in Section 3(1) of ERISA), or other plans, arrangements,
or policies relating to stock options, stock purchases, compensation,
deferred compensation, severance, fringe benefits, and other employee
benefits, in each case maintained, or contributed to, or required to be
maintained or contributed to, by the Company or any Commonly Controlled
Entity for the benefit of any current or former employees, officers, agents,
or directors (or any beneficiaries of such persons) of the Company or any of
its subsidiaries (collectively, "BENEFIT PLANS") promises or provides medical
benefits to any person after termination of employment with the Company or
any agency of the Company, except as otherwise required by law in the
applicable jurisdiction. Each individual who is paid for services in any
form by the Company or any Commonly Controlled Entity and who is treated by
the Company or a Commonly Controlled Entity as an independent contractor for
federal income tax purposes (including, without limitation, Code provisions
applicable or relating to employee benefit plans), state unemployment tax
purposes, or any other purpose, is an independent contractor for such
purpose. Except where it is not reasonably expected to result in a Company
Material Adverse Effect: (a) each Benefit Plan has been administered in
accordance with its terms; (b) the Company and all the Benefit Plans are all
in compliance with applicable provisions of ERISA, the Code, and all other
applicable laws; (c) each Benefit Plan could be amended or terminated without
liability to the Company, any Commonly Controlled Entity, the Purchaser, or
the Parent on or at any time after the Effective Time; (d) neither the
Company nor any Commonly Controlled Entity has incurred any liability, and no
event has occurred that would result in any liability, to a Pension Plan
(other than for contributions not yet due) or to the Pension Benefit Guaranty
Corporation (other than for payment of premiums not yet due) that has not
been fully paid; (e) neither the Company nor any Commonly Controlled Entity
has incurred any direct or indirect liability under, arising out of, or by
operation of Title IV of ERISA, in connection with the termination of, or
withdrawal from, any Pension Plan or other requirement plan or arrangement,
and no fact or event exists that is reasonably expected to give rise to any
such liability; and (f) the aggregate accumulated benefit obligations of each
Pension Plan subject to Title IV of ERISA do not exceed the fair market value
of the assets of such Pension Plan.
3.11 TAXES. The Company and its subsidiaries have timely filed all
federal income tax returns and reports and other material returns and reports
relating to federal, state, local, and foreign taxes required to be filed.
Such reports and returns are true, correct and complete, except for such
failures to be true, correct and complete as are not, individually or in the
aggregate,
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reasonably expected to result in a Company Material Adverse Effect. The
Company and its subsidiaries have paid or made adequate provision for all
taxes owed except taxes that if not so paid or provided for is not reasonably
expected to result in a Company Material Adverse Effect, and, except as
disclosed in SCHEDULE 3.11, no unpaid deficiencies in taxes or other
governmental charges for any period have been proposed or assessed by any
government taxing authority and, to the knowledge of the Company, no
government tax authority is threatening to propose or assess against the
Company or any of its subsidiaries any such deficiency or charge that is,
individually or in the aggregate, reasonably expected to result in a Company
Material Adverse Effect. The Company and its subsidiaries have withheld or
collected and paid over to the appropriate governmental authorities or are
properly holding for such payment all taxes required by law to be withheld or
collected, except for such failures to have so withheld or collected and paid
over, or to be so holding for payment as are not, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect. There are no material liens for taxes upon the assets of the Company
or its subsidiaries, other than liens for current taxes not yet due and
payable and liens for taxes that are being contested in good faith by
appropriate proceedings diligently prosecuted. Neither the Company nor any
of its subsidiaries has agreed to or is required to make any adjustment under
Section 481(a) of the Code. Neither the Company nor any of its subsidiaries
has made any election under Section 341(f) of the Code.
3.12 LITIGATION. There is no suit, claim, action, proceeding, or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries or any of their respective properties
or assets before any court, regulatory agency, or tribunal as to which an
adverse determination is reasonably considered probable that, individually or
in the aggregate, is reasonably expected to result in a Company Material
Adverse Effect. Neither the Company nor any of its subsidiaries is subject
to any outstanding order, writ, injunction, or decree that, individually or
in the aggregate, is reasonably expected to result in a Company Material
Adverse Effect or would prevent or delay the consummation of the transactions
contemplated by this Agreement.
3.13 ENVIRONMENTAL MATTERS. Except for matters disclosed in SCHEDULE
3.13 and except for matters that are not reasonably expected to result,
individually or in the aggregate with all other such matters, in liability to
the Company or any of its subsidiaries in excess of $200,000, (i) the
properties, operations and activities of the Company and its subsidiaries are
in compliance with all applicable Environmental Laws; (ii) the Company and
its subsidiaries and the properties and operations of the Company and its
subsidiaries are not subject to any existing, pending or, to the knowledge of
the Company, threatened action, suit, claim, investigation, inquiry or
proceeding by or before any governmental authority under any Environmental
Laws; (iii) all notices, permits, licenses, or similar authorizations, if
any, required to be obtained or filed by the Company or any of its
subsidiaries under any Environmental Laws in connection with any aspect of
the business of the Company or its subsidiaries, including without limitation
those relating to the treatment, storage, disposal or release of a hazardous
or otherwise regulated substance, have been duly obtained or filed and will
remain valid and in effect after the Merger, and the Company and its
subsidiaries are in compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations; (iv) the Company and
its subsidiaries have satisfied and are currently in compliance with all
financial responsibility requirements applicable to their operations and
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imposed by any governmental authority under any Environmental Laws, and the
Company and its subsidiaries have not received any notice of noncompliance
with any such financial responsibility requirements; (v) to the Company's
knowledge, there are no physical or environmental conditions existing on any
property of the Company or its subsidiaries or resulting from the Company's
or such subsidiaries' operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial
obligations imposed on the Company or any of its subsidiaries under any
Environmental Laws or that would impact the soil, groundwater or surface
water or human health (to the extent of exposure to hazardous substances);
(vi) to the Company's knowledge, since the effective date of the relevant
requirements of applicable Environmental Laws and to the extent required by
such applicable Environmental Laws, all hazardous or otherwise regulated
substances generated by the Company and its subsidiaries have been
transported only by carriers authorized under Environmental Laws to transport
such substances and wastes, and disposed of only at treatment, storage, and
disposal facilities authorized under Environmental Laws to treat, store or
dispose of such substances and wastes; (vii) there has been no exposure of
any person or property to hazardous substances or any pollutant or
contaminant, nor has there been any release of hazardous substances, or any
pollutant or contaminant into the environment by the Company or its
subsidiaries or in connection with their properties or operations that is
reasonably expected to give rise to any claim against the Company or any of
its subsidiaries for damages or compensation; and (viii) subject to
restrictions necessary to preserve any attorney client privilege, the Company
and its subsidiaries have made available to Parent all internal and external
environmental audits and studies and all correspondence on substantial
environmental matters in the possession of the Company or its subsidiaries
relating to any of the current or former properties or operations of the
Company and its subsidiaries.
For purposes of this Agreement, the term "ENVIRONMENTAL LAWS" shall mean
any and all laws, statutes, ordinances, rules, regulations, or orders of any
Governmental Entity pertaining to health (to the extent of exposure to
hazardous substances) the environment currently in effect in any and all
jurisdictions in which the Company and its subsidiaries own property or
conduct business, including without limitation, the Clean Air Act, as
amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984,
as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990 ("OPA"), any state laws implementing the foregoing
federal laws, and all other environmental conservation or protection laws.
For purposes of this Agreement, the terms "hazardous substance" and "release"
have the meanings specified in CERCLA and RCRA and shall include petroleum
and petroleum products, radon and PCB's, and the term "disposal" has the
meaning specified in RCRA; PROVIDED, HOWEVER, that to the extent the laws of
the state in which the property is located establish a meaning for "hazardous
substance," "release," or "disposal" that is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply.
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3.14. VOTING REQUIREMENTS. The Board of Directors of the Company
has approved the Offer, the Merger and this Agreement, and such approval is
sufficient to render inapplicable to the Offer, the Merger and the Agreement
the provisions of Section 203 of the DGCL. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock in favor of
adoption of this Agreement and the Merger is the only vote of the holders of
any class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated hereby under any applicable law,
rule or regulations or pursuant to the requirements of the Company's
certificate of incorporation or bylaws.
3.15. FINDERS AND INVESTMENT BANKERS; TRANSACTION EXPENSES. Neither
the Company nor any of its officers or directors has employed any investment
banker, business consultant, financial advisor, broker or finder in
connection with the transactions contemplated by this Agreement, except for
DLJ and Paul Stoffel, or incurred any liability for any investment banking,
business consultancy, financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby, except
for fees payable to DLJ (as reflected in agreements between such firms and
the Company, copies of which have been delivered to Parent).
3.16. INSURANCE. The Company and each of its subsidiaries are
currently insured, and during each of the past five calendar years have been
insured, for reasonable amounts against such risks as companies engaged in a
similar business and similarly situated would, in accordance with good
business practice, customarily be insured.
3.17. TITLE TO PROPERTIES; ENTIRE BUSINESS. The Company and its
subsidiaries have good title or a valid and subsisting leasehold interest in
and to or a valid and enforceable license to use all material assets,
properties and rights owned, used or held of use by them in the conduct of
their respective businesses, in each case, free and clear of any Liens other
than Permitted Liens. The Company and its subsidiaries own or have
sufficient right to use all assets and properties necessary to conduct their
businesses in the manner in which they are currently conducted. As used
herein, "PERMITTED LIENS" mean: (i) a lien of a landlord, carrier,
warehouseman, mechanic, materialman, or any other statutory lien arising in
the ordinary course of business; (ii) a lien for taxes not yet due or being
contested in good faith; (iii) with respect to the right of the Company or
its subsidiaries to use any property leased to the Company or its
subsidiaries, arises by the terms of the applicable lease; (iv) a purchase
money security interest arising in the ordinary course of business; or (v)
does not materially detract from the value of the encumbered property or
assets or materially detract from or interfere with the use of the encumbered
property or assets in the ordinary course of business.
3.18. INTELLECTUAL PROPERTY RIGHTS. Except as set forth in SCHEDULE
3.18, the Company and its subsidiaries have the right to use all of the
material trademarks and trade names utilized by it in the conduct of its
business and any other computer software and software licenses, intellectual
property, proprietary information, trade secrets, trademarks, trade names,
copyrights, material and manufacturing specifications, drawings and designs
used by the Company or any of its subsidiaries and material to the operation
of the business of the Company or any of its subsidiaries (collectively,
"Intellectual Property"), without infringing on or otherwise acting adversely
to the rights or claimed rights of any person, except to the extent such
infringement or
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actions adverse to another's rights or claimed rights is not reasonably
expected to have a Company Material Adverse Effect. Except as set forth on
such SCHEDULE 3.18, neither the Company nor any of its subsidiaries is
obligated to pay any royalty or other consideration material to the Company
and its subsidiaries taken as a whole to any person in connection with the
use of any Intellectual Property. Except as set forth in such SCHEDULE 3.18
and as is not reasonably expected to have a Company Material Adverse Effect,
to the Company's knowledge, no other person is infringing on the rights of
the Company and its subsidiaries in any of their Intellectual Property.
