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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO RULE 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
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MORRISON RESTAURANTS INC.
(Name of Subject Company)
PICCADILLY CAFETERIAS, INC.
PICCADILLY ACQUISITION CORPORATION
(Bidder)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
618478 10 1
(CUSIP Number of Class of Securities)
RONALD A. LABORDE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PICCADILLY CAFETERIAS, INC.
3232 SHERWOOD FOREST BLVD.
BATON ROUGE, LOUISIANA 70816
TELEPHONE: (504) 293-9440
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copies to:
CURTIS R. HEARN
JONES, WALKER, WAECHTER, POITEVENT,
CARRERE & DENEGRE L.L.P.
201 ST. CHARLES AVENUE, SUITE 5100
NEW ORLEANS, LA 70170
TELEPHONE: (504) 582-8000
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of filing fee**
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$47,244,740 $9,449
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* Based on the offer to purchase all of the outstanding shares of Common
Stock (including the associated preferred share purchase rights) of the
Subject Company at a purchase price of $5.00 cash per share, 9,236,440
shares outstanding and 212,508 currently exercisable and in-the-money
options to purchase shares outstanding.
**
1/50th 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.
Amount Previously Paid:
Form or Registration No.:
Filing Party:
Date Filed:
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This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Piccadilly Acquisition Corporation, a Georgia corporation (the "Purchaser"), to
purchase all of the outstanding shares of Common Stock, par value $0.01 per
share (the "Shares"), of Morrison Restaurants Inc., a Georgia corporation (the
"Company"), including the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of March 2, 1996 (as
amended, the "Rights Agreement"), between the Company and SunTrust Bank, N.A.,
as rights agent, at a purchase price of $5.00 per Share (and associated Right),
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated April 29, 1998 (the
"Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and
in the related Letter of Transmittal (which, together with the Offer to
Purchase, constitute the "Offer"), a copy of which is attached hereto as Exhibit
(a)(2). The Purchaser is a wholly owned subsidiary of Piccadilly Cafeterias,
Inc., a Louisiana corporation (the "Parent").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Morrison Restaurants Inc., which has
its principal executive offices at 3300 Highlands Parkway, Suite 130, Atlanta,
Georgia 30082.
(b) The exact title of the class of equity securities being sought in the
Offer is common stock, par value $.01 per share, of the Company and the
associated preferred stock purchase rights. The information set forth in the
Introduction (the "Introduction") of the Offer to Purchase is incorporated
herein by reference.
(c) The information concerning the principal market on which the Shares are
traded and the high and low sales prices of the Shares in such principal market
set forth in Section 6 ("Price Range of Shares; Cash Dividends") of the Offer to
Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by the Parent and the Purchaser.
The information concerning the name, state or other place of organization,
principal business and address of the principal office of the Parent and the
Purchaser is set forth in Section 8 ("Certain Information Concerning the Parent
and the Purchaser") of the Offer to Purchase and is incorporated herein by
reference. The information concerning the name, business address, citizenship,
and present principal occupation or employment of each of the executive officers
and directors of the Parent and the Purchaser and the name, principal business
and address of any corporation or other organization in which such employment or
occupation is conducted, material occupations, positions, offices or employments
during the last five years and the name, principal business and address of any
corporation or other organization in which such occupation, position, office or
employment was carried on set forth in Schedule I to the Offer to Purchase is
incorporated herein by reference.
(e) and (f) During the last five years, none of the Parent, the Purchaser,
nor, to the best knowledge of the Parent and the Purchaser, any of the persons
listed in Schedule I to the Offer to Purchase (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) 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 or final order enjoining future violations of, or prohibiting
activities subject to, Federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) There have been no transactions since June 5, 1994, which would be
required to be disclosed under this Item 3(a) between any of the Parent, the
Purchaser or, to the best knowledge of the Parent and the Purchaser, any of the
persons listed in Schedule I to the Offer to Purchase and the Company, any of
its affiliates that are corporations, any of its executive officers, directors
or any of the Company's non-corporate affiliates.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company"), Section 11 ("The Merger Agreement") and Section 12
("Purpose of the Offer; the Merger; Plans for the Company; Rights Agreement") of
the Offer to Purchase is incorporated herein by reference. Except as set
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forth in Sections 10, 11 and 12 of the Offer to Purchase, since June 5, 1994,
there have been no contacts, negotiations or transactions which would be
required to be disclosed under Item 3(b) between any of the Parent, the
Purchaser, or any of their respective subsidiaries or, to the best knowledge of
the Parent and the Purchaser, any of those persons listed in Schedule I to the
Offer to Purchase and the Company or its affiliates concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("The Merger
Agreement"), Section 12 ("Purpose of the Offer; the Merger; Plans for the
Company; Rights Agreement") and Section 14 ("Effect of the Offer on the Market
for the Shares, New York Stock Exchange Listing and Exchange Act Registration")
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Except as set forth herein, none of the Parent, the Purchaser nor, to
the best knowledge of the Parent and the Purchaser, any of the persons listed in
Schedule I to the Offer to Purchase or any associate or majority-owned
subsidiary of the Parent, the Purchaser or any of the persons so listed
beneficially owns or has any right to acquire, directly or indirectly, any
Shares. Mr. LaBorde, the President and Chief Executive Officer of the Parent and
President of the Purchaser, beneficially owns 500 Shares. Mr. LaBorde is also a
director of Parent and the Purchaser.
(b) None of the Parent, the Purchaser nor, to the best knowledge of the
Parent and the Purchaser, any of the persons listed in Schedule I to the Offer
to Purchase or any associate or majority-owned subsidiary of any of the
foregoing has effected any transactions in the Shares during the past sixty
days.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Section 11 ("The Merger Agreement") and
Section 12 ("Purpose of the Offer; The Merger; Plans for the Company; Rights
Agreement") of the Offer to Purchase is incorporated herein by reference. Except
as set forth in Sections 11 and 12 of the Offer to Purchase, none of the Parent,
the Purchaser nor, to the best knowledge of the Parent and the Purchaser, any of
the persons listed in Schedule I to the Offer to Purchase, has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loans or option arrangements, puts or
calls, guarantees of loans, guarantee agreements or any giving or withholding of
proxies).
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("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 8 ("Certain Information Concerning the
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
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ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("The Merger Agreement") and
Section 12 ("Purpose of the Offer; the Merger; Plans for the Company; Rights
Agreement") of the Offer to Purchase is incorporated herein by reference.
(b) and (c) The information set forth in Section 16 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 16 ("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 and the Letter of
Transmittal is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase dated April 29, 1998.
(a) (2) Letter of Transmittal.
(a) (3) Notice of Guaranteed Delivery.
(a) (4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a) (5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a) (6) Letter to Record Holders of the Company's Common Stock who are
holding Stock Certificates of the Company's Former Parent.
(a) (7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a) (8) Summary Advertisement as published on April 29, 1998.
(a) (9) Press Release issued by the Parent on April 23, 1998.
(b) (1) Commitment Letter dated April 28, 1998 to the Parent from Hibernia
National Bank (with summary term sheet).
(c) (1) Plan and Agreement of Merger dated as of April 22, 1998 by and
among Piccadilly Cafeterias, Inc., Piccadilly Acquisition Corporation and
Morrison Restaurants Inc.
(c) (2) Form of Shareholders Agreement between the Parent and directors of
the Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify the
information set forth in this statement is true, complete and correct.
PICCADILLY CAFETERIAS, INC.
By: /s/ RONALD A. LABORDE
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Ronald A. LaBorde
President and Chief Executive
Officer
PICCADILLY ACQUISITION CORPORATION
By: /s/ RONALD A. LABORDE
----------------------------------
Ronald A. LaBorde
President
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EXHIBIT INDEX
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EXHIBIT PAGE
NO. DESCRIPTION NO.
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11(a)(1) -- Offer to Purchase, dated April 29, 1998..................
11(a)(2) -- Letter of Transmittal....................................
11(a)(3) -- Notice of Guaranteed Delivery............................
11(a)(4) -- Letter from the Dealer Manager to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees...........
11(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Company and Nominees........................
11(a)(6) -- Letter to Record Holders of the Company's Common Stock
who are Holding Stock Certificates of the Company's
Former Parent............................................
11(a)(7) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9............................
11(a)(8) -- Summary Advertisement as published on April 29, 1998.....
11(a)(9) -- Press Release issued by the Parent on April 23, 1998.....
11(b)(1) -- Commitment Letter dated April 28, 1998 to the Parent from
Hibernia National Bank (with summary term sheet).........
11(c)(1) -- Plan and Agreement of Merger dated as of April 22, 1998
by and among Piccadilly Cafeterias, Inc., Piccadilly
Acquisition Corporation and Morrison Restaurants Inc.....
11(c)(2) -- Form of Shareholders Agreement between the Parent and
directors of the Company.................................
</TABLE>
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
AT
$5.00 NET PER SHARE
BY
PICCADILLY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PICCADILLY CAFETERIAS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, MAY 27, 1998,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION OF THE
OFFER SUCH NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE
"COMMON STOCK"), OF MORRISON RESTAURANTS INC. (THE "COMPANY"), WHICH CONSTITUTES
NOT LESS THAN 66 2/3% OF THE SHARES OF COMMON STOCK OF THE COMPANY OUTSTANDING
ON THE DATE OF PURCHASE AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE
WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976,
AS AMENDED. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE
INTRODUCTION AND SECTIONS 1 AND 15.
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THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED BY UNANIMOUS VOTE THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE HOLDERS OF SHARES OF COMMON STOCK OF THE
COMPANY AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES TO THE PURCHASER PURSUANT TO THE OFFER.
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IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) (and the associated preferred stock purchase rights
(the "Rights") of the Company) should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, mail or deliver the Letter of Transmittal (or such
facsimile) and any other required documents to the Depositary (as defined
herein), and either deliver the certificates representing the tendered Shares
(and Rights, if applicable) and any other required documents to the Depositary
or tender such Shares (and Rights, if applicable) pursuant to the procedure for
book-entry transfer set forth in Section 3 or (2) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Stockholders having Shares (and Rights, if
applicable) registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if they desire to tender Shares (and Rights, if
applicable) so registered.
A stockholder who desires to tender Shares (and Rights) and whose
certificates representing such Shares (and Rights, if applicable) are not
immediately available, or who cannot deliver the certificates for Shares (and
Rights, if applicable) and all other required documents to reach the Depositary
on or prior to the Expiration Date (as defined herein), or who cannot comply
with the procedure for book-entry transfer on a timely basis may tender such
Shares (and Rights, if applicable) by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to Scott &
Stringfellow, Inc. (the "Dealer Manager") or to MacKenzie Partners, Inc. (the
"Information Agent") at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may also be obtained from the Information Agent, the Dealer Manager, or
brokers, dealers, commercial banks or trust companies.
THE DEALER MANAGER FOR THE OFFER IS:
[STRINGFELLOW LOGO]
APRIL 29, 1998
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TABLE OF CONTENTS
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INTRODUCTION...................................................... 1
THE TENDER OFFER.................................................. 3
1. Terms of the Offer; Expiration Date......................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedure for Tendering Shares and Rights................... 5
4. Withdrawal Rights........................................... 9
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Cash Dividends....................... 10
7. Certain Information Concerning the Company.................. 10
8. Certain Information Concerning the Parent and the
Purchaser................................................... 14
9. Source and Amount of Funds.................................. 17
10. Background of the Offer; Contacts with the Company.......... 17
11. The Merger Agreement........................................ 18
12. Purpose of the Offer; the Merger; Plans for the Company;
Rights Agreement............................................ 27
13. Dividends and Distributions................................. 32
14. Effect of the Offer on the Market for the Shares, New York
Stock Exchange Listing and Exchange Act Registration........ 32
15. Certain Conditions of the Offer............................. 33
16. Certain Legal Matters and Regulatory Approvals.............. 34
17. Fees and Expenses........................................... 36
18. Miscellaneous............................................... 36
SCHEDULE I -- DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT AND
THE PURCHASER................................................... I-1
</TABLE>
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To the Stockholders of
MORRISON RESTAURANTS INC.
INTRODUCTION
Piccadilly Acquisition Corporation, a Georgia corporation (the
"Purchaser"), which is a wholly owned subsidiary of Piccadilly Cafeterias, Inc.,
a Louisiana corporation (the "Parent"), hereby offers to purchase all of the
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
Morrison Restaurants Inc., a Georgia corporation (the "Company"), and the
associated preferred stock purchase rights (the "Rights") issued pursuant to
that certain Rights Agreement, dated as of March 2, 1996 (as amended, the
"Rights Agreement"), by and between the Company and SunTrust Bank, N.A., as
rights agent, at a purchase price of $5.00 per Share and associated Right, net
to the seller in cash without interest thereon, upon the terms and subject to
the conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). The Rights Agreement is described in greater detail below in Section
12. Unless the context requires otherwise, all references in this Offer to
Purchase to Shares shall be deemed to refer also to the associated Rights, and
all references to Rights shall be deemed to include all benefits that may inure
to the stockholders of the Company or to holders of the Rights pursuant to the
Rights Agreement. In connection with the Merger Agreement (as defined below),
the Company has amended the Rights Agreement so that the execution and delivery
of the Merger Agreement and the consummation of the transactions contemplated
thereby, including the Offer and the purchase of Shares pursuant thereto, will
not result in the occurrence of a Distribution Date, a Stock Acquisition Date, a
Triggering Event or any person becoming an Acquiring Person (each as defined in
the Rights Agreement), or in any adjustment to the exercise price or other terms
of the Rights. Unless and until the Distribution Date occurs, the Rights will be
transferred with and only with the Shares and, therefore, the surrender for
transfer of any of the certificates representing Shares (the "Share
Certificates"), including upon acceptance for payment of such Shares pursuant to
the Offer, will also constitute the surrender for transfer of the Rights
associated with the Shares represented by such Share Certificates. See Section
12.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares and Rights pursuant to the
Offer. The Purchaser will pay all fees and expenses of Scott & Stringfellow,
Inc., which is acting as Dealer Manager for the Offer (in such capacity, the
"Dealer Manager"), IBJ Schroder Bank & Trust Company, which is acting as the
Depositary (in such capacity, the "Depositary"), and MacKenzie Partners, Inc.,
which is acting as the Information Agent (in such capacity, the "Information
Agent"), incurred in connection with the Offer. See Section 17.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS") HAS
APPROVED BY UNANIMOUS VOTE THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER (AS DEFINED BELOW), AND
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE HOLDERS OF THE SHARES AND RECOMMENDS THAT THE HOLDERS OF
THE SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER PURSUANT TO
THE OFFER.
The Board of Directors has received the opinion dated April 22, 1998 of
Wheat First Securities, Inc. ("Wheat First"), financial advisor to the Company,
to the effect that, as of such date and based upon and subject to certain
assumptions stated therein, the $5.00 per Share cash consideration to be
received in the Offer and the Merger by holders of Shares (other than the
Parent, Purchaser or any other subsidiary of Parent its affiliates and
stockholders who exercise their dissenters' rights in accordance with applicable
law) was fair from a financial point of view to such stockholders. A copy of the
opinion of Wheat First is attached to the Company's Solicitation/Recommendation
Statement on Schedule 14D-9, which is being distributed to the stockholders of
the Company, and stockholders are urged to read the opinion carefully in its
entirety for the assumptions made, matters considered and limitations on the
review undertaken by Wheat First.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN SECTION 1) SUCH NUMBER OF SHARES WHICH CONSTITUTES NOT LESS THAN
66 2/3% OF THE SHARES OUTSTANDING ON THE DATE OF PURCHASE (THE "MINIMUM
CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT") (THE "HSR ACT CONDITION"). SEE SECTIONS 1 AND 15. IF THE
PURCHASER PURCHASES NOT LESS THAN THAT NUMBER OF SHARES NEEDED TO SATISFY THE
MINIMUM CONDITION, OR, IF IT WAIVES THE MINIMUM CONDITION AND PURCHASES NOT LESS
THAN A MAJORITY OF THE OUTSTANDING SHARES, IT WILL BE ABLE TO EFFECT THE MERGER
WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER OF THE COMPANY. SEE
SECTION 12.
The Offer is being made pursuant to a Plan and Agreement of Merger, dated
as of April 22, 1998 (the "Merger Agreement"), among the Parent, the Purchaser
and the Company. The Merger Agreement provides, among other things, for the
making of the Offer by the Purchaser, and further provides that, following the
completion of the Offer, upon the terms and subject to the conditions of the
Merger Agreement, and in accordance with the Georgia Business Corporation Code
(the "GBCC"), the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and become a wholly owned subsidiary
of the Parent, and the separate corporate existence of the Purchaser will cease.
See Section 11.
At the effective time of the Merger (the "Effective Time"), each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares owned by the Parent, the Purchaser or any other subsidiary of the Parent,
or held in the treasury of the Company, which shall be canceled, and other than
Shares, if any (collectively, the "Dissenting Shares"), held by stockholders who
have properly exercised and perfected dissenters' rights under Part 2 of Article
13 of the GBCC), will, by virtue of the Merger and without any action on the
part of the holders of the Shares, be converted into the right to receive $5.00
in cash (the "Merger Consideration"), payable to the holder thereof, without
interest, upon surrender of the certificate formerly representing such Share,
less any required withholding taxes.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of the Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
The Merger Agreement provides that, promptly upon the acceptance for
payment by Purchaser of Shares tendered pursuant to the Offer, the Purchaser
shall be entitled to designate such number of directors, rounded up to the next
whole number, as will give it representation on the Board of Directors equal to
at least that number of directors equal to the product of (i) the total number
of directors on the Board of Directors and (ii) the percentage that the number
of Shares so accepted for payment bears to the number of Shares outstanding. In
the Merger Agreement, the Company has agreed, at the election of the Purchaser,
either to increase the size of the Board of Directors or use its best efforts to
cause the appropriate number of directors who were directors of the Company as
of the date of the Merger Agreement to resign and Purchaser's designees to be
appointed or elected to fill the vacancies thereby created. However, until the
Effective Time, the Board must include at least three directors who were
directors of the Company on the date of the Merger Agreement and who are neither
designees, officers, directors, full-time employees or affiliates of Parent or
the Purchaser nor full-time employees of the Company.
The Company has represented to the Parent that as of the close of business
on April 20, 1998, there were 9,236,440 Shares issued and outstanding. Pursuant
to the Merger Agreement, holders of stock options granted under Company
incentive plans, whether or not then exercisable, which were outstanding on the
date of the Merger Agreement, and which have not been exercised prior to the
acquisition of Shares pursuant to the Offer, shall be entitled to receive, in
cancellation and settlement of such options, a cash payment equal to the excess,
if any, of the Merger Consideration over the respective exercise prices of such
options. Based upon the foregoing and assuming no exercise of outstanding
options, the Purchaser believes that 6,157,627 Shares constitutes 66 2/3% of the
outstanding Shares. Accordingly, if the Purchaser acquires such minimum number
of Shares, it would have sufficient voting power to approve the Merger without
the affirmative vote of any other stockholder. Under the terms of the Merger
Agreement, Parent and Purchaser may waive the Minimum
2
<PAGE> 5
Condition and acquire not less than a majority of the outstanding Shares. Parent
and Purchaser currently do not intend to waive the Minimum Condition but reserve
the right to do so, subject to the terms of the Merger Agreement and the
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date and not properly withdrawn as
permitted by Section 4. The term "Expiration Date" means 12:00 midnight, New
York City time, on Wednesday, May 27, 1998, unless and until the Purchaser, in
its sole discretion (but subject to the terms and conditions of the Merger
Agreement), shall have extended the period 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 conditioned upon, among other things, satisfaction of the
Minimum Condition and the HSR Act Condition. See Section 15, which sets forth in
full the conditions to the Offer. Subject to the provisions of the Merger
Agreement and the applicable rules and regulations of the Commission, the
Purchaser reserves the right, in its sole discretion, to waive any or all
conditions to the Offer (other than the Minimum Condition (so as to acquire less
than a majority of the outstanding Shares)) and to modify the terms of the
Offer. Subject to the provisions of the Merger Agreement, including the
provisions of the Merger Agreement described in the next paragraph, and the
applicable rules and regulations of the Commission, if by the Expiration Date
any or all of such conditions to the Offer have not been satisfied, the
Purchaser reserves the right (but shall not be obligated) to (i) terminate the
Offer and return all tendered Shares to tendering stockholders, (ii) waive such
unsatisfied conditions and purchase all Shares validly tendered or (iii) extend
the Offer and, subject to the terms of the Offer (including the rights of
stockholders to withdraw their Shares), retain the Shares which have been
tendered, until the termination of the Offer, as extended.
Under the terms of the Merger Agreement, the Purchaser has agreed with the
Company that it will not, without the prior written consent of the Company,
decrease the price per Share payable in the Offer, decrease the number of Shares
being sought in the Offer, change the form of consideration payable in the Offer
(other than by adding consideration), add additional conditions to the Offer,
or, subject to the Purchaser's right to extend the Offer as set forth below,
make any other change in the terms of the Offer which is adverse to the holders
of Shares. The Merger Agreement provides that the Purchaser may, without the
consent of the Company, (i) extend the Offer (on one or more occasions) beyond
the scheduled Expiration Date if at any such date any of the conditions to the
Purchaser's obligation to purchase Shares have not been satisfied or waived,
until such time as such conditions are satisfied or waived, or (ii) extend the
Offer to the extent required by any rule or regulation of the Commission.
Notwithstanding anything in the preceding sentence to the contrary, the Merger
Agreement provides that the Purchaser may not, without the Company's prior
written consent, (A) extend the Expiration Date if the failure to meet any
condition to the Offer was directly or indirectly caused by an act or omission
of the Parent or the Purchaser or (B) effect any individual extension under
clause (i) of the immediately preceding sentence in excess of the amount of time
reasonably believed by the Parent to be necessary to satisfy such condition,
which shall in no event exceed 10 business days. The Purchaser shall have no
obligation to pay interest on the purchase price of tendered Shares. Subject to
the applicable rules and regulations of the Commission and the provisions of the
Merger Agreement described above, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 15 shall have occurred, to
(i) extend the
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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 or (ii) amend the Offer in any respect by
giving oral or written notice of such amendment to the Depositary. During any
such extension, all Shares previously tendered and not properly withdrawn will
remain subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
Any extension, delay, termination, waiver or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, and such
announcement in the case of an extension will be made in accordance with Rule
14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), no later than 9:00 A.M., New York City time, on the next business day
after the previously scheduled Expiration Date. Without limiting the manner in
which the Purchaser may choose to make any public announcement, except as
provided by applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that material changes be promptly disseminated to
holders of Shares), the Purchaser shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or if it waives a material condition of the
Offer, the Purchaser will disseminate additional tender offer materials and
extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act. The minimum period during which an offer must remain
open following material changes in the terms of the Offer or the 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, including
the materiality of the changed terms or information. With respect to a change in
price or, subject to certain limitations, a change in the percentage of
securities sought, a minimum ten business day period from the day of such change
is generally required to allow for adequate dissemination to stockholders. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday, or a federal holiday and consists of the time period from 12:01 A.M.
through 12:00 midnight, New York City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE 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 all Shares
validly tendered and not properly withdrawn on or prior to the Expiration Date
as soon as practicable after the later to occur of (i) the Expiration Date and
(ii) the satisfaction or waiver of the conditions of the Offer set forth in
Section 15, including without limitation the Minimum Condition and the HSR Act
Condition. All determinations concerning the satisfaction of such terms and
conditions will be within the Purchaser's discretion, which determinations will
be final and binding. In addition, subject to applicable rules of the
Commission, the Purchaser expressly reserves the right to delay acceptance for
payment of or payment for shares in order to comply in whole or in part with any
law, including, without limitation, the HSR Act. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to a
bidder's obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the HSR Act, see Section 16.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
Share Certificates and, if applicable, certificates evidencing the Rights
("Rights Certificates"), or timely confirmation (a "Book-Entry Confirmation") of
a book-entry
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<PAGE> 7
transfer of such Shares and, if applicable, Rights into the Depositary's account
at The Depository Trust Company (the "Book-Entry Transfer Facility")pursuant to
the procedures set forth in Section 3, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer, and (iii) any other documents required by the Letter
of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares and, if applicable, Rights 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.
PRIOR TO A DISTRIBUTION DATE, A VALID TENDER OF SHARES WILL ALSO CONSTITUTE
A TENDER OF THE ASSOCIATED RIGHTS. If Rights Certificates have been distributed
to holders of Shares, such holders are required to tender, or make book-entry
transfer of, Rights Certificates representing a number of Rights equal to the
number of Shares being tendered in order to effect a valid tender of such
Shares. See Section 12.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares and Rights validly tendered and not
properly 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 and
Rights pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares and Rights 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 payments from the Purchaser and transmitting such payments to
stockholders whose Shares and Rights have been accepted for payment. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES AND RIGHTS BE PAID
BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT. If, for any reason whatsoever, acceptance for payment of or
payment for any Shares and Rights tendered pursuant to the Offer is delayed or
the Purchaser is unable to accept for payment or pay for Shares and Rights
tendered pursuant to the Offer, then without prejudice to the Purchaser's rights
set forth herein, the Depositary may nevertheless, on behalf of the Purchaser
and subject to Rule 14e-1(c) under the Exchange Act, retain tendered Shares and
Rights, and such Shares and Rights may not be withdrawn except to the extent
that the tendering stockholder is entitled to and duly exercises withdrawal
rights as described in Section 4.
If any tendered Shares and Rights are not accepted for payment for any
reason or if Share Certificates are submitted for more Shares and Rights than
are tendered, Share Certificates evidencing unpurchased or untendered Shares and
Rights will be returned without expense to the tendering stockholder (or, in the
case of Shares and Rights tendered by book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares and Rights will be credited to an account maintained
at the Book-Entry Transfer Facility), in each case with the related Rights
Certificates, if any, as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more corporations directly or indirectly
wholly-owned by Parent the right to purchase all or any portion of the Shares
and Rights tendered pursuant to the Offer, but any such transfer or assignment
will not relieve the Purchaser of its obligations under the Offer or prejudice
the rights of tendering stockholders to receive payment for Shares and Rights
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES AND RIGHTS.
Valid Tenders. Except as set forth below, in order for Shares and Rights to
be validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares and Rights, and any other documents required by
the Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date and either (i) Share Certificates and Rights Certificates,
if applicable, evidencing
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<PAGE> 8
tendered Shares and Rights must be received by the Depositary at such address or
such Shares and Rights must be tendered pursuant to the procedure for book-entry
transfer described below and a Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date or (ii) the
guaranteed delivery procedures described below must be complied with.
Rights Certificates. PRIOR TO A DISTRIBUTION DATE, A VALID TENDER OF SHARES
WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. If the Distribution Date
has occurred and Rights Certificates have been distributed to such holders prior
to the date of tender pursuant to the Offer, Rights Certificates representing a
number of Rights equal to the number of Shares being tendered must be delivered
to the Depositary or, if available, a Book-Entry Confirmation must be received
by the Depositary with respect thereto, in order for such Shares to be validly
tendered. If the Distribution Date has occurred and Rights Certificates have not
been distributed prior to the time Shares are tendered pursuant to the Offer,
Rights may be tendered prior to a stockholder receiving Rights Certificates by
use of the guaranteed delivery procedures described below. A tender of Shares
without Rights Certificates as set forth above constitutes an agreement by the
tendering stockholder to deliver Rights Certificates representing a number of
Rights equal to the number of Shares tendered pursuant to the Offer to the
Depositary within three business days after the date Rights Certificates are
distributed.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility 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 at the Book-Entry Transfer
Facility, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, must in any case be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with. If the Distribution Date
occurs, to the extent that the Rights become eligible for book-entry transfer
under procedures established by the Book-Entry Transfer Facility, the Depositary
will make a request to establish an account with respect to the Rights at the
Book-Entry Transfer Facility as soon as practicable. If book-entry delivery of
Rights is available, the foregoing book-entry transfer procedure will also apply
to Rights. However, no assurance can be given that book-entry delivery of Rights
will be available. If book-entry delivery is not available and if separate
Rights Certificates have been issued, a tendering stockholder is not relieved of
delivery requirements hereunder and thus will be required to tender Rights by
means of actual physical delivery of Rights Certificates to the Depositary or
pursuant to the guaranteed delivery procedures set forth below.
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 SHARE CERTIFICATES AND RIGHTS CERTIFICATES, IF
APPLICABLE, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY (INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares and Rights are tendered
(i) by a registered holder of Shares who has not completed either the box
labeled "Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
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If the Share Certificates and Rights Certificates, if applicable, 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 Share Certificates and Rights
Certificates, if applicable, not accepted for payment or not tendered are to be
returned, to a person other than the registered holder, the Share Certificates
and Rights Certificates, if applicable, must be endorsed or accompanied by
appropriate stock powers, in either case, signed exactly as the name of the
registered holder appears on such certificates, with the signatures on such
certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5
of the Letter of Transmittal.