3.19 LARGEST CUSTOMERS. The Company has made available to Parent a list
of the 10 largest customers by dollar volume of the Company and its
subsidiaries (the "LARGEST CUSTOMERS"), with the amount of revenues
attributable to each such customer, for each fiscal years ending December 31,
1996 and 1997. Except as previously disclosed, none of the Largest Customers
has terminated or materially altered its relationship with the Company since
January 1, 1996 or, to the Company's knowledge, threatened to do so or
otherwise notified the Company of its intention to do so, and there has been
no material dispute with any of the Largest Customers since January 1, 1996.
3.20 YEAR 2000 COMPLIANCE. The disclosures in the Company's Annual
Report on Form 10-K for the year ending December 31, 1997 and in its
Quarterly Report on Form 10-Q for the quarter ending June 30, 1998 regarding
the "status of Year 2000 Compliance" met the applicable standards (as
generally understood by legal practitioners) required with regard thereto as
of the dated filed, and such disclosures continue to be correct, in light of
the circumstances made and when measured against the disclosure standards
sought to be satisfied, in all material respects as if made on the date of
this Agreement.
3.21 CERTAIN MATERIAL CONTRACTS. The Company has disclosed to the
Purchaser and the Parent all agreements and arrangements (whether written or
oral and including all amendments thereto) to which the Company or any of its
Subsidiaries is a party or a beneficiary or by which the Company or any of
its Subsidiaries is bound that are material, directly or indirectly, to the
business of the Company and any of its Subsidiaries, taken as a whole
(collectively, the "MATERIAL CONTRACTS"). The Company and its Subsidiaries
have performed all of its obligations under each Material Contract, and there
exist no breach or default, or event that with notice or lapse of time would
constitute a breach or default under any Material Contract except as is not
reasonably expected to have a Company Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
Each of the Parent and the Purchaser represents and warrants to the
Company as follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of the Parent and the
Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority and any necessary governmental
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authority to carry on its business as now conducted. Each of the Parent and
the Purchaser is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities makes such qualification or licensing
necessary, except for failures to be so duly qualified or licensed and in
good standing as are not, individually or in the aggregate, reasonably
expected to result in a Parent Material Adverse Effect. For the purposes of
this Agreement, "PARENT MATERIAL ADVERSE EFFECT" means any change or effect
that, individually or when taken together with all such other changes or
effects, are reasonably expected to be materially adverse to the condition
(financial or other), business, operations, properties, assets, liabilities,
prospects, or results of operations of the Parent and its subsidiaries, taken
as a whole.
4.2 CORPORATE AUTHORIZATION. Each of the Parent and the Purchaser has
the full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated by this Agreement. The
execution, delivery, and performance by each of the Parent and the Purchaser
of this Agreement and the consummation by the Parent and the Purchaser of the
Merger and of the other transactions necessary for such consummation have
been duly and validly authorized by the Parent as sole stockholder of the
Purchaser and by the Board of Directors of each of the Parent and the
Purchaser and no other corporate proceedings on the part of the Parent or the
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
and validly executed and delivered by each of the Parent and the Purchaser
and constitutes a valid and binding obligation of each of the Parent and the
Purchaser, enforceable in accordance with its terms.
4.3 APPROVALS; NO VIOLATIONS. Except for applicable requirements of
the Exchange Act and the HSR Act and the filing and recordation of the
Certificate of Merger as required by the DGCL, no filing with, and no permit,
authorization, consent, or approval of any foreign or domestic public body or
authority is necessary for the consummation by the Parent and the Purchaser
of the transactions contemplated by this Agreement. Neither the execution
and delivery of this Agreement by the Parent and the Purchaser nor the
consummation by the Parent and the Purchaser of the transactions contemplated
by this Agreement nor compliance by them with any of the provisions of this
Agreement will (a) conflict with or result in any breach of any provision of
the organizational documents or bylaws of the Parent or the Purchaser; (b)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, cancellation, or acceleration under), any of the terms,
conditions, or provisions of any note, bond, mortgage, indenture, license,
lease, contract, agreement, or other instrument or obligation to which the
Parent or the Purchaser is a party or by which either of them or any of their
respective properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to the Parent or
the Purchaser or any of their respective properties or assets; except such
violations, conflicts, breaches, defaults, terminations, or accelerations
referred to in this SECTION 4.3 as are not, individually or in the aggregate,
reasonably expected to result in a Parent Material Adverse Effect.
4.4 NO PRIOR ACTIVITIES. Except for obligations or liabilities
incurred in connection with its incorporation or organization, the Offer, or
the negotiation and consummation of this
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Agreement and the transactions contemplated by this Agreement, the Purchaser
has not incurred any obligations or liabilities, nor has it engaged in any
business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
4.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Parent or the Purchaser for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9, the information
statement under Section 14(f) of the Exchange Act, or the Proxy Statement
will, in the case of the Offer Documents and the Schedule 14D-9, at the
respective times the Offer Documents and the Schedule 14D-9 are filed with
the SEC or first published, sent, or given to the stockholders of the
Company, or, in the case of the Proxy Statement, at the date the Proxy
Statement is first mailed to the stockholders of the Company or at the time
of the meeting of the stockholders of the Company held to vote on approval
and adoption of this Agreement and the Merger, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Offer
Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation or warranty is made by the Parent
or the Purchaser with respect to statements made or incorporated by reference
in the Offer Documents based on information supplied by the Company for
inclusion or incorporation by reference in the Offer Documents.
4.6 FINANCING. Parent or Purchaser will have available to it at the
time required the funds necessary to consummate the Offer, the Merger and the
transactions contemplated hereby.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS OF THE COMPANY.
(a) Except as expressly contemplated by this Agreement and except
in cases where, at or after such time as the designees of the Parent
constitute a majority of the members of the Board of Directors of the Company
and the failure to comply with the covenants set forth in this SECTION 5.1
results from actions, or omissions to act, taken or authorized by such
designees, during the period from the date of this Agreement to the Effective
Time:
(i) Each of the Company and its subsidiaries will conduct
its business solely in the ordinary course consistent with past practices,
except as is reasonably expected to facilitate the consummation of the Offer,
the Merger or the transactions contemplated hereby.
(ii) Neither the Company nor any of its subsidiaries will
intentionally take or willfully omit to take any actions that results in or
are reasonably expected to result in, a Company Material Adverse Effect.
(iii) The Company will use its reasonable best efforts to
preserve intact the business organization of the Company and each of its
subsidiaries, to keep available the
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services of its and their present officers and key employees and consultants,
and to maintain satisfactory relationships with customers, agents,
reinsurers, suppliers, and other persons having business relationships with
the Company or its subsidiaries.
(b) Without limiting the provisions of SECTION 5.1(a), except as
expressly contemplated by this Agreement and except in cases where, at or
after such time as the designees of the Parent constitute a majority of the
members of the Board of Directors of the Company and the failure to comply
with the covenants set forth in this SECTION 5.1 results from actions, or
omissions to act, taken or authorized by such designees, during the period
from the date of this Agreement to the Effective Time, neither the Company
nor any of its subsidiaries will:
(i) issue, sell, or dispose of additional shares of capital
stock of any class (including the Shares) of the Company or any of its
subsidiaries, or securities convertible into or exchangeable for any such
shares or securities, or any rights, warrants, or options to acquire any
such shares or securities, other than Shares issued upon exercise of options
disclosed in SECTION 3.3, which options cover a total of no more than
3,328,989 Shares;
(ii) redeem, purchase, or otherwise acquire, or propose to
redeem, purchase, or otherwise acquire, any of its outstanding capital stock,
or other securities of the Company or any of its subsidiaries;
(iii) split, combine, subdivide, or reclassify any of its
capital stock or declare, set aside, make, or pay any dividend or
distribution on any shares of its capital stock except for dividends or
distributions to the Company and its subsidiaries from their respective
subsidiaries;
(iv) sell, pledge, dispose of, or encumber any of its
assets, except for sales, pledges, dispositions, or encumbrances in the
ordinary course of business consistent with past practices or between the
Company and its subsidiaries, except as reasonably may be expected to
facilitate the consummation of the Offer, the Merger or the transactions
contemplated hereby;
(v) incur or modify any indebtedness or issue any debt
securities, or assume, guarantee, endorse, or otherwise as an accommodation
become absolutely or contingently responsible for obligations of any other
person, or make any loans or advances, other than in the ordinary course of
business consistent with past practices;
(vi) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or other employee benefit agreements, trusts, plans,
funds, or other arrangements for the benefit or welfare of any director,
officer, or employee, or (except for normal increases in the ordinary course
of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company) increase in any manner the compensation or fringe
benefits of any director, officer, or employee or pay any benefit not
required by any existing plan or arrangement (including, without limitation,
the granting or vesting of stock options or stock appreciation rights) or
take any action or grant any benefit not expressly
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required under the terms of any existing agreements, trusts, plans, funds, or
other such arrangements or enter into any contract, agreement, commitment, or
arrangement to do any of the foregoing; or make or agree to make any payments
to any directors, officers, agents, contractors, or employees relating to a
change or potential change in control of the Company;
(vii) acquire by merger, consolidation, or acquisition of
stock or assets any corporation, partnership, or other business organization
or division or make any investment either by purchase of stock or securities,
contributions to capital (other than to wholly-owned subsidiaries), property
transfer, or purchase of any material amount of property or assets, in any
other person;
(viii) except as required by this Agreement, adopt any
amendments to their respective charters or bylaws or equivalent
organizational documents;
(ix) take any action other than in the ordinary course of
business and consistent with past practices, to pay, discharge, settle, or
satisfy any claim, liability, or obligation (absolute or contingent, accrued
or unaccrued, asserted or unasserted, or otherwise);
(x) change any method of accounting or accounting practice
used by the Company or any of its subsidiaries, except for any change
required by reason of a concurrent change in generally accepted accounting
principles;
(xi) revalue in any respect any of its assets, including,
without limitation, writing down the value of its portfolio or writing off
notes or accounts receivable other than in the ordinary course of business
consistent with past practices (other than with respect to MatriDigm
Corporation);
(xii) except in the ordinary course of business consistent
with past practice, authorize any new capital expenditures;
(xiii) make any tax election, settle or compromise any
federal, state, or local tax liability or consent to the extension of time
for the assessment or collection of any federal, state, or local tax, the
effect of which would be material;
(xiv) settle or compromise any pending or threatened suit,
action, or claim material to the Company and its subsidiaries taken as a
whole or relevant to the transactions contemplated by this Agreement;
(xv) except as permitted by this Agreement, enter into any
agreement, arrangement, or understanding to do any of the foregoing actions
in this SECTION 5.1, including any agreement, arrangement, or understanding
resulting in or providing for a sale of any assets of the Company (other than
a sale of assets in the ordinary course of business and consistent with past
practices) or a merger or other liquidation, sale, or disposition of the
Company; or
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(xvi) voluntarily take any action or willfully omit to take
any action that is reasonably expected to make any representation or warranty
in ARTICLE III untrue or incorrect in any material respect at any time,
including as of the date of this Agreement and as of the time of consummation
of the Offer and the Effective Time, as if made as of such time.