If Share Certificates and Rights Certificates, if applicable, are forwarded
separately to the Depositary, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) must accompany each such delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares and Rights
pursuant to the Offer and such stockholder's Share Certificates and Rights
Certificates, if applicable, are not immediately available, or such stockholder
cannot deliver the Share Certificates and Rights Certificates, if applicable,
and all other required documents to reach the Depositary on or prior to the
Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares and Rights may
nevertheless be tendered, provided that all of the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form made available by the Purchaser is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates and Rights Certificates, if applicable
(or a Book-Entry Confirmation), representing all tendered Shares and Rights
in proper form for transfer, together with the Letter of Transmittal (or a
facsimile thereof) properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry 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 is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares and Rights tendered within the meaning of, and that
the tender of the Shares and Rights effected thereby complies with, Rule 14e-4
under the Exchange Act, each in the form set forth in such Notice of Guaranteed
Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates and Rights Certificates, if
applicable, for, or of Book-Entry Confirmation with respect to, such Shares and
Rights, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), together with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal. Accordingly, payment might not be made to
all tendering stockholders at the same time and will depend upon when Share
Certificates and Rights Certificates, if applicable, or Book-Entry Confirmations
with respect to such Shares and Rights are received into the Depositary's
account at a Book-Entry Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser and each of them as
such stockholder's attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares and Rights
tendered by such stockholder and accepted for payment by the Purchaser (and with
respect to any and all other Shares or Rights or other securities issued or
issuable in respect of such Shares or Rights on or after the date hereof). All
such powers of attorney and proxies shall be considered irrevocable and coupled
with an interest in the tendered Shares. Such appointment
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<PAGE> 10
will be effective when, and only to the extent that, the Purchaser accepts such
Shares and Rights for payment. Upon such acceptance for payment, all prior
powers of attorney and proxies given by such stockholder with respect to such
Shares and Rights (and such other Shares, Rights and other securities) will be
revoked without further action, and no subsequent powers of attorney and proxies
may be given nor any subsequent written consents executed (and, if given or
executed, will not be deemed effective). The designees of the Purchaser will,
with respect to the Shares and Rights (and such other Shares, Rights and other
securities) for which such appointment is effective, be empowered to exercise
all voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares and Rights to be deemed validly tendered, immediately upon the
Purchaser's payment for such Shares and Rights, the Purchaser must be able to
exercise full voting rights with respect to such Shares, Rights and other
securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares and Rights will be determined by the Purchaser in its sole discretion,
which determination shall be final and binding. The Purchaser reserves the
absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may in the opinion of its
counsel be unlawful. The Purchaser also reserves the absolute right to waive any
of the conditions of the Offer (subject to the provisions of the Merger
Agreement) or any defect or irregularity in any tender of Shares or Rights of
any particular stockholder whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares or Rights will be
deemed to have been validly made until all defects and irregularities have been
cured or waived. None of the Purchaser, the Parent, any of their affiliates or
assigns, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. 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 Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash made pursuant to
the Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash 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. 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
substitute Form W-9 included in 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
Depositary). Certain stockholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign 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 of the
Letter of Transmittal.
Other Requirements. The Purchaser's acceptance for payment of Shares and
Rights tendered pursuant to any 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, including
the tendering stockholder's representation and warranty that the stockholder is
the holder of the Shares and Rights within the meaning of, and that the tender
of the Shares and Rights complies with, Rule 14e-4 under the Exchange Act.
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4. WITHDRAWAL RIGHTS.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable,
except that Shares and Rights tendered pursuant to the Offer may be withdrawn at
any time on or prior to the Expiration Date and, unless theretofore accepted for
payment by the Purchaser pursuant to the Offer, may be withdrawn at any time
after June 22, 1998. If the Purchaser extends the Offer, is delayed in its
acceptance for payment of Shares and Rights or is unable to purchase Shares and
Rights validly tendered pursuant to the Offer for any reason, then without
prejudice to the Purchaser's rights under the Offer, the Depositary may
nevertheless, on behalf of the Purchaser, retain tendered Shares and Rights, and
such Shares and Rights may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described in this Section 4.
Any such delay in acceptance for payment will be accompanied by an extension of
the Offer to the extent required by law or by the Merger Agreement.
For a withdrawal to be effective, a written, telegraphic, telex 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. Any notice of withdrawal must specify the name of the person who
tendered the Shares and Rights to be withdrawn, the number of Shares or Rights
to be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares and Rights. If Share Certificates or, if
applicable, Rights Certificates to be withdrawn 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 the signatures on the notice of withdrawal must be guaranteed
by an Eligible Institution unless such Shares or Rights have been tendered for
the account of an Eligible Institution. If Shares or Rights have been tendered
pursuant to the procedure for book-entry transfer as set forth in Section 3, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares or Rights,
in which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the first sentence of this
paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, the Parent, any of their affiliates or assigns, the Dealer Manager,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Withdrawals of Shares and Rights may not be rescinded. Any Shares and
Rights properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer. However, withdrawn Shares and Rights may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The summary of tax consequences set forth below is for general information
only and is based on the law as currently in effect. The tax treatment of each
stockholder will depend in part upon such stockholder's particular situation.
Special tax consequences not described herein may be applicable to particular
classes of taxpayers, such as financial institutions, broker-dealers, persons
who are not citizens or residents of the United States, stockholders who
acquired their Shares through the exercise of an employee stock option or
otherwise as compensation, and persons who receive payments in respect of
options to acquire Shares. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND
ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX
LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, for Federal income tax
purposes, a stockholder will recognize gain or loss in an amount equal to the
difference between the cash received by the stockholder pursuant to the Offer or
the Merger and the stockholder's adjusted tax basis in the Shares and the
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associated Rights tendered by the stockholder and purchased pursuant to the
Offer or the Merger. For Federal income tax purposes, such gain or loss will be
a capital gain or loss if the Shares are a capital asset in the hands of the
stockholder, and a long-term capital gain or loss if the stockholder's holding
period is more than one year as of the date the Purchaser accepts such Shares
for payment pursuant to the Offer or the effective date of the Merger, as the
case may be. There are limitations on the deductibility of capital losses.
Long-term capital gains of individuals are eligible for reduced rates of
taxation, with additional rate reductions applicable to gains from capital
assets held for more than 18 months. INDIVIDUALS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE TAX TREATMENT OF CAPITAL GAINS AND LOSSES.
6. PRICE RANGE OF SHARES; CASH DIVIDENDS.
The Shares are listed and traded on the New York Stock Exchange under the
symbol "MRN." The following table sets forth, for the quarters indicated
(starting from the date of the Distribution (as defined below)), the high and
low sales prices per Share of Common Stock as reported by the New York Stock
Exchange and the amount of cash dividends per Share paid during such periods.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
----- ----- ---------
<S> <C> <C> <C>
Fiscal Year Ended June 1, 1996:
(commencing March 9, 1996).............................. $9.00 $5.50 $0.09
Fiscal Year Ended May 31, 1997:
First Quarter........................................... $7.38 $4.25 $0.09
Second Quarter.......................................... $5.88 $4.63 $0.09
Third Quarter........................................... $5.38 $4.50 $0.09
Fourth Quarter.......................................... $5.38 $4.50 $0.09
Fiscal Year Ended May 31, 1998:
First Quarter........................................... $5.25 $4.38 $0.09
Second Quarter.......................................... $4.81 $3.00 --
Third Quarter........................................... $3.50 $2.25 --
Fourth Quarter (through April 21, 1998)................. $4.63 $2.88 --
</TABLE>
On April 22, 1998, the last full trading day prior to the public
announcement of the execution of the Merger Agreement by the Company, the Parent
and Purchaser, the last reported sales price per Share on the New York Stock
Exchange was $4.38. On April 28, 1998, the last full trading day prior to the
Parent's commencement of the Offer, the last reported sales price per Share on
the New York Stock Exchange was $4.82. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
The Rights are currently attached to the outstanding Shares and may not be
traded separately. If a Distribution Date occurs, the Rights could begin trading
separately from the Shares. See Section 12. IN SUCH EVENT, STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION, IF ANY, FOR THE RIGHTS. Holders of
Shares are required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. Accordingly, if a Distribution Date occurs,
stockholders who sell their Rights separately from their Shares and do not
otherwise acquire Rights may not be able to satisfy the requirements of the
Offer for a valid tender of Shares.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The summary information concerning the Company in this Section 7 and
elsewhere in this Offer to Purchase is derived from the Company's 1996 Annual
Report to Stockholders, 1997 Annual Report to Stockholders, other publicly
available information and other information provided by the Company. The summary
information set forth below is qualified in its entirety by reference to the
publicly available reports of the Company (which may be obtained and inspected
as described below) and should be considered in conjunction with the more
comprehensive financial and other information contained in such reports and
other publicly available reports and documents filed by the Company with the
Commission and other publicly available information. Although neither the
Purchaser nor the Parent has any knowledge that would indicate that any
statements contained herein based upon such reports are untrue, neither the
Purchaser nor the Parent
10
<PAGE> 13
assumes any responsibility for the accuracy or completeness of the information
contained in such reports, 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 but which are unknown to the Parent and the Purchaser.
General. The Company owns and operates cafeterias, buffets and mall food
court locations in the southeastern and mid-Atlantic regions of the United
States. Prior to March 1996, the Company comprised the family dining business of
Morrison Restaurants Inc. ("MRI"). On March 7, 1996, the shareholders of MRI
approved the distribution of the Company's Common Stock to the shareholders of
MRI (the "Distribution"). The effective date of the Distribution was March 9,
1996, and, pursuant to the Distribution, the shareholders of MRI received, among
other things, one Share for every four shares of MRI held. The Company, formed
in 1995 as a Georgia corporation, has its principal executive offices at 3300
Highlands Parkway, Suite 130, Atlanta, Georgia 30082.
Financial Information. Set forth below is certain selected financial
information for the Company which was derived from the Company's 1996 Annual
Report to Stockholders, 1997 Annual Report to Stockholders and Quarterly Report
on Form 10-Q for the thirty-nine week period ended February 28, 1998, each as
filed with the Commission pursuant to the Exchange Act. More comprehensive
financial information is included in the reports (including management's
discussion and analysis of financial condition and results of operations) and
other documents filed by the Company with the Commission, and the following
financial information is qualified in its entirety by reference to such reports
and other documents including the financial information and related notes
contained therein. Such reports and other documents may be examined and copies
thereof may be inspected and copied at the offices of the Commission and the New
York Stock Exchange in the manner set forth below.
11
<PAGE> 14
MORRISON RESTAURANTS INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
----------------------------------------------------
MAY 31, JUNE 1, JUNE 3, JUNE 4, JUNE 5,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................. $249,637 $267,638 $294,587 $292,493 $291,032
Operating costs and expenses.............. 245,288 283,226 275,479 275,769 277,922
-------- -------- -------- -------- --------
Income (loss) before income taxes......... 4,349 (15,588) 19,108 16,724 13,110
Provision for (benefit from) federal and
state income taxes..................... 1,617 (5,694) 7,734 6,646 4,898
-------- -------- -------- -------- --------
Net income (loss)......................... $ 2,732 $ (9,894) $ 11,374 $ 10,078 $ 7,700
======== ======== ======== ======== ========
Earnings (loss) per common share and
common equivalent share................ $ 0.30 $ (1.10) $ 1.27 $ 1.08 $ 0.81
======== ======== ======== ======== ========
Dividends per common share................ $ 0.36 $ 0.09 $ -- $ -- $ --
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF
----------------------------------------------------
MAY 31, JUNE 1, JUNE 3, JUNE 4, JUNE 5,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital deficit................... $(16,983) $(13,754) $(14,916) $(20,667) $(18,131)
Total assets.............................. 84,028 83,539 90,122 77,461 82,077
Stockholders' equity...................... 39,944 39,844 47,465 29,303 32,623
</TABLE>
<TABLE>
<CAPTION>
FOR THE THIRTY-NINE
WEEKS ENDED
------------------------
FEBRUARY 28, MARCH 1,
1998 1997
------------ --------
<S> <C> <C>
INCOME STATEMENT DATA:
Net sales................................................. $179,670 $188,056
Operating costs and expenses.............................. 184,269 184,582
-------- --------
Income (loss) before income taxes......................... (4,599) 3,474
Provision for (benefit from) federal and state income
taxes.................................................. (1,709) 1,288
-------- --------
Net income (loss)......................................... $ (2,890) $ 2,186
======== ========
Basic earnings (loss) per share........................... $ (0.32) $ 0.24
======== ========
Diluted earnings (loss) per share......................... $ (0.32) $ 0.24
======== ========
Dividends per common share................................ $ -- $ 0.27
======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF
FEBRUARY 28,
1998
------------
<S> <C>
BALANCE SHEET DATA:
Working capital deficit................................... $(23,322)
Total assets.............................................. 83,365
Stockholders' equity...................................... 36,862
</TABLE>
---------------------
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and in accordance therewith is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors
12
<PAGE> 15
and officers, their compensation, options granted to them, 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 such proxy
statements and distributed to the Company's 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 in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at prescribed rates at the
regional offices of the Commission located at CitiCorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite
1300, New York, New York 10048. Such reports, proxy statements and other
information may also be obtained at the Web site that the Commission maintains
at http://www.sec.gov. Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
material should also be available for inspection at the offices of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005. Except as otherwise
noted in this Offer to Purchase, all of the information with respect to the
Company set forth in this Offer to Purchase has been derived from publicly
available information.
Certain Projections. In connection with the Parent's and Purchaser's due
diligence review of the Company, the Company made available to Parent certain
non-public information, including a business plan and quarterly financial
projections (income statement, balance sheet and cash flows) for the fiscal
years ended May 1998, 1999 and 2000. Two scenarios were presented -- Scenario A
and Scenario B, with Scenario A reflecting results that Company's management
believed were achievable under its business plan, and Scenario B presenting more
conservative potential results.
The projections provided by the Company to the Parent and Purchaser were
prepared in connection with the Company's negotiations with its lender with
respect to the restructuring of its Credit Facility effort to sell the Company.
While presented with numerical specificity, the projections are based upon a
variety of assumptions relating to the business of the Company, industry
performance, general business and economic conditions and other matters and are
subject to significant uncertainties and contingencies, many of which are beyond
the Parent's, Purchaser's or the Company's control. All such assumptions were
developed by the Company's management without the approval or involvement by
Parent or Purchaser. Such projections are inherently imprecise, and there can be
no assurances that any such projections would be realized or that actual results
would not differ significantly from those set forth below. Neither the Parent
nor the Company, nor their respective directors or financial advisors, accepts
any responsibility for such projections or the bases or assumptions on which
they were prepared. Such projections were not intended to be a forecast of
financial results by the Company, were not prepared with a view to public
disclosure or compliance with the published guidelines of the Commissioner or
the guidelines established by the American Institute of Certified Public
Accountants regarding projections and forecasts, and were not reviewed by the
Company's independent auditors.
Such projections for the Company's fiscal years 1998, 1999 and 2000 are
being summarized below solely because they were made available to Parent and
Purchaser during the course of its due diligence review. Neither the Parent nor
the Purchaser relied on such projections in evaluating a transaction with the
Company, and none of Parent, Purchaser, or the Company or any of their financial
advisors assumes any responsibility for the validity, reasonableness, accuracy
or completeness of the projections. None of Parent, Purchaser, the Company or
any of their financial advisors has made, or makes, any representation to any
person regarding the information contained in the projections and none of them
intends to update or publicly revise the projections to reflect circumstances
existing or occurring after the date when made or to reflect the occurrence of
future events even if any or all of the assumptions underlying the projections
prove to be in error.
The principal assumptions (which were the same for Scenario A and Scenario
B, except for customer count trends) underlying the projections are as follows:
(i) improvements in customer count trends, with Scenario A assuming a
faster rate of improvement in customer counts than Scenario B;
13
<PAGE> 16
(ii) increases in average check sales per customer of approximately 3%
per year, basically to offset projected increases in food costs;
(iii) The opening of 6 new small cafeterias in 1999, and 6 additional
small cafeterias in 2000, partially offset by the anticipated closure of a
total of 6 cafeterias during the same period;
(iv) increase of food prices of 2.5%, due to general inflation;
(v) annual increase in overall wages of 2.1% for each of 1999 and
2000; and
(vi) capital expenditures of $11.5 million in 1999 and $5.1 million in
2000 to remodel existing stores, open new stores and purchase equipment and
technology.
Because of the inherent difficulty in predicting future quarterly results,
projections for each full fiscal year have been included.
COMPANY SELECTED FINANCIAL PROJECTIONS
(IN THOUSANDS)
SCENARIO A
<TABLE>
<CAPTION>
FY 1998 E FY 1999 E FY 2000 E
--------- --------- ---------
<S> <C> <C> <C>
Net Sales................................................... $245,701 $252,381 $263,374
Gross Margin................................................ 177,656 185,869 194,124
EBITDA...................................................... 6,407 9,620 10,533
Depreciation................................................ 9,909 9,645 8,257
EBT......................................................... $ (4,448) $ (1,166) $ 1,254
</TABLE>
SCENARIO B
<TABLE>
<CAPTION>
FY 1998 E FY 1999 E FY 2000 E
--------- --------- ---------
<S> <C> <C> <C>
Net Sales................................................... $243,608 $247,045 $252,365
Gross Margin................................................ 176,153 181,975 186,074
EBITDA...................................................... 4,964 5,892 3,031
Depreciation................................................ 9,909 9,645 8,250
EBT......................................................... $ (5,924) $ (5,156) $ (7,000)
</TABLE>
8. CERTAIN INFORMATION CONCERNING THE PARENT AND THE PURCHASER.
The Purchaser. The Purchaser is a newly formed Georgia corporation
organized at the direction of the Parent in connection with the Offer and the
Merger. The address of the Purchaser is the same as the address of the Parent.
The Parent. The Parent is a Louisiana corporation that was incorporated in
1965 and is the successor to various predecessor corporations and partnerships
which operated "Piccadilly" cafeterias beginning with the acquisition of the
first unit in 1944. The Parent operates 131 cafeterias in 15 states, four
Piccadilly Express in Associated Grocer Supermarkets and seven Ralph & Kacoo's
seafood restaurants in three states. All units are owned by the Parent. The
Parent's principal executive offices are located at 3232 Sherwood Forest Blvd.,
Baton Rouge, Louisiana 70816.
Except as set forth in this Offer to Purchase, neither the Purchaser,
Parent, any of their respective affiliates nor, to the best of their knowledge,
any of the persons listed on Schedule I to this Offer to Purchase ("Schedule
I"), has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any securities of the Company, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against
loss, or the giving
14
<PAGE> 17
or withholding of proxies. Except as set forth in this Offer to Purchase,
neither the Purchaser nor Parent, nor to the best of the knowledge of the
Purchaser and Parent, any of the persons listed on Schedule I, has entered into
any transaction with the Company, or any of the Company's affiliates which are
corporations, since June 5, 1994, the aggregate amount of which was equal to or
greater than one percent of the consolidated revenues of the Company for (i) the
fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred this fiscal
year. Except as set forth in this Offer to Purchase, neither the Purchaser,
Parent, any of their respective affiliates, nor, to the best of their knowledge,
any of the persons listed on Schedule I, has had, since June 5, 1994, any
business relationships or transactions with the Company or any of its executive
officers, directors or affiliates that would require reporting under the rules
of the Commission. Except as set forth in this Offer to Purchase, since June 5,
1994, there have been no contacts, negotiations or transactions between the
Purchaser, Parent, any of their respective affiliates or, to the best of their
knowledge, any of the persons listed on Schedule I, and the Company or its
affiliates concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
Financial Information. Set forth below is certain selected financial
information for the Parent. More comprehensive financial information is included
in the reports (including management's discussion and analysis of financial
condition and results of operations) and other documents filed by the Parent
with the Commission, and the following financial information is qualified in its
entirety by reference to such reports and other documents including the
financial information and related notes contained therein. Such reports and
other documents may be examined and copies thereof may be inspected and copied
at the offices of the Commission and the New York Stock Exchange in the manner
set forth below.
15
<PAGE> 18
PICCADILLY CAFETERIAS, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED JUNE 30,
----------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................. $304,838 $300,550 $287,848 $276,223 $271,460
Costs and expenses.................... 289,693 299,922 281,207 264,670 263,801
-------- -------- -------- -------- --------
Income before income taxes............ 15,145 628 6,641 11,553 7,659
Provision for income taxes............ 5,755 243 2,590 4,506 2,834
-------- -------- -------- -------- --------
Net income............................ $ 9,390 $ 385 $ 4,051 $ 7,047 $ 4,825
======== ======== ======== ======== ========
Net income per share -- basic and
assuming dilution.................. $ 0.89 $ 0.04 $ 0.40 $ 0.70 $ 0.49
======== ======== ======== ======== ========
Cash dividends per share.............. $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30,
----------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)............. $(19,167) $(26,750) $(45,771) $(26,063) $ 2,043
Total assets.......................... 147,332 148,280 165,121 154,773 152,618
Stockholders' equity.................. 77,604 73,293 76,445 75,874 72,192
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
DECEMBER 31,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
INCOME STATEMENT DATA:
Net sales................................................. $158,141 $152,969
Costs and expenses........................................ 150,358 146,146
-------- --------
Income before income taxes................................ 7,783 6,823
Provision for income taxes................................ 2,880 2,593
-------- --------
Net income................................................ $ 4,903 $ 4,230
======== ========
Net income per share -- basic and assuming dilution....... $ 0.47 $ 0.40
======== ========
Cash dividends per share.................................. $ 0.24 $ 0.24
======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
1997
------------
<S> <C>
BALANCE SHEET DATA:
Working capital deficit................................... $(19,903)
Total assets.............................................. 147,587
Stockholders' equity...................................... 79,984
</TABLE>
Available Information. Parent is subject to the informational requirements
of the Exchange Act and in accordance therewith is obligated to file periodic
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission located in
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at CitiCorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite
1300, New York, New York 10048. Such reports, proxy statements and other
information may also be obtained at the Web site that the Commission maintains
at http://www.sec.gov. Copies of such material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street,
16
<PAGE> 19
N.W., Washington, D.C. 20549. In addition, such material should also be
available for inspection at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The name, citizenship, business address, present principal occupation or
employment and five year employment history of each of the directors and
executive officers of the Parent and the Purchaser are set forth on Schedule I
hereto.
9. SOURCE AND AMOUNT OF FUNDS.
The Purchaser will require approximately $48.3 million to (i) purchase the
Shares (assuming all in-the-money and exercisable options are exercised)
pursuant to the Offer and the Merger and (ii) pay fees and expenses to be
incurred in connection with the completion of the Offer and the Merger. All of
the funds required to finance the foregoing will be furnished to the Purchaser
by the Parent. The Parent will obtain such funds from a revolving credit
facility that will be established prior to the purchase of any Shares pursuant
to the Offer. The Company has received a commitment letter issued by Hibernia
National Bank ("Hibernia"), pursuant to which Hibernia has agreed to provide a
$100 million revolving credit facility (the "Revolver") to the Parent, which
will have a three year term and be unsecured. Amounts borrowed under the
Revolver will bear interest at LIBOR plus a margin that will vary depending on
the Company's financial performance. Currently, the approximate interest rate
would be 7.3%.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In September 1997, Ronald A. LaBorde, the Chief Executive Officer of
Parent, contacted Ronnie L. Tatum, the Chief Executive Officer of the Company,
and suggested a meeting, which was held in October 1997. At the meeting, Messrs.
LaBorde and Tatum discussed the possible combination of the two companies. In
December 1997, after several follow-up telephone conversations between Messrs.
LaBorde and Tatum, Mr. Tatum advised Mr. LaBorde that the Company's Board was
considering Parent's proposal. Shortly thereafter, Parent was advised by Wheat
First that it had been engaged by the Company to assist in a controlled auction
and that Parent would be invited to bid. At the request of Wheat First and the
Company, Parent executed a confidentiality agreement on December 30, 1997.
On January 23, 1998, Wheat First provided Parent with a Confidential
Information Memorandum regarding the Company and asked Parent to submit a
preliminary, non-binding written indication of interest no later than February
20, 1998. On February 18, 1998, Parent's Board met and authorized the submission
by Parent of a non-binding indication of interest in acquiring all of the
Company's outstanding stock for aggregate consideration of $35 million, or $3.79
per share, in cash. On February 20, 1998, Parent submitted its non-binding
indication of interest, and asked to be provided with additional information
regarding the Company. On February 25, 1998, Parent was advised that, based on
its initial proposal, it would be invited to submit a revised proposal in a
second round of bidding, but that its chances of being the successful bidder
would be enhanced if the aggregate consideration proposed by Parent was
increased. On March 16, 1998, Parent engaged Scott & Stringfellow, Inc. to
advise it with respect to the proposed purchase of the Company.
On March 27, 1998, Parent's Board met and, after being advised by
management as to the current status of the auction, authorized an increase in
the Parent's proposed purchase price to an aggregate of $42 million, or $4.55
per share, which proposal Mr. LaBorde conveyed to Wheat First that same day.
Parent was advised that although the increase in its proposed purchase price was
sufficient to permit Parent to continue to participate in the bidding, there was
no assurance that Parent's bid would be successful. Nevertheless, on March 31,
1998, the Company's counsel provided Parent with a draft merger agreement and
asked for preliminary comments to that draft.
On April 9, 1998, Parent's Board met and authorized Mr. LaBorde to make a
binding offer to acquire the Company's outstanding stock for approximately $46.2
million, or $5.00 per share in cash. On April 10, 1998, Wheat First advised
Parent that the Company was prepared to negotiate a definitive merger agreement
with Parent based on the proposed $5.00 per share cash price. Between April 13,
1998 and April 22, 1998, representatives of Parent completed their due diligence
investigation of the Company and conducted several negotiation sessions with
representatives of the Company concerning the terms of the Merger Agreement.
17
<PAGE> 20
On April 21, 1998, the Company's Board met and authorized Mr. Tatum to
execute the Merger Agreement, and on April 22, 1998, Parent's Board met and
authorized Mr. LaBorde to execute the Merger Agreement. The parties executed the
Merger Agreement after the close of business on April 22, 1998 and a joint
announcement of the execution of the Merger Agreement was made by the Parent and
the Company on April 23, 1998, prior to the beginning of trading on the New York
Stock Exchange.
11. THE MERGER AGREEMENT.
The following is a summary of the Merger Agreement, which summary is
qualified in its entirety by reference to the copy thereof filed as an exhibit
to the Parent's Tender Offer Statement on Schedule 14D-1 filed with the
Commission.
THE MERGER AGREEMENT
The Offer. The Merger Agreement provides that within five business days of
the public announcement of the execution of the Merger Agreement, the Purchaser
will commence the Offer. The Merger Agreement further provides that the
Purchaser will accept for payment all Shares validly tendered pursuant to the
Offer, and not withdrawn, as soon as legally permissible and shall pay for all
such Shares as soon as practicable thereafter; provided that all of the
conditions to the Offer set forth in the Merger Agreement have been satisfied or
waived. The parties to the Merger Agreement have also agreed in the Merger
Agreement that the obligations of the Parent and the Purchaser to consummate the
Offer, and to accept for payment and pay for Shares tendered pursuant to the
Offer, will be subject only to the conditions described in Section 15 hereof.
Under the Merger Agreement, the Purchaser expressly reserves the right, in its
sole discretion, to waive any such condition (other than the Minimum Condition
(so as to acquire less than a majority of the outstanding Shares)); provided,
that, unless previously approved in writing by the Board of Directors, the
Purchaser will not (i) decrease the Merger Consideration, (ii) decrease the
number of Shares being sought in the Offer, (iii) change the form of
consideration payable in the Offer (other than by adding consideration), (iv)
add additional conditions to the Offer, or (v) subject to the Purchaser's right
to extend the Offer as described below, make any other change in the terms of
the Offer which is adverse to the holders of Shares. Under the Merger Agreement,
the Purchaser may, without consent of the Company, (i) extend the Offer (on one
or more occasions) beyond the scheduled Expiration Date if at any such date any
of the conditions to the Purchaser's obligation to purchase Shares have not been
satisfied or waived, until such conditions are satisfied or waived, or (ii)
extend the Offer to the extent required by any rule or regulation of the
Commission; provided that notwithstanding anything in the foregoing clause to
the contrary, the Purchaser may not, without the Company's prior written
consent, (A) extend the Expiration Date if the failure to meet any condition was
directly or indirectly caused by an act or omission of the Parent or the
Purchaser or (B) effect any individual extension as described in clause (i) of
this sentence in excess of the amount of time reasonably believed by the
Purchaser to be necessary to satisfy such condition, but in no case shall such
date exceed 10 business days; provided further, that if the Purchaser does not
consummate the Offer on the initial Expiration Date, or any extension thereof,
due to the failure of one or more conditions in any of paragraphs b(i) through
(iii) or b(v) under Section 15 hereof to be satisfied, the Parent will cause the
Purchaser to, and the Purchaser will, unless the Company has materially breached
the Merger Agreement and failed to cure such breach within 15 days of being
notified thereof in writing, extend the Offer one or more times until the
earlier or (i) 11:59 p.m. New York City time on the 60th calendar day after the
date of the Merger Agreement or (ii) two business days after such time as such
condition or conditions are satisfied or waived; provided further, that the
Purchaser will not be obligated to extend the Offer pursuant to the foregoing
proviso if the condition that has not been satisfied is not reasonably capable
of being cured or satisfied at or prior to the 60th calendar day after the date
of the Merger Agreement. The Merger Agreement provides that the Parent will make
available to the Purchaser on a timely basis the funds necessary to accept for
payment and pay for Shares pursuant to this Offer. The Merger Agreement further
provides that the Purchaser may, at any time, transfer or assign to one or more
corporations directly or indirectly wholly-owned by the Purchaser the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve the Purchaser of its
obligations with respect to the Offer or prejudice the rights of tendering
stockholders to receive payments for Shares validly tendered and accepted for
payment in the Offer.
18
<PAGE> 21
Company Board Representation. The Merger Agreement provides that, promptly
upon acceptance for payment by the Purchaser of Shares pursuant to the Offer,
the Purchaser will be entitled to designate such number of directors, rounded up
to the next whole number, as will give the Purchaser representation on the Board
of Directors equal to at least that number of directors equal to the product of
(i) the total number of directors on the Board of Directors and (ii) the
percentage that the number of Shares so accepted for payment bears to the number
of Shares outstanding, and the Company will, at such time, at the election of
the Purchaser either increase the size of the Board of Directors or use its best
efforts to cause the appropriate number of directors who are members of the
Board of Directors as of the date of the Merger Agreement to resign and the
Purchaser's designees to be appointed or elected to fill the vacancies thereby
created in conformity with the GBCC, the Company's amended and restated articles
of incorporation and by-laws and other applicable law. In addition, until the
Effective Time, there will be at least three directors on the Board of Directors
who are directors of the Company as of the date of the Merger Agreement and who
are neither designees, officers, directors, full-time employees or affiliates of
Parent or the Purchaser nor full-time employees of the Company (the "Independent
Directors"); provided, however, that if the number of Independent Directors is
reduced below three for any reason, the Board of Directors will, subject to the
approval of the remaining Independent Directors, if any, designate a person or
persons to fill the vacancy or vacancies who were directors of the Company on
the date of the Merger Agreement and are not an officer, director, full-time
employee or affiliate of Parent or the Purchaser or a full-time employee of the
Company, and such persons will be deemed to be Independent Directors for
purposes of the Merger Agreement. The Merger Agreement further provides that the
Company's obligations to appoint designees to its Board of Directors will be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The Merger Agreement provides that following the election or appointment of
the Purchaser's designees pursuant to the provisions described in the
immediately preceding paragraph and until the Effective Time, any amendment of
the Merger Agreement or the restated articles of incorporation or by-laws of the
Company, any termination of the Merger Agreement by the Company, any extension
by the Company of the time for the performance of any of the obligations or
other acts of Parent or the Purchaser, any waiver of any of the Company's rights
thereunder, or any transaction between Parent (or any affiliate or associate
thereof) and the Company will require the concurrence of a majority of the
Independent Directors. The Independent Directors will have the authority to
retain such counsel and other advisors at the expense of the Company as are
reasonably appropriate to assist them in the exercise of their duties in
connection with Merger Agreement. In addition, the Independent Directors will
have the authority to institute any action on behalf of the Company to enforce
performance of the Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, at the Effective Time and in accordance with the
GBCC, the Purchaser will be merged with and into the Company. As a result of the
Merger, the separate corporate existence of the Purchaser will cease and the
Company will continue as the Surviving Corporation.
The Merger Agreement provides that upon consummation of the Merger the
amended and restated articles of incorporation of the Company, as in effect
immediately prior to the Effective Time, with such amendments as may be
requested by the Purchaser and approved by the Board of Directors and
stockholders of the Company, will be the articles of incorporation of the
Surviving Corporation until thereafter amended or repealed as provided therein
and in accordance with applicable law, and that the by-laws of the Purchaser, as
in effect immediately prior to the Effective Time, will be the by-laws of the
Surviving Corporation until thereafter amended or repealed in accordance with
their terms and as provided by law. The Merger Agreement further provides that
upon consummation of the Merger the directors of the Purchaser immediately prior
to the Effective Time will be the initial directors of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified or their earlier resignation or removal, and the officers of the
Purchaser immediately prior to the Effective Time will be the initial officers
of the Surviving Corporation, to hold office until the earlier of their
resignations or removal or until their respective successors are duly appointed
and qualified, as the case may be.
At the Effective Time, each Share issued and outstanding immediately prior
thereto (other than Shares owned by the Parent, the Purchaser or any other
direct or indirect subsidiary of the Parent or held in the
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Company's treasury and Dissenting Shares (as defined in the Merger Agreement)),
will be converted into the right to receive in cash the Merger Consideration,
without interest, upon surrender of the certificate formerly representing such
Share in the manner described in the Merger Agreement. All treasury Shares
existing immediately prior to the Effective Time, if any, and all Shares owned
by the Parent, the Purchaser or any other direct or indirect wholly-owned
subsidiary of Parent, if any, will be canceled and extinguished, and no payment
will be made with respect to such Shares.
The Merger Agreement provides that Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by a stockholder who
has demanded and perfected the right, if any, for appraisal of such Shares in
accordance with Section Part 2 of Article 13 of the GBCC will not be converted
into or represent the right to receive the Merger Consideration, but will only
be entitled to such rights as are granted by the GBCC; provided however, that if
such holder shall effectively withdraw or lose (through failure to perfect or
otherwise) the right to appraisal under the GBCC, then each Share of such holder
will thereupon be deemed to have been converted into and to represent, as of the
Effective Time, only the right to receive the Merger Consideration, without any
interest thereon, as described above.
The Merger Agreement provides that each share of common stock of the
Purchaser will, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into one share of common stock of the Surviving
Corporation.
Pursuant to the Merger Agreement, holders of stock options granted under
Company incentive plans, whether or not then exercisable, which were outstanding
on the date of the Merger Agreement, and which have not been exercised prior to
the acquisition of Shares pursuant to the Offer, shall be entitled to receive,
in cancellation and settlement of such options, a cash payment per Share equal
to excess, if any, of the Merger Consideration over the respective exercise
prices payable for such Shares. The Company has agreed to take actions available
under the incentive plans to effect the cancellation of all such options.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties including, without limitation,
representations and warranties by the Company as to the Company's organization
and qualifications, capital stock, subsidiaries, its power and authority to
enter into the Merger Agreement and consummate the transactions contemplated
thereby, absence of conflicts with governing instruments or other agreements,
governmental approvals and consents, accuracy of information contained in the
Company's public filings with the Commission, legal proceedings, contracts and
other agreements, absence of certain changes or events, taxes, brokers' and
finders' fees, employee benefits and related matters, other employment matters,
environmental matters, compliance with laws, possession of material licenses,
accreditations and regulatory approvals, real property, the vote required to
approve the Merger Agreement, the receipt of the opinion of the Company's
financial advisor as to the fairness of the proposed transactions from a
financial point of view, the exemption from application of state takeover
statutes, the Rights Agreement and the veracity of information to be contained
in the Company's Schedule 14D-9 to be filed with the Commission and supplied by
the Company for inclusion in the Schedule 14D-1 filed by the Parent and
Purchaser.
In addition, the Merger Agreement contains representations and warranties
of the Parent and the Purchaser concerning their organization, power and
authority to enter into the Merger Agreement and consummate the transactions
contemplated thereby, capital stock of the Purchaser, accuracy of information
contained in the Parent's filings with the Commission, solvency of the Surviving
Corporation following completion of the Merger, availability of financing,
absence of violations of laws, and the veracity of the information to be
contained in the Schedule 14D-1 filed by the Parent and Purchaser and supplied
by the Parent for inclusion in the Schedule 14D-9 filed by the Company.
Agreements of the Company, the Parent and the Purchaser.
Conduct of Business Pending the Merger. Pursuant to the Merger Agreement,
the Company has covenanted and agreed that it will use reasonable commercial
efforts to preserve its business organization intact, to keep available to
Parent and the Surviving Corporation the services of the Company's present
employees, and to preserve for the Parent and the Surviving Corporation the
goodwill of the Company's suppliers, customers and others with whom it has
business relations. In addition, the Company has covenanted
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<PAGE> 23
and agreed that, prior to the Effective Time, unless expressly contemplated by
the Merger Agreement and the disclosure schedule to the Merger Agreement (the
"Disclosure Schedule"), it will not without first obtaining the written consent
of the Parent and the consent of a majority of the Independent Directors:
(a) encumber any asset or enter into any transaction or make any
contract or commitment relating to the properties, assets and business of
the Company, other than in the ordinary course of business;
(b) enter into any employment contract that is not terminable upon
notice of 30 days or less, at will, and without penalty to the Company;
(c) make any capital expenditure or commitment therefor or enter into
any contract or agreement (i) which cannot be performed within three months
or less or (ii) which involves the expenditure of over $250,000;
(d) issue or sell, or agree to issue or sell, any shares of capital
stock or other securities of the Company, other than pursuant to stock
options outstanding as of the date of the Merger Agreement;
(e) make any contribution, payment or distribution to the trustee
under any bonus, pension, profit-sharing or retirement plan or incur any
obligation to make any such payment or contribution which is not in
accordance with the Company's usual past practice, or establish or enter
into any new plan or contract or arrangement or make any change in any
existing plan, contact or arrangement providing for bonuses, executive
incentive compensation, pensions, deferred compensation, retirement
payments, profit-sharing or the like, or terminate any plan;
(f) increase indebtedness for borrowed money or extend a material
amount of credit to anyone, except in the ordinary course of business
consistent with prior practices;
(g) guarantee the material obligation of any person, firm or
corporation, except in the ordinary course of business consistent with
prior practices;
(h) amend its articles of incorporation or by-laws;
(i) enter into any option to purchase or purchase agreement or buy any
real property, or enter into any new leases or renewals of existing leases
for real property or open any new restaurant locations (unless
contractually committed to do so); or
(j) do any of the following:
(A) discharge or satisfy any material lien or encumbrance, or pay
or satisfy any material obligation or liability (absolute, accrued,
contingent or otherwise) other than (i) liabilities shown or reflected
on the Company's balance sheet as of February 28, 1998 or (ii)
liabilities incurred since the date of the Company's last filing with
the Commission in the ordinary course of business, which discharge or
satisfaction would have a material adverse effect on the Company;
(B) increase or establish any reserve for taxes or any other
liability on the Company's books or otherwise provided therefor which
would have a material adverse effect on the Company, except as may have
been required due to consolidated income or operations of the Company
since the date of the Company's last filing with the Commission;
(C) make any material change affecting any banking, safe deposit or
power of attorney arrangements;
(D) make any change in any method of accounting or auditing
practice;
(E) mortgage, pledge or subject to any lien, charge or other
encumbrance any of the assets, tangible or intangible, which are
material to the consolidated business or financial condition of the
Company;
(F) sell or transfer any of the assets material to the consolidated
business of the Company, cancel any material debts or claims or waive
any material rights, except in the ordinary course of business;
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(G) grant any general or uniform increase in the rates of pay of
employees or any material increase in salary payable or to become
payable by the Company to any officer or employee, consultant or agent
(other than normal merit increases), or by means of any bonus or pension
plan, contract or other commitment, increase in a material respect the
compensation of any officer, employee, consultant or agent;
(H) except for the Merger Agreement and any other agreement
executed and delivered pursuant to the Merger Agreement, merge or
consolidate with another entity or acquire or agree to acquire any
business or corporation, partnership or other business organization, or
enter into any material transaction other than in the ordinary course of
business or permitted under the provisions of the Merger Agreement; or
(I) declare or pay any dividend or make any distribution with
respect to any of the Company's equity interests, or redeem, purchase or
otherwise acquire any of its equity interests, or issue any stock, bonds
or other securities, or any option, warrant or other right to purchase
or acquire any such interest, other than stock options granted to
employees, directors or consultants of the Company, which are disclosed
on the Disclosure Schedule.
No Solicitation of Transactions. The Merger Agreement provides that the
Company will not, and will not permit any of its directors, officers, attorneys,
financial advisors, agents or other representatives to, directly or indirectly,
solicit, initiate or encourage (including by way of furnishing information) the
making of any proposal or offer that constitutes, or may reasonably be expected
to lead to, any Takeover Proposal (as defined below) from any person. In
addition, the Company will, and will cause its directors, officers, attorneys,
financial advisors, agents and other representatives to, immediately upon
execution of the Merger Agreement, cease any existing discussions or
negotiations, or other activities referred to in the immediately preceding
sentence, with any person conducted theretofore with respect to any of the
foregoing matters referred to in the immediately preceding sentence.
Notwithstanding the foregoing, the Company may (i) furnish information pursuant
to a customary confidentiality agreement concerning the Company and its
businesses, properties or assets to a third party who has, without solicitation
by the Company, indicated that it is interested in making a Takeover Proposal
after the date of the Merger Agreement, (ii) engage in discussions or
negotiations with such a third party who has made an unsolicited Superior
Proposal (as defined below) after the date of the Merger Agreement, and/or (iii)
following receipt of an unsolicited Superior Proposal after the date of the
Merger Agreement, take and disclose to its stockholders a position contemplated
by Rule 14e-2(a) under the Exchange Act or otherwise make disclosure to its
stockholders, but in each case referred to in the foregoing clauses (i) through
(iii) only to the extent that the Board of Directors shall have concluded in
good faith, after consultation with its outside counsel, that such action is a
necessary exercise of its fiduciary duties to the stockholders of the Company
under Georgia law; provided that the Board of Directors will not take any of the
actions referred to in clauses (i) through (iii) above until it has delivered
the Notice of Takeover Proposal (as defined below) with respect thereto as
described in the next paragraph. As used herein: "Takeover Proposal" means any
proposal or offer, or any expression of interest by any person relating to the
Company's willingness or ability to receive or discuss any proposal or offer
(other than a proposal or offer by Parent or the Purchaser), for any tender or
exchange offer, merger, consolidation, recapitalization or other business
combination involving the Company or the acquisition in any manner of a
substantial equity interest in (10% or more), or a substantial portion of the
assets of, the Company or any other similar transaction the consummation of
which would or could reasonably be expected to impede, interfere with, prevent
or materially delay the Offer or the Merger; and "Superior Proposal" means a
bona fide written proposal or offer made by any person to acquire the Company
pursuant to any tender or exchange offer, merger, consolidation,
recapitalization or other business combination or acquisition of all or
substantially all of the assets of the Company on terms that the Board of
Directors determines in good faith, and in the exercise of sound and reasonable
judgment (after consultation with outside legal counsel and independent
financial advisors), to be more favorable to the Company and its stockholders
than the transaction contemplated by the Merger Agreement (taking into account
any fees or expenses payable under the Merger Agreement and conditions to
consummation) and for which any required financing is committed or that, in the
good faith judgment of the Board of Directors (after consultation with
independent financial advisors), is reasonably capable of being financed by such
person.
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The Merger Agreement provides that the Company will promptly advise
Purchaser orally and in writing of the receipt of any proposal it believes to be
a Takeover Proposal, the material terms and conditions thereof, and the identity
of the person making any such proposal or inquiry (the "Notice of Takeover
Proposal"). The Company will keep Parent fully informed of the status and
details of any such proposal or inquiry.
Pursuant to the Merger Agreement, the Company agreed not to release any
third party from, or waive any provisions of, any confidentiality or standstill
agreement to which the Company is a party.
Proxy Statement. The Merger Agreement provides that promptly after
consummation of the Offer, the Company will prepare and file with the
Commission, if required by federal securities laws, a preliminary form of the
proxy statement (the "Proxy Statement") to be mailed to the stockholders of the
Company in connection with the meeting of such stockholders to consider and vote
upon the Merger (the "Special Meeting"). The Company will cause the Proxy
Statement to comply as to form in all material respects with the applicable
provisions of the Exchange Act. As promptly as practicable after the Proxy
Statement has been cleared by the Commission, the Company will mail the Proxy
Statement to the stockholders of the Company.
Stockholders Meeting. The Merger Agreement provides that, if necessary to
consummate the Merger, the Company will take all steps necessary in accordance
with its amended and restated articles of incorporation and bylaws to call, give
notice of, convene and hold the Special Meeting as soon as reasonably
appropriate for the purpose of approving the Merger Agreement and for such other
purposes as may be necessary. Unless the Merger Agreement has been validly
terminated in accordance with its terms, the Board of Directors, subject to the
provisions described under "No Solicitation of Transactions," will (i) recommend
to the Company's stockholders the approval of the Merger Agreement, the
transactions contemplated thereby and any other matters to be submitted to the
stockholders in connection therewith, to the extent that such approval is
required by applicable law in order to consummate the Merger, and (ii) use
reasonable, good faith efforts to obtain the approval by the Company's
stockholders of the Merger Agreement and the transactions contemplated thereby.
The Merger Agreement provides that at the Special Meeting, Parent and the
Purchaser and its direct and indirect subsidiaries will vote, or cause to be
voted, all Shares owned by them in favor of the Merger.
Filings; Other Actions. The Merger Agreement provides that the Company and
Parent will: (i) promptly make their respective filings and thereafter use their
reasonable, good faith efforts to promptly make any required submissions under
the HSR Act with respect to the Merger and the transactions contemplated by the
Merger Agreement; and (ii) use their respective reasonable, good faith efforts
to obtain all other permits, authorizations, consents and approvals from third
parties and governmental authorities necessary to consummate the Merger and the
transactions contemplated the Merger Agreement. The Company and Parent have also
agreed to (i) cooperate with one another in determining whether any filings are
required to be made or consents required to be obtained in any jurisdiction
prior to the Effective Time in connection with the consummation of the
transactions contemplated by the Merger Agreement and cooperate in making any
such filings promptly and in seeking to obtain timely any such consents; and
(ii) use their respective best efforts to cause to be lifted any injunction
prohibiting the Merger, or any part thereof, or the other transactions
contemplated by the Merger Agreement.
Inspection; Confidentiality; Notification. Pursuant to the Merger
Agreement, from the date thereof to the closing date of the Merger (the "Closing
Date"), the Company and the Parent (i) will each give to the other party and its
counsel, accountants and other representatives full access to all the
properties, contracts, personnel files and other records of such party and shall
furnish the other party with copies of such documents and with such information
with respect to the affairs of such party as the other party may from time to
time reasonably request and (ii) disclose and make available to the other party
and its representatives all books, contracts, accounts, personnel records,
letters of intent, papers, records, communications with regulatory authorities
and other documents relating to the business and operations of the other party.
The Company has also agreed to make available to Parent all such banking,
investment and financial information as shall be necessary to allow for the
efficient integration of the Company's banking, investment and financial
arrangements with those of the Parent at the Effective Time. Information
obtained pursuant to the immediately
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preceding sentences will constitute "Confidential Information" under a
confidentiality agreement previously entered into between the parties.
The Merger Agreement provides that the Company will give prompt notice to
Parent, and Parent will give prompt notice to the Company, of any changes,
additions or events which would cause any material change or addition to the
Disclosure Schedule. If the effect of such change or addition would,
individually or in the aggregate, cause or constitute a material breach of a
representation or warranty contained in the Merger Agreement, then the
non-notifying party has ten days from receipt of the notice to terminate the
Merger Agreement.
Other Actions. The Company, the Parent and the Purchaser have agreed in the
Merger Agreement not to knowingly or intentionally take any action, or omit to
take any action, if such action or omission would, or reasonably might be
expected to, result in any of such party's representations and warranties in the
Merger Agreement becoming untrue in any material respect or in any of the
conditions to the Merger not being satisfied, or (unless such action is required
by applicable law) which would materially adversely affect the ability of the
Company or the Parent to obtain any consents or approvals required for the
consummation of the Merger without imposition of a condition or restriction
which would have a material adverse effect on the Surviving Corporation or which
would otherwise materially impair the ability of the Company or Parent to
consummate the Merger in accordance with the terms of the Merger Agreement or
materially delay the consummation thereof.
Employee Matters. Pursuant to the Merger Agreement, Parent has agreed to
retain all employees of the Company who are employed at the Effective Time as
employees-at-will (except to the extent that such employees are parties to
contracts providing for other employment terms, in which case such employee
shall be retained in accordance with the terms of such contracts) and shall
provide such employees with the same customary employee benefits as the Parent
provides to its existing employees. Parent has also agreed to cause the
Surviving Corporation to honor certain bonus arrangements of the Company in
effect at the date of the Merger Agreement. In addition, Parent has agreed to
give employees of the Company credit for their respective periods of employment
with the Company prior to the Effective Time for purposes of determining their
eligibility for vesting, level of participation and benefit accrual (but not for
benefit accrual under any defined benefit pension plan), in any employee benefit
program, plan or arrangement which the Surviving Corporation adopts, maintains
or contributes to following the Effective Time.
Indemnification of Directors and Officers. The Merger Agreement provides
that the Company, and from and after the Effective Time, the Parent and the
Surviving Corporation will indemnify, defend and hold harmless the present and
former officers and directors of the Company (collectively, "Indemnified
Parties") against (i) all losses, claims, damages, costs, expenses, liabilities,
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of, or in
connection with, any claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director or officer of the Company pertaining to any matter
existing or occurring at or prior to the Effective Time ("Indemnified
Liabilities") and (ii) all Indemnified Liabilities based in whole or in part on,
or arising in whole or in part out of, or pertaining to the Merger, the Merger
Agreement or any other transactions contemplated thereby, in each case to the
same extent as such Indemnified Parties were entitled to be indemnified under
the Company's restated articles of incorporation or by-laws as in effect on
December 31, 1997 (and Parent and the Surviving Corporation, as the case may be,
will pay expenses, including through advancement, to the full extent provided in
the Company's restated articles of incorporation or by-laws as in effect on
December 31, 1997). The provisions described in this paragraph are intended to
be for the benefit of, and will be enforceable by, each Indemnified Party and
his or her heirs and legal representatives.
The Merger Agreement further provides that the Parent will pay the
insurance premiums required for any extension of the Company's director and
officer insurance policy following the Closing Date for a "discovery" period
elected under such insurance policy covering the officers and directors of the
Company for a period of six years or shall provide comparable coverage for the
same period under its own director and officer insurance policy for all
directors and officers of the Company covered by the Company's policy.
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The rights to indemnification under the Merger Agreement are subject to,
among others, the following limitations: (i) the total aggregate indemnification
to be provided by Parent and/or the Surviving Corporation pursuant to the
indemnification provisions of the Merger Agreement (exclusive of insurance
coverage available), as to all Indemnified Parties as a group, will not exceed
the sum of $10 million, and Parent shall have no responsibility to any
Indemnified Party for the manner in which such sum is allocated among that group
and (ii) amounts otherwise required to be paid by Parent to an Indemnified Party
pursuant to the indemnification provisions of the Merger Agreement shall be
reduced by any amounts that such Indemnified Party has recovered by virtue of
the claim for which indemnification is sought and the Parent shall be reimbursed
for any amounts paid by Parent that such Indemnified Party subsequently recovers
by virtue of such claim.
Conditions to the Merger. The Merger Agreement provides that the respective
obligations of each party to effect the Merger is subject to the satisfaction,
at or prior to the Closing Date, of each of the following conditions: (i) no
party or any of its subsidiaries shall be subject to any order, decree or
injunction by a court of competent jurisdiction which (a) prevents or materially
delays the consummation of the Merger or (b) would impose any material
limitation on the ability of the Parent effectively to exercise full right of
ownership of the common stock of the Surviving Corporation on any material
portion of the assets or business of the Company, (ii) no statute, rule or
regulation shall have been enacted by the government (or any governmental
agency) of the United States or any state, municipality or other political
subdivision thereof that makes the consummation of the Merger or any other
transaction contemplated by the Merger Agreement illegal, (iii) any waiting
period (and any extension thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated, (iv) the holders of the
Company's common stock shall have approved the adoption of the Merger Agreement
and any other matters submitted to them in accordance with the provisions of the
Merger Agreement and (v) Purchaser shall have purchased all Shares validly
tendered pursuant to the Offer.
The Merger Agreement also provides that the obligations of Parent and
Purchaser to consummate the Merger and the other transactions contemplated by
the Merger Agreement are subject to the satisfaction, at or prior to the Closing
Date, of the following conditions: (i) each of the agreements of the Company to
be performed at or prior to the Closing Date pursuant to the Merger Agreement
shall have been duly performed in all material respects, and the Company shall
have performed, in all material respects, all of the acts required to be
performed by it at or prior to the Closing Date by the terms of the Merger
Agreement; (ii) the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall be true and
correct and those that are not so qualified shall be true and correct in all
material respects, as of the date of the Merger Agreement and as of the Closing
Date as though made at and as of such time; and (iii) the receipt by Parent of
an opinion of counsel to the Company with respect to certain customary legal
matters.
The Merger Agreement further provides that the obligation of the Company to
consummate the Merger and the other transactions contemplated by the Merger
Agreement shall be subject to the satisfaction, at or prior to, the Closing
Date, of the following conditions: (i) each of the agreements of Parent and
Purchaser to be performed at or prior to the Closing Date pursuant to the terms
of the Merger Agreement shall have been duly performed, in all material
respects, and Parent and Purchaser shall have performed, in all material
respects, all of the acts required to be performed by them at or prior to the
Closing Date by the terms of the Merger Agreement; (ii) the representations and
warranties of Parent set forth in the Merger Agreement that are qualified as to
materiality shall be true and correct, and those that are not so qualified shall
be true and correct in all material respects, as of the date of the Merger
Agreement and as of the Closing Date as though made at and as of such time; and
(iii) the receipt by the Company of an opinion of counsel to Parent with respect
to certain customary legal matters.
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Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated at any time prior to the Effective Time, whether before or after
approval by the stockholders of the Company of matters presented in connection
with the Merger:
(a) by mutual written consent of the Company and the Parent;
(b) by either the Parent or the Company: (i) if, upon a vote at a duly
held meeting of the stockholders of the Company or any adjournment thereof,
any required approval of the stockholders of the Company shall not have
been obtained, (ii) if the Merger shall not have been consummated on or
before October 31, 1998, unless the failure to consummate the Merger is the
result of a willful and material breach of the Merger Agreement by the
party seeking to terminate the Merger Agreement; provided, however, that
the passage of such period shall be tolled for any part thereof (but not
exceeding 60 days in the aggregate) during which any party shall be subject
to a nonfinal order, decree, ruling or action restraining, enjoining or
otherwise prohibiting the consummation of the Merger or the calling or
holding of a meeting of the Company's stockholders, (iii) if any court of
competent jurisdiction or other governmental or regulatory authority shall
have issued an Order (as defined in the Merger Agreement) or taken any
other action permanently enjoining, restraining or otherwise prohibited the
Merger and such Order or other action shall have become final and
nonappealable, (iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in the
Merger Agreement which (A) would give rise to the failure of any condition
described in the second two paragraphs under "Conditions to the Merger"
above, as applicable, and (B) cannot be or has not been cured within 30
days after the giving of notice to the breaching party of such breach; (v)
if either the Parent or the Company gives notice of termination as a
non-notifying party pursuant to the terms of the Merger Agreement; (vi) the
Offer is terminated or expires in accordance with its terms without the
purchase of any Shares pursuant thereto; provided, however, that neither
party shall be entitled to terminate for such reason if the cause thereof
is a breach by such party of any of its obligations under the Merger
Agreement; or (vii) if (A) all of the conditions to the obligation of such
party to effect the Merger set forth in the first paragraph under
"Conditions to the Merger" above shall have been satisfied and (B) any
condition to the obligation of such party to effect the Merger described in
the second two paragraphs under "Conditions to the Merger" above is not
capable of being satisfied prior to October 31, 1998, as such date may be
extended pursuant to the terms of the Merger Agreement;
(c) by the Company, if: (i) the Company receives a Superior Proposal
prior to the consummation of the Offer; provided that, prior to terminating
the Merger Agreement, (A) the Company shall have provided the Notice of
Takeover Proposal and (B) the Company shall have paid to the Parent the Fee
(as defined below); or (ii) the Offer has not been timely commenced in
accordance with the terms of the Merger Agreement; or
(d) by the Parent and the Purchaser, if: (i) the Board of Directors
shall have withdrawn or modified, in any manner adverse to the Parent and
the Purchaser, its approval or recommendation of the Merger Agreement, the
Offer or the Merger or approved or recommended any Takeover Proposal, or
shall have resolved to do any of the foregoing; or (ii)(A) a Takeover
Proposal that is publicly disclosed shall have been commenced, publicly
proposed or communicated to the Company and (B) the Company shall not have
rejected such Takeover Proposal within 15 business days (or 10 business
days if required by the federal securities laws) after the earlier of its
receipt thereof or the date its existence first becomes publicly disclosed.