5.2 PROXY STATEMENT. Promptly after the execution of this Agreement,
the Company and the Parent will cooperate with each other and use all
reasonable efforts to prepare, and the Company and the Parent will file with
the SEC, as soon as is reasonably practicable after completion of the Offer,
a proxy statement, together with a form of proxy, or information statement,
with respect to the Special Meeting (as defined in SECTION 5.3), if such
Special Meeting is required to be held pursuant to SECTION 5.3. For the
purposes of this Agreement, the term "PROXY STATEMENT" means such proxy or
information statement filed in final form with the SEC at the time it
initially is mailed to the stockholders of the Company and all amendments or
supplements thereto, if any, similarly filed and mailed. The parties will
use all reasonable efforts to have the Proxy Statement cleared by the SEC as
promptly as practicable after filing and, as promptly as practicable after
the Proxy Statement has been so cleared, will mail the Proxy Statement to the
stockholders of the Company as of the record date for the Special Meeting.
The Company represents that none of the information provided or to be
provided by it, and the Parent and the Purchaser represent that none of the
information provided or to be provided by them, for use in the Proxy
Statement will, on the date the Proxy Statement is first mailed to the
stockholders of the Company and on the date of the Special Meeting, be false
or misleading with respect to any material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading, and the Parent, the Company, and the Purchaser each agrees to
correct any information provided by it for use in the Proxy Statement that
has become false or misleading in any material respect and file such
amendments and supplements as are necessary. The Proxy Statement will comply
as to form in all material respects with all applicable requirements of
federal securities laws and applicable state laws.
5.3 ACTION OF STOCKHOLDERS OF THE COMPANY; VOTING AND DISPOSITION OF
THE SHARES.
(a) Promptly after completion of the Offer and if required by
applicable law in order to consummate the Merger, the Company will take all
action necessary in accordance with the DGCL and the Certificate of
Incorporation and Bylaws of the Company, to call a meeting of its
stockholders (the "SPECIAL MEETING") with a record date as of which the
Parent is the record owner of the Shares purchased pursuant to the Offer at
which the stockholders of the Company will consider and vote upon the Merger
and this Agreement. Unless the fiduciary duties of the Board of Directors or
any Director under applicable law require otherwise, the Proxy Statement will
contain the unanimous recommendation of the Board of Directors of the Company
that the stockholders of the Company vote to adopt and approve the Merger and
this Agreement. The Company will, at the request of the Parent, use all
reasonable efforts to obtain from its stockholders proxies in favor of such
adoption and approval and to take all other action necessary, or, in the
reasonable judgment of the Company and the Parent, helpful to secure the vote
or consent of stockholders required by the DGCL to effect the Merger.
Notwithstanding the foregoing, in the event that the Parent determines to
effect the Merger without a meeting of the
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stockholders of the Company pursuant to Section 228 or Section 253 of the
DGCL, the parties will take all necessary or appropriate action to cause the
Merger to become effective as soon as practicable after expiration of the
Offer without a meeting of stockholders, in accordance with either such
section of the DGCL.
(b) At the Special Meeting, the Parent, the Purchaser, and their
subsidiaries will vote, or cause to be voted, all of the Shares then owned by
any of them in favor of the Merger.
5.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions of this
Agreement and to the fiduciary obligations of the Board of Directors of the
Company under applicable law, each of the parties agrees to use their
respective reasonable best efforts to take, or cause to be taken, all actions
to do, or cause to be done, all things necessary, proper, or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement (including consummation of the Offer, the
Merger, and the Financing (as defined in SECTION 5.11)) and to cooperate with
each other in connection with the foregoing, including, without limitation,
using their respective reasonable best efforts (a) to obtain all necessary
waivers, consents, and approvals from other parties to loan agreements,
leases, and other contracts, (b) to obtain all necessary consents, approvals,
and authorizations as are required to be obtained under any federal, state,
or foreign law or regulations, (c) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated by this Agreement, (d) to
prepare and effect all necessary registrations and filings, and (e) to
fulfill all conditions to and covenants contained in this Agreement. If,
after the Effective Time, any action is necessary to effect the purposes of
this Agreement, the proper officers and directors of each party will take all
such necessary action.
5.5 NOTIFICATION OF CERTAIN MATTERS. The Company will give prompt
notice to the Parent and the Purchaser, and the Parent and the Purchaser will
give prompt notice to the Company, of (a) the occurrence, or failure to
occur, of any event, which occurrence or failure is reasonably expected to
cause any representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect at any time, (b) any material failure
of the Company, the Parent, or the Purchaser, as the case may be, or of any
officer, director, employee, or agent of the Company, the Parent, or the
Purchaser, to comply with or satisfy any covenant, condition, or agreement to
be complied with or satisfied by it under this Agreement, (c) any act,
omission to act, event, or occurrence that, with notice, the passage of time,
or otherwise, is reasonably expected to result in a Company Material Adverse
Effect or a Parent Material Adverse Effect, as the case may be, and (d) any
contingent liability of the Company for which it reasonably believes it will,
with the passage of time or otherwise, become liable. No such notification
will affect the representations or warranties of the parties or the
conditions to the obligations of the parties under this Agreement.
5.6 ACCESS TO INFORMATION.
(a) From the date of this Agreement to the Effective Time, the
Company will, and will cause its subsidiaries, officers, directors,
employees, and agents upon reasonable notice
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to, afford to officers, employees, and agents of the Parent, the Purchaser
and their affiliates and, subject to the execution and delivery of a
customary confidentiality agreement, the banks, other financial institutions,
and investment bankers working with the Parent or the Purchaser, and their
respective officers, employees, and agents, complete access at all reasonable
times to its officers, employees, agents, properties, books, records, and
contracts, and will furnish the Parent, the Purchaser and their affiliates
and, subject to the execution and delivery of a customary confidentiality
agreement, the banks, other financial institutions, and investments bankers
working with the Parent or the Purchaser, all financial, operating, and other
data and information as they reasonably request.
(b) Each of the Parent and the Purchaser will hold and will cause
its directors, officers, agents, employees, consultants, and advisors to hold
in confidence, unless compelled to disclose by judicial or administrative
process or, in the written opinion of its legal counsel, by other
requirements of law, all documents and information concerning the Company and
its subsidiaries furnished to such persons in connection with the
transactions contemplated by this Agreement (except to the extent that such
information can be shown to have been (i) previously known by such persons
from sources other than the Company, or its directors, officers,
representatives, or affiliates, (ii) in the public domain through no fault of
such persons, or (iii) later lawfully acquired by such persons on a
non-confidential basis from other sources who are not known by the Parent or
the Purchaser to be bound by a confidentiality agreement or otherwise
prohibited from transmitting the information to the Parent or the Purchaser
by a contractual, legal, or fiduciary obligation) and will not release or
disclose such information to any other person, except its directors,
officers, agents, employees, consultants, and advisors, in connection with
this Agreement who need to know such information. If the transactions
contemplated by this Agreement are not consummated, such confidence shall be
maintained and, if requested by or on behalf of the Company, the Parent and
the Purchaser will, and will use all reasonable efforts to cause their
auditors, attorneys, financial advisors, and other consultants, agents, and
representatives to, return to the Company or destroy all copies of written
information furnished by the Company to the Parent and the Purchaser or their
agents, representatives, or advisors. It is understood that the Parent and
the Purchaser will be deemed to have satisfied their obligation to hold such
information confidential if they exercise the same care as they take to
preserve confidentiality for their own similar information.
(c) Within ten (10) days following the date hereof, the Company
will deliver or cause to be delivered to Purchaser and Parent copies of and
any relevant information relating to, and SCHEDULE 5.6(c) setting forth, the
following: (i) registered patents, trademarks, service marks, trade names or
copyrights, or applications for or licenses (to or from the Company or any of
its subsidiaries) with respect to any of the foregoing that are material to
the Company and its subsidiaries taken as a whole, that (A) are owned by the
Company or any of its subsidiaries, or with respect to which the Company or
any of its subsidiaries has any rights, or (B) are used, whether directly or
indirectly, by the Company or any of its subsidiaries, and (ii) all Pension
Plans and Benefit Plans.
(d) If the Parent and the Purchaser obtain actual knowledge that
the Company is in breach of any representation or warranty contained in this
Agreement, the Parent and the
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Purchase will promptly inform the Company of such breach. However, no
investigation pursuant to this SECTION 5.6 will affect any representations or
warranties of the parties in this Agreement or the conditions to the
obligations of the parties to this Agreement.
5.7 PUBLIC ANNOUNCEMENTS. The Parent and the Purchaser on the one hand
and the Company on the other hand will consult with each other before issuing
any press release or otherwise making any public statements with respect to
this Agreement, the Offer, or the other transactions contemplated by this
Agreement, and will not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or the
listing requirements of any securities exchange.
5.8 OFFICERS' AND DIRECTORS' INDEMNIFICATION.
(a) The Parent and the Purchaser agree that all rights to
indemnification now existing in favor of the directors or officers of the
Company and its subsidiaries as provided in their respective certificates of
incorporation or bylaws and pursuant to the contracts listed on SCHEDULE 5.8
will, to the extent such rights are in accordance with applicable law,
survive the Merger and stay in effect in accordance with their respective
terms. Parent hereby guarantees the full and faithful performance by Parent,
Purchaser and the Surviving Corporation of their respective obligations set
forth in this SECTION 5.8(a).
(b) In the event any action, suit, proceeding, or investigation
relating to this Agreement or to the transactions contemplated by this
Agreement is commenced by a third party, whether before or after the
Effective Time, the parties to this Agreement agree, subject to the fiduciary
duties of the respective Directors of the Company and Parent, to cooperate
and use all reasonable efforts to defend against and respond to such action,
suit, proceeding, or investigation.
(c) For a period of three (3) years after the Effective Time,
Parent shall cause the Surviving Corporation to maintain officers' and
directors' liability insurance for all persons currently covered under the
Company's officers' and directors' liability insurance policies, in their
capacities as officers and directors, on terms no less favorable to the
covered persons than such existing insurance; provided, however, that Parent
shall not be required in order to maintain or procure such coverage to pay an
annual premium in excess of 200% of the current annual premium paid by the
Company for its existing coverage (the "Cap"); and provided, further, that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of the Cap, Parent shall only be required to obtain
as much coverage as can be obtained by paying an annual premium equal to the
Cap. This SECTION 5.8(c) is intended to be for the benefit of, and shall be
enforceable by, the persons referred to above, their heirs and personal
representatives, and shall be binding on Parent and its successors and
assigns.
(d) The covenants contained in this SECTION 5.8 will survive the
Merger and the Termination of this Agreement as a result thereof,
indefinitely.
5.9 OTHER ACTIONS BY THE COMPANY. If any "fair price," "moratorium,"
"control share acquisition," or other form of antitakeover statute,
regulation, charter provision, or contract is or
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becomes applicable to the transactions contemplated by this Agreement, the
Company and the members of the Board of Directors of the Company will use
their reasonable efforts to grant such approvals and take such actions as are
necessary under such laws, provisions, or contracts so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise act to eliminate or
minimize the effects of such statute, regulation, provision or contract on
the transactions contemplated by this Agreement.