The Merger Agreement provides that if: the Merger Agreement is terminated
(i) by the Parent and Purchaser pursuant to clause (d)(i) of the immediately
preceding paragraph or by the Company pursuant to clause (c)(i) of the
immediately preceding paragraph, or (ii)(A) by the Parent and Purchaser pursuant
to any of clauses (d)(ii) or (b)(iv), (v) or (vii) of the immediately preceding
paragraph or by any party to the Merger Agreement pursuant to clause (b)(iii) of
the immediately preceding paragraph, but only if the Order, ruling or other
action by the governmental or regulatory authority giving rise thereto is issued
or taken as a result of an action, suit or proceeding in which a Third Party (as
defined below) who has made a Takeover Proposal or Superior Proposal is a
participant or which involves issues arising out of a Takeover Proposal or
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Superior Proposal, and (B) within 12 months thereafter, either (1) the Company
enters into an agreement with respect to a Third Party Acquisition or (2) any
Third Party Acquisition occurs, and (C) after the execution and delivery of the
Merger Agreement but prior to such termination, (1) the Company (or its agents)
had discussions with respect to such Third Party Acquisition, (2) the Company
(or its agents) furnished information with respect to or with a view to such
Third Party Acquisition or (3) a Third Party announced an interest publicly with
respect to any Third Party Acquisition, or indicated an interest or made a
proposal with respect to any Third Party Acquisition and thereafter such
indication or proposal became public, or, with respect to any Third Party that
announced an interest publicly prior to the date hereof with respect to any
Third Party Acquisition, or indicated an interest or made a proposal prior to
the date hereof with respect to any Third Party Acquisition, such Third Party
indicated publicly its continued interest with respect to such Third Party
Acquisition, or indicated its continued interest or amended any previous
proposal with respect to such Third Party Acquisition and thereafter such
indication or amendment became public; then the Company shall pay to Parent
within two business days following any such termination under clause (i) above
or within two business days following the closing of a Third Party Acquisition
described in clause (ii)(B) in the event of any such termination under paragraph
(ii) above, a fee, in cash and immediately available funds, of $2.6 million,
including all out-of-pocket expenses of the Parent and Purchaser (the "Fee").
Notwithstanding the foregoing (i) in no event shall the Company be obligated to
pay more than one Fee with respect to all such terminations, (ii) the Company
shall not be obligated to pay the Fee if either the Parent or Purchaser shall be
in material breach of its respective covenants or agreements made in the Merger
Agreement and (iii) the Company shall reimburse the Parent for all reasonable
attorneys' fees and other out-of-pocket expenses incurred in connection with
collecting a Fee if it is ultimately determined that a Fee is payable by the
Company under the terms of the Merger Agreement. As used in the Merger
Agreement, "Third Party" means any person other than the Parent, Purchaser or
any affiliate thereof; and "Third Party Acquisition" means the occurrence of any
of the following events, in a single transaction or a series of related
transactions: (i) the acquisition of the Company by merger, tender offer,
exchange offer or otherwise by any Third Party; (ii) the acquisition by a Third
Party of 30% or more of the assets of the Company and its subsidiaries, taken as
a whole, (iii) the acquisition by a Third Party or the Company of more than 30%
of the outstanding Shares; or (iv) the adoption by the Company of a plan of
liquidation or the declaration or payment of an extraordinary dividend.
The Merger Agreement provides that in the event of a termination by either
the Company or the Parent and the Purchaser pursuant to the terms of the Merger
Agreement, the Merger Agreement will then become void and have no further
effect, without liability or obligation on the part of any party, subject to
certain exceptions.
The Merger Agreement further provides that each party will bear its own
expenses in connection with the Merger Agreement and the transactions
contemplated thereby, subject to certain exceptions.
In connection with the execution of the Merger Agreement, the Company
entered into agreements with each of the Company's directors, pursuant to which
the directors agreed not to exercise any dissenters' rights that the directors
may have under the GBCC with respect to any Shares owned by them in connection
with the Merger. These agreements, however, did not obligate the directors to
tender Shares owned by them pursuant to the Offer or to vote Shares in favor of
the Merger.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY; RIGHTS AGREEMENT.
Purpose. The purpose of the Offer, the Merger and the Merger Agreement is
for Parent to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to the Merger Agreement. As promptly
as practicable following consummation of the Offer and after satisfaction or
waiver of all conditions to the Merger set forth in the Merger Agreement, the
Purchaser intends to acquire the remaining equity interest in the Company not
acquired in the Offer by consummating the Merger, and the Company will become a
wholly-owned subsidiary of Parent. The Offer is intended to increase the
likelihood that the Merger will be effected.
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Vote Required to Approve the Merger. The Board of Directors has approved
the Merger Agreement in accordance with the GBCC. If required for approval of
the Merger, the Company has agreed, subject to the satisfaction of the
conditions to the Merger set forth in the Merger Agreement, in accordance with
and subject to the GBCC, to duly convene a meeting of its stockholders as
promptly as practicable following the purchase of Shares pursuant to the Offer
for the purpose of considering and taking action on the Merger Agreement. If
stockholder approval is required, the Merger Agreement must be approved by the
vote of the holders of a majority of the outstanding Shares. As a result, if the
Minimum Condition is satisfied (or if the Purchaser waives the Minimum Condition
and acquires a majority of the outstanding Shares), the Purchaser will have the
power to approve the Merger Agreement without the affirmative vote of any other
stockholder.
Dissenters' Rights. Stockholders do not have dissenters' rights as a result
of the Offer. However, if the Merger is consummated, stockholders of the Company
at the time of the Merger who do not vote in favor of the Merger and comply with
all statutory requirements will have the right under the GBCC to demand and
receive payment in cash of the fair value of, their Shares outstanding
immediately prior to the effective date of the Merger in accordance with Part 2
of Section 13 of the GBCC.
Under the GBCC, within ten days of the later of (i) the date of the
consummation of the Merger or (ii) receipt of a payment demand from a dissenting
stockholder, by notice to each dissenting stockholder who complied with the
statutory requirements, the Company is required to offer to pay such dissenting
stockholders the amount the Company estimates to be the fair value of the Shares
owned by such dissenting stockholders, plus accrued interest thereon, and send
to the dissenting stockholders certain other statutorily required information
with respect to the Company and its estimate of the fair value of the Common
Stock. If the Company does not offer payment for such Shares within the required
time period, the dissenting stockholders may (i) demand from the Company the
information required to accompany a company's offer to purchase under GBCC or
(ii) notify the Company of its own estimate of the fair value of the Common
Stock and demand payment thereof with respect to Shares owned by him or her. If
the dissenting stockholder fails to respond within 30 days of the Company's
offer to pay, the dissenting stockholder will be deemed to have accepted the
Company's offer. If the dissenting stockholder accepts or is deemed to have
accepted the Company's offer, the Company shall make payment for such dissenting
stockholder's Shares within 60 days of the later of (i) making the offer to pay
or (ii) consummating the Merger.
If the Company and the dissenting stockholder cannot settle on a payment
amount, the Company shall commence a court proceeding within 60 days after
receiving the dissenting stockholder's payment demand in order to determine the
fair value of the Shares and accrued interest thereon. Stockholders who properly
demand payment and otherwise comply with the applicable statutory procedures
will be entitled to receive a judicial determination of the fair value of their
Shares (exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash.
Any such judicial determination of the fair value of such Shares could be based
upon considerations other than or in addition to the price paid in the Offer and
the Merger and the market value of the Shares. Stockholders should recognize
that the value so determined could be higher than, lower than or equal to the
price per Share paid pursuant to the Offer or the consideration per Share to be
paid in the Merger.
If any holder of Shares who demands payment for of his or her Shares under
the GBCC fails to perfect, or effectively withdraws or loses his dissenters'
rights, as provided in the GBCC, the Shares of such holder will be converted
into the Merger Consideration in accordance with the Merger Agreement. A
stockholder may withdraw his demand for payment by delivery to Parent of a
written withdrawal of his demand for payment and acceptance of the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF STOCKHOLDERS DOES NOT PURPORT TO BE
A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING
TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE PRESERVATION AND EXERCISE OF
DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
GBCC. FAILURE TO FOLLOW THE PROCEDURES SET FORTH IN SUCH PROVISIONS MAY RESULT
IN A LOSS OF SUCH RIGHTS.
The foregoing description of certain provisions of the GBCC is not
necessarily complete and is qualified in its entirety by reference to the GBCC.
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In connection with the execution of the Merger Agreement, the Company
entered into agreements with each of the Company's directors, pursuant to which
the directors agreed not to exercise any dissenters' rights that the directors
may have under the GBCC with respect to any Shares owned by them in connection
with the Merger. These agreements, however, did not obligate the directors to
tender Shares owned by them pursuant to the Offer or to vote Shares in favor of
the Merger.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. 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 or such alternative transaction and the consideration offered to minority
stockholders in the Merger or such alternative transaction, be filed with the
Commission and disclosed to stockholders prior to consummation of the Merger or
such alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 14. If such registration were terminated,
Rule 13e-3 would be inapplicable to any such future Merger or such alternative
transaction.
Plans for the Company. If the Purchaser obtains control of the Company
pursuant to the Offer, the Parent expects to conduct a detailed review of the
Company and its businesses, assets, corporate structure, capitalization,
operations, properties, policies, management and personnel and to consider what,
if any, changes would be desirable in light of the circumstances that then
exist. Such changes could include changes in the Company's businesses, corporate
structure, articles of incorporation, by-laws, capitalization, Board of
Directors, management or dividend policy.
Except as described in this Offer to Purchase, neither the Parent nor the
Purchaser has any present plans or proposals that would relate to or result in
an extraordinary corporate transaction such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries or a sale or other
transfer of a material amount of assets of the Company or any of its
subsidiaries, any material change in the capitalization of the Company or any
other material change in the Company's corporate structure or business or the
composition of its Board of Directors or management.
Rights Agreement. The following discussion, including the summary of
certain aspects of the Rights, is based in part on information contained in the
Company's Registration Statement on Form 10 dated February 7, 1996, as amended
by Amendment No. 1 to the Company's Registration Statement on Form 10 dated
February 28, 1996 (as amended, the "Form 10"), and the Notice of Special Meeting
and Proxy Statement, dated February 6, 1996, of Morrison Restaurants Inc., and
is qualified in its entirety by reference to such information. Although the
Purchaser and the Parent do not have any knowledge that would indicate that any
statements contained herein based upon such documents are untrue, neither the
Purchaser nor the Parent assumes any responsibility for the accuracy or
completeness of the information contained in such documents, 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 but which are unknown to the
Purchaser and the Parent.
In connection with the Distribution, the former stockholders of MRI
received one Right for each outstanding Share received in the Distribution. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $0.01 per share (the "Preferred Shares"), of the Company at a price of
$50.00 per one-thousandth of a Preferred Share (the "Purchase Price"), subject
to adjustment.
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Until the earlier of (i) the tenth day following the first public
announcement that a person or group of affiliated or associated persons have
acquired beneficial ownership of 20% or more of the outstanding Shares (an
"Acquiring Person"), or (ii) the tenth day following the commencement of, or the
first public announcement of an intention of any person to commence, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 30% or more of the outstanding Shares (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Share Certificates outstanding as of the
Record Date, by such Share Certificate.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Share Certificates issued after the Record Date
upon transfer or new issuance of Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any Share
Certificates outstanding as of the Record Date, even without such notation, will
also constitute the transfer of the Rights associated with the Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate Rights Certificates will be mailed to holders of
record of the Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on March 1, 2006 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Shares or a stock dividend on
the Shares payable in Shares or subdivisions, consolidations or combinations of
the Shares occurring, in any such case, prior to the Distribution Date.
Each Preferred Share will be entitled to a minimum preferential quarterly
dividend payment of $100 per share but will be entitled to an aggregate dividend
of 1,000 times the aggregate cash dividends declared per Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $1,000 per share but will be entitled to an
aggregate payment of 1,000 times the payment made per Share. Each Preferred
Share will have 1,000 votes, voting together with the Shares. Finally, in the
event of any merger, consolidation or other transaction in which Shares are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right,
other than Rights beneficially owned by an Acquiring Person or transferee
thereof, will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market
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value of two times the exercise price of the Right. In the event that the
Company is the surviving corporation in a merger and the Shares are not changed
or exchanged, or in the event that an Acquiring Person engages in one of a
number of self-dealing transactions specified in the Rights Agreement, or
acquires 50% of the outstanding Shares, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person or transferee thereof, will thereafter have the right to receive upon
exercise that number of Shares having a market value of two times the exercise
price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the Distribution Date, the Board of Directors may
redeem the Rights in whole, but not in part, at a price of $.005 per Right (the
"Redemption Price"). At any time thereafter, the Continuing Directors (as
defined below) may redeem the Rights, in whole, but not in part, at the
Redemption Price. Immediately upon the action of the Board of Directors or
Continuing Directors, as the case may be, ordering redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price. As used herein, the term
"Continuing Director" shall mean any individual who was a director prior to the
Distribution Date, and who remains a director after the Distribution Date.
The terms of the Rights may be amended by the Board of Directors without
the consent of the holders of the Rights at such time as there is no Acquiring
Person in any respect and, at such time as there is an Acquiring Person, by the
Continuing Directors, except that no such amendment following such time as there
is an Acquiring Person may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors since the Rights may be redeemed by the Company at the
Redemption Price prior to the time that a person or group becomes an Acquiring
Person.
The Rights Agreement, dated as of March 2, 1996, between the Company and
AmSouth Bank of Alabama, as rights agent, specifying the terms of the Rights and
including the form of the Certificate of Designation, Preferences and Rights
setting forth the terms of the Preferred Shares was filed as an exhibit to the
Form 10 and is incorporated herein by reference to the Form 10. The foregoing
description of the Rights is qualified in its entirety by reference to the
Rights Agreement.
The Amendment No. 1 to the Rights Agreement (dated as of February 28, 1997)
appointed SunTrust Bank, Atlanta, as successor to AmSouth Bank of Alabama as
rights agent.
Effective April 22, 1998, the Rights Agreement was amended (the "Second
Amendment") to provide that no Stock Acquisition Date or Distribution Date shall
occur, and no person (including Parent and the Purchaser) shall be deemed an
Acquiring Person, as a result of (i) the commencement of, or the public
announcement of Parent's intention to commence, the Offer or (ii) the
consummation of the Offer or the Merger.
In addition, the Rights Agreement was modified by the Second Amendment to
provide that neither the consummation of the Merger nor the execution of the
Merger Agreement will constitute a Triggering Event or be precluded by the terms
of the Rights Agreement. In addition, the Rights Agreement was amended to
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provide for the termination of the Rights Agreement and the expiration of all
Rights upon consummation of the Merger.
13. DIVIDENDS AND DISTRIBUTIONS.
As described more fully in Section 11, pursuant to the Merger Agreement,
the Company has covenanted and agreed that, prior to the Effective Time, unless
expressly contemplated by the Merger Agreement or the Disclosure Schedule, or
the Parent otherwise agrees in writing and a majority of the Independent
Directors approve, the Company will not, among other things, issue any stock,
bonds or other securities or any option, warrant or other right to purchase or
acquire such interest, other than stock options previously granted and disclosed
on the Disclosure Schedule. Similarly, as described more fully in Section 11,
pursuant to the Merger Agreement, the Company has covenanted and agreed that,
prior to the Effective Time, unless expressly contemplated by the Merger
Agreement or the Disclosure Schedule, or the Parent otherwise agrees in writing
and a majority of the Independent Directors approve, the Company will not, among
other things, declare or pay any dividend or make any distributions with respect
to any of the Company's equity interests, or redeem, purchase or otherwise
acquire any of its equity interests.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NEW YORK STOCK EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and will reduce the number of holders
of Shares. This could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may be subject to delisting by the New York Stock Exchange upon
completion of the Offer. According to the published guidelines of the New York
Stock Exchange, the New York Stock Exchange would consider delisting the Shares
if, among other things, the number of total stockholders is less than 1,200, the
number of publicly-held Shares (exclusive of Shares held by the Company's
directors, officers or their immediate families and other concentrated holdings
of 10% or more ("NYSE Excluded Holdings")) is less than 600,000 or the aggregate
market value of publicly-held Shares (exclusive of NYSE Excluded Holdings)
should fall below $5,000,000. According to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended February 28, 1998, as of March 27,
1998, there were approximately 9,233,988 Shares outstanding. According to the
Company's 1997 Annual Report to Stockholders as of July 11, 1997, there were
5,884 stockholders or record. If, as a result of the purchase of Shares pursuant
to the Offer or otherwise, the Shares no longer meet the requirements of the New
York Stock Exchange for continued listing and the listing of the Shares is
discontinued, the market for the Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of continued
listing on the New York Stock Exchange, it is possible that such Shares would
continue to trade on other securities exchanges or through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or in
the over-the-counter market and that price quotations would be reported by such
exchanges or through other sources. However, the extent of the public market for
the Shares and the availability of quotations would depend upon such factors as
the number of stockholders and/or the aggregate market value 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 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.
The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders. The 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 the Shares and would make certain provisions of the
Exchange Act,
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such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with stockholders'
meetings 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 the
securities pursuant to Rule 144 under the Securities Act of 1933.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, but subject to the terms
and conditions of the Merger Agreement, the Purchaser shall not be required to
accept for payment or pay for any tendered Shares (subject to any applicable
rules and regulations of the Commission, including Rule 14e-1(c) under the
Exchange Act) and may terminate or amend the Offer and may postpone the
acceptance for payment and payment for tendered Shares, if:
(a) there are not validly tendered prior to the Expiration Date and
not withdrawn a number of Shares which constitutes on the date of purchase
at least 66 2/3% of the outstanding Shares on a fully diluted basis; or
(b) at any time before the time of payment for such Shares (whether or
not Shares have been accepted for payment or paid for pursuant to the
Offer) any of the following events shall occur:
(i) there shall have been instituted or pending any action or
proceeding by or before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or foreign, which
is reasonably likely to (A) restrain or prohibit the consummation of the
Offer or the Merger, or obtain any material damages in connection
therewith, (B) make the purchase of or payment for some or all of the
Shares pursuant to the Offer or the Merger illegal, (C) impose material
limitations on the ability of Parent or Purchaser (or any of their
affiliates) effectively to acquire or hold, or requiring Parent, the
Purchaser or the Company or any of their respective affiliates or
subsidiaries to dispose of or hold separate, any of the assets or the
business of Parent or Purchaser and their affiliates taken as a whole or
the Company or otherwise have a material adverse effect on Parent or the
Company or (D) impose material limitations on the ability of the Parent
(or its affiliates) to exercise full rights of ownership of the Shares
purchased by it on all matters properly presented to the stockholders of
the Company; or
(ii) there shall have been promulgated, enacted, entered, enforced
or deemed applicable to the Offer or the Merger, by any state, federal
or governmental authority or by any court, any statute, rule,
regulation, judgment, decree, order or injunction, that is reasonably
likely, directly or indirectly, to result in any of the consequences
referred to in clauses (A) through (D) of subsection (b)(i) above; or
(iii) there shall have occurred (A) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (B) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (C) the commencement
of a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States, or (D) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, in the reasonable judgment of the Purchaser, a material
acceleration or worsening thereof; or
(iv) the Merger Agreement shall have been terminated in accordance
with its terms; or
(v) any waiting period under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been
terminated; or
(vi) any of the representations or warranties made by the Company
in the Merger Agreement shall not have been true and correct in all
material respects when made, or shall thereafter have ceased to be true
and correct in all material respects on the Expiration Date (other than
(A) changes in or disruptions of the Company's business resulting from
the execution of the Merger
33
<PAGE> 36
Agreement or the announcement of the Offer and the Merger and (B)
representations and warranties made as of a specified date), or the
Company shall not in all material respects have performed each
obligation and agreement and complied with each covenant to be performed
and complied with by it under the Merger Agreement and the Company fails
to cure such breach within five days after notice thereof is given by
the Purchaser, but in no event later than the Expiration Date; or
(vii) a Material Adverse Change (as defined in the Merger
Agreement) shall have occurred with respect to the Company; or
(viii) the Board of Directors shall have withdrawn or modified, in
any manner adverse to Parent and Purchaser, its approval or
recommendation of the Merger Agreement, the Offer or the Merger or
approved or recommended any Takeover Proposal or shall have resolved to
do any of the foregoing.
which, in the reasonable discretion of the Purchaser, in any case, giving rise
to any such condition, makes it inadvisable to proceed with the Offer or with
acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of the Parent and the
Purchaser and may be asserted by the Parent or the Purchaser regardless of the
circumstances giving rise to any such condition and may be waived by the Parent
or the Purchaser in whole or in part at any time and from time to time in their
sole discretion, except as otherwise provided in the Merger Agreement with
respect to the Minimum Condition and compliance with the HSR Act. The Parent's
or the Purchaser's failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, neither the Purchaser nor the Parent is
aware of any licenses or other regulatory permits that appear 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 filings, approvals or other actions by or with any domestic
(federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of Shares by the Purchaser pursuant to the Offer as contemplated
herein. Should any such approval or other action be required, it is the Parent's
present intention to seek such approval or action. There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, the Parent or the Purchaser or that certain parts of
the businesses of the Company, the Parent or the Purchaser might not have to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval or other action or in the event that such approval
was not obtained or such other action was not taken, any of which could cause
the Purchaser to elect (subject to the terms of the Merger Agreement) to
terminate the Offer without the purchase of the Shares thereunder. The
Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions, including conditions relating to the legal
matters discussed in this Section 16.
State Takeover Laws. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have or whose business operations have substantial economic effects in
such states, or which have substantial assets, security holders, principal
executive offices or principal places of business therein. In 1982, the Supreme
Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Act, which as a matter of
state securities law made takeovers of corporations meeting certain requirements
more difficult, and the reasoning in such decision is likely to apply to certain
other state takeover statutes. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, the
34
<PAGE> 37
Supreme Court of the United States held that the State of Indiana could, as a
matter of corporate law and in particular those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. In the Merger Agreement, the Company has
represented that those sections of the GBCC that are applicable to transactions
with an "interested shareholder" (as defined in the GBCC) are inapplicable to
the transactions contemplated by the Merger Agreement.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer. The Purchaser reserves the right to challenge the
validity or applicability of any state law allegedly applicable to the Offer,
and nothing in this Offer to Purchase nor any action taken in connection
herewith is intended as a waiver of that right. In the event that any state
takeover statute is found applicable to the Offer, the Purchaser might be unable
to accept for payment or purchase Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for purchase or pay for any Shares tendered. See
Section 15.
Antitrust. The Offer and the Merger are subject to the HSR Act and the
rules that have been promulgated thereunder by the Federal Trade Commission
("FTC"), which provide that certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC and
certain waiting period requirements have been satisfied.
The Parent intends, as soon as reasonably practicable following the date
hereof, to file with the FTC and the Antitrust Division a Premerger Notification
and Report Form in connection with the purchase of Shares pursuant to the Offer.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by the Parent, unless both
the Antitrust Division and the FTC terminate the waiting period prior thereto.
If, within such 15-calendar day waiting period, either the Antitrust Division or
the FTC requests additional information or documentary material from the Parent,
the waiting period would be extended for an additional 10 calendar days
following substantial compliance by the Parent with such request. Thereafter,
the waiting period could be extended only by court order. If the acquisition of
Shares is delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not (except as otherwise provided in the Merger Agreement),
be extended and in any event the purchase of and payment for Shares will be
deferred until 10 days after the request is substantially complied with, unless
the waiting period is sooner terminated by the FTC and the Antitrust Division.
See Section 1. Only one extension of such waiting period pursuant to a request
for additional information is authorized by the HSR Act and the rules
promulgated thereunder, except by court order. Any such extension of the waiting
period will not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4.
The FTC and the Antitrust Division frequently review the legality under the
antitrust laws of transactions such as the proposed acquisition of Shares by the
Purchaser pursuant to the Offer. At any time before or after the purchase by the
Purchaser of Shares pursuant to the Offer, either of the FTC and the Antitrust
Division 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
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
the Purchaser or the divestiture of substantial assets of the Parent, its
subsidiaries or the Company. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Parent and the Purchaser believe
that the acquisition of Shares pursuant to the Offer would not violate the
antitrust laws. There can be no assurance, however, that a challenge to the
Offer on antitrust grounds will not be made or, if such challenge is made, what
the outcome will be. See Section 15 for certain conditions to the Offer,
including conditions with respect to litigation and certain government actions.
35
<PAGE> 38
Margin Credit Regulations. Federal Reserve Board Regulations T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
All financing for the Offer will be in full compliance with Margin Credit
Regulations.
17. FEES AND EXPENSES.
Scott & Stringfellow, Inc. is acting as Dealer Manager in connection with
the Offer. As compensation for its services as Dealer Manager, Scott &
Stringfellow, Inc. will receive a fee of approximately $25,000 if the Offer is
consummated. Parent will also reimburse Scott & Stringfellow, Inc. for
reasonable out-of-pocket expenses including reasonable attorney's fees and has
also agreed to indemnify Scott & Stringfellow, Inc. against certain liabilities
and expenses in connection with the Offer, including certain liabilities under
the Federal securities law.
The Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and IBJ Schroder Bank & Trust Company to act as the Depositary
in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for services relating to the Offer
and will be reimbursed for certain out-of-pocket expenses. The Purchaser and the
Parent have also agreed to indemnify the Information Agent and the Depositary
against certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager, the Information Agent and the Depositary).
Brokers, dealers, commercial banks and trust companies will, upon request, be
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
18. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares other than the
Company. The Purchaser is not aware of any state where the making of the Offer
or the tender of Shares and Rights in connection therewith is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares and Rights pursuant thereto, the Purchaser
will make a good faith effort to comply with any such state statute. If after
such good faith effort, the Purchaser cannot comply with such state statute, the
Offer will not be made to nor will tenders be accepted from or on behalf of the
holders of Shares in such state. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
The Purchaser and the Parent have filed with the Commission a Schedule
14D-1 (including exhibits) pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer. Such
statement and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the offices of the Commission (except that they will
not be available at the regional offices of the Commission) in the manner set
forth in Section 8 of this Offer to Purchase.
36
<PAGE> 39
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR THE 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.
PICCADILLY ACQUISITION CORPORATION
April 29, 1998
37
<PAGE> 40
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE
PARENT AND THE PURCHASER
The following sets forth the name, age, present principal occupation or
employment, and material occupations, positions, offices or employment for the
past five years of each director and executive officer of the Parent. All
directors and executive officers listed below are citizens of the United States.
The business address of Messrs. LaBorde, Fuchs, Goldsmith, Johnson, Landry,
Listen, Mestayer, Polito, Prudhomme, Siddle, Touchet, Von Gruben and Bozzell is
P. O. Box 2467, Baton Rouge, Louisiana 70821. The business address of Mr.
Murrill is c/o Piccadilly Cafeterias, Inc., 3232 Sherwood Forest Boulevard,
Baton Rouge, Louisiana 70816. The business address of Mr. Erben is The Nowlin
Building, Suite 700, 9311 San Pedro Avenue, San Antonio, Texas 78216. The
business address of Mr. Francis is c/o Xavier University of Louisiana, 6325
Palmetto Street, New Orleans, Louisiana 70125-1098. The business address of Mr.
Guyton is 10 Sylvan Drive, Suite 25, St. Simons Island, Georgia 31522. The
business address of Mr. Redman is c/o United Companies Financial Corp., 4041
Essen Lane, Baton Rouge, Louisiana 70809. The business address of Mr. Simmons is
c/o McIlhenny Corporation, Avery Island, Louisiana 70513. The business address
of Ms. Slaughter is c/o SSA Consultants, 9331 Bluebonnet Boulevard, Baton Rouge,
Louisiana 70810. The business address of Mr. Smith is c/o Darden Graduate School
of Business Administration, University of Virginia, P. O. Box 6550-North Ground,
Charlottesville, Virginia 22906. Mr. LaBorde serves as the President of the
Purchaser and Mr. Johnson serves as the Secretary of the Purchaser. Messrs.
LaBorde and Murrill are the only directors of the Purchaser.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND POSITION FIVE-YEAR EMPLOYMENT HISTORY
- ----------------- ----------------------------------------------
<S> <C>
Ronald A. LaBorde, President, Chief Mr. LaBorde (age 41) is President and Chief Executive
Executive Officer and Director Officer of the Parent and has held such positions since
June 1995. From January 1992 to May 1995 he was
Executive Vice President, Treasurer and Chief Financial
Officer of the Parent. He is also a director of
AMEDYSIS, Inc.
Frederick E. Fuchs Jr., Executive Vice Mr. Fuchs (age 51) has served as Executive Vice President
President and Director of Real Estate and Director of Real Estate for the Parent since June
1986.
Jere W. Goldsmith Jr., Executive Vice Mr. Goldsmith (age 51) has served as Executive Vice
President and Director of Training President and Director of Training of the Parent since
July 1995. Mr. Goldsmith previously served in this
capacity from May 1987 to February 1992. From February
1992 to July 1995 he served as Executive Vice President
and Region Manager for the Parent.
J. Fred Johnson, Executive Vice Mr. Johnson (age 46) has served as Executive Vice
President, Treasurer and Chief President, Treasurer and Chief Financial Officer of the
Financial Officer Parent since November 1995. From August 1985 through
October 1995 he was employed by Graphic Industries,
Inc., a printing company, in various positions including
Chief Financial Officer and Treasurer. The business
address of Graphic Industries, Inc. is 1720 Peachtree
Street, N.W., Suite 1048, Atlanta, Georgia 30309-2439.
D. Thomas Landry, Executive Vice Mr. Landry (age 45) has served as Executive Vice President
President and Director of and Director of Maintenance, Construction and Design of
Maintenance, Construction and Design the Parent since May 1992.
</TABLE>
I-1
<PAGE> 41
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND POSITION FIVE-YEAR EMPLOYMENT HISTORY
- ----------------- ----------------------------------------------
<S> <C>
Robert P. Listen, Executive Vice Mr. Listen (age 50) has served as Executive Vice President
President and Director of Technical and Director of Technical Services of the Parent since
Services December 1992.
Mark L. Mestayer, Executive Vice Mr. Mestayer (age 39) has served as Executive Vice
President, Secretary and Director of President, Secretary and Director of Finance of the
Finance Parent since July 1996. From May 1992 to July 1996, he
served as the Parent's Executive Vice President,
Secretary and Controller.
Joseph S. Polito, Executive Vice Mr. Polito (age 56) has served as Executive Vice President
President and General Manager and General Manager of the Parent since July 1995. From
October 1992 to July 1995, he served as the Parent's
Executive Vice President and Director of Training.
Patrick R. Prudhomme, Executive Vice Mr. Prudhomme (age 47) has served as Executive Vice
President and Region Manager President and Region Manager of the Parent since
February 1992.
C. Warriner Siddle, Executive Vice Mr. Siddle (age 47) has served as Executive Vice President
President and Director of Development and Director of Development of the Parent since July
1995. From February 1992 to July 1995 he served as the
Parent's Executive Vice President and Region Manager.
Donovan B. Touchet, Executive Vice Mr. Touchet (age 48) has served as Executive Vice
President and Director of Data President and Director of Data Processing of the Parent
Processing since June 1988.
Brian G. Von Gruben, Executive Vice Mr. Von Gruben (age 50) has served as Executive Vice
President and Director of President and Director of Administrative Services of the
Administrative Services Parent since May 1987.
W. Scott Bozzell, Vice President and Mr. Bozzell (age 35) has served as the Parent's Vice
Controller President and Controller since July 1996. From May 1992
to July 1996 he was a Vice President and Assistant
Controller of the Parent.
Paul W. Murrill, Chairman of the Board Mr. Murrill (age 67) is Chairman of the Parent's Board of
Directors. He is retired. He has served as a director of
Gulf States Utilities Company and its successor company,
Entergy Corporation, since 1978. He was chairman and
chief executive officer of Gulf States Utilities Company
for five of those years. Mr. Murrill also served as
Chancellor of Louisiana State University for seven
years. He is a director of Tidewater, Inc., ChemFirst
Corporation, Howell Corporation and ZYGO, Inc.
Ralph P. Erben, Director Mr. Erben (age 67) is principally engaged in personal
investments. He was formerly the Chairman and Chief
Executive Officer of Luby's Cafeterias, Inc. ("Luby's"),
a cafeteria chain, having served as an officer of that
company from 1978 to 1996 and as a director from 1985 to
1997. The business address of Luby's is 2211 Northeast
Loop 410, San Antonio, Texas 78265-3069.
Norman C. Francis, Director Mr. Francis (age 67) is the President of Xavier University
of Louisiana, located in New Orleans, Louisiana, a
position that he has held for over five years. Mr.
Francis is also a director of The Equitable Life, New
York, First National Bank of Commerce and Entergy
Corporation. He is also Chairman of the Board of Liberty
Bank and Trust.
</TABLE>
I-2
<PAGE> 42
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND POSITION FIVE-YEAR EMPLOYMENT HISTORY
- ----------------- ----------------------------------------------
<S> <C>
Robert P. Guyton, Director Mr. Guyton (age 60) is a financial consultant. He served
as a vice president and financial consultant for Raymond
James & Associates, Inc., an investment banking and
brokerage firm, from 1993 to 1996, located at 100
Galleria Parkway, Suite 1760, Atlanta, Georgia 30339.
From 1981 to 1991, he served as president and chief
executive officer of Bank South Corporation. Mr. Guyton
is also a director of ChemFirst Corporation.
Dale E. Redman, Director Mr. Redman (age 50) has been Executive Vice President and
Chief Financial Officer of United Companies Financial
Corporation (the "United Companies"), a publicly-traded,
provider of non-traditional consumer and mortgage loan
products, since 1988 and a director of the United
Companies since 1983.
Edward M. Simmons, Sr., Director Mr. Simmons (age 69) is the Chairman of the Board and
Chief Executive Officer of McIlhenny Co., the makers of
TABASCO brand pepper sauce. He is also a director of Pan
American Life Insurance Company, First Commerce
Corporation, First National Bank of Commerce and Central
Louisiana Electric Company.
Christel C. Slaughter, Director Ms. Slaughter (age 43) is the co-owner of and a management
consultant with Slaughter and Associates, SSA
Consultants, Inc. Ms. Slaughter earned a Ph.D. in
management from Louisiana State University in 1979. Ms.
Slaughter serves as a regional director of BankOne
Corporation. Since 1979, she has been an active lecturer
and consultant for both governmental and private
entities.
C. Ray Smith, Director Mr. Smith (age 62) is the Tipton R. Snavely professor of
business administration and interim dean of the Darden
Graduate School of Business Administration, University
of Virginia. Mr. Smith has taught at the University of
Virginia since 1961.
</TABLE>
I-3
<PAGE> 43
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Facsimile:
(212) 858-2611
Confirm by Telephone:
(212) 858-2103
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
P. O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attention: Reorganization Operations Dept.
Attention: Reorganization Department Securities Processing Window SC-1
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent. You may also contact your broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
OR
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
[STRINGFELLOW LOGO]
909 East Main Street
Richmond, Virginia 23219
CALL TOLL-FREE (800) 404-8924
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 29, 1998
BY
PICCADILLY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PICCADILLY CAFETERIAS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, MAY 27, 1998,
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Facsimile:
(212) 858-2611
Confirm by telephone:
(212) 858-2103
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
P. O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attention: Reorganization Operations Dept.
Attention: Reorganization Dept. Securities Processing Window SC-1
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares or Rights (as such terms are defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if tenders of Shares or Rights are to be made by
book-entry transfer into the account of IBJ Schroder Bank & Trust Company, as
Depositary (the "Depositary"), at the Depository Trust Company ("DTC" or the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3 of the Offer to Purchase (as defined below). Stockholders who tender Shares or
Rights by book-entry transfer are referred to herein as "Book-Entry
Stockholders."
Holders of Shares will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share. Unless and until a
Distribution Date (as defined in the Offer to Purchase) occurs, a
<PAGE> 2
tender of Shares will also constitute a tender of the associated Rights. See
Section 3 of the Offer to Purchase. If the Distribution Date has occurred, and
certificates representing Rights (the "Rights Certificates") have been
distributed to holders of Shares, such holders will be required to tender Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered in order to effect a valid tender of such Shares. Holders of Shares and
Rights whose certificates for such Shares (the "Share Certificates") and, if
applicable, Rights Certificates are not immediately available or who cannot
deliver their Share Certificates or, if applicable, Rights Certificates and all
other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase), or who cannot complete the
procedure for book-entry transfer on a timely basis, must tender their Shares
and Rights according to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
2
<PAGE> 3
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON THE CERTIFICATE(S))
- --------------------------------------------------------------------------------------------------------
========================================================================================================
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------------------------------
CERTIFICATE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
SHARE CERTIFICATE NUMBER(S) (1) REPRESENTED BY CERTIFICATE(S) (1) NUMBER OF SHARES TENDERED (2)
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Deposit of Shares in the Dividend Reinvestment and Share Purchase
Plan (the "DRP") (3)................................................
- --------------------------------------------------------------------------------------------------------
Total Shares........................................................
- --------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by Certificates
delivered to the Depositary are being tendered. See Instruction 4.
(3) Shares held in your account under the DRP are not represented by any Share Certificates, but such
Shares are registered in your name. If you desire to tender any of your DRP Shares, then indicate
the number of DRP Shares to be deposited in the box appropriate in the column entitled "Number of
Shares Tendered." If you wish tender all of the DRP Shares held in you account, please write in
"ALL" in the box.
- --------------------------------------------------------------------------------------------------------
</TABLE>
[ ] 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:
-----------------------------------------------------------------------------
Book-Entry Transfer Facility Account Number:
--------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
-------------------------------------------------------------------------
If delivered by book-entry transfer:
Book-Entry Transfer Facility Account Number:
--------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
3
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Piccadilly Acquisition Corporation, a
Georgia corporation (the "Purchaser"), which is a wholly-owned subsidiary of
Piccadilly Cafeterias, Inc., a Louisiana corporation (the "Parent"), the
above-described shares of Common Stock, par value $.01 per share (the "Shares"),
of Morrison Restaurants Inc., a Georgia corporation (the "Company"), and the
associated preferred stock purchase rights (the "Rights") issued pursuant to
that certain Rights Agreement, dated as of March 2, 1996 (as amended, the
"Rights Agreement"), by and between the Company and SunTrust Bank, N.A., as
Rights Agent, at a purchase price of $5.00 per Share (and associated Right), net
to the seller in cash without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated April 29, 1998 (the
"Offer to Purchase") and in this Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context requires
otherwise, all references to Shares shall be deemed to refer also to the
associated Rights, and all references to Rights shall be deemed to include all
benefits that may inure to the stockholders of the Company or to holders of the
Rights pursuant to the Rights Agreement. The undersigned understands that the
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more corporations directly or indirectly wholly-owned by
the Purchaser, the right to purchase all or any portion of the Shares and Rights
tendered pursuant to the Offer, receipt of which is hereby acknowledged.
Prior to the occurrence of a Distribution Date (as defined in the Offer to
Purchase), a valid tender of Shares will constitute a tender of the associated
Rights. The undersigned understands that if the Distribution Date has occurred
and certificates representing Rights (the "Rights Certificates") have been
distributed to holders prior to the date of tender of the Shares and Rights
tendered herewith pursuant to the Offer, Rights Certificates representing a
number of Rights equal to the number of Shares being tendered herewith must be
delivered to the Depositary (as defined below) or, if available, a Book-Entry
Confirmation (as defined herein) must be received by the Depositary with respect
thereto in order for such Shares tendered herewith to be validly tendered. If
the Distribution Date has occurred and Rights Certificates have not been
distributed prior to the time Shares are tendered herewith pursuant to the
Offer, the undersigned agrees to deliver Rights Certificates representing a
number of Rights equal to the number of Shares tendered herewith to IBJ Schroder
Bank & Trust Company (the "Depositary") within three business days after the
date such Rights Certificates are distributed. A tender of Shares without Rights
Certificates constitutes an agreement by the tendering stockholder to deliver
Rights Certificates representing a number of Rights equal to the number of
Shares tendered pursuant to the Offer to the Depositary within three business
days after the date such Rights Certificates are distributed. The undersigned
understands that if the Distribution Date occurs prior to the Expiration Date,
the Purchaser reserves the Right to require that the Depositary receive such
Rights Certificates or a Book-Entry Confirmation with respect to such Rights
prior to accepting Shares for payment. In that event, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of, or Book-Entry Confirmation with respect to,
among other things, Rights Certificates, if Rights Certificates have been
distributed to holders of Shares.
Subject to, and effective upon, acceptance for payment for the Shares and
Rights tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares and Rights
that are being tendered hereby and any and all dividends, distributions
(including additional Shares) or rights declared, paid or issued with respect to
the tendered Shares and Rights on or after the date hereof and payable or
distributable to the undersigned on a date prior to the transfer to the name of
the Purchaser or nominee or transferee of the Purchaser on the Company's stock
transfer records of the Shares and Rights tendered herewith (collectively, a
"Distribution"), and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and Rights (and
any Distribution) with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver such
Share Certificates (as defined herein) (and any Distribution) or transfer
ownership of such Shares and Rights (and
4
<PAGE> 5
any Distribution) on the account books maintained by the Book-Entry Transfer
Facility, together in either case with appropriate evidences of transfer, to the
Depositary for the account of the Purchaser, (b) present such Shares and Rights
(and any Distribution) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares and Rights (and any Distribution), all in accordance with the terms and
subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, with full power of substitution, to the full extent of such
stockholder's rights with respect to the Shares and Rights tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other shares or other securities issued or issuable in respect of such
Shares or Rights on or after the date hereof. Such appointment will be effective
when, and only to the extent that, the Purchaser accepts such Shares and Rights
for payment. Upon such acceptance for payment, all prior proxies given by such
stockholder with respect to such Shares and Rights (and such other shares and
securities) will be revoked without further action, and no subsequent proxies
may be given nor any subsequent written consents executed (and, if given or
executed, will not be deemed effective). The designees of the Purchaser will be
empowered to exercise all voting and other rights of such stockholder as they in
their sole discretion may deem proper at any annual or special meeting of the
Company's stockholders or any adjournment or postponement thereof, by written
consent in lieu of any such meeting or otherwise. The Purchaser reserves the
right to require that, in order for Shares and Rights to be deemed validly
tendered, immediately upon the Purchaser's payment for such Shares and Rights
the Purchaser must be able to exercise full voting rights with respect to such
Shares and Rights.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights (and any Distribution) tendered hereby and (b) when the Shares and Rights
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title to the Shares and Rights (and any
Distribution), free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and Rights tendered
hereby (and any Distribution). In addition, the undersigned shall promptly remit
and transfer to the Depositary for the account of the Purchaser any and all
Distributions in respect to the Shares and Rights tendered hereby, accompanied
by appropriate documentation of transfer; and pending such remittance or
appropriate assurance thereof, the Purchaser will be, subject to applicable law,
entitled to all rights and privileges as the owner of any such Distribution 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.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Tenders of
Shares and Rights made pursuant to the Offer are irrevocable, except that Shares
and Rights tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date (as defined in the Offer to Purchase) and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after June 22, 1998. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares and Rights pursuant to
any of the procedure described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares and Rights being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares and Rights not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," please mail the check for the purchase price and/or any
certificate(s) for Shares and Rights not tendered or not accepted for payment
(and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing
5
<PAGE> 6
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 any certificate(s) for Shares and
Rights not tendered or accepted for payment in the name of, and deliver such
check and/or such certificates to, the person or persons so indicated. Unless
otherwise indicated herein under "Special Payment Instructions," please credit
any Shares and Rights tendered herewith by book-entry transfer that are not
accepted for payment by crediting the account at the Book-Entry Transfer
Facility (as defined herein) designated above. The undersigned recognizes that
the Purchaser has no obligation, pursuant to the Special Payment Instructions,
to transfer any Shares or Rights from the name(s) of the registered holder(s)
thereof if the Purchaser does not accept for payment any of the Shares or Rights
so tendered.
6
<PAGE> 7
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares and
Rights accepted for payment are to be issued in the name of someone other than
the undersigned or if Shares or Rights tendered by book-entry transfer which are
not accepted for payment are to be returned by credit to an account maintained
at the Book-Entry Transfer Facility.
Issue: [ ] check [ ] certificates to:
Name:
- --------------------------------------------------
(Please Print)
Address:
- ------------------------------------------------
- ----------------------------------------------------------
(Include Zip Code)
- ----------------------------------------------------------
(Tax Id. or Social Security No.)
(See Substitute Form W-9)
[ ] Credit Shares and Rights tendered by book-entry transfer that are not
accepted for payment to DTC.
- ----------------------------------------------------------
(DTC Account No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares and
Rights accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
MAIL: [ ] check [ ] certificates to:
Name:
- --------------------------------------------------
(Please Print)
Address:
- ------------------------------------------------
(Include Zip Code)
- ----------------------------------------------------------
(Tax Id. or Social Security No.)
(See Substitute Form W-9)
7
<PAGE> 8
SIGN HERE SIGN
AND COMPLETE SUBSTITUTE FORM W-9 HERE
SIGN HERE
----------------------------------------------------------------------
SIGN HERE
----------------------------------------------------------------------
Dated: , 1998
------------------------------------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificate(s) or Rights Certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by 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 Number
------------------------------------------------
Tax Identification or Social Security Number
-----------------------------------
COMPLETE SUBSTITUTE FORM W-9
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized Signature
-----------------------------------------------------------
Name
---------------------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
(Please Print)
Address
------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
------------------------------------------------
Dated , 1998
-------------------------------------------------------------------
8
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares and Rights (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 and/or
Rights tendered) herewith, unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" above, or (b) if such Shares and/or Rights are tendered for the
account of a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if tenders are to be made pursuant to the procedure
for tender by book-entry transfer set forth in Section 3 of the Offer to
Purchase. Share Certificates evidencing tendered Shares, or timely confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase) and, if a Distribution Date occurs, Rights Certificates evidencing
tendered Rights, or timely confirmation of a book-entry transfer of Rights into
the Depositary's account at the Book-Entry Transfer Facility, if available
(together with, if Rights are forwarded separately from Shares, a properly
completed and duly executed Letter of Transmittal (or a facsimile hereof), with
any required signature guarantees or an Agent's Message in connection with a
book-entry transfer, and any other documents required by this Letter of
Transmittal), must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date or, if later, within three business
days after the date such Rights Certificates are distributed. Stockholders whose
Share Certificates or Rights Certificates are not immediately available
(including Rights Certificates that have not yet been distributed by the
Company) or who cannot deliver their Share Certificates or Rights Certificates
and all other required documents to the Depositary prior to the Expiration Date
or who cannot complete the procedure for delivery by book-entry transfer on a
timely basis may tender their Shares and Rights by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such
procedure: (i) such tender must be made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Purchaser, must be received by
the Depositary prior to the Expiration Date; (iii) the Share Certificates (or a
Book-Entry Confirmation) representing all tendered Shares, in proper form for
transfer, in each case together with the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry delivery, an Agent's Message) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery; and (iv) the Rights
Certificates, if issued, representing the appropriate number of Rights or a
Book-Entry Confirmation, if available, in each case together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof), with
any required signature guarantees (or, in the case of a book-entry delivery, 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 trading
days after the date of execution of such Notice of Guaranteed Delivery, or if
later, three business days after Rights Certificates are distributed to
stockholders, all as provided in Section 3 of the Offer to Purchase. If Share
Certificates and Rights Certificates are forwarded separately to the Depositary,
a properly completed and duly executed Letter of Transmittal must accompany each
such delivery. Prior to a Distribution Date, a valid tender of Shares will
constitute a tender of the associated Rights.
9
<PAGE> 10
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES OR
RIGHTS CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH
THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY (INCLUDING, IN THE CASE OF BOOK ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares and Rights will be purchased. All tendering stockholders, by
execution of this Letter of Transmittal (or a facsimile hereof), waive any right
to receive any notice of the acceptance of their Shares and Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and Rights and any other
required information should be listed on a separate signed schedule attached
hereto.
4. PARTIAL TENDERS. (Not Applicable to Book-Entry Stockholders) If fewer
than all the Shares evidenced by any Share Certificates submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." In such cases, new Share Certificates or
Rights Certificates, as the case may be, for the Shares or Rights that were
evidenced by your old Share Certificates or Rights Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All shares represented by Share Certificates and all Rights
represented by Rights Certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares and Rights tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares and Rights 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 is signed by the registered holder(s) of the
Shares and Rights 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 or Rights not tendered or not purchased are to be issued
in the name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s).
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
If Rights Certificates have been distributed to holders of Shares, such
holders are required to tender Rights Certificate(s) representing a number of
Rights equal to the number of Shares tendered in order to effect a valid tender
of such Shares. It is necessary that stockholders follow all signature
requirements of this Instruction 5 with respect to the Rights in order to tender
such Rights. Prior to a Distribution Date, a valid tender of Shares will
constitute a tender of the associated Rights.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares and Rights to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificate(s)
for Shares and Rights not tendered or accepted for payment are to be registered
in the name of, any person other than the registered holder(s), or if tendered
certificate(s) are registered in the name of any person other than the person(s)
10
<PAGE> 11
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or an exemption therefrom, is
submitted.
Except as otherwise provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares and Rights not tendered or not
accepted for payment are to be issued or returned to, a person other than the
signer of this Letter of Transmittal or if a check and/or such certificates are
to be returned to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown in this Letter of
Transmittal, the appropriate boxes on this Letter of Transmittal must be
completed. A Book-Entry Stockholder may request that Shares and/or Rights not
accepted for payment be credited to such account maintained at the Book Entry
Transfer Facility as such Book-Entry Stockholder may designate under "Special
Payment Instructions." If no such instructions are given, such Shares or Rights
not accepted for payment will be returned by crediting the account at the
Book-Entry Transfer Facility designated above.
8. WAIVER OF CONDITIONS. Subject to the terms and conditions of the Merger
Agreement (as defined in the Offer to Purchase), the conditions of the Offer
(other than the Minimum Condition (so as to acquire less than a majority of the
outstanding Shares) as defined in the Offer to Purchase) may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with 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 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. 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 order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the 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.
11
<PAGE> 12
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares or, if a Distribution Date occurs, Rights has been lost, destroyed or
stolen, the stockholder should promptly notify the Depositary. The stockholder
will then be instructed as to the steps that must be taken in order to replace
the certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
12. DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN. A shareholder
participating in the DRP may tender pursuant to the Offer all or part of the
Shares held in such shareholder's account under the DRP by completing the
portion of the box captioned "Description of Shares Tendered" relating to the
DRP, and need not obtain a certificate for such Shares in order to tender such
Shares pursuant to the Offer. Any DRP shares tendered but not purchased will be
returned to the participant's DRP account.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
12
<PAGE> 13
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY, AS DEPOSITARY
- -------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW:
FORM W-9
Department of the Treasury
Internal Revenue Service
-----------------------------------------------------
DEPARTMENT OF THE PART 2 -- Certification -- Under penalties of
TREASURY INTERNAL perjury, I certify that:
REVENUE SERVICE.
(1) The number shown on this form is my correct
PAYEE'S REQUEST FOR Taxpayer Identification Number (or I am waiting for
TAXPAYER IDENTIFICATION a number to be issued to me) and
NUMBER ("TIN")
(2) I am not subject to backup withholding because
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to
backup withholding.
Certification Instructions -- You must cross out
item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding
because of under-reporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding,
you received another notification from the IRS that
you were subject to backup withholding, do not cross
out such item (2).
-----------------------------------------------------
SIGN HERE W
Signature ----------------------------------------
Date --------------------------------------- 1998
- -------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY, AS DEPOSITARY
- -------------------------------------------------------------------------------------------
SUBSTITUTE ------------------------------------
Social Security Number
FORM W-9 or
Department of the Treasury ------------------------------------
Internal Revenue Service Employer Identification Number
-----------------------------------------------------
DEPARTMENT OF THE PART 2 -- Certification -- Under penalties of
TREASURY INTERNAL perjury, I certify that:
REVENUE SERVICE. withholding, or (b) I have not be
en
(1) The number shown on this form is my correct notified by the Internal Revenue
PAYEE'S REQUEST FOR Taxpayer Identification Number (or I am waiting for Service (the interest or dividends
,
TAXPAYER IDENTIFICATION a number to be issued to me) and or (c) the IRS has notified me tha
t I
NUMBER ("TIN") am no longer subject to by the IRS
(2) I am not subject to backup withholding because that you are currently subject to back
up
(a) I am exempt from backup withholding, or (b) I withholding because of under- reportin
g
have not been notified by the Internal Revenue interest or dividends on your tax retu
rn.
Service (the "IRS") that I am subject to backup However, if after being notified by th
e
withholding as a result of a failure to report IRS that you were subject to backup
all interest or dividends, or (c) the IRS has withholding, you received another
notified me that I am no longer subject to notification from
backup withholding.
Certification Instructions -- You must cross out
item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding
because of under-reporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding,
you received another notification from the IRS that
you were subject to backup withholding, do not cross
out such item (2).
-----------------------------------------------------
SIGN HERE W PART 3 --
Awaiting TIN [ ]
- -------------------------------------------------------------------------------------------
</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.
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 be will be withheld.
Signature
- --------------------------------------------------- Date
- ------------------------------, 1998
13
<PAGE> 14
The Information Agent for the Offer is:
[MACKENZIE LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
[STRINGFELLOW LOGO]
909 East Main Street
Richmond, Virginia 23219
CALL TOLL-FREE (800) 404-8924
April 29, 1998
14
<PAGE> 1
EXHIBIT 11(a)(3)
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if certificates for Shares (as defined below) or the
associated preferred stock purchase rights (the "Rights") are not immediately
available or the certificates for Shares or Rights and all other required
documents cannot be delivered to IBJ Schroder Bank & Trust Company (the
"Depositary") on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) or if the procedure for delivery by book-entry transfer
cannot be completed on a timely basis. This instrument may be delivered by hand
or transmitted by facsimile transmission or mailed to the Depositary.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Facsimile:
(212) 858-2611
Confirm by telephone:
(212) 858-2103
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
P. O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attention: Reorganization Operations Dept.
Attention: Reorganization Dept. Securities Processing Window SC-1
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tender(s) to Piccadilly Acquisition Corporation, a
Georgia corporation, which is a wholly owned subsidiary of Piccadilly
Cafeterias, Inc., a Louisiana corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 29, 1998 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"), receipt of which is hereby
acknowledged, the number of shares of Common Stock, par value $.01 per share
(the "Shares"), of Morrison Restaurants Inc., a Georgia corporation, and the
associated Rights, pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
<PAGE> 2
Signature(s)
- ---------------------------------------
Name(s) of Record Holders
- ------------------------------------------------------
Please Type or Print
Number of Shares and Rights
- ---------------------
Certificate Nos. (If Available)
- ------------------------------------------------------
- ------------------------------------------------------
Dated
- ----------------------------------------, 1998
Address(es)
- ----------------------------------------
- ------------------------------------------------------
Zip Code
Area Code and Tel No(s)
- -------------------------
If Shares and Rights will be tendered by book-entry transfer), please provide:
Book-Entry Transfer
Account Number
- ----------------------------------
- ------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares and Rights tendered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended
("Rule 14e-4"), (b) represents that such tender of Shares and Rights complies
with Rule 14e-4, (c) guarantees to deliver to the Depositary either the
certificates evidencing all tendered Shares, in proper form for transfer, or to
deliver Shares pursuant to the procedure for book-entry transfer into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), in either case together with the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery, and any other required documents, all
within three New York Stock Exchange trading days after the date hereof and (d)
guarantees, if a Distribution Date (as defined in the Offer to Purchase) occurs,
to deliver certificates representing the Rights ("Rights Certificates") in
proper form for transfer, or to deliver such Rights pursuant to the procedure
for book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, together with, if Rights are forwarded separately, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed with
any required signature guarantees or an Agent's Message (as defined in the Offer
to Purchase) in the case of a book-entry delivery, and any other required
documents, all within the later of (1) three New York Stock Exchange trading
days after the date hereof and (2) three business days after the date the Rights
Certificates are distributed to holders of Shares.
- ------------------------------------------------------
Name of Firm
- ------------------------------------------------------
Address
- ------------------------------------------------------
Zip Code
- ------------------------------------------------------
Area Code and Tel. No.
- ------------------------------------------------------
Authorized Signature
Name
- ----------------------------------------------
Please Type or Print
Title
- ------------------------------------------------
Dated
- ---------------------------------------, 1998
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR, IF A DISTRIBUTION DATE OCCURS,
RIGHTS WITH THIS NOTICE. CERTIFICATES FOR SHARES, OR IF A DISTRIBUTION
DATE OCCURS, RIGHTS SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
AT
$5.00 NET PER SHARE
BY
PICCADILLY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PICCADILLY CAFETERIAS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, MAY 27, 1998,
UNLESS THE OFFER IS EXTENDED.
April 29, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Piccadilly Acquisition Corporation, a Georgia
corporation (the "Purchaser"), which is a wholly owned subsidiary of Piccadilly
Cafeterias, Inc., a Louisiana corporation (the "Parent"), to act as dealer
manager in connection with the Purchaser's offer to purchase for cash all the
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
Morrison Restaurants Inc., a Georgia corporation (the "Company"), and the
associated preferred stock purchase rights ("the Rights") issued pursuant to the
Rights Agreement, dated as of March 2, 1996 (as amended, the "Rights
Agreement"), by and between the Company and SunTrust Bank, N.A., as Rights
Agent, at a purchase price of $5.00 per Share (and associated Right), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 29, 1998 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer") enclosed herewith. Holders of
Shares will be required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. If the Distribution Date (as defined in the
Offer to Purchase) has not occurred prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares will constitute a tender of the
associated Rights. If the Distribution Date has occurred and the certificates
representing such Rights ("Rights Certificates") have been distributed by the
Company to holders of Shares, such holders of Shares will be required to tender
Rights Certificates representing a number of Rights equal to the number of
Shares being tendered in order to effect valid tender of such Shares. Holders of
Shares and Rights whose certificates for such Shares (the "Share Certificates")
and, if applicable, Rights Certificates are not immediately available or who
cannot deliver their Share Certificates and, if applicable, Rights Certificates
and all other required documents to the Depositary (as defined below) prior to
the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Shares and Rights according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. As used herein, unless the context
otherwise requires, the term "Shares" includes the associated Rights.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
<PAGE> 2
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated April 29, 1998.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if Share Certificates or, if applicable, Rights Certificates are
not immediately available or if such certificates and all other required
documents cannot be delivered to IBJ Schroder Bank & Trust Company (the
"Depositary") by the Expiration Date or if the procedure for book-entry
transfer cannot be completed by the Expiration Date.