5.10 AVAILABLE FUNDS. The Parent will at the times required have
financing that, together with internally generated or otherwise available
funds and Parent's current revolving credit agreement will be sufficient to
permit the Purchaser to consummate the Offer and the Merger (the
"FINANCING"). The Parent and the Purchaser will use their reasonable best
efforts to pursue and obtain the Financing as soon as practicable.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger are
subject to the satisfaction prior to the Effective Time of the following
conditions:
6.1 STOCKHOLDER APPROVAL. This Agreement will have been adopted and
approved by the affirmative vote of the stockholders of the Company in
accordance with the Certificate of Incorporation and Bylaws of the Company
and with applicable law, unless no stockholder vote is required by law.
6.2 NO INJUNCTION. No federal or state statute, rule, regulation,
injunction, decree, or order will be enacted, promulgated, entered, or
enforced that would (i) prohibit consummation of the Merger or of the other
transactions contemplated by this Agreement or (ii) impose any material
limitation on the ability of the Parent or the Purchaser to exercise all
rights of ownership with respect to the Shares; provided that the parties to
this Agreement agree to use their respective reasonable best efforts to have
any such injunction, decree, or order lifted.
6.3 OFFER. The Purchaser will have purchased Shares pursuant to the
Offer (except that the Purchaser or the Parent in their sole discretion may
waive conditions to the Offer).
6.4 GOVERNMENTAL CONSENTS. The waiting period applicable to the
consummation of the Merger under the HSR Act will have expired or been
terminated and all filings required to be made prior to the Effective Time
with, and all consents, approvals, permits, and authorizations required to be
obtained prior to the Effective Time from, governmental and regulatory
authorities in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement will
have been made or obtained (as the case may be).
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ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.1 TERMINATION. This Agreement may be terminated and the Offer and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any Stockholder approval of the Merger):
(a) by mutual written consent of the Parent, the Purchaser, and
the Company (subject to the provisions of SECTION 1.3(b));
(b) by the Parent and the Purchaser or the Company if any court of
competent jurisdiction or other governmental body has issued a final order,
decree, or ruling or taken any other final action restraining, enjoining, or
otherwise prohibiting the Merger and such order, decree, ruling, or other
action is or has become nonappealable;
(c) by the Parent and the Purchaser if due to an occurrence or
circumstance that has resulted or is reasonably expected to result in a
failure to satisfy any of the conditions set forth in ANNEX A, the Purchaser
has (i) failed to commence the Offer within five business days following the
date of the initial public announcement of the Offer, (ii) terminated the
Offer, or (iii) failed to pay for the Shares pursuant to the Offer by January
31, 1999;
(d) by the Company if (i) there has not been a breach of any
material representation, warranty, covenant, or agreement on the part of the
Company, and the Purchaser has (A) failed to commence the Offer within five
business days following the date of the initial public announcement of the
Offer, (B) terminated the Offer, or (C) failed to pay for the Shares pursuant
to the Offer by January 31, 1999; provided, that any termination pursuant to
this CLAUSE (C) must be made by written notice irrevocably stating the intent
of the Company to terminate this Agreement under this SECTION 7.1(d)(i)(C)
delivered to the Purchaser and the Parent by 12:00 noon, Dallas time, on
January 31, 1999, or (ii) prior to the purchase of Shares pursuant to the
Offer, a person or group has made a bona fide offer that the Board of
Directors of the Company by a majority vote determines in its good faith
judgment and in the exercise of its fiduciary duties, after consultation with
its financial and legal advisors, is obligated by its fiduciary duties under
applicable law to terminate this Agreement, provided that such termination
under this CLAUSE (ii) will not be effective until payment of the fee
required by SECTION 7.3(b);
(e) by the Parent and the Purchaser prior to the purchase of
Shares pursuant to the Offer, if:
(i) there has been a breach (which breach is not cured or
not capable of being cured prior to the earlier of (A) 10 days following
notice to the Company by the Purchaser of such breach or (B) two business
days prior to the expiration date of the Offer, as extended from time to time
pursuant to the terms of this Agreement) of any representation or warranty on
the part of the Company (a) having a Company Material Adverse Effect or (b)
such that closing would put the Purchaser or the Parent in conflict with the
federal securities law;
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(ii) there has been a breach (which breach is not cured or
not capable of being cured prior to the earlier of (A) 10 days following
notice to the Company by the Purchaser of such breach or (B) two business
days prior to the expiration date of the Offer, as extended from time to time
pursuant to the terms of this Agreement) of any covenant or agreement on the
part of the Company (a) resulting in a Company Material Adverse Effect or (b)
such that closing would put the Purchaser or the Parent in conflict with the
federal securities law;
(iii) the Company engages in negotiations with any person or
group (other than the Parent or the Purchaser) that has proposed a Third
Party Acquisition (as defined in SECTION 7.3) except to the extent permitted
by SECTION 8.8;
(iv) the Company enters into an agreement, letter of intent,
or arrangement with respect to a Third Party Acquisition;
(v) the Board has withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Purchaser its
approval or recommendation of the Offer, this Agreement, or the Merger or has
recommended another offer, or has adopted any resolution to effect any of the
foregoing; or
(vi) the Minimum Conditions have not been satisfied by the
expiration date of the Offer and on or prior to such date (A) any person or
group (other than the Parent or the Purchaser) has made and not withdrawn a
public announcement with respect to a Third Party Acquisition or (B) any
person or group (including the Company or any of its affiliates) other than
the Parent or the Purchaser has become the beneficial owner of 19.9% (except
in bona fide arbitrage transactions) or more of the Shares; or
(f) by the Company if (i) there has been a breach (which breach is
not cured or not capable of being cured prior to the earlier of (A) 10 days
following notice to Parent of such breach or (B) two business days prior to
the expiration date of the Offer, as extended from time to time pursuant to
the terms of this Agreement) of any representation or warranty on the part of
the Parent or the Purchaser that materially adversely affects (or materially
delays) the consummation of the Offer or (ii) there has been a material
breach (which breach is not cured or not capable of being cured prior to the
earlier of (A) 10 days following notice to Parent of such breach or (B) two
business days prior to the expiration date of the Offer, as extended from
time to time pursuant to the terms of this Agreement) of any covenant or
agreement on the part of the Parent or the Purchaser that materially
adversely affects (or materially delays) the consummation of the Offer.
7.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to SECTION 7.1, this Agreement will
become void and have no effect, without any liability on the part of any
party to this Agreement or its affiliates, directors, officers, or
stockholders, other than the provisions of this SECTION 7.2 and SECTIONS
5.6(b), 5.8, and 7.3. Nothing contained in this SECTION 7.2 will relieve any
party from liability for any breach of this Agreement.
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7.3 FEES AND EXPENSES. (a) In the event the Parent and the Purchaser
terminate this Agreement pursuant to SECTIONS 7.1(e)(i) through (v) or the
Company terminates this Agreement pursuant to SECTION 7.1(d)(ii) or SECTION
7.1(d)(i)(C), the Company will reimburse the Parent, the Purchaser, and their
affiliates (not later than one business day after submission of statements
together with reasonable documentation therefor) for all out-of-pocket fees
and expenses actually incurred by any of them or on their behalf in
connection with the Offer and the Merger and the proposed consummation of all
transactions contemplated by this Agreement (including, without limitation,
costs of advertising, filing fees and fees payable to legal counsel,
financial printers, financing sources, investment bankers, counsel to any of
the foregoing, and accountants) not in excess of $3,000,000.
(b) If (i) (A) the Parent and the Purchaser terminate this
Agreement pursuant to SECTIONS 7.1(e)(i) through (v) or in circumstances that
would permit the Parent and the Purchaser to terminate this Agreement
pursuant to SECTIONS 7.1(e)(i) through (v) had a notice of termination
specified such SECTIONS 7.1(e)(i) through (v) or (B) if the Company
terminates this Agreement pursuant to SECTION 7.1(d)(i)(C) and, within four
months after such termination pursuant to clause (A) or clause (B) the
Company enters into an agreement, letter of intent, or binding arrangement
with respect to a Third Party Acquisition, or a Third Party Acquisition
occurs (or within 9 months after such termination if the Third Party
Acquisition that occurs or with respect to which an agreement, letter of
intent or binding arrangement has been entered into is or is reasonably
expected to be a transaction more favorable to the Company's stockholders
than the transactions contemplated by this Agreement) or (ii) the Company
terminates this Agreement pursuant to SECTION 7.1(d)(ii), then in either case
the Company will pay to the Parent and the Purchaser, within one business day
following the execution and delivery of such agreement or letter of intent or
the entering into of such an arrangement or the occurrence of such Third
Party Acquisition, as the case may be, or simultaneously with such
termination pursuant to SECTION 7.1(d)(ii), a fee, in cash, of $10,000,000
and reimburse Parent for all out-of-pocket fees and expenses actually
incurred by or on behalf of Parent or Purchaser in connection with the Offer
and the Merger and the proposed consummation of all the transactions
contemplated by this Agreement (including, without limitation, costs of
advertising, filing fees and fees payable to legal counsel, financial
printers, financing sources, investment bankers, counsel to any of the
foregoing, and accountants) not in excess of $3,000,000 (with a credit for
amounts, if any, paid under SECTION 7.3(a)).
For the purposes of this Agreement, "THIRD PARTY ACQUISITION" means the
occurrence of any of the following events (i) the acquisition of the Company
by merger or otherwise by any person or group other than the Parent, the
Purchaser, or any affiliate of the Parent or the Purchaser (a "THIRD PARTY");
(ii) the acquisition by a Third Party of more than 19.9% of the total assets
of the Company and its subsidiaries, taken as a whole; (iii) the acquisition
by a Third Party of 19.9% or more of the outstanding Shares from the Company
or in a transaction or series of related transactions that results in a
change of control of the Company; (iv) the adoption by the Company of a plan
of liquidation or the declaration or payment of an extraordinary dividend; or
(v) the acquisition by the Company or any of its subsidiaries of more than
19.9% of the outstanding Shares.
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(c) Except as specifically provided in this SECTION 7.3 each party
will bear its own expenses in connection with this Agreement and the
transactions contemplated by this Agreement.
7.4 AMENDMENT. This Agreement may not be amended except in an
instrument in writing signed on behalf of all of the parties to this
Agreement; PROVIDED, HOWEVER, that after approval of the Merger by the
stockholders of the Company, no amendment that would either decrease the
Merger Consideration or change any other term or condition of this Agreement,
if any such change, alone or in the aggregate, would materially and adversely
affect the stockholders of the Company, may be made without the further
approval of the stockholders of the Company; PROVIDED, FURTHER, that, after
purchase of the Shares pursuant to the Offer, no amendment may be made to
SECTION 5.8 without the consent of the indemnified persons.
7.5 WAIVER. At any time prior to the Effective Time, whether before or
after the Special Meeting, any party to this Agreement may (i) subject to the
second proviso in SECTION 7.4, extend the time for the performance of any of
the obligations or other acts of any other party or parties to this
Agreement, (ii) subject to the provisos contained in SECTION 7.4 of this
Agreement, waive any inaccuracies in the representations and warranties
contained in this Agreement by any other applicable party or in any
documents, certificate, or writing delivered pursuant to this Agreement by
any other applicable party, or (iii) subject to the provisos contained in
SECTION 7.4 of this Agreement, waive compliance with any of the agreements of
any other party or with any conditions to its own obligations. Any agreement
on the part of a party to this Agreement to any such extension or waiver will
be valid only if set forth in an instrument in writing signed on behalf of
such party by a duly authorized officer.
ARTICLE VIII
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS. The
representations and warranties made in this Agreement will not survive beyond
the Effective Time or the termination of this Agreement, as the case may be.
No investigation made, or information received by, any party to this
Agreement will affect any representation or warranty made by any other party
to this Agreement. The covenants and agreements of the parties to this
Agreement will survive in accordance with their terms.
8.2 BROKERAGE FEES AND COMMISSIONS. The Company hereby represents and
warrants to the Parent with respect to the Company and any of its
subsidiaries that, except for fees payable to Paul Stoffel (not to exceed
$1.3 million) and fees payable to DLJ pursuant to an agreement described in
the Offer, and except as disclosed in the Offer, the Parent and the Purchaser
hereby represent and warrant to the Company with respect to Parent or any of
its subsidiaries that, no person is entitled to receive from the Company, the
Parent, the Purchaser or any of their subsidiaries, respectively, any
investment banking, brokerage, or finder's fee or fees in connection with
this Agreement or any of the transactions contemplated by this Agreement.
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8.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with the
Stock Tender Agreements and all the Schedules and Annexes, (a) constitutes
the entire agreement between the parties with respect to the subject matter
of this Agreement and supersedes all other prior written agreements and
understandings and all prior and contemporaneous oral agreements and
understandings between the parties to this Agreement or any of them with
respect to the subject matter of this Agreement and (b) will not be assigned
by operation of law or otherwise, provided that the Parent may assign its
rights and obligations under this Agreement, or those of the Purchaser,
including, without limitation, the right to substitute in place of the
Purchaser a subsidiary as one of the constituent corporations to the Merger
as provided in SECTION 2.1 to any direct or indirect subsidiary of the
Parent, but no such assignment will relieve the assigning party of its
obligations under this Agreement. Any purported assignment of this Agreement
not made in accordance with this SECTION 8.3 will be null, void, and of no
effect. No party to this Agreement has relied upon any representation or
warranty, oral or written, of any other party to this Agreement or any of
their officers, directors, or stockholders except for the representations and
warranties contained in this Agreement and the Stock Tender Agreements.
8.4 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect. Upon any final judicial determination that
any term or other provision is invalid, illegal, or incapable of being
enforced, the parties to this Agreement will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement be consummated to the extent possible.
8.5 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed to
have been duly given when delivered in person, by cable, telegram or telex,
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
(a) if to the Parent or the Purchaser, to:
Affiliated Computer Services, Inc.
2828 N. Haskell, 10th Floor
Dallas, Texas 75204
Attention: Jeff A. Rich
Fax: (214) 821-1014
and
Affiliated Computer Services, Inc.
2828 N. Haskell, 10th Floor
Dallas, Texas 75204
Attention: David Black
Fax: (214) 823-5746
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with a copy to:
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Attn: David G. Luther, Jr.
Fax: (214) 939-6100
(b) if to the Company, to:
BRC Holdings, Inc.
1111 W. Mockingbird Lane
Suite 1400
Dallas, Texas 75247
Attention: Thomas A. Kiraly
Fax: (214) 689-0317
with a copy to:
Arter & Hadden LLP
1717 Main Street, Suite 4100
Dallas, Texas 75201
Attn: Jeffrey M. Sone
Fax: (214) 741-7139
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address will be effective only upon
receipt).
8.6 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
8.7 SPECIFIC PERFORMANCE. Each of the parties to this Agreement
acknowledges and agrees that the other parties to this Agreement would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. Accordingly, each of the parties to this Agreement agrees that
each of them will be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions of this Agreement in any action
instituted in any court of the United States or any state having subject
matter jurisdiction, in addition to any other remedy to which such party may
be entitled, at law or in equity.
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8.8 OTHER POTENTIAL BIDDERS.
(a) Subject to the next sentence, the Company shall not, directly
or indirectly, through any officer, director, employee, representative or
agent of the Company or any of its subsidiaries, solicit or encourage
(including by way of furnishing information) the initiation of any inquires
or proposals regarding a Third Party Acquisition (any of the foregoing
inquiries or proposals being referred to herein as an "Acquisition
Proposal"). Notwithstanding the foregoing, nothing contained in this SECTION
8.8(a) or any other provision of this Agreement shall prevent the Board if it
determines in good faith, after consultation with, and the receipt of advice
from, outside counsel, that it is required to do so in order to discharge
properly its fiduciary duties, from considering, negotiating, approving and
recommending to the stockholders of the Company an unsolicited bona fide
written Acquisition Proposal, or providing information to any third party in
connection therewith, which the Board of Directors of the Company determines
in good faith (after consultation with its financial advisors and legal
counsel) may reasonably result in a transaction more favorable to the
Company's stockholders than the transaction contemplated by this Agreement
(any Acquisition Proposal meeting such criterion, including those specified
in the immediately preceding parenthetical proviso, being referred to herein
as a "SUPERIOR PROPOSAL"). Nothing therein shall prohibit the Company from
complying with Rules 14d-9 and 14e-2 under the Exchange Act with respect to
any other tender offers.
(b) The Company shall promptly, but in no event later than 24
hours, notify Parent after receipt of any Acquisition Proposal or any request
for nonpublic information relating to the Company or any of its subsidiaries
in connection with an Acquisition Proposal or for access to the properties,
books or records of the Company or any subsidiary by any person or entity
that informs the Board that it is considering making, or has made, an
Acquisition Proposal. Such notice to Parent shall be made orally and in
writing and shall indicate in reasonable detail the identity of the offeror
and the terms and conditions of such proposal, inquiry or contact.
(c) If the Board receives a request for material nonpublic
information by a party who makes an unsolicited bona fide Acquisition
Proposal and the Board determines that such proposal, if consummated pursuant
to its terms would be a Superior Proposal, then, and only in such case, the
Company may, subject to the execution of a confidentiality agreement
substantially similar to that then in effect between the Company and Parent,
provide such party with access to information regarding the Company.
(d) The Company shall immediately cease and cause to be terminated
any existing discussions or negotiations with any parties (other than the
Parent and the Purchaser) conducted heretofore with respect to any of the
foregoing. The Company agrees not to release any third party from any
confidentiality or standstill agreement to which the Company is a party.
(e) The Company shall ensure that the officers, directors and
employees of the Company and its subsidiaries and any investment banker or
other advisor or representative retained by the Company are aware of the
restrictions described in this Section; and shall be responsible for any
breach of this SECTION 8.8 by such bankers, advisors and representatives.
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8.9 DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
References in this Agreement to Sections, Annexes, and Schedules are
references to the Sections, Annexes, and Schedules of this Agreement unless
the context indicates otherwise.
8.10 PARTIES IN INTEREST. This Agreement will be binding upon and inure
solely to the benefit of each party to this Agreement, and, except as
provided in SECTIONS 5.9 and 8.11, nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
8.11 BENEFICIARIES. The Parent hereby acknowledges that SECTION 5.8 is
intended to benefit the indemnified parties referred to in SECTION 5.8, any
of whom will be entitled to enforce SECTION 5.8 against the Surviving
Corporation, the Parent or the Company, as the case may be.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of
which will constitute one and the same agreement.
8.13 OBLIGATIONS. The Parent will perform or cause the Purchaser to
perform all of the obligations of the Purchaser under this Agreement,
including consummation of the Merger, in accordance with the terms of this
Agreement.
8.14 CERTAIN DEFINITIONS. For the purposes of this Agreement: (a) the
term "SUBSIDIARY" means each person in which a person owns or controls,
directly or through one or more subsidiaries, 50 percent or more of the stock
or other interests having general voting power in the election of directors
or persons performing similar functions or more than 50% of the equity
interests; (b) the term "PERSON" will be broadly construed to include any
individual, corporation, company, partnership, trust, joint stock company,
association, or other private or governmental entity; (c) the term "GROUP"
has the meaning given in Section 13(d)(3) of the Exchange Act; (d) the term
"AFFILIATE" has the meaning given in Rule 144(a)(1) under the Securities Act;
and (e) the term "BUSINESS DAY" has the meaning given in Rule 14d-1(c)(6)
under the Exchange Act.
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IN WITNESS WHEREOF, each of the parties to this Agreement has caused
this Agreement to be executed on its behalf by its duly authorized officers,
all as of the day and year first above written.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ Mark A. King
----------------------------------
Name: Mark A. King
Title: Executive Vice President,
Chief Financial Officer
ACS ACQUISITION CORPORATION
By: /s/ Mark A. King
----------------------------------
Name: Mark A. King
Title: Vice President
BRC HOLDINGS, INC.
By: /s/ Jerrold L. Morrison
----------------------------------
Name: Jerrold L. Morrison
Title: President and Chief Operating
Officer
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ANNEX A
Terms used in this Annex A have the meanings ascribed to them in the
Agreement and Plan of Merger dated as of October 19, 1998 (the "MERGER
AGREEMENT").