4. 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, which includes the
recommendation of the Board of Directors of the Company that stockholders
accept the Offer and tender their Shares to the Purchaser pursuant to the
Offer.
5. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
7. A return envelope addressed to IBJ Schroder Bank & Trust Company,
the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MAY 27, 1998, UNLESS THE OFFER
IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn pursuant to the Offer prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase) such number of Shares which
constitutes not less than 66 2/3% of the outstanding Shares on the date of
purchase (the "Minimum Condition"), and (ii) the expiration or termination of
any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
The Board of Directors of the Company (the "Board of Directors") has
approved by unanimous vote the Merger Agreement (as defined below) and the
transactions contemplated thereby, including the Offer and the Merger (as
defined below), and determined that terms of the Offer and the Merger are fair
to, and in the best interest of, the holders of the Shares and recommends that
the holders of the Shares accept the Offer and tender their Shares to the
Purchaser pursuant to the Offer.
The Offer is being made pursuant to a Plan and Agreement of Merger, dated
as of April 22, 1998 (the "Merger Agreement"), by and among the Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement, and in accordance with the Georgia Business
Corporation Code, the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation and become a wholly owned subsidiary of the Parent, and the separate
corporate existence of the Purchaser will cease.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and other required documents should be sent to
the Depositary, and (ii) either Share Certificates and, if applicable, Rights
Certificates, representing the tendered Shares and, if applicable, tendered
Rights should be delivered to the Depositary, or such Shares and Rights
2
<PAGE> 3
should be tendered by book-entry transfer into the Depositary's account
maintained at the Book-Entry Transfer Facility (as described in 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, if applicable, Rights Certificates or other
required documents on or prior to the Expiration Date or to comply with the
book-entry transfer procedures on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified in Section 3 of the Offer
to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and MacKenzie
Partners, Inc. (the "Information Agent") (as described in the Offer to
Purchase)) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for customary clerical and mailing
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchaser will pay or cause to be paid any stock transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Inquiries you may have with respect to the Offer should be addressed to the
Information Agent or the undersigned, at the respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase. Additional copies
of the enclosed materials may be obtained from the Information Agent.
Very truly yours,
SCOTT & STRINGFELLOW, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE PARENT, THE DEALER MANAGER, THE
COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
AT
$5.00 NET PER SHARE
BY
PICCADILLY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PICCADILLY CAFETERIAS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, MAY 27, 1998,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated April 29,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal relating
to an offer by Piccadilly Acquisition Corporation, a Georgia corporation (the
"Purchaser"), which is a wholly owned subsidiary of Piccadilly Cafeterias, Inc.,
a Louisiana corporation (the "Parent"), to purchase all of the outstanding
shares of Common Stock, par value $.01 per share (the "Shares"), of Morrison
Restaurants Inc., a Georgia corporation (the "Company"), and the associated
preferred stock purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of March 2, 1996 (as amended, the "Rights Agreement"), by
and between the Company and SunTrust Bank, N.A., as Rights Agent, at a purchase
price of $5.00 per Share (and associated Right), net to the seller in cash
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). Unless the context
requires otherwise, all references to "Shares" shall be deemed to refer also to
the associated Rights, and all references to Rights shall be deemed to include
all benefits that may inure to the stockholders of the Company or to the holders
of the Rights pursuant to the Rights Agreement. Holders of Shares and Rights
whose certificates for such Shares (the "Share Certificates") and, if
applicable, for such Rights (the "Rights Certificates") are not immediately
available or who cannot deliver their Share Certificates and, if applicable,
Rights Certificates and all other required documents to IBJ Schroder Bank &
Trust Company, the Depositary, prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
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 BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by use for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase.
<PAGE> 2
Your attention is directed to the following:
1. The tender price is $5.00 per share, net to the seller in cash
without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Board of Directors of the Company has approved by unanimous
vote the Merger Agreement (as defined below) and the transactions
contemplated thereby, including the Offer and the Merger (as defined
below), and determined that the terms of the Offer and the Merger are fair
to, and in the best interests of, the holders of Shares and recommends that
holders of Shares accept the Offer and tender their Shares to the Purchaser
pursuant to the Offer.
4. The Offer is being made pursuant to a Plan and Agreement of Merger,
dated as of April 22, 1998 (the "Merger Agreement") by and among the
Parent, the Purchaser and the Company. The Merger Agreement provides, among
other things, that, subject to the terms and conditions of the Merger
Agreement, subsequent to the consummation of the Offer, the Purchaser will
merge with and into the Company.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, May 27, 1998, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commission or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn pursuant to the Offer prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) such
number of Shares which constitutes not less than 66 2/3% of the outstanding
Shares on the date of purchase (the "Minimum Condition"), and (ii) the
expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Purchaser
is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, the Purchaser cannot comply with such statute, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Purchaser by Scott &
Stringfellow, Inc., the Dealer Manager for the Offer, or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
MORRISON RESTAURANTS INC.
BY
PICCADILLY ACQUISITION CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated April 29, 1998 (the "Offer to Purchase") and the related
Letter of Transmittal pursuant to an offer by Piccadilly Acquisition
Corporation, a Georgia corporation, which is a wholly owned subsidiary of
Piccadilly Cafeterias, Inc., a Louisiana corporation, to purchase all
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
Morrison Restaurants Inc., a Georgia corporation, and the associated preferred
stock purchase rights (the "Rights"), at a purchase price of $5.00 per Share,
net to the seller in cash without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares which are held by you for the
account of the undersigned), upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Number of Shares (and Rights)
to be Tendered*
____ Shares (and Rights)
Dated , 1998
SIGN HERE
------------------------------------------------
------------------------------------------------
Signature(s)
------------------------------------------------
Please Print Name(s)
------------------------------------------------
Address
------------------------------------------------
Area Code and Telephone Number
------------------------------------------------
Tax, Identification, or
Social Security Number
- ---------------
* Unless otherwise indicated, it will be assumed that all of your Shares (and
Rights) held by us for your account are to be tendered. Prior to a
Distribution Date (as defined in the Offer to Purchase), a valid tender of
Shares will constitute a tender of the associated Rights.
3
<PAGE> 1
To all Holders of Stock Certificates issued by the former parent of Morrison
Restaurants Inc., "Old" Morrison Restaurants Inc.:
This letter is being sent to you as a holder of record of common stock,
$0.01 par value per share (the "Shares"), of Morrison Restaurants Inc. (the
"Company") in connection with an offer by Piccadilly Acquisition Corporation
(the "Purchaser") to purchase for cash all Shares and the associated preferred
stock purchase rights issued pursuant to that certain Rights Agreement, dated as
of March 2, 1996 (as amended, the "Rights Agreement"), by and between the
Company and SunTrust Bank, N.A., as Rights Agent, at a purchase price of $5.00
per share, net to the seller, without interest (the "Offer").
The records of AmSouth Bank of Alabama (the "AmSouth"), the escrow agent of
the former parent of the Company, "Old" Morrison Restaurants Inc. ("Old
Morrison"), indicate that many holders of stock certificates issued by Old
Morrison have not yet exchanged their certificate(s) in connection with the
spin-off and reverse stock split, pursuant to which the Company became a
publicly-traded entity, that Old Morrison completed in March 1996 (the
"Distribution"). In connection with the Distribution, holders of Old Morrison
common stock received the following: (i) one Share of common stock of the
Company (formerly named Morrison Fresh Cooking, Inc.) for every four shares of
Old Morrison common stock owned, (ii) one share of Morrison Health Care, Inc.
("Morrison Health Care") common stock for every three shares of Old Morrison
common stock owned and (iii) one share of Ruby Tuesday, Inc. ("Ruby Tuesday")
common stock for every two shares of Old Morrison Common Stock owned.
If you have not exchanged and still hold Old Morrison stock certificates,
you may participate in this Offer by submitting your Old Morrison stock
certificate(s) pursuant to this Offer and completing the enclosed Letter of
Transmittal along with any other required documents as specified in the enclosed
materials.
Stock certificates for common stock of Old Morrison (which are any share
certificates issued prior to March 1996) that are tendered to IBJ Schroder Bank
and Trust Company (the "Depositary") pursuant to the Offer, will be forwarded to
the Escrow Agent following completion of the Offer. The Escrow Agent will
forward certificates representing shares of common stock of Ruby Tuesday and
Morrison Health Care directly to an exchanging holder and return the
certificates representing Shares to the Depositary, who will then pay the
consideration offered by the Purchaser in the Offer. As an example: a holder of
a certificate representing 100 shares of Old Morrison common stock will receive
in exchange for such certificate: (i) 33 shares of Morrison Health Care common
stock, (ii) 50 shares of Ruby Tuesday common stock and (iii) $125 for the 25
shares of Company common stock.
The Offer is fully explained in the enclosed materials. Should you have any
questions, however, you may call MacKenzie Partners, Inc. who is acting as
information agent for the offer at (800) 322-2885 (Toll Free) or (212) 929-5500
(Call Collect).
PICCADILLY ACQUISITION CORPORATION
<PAGE> 1
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>
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL
SECURITY
NUMBER OF --
- ---------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- ---------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint The actual owner of
account) the account, or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor or
incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or The legal entity (Do
pension trust 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 The organization
educational organization
account
12. Partnership account held in The partnership
the name of the partnership
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
- ---------------------------------------------------------
---------------------------------------------------------
1List first and circle the name of the person whose number you furnish.
2Circle the minor's name and furnish the minor's social security number.
3Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
4Show your individual name. You may also enter your business name. You may use
either your Social Security Number or your Employer Identification Number.
5List 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> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") 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) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan.
- The United States or any agency or instrumentalities.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality.
- 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) of the Code.
- An exempt charitable remainder trust, or non-exempt trust described in
Section 4947(a)(1) of the Code.
- 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 of
the Code.
- 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 certain 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 of the Code).
- Payments described in Section 6049(b)(5) of the Code to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file a 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, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN
ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL
REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, 6050A and 6050N of
the Code and the regulations promulgated therein.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividends and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
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
that results in no imposition of backup withholding, you are subject to a
penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Willfully 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> 1
EXHIBIT 11(a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated April 29, 1998 and the related Letter of
Transmittal (and any amendments thereto) and is being made to all holders of
Shares. The Purchaser (as defined below) is not aware of any state where the
making of the Offer is prohibited by administrative or judicial action pursuant
to state statute. If the Purchaser becomes aware of any state where the making
of the Offer is prohibited, the Purchaser will make a good faith effort to
comply with any such statute. If, after such good faith effort, the Purchaser
cannot comply with any applicable statute, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Shares in such
state. In those jurisdictions where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by Scott & Stringfellow, Inc. or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
Morrison Restaurants Inc.
at
$5.00 Net Per Share
by
Piccadilly Acquisition Corporation
a wholly owned subsidiary of
Piccadilly Cafeterias, Inc.
Piccadilly Acquisition Corporation, a Georgia corporation (the "Purchaser"),
which is a wholly owned subsidiary of Piccadilly Cafeterias, Inc., a Louisiana
corporation (the "Parent"), is offering to purchase all of the outstanding
shares of Common Stock, par value $.01 per share (the "Shares"), of Morrison
Restaurants Inc., a Georgia corporation (the "Company"), and the associated
preferred stock purchase rights (the "Rights") issued pursuant to that certain
Rights Agreement, dated as of March 2, 1996 (as amended, the "Rights
Agreement"), by and between the Company and SunTrust Bank, N.A., as rights
agent, at a purchase price of $5.00 per Share (and associated Right), net to the
seller in cash without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 29, 1998 (the "Offer
to Purchase") and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context requires
otherwise, all references to Shares shall be deemed to refer also to the
associated Rights, and all references to Rights shall be deemed to include all
benefits that may inure to the stockholders of the Company or to holders of the
Rights pursuant to the Rights Agreement. A valid tender of Shares will also
constitute a tender of the associated Rights.
<PAGE> 2
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MAY 27, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn pursuant to the Offer prior to the expiration of the
Offer such number of Shares which constitutes not less than 66 2/3% of the
Shares outstanding on the date of purchase and (ii) the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
The Offer is being made pursuant to a Plan and Agreement of Merger, dated as of
April 22, 1998 (the "Merger Agreement"), among the Parent, the Purchaser and the
Company. The Merger Agreement provides, among other things, for the making of
the Offer by the Purchaser, and further provides that, following the completion
of the Offer, upon the terms and subject to the conditions of the Merger
Agreement, and in accordance with the Georgia Business Corporation Code (the
"GBCC"), the Purchaser will be merged with and into the Company (the "Merger")
and each Share issued and outstanding immediately prior to the effective time of
the Merger (other than Shares owned by the Parent, the Purchaser or any other
subsidiary of the Parent, or held in the treasury of the Company, which shall
be canceled, and other than Shares, if any, held by stockholders who have
properly exercised and perfected dissenters' rights under the GBCC), will, by
virtue of the Merger and without any action on the part of the holders of the
Shares, be converted into the right to receive $5.00 in cash, payable to the
holder thereof, without interest, upon surrender of the certificate formerly
representing such Share, less any required withholding taxes. The Merger
Agreement is more fully described in Section 11 of the Offer to Purchase.
The Board of Directors of the Company has approved by unanimous vote the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, and determined that the terms of the Offer and the Merger are fair to,
and in the best interests of, the holders of the Shares and recommends that the
holders of the Shares accept the Offer and tender their Shares to the Purchaser
pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to IBJ
Schroder Bank & Trust Company (the "Depositary") of the Purchaser's acceptance
for payment of such Shares for payment pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting such payments
to stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price for Shares be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
<PAGE> 3
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) certificates representing Shares (the "Share Certificates") and, if
applicable, rights certificates, or timely confirmation of a book-entry transfer
of such Shares, and, if applicable, Rights into the Depositary's account at the
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of
Transmittal (or a facsimile thereof, properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in Section
2 of the Offer to Purchase) in connection with a book-entry transfer, and (iii)
any other documents required by the Letter of Transmittal.
As described in Section 1 of the Offer to Purchase, in the Merger Agreement, the
Purchaser and Parent have agreed with the Company not to extend, delay
acceptance for payment of, or the payment for, Shares, or to terminate, waive or
amend the Offer, except under certain circumstances or if certain conditions
have not been satisfied. In addition, as described in Section 1 of the Offer to
Purchase, in the Merger Agreement, the Purchaser and the Parent have agreed with
the Company that they will extend the Offer under certain conditions. Subject to
the applicable rules and regulations of the Securities and Exchange Commission
and the terms of the Merger Agreement described above, the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to time,
and regardless of whether or not any of the events set forth in Section 15 of
the Offer to Purchase shall have occurred, to (i) extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary and (ii) amend the Offer in any respect by giving oral or
written notice of such amendment to the Depositary. Any extension, delay,
termination, waiver or amendment will be followed as promptly as practicable by
public announcement to be made 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 properly withdrawn will
remain subject to the offer, subject to the rights of a tendering stockholder to
withdraw such stockholder's Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Wednesday, May 27, 1998, unless and until the Purchaser in its sole discretion
(but subject to the terms and conditions of the Merger Agreement), shall have
extended the period during which the Offer is open, in which event the
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable, except
that Shares and Rights tendered pursuant to the Offer may be withdrawn at any
time on or prior to the Expiration Date and, unless theretofore accepted for
payment by the Purchaser pursuant to the Offer, may be withdrawn at any time
after June 22, 1998. For a withdrawal to be effective, a written, telegraphic,
telex or facsimile transmission notice of withdrawal must be timely received by
<PAGE> 4
the Depositary at one of its addresses set forth on the back cover of the Offer
to Purchase. Any notice of withdrawal must specify the name of the person who
tendered such Shares or Rights to be withdrawn, the number of Shares or Rights
to be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares or Rights. If Share Certificates or, if
applicable, Rights Certificates to be withdrawn 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 the signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to
Purchase) unless such Shares or Rights have been tendered for the account of an
Eligible Institution. If Shares or Rights have been tendered pursuant to the
procedure for book-entry transfer as set forth in Section 3 of the Offer to
Purchase, any notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares or Rights, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in the second
sentence of this paragraph. A withdrawal of Shares shall also constitute a
withdrawal of the associated Rights. All questions as to the form and validity
(including time of receipt) of any notice of withdrawal will be determined by
the Purchaser, in its sole discretion, which determination will be final and
binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed by the Purchaser to record holders of Shares
and furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
The Offer to Purchase and the related Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the Dealer Manager or
to the Information Agent as set forth below. Requests for copies of the Offer
to Purchase and the related Letter of Transmittal and all other tender offer
materials may be directed to the Information Agent or the Dealer Manager, and
copies will be furnished promptly at the Purchaser's expense. The Purchaser will
not pay any fees or commissions to any broker or dealer or any other person
(other than the Dealer Manager and the Information Agent) for soliciting tenders
of Shares pursuant to the Offer.
<PAGE> 5
The Information Agent for the Offer is:
[MacKenzie Partners Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
Scott & Stringfellow, Inc.
909 East Main Street
Richmond, VA 23219
CALL TOLL-FREE (800) 404-8924
April 29, 1998
<PAGE> 1
EXHIBIT 11(a)(9)
PRESS RELEASE
Contacts: PICCADILLY CAFETERIAS, Inc. MORRISON RESTAURANTS INC.
J. Fred Johnson Craig D. Nelson
Chief Financial Officer Chief Financial Officer
(504) 293-9440 (770) 308-3700
PICCADILLY CAFETERIAS, INC. TO ACQUIRE MORRISON RESTAURANTS INC.
----------------
ACQUISITION WILL CREATE THE LEADING CAFETERIA COMPANY
IN THE SOUTHEASTERN AND MID-ATLANTIC REGIONS
BATON ROUGE, La. and ATLANTA, Ga. (April 23, 1998) - Piccadilly Cafeterias, Inc.
(NYSE:PIC) ("Piccadilly") and Morrison Restaurants Inc. (NYSE:MRN) ("Morrison")
today jointly announced the signing of a definitive merger agreement under which
Piccadilly will acquire all of the outstanding shares of Morrison. Pursuant to
the agreement, Piccadilly will pay $5.00 per share for each outstanding share of
Morrison common stock. Morrison currently has approximately 9.2 million shares
outstanding.
The transaction will be structured as a cash tender offer followed by a
cash merger to acquire any shares not previously tendered. As a result of the
transaction, Morrison will become a wholly owned subsidiary of Piccadilly. The
transaction has been unanimously approved by the Boards of Directors of each
company. Piccadilly expects to commence its cash tender offer on April 30, 1998.
The cash tender offer is subject to receipt by Piccadilly of at least 66-2/3% of
the shares of Morrison as well as customary regulatory approvals. It is expected
to be completed within 90 days.
"The acquisition of Morrison will establish Piccadilly as the leading
cafeteria company in the southeastern and mid-Atlantic regions," said Ronald A.
LaBorde, President and Chief Executive Officer of Piccadilly. "In addition to
broader market coverage, we believe the combination of our two organizations
will create significant opportunities for improved operating efficiencies. We
plan to immediately evaluate any underperforming Morrison units and deal with
each on a case-by-case basis. The remaining units will almost double the number
of units in operation and are expected to be accretive to Piccadilly's earnings
at their current level of operations."
LaBorde added, "We are arranging for a new $100 million credit facility
with a consortium of banks to finance this transaction and to replace our
existing facilities. The new facility should be in place in the near future."
Ronnie Tatum, Chief Executive Officer of Morrison, stated, "This merger
completes our previously announced evaluation of strategic alternatives. By
merging with another cafeteria company with the quality operating standards of
Piccadilly, we believe we are delivering the best possible values to our
shareholders, employees and customers."
Morrison currently operates 142 restaurants in 13 southeastern and
mid-Atlantic states. For the nine months ended March 28, 1998, Morrison reported
sales of $179.7 million and a net loss of $2.9 million, or
<PAGE> 2
$0.32 per diluted share. For the nine months ended March 31, 1998, Piccadilly
reported sales of $234.8 million and net income of $7.5 million, or $0.71 per
diluted share. On an annualized basis the combined companies are expected to
produce sales in excess of $500 million.
Piccadilly operates 131 cafeterias in 15 states, four Piccadilly
Express in Associated Grocer supermarkets, and seven Ralph & Kacoo's seafood
restaurants in three states. All units are Company-owned.
Forward-looking statements regarding management's present plans or
expectations for new unit openings and operating results may differ materially
from actual results. These plans and expectations involve risks and
uncertainties relative to certain factors including return expectation,
allocation of resources, changing economic or competitive conditions,
advertising effectiveness, the ability to achieve cost reductions, and the
ability to offset inflationary pressures through increases in selling prices,
among others, any of which may result in material differences.
<PAGE> 1
EXHIBIT 11(b)1
[HIBERNIA LOGO]
April 27, 1998
J. Fred Johnson
Executive Vice President,
Treasurer & Chief Financial Officer
Piccadilly Cafeterias, Inc.
3232 S. Sherwood Forest Blvd.
Baton Rouge, LA 70821-2467
RE: Commitment Letter for $100,000,000 Senior Credit Facility
Dear Fred:
You have advised us that Piccadilly Cafeterias, Inc. (the "Borrower") seeks
financing to refinance existing indebtedness, to finance the acquisition of
Morrison Restaurants, Inc. (the "Target"), for ongoing working capital
requirements and other general corporate purposes. Attached hereto is a Summary
of Terms and Conditions (the "Term Sheet") describing the general terms and
conditions for an aggregate $100 million senior credit facility (the "Credit
Facility"). Based upon and subject to the terms and conditions set forth
herein, in the Term Sheet and in the fee letter of even date (the "Fee
Letter"), Hibernia National Bank (the "Bank") is pleased to advise you of its
commitment to act as Agent for the Credit Facility and provide $100 million of
the aggregate principal amount of the Credit Facility.
The commitments of the Bank hereunder are based upon the financial and other
information regarding the Borrower and its subsidiaries previously provided to
the Bank. Accordingly, the commitments hereunder are subject to the condition,
among others, that (i) there shall not have occurred after the date of such
financial and other information any material adverse change in the business,
assets, liabilities (actual or contingent), operations or condition (financial
or otherwise) of the Borrower, the Target, or their subsidiaries taken as a
whole, (ii) the Bank continues to be satisfied with the business, assets,
liabilities (actual or contingent), operations and condition (financial or
otherwise) of the Borrower, the Target and their subsidiaries taken as a whole,
(iii) the information concerning the Borrower, the Target and their
subsidiaries shall not differ in any material respect from the information
previously provided to the Bank by the Borrower, (iv) the determination of the
Bank that, prior to and during the primary syndication of the Credit Facility,
there shall be no competing issuance of debt, securities or commercial bank
facilities of the Borrower or any of its subsidiaries being offered, placed or
arranged except with the written consent of the Bank and (v) the Bank shall
have completed, to their satisfaction, all legal due diligence of the Borrower,
the Target and their subsidiaries. Further, the commitments of the Bank are
subject to there not having occurred any material disruption or adverse change
in the financial, banking or capital markets that could, in the reasonable
judgement of the Bank, materially impair the syndication of the Facility.
You agree to actively assist the Bank (including after the closing of the
Credit Facility) in achieving a syndication of the Credit Facility that is
satisfactory to the Bank and you. Such syndication may be accomplished in by a
variety of means, including direct contact during the
<PAGE> 2
syndication between senior management and advisors of the Borrower and its
subsidiaries, and the proposed syndicate members. To assist the Bank in the
syndication efforts you hereby agree (i) to provide and cause your advisors to
provide the Bank and the other syndicate members upon request with all
information deemed reasonably necessary by the Bank to complete the
syndication, including but not limited to information and evaluations prepared
by you and any of your subsidiaries and their advisors, or on their behalf,
relating to the transactions contemplated hereby, (ii) to assist the Bank upon
its reasonable request in the preparation of an Information Memorandum to be
used in connection with the syndication of the Credit Facility and (iii) to
otherwise assist the Bank in its syndication efforts, including making officers
and advisors of the Borrower and its subsidiaries available from time to time
to attend and make presentations regarding the business and prospects of the
Borrower and its subsidiaries, as appropriate, at a meeting or meetings of
Lenders or prospective Lenders.
It is understood and agreed that the Bank, after consultation with you, will
manage and control all aspects of the syndication, including decisions as to
the selection of proposed Lenders and any titles offered to proposed Lenders,
when commitments will be accepted and the final allocations of the commitments
among the Lenders.
You agree to afford the Bank and its affiliates an opportunity to offer
proposals to provide, arrange, underwrite or administer (i) any interest rate
caps, currency swaps or other hedging transactions to be entered into by you or
any of your subsidiaries or affiliates, (ii) any cash management, funds
transfer, trade, corporate trust and securities services to be obtained by you
or any of your subsidiaries or affiliates and (iii) any private debt
instruments to be issued by you or any of your subsidiaries or affiliates.
By executing this letter agreement, you further agree to indemnify and hold
harmless the Bank, each other Lender and each director, officer, employee,
attorney an affiliate of the Bank and each other Lender (each such person or
entity referred to hereafter in this paragraph as an "Indemnified Person") from
any losses, claims, costs, damages, expenses or liabilities (or actions, suits
or proceedings, including any inquiry or investigation, with respect thereto)
to which any Indemnified Person may become subject, insofar as such losses,
claims, costs, damages, expenses or liabilities (or actions, suits, or
proceedings, including any inquiry or investigation, with respect thereto)
arise out of, in any way relate to, or result from, this letter, the Credit
Facility or the other transactions contemplated hereby and thereby and to
reimburse upon demand each Indemnified Person for any and all legal and other
expenses incurred in connection with investigating, preparing to defend or
defending any such loss, claim, cost, damage, expense or inquiry or
investigation, with respect thereto; provided, that you shall have no
obligation under this indemnity provision for liabilities resulting from gross
negligence or willful misconduct of any Indemnified Person. The foregoing
provisions of this paragraph shall be in addition to any right that an
Indemnified Person shall have at common law or otherwise. No Indemnified Person
shall be responsible or liable for consequential damages which may be alleged
as a result of this letter.
The provisions of the immediately preceding two paragraphs shall remain in full
force and effect regardless of whether definitive financing documentation shall
be executed and delivered and notwithstanding the termination of this letter
agreement or the commitment of the Bank hereunder.
You acknowledge and agree that the services or the Bank as Arranger will be on
an exclusive basis during the term of this letter and that, during such term,
no other bank or other financial institution
<PAGE> 3
will be engaged or otherwise consulted or contacted by you regarding any
proposed senior bank facility for the Borrower or its subsidiaries.
Except as required by applicable law, this letter and the contents hereof shall
not be disclosed by you to any third party without the prior consent of the
Bank, other than to your attorneys, financial advisors and accountants, in each
case in connection with your evaluation hereof and to the extent necessary in
your reasonable judgement. You acknowledge and agree that the Bank may share
with its respective affiliates any information relating to the Credit Facility,
the Borrower and its subsidiaries. You further acknowledge and agree to the
disclosure by the Bank of information relating to the Credit Facility to Gold
Sheets and other similar bank trade publications, with such information to
consist of deal terms and other information customarily found in such
publications.
This letter may be executed in counterparts which, taken together, shall
constitute an original. This letter, together with the Term Sheet and the Fee
Letter of even date herewith, embodies the entire agreement and understanding
between the Bank and the Borrower with respect to the specific matters set
forth above and supersedes all prior agreements and understandings relating to
the subject matter hereof. No party has been authorized by the Bank to make any
oral or written statements inconsistent with this letter.
THIS LETTER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF LOUISIANA.
This letter may not be assigned by the Borrower without the prior written
consent of the Bank.
If you are in agreement with the foregoing, please execute the enclosed copy of
this letter and the Fee Letter and pay the Acceptance Fee no later than the
close of business on April 29, 1998. This letter will become effective upon
your delivery to us of executed counterparts of this letter and the Fee Letter
and receipt by the Bank of the Acceptance Fee. This Commitment Letter shall
terminate if not so accepted by you prior to that time. Following acceptance
by you, this Commitment Letter shall expire at 5:00 p.m. on June 29, 1998,
unless the Facility is closed by such time.
Very truly yours,
/s/ TROY J. VILLAFARRA /s/ JANET OLSON RACK
- ---------------------------------- ------------------------------
Troy J. Villafarra Janet Olson Rack
Senior Vice President Senior Vice President
COMMITMENT ACCEPTED AND AGREED TO THIS 28th DAY OF APRIL, 1998;
PICCADILLY CAFETERIAS, INC.
By: /s/ RONALD A. LABORDE
Name: Ronald A. LaBorde
Title: President and Chief Executive Officer
<PAGE> 4
PICCADILLY CAFETERIAS, INC.
- --------------------------------------------------------------------------------
SUMMARY TERMS AND CONDITIONS
$100,000,000
SENIOR CREDIT FACILITY
BORROWER: Piccadilly Cafeterias, Inc. and its current and future
direct and indirect subsidiaries (the "Borrower").
AGENT: Hibernia National Bank ("Hibernia" or the "Agent")
CREDIT FACILITY: $100,000,000 Senior Revolving Credit Facility (the "Credit
Facility"). The Credit Facility will include a $10,000,000
sublimit for swing loans (to be provided by the Agent) and a
$5,000,000 sublimit for the issuance of letters of credit
("Letters of Credit"). Each Lender shall have a risk
participation in each Letter of Credit.
LENDERS: Hibernia and a group of financial institutions reasonably
acceptable to Hibernia and the Borrower. The Agent reserves
the right to allocate commitments among the Lenders at its
sole discretion.
USE OF PROCEEDS: (i) refinance all existing Senior Debt; (ii) finance the
acquisition of Morrison Restaurants, Inc.; (iii) capital
expenditures; (iv) working capital; (v) standby L/C's; and
(vi) general corporate purposes.
MATURITY: Three years from the closing date.
SECURITY: Unsecured with negative pledge on all unencumbered assets
of the Borrower.
REPAYMENT: Interest only payable quarterly in arrears for Base Rate
Loans, and at the end of the applicable Interest Period for
Eurodollar Rate Loans. If such Interest Period is longer
than 3 months, then every three months during such Interest
Period for Eurodollar Rate Loans. Principal shall be repaid
in full on or prior to Maturity.
<PAGE> 5
PICCADILLY CAFETERIAS, INC. CONFIDENTIAL
- --------------------------------------------------------------------------------
BORROWING
OPTIONS: Borrowings under the Credit Facility shall be at the New York
Prime Rate ("Base Rate Loan") plus the Applicable Margin or the
Eurodollar Rate ("Eurodollar Rate Loan") plus the Applicable
Margin. Eurodollar Rates will be quoted for 1,2,3 and 6 months
("Interest Period"), except for swing loans, which will be based
on Overnight Eurodollar Rates. Base Rate Loans will require one
business days advance notice. Eurodollar Rate Loans (except for
swing loans) will require three business days advance notice.
All interest on Base Rate Loans, the Commitment Fee and other
fee calculations shall be based on a 365/366-day year and actual
days elapsed. All interest on Eurodollar Rate Loans shall be
based on a 360-day year and actual days elapsed.
APPLICABLE
MARGIN: The Applicable Margin will be tied to the ratio of consolidated
Total Funded Debt to rolling four quarter EBITDA, measured
quarterly, as detailed in the attached pricing grid.
DEFAULT RATE: 2.00% above the applicable Base Rate.
COMMITMENT
FEE: A per annum fee on the unused portion of the Credit Facility, as
detailed in the attached pricing grid, payable quarterly in
arrears.
L/C ISSUING
BANK: Hibernia
LETTER OF
CREDIT FEE: Fees for financial L/Cs issued under the Credit Facility shall
be equal to the Applicable Eurodollar Applicable Margin for
borrowing under the Credit Facility, payable quarterly in
arrears. Fees for Performance L/Cs shall be equal to 50% of the
Eurodollar Applicable Margin, payable quarterly in arrears. In
addition, the borrower will pay the L/C issuing Bank a fronting
fee equal to 1/8% per annum on the face amount of each L/C,
payable quarterly in arrears, plus all customary issuance and
administrative fees of the L/C Issuing Bank.
- --------------------------------------------------------------------------------
Page 2 of 6 HIBERNIA NATIONAL BANK
<PAGE> 6
PICCADILLY CAFETERIAS, INC. CONFIDENTIAL
VOLUNTARY
COMMITMENT
REDUCTION: The Borrower, may upon at least five business days notice,
terminate or cancel, in whole or in part, the unused portion of
the Credit Facility; provided that each partial reduction shall
be in an amount of $1,000,000 or an integral multiple of $500,000
in excess thereof.
REPRESENTATIONS
AND
WARRANTIES: Usual and customary for credit facilities of this size, type and
purpose.
FINANCIAL
COVENANTS: Financial covenants to include: (i) maximum Total Funded Debt to
EBITDA; (ii) Maximum Total Funded Debt to Capital; (iii) minimum
Fixed Charge Coverage. Covenant levels to be determined.
OTHER
COVENANTS: Other affirmative and negative covenants to include without
limitation:
(i) Usual and customary financial reporting requirements,
including without limitation unaudited quarterly
consolidated financial statements and compliance
certificates (in form and substance acceptable to Agent),
annual audited financial statements and compliance
certificates; all SEC filings; annual budgets,
projections, business plan, and other financial
information as requested by the Agent from time to time;
(ii) Maintenance of properties and insurance, payment of taxes,
compliance with laws, contracts, licenses and permits;
ERISA covenants;
(iii) Limitation and restriction on: indebtedness, L/Cs; liens;
investments and advances; capital expenditures; asset
sales; mergers and acquisitions; dividends and
distributions and stock repurchases/redemptions;
transactions with affiliates;
(iv) Prohibition on the granting of negative pledges to other
creditors on any of the Borrower's assets;
Page 3 of 6 HIBERNIA NATIONAL BANK
<PAGE> 7
PICCADILLY CAFETERIAS, INC. CONFIDENTIAL
- --------------------------------------------------------------------------------
EVENTS OF
DEFAULT: Usual and customary for transactions of this type including
without limitation failure to pay principal, interest or
fees on the Credit Facility when due; failure to comply with
covenants; inaccurate or false representations and
warranties; insolvency; bankruptcy; cross defaults;
judgement defaults; change of control; change of management;
laws and regulations; and ERISA.
CONDITIONS
PRECEDENT: Usual and customary conditions precedent for transactions of
this type, including without limitation: absence of Default;
all necessary consents and approvals to the financing shall
have been obtained; all required permits and licenses are in
full force and effect; preparation, execution and delivery
of definitive documentation satisfactory to the Agent;
accuracy of representations and warranties; opinion of
Borrower's counsel in form and substance acceptable to
Agent; no material adverse change in the business,
prospects, and financial affairs of the Borrower; and no
material adverse changes in governmental regulation or
policy affecting the Lenders involved in this transaction or
the Borrower.
MAJORITY
BANKS: 66 2/3%
ASSIGNMENTS AND
PARTICIPATIONS: Lenders will be permitted to grant participations or
assignments of their loans and commitments. Any Lender will
be permitted to assign a portion of the Credit Facility to
another lending institution in minimum amounts of $5
million, subject to consent of the Borrower and Agent,
which consent shall not be unreasonably withheld. The Agent
shall receive a processing and recordation fee of $3,500
from each assignee with each assignment.
INDEMNIFICATION: The Borrower agrees to indemnify and hold the Agent, the
Lenders and their respective shareholders, directors,
officers, agents, subsidiaries, and affiliates harmless
from and against any and all damages, losses, settlement
payments, obligations, liabilities, claims, actions or
causes of action, and reasonable costs and expenses
incurred, suffered, sustained, or required to be paid by an
indemnified party by reason of or resulting from the gross
negligence or willful misconduct of the indemnified party.
In all such litigation, or the preparation therefor, the
- --------------------------------------------------------------------------------
Page 4 of 6 HIBERNIA NATIONAL BANK
<PAGE> 8
PICCADILLY CAFETERIAS, INC. CONFIDENTIAL
- --------------------------------------------------------------------------------
Agent and the Lenders shall be entitled to select their own
counsel and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel.
EXPENSES: Legal fees and other out of pocket expenses of the Agent in
connection with this transaction will be for the account of
the Borrower, whether or not the Credit Facility closes.
COST & YIELD
PROTECTION: Standard yield protection and indemnification, including
capital adequacy requirements, will be incorporated to
satisfactorily compensate the Lenders in the event that any
existing or future law, requirement, guideline, or request
of relevant authorities shall increase costs, reduce
payments or earnings, or increase capital requirements.
LAW: State of Louisiana
LENDER COUNSEL:
- --------------------------------------------------------------------------------
Page 5 of 6 HIBERNIA NATIONAL BANK
<PAGE> 9
PICCADILLY CAFETERIAS, INC. CONFIDENTIAL
- --------------------------------------------------------------------------------
PRICING GRID
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
EURODOLLAR BASE RATE APPLICABLE
TOTAL FUNDED APPLICABLE APPLICABLE COMMITMENT
DEBT/EBITDA MARGIN MARGIN FEE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
< 0.75x 75.0 bps 0.0 bps 25.0 bps
>= 0.75x < 1.00x 100.0 bps 0.0 bps 25.0 bps
>= 1.00x < 1.50x 125.0 bps 0.0 bps 37.5 bps
>= 1.50x < 2.00x 150.0 bps 0.0 bps 37.5 bps
>= 2.00x 175.0 bps 0.0 bps 37.5 bps
- ---------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Page 6 of 6 HIBERNIA NATIONAL BANK
<PAGE> 1
EXHIBIT 11(c)(1)
PLAN AND AGREEMENT OF MERGER
BY AND AMONG
PICCADILLY CAFETERIAS, INC.,
PICCADILLY ACQUISITION CORPORATION
AND
MORRISON RESTAURANTS INC.
APRIL 22, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1 THE TENDER OFFER........................................................................................1
1.1 The Offer.......................................................................................1
1.2 Target Action...................................................................................2
1.3 Shareholder Lists...............................................................................3
1.4 Funding of Tender Offer.........................................................................3
1.5 Directors.......................................................................................3
SECTION 2 THE MERGER..............................................................................................4
2.1 Merger..........................................................................................4
2.2 Shareholders Meeting of Target..................................................................5
2.3 Consummation of the Merger......................................................................5
2.4 Dissenters' Rights..............................................................................6
2.5 Payment for Shares..............................................................................6
2.6 Closing of Target's Transfer Books..............................................................7
2.7 Corporate Acts of Subsidiary....................................................................7
SECTION 3 REPRESENTATIONS AND WARRANTIES OF TARGET................................................................7
3.1 Organization and Qualification..................................................................8
3.2 Target Capital Stock............................................................................8
3.3 Subsidiaries and Affiliated Partnerships........................................................8
3.4 Power and Authority.............................................................................8
3.5 Non-Contravention; Approvals and Consents.......................................................9
3.6 Target Public Information.......................................................................9
3.7 Legal Proceedings..............................................................................10
3.8 Contracts, Etc.................................................................................10
3.9 Subsequent Events..............................................................................11
3.10 Taxes..........................................................................................12
3.11 Commissions and Fees...........................................................................14
3.12 ERISA and Related Matters......................................................................14
3.13 Employment Matters.............................................................................16
3.14 Environmental Matters..........................................................................17
3.15 Compliance with Laws in General................................................................18
3.16 Licenses, Accreditation and Regulatory Approvals...............................................19
3.17 Real Property..................................................................................19
3.18 Vote Required..................................................................................20
3.19 Opinion of Financial Advisor...................................................................20
3.20 Takeover Statutes..............................................................................20
3.21 Rights Agreement...............................................................................21
3.22 No Untrue Representations; Information Supplied................................................21
SECTION 4 REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY AND ACQUIRER..............................................21
4.1 Organization, Existence and Capital Stock......................................................21
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
4.2 Power and Authority............................................................................22
SECTION 5 REPRESENTATIONS AND WARRANTIES OF ACQUIRER.............................................................22
5.1 Organization, Existence and Good Standing......................................................22
5.2 Power and Authority............................................................................22
5.3 Subsidiary Common Stock........................................................................23
5.4 Solvency.......................................................................................23
5.5 Financing......................................................................................23
5.6 No Violations..................................................................................23
5.7 No Untrue Representation; Information Supplied.................................................23
5.8 Commencement of Tender.........................................................................24
SECTION 6 ACCESS TO INFORMATION AND DOCUMENTS....................................................................24
6.1 Access to Information..........................................................................24
6.2 Return of Records..............................................................................24
6.3 Effect of Access...............................................................................25
SECTION 7 COVENANTS..............................................................................................25
7.1 Preservation of Business.......................................................................25
7.2 Material Transactions..........................................................................25
7.3 Meeting of Target Shareholders.................................................................26
7.4 Exemption from State Takeover Laws.............................................................27
7.5 HSR Act Compliance.............................................................................27
7.6 Public Disclosures.............................................................................27
7.7 Resignation of Target Directors................................................................27
7.8 Notice of Subsequent Events....................................................................27
7.9 No Solicitation................................................................................28
7.10 Other Actions..................................................................................29
7.11 Cooperation....................................................................................29
7.12 Target Employees...............................................................................30
7.13 Indemnification................................................................................30
7.14 Termination of Plans...........................................................................32
SECTION 8 TERMINATION, AMENDMENT AND WAIVER......................................................................32
8.1 Termination....................................................................................32
8.2 Effect of Termination..........................................................................33
8.3 Amendment......................................................................................34
8.4 Extension; Waiver..............................................................................34
8.5 Procedure for Termination, Amendment, Extension or Waiver......................................34
8.6 Expenses; Break-up Fees........................................................................34
SECTION 9 CONDITIONS TO CLOSING..................................................................................36
9.1 Mutual Conditions..............................................................................36
9.2 Conditions to Obligations of Acquirer and Subsidiary...........................................36
9.3 Conditions to Obligations of Target............................................................37
SECTION 10 MISCELLANEOUS.........................................................................................38
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
10.1 Nonsurvival of Representations and Warranties..................................................38
10.2 Notices........................................................................................38
10.3 Further Assurances.............................................................................39
10.4 Governing Law..................................................................................39
10.5 Definitions....................................................................................39
10.6 Captions.......................................................................................40
10.7 Integration of Exhibits........................................................................40
10.8 Entire Agreement...............................................................................40
10.9 Counterparts...................................................................................40
10.10 Binding Effect.................................................................................40
10.11 No Rule of Construction........................................................................40
</TABLE>
iii
<PAGE> 5
PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER (the "Plan of Merger"), made and entered
into as of the 22nd day of April, 1998, by and among PICCADILLY CAFETERIAS,
INC., a Louisiana corporation ("Acquirer"), PICCADILLY ACQUISITION CORPORATION,
a Georgia corporation (the "Subsidiary"), and MORRISON RESTAURANTS INC., a
Georgia corporation ("Target") (Subsidiary and Target being sometimes
collectively referred to herein as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Acquirer, Subsidiary and Target
each have approved the acquisition of Target by Subsidiary and, in furtherance
of the acquisition, Subsidiary proposes to make a tender offer for all
outstanding shares of Common Stock, par value $.01 per share, including the
associated rights to purchase shares of Series A Junior Participated Preferred
Stock, $.01 par value per share of Target pursuant to Target's Rights Plan (the
"Shares" or "Target Common Stock"), and the Board of Directors of Target has
approved the Offer and recommends that it be accepted by the shareholders of
Target; and
WHEREAS, each of Acquirer, Subsidiary and Target desires to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein, the parties hereto do hereby agree as
follows:
SECTION 1
THE TENDER OFFER
1.1 The Offer.
Provided that none of the events set forth in Annex A hereto shall have
occurred or be existing, Subsidiary, as promptly as practicable, but in any
event within five business days of the public announcement of this Plan of
Merger, shall commence a tender offer (the "Offer") for all outstanding Shares
at a price of $5.00 per Share, net to the seller in cash. Assuming the prior
satisfaction or waiver of the conditions to the Offer set forth in Annex A
hereto, Subsidiary will accept for payment all Shares validly tendered pursuant
to the Offer, and not withdrawn, as soon as legally permissible and shall pay
for all such Shares as soon as practicable thereafter. The Offer initially shall
expire on the twentieth business day after its commencement; provided, however,
that Subsidiary may, without the consent of Target, (i) extend the Offer (on one
or more occasions) beyond the scheduled expiration date if at any such date any
of the conditions to Subsidiary's obligation to purchase Shares shall not be
satisfied or waived, until such time as such conditions are satisfied or waived,
or (ii) extend the Offer to the extent required by any rule or regulation of the
Securities and Exchange Commission (the "Commission"); provided further
<PAGE> 6
that, notwithstanding anything in the foregoing proviso to the contrary,
Subsidiary may not, without Target's prior written consent, (A) extend the
expiration date of the Offer if the failure to meet any condition to the Offer
was directly or indirectly caused by an act or omission of Acquirer or
Subsidiary or (B) effect any individual extension under clause (i) in excess of
the amount of time reasonably believed by Acquirer to be necessary to satisfy
such condition, which shall in no event exceed 10 business days; provided
further that if Subsidiary does not consummate the Offer on the initial
expiration date, or any extension thereof, due to the failure of one or more
conditions in any of paragraphs (a), (b), (c) or (e) of Annex A to be satisfied,
Acquirer shall cause Subsidiary to, and Subsidiary shall, unless Target shall
have materially breached this Plan of Merger and failed to cure such breach
within 15 days of being notified thereof in writing, extend the Offer one or
more times until the earlier of (i) 11:59 p.m. New York City time on the 60th
calendar day after the date of this Plan of Merger or (ii) 2 business days after
such time as such condition or conditions are satisfied or waived; provided
further that Subsidiary shall not be obligated to extend the Offer pursuant to
the foregoing proviso if the condition that has not been satisfied is not
reasonably capable of being cured or satisfied at or prior to the 60th calendar
day after the date of this Plan of Merger. Without the prior written consent of
Target, Subsidiary will not decrease the price per Share, decrease the number of
Shares being sought in the Offer, change the form of consideration payable in
the Offer (other than by adding consideration), add additional conditions to the
Offer, or, subject to the rights to extend the Offer as set forth above, make
any other change in the terms of the Offer which is adverse to the holders of
Shares. It is agreed that the Offer will be subject only to the conditions set
forth in Annex A hereto, which are for the benefit of Subsidiary and may be
asserted or waived by Subsidiary in whole or in part at any time and from time
to time, in its sole discretion; provided, however, that Subsidiary may not
waive the Minimum Condition (as defined in Annex A hereto) so as to acquire less
than a majority of the outstanding Shares without the prior written consent of
Target. As soon as practicable on the date of commencement of the Offer,
Acquirer and Subsidiary shall file with the Commission a Tender Offer Statement
on Schedule 14D-1 with respect to the Offer (the "Schedule 14D-1"), which will
contain the offer to purchase and form of the related letter of transmittal.
Acquirer and Subsidiary shall give Target and its counsel the opportunity to
review the Schedule 14D-1 and any amendments or supplements thereto prior to
their being filed with the Commission. Subsidiary may, at any time, transfer or
assign to one or more corporations directly or indirectly wholly owned by
Acquirer the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment shall not relieve
Subsidiary of its obligations under the Offer or prejudice the rights of
tendering shareholders to receive payment for Shares properly tendered and
accepted for payment.
1.2 Target Action.
Target hereby consents to the Offer. Promptly after the commencement of
the Offer, Target shall file with the Commission and mail to the holders of
Shares a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"). The Schedule 14D-9 will set forth, and Target hereby represents, that
the Board of Directors of Target has (a) determined that the Offer and the
Merger (as defined in Section 2.1) considered as a whole are fair to and in the
best interests of Target and its shareholders, and (b) resolved to recommend
acceptance of the Offer and approval and adoption of the Merger and this Plan of
Merger by the holders of Shares. Target shall give the Acquirer and its counsel
an opportunity to
2
<PAGE> 7
review the Schedule 14D-9 and any amendments or supplements thereto prior to its
being filed with the Commission. Target hereby consents to the inclusion in the
Tender Offer Material (as defined in Rule 14d-2(b)(5) adopted pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of the
recommendation referred to in this Section 1.2.
1.3 Shareholder Lists.
Target shall promptly furnish Subsidiary with a list of the holders of
Shares and mailing labels containing the names and addresses of all record
holders of Shares and lists of securities positions of Shares held in stock
depositors, each as of a recent date, and shall promptly furnish Subsidiary with
such additional information, including updated lists of shareholders of Target,
mailing labels and lists of securities positions, and such other assistance, as
Subsidiary or its agents may reasonably request in connection with communicating
the Offer to the record and beneficial holders of the Shares.
1.4 Funding of Tender Offer.
Acquirer shall make available to Subsidiary on a timely basis funds as
necessary to pay for the Shares that Subsidiary becomes obligated to accept for
payment and pay for pursuant to the Offer.
1.5 Directors.
(a) Promptly upon acceptance for payment by Subsidiary of Shares
tendered pursuant to the Offer, Subsidiary shall be entitled to designate such
number of directors, rounded up to the next whole number, as will give
Subsidiary representation on the Board equal to at least that number of
directors equal to the product of (i) the total number of directors on the Board
and (ii) the percentage that the number of Shares so accepted for payment bears
to the number of Shares outstanding, and Target shall, at such time, at the
election of Subsidiary either increase the size of the Board or use its best
efforts to cause the appropriate number of directors who are members of the
Board as of the date hereof to resign and Subsidiary's designees to be appointed
or elected to fill the vacancies thereby created in conformity with the Georgia
Business Corporation Code (the "GBCC"), Target's amended and restated articles
of incorporation and bylaws and other applicable law. In addition, until the
Effective Time (defined in Section 2.4), there shall be at least three directors
on the Board who are directors on the date hereof and who are not designees nor
officers, directors, full-time employees or affiliates of Acquirer or Subsidiary
nor full-time employees of Target (the "Independent Directors"); provided,
however, that if the number of Independent Directors shall be reduced below
three for any reason, the Board shall, subject to the approval of the remaining
Independent Directors, if any, designate a person or persons to fill the vacancy
or vacancies who are directors on the date hereof and not an officer, director,
full-time employee or affiliate of Acquirer or Subsidiary nor a full-time
employee of Target, and such persons shall be deemed to be Independent Directors
for purposes of this Plan of Merger.
(b) Target's obligations to appoint Subsidiary's designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. Acquirer and Subsidiary shall supply and shall be solely responsible
for all information with respect to
3
<PAGE> 8
themselves, their officers, directors and affiliates, and Subsidiary's designees
required by Section 14(f) and Rule 14f-1. Target shall promptly take all actions
required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.5, and shall include in the Schedule 14D-9 such
information with respect to Target and its officers and directors as is required
under Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Subsidiary's designees
pursuant to this Section 1.5 and until the Effective Time, any amendment of this
Plan of Merger or the amended and restated articles of incorporation or bylaws
of Target, any termination of this Plan of Merger by Target, any extension by
Target of the time for the performance of any of the obligations or other acts
of Acquirer or Subsidiary, any waiver of any of Target's rights hereunder, or
any transaction between Acquirer (or any affiliate or associate thereof) and
Target shall require the concurrence of a majority of the Independent Directors.
The Independent Directors shall have the authority to retain such counsel and
other advisors at the expense of Target as are reasonably appropriate to assist
them in the exercise of their duties in connection with this Plan of Merger. In
addition, the Independent Directors shall have the authority to institute any
action on behalf of Target to enforce performance of this Plan of Merger.
SECTION 2
THE MERGER
2.1 Merger.
(a) Merger. Upon the terms and subject to the conditions of this
Plan of Merger, Subsidiary will be merged with and into Target (the "Merger"),
in accordance with Section 14-2-1101 of the GBCC, as soon as practicable
following the expiration or termination of the Offer. Target shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation") and shall continue its existence under the laws of the
State of Georgia. The separate existence of Subsidiary shall cease. The name of
the Surviving Corporation shall be "Morrison Restaurants Inc."
(b) Effect of Merger. The amended and restated articles of
incorporation of Target in effect upon the consummation of the Merger, with such
amendments as requested by Subsidiary and approved by the Board of Directors and
shareholders of Target, shall be the articles of incorporation of the Surviving
Corporation, and the bylaws of Subsidiary in effect upon consummation of the
Merger shall be the bylaws of the Surviving Corporation. The directors of
Subsidiary upon consummation of the Merger shall be the directors of the
Surviving Corporation, and the officers of Subsidiary shall be the officers of
the Surviving Corporation, in each case until their respective successors are
duly elected and qualified. The Merger shall have the effects set forth in
Section 14-2-1106 of the GBCC.
(c) Conversion of Shares. At the Effective Time (as defined in
Section 2.3), by virtue of the Merger and without any action on the part of any
holder of any Shares, (i) each Share issued and outstanding immediately prior to
the Effective Time (other than Shares to be cancelled pursuant to Section 2.1(c)
(ii) and any Dissenting Shares (as defined in Section 2.4)) shall be converted
into the right to receive in cash an amount per Share equal to the price paid
per
4
<PAGE> 9
Share pursuant to the Offer (the "Merger Consideration"), without interest;
and (ii) each Share owned by Acquirer, Subsidiary or any other direct or
indirect subsidiary of Acquirer or held in the treasury of Target, immediately
prior to the Effective Time, shall be cancelled and extinguished, and no payment
will be made with respect to those Shares (it being understood that the Shares
held in Target's Deferred Compensation Plan and the Shares held in Target's
Salary Deferral (401(k)) Plan, whether or not allocated, shall be deemed as
issued and outstanding and not held in the treasury of Target for purposes of
this Plan of Merger); and (iii) each share of common stock, par value $.01 per
share of Subsidiary then issued and outstanding shall be converted into one
share of common stock of the Surviving Corporation, which shares thereafter will
constitute all of the issued and outstanding shares of capital stock of the
Surviving Corporation.
(d) Stock Options. As soon as practicable, but in any event no
later than the date payment is made for Shares tendered pursuant to the Offer,
each holder of a stock option granted under the plans or agreements set forth in
Exhibit 2.1(d) of the Disclosure Schedule (as defined herein) (collectively, the
"Target Incentive Plans"), whether or not then exercisable, which is outstanding
as of the date hereof and which has not been exercised prior to the acquisition
of Shares pursuant to the Offer (each option held by such a person is referred
to as a "Target Option") shall be entitled to receive, in cancellation and
settlement of the Target Option, an amount equal to the product of (x) the
number of Shares provided in the Target Option and (y) the excess, if any, of
the Merger Consideration over the exercise price per Share provided for in the
Target Option (the "Option Consideration"). As soon as practicable following
acceptance of the Offer by the Subsidiary, the Subsidiary shall tender the
Option Consideration in cash to each holder of a Target Option to whom Option
Consideration is payable. The Target shall take such other actions available
under the Target Incentive Plans to effect the cancellation of all Target
Options. At the request of Acquirer, Target agrees to use commercially
reasonable efforts to obtain consents from the holders of such Target Options to
their cancellation to the extent Acquirer determines such consents to be
advisable.
2.2 Shareholders Meeting of Target.
Unless Subsidiary makes the election referred to in Section 2.3, Target
will take all action necessary in accordance with applicable law and its Amended
and Restated Articles of Incorporation and Bylaws to convene a special meeting
of its shareholders promptly after consummation of the Offer to consider and
vote upon the approval of the Merger and adoption of this Plan of Merger.
Subject to their fiduciary duties under applicable law (after being advised by
counsel), the Board of Directors of Target will recommend that shareholders of
Target vote in favor of the approval of the Merger and the adoption of this Plan
of Merger at any such meeting. At any such meeting, all of the Shares then owned
by Acquirer, Subsidiary or any other direct or indirect subsidiary of Acquirer
will be voted in favor of the approval of the Merger and adoption of this Plan
of Merger.
2.3 Consummation of the Merger.
Upon the terms and subject to the conditions of this Plan of Merger as
soon as practicable after consummation of the Offer, and, if the vote of the
shareholders of Target is required pursuant to Section 2.2 after the vote of
such shareholders in favor of the Merger and this Plan of
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Merger has been obtained, Target (or Subsidiary, if appropriate) shall execute
in the manner required by the GBCC and file with the Secretary of State of the
State of Georgia a certificate of merger, as required by the GBCC, and the
parties shall take all such other and further actions as may be required by law
to make the Merger effective. Prior to the filing referred to in this Section
2.3, a closing will be held at the offices of Powell, Goldstein, Frazer & Murphy
LLP, Atlanta, Georgia (or such other place as the parties may agree) for the
purpose of confirming all of the foregoing. The time the Merger becomes
effective in accordance with applicable law is referred to as the "Effective
Time."
2.4 Dissenters' Rights.
Notwithstanding any provision of this Plan of Merger to the contrary,
any Shares outstanding immediately prior to the Effective Time held by a holder
who has demanded and perfected the right, if any, for appraisal of those Shares
in accordance with the provisions of Article 13 of the GBCC and as of the
Effective Time has not withdrawn or lost such right to such appraisal
("Dissenting Shares") shall not be converted into or represent a right to
receive a cash payment pursuant to Section 2.1(c)(i), but the holder shall only
be entitled to such rights as are granted by the GBCC. If a holder of Shares who
demands appraisal of those Shares under the GBCC shall effectively withdraw or
lose (through failure to perfect or otherwise) the right to appraisal, then, as
of the Effective Time or the occurrence of such event, whichever last occurs,
those Shares shall be converted into and represent only the right to receive the
Merger Consideration as provided in Section 2.1(c)(i), without interest, upon
the surrender of the certificate or certificates representing those Shares.