Notwithstanding any other provisions of the Offer, the Purchaser will
not be required to accept for payment or (subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) relating to the obligation of
the Purchaser to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer) to pay for tendered Shares, or may
terminate or amend the Offer as provided in the Agreement, or may postpone
the acceptance for payment of, or payment for, Shares (whether or not any
other Shares have been accepted for payment or paid for pursuant to the
Offer) if prior to the expiration of the Offer (i) the Minimum Condition has
not been satisfied; (ii) the waiting period under the HSR Act has not expired
or been terminated with respect to purchase of the Shares; or (iii) if at any
time on or after the date of the Merger Agreement, and at any time before the
time of acceptance for payment of any such Shares, any of the following
occurs:
(a) any of the representations or warranties of the Company contained
in the Merger Agreement is not true and correct at and as of any date prior
to the expiration date of the Offer as if made at and as of such time,
except for (i) failures (other than with respect to the Company's
investment in MatriDigm) to be true and correct as are not, individually or
in the aggregate, reasonably expected to result in a Company Material
Adverse Effect; or (ii) failures to comply as are capable of being and are
cured prior to the earlier of (A) 10 days after written notice from the
Purchaser to the Company of such failure or (B) two business days prior to
the expiration date of the Offer;
(b) the Company has failed to comply with any of its obligations
under the Merger Agreement, except for(i) failures to so comply as are not,
individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect; and (ii) failures to comply as are capable
of being and are cured prior to the earlier of (A) 10 days after written
notice from the Purchaser to the Company of such failure or (B) two
business days prior to the expiration date of the Offer;
(c) the Board of Directors of the Company has withdrawn or modified
in any respect adverse to the Purchaser or the Parent its recommendation of
the Offer or taken any position inconsistent with such, recommendation;
(d) the Merger Agreement has been terminated in accordance with its
terms;
(e) the Company has reached an agreement with the Parent or the
Purchaser that the Offer or the Merger be terminated or amended;
(f) any state, federal, or foreign government, or governmental
authority has taken any action, or proposed, sought, promulgated, or
enacted, or any state, federal, or
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foreign government or governmental authority or court has entered,
enforced, or deemed applicable to the Offer or the Merger, any statute,
rule, regulation, judgment, order, or injunction that is reasonably likely
to (i) make the acceptance for payment of, the payment for, or the
purchase of, some or all of the Shares illegal or otherwise restrict,
materially delay, prohibit consummation of, or make materially more
costly, the Offer or the Merger, (ii) result in a material delay in or
restrict the ability of the Purchaser, or render the Purchaser unable,
to accept for payment, pay for or purchase some or all of the Shares in
the Offer or the Merger, (iii) require the divestiture by the Parent, the
Purchaser, or the Company or any of their respective subsidiaries or
affiliates of all or any material portion of the business, assets, or
property of any of them or any Shares, or impose any material limitation
on the ability of any of them to conduct their business and own such
assets, properties, and Shares, (iv) impose material limitations on the
ability of the Parent or the Purchaser to acquire or hold or to exercise
effectively all rights of ownership of the Shares, including the right to
vote any Shares acquired by either of them on all matters properly
presented to the Stockholders of the Company,(v) impose any limitations on
the ability of the Parent, the Purchaser, or any of their respective
subsidiaries or affiliates effectively to control in any material respect
the business or operations of the Company, the Parent, the Purchaser, or
any of their respective subsidiaries or affiliates;
(g) any change (or any condition, event or development involving a
prospective change) has occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
financial condition, operations, licenses or franchises results of
operations, or prospects of the Company or any of its subsidiaries, that is
reasonably expected to result in a Company Material Adverse Effect;
(h) there has occurred (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 or quotations for shares traded thereon as
reported by the NASDAQ or otherwise, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or (whether or not mandatory), (iii) a commencement of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States other than as a participant in
police actions sponsored by international organizations, (iv) any
limitation (whether or not mandatory) by any governmental authority on the
extension of credit by banks or other financial institutions, (v) after the
date of the Merger Agreement, an aggregate decline of at least 25% in the
Dow Jones Industrial Average or Standard & Poor's 500 Index or a decline in
either such index of 12-1/2% in any 24-hour period, or (vi) in the case of
any of the occurrences referred to in clauses (i) through (iv) existing at
the time of the commencement of the Offer, in the reasonable judgment of
the Purchaser, a material acceleration or worsening thereof;
(i) any person or group other than the Parent or the Purchaser and
their affiliates has entered into a definitive agreement or an agreement in
principle with the Company with respect to a tender offer or exchange offer
for any Shares or a merger, consolidation, or other business combination or
acquisition with or involving the Company or any of its subsidiaries; or
A-2
<PAGE>
(j) any material approval, permit, authorization, consent, or waiting
period of any domestic or foreign, governmental, administrative, or
regulatory entity.(federal, state, local, provincial or otherwise) has not
been obtained or satisfied on terms satisfactory to the Purchaser in its
sole discretion
that, in the good faith judgment of the Purchaser, makes it inadvisable to
proceed with the Offer or with such acceptance for payment of, or payment
for, Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise
to any such condition or may be waived by the Purchaser in whole or in part
at any time and from time to time in its sole discretion (subject to the
terms of the Agreement). The failure by the Purchaser at any time to
exercise any of the foregoing rights will not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances will not be deemed to waiver with respect to any other facts or
circumstances, and each such right will be deemed an ongoing right that may
be asserted at any time and from time to time.
A-3
<PAGE>
ANNEX B-1
Kathy Ayres Esping, individually and as Independent Executor of the
Estate of P.E. Esping and as Director of the Esping Family Foundation,
Inc.
Paul Stoffel
B1-1
<PAGE>
ANNEX B-2
STOCK TENDER AGREEMENT
STOCK TENDER AGREEMENT (this "Agreement"), dated October 19, 1998, by
and among AFFILIATED COMPUTER SERVICES, INC., a Delaware corporation
("Parent"), ACS ACQUISITION CORPORATION, a Delaware corporation and
wholly-owned subsidiary of the Parent ("Purchaser") and each of the parties
listed on the signature pages hereto (each a "Stockholder", and collectively,
the "Stockholders").
WHEREAS, each of the Stockholders is, as of the date hereof, the record
and beneficial owner of the shares of common stock, par value $.01 per share
(the "Common Stock"), of BRC HOLDINGS, INC., a Delaware corporation (the
"Company"), set forth opposite its name on Annex I hereto;
WHEREAS, Parent, Purchaser and the Company concurrently herewith are
entering into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), which provides, among other things, for the
acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") by Purchaser for all of the outstanding shares of Common Stock and
for the subsequent merger (the "Merger") of Purchaser with and into the
Company upon the terms and subject to the conditions set forth in the Merger
Agreement; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, and in order to induce Parent and Purchaser
to enter into the Merger Agreement, the Stockholders have agreed to enter
into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Parent
and Purchaser of the Merger Agreement and the mutual representations,
warranties, covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Each of
the Stockholders hereby represents and warrants to Parent and Purchaser,
severally and not jointly, as follows:
(a) Such Stockholder is the beneficial owner of the shares of
Common Stock (as may be adjusted from time to time pursuant to Section 6
hereof, the "Shares") set forth opposite its name on Annex I to this
Agreement. Such Shares are held of record, in each case, by the custodian of
such Stockholder. On the date hereof, the Shares opposite such Stockholder's
name constitute all of the Shares owned by such Stockholder. Such
Stockholder has the exclusive right to vote or dispose of (or exercise the
voting or disposition of) such Shares.
(b) Such Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all action necessary to authorize the execution,
delivery and performance of this Agreement.
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(c) This Agreement has been duly authorized, validly executed
and delivered by such Stockholder and constitutes the legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(d) The execution and delivery of this Agreement by such
Stockholder do not, and the performance by such Stockholder of its
obligations hereunder will not, require any filing by such Stockholder with,
or any permit, authorization, consent or approval of, any Governmental or
Regulatory Authority or any third party other than an amendment to Schedule
13D and Form 4 and/or Form 5. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Stockholder is
a trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by such Stockholder of the transactions
contemplated hereby.
(e) The Shares and the certificates representing the Shares
owned by such Stockholder are now and at all times during the term hereof
will be held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all Liens, proxies, voting
trusts or agreements or understandings or arrangements whatsoever, except for
any such liens or proxies arising hereunder, and not subject to any
preemptive rights.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Each of Parent and Purchaser hereby represents and warrants to the
Stockholders as follows:
(a) Parent and Purchaser are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and each of Parent and Purchaser has full
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby and has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by each of Parent and Purchaser and constitutes the legal, valid
and binding obligation of each of Parent and Purchaser, enforceable against
each of them in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance by Parent and Purchaser of their
obligations hereunder and the consummation of the transactions contemplated
hereby will not, (i) conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or imposition of
any Lien upon any of the assets or properties of Parent or Purchaser under,
any of the terms, conditions or provisions of (A) the certificates or
2
<PAGE>
articles of incorporation or bylaws of Parent or Purchaser or (B) (x) any
Law or Order of any Governmental or Regulatory Authority applicable to Parent
or Purchaser or any of their respective assets or properties, or (y) any
Contract to which Parent or Purchaser is a party or by which Parent or
Purchaser or any of their respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) conflicts, violations, breaches,
defaults, terminations, modifications, accelerations and creations and
impositions of Liens which, individually or in the aggregate, could not be
reasonably expected to have a material adverse effect on the ability of
Parent and Purchaser to consummate the transactions contemplated by this
Agreement, or (ii) require any filing by Parent or Purchaser with, or any
permit, authorization, consent or approval of, any Governmental or Regulatory
Authority.
SECTION 3. PURCHASE AND SALE OF THE SHARES. Each of the Stockholders
hereby agrees to tender the Shares set forth opposite its name on Annex I to
this Agreement into the Offer promptly, and in any event no later than the
fifth business day following the commencement of the Offer pursuant to
Section 1.1 of the Merger Agreement and not to withdraw any Shares so
tendered unless the Offer is terminated or has expired; provided that if such
Stockholder shall thereafter acquire shares of Common Stock, then any such
Shares shall be tendered on the next succeeding business day after such
acquisition. Purchaser hereby agrees to purchase all the Shares so tendered
at a price per Share equal to $19.00 per Share or any higher price that may
be paid in the Offer; provided, however, that Purchaser's obligation to
accept for payment and pay for the Shares in the Offer is subject to all the
terms and conditions of the Offer set forth in the Merger Agreement and Annex
A thereto.
SECTION 4. TRANSFER OF THE SHARES; PROXIES AND NON-INTERFERENCE. Prior
to the termination of this Agreement, except as otherwise provided herein,
none of the Stockholders shall, directly or indirectly, (i) offer for sale,
sell, transfer, tender, pledge, encumber, assign, or otherwise dispose of,
any or all of the Shares; (ii) enter into any Contract, option or
understanding with respect to any transfer of any or all of the Shares or any
interest therein; (iii) except as provided herein, grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares; or (v) take any other
action that would in any way restrict, limit or interfere with the
performance of such Stockholder's obligations hereunder or the transactions
contemplated hereby.
SECTION 5. STOCKHOLDER CAPACITY. No person executing this Agreement
who is or becomes during the term hereof a director of the Company makes any
agreement or understanding herein in his or her capacity as such director.
Each Shareholder signs solely in his or her capacity as the owner of, or the
trustee of a trust whose beneficiaries are the owners of, such Shareholder
Shares.
SECTION 6. CERTAIN EVENTS. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by any Stockholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the rights and obligations
hereunder shall attach to any additional shares
3
<PAGE>
of Common Stock or other securities or rights of the Company issued to or
acquired by any such Stockholder.
SECTION 7. CERTAIN OTHER AGREEMENTS. From the date of this Agreement
until the earlier of the termination of this Agreement or the Effective Time,
none of the Stockholders shall, and none of the Stockholders shall permit or
authorize any advisor or representative retained by or acting for or on
behalf of any such Stockholder to, directly or indirectly, (i) take any
action to initiate, solicit, continue, encourage or facilitate (including by
way of furnishing or disclosing non-public information) any inquiries or the
making of any offer or proposal with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
of its subsidiaries or any proposal or offer to acquire in any manner,
directly or indirectly, 15% or more of the shares of any class of voting
securities of the Company or any of its subsidiaries or a substantial portion
of the assets of the Company or any of its subsidiaries, other than the
transactions contemplated by the Merger Agreement or by this Agreement (any
of the foregoing being referred to as an "Acquisition Proposal"), or (ii)
engage in negotiations, discussions or communications regarding or disclose
any information relating to the Company or any of its subsidiaries or afford
access to the properties, books or records of the Company or any of its
subsidiaries to any person, corporation, partnership or other entity or group
(a "Potential Acquiror") that may be considering making, or has made, an
Acquisition Proposal or knowingly facilitate any effort or attempt to make or
implement an Acquisition Proposal or accept an Acquisition Proposal. The
obligations of each of the Stockholders pursuant to this Section are several
and not joint.
SECTION 8. FURTHER ASSURANCES. Each of the Stockholders shall, upon
request of Parent or Purchaser, take such further actions as may reasonably
be necessary or desirable to carry out the provisions hereof, provided that
the Stockholders shall not be required to incur any additional costs or
expenses or receive less-than the agreed price without their consent.
SECTION 9. TERMINATION. Except as otherwise provided in this
Agreement, this Agreement, and all rights and obligations of the parties
hereunder, shall terminate immediately upon the earlier of (i) the
consummation of the Offer, (ii) the termination of the Merger Agreement in
accordance with its terms or (iii) the Effective Time; provided, however,
that Sections 7 and 10 shall survive any termination of this Agreement.
SECTION 10. EXPENSES. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 11. PUBLIC ANNOUNCEMENTS. Each of the Stockholders, Parent and
Purchaser agrees that it will not issue any press release or otherwise make
any public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however,
that such disclosure can be made without obtaining such prior consent if (i)
the disclosure is required by law, and (ii) the party making such disclosure
has first used its best efforts to consult with the other party about the
form and substance of such disclosure. The obligations of each of the
Stockholders pursuant to this Section are several and not joint.
4
<PAGE>
SECTION 12. DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings indicated below:
"CONTRACT" means any agreement, lease, evidence of indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"LAW" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision.
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
SECTION 13. MISCELLANEOUS.
(a) All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class
postage prepaid) to the parties at the following addresses or facsimile
numbers:
(A) if to any or all the Stockholders, to:
Paul Stoffel
Capital Corp.
5949 Sherry Lane
Suite 1465
Dallas, Texas 75225
Facsimile: (214) 750-7754
and
5
<PAGE>
(B) if to Parent or Purchaser, to:
Affiliated Computer Services, Inc.
2828 N. Haskell, 10th Floor
Dallas, Texas 75204
David Black
Facsimile: (214) 823-5746
with a copy to:
David G. Luther, Jr.
Hughes & Luce LLP
1717 Main Street
Suite 2800
Dallas, Texas 75201
Facsimile: (214) 939-6100
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by
giving notice specifying such change to the other parties hereto.
(b) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
(c) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(d) This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, whether written and oral,
among the parties hereto with respect to the subject matter hereof.
(e) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas without giving effect to the
principles of conflicts of laws thereof; provided, however, that the
consummation and effectiveness of the Merger will be governed and construed
in accordance with the laws of the State of Delaware.
(f) Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts in the State of Texas or the United States
District Court for the Northern District of Texas
6
<PAGE>
in any action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought only in
such court (and waives any objection based on forum non conveniens or any
other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (f) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of Texas other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, and any such purported assignment shall be null and void;
provided, however, Purchaser or Parent may, without the prior written consent
of any Stockholder assign its rights and obligations to any of its direct or
indirect wholly owned subsidiaries. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties and their respective successors and assigns, and the
provisions of this Agreement are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
(i) Each of the parties hereto acknowledge and agrees that in
the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in
any action for specific performance, the defense of adequacy of a remedy at
law and (ii) shall be entitled, in addition to any other remedy to which they
may be entitled at law or in equity, to compel specific performance of this
Agreement.
(j) No amendment, modification or waiver in respect to this
Agreement shall be effective unless it shall be in writing and signed by each
party hereto; provided that Annex I hereto may be supplemented by Parent by
adding the name and other relevant information concerning any stockholder of
the Company who agrees to be bound by the terms of this Agreement without the
agreement of any other party hereto, and thereafter such added stockholder
shall be treated as a "Stockholder" for all purposes of this Agreement.
[THE REMAINDER OF PAGE IS INTENTIONALLY OMITTED]
7
<PAGE>
IN WITNESS WHEREOF, each of Parent, the Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
AFFILIATED COMPUTER SERVICES, INC.
By:
-----------------------------------------
Name: Mark A. King
Title: Executive Vice President
ACS ACQUISITION CORPORATION
By:
-----------------------------------------
Name: Mark A. King
Title: Vice President
[STOCKHOLDERS]
--------------------------------------------
Paul T. Stoffel
--------------------------------------------
Kathryn Ayres Esping, individually and as
Independent Executor of the Estate of
P.E. Esping and as Director of the
Esping Family Foundation, Inc.
--------------------------------------------
--------------------------------------------
8
<PAGE>
ANNEX I
Ownership of Company Common Stock
<TABLE>
<CAPTION>
STOCKHOLDER NUMBER OF SHARES
- ----------- ----------------
<S> <C>
Kathryn Ayres Esping, individually and 2,960,890
as Independent Executor of the Estate of
P.E. Esping and as Director of the
Esping Family Foundation, Inc.
Paul Stoffel 344,246
</TABLE>
9
<PAGE>
STOCK TENDER AGREEMENT
STOCK TENDER AGREEMENT (this "Agreement"), dated October 19, 1998, by
and among AFFILIATED COMPUTER SERVICES, INC., a Delaware corporation
("Parent"), ACS ACQUISITION CORPORATION, a Delaware corporation and
wholly-owned subsidiary of the Parent ("Purchaser") and each of the parties
listed on the signature pages hereto (each a "Stockholder", and collectively,
the "Stockholders").
WHEREAS, each of the Stockholders is, as of the date hereof, the record
and beneficial owner of the shares of common stock, par value $.01 per share
(the "Common Stock"), of BRC HOLDINGS, INC., a Delaware corporation (the
"Company"), set forth opposite its name on Annex I hereto;
WHEREAS, Parent, Purchaser and the Company concurrently herewith are
entering into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), which provides, among other things, for the
acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") by Purchaser for all of the outstanding shares of Common Stock and
for the subsequent merger (the "Merger") of Purchaser with and into the
Company upon the terms and subject to the conditions set forth in the Merger
Agreement; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, and in order to induce Parent and Purchaser
to enter into the Merger Agreement, the Stockholders have agreed to enter
into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Parent
and Purchaser of the Merger Agreement and the mutual representations,
warranties, covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Each of
the Stockholders hereby represents and warrants to Parent and Purchaser,
severally and not jointly, as follows:
(a) Such Stockholder is the beneficial owner of the shares of
Common Stock (as may be adjusted from time to time pursuant to Section 6
hereof, the "Shares") set forth opposite its name on Annex I to this
Agreement. Such Shares are held of record, in each case, by the custodian of
such Stockholder. On the date hereof, the Shares opposite such Stockholder's
name constitute all of the Shares owned by such Stockholder. Such
Stockholder has the exclusive right to vote or dispose of (or exercise the
voting or disposition of) such Shares.
(b) Such Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all action necessary to authorize the execution,
delivery and performance of this Agreement.
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(c) This Agreement has been duly authorized, validly executed
and delivered by such Stockholder and constitutes the legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(d) The execution and delivery of this Agreement by such
Stockholder do not, and the performance by such Stockholder of its
obligations hereunder will not, require any filing by such Stockholder with,
or any permit, authorization, consent or approval of, any Governmental or
Regulatory Authority or any third party other than an amendment to Schedule
13D and Form 4 and/or Form 5. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Stockholder is
a trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by such Stockholder of the transactions
contemplated hereby.
(e) The Shares and the certificates representing the Shares
owned by such Stockholder are now and at all times during the term hereof
will be held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all Liens, proxies, voting
trusts or agreements or understandings or arrangements whatsoever, except for
any such liens or proxies arising hereunder, and not subject to any
preemptive rights.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Each of Parent and Purchaser hereby represents and warrants to the
Stockholders as follows:
(a) Parent and Purchaser are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and each of Parent and Purchaser has full
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby and has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by each of Parent and Purchaser and constitutes the legal, valid
and binding obligation of each of Parent and Purchaser, enforceable against
each of them in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance by Parent and Purchaser of their
obligations hereunder and the consummation of the transactions contemplated
hereby will not, (i) conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or imposition of
any Lien upon any of the assets or properties of Parent or Purchaser under,
any of the terms, conditions or provisions of (A) the certificates or
2
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articles of incorporation or bylaws of Parent or Purchaser or (B) (x) any Law
or Order of any Governmental or Regulatory Authority applicable to Parent or
Purchaser or any of their respective assets or properties, or (y) any
Contract to which Parent or Purchaser is a party or by which Parent or
Purchaser or any of their respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) conflicts, violations, breaches,
defaults, terminations, modifications, accelerations and creations and
impositions of Liens which, individually or in the aggregate, could not be
reasonably expected to have a material adverse effect on the ability of
Parent and Purchaser to consummate the transactions contemplated by this
Agreement, or (ii) require any filing by Parent or Purchaser with, or any
permit, authorization, consent or approval of, any Governmental or Regulatory
Authority.
SECTION 3. PURCHASE AND SALE OF THE SHARES. Each of the Stockholders
hereby agrees to tender the Shares set forth opposite its name on Annex I to
this Agreement into the Offer promptly, and in any event no later than the
fifth business day following the commencement of the Offer pursuant to
Section 1.1 of the Merger Agreement and not to withdraw any Shares so
tendered unless the Offer is terminated or has expired; provided that if such
Stockholder shall thereafter acquire shares of Common Stock, then any such
Shares shall be tendered on the next succeeding business day after such
acquisition. Purchaser hereby agrees to purchase all the Shares so tendered
at a price per Share equal to $19.00 per Share or any higher price that may
be paid in the Offer; provided, however, that Purchaser's obligation to
accept for payment and pay for the Shares in the Offer is subject to all the
terms and conditions of the Offer set forth in the Merger Agreement and Annex
A thereto.
SECTION 4. TRANSFER OF THE SHARES; PROXIES AND NON-INTERFERENCE. Prior
to the termination of this Agreement, except as otherwise provided herein,
none of the Stockholders shall, directly or indirectly, (i) offer for sale,
sell, transfer, tender, pledge, encumber, assign, or otherwise dispose of,
any or all of the Shares; (ii) enter into any Contract, option or
understanding with respect to any transfer of any or all of the Shares or any
interest therein; (iii) except as provided herein, grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares; or (v) take any other
action that would in any way restrict, limit or interfere with the
performance of such Stockholder's obligations hereunder or the transactions
contemplated hereby.
SECTION 5. STOCKHOLDER CAPACITY. No person executing this Agreement
who is or becomes during the term hereof a director of the Company makes any
agreement or understanding herein in his or her capacity as such director.
Each Shareholder signs solely in his or her capacity as the owner of, or the
trustee of a trust whose beneficiaries are the owners of, such Shareholder
Shares.
SECTION 6. CERTAIN EVENTS. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by any Stockholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the rights and obligations
hereunder shall attach to any additional shares
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<PAGE>
of Common Stock or other securities or rights of the Company issued to or
acquired by any such Stockholder.
SECTION 7. CERTAIN OTHER AGREEMENTS. From the date of this Agreement
until the earlier of the termination of this Agreement or the Effective Time,
none of the Stockholders shall, and none of the Stockholders shall permit or
authorize any advisor or representative retained by or acting for or on
behalf of any such Stockholder to, directly or indirectly, (i) take any
action to initiate, solicit, continue, encourage or facilitate (including by
way of furnishing or disclosing non-public information) any inquiries or the
making of any offer or proposal with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
of its subsidiaries or any proposal or offer to acquire in any manner,
directly or indirectly, 15% or more of the shares of any class of voting
securities of the Company or any of its subsidiaries or a substantial portion
of the assets of the Company or any of its subsidiaries, other than the
transactions contemplated by the Merger Agreement or by this Agreement (any
of the foregoing being referred to as an "Acquisition Proposal"), or (ii)
engage in negotiations, discussions or communications regarding or disclose
any information relating to the Company or any of its subsidiaries or afford
access to the properties, books or records of the Company or any of its
subsidiaries to any person, corporation, partnership or other entity or group
(a "Potential Acquiror") that may be considering making, or has made, an
Acquisition Proposal or knowingly facilitate any effort or attempt to make or
implement an Acquisition Proposal or accept an Acquisition Proposal. The
obligations of each of the Stockholders pursuant to this Section are several
and not joint.
SECTION 8. FURTHER ASSURANCES. Each of the Stockholders shall, upon
request of Parent or Purchaser, take such further actions as may reasonably
be necessary or desirable to carry out the provisions hereof, provided that
the Stockholders shall not be required to incur any additional costs or
expenses or receive less-than the agreed price without their consent.
SECTION 9. TERMINATION. Except as otherwise provided in this
Agreement, this Agreement, and all rights and obligations of the parties
hereunder, shall terminate immediately upon the earlier of (i) the
consummation of the Offer, (ii) the termination of the Merger Agreement in
accordance with its terms or (iii) the Effective Time; provided, however,
that Sections 7 and 10 shall survive any termination of this Agreement.
SECTION 10. EXPENSES. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 11. PUBLIC ANNOUNCEMENTS. Each of the Stockholders, Parent and
Purchaser agrees that it will not issue any press release or otherwise make
any public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however,
that such disclosure can be made without obtaining such prior consent if (i)
the disclosure is required by law, and (ii) the party making such disclosure
has first used its best efforts to consult with the other party about the
form and substance of such disclosure. The obligations of each of the
Stockholders pursuant to this Section are several and not joint.
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<PAGE>
SECTION 12. DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings indicated below:
"CONTRACT" means any agreement, lease, evidence of indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"LAW" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision.
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
SECTION 13. MISCELLANEOUS.
(a) All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class
postage prepaid) to the parties at the following addresses or facsimile
numbers:
(A) if to any or all the Stockholders, to:
Paul Stoffel
Capital Corp.
5949 Sherry Lane
Suite 1465
Dallas, Texas 75225
Facsimile: (214) 750-7754
and
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<PAGE>
(B) if to Parent or Purchaser, to:
Affiliated Computer Services, Inc.
2828 N. Haskell, 10th Floor
Dallas, Texas 75204
David Black
Facsimile: (214) 823-5746
with a copy to:
David G. Luther, Jr.
Hughes & Luce LLP
1717 Main Street
Suite 2800
Dallas, Texas 75201
Facsimile: (214) 939-6100
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by
giving notice specifying such change to the other parties hereto.
(b) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
(c) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(d) This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, whether written and oral,
among the parties hereto with respect to the subject matter hereof.
(e) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas without giving effect to the
principles of conflicts of laws thereof; provided, however, that the
consummation and effectiveness of the Merger will be governed and construed
in accordance with the laws of the State of Delaware.
(f) Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts in the State of Texas or the United States
District Court for the Northern District of Texas
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<PAGE>
in any action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought only in
such court (and waives any objection based on forum non conveniens or any
other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (f) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of Texas other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, and any such purported assignment shall be null and void;
provided, however, Purchaser or Parent may, without the prior written consent
of any Stockholder assign its rights and obligations to any of its direct or
indirect wholly owned subsidiaries. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties and their respective successors and assigns, and the
provisions of this Agreement are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
(i) Each of the parties hereto acknowledge and agrees that in
the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in
any action for specific performance, the defense of adequacy of a remedy at
law and (ii) shall be entitled, in addition to any other remedy to which they
may be entitled at law or in equity, to compel specific performance of this
Agreement.
(j) No amendment, modification or waiver in respect to this
Agreement shall be effective unless it shall be in writing and signed by each
party hereto; provided that Annex I hereto may be supplemented by Parent by
adding the name and other relevant information concerning any stockholder of
the Company who agrees to be bound by the terms of this Agreement without the
agreement of any other party hereto, and thereafter such added stockholder
shall be treated as a "Stockholder" for all purposes of this Agreement.
[THE REMAINDER OF PAGE IS INTENTIONALLY OMITTED]
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<PAGE>
IN WITNESS WHEREOF, each of Parent, the Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ Mark A. King
-------------------------------------
Name: Mark A. King
Title: Executive Vice President
ACS ACQUISITION CORPORATION
By: /s/ Mark A. King
-------------------------------------
Name: Mark A. King
Title: Vice President
[STOCKHOLDERS]
/s/ Paul T. Stoffel
----------------------------------------
Paul T. Stoffel
/s/ Kathryn Ayres Esping
----------------------------------------
Kathryn Ayres Esping, individually and as
Independent Executor of the Estate of
P.E. Esping and as Director of the
Esping Family Foundation, Inc.
----------------------------------------
----------------------------------------
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<PAGE>
ANNEX I
Ownership of Company Common Stock
<TABLE>
<CAPTION>
STOCKHOLDER NUMBER OF SHARES
- ----------- ----------------
<S> <C>
Kathryn Ayres Esping, individually and 2,960,890
as Independent Executor of the Estate of
P.E. Esping and as Director of the
Esping Family Foundation, Inc.
Paul Stoffel 344,246
</TABLE>
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<PAGE>
CONFIDENTIAL DISCLOSURE AGREEMENT
This Confidential Disclosure Agreement ("Agreement") is entered into this
15th day of June, 1998 by and between BRC HOLDINGS, INC., a Delaware corporation
hereinafter referred to as ("Discloser") and AFFILIATED COMPUTER SERVICES, INC.,
a Delaware corporation herein after referred to as ("Recipient").
WHEREAS Discloser owns, possesses or controls certain proprietary and
confidential information acquired through the expenditure of time, effort and
money, of a technical nature relating to the Discloser's business, including
proprietary third party information ("Information"); and
WHEREAS Recipient desires to receive, and Discloser is willing to supply,
the Information on the terms and conditions set out herein, solely for the
purpose of preliminary review with potential interest in the formulation of a
business relationship ("Purpose").
NOW THEREFORE in consideration of the premises and mutual covenants and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:
1. Discloser shall at its discretion provide Information to Recipient as
is required for the Purpose. Nothing in this Agreement obligates Discloser to
make any particular disclosure of Information, and no representations or
warranties are made hereby with regard to any information disclosed.
2. All right, title and interest in and to the Information shall remain
the exclusive property of Discloser and the Information shall be held in trust
and confidence by Recipient for Discloser. No interest, license or any right
respecting the Information, other than expressly set forth herein, is granted to
Recipient under this Agreement by implication or otherwise.
3. Recipient shall not use the Information in any manner except as
reasonably required for the Purpose.
4. Recipient shall use all reasonable efforts to protect Discloser's
interest in the Information and keep it confidential, using a standard of care
no less than the degree of care that Recipient would be reasonably expected to
employ for its own similar confidential information. In particular, Recipient
shall not directly or indirectly disclose, allow access to, transmit or transfer
the Information to a third party without the Discloser's prior written consent.
Recipient shall disclose the information only to those of its employees, or to
those employees of any consultant of Recipient, who have a need to know the
Information for the Purpose. Recipient shall, prior to disclosing the
Information to such employees and consultants, issue appropriate instructions to
them to satisfy its obligations herein and obtain their agreement to receive and
use the Information on a confidential basis on the same conditions as contained
in this Agreement.
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<PAGE>
5. The Information shall not be copied, reproduced in any form, or stored
in a retrieval system or database by Recipient without the prior written consent
of Discloser, except for such copies and storage as may reasonably be required
internally by Recipient for the Purpose. (All copies shall contain the same
proprietary notices of Discloser which may appear on the original Information.)
6. The obligations of the Recipient under Sections 3, 4 and 5 shall not
apply to Information:
(a) which at the time of disclosure is readily available to the trade
or the public; or
(b) which after disclosure becomes readily available to the trade or
the public; other than through a breach of this Agreement; or
(c) which is subsequently lawfully and in good faith obtained by
Recipient from an independent third party without breach of this Agreement;
or
(d) which Recipient can establish, was in its possession prior to the
date of disclosure of such Information by Discloser; or
(e) any Information which the Recipient is by law required to
disclose.
7. Recipient shall, upon request of Discloser, immediately return the
Information and all copies, extracts or summaries thereof in any form whatsoever
under the power or control of Recipient to Discloser, and delete the Information
from all retrieval systems and databases or destroy same as directed by
Discloser.
8. Both parties agree that for a period of two (2) years from the date of
this Agreement, they shall not solicit the employment of any senior management
employees of the other party who were introduced or became known in connection
with the Purpose, provided that this restriction shall not apply to employees
who respond to general solicitation for employment.
9. This Agreement constitutes the entire understanding and agreement
between the Parties with respect to the subject matter of this Agreement, and
supersedes any and all prior understandings, agreements or discussions among the
Parties with respect to the subject matter of this Agreement. There are no
representations, agreements, or arrangements or understandings, oral or written,
between or among the Parties related to the subject matter of this Agreement
which are not fully expressed in this Agreement.
10. This Agreement shall remain in full force and effect for a period of
two (2) years from the date hereof.
11. This Agreement may not be modified or amended except by mutual written
agreement that is executed by the Parties to this Agreement.
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<PAGE>
12. This Agreement may not be assigned by Recipient without Discloser's
prior written consent.
13. This Agreement shall be binding upon and inure to the benefit of
Parties hereto, and be enforceable by and against their respective heirs,
administrators, successors, executors and assigns.
14. This Agreement shall be construed in accordance with the laws of the
State of Texas.
15. If any provision of this Agreement or the application thereof to any
person or circumstances shall be held invalid, illegal or unenforceable and such
provision or the application thereof may not be reformed, such illegality or
unenforceability shall extend to that provision solely, and the remaining
provisions of this Agreement shall not be in any way impaired and there shall be
substituted for such invalid, illegal or unenforceable provision, a provision as
like in substance as shall be possible and be legal, valid and enforceable.
16. In the event it becomes necessary for Discloser to file suit or engage
an attorney to enforce this Agreement or any provision contained herein,
Discloser shall be entitled to recover, in addition to all other remedies or
damages, court costs, expenses of litigation and reasonable attorneys fees
incurred in such suit or action.
17. Each of the undersigned states that he or she has carefully read the
foregoing, and knows the contents thereof and has signed the same as his or her
own free act and deed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
DISCLOSER: RECIPIENT:
- ---------- ----------
BRC HOLDINGS, INC. AFFILIATED COMPUTER SERVICES, INC.
By: /s/THOMAS E. KIRALY By: /s/ JOHN H. REXFORD
--------------------------------- -------------------------------
Title: Executive Vice President and Title: Senior Vice President
Chief Executive Officer
3