Target shall give Acquirer (i) prompt notice of any written demands for
appraisal of any Shares, attempted withdrawals of such demands, and any other
instruments served pursuant to the GBCC received by Target relating to
shareholders' rights of appraisal and (ii) the opportunity to participate in all
negotiations and proceedings with respect to demands for appraisal under the
GBCC. Target shall not, except with the prior written consent of Acquirer,
voluntarily make any payment with respect to any such demands for appraisals of
capital stock of Target, offer to settle or settle any such demands or approve
any withdrawal of any such demands.
2.5 Payment for Shares.
Prior to the Effective Time, Subsidiary shall designate a commercial
bank or trust company organized under the laws of the United States or any state
of the United States with capital, surplus and undivided profits of at least
$100,000,000 to act as Paying Agent with respect to the Merger (the "Paying
Agent"). Each holder (other than Acquirer, Subsidiary or any subsidiary of
Acquirer) of a certificate or certificates (the "Certificates") which
immediately prior to the Effective Time represented outstanding Shares will be
entitled to receive, upon surrender to the Paying Agent of the Certificates for
cancellation, cash in an amount equal to the product of the number of Shares
previously represented by the Certificates multiplied by the Merger
Consideration, subject to any required withholding of taxes. When and as needed,
Subsidiary shall make available to the Paying Agent sufficient funds to make all
payments pursuant to the preceding sentence. No interest shall accrue or be paid
on the cash payable upon the surrender of the Certificates. If payment is to be
made to a person other than the person in whose name the Certificates
surrendered are registered, it shall be a condition of payment that the
Certificates so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the
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person requesting the payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
Certificates surrendered or establish to the satisfaction of the Surviving
Corporation that the tax has been paid or is not applicable. Following the
Effective Time, until surrendered to the Paying Agent in accordance with the
provisions of this Section 2.5, each Certificate (other than Certificates
representing Dissenting Shares and Shares owned by Acquirer or any subsidiary of
Acquirer) shall represent for all purposes only the right to receive upon
surrender the Merger Consideration multiplied by the number of Shares evidenced
by the Certificate, without any interest, subject to any required withholding of
taxes. Any funds delivered or made available to the Paying Agent pursuant to
this Section 2.5 and not exchanged for Certificates within six months after the
Effective Time will be returned by the Paying Agent to the Surviving
Corporation, which thereafter will act as Paying Agent, subject to the rights of
holders of unsurrendered Certificates under this Article 2, and any former
shareholders of Target who have not previously exchanged their Certificates will
thereafter be entitled to look only to the Surviving Corporation for payment of
their claims for the consideration set forth in Section 2.1(c)(i), without any
interest, but will have no greater rights against the Surviving Corporation than
may be accorded to general creditors thereof under applicable law. As soon as
practicable after the Effective Time, the Surviving Corporation will cause the
Paying Agent to mail to each record holder of Certificates a form of letter of
transmittal (which will specify that delivery will be effected, and risk of loss
and title of 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.
2.6 Closing of Target's Transfer Books.
At the Effective Time, the stock transfer books of Target shall be
closed and no transfer of Shares shall thereafter be made. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged for cash as provided in Section 2.5, subject to
applicable law in the case of Dissenting Shares.
2.7 Corporate Acts of Subsidiary.
All corporate acts, plans, policies, approvals and authorizations of
Subsidiary, its sole shareholder, its Board of Directors, committees elected or
appointed by the Board of Directors, and all officers and agents, valid
immediately prior to the Effective Time, shall be those of the Surviving
Corporation and shall be as effective and binding thereon as they were with
respect to Subsidiary. The employees and agents of Subsidiary shall become the
employees and agents of the Surviving Corporation and continue to be entitled to
the same rights and benefits which they enjoyed as employees and agents of
Subsidiary.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF TARGET
Target hereby represents and warrants to Acquirer and Subsidiary as
follows:
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3.1 Organization and Qualification.
Target is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Georgia and has all requisite corporate
power and authority to own, lease and operate its property and carry on its
business as now being conducted. Target is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except to the extent that any
failure to so qualify or be in good standing would not have a Material Adverse
Effect (as defined in Section 10.5 hereof) on Target. Target has made available
to Acquirer correct and complete copies on the amended and restated articles of
incorporation and bylaws of Target.
3.2 Target Capital Stock.
Target's authorized capital consists of 100,000,000 shares of Target
Common Stock, par value $.01 per share, of which 9,236,440 Shares were issued
and outstanding as of April 20, 1998, including 319,176 Shares in the Salary
Deferral Plan (70,067 of which are unallocated) and 46,914 Shares issued under
the Deferred Compensation Plan, and 200,000 shares of Preferred Stock, of which
50,000 shares are designated as Series A Junior Participating Preferred Stock;
no shares of Preferred Stock are issued or outstanding as of the date hereof.
All of the issued and outstanding shares of Target Common Stock are duly
authorized and validly issued, fully paid and nonassessable. Except as set forth
on Exhibit 3.2 to the Disclosure Schedule delivered by Target to Acquirer
simultaneously with the execution and delivery hereof (the "Disclosure
Schedule"), there are no options, warrants, or similar rights granted by Target
or any other agreements to which Target is a party providing for the issuance or
sale by it of any additional securities which would remain in effect after the
Effective Time. There is no liability for dividends declared or accumulated but
unpaid with respect to any of the shares of Target Common Stock. Except for the
Shares (including the associated Rights), there are no outstanding bonds,
debentures, notes or other indebtedness or other securities of Target having the
right to vote (or convertible into or exchangeable for, securities having the
right to vote) on any matters on which shareholders of Target may vote. There
are no agreements or arrangements to which Target is a party pursuant to which
Target is or could be required to register Shares or other securities under the
Securities Act of 1933, as amended (the "Securities Act"). Target represents
that the information set forth on Exhibit 3.2 to the Disclosure Schedule is true
and correct in all material respects.
3.3 Subsidiaries and Affiliated Partnerships.
Target has no subsidiaries, and Target does not own stock in and does
not control, directly or indirectly, any other corporation, association or
business organization.
3.4 Power and Authority.
Subject to the satisfaction of the conditions precedent set forth
herein, Target has the corporate power to execute, deliver and perform the Plan
of Merger and all agreements and other documents executed and delivered or to be
executed and delivered by it pursuant to the Plan of Merger, and, subject to the
satisfaction of the conditions precedent set forth herein, has taken all
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action required by its Amended and Restated Articles of Incorporation, Bylaws or
otherwise, to authorize the execution, delivery and performance of the Plan of
Merger and such related documents. The execution and delivery of this Plan of
Merger has been approved by the Board of Directors of Target. This Plan of
Merger has been duly executed and delivered by Target and, assuming this Plan of
Merger constitutes a valid and binding obligation of Acquirer and Subsidiary, as
the case may be, constitutes a valid and binding obligation of Target,
enforceable against Target in accordance with its terms.
3.5 Non-Contravention; Approvals and Consents.
(a) Except as disclosed in Exhibit 3.5 of the Disclosure Schedule,
the execution and delivery of this Plan of Merger by Target does not, and the
performance by Target of its obligations hereunder and the consummation of the
transactions contemplated hereby will not, conflict with, result in a violation
or breach of, constitute (with or without notice or lapse of time or both) a
default under, permit the termination of any provision of, or result in the
termination of or the acceleration of the maturity or performance of, or result
in the creation or imposition of any lien upon any of the assets or properties
of Target under, any of the terms, conditions or provisions of (i) the amended
and restated articles of incorporation or bylaws of Target, or (ii) subject to
receipt of the requisite shareholder approval with respect to the Merger, (A)
any statute, law, rule, regulation or ordinance (together, "Laws"), or any
judgment, decree, order, writ, permit or license (together, "Orders"), of any
court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States or any state, county, city or other
political subdivision in the United States, or of any foreign country (a
"Governmental or Regulatory Authority"), applicable to Target or any of its
assets or properties, (B) any note, bond, mortgage, security agreement,
indenture, license, franchise, contract or other instrument, obligation or
agreement of any kind (other than leases or subleases of real property)
(together, "Contracts") to which Target is a party or by which Target or any of
its assets or properties is bound, or (C) any Employee Plan or Benefit
Arrangement (defined in Section 3.12); except, with respect to the foregoing
clause (ii), those which, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on Target.
(b) Except for (i) the premerger notification requirements of the
HSR Act, (ii) the requirements of the Exchange Act and the New York Stock
Exchange and (iii) the filing of appropriate documents relating to the Merger
required by the GBCC, no consent, approval or action of, or filing with or
notice to, any Governmental or Regulatory Authority or other person is required
under any Law or Order or any Contract to which Target is a party or by which
Target or any of its assets or properties is bound, for the execution and
delivery of this Plan of Merger by Target or the performance by Target of its
obligations hereunder or the consummation by Target of the transactions
contemplated hereby, except those as to which the failure to make or obtain,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on Target.
3.6 Target Public Information.
(a) Target has heretofore furnished Acquirer with a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by it with the Commission (as any such documents have
since the time of their original filing been amended,
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the "Target Documents") since March 9, 1996, which are all the documents (other
than preliminary materials) that it was required to file with the SEC from such
date through the date of this Plan of Merger. As of their respective dates, the
Target Documents did not contain any untrue statements of material facts or omit
to state material facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of their respective dates, Target Documents complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated under such statutes. The
financial statements contained in Target Documents, together with the notes
thereto, have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods indicated (except as may
be indicated in the notes thereto, or, in the case of the unaudited financial
statements, as permitted by Form 10-Q), reflect all known liabilities of Target
required to be stated therein, including all such known contingent liabilities
as of the end of each period reflected therein, and present fairly the financial
condition of Target at said dates and the consolidated results of operations and
cash flows of Target for the periods then ended. The consolidated balance sheet
of Target at February 28, 1998 included in Target Documents is herein sometimes
referred to as the "Target Balance Sheet".
(a) Except for matters reflected or reserved against in Target
Balance Sheet or arising under this Plan of Merger, Target had not at that date,
and has not since that date, incurred any liabilities or obligations (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due) of any nature that would be required by generally accepted accounting
principles to be reflected in a consolidated balance sheet of Target (including
the notes thereto), except liabilities or obligations that (i) were incurred in
the ordinary course of business consistent with past practices or (ii) have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Target.
3.7 Legal Proceedings.
Except as disclosed in Target Documents or on Exhibit 3.7 to the
Disclosure Schedule, there is no material litigation, governmental investigation
or other proceeding pending or, to the knowledge of Target, threatened against
or relating to Target, its properties or business, or the transaction
contemplated by the Plan of Merger and, to the knowledge of Target, no basis for
any such action exists.
3.8 Contracts, Etc.
(a) All contracts, leases, agreements and arrangements to which
Target is a party are legally valid and binding in accordance with their terms
and in full force and effect, and to the knowledge of Target, no party is in
default thereunder, and no event has occurred which, but for the passage of time
or the giving of notice or both, would constitute a default thereunder, except,
in each case, where the invalidity of the lease, contract, agreement or
arrangement or the default or breach thereunder or thereof would not,
individually or in the aggregate, have a Material Adverse Effect on Target.
(b) Except as set forth on Exhibit 3.8 to the Disclosure Schedule,
no contract or agreement to which Target is a party will, by its terms,
terminate as a result of the transactions
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contemplated hereby or require any consent from any obligor thereto in order to
remain in full force and effect immediately after the Effective Time, except for
contracts or agreements which, if terminated, would not have a Material Adverse
Effect on Target.
(c) Except as set forth on Exhibit 3.8 to the Disclosure Schedule,
Target has not granted any right of first refusal or similar right in favor of
any third party with respect to any material portion of its properties or assets
or entered into any non-competition agreement or similar agreement restricting
its ability to engage in any business in any location.
3.9 Subsequent Events.
(a) Except as disclosed in Exhibit 3.9 of the Disclosure Schedule
or as reflected in Target Documents made prior to the date of this Plan of
Merger, since the date of Target Balance Sheet (i) there has not been any
change, event or development having, or that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Target,
(ii) Target has conducted its business, in all material respects, in the
ordinary course consistent with past practices, and, (iii) Target has not taken
any action that, if taken after the date hereof, would constitute a breach of
any provision of Section 7.2.
(b) Except as set forth on Exhibit 3.9 to the Disclosure Schedule
or disclosed in Target Documents, Target has not, since the date of Target
Balance Sheet:
(i) Discharged or satisfied any material lien or encumbrance,
or paid or satisfied any material obligation or liability
(absolute, accrued, contingent or otherwise) other than (i)
liabilities shown or reflected on Target Balance Sheet or (ii)
liabilities incurred since the date of the last-filed Target
Document in the ordinary course of business, which discharge or
satisfaction would have a Material Adverse Effect on Target;
(ii) Increased or established any reserve for taxes or any
other liability on its books or otherwise provided therefor which
would have a Material Adverse Effect on Target, except as may have
been required due to consolidated income or operations of Target
since the date of the last-filed Target Document;
(iii) made any material change affecting any banking, safe
deposit or power of attorney arrangements;
(iv) made any change in any method of accounting or auditing
practice;
(v) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of the assets, tangible or intangible, which
assets are material to the consolidated business or financial
condition of Target.
(vi) Sold or transferred any of the assets material to the
consolidated business of Target, cancelled any material debts or
claims or waived any material rights, except in the ordinary course
of business.
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(vii) Granted any general or uniform increase in the rates of
pay of employees or any material increase in salary payable or to
become payable by Target to any officer or employee, consultant or
agent (other than normal merit increases), or by means of any bonus
or pension plan, contract or other commitment, increased in a
material respect the compensation of any officer, employee,
consultant or agent.
(viii) Except for this Plan of Merger and any other agreement
executed and delivered pursuant to this Plan of Merger, merged or
consolidated with another entity or acquired or agreed to acquire
any business or any corporation, partnership or other business
organization, or entered into any material transaction other than
in the ordinary course of business or permitted under other
Sections hereof.
(ix) Declared or paid any dividend or made any distribution
with respect to any of its equity interests, or redeemed, purchased
or otherwise acquired any of its equity interests, or issued any
stock, bonds or other securities, or any option, warrant or other
right to purchase or acquire any such interest, other than stock
options granted to employees, directors or consultants of Target,
all of which are disclosed on Exhibit 3.2 to the Disclosure
Schedule.
3.10 Taxes.
(a) As used herein, "Taxes" means all taxes of any kind, including
those on, measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, value added, or property taxes, and all customs
duties and similar fees, assessments and charges of any kind whatsoever,
together with any interest thereon and any penalties, additions to tax and
additional amounts imposed with respect thereto by any Governmental or
Regulatory Authority. As used herein, "Tax Return" means any return, report,
declaration, information statement and other document with respect to Taxes
required to be filed by Target with the Internal Revenue Service or any other
Governmental or Regulatory Authority, including all accompanying schedules. For
purposes of this Section 3.10, any reference to Target shall include any
corporation that merged or was liquidated with and into Target.
(b) Except as set forth on Exhibit 3.10 to the Disclosure Schedule,
Target has (i) timely filed all federal and state income Tax Returns and all
other material Tax Returns required to be filed by it and such Tax Returns are
correct and complete in all material respects, and (ii) has paid all Taxes shown
thereon to be due and has provided adequate reserves in its financial statements
for any Taxes that have not been paid, whether or not shown as being due on any
Tax Returns, and all other Taxes for which a notice of assessment or demand for
payment has been received by Target, except for such Taxes as to which the
failure to pay, individually or in the aggregate, would not have a Material
Adverse Effect on Target. Except as set forth on Exhibit 3.10 to the Disclosure
Schedule, Target has not granted any waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax.
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(c) Except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Target or as
disclosed in Exhibit 3.10 of the Disclosure Schedule: (i) no material claim for
unpaid Taxes due and payable has become a lien against the property of Target or
is being asserted against Target nor, to Target's knowledge, are there pending
any material proposed adjustments to the manner in which any Tax of Target is
determined; (ii) except as provided in Exhibit 3.10 to the Disclosure Schedule,
to the Knowledge of Target, no audit of any Tax Return of Target is pending,
threatened or being conducted by a Governmental or Regulatory Authority; (iii)
Target is not a party to any agreement or arrangement that would, individually
or in the aggregate, (A) result in the actual or deemed payment by Target of any
"excess parachute payments" within the meaning of Section 280G of the Code, or
(B) constitute compensation in excess of the limitation set forth in Section
162(m) of the Code; (iv) no acceleration of the vesting schedule for any
property that is substantially unvested within the meaning of the regulations
under Section 83 of the Code will occur in connection with the transactions
contemplated by this Plan of Merger; (v) no consent under Section 341(f) of the
Code has been filed with respect to Target; (vi) Target has not been at any time
a member of any partnership or joint venture or the holder of a beneficial
interest in any trust for any period for which the statute of limitations for
any Tax has not expired; (vii) Target has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code; (viii)
Target has made all payments of estimated Taxes required to be made under
Section 6655 of the Code and any comparable state, local or foreign Tax
provision; (ix) all Taxes required to be withheld, collected or deposited by or
with respect to Target and each of its subsidiaries have been timely withheld,
collected or deposited, as the case may be, and, to the extent required, have
been paid to the relevant taxing authority; (x) Target has not issued or assumed
(A) any obligations described in Section 279(a) of the Code, (B) any applicable
high yield discount obligations, as defined in Section 163(i) of the Code, or
(C) any registration-required obligations, within the meaning of Section
163(f)(2) of the Code, that are not in registered form; (xi) there are no
requests for information currently outstanding that could affect the Taxes of
Target; (xii) there are no proposed reassessments of any property owned by
Target or other proposals that could increase the amount of any Tax to which
Target would be subject; and (xiii) no power of attorney that is currently in
force has been granted with respect to any matter relating to Taxes that could
materially affect the Tax liability of Target. No claim has been made by a
Governmental or Regulatory Authority in a jurisdiction where Target does not
file Tax Returns that Target is or may be subject to taxation by that
jurisdiction.
(d) Except as set forth on Exhibit 3.10 to the Disclosure Schedule,
Target has never (i) joined in or been required to join in the filing of a
consolidated or combined federal, state or local income Tax Return with respect
to which Target could be liable for the Taxes of a person other than Target or
(ii) been the subject of a Tax ruling or a closing agreement with respect to
Taxes with any Governmental or Regulatory Authority that has continuing effect.
Except as set forth on Exhibit 3.10 to the Disclosure Schedule, Target is not a
party to any tax sharing or tax allocation agreement or arrangement pursuant to
which it could be liable for Taxes of a person other than Target. Except as set
forth on Exhibit 3.10 to the Disclosure Schedule, Target has not agreed to make
nor is it required to make any adjustment under Section 481 of the Code by
reason of a change in accounting method or otherwise.
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(e) Except as set forth in Exhibit 3.10, and to the Knowledge of
Target, but only to the extent such Taxes, individually or in the aggregate,
would not have a Material Adverse Effect on Target: (i) no deficiencies exist or
have been asserted (either formally or informally) or are expected to be
asserted with respect to Taxes of any group of corporations that filed a
consolidated Return, but only to the extent such deficiencies relate to such
consolidated Return, that included Target or the business operations of Target
(a "Target Consolidated Group"); (ii) no notice (either formally or informally)
has been received by any member of the Target Consolidated Group that it has not
filed a Return or paid Taxes with respect to a Return required to be filed or
paid by such member, but only with respect to a Return of the Target
Consolidated Group; (iii) no member of the Target Consolidated Group is a party
to any pending action or proceeding for assessment or collection of Taxes, nor
has such action or proceeding with respect to Taxes been asserted or threatened
(either formally or informally) against any such member or any of its assets,
but only for those Taxes with respect to a Return of the Target Consolidated
Group; and (iv) no waiver or extension of any statute of limitations is in
effect with respect to Taxes (with respect to a Return of) or Returns of any
member of the Target Consolidated Group, but only for those Taxes or Returns of
the Target Consolidated Group.
(f) Target has not taken any action that would cause it to be
liable to any party under the Tax Allocation and Indemnification Agreement,
dated March 6, 1996, among Target, Custom Management Corporation of
Pennsylvania, Custom Management Corporation, John C. Metz & Associates, Inc.,
Morrison International, Inc., Ruby Tuesday, Inc., Ruby Tuesday (Georgia), Inc.,
Morrison Health Care, Inc., Tias, Inc., Morrison Custom Management Corporation
of Pennsylvania, and Morrison Restaurants Inc.
3.11 Commissions and Fees.
Except as set forth in Exhibit 3.11 to the Disclosure Schedule, there
are no valid claims for brokerage commissions or finder's or similar fees in
connection with the transactions contemplated by this Plan of Merger which may
be now or hereafter asserted against Acquirer resulting from any action taken by
Target or its shareholders, officers or Directors, or any of them.
3.12 ERISA and Related Matters.
(a) Exhibit 3.12 of the Disclosure Schedule contains a true and
complete list of each Employee Plan and Benefit Arrangement (each as defined
below). Target has made available to Acquirer a current, accurate and complete
copy of each Employee Plan and Benefit Arrangement, including all plan
amendments, trust agreements, and written interpretations thereof together with
the most recent annual report (Form 5500) and the most recent actuarial
valuation report prepared in connection with any Employee Plan or Benefit
Arrangement, and, to the extent applicable, all related reports (actuarial or
otherwise) that materially affect the Tax liability of Target.
(b) Each Employee Plan and Benefit Arrangement has been maintained
and administered in compliance with its terms and with the requirements of
applicable Laws, including the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and the Code, except where the failure to comply could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Target. There is no litigation,
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administrative or arbitration proceeding or other dispute pending or, to
Target's knowledge, threatened that involves any Employee Plan or Benefit
Arrangement (defined below) that could reasonably be expected to have a Material
Adverse Effect on Target or a Material Adverse Effect on any employee or
director of Target or on any fiduciary (as defined in ERISA Section 3(21)) of
such Employee Plan or Benefit Arrangement.
(c) Except as provided in Exhibit 3.12 of the Disclosure Schedule,
Target does not maintain, has never maintained, and has never been required to
contribute to, an "employee benefit plan" as defined in Section 3 of ERISA that
is or was (i) a plan subject to Title IV of ERISA or (ii) a "multiemployer plan"
as defined in Section 3(37) of ERISA. Neither Target nor any of its current or
former affiliates (as defined under Section 414 of the Code) has or incurred, or
reasonably expects to incur prior to closing, any liability under Title IV of
ERISA arising in connection with the termination of, or a complete or partial
withdrawal from any plan covered or previously covered by title IV of ERISA or
any liability under Section 4971 of the Code that in either case could become a
liability of Target or Acquirer or any affiliate of either of them after the
Effective Date.
(d) Neither Target or any of its current or former affiliates (as
defined under Section 414 of the Code), nor, to Target's Knowledge, any of its
current or former directors, officers or employees, has engaged in any
transaction with respect to an Employee Plan that could subject Target to a tax,
penalty or liability for a prohibited transaction, as defined in Section 406 of
ERISA or Section 4975 of the Code, or for a "reportable event" within the
meaning of Section 4043 of ERISA, except for such taxes, penalties or
liabilities that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Target.
(e) At May 31, 1997, each Employee Plan that constitutes a defined
benefit pension plan had assets exceeding its projected benefit obligations, as
reflected by the notes to Target's audited financial statements.
(f) Except as provided in Exhibit 3.12 of the Disclosure Schedule,
no independent contractor or other contract employee has participated or is
entitled to participate in any Employee Plan or Benefit Arrangement.
(g) Each Employee Plan and Benefit Arrangement that is intended to
be qualified within the meaning of Code Sections 401(a) or 501(a) is so
qualified and has received a favorable determination letter as to its
qualification or has filed a timely application with the Internal Revenue
Service requesting such a favorable determination letter. Nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification.
(h) Since January 1, 1992, Target has not received any written
notice from the Pension Benefit Guaranty Corporation ("PBGC") issued pursuant to
ERISA Section 4042 with respect to its Employee Plans.
(i) Except as disclosed on Exhibit 3.12 to the Disclosure Schedule,
there has been no amendment to, written interpretation of or announcement
(whether or not written) by Target relating to, or change in employee
participation or coverage under, any Employee Plan or
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Benefit Arrangement that would increase for the current fiscal year the expense
of maintaining such Employee Plan or Benefit Arrangement above the level of the
expense incurred in respect thereof for the most recent fiscal year, except any
such increase which would not have a Material Adverse Effect on Target.
(j) As used herein:
(i) "Benefit Arrangement" means any employment, severance or
similar contract, or any other contract, plan, policy or
arrangement (whether or not written) providing for compensation,
bonus, profit-sharing, stock option or other stock related rights
or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured
arrangement), health or medical benefits, cafeteria plan benefits,
disability benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension, health,
medical and life insurance benefits), other than an Employee Plan,
that is maintained, administered or contributed to by Target and
covers any employee or former employee of Target; and
(ii) "Employee Plan" means a plan or arrangement as defined in
Section 3(3) of ERISA that (A) is subject to any provision of
ERISA, (B) is maintained, administered or contributed to by Target
or any member of Target's control group (past or present), as
defined in Code section 1563(a), and (C) covers any employee or
former employee of Target.
3.13 Employment Matters.
(a) Except as described in Target Documents or set forth on Exhibit
3.13 to the Disclosure Schedule, Target is not a party to any oral or written
(i) union, guild or collective bargaining agreement which agreement covers
employees in the United States (nor is it aware of any union organizing activity
currently being conducted in respect to any of its employees), (ii) agreement
with any executive officer or other key employee the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction of the nature contemplated by this Plan of Merger, (iii) agreement
or plan, including any stock option plan, stock appreciation rights 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 Plan of Merger or
the value of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Plan of Merger, or (iv) employment
contracts with any officer or employee.
(b) Target is in compliance with all currently applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor practice,
except where the failure to so comply or the engagement in which would not have
a Material Adverse Effect on Target. There is no unfair labor practice complaint
pending, or to the Knowledge of Target, threatened against Target before the
National Labor Relations Board.
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3.14 Environmental Matters.
Except as disclosed in Exhibit 3.14 of the Disclosure Schedule or in
Target Documents filed prior to the date hereof:
(a) Target has obtained all material licenses, permits,
authorizations, approvals and consents ("Environmental Permits") from all
Governmental or Regulatory Authorities that are required in respect of its
business or operations under any applicable Environmental Law (defined below),
and each of such Environmental Permits is in full force and effect.
(b) Target is in compliance with the terms and conditions of all
such Environmental Permits and with all applicable Environmental Laws, except
for such failures that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on Target.
(c) (i) To the Knowledge of Target, no site or facility now or
previously owned, operated or leased by Target is listed or
proposed for listing on the National Priorities List or CERCLIS,
promulgated pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), and
the rules and regulations thereunder or on any similar state or
local list of sites requiring investigation or Remedial Action
(defined below).
(ii) Since March 9, 1996, Target has not received any written
notice of any actual or alleged material violation of any
Environmental Law with respect to any of its facilities.
(iii) Target is not subject to any material outstanding
agreements with or Orders of any Governmental or Regulatory
Authority respecting (A) Environmental Laws, (B) Remedial Action or
(C) any Release of a Hazardous Material (defined below).
(iv) Since March 9, 1996, Target has not received any written
notice or request for information pertaining to a response or
removal action (as defined by CERCLA), with respect to any of its
sites or facilities now or previously owned, operated or leased by
it.
(d) No liens have arisen under or pursuant to any Environmental Law
on any site or facility owned, operated or leased by Target, other than liens
that individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Target.
(e) There have been no material environmental investigations,
studies, audits, tests, reviews or other analyses conducted by, or that are in
the possession of, Target in relation to any site or facility owned, operated or
leased by Target, except those reports that have been identified on Exhibit
3.14.
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(f) Except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Target, since March
9, 1996, no Hazardous Material has been Released, disposed of or arranged to be
disposed of by Target at or about any site or facility now or previously owned,
operated or leased by Target, other than Releases or disposals permitted under
Orders issued by any Governmental or Regulatory Authorities.
(g) As used herein:
(i) "Environmental Law" means any Law or Order relating to the
environment or to emissions, discharges or Releases of pollutants,
contaminants, or chemicals, or industrial, toxic or hazardous
substances or wastes, into the environment (including structures,
ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes;
(ii) "Hazardous Material" means (A) any chemicals or other
materials or substances that are defined as or included in the
definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "pollutants,"
"contaminants," or words of similar import under any Environmental
Law, including petroleum, friable asbestos, PCBs and CFCs; and (B)
any other chemical, material or substance, the presence of or
exposure to which is prohibited, limited or regulated by any
Governmental or Regulatory Authority under any Environmental Law;
(iii) "Release" means any actual or threatened (as defined
under CERCLA) release, spill, effluent, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the environment or any structure; and
(iv) "Remedial Action" means all actions, including any capital
expenditures, required by a Governmental or Regulatory Authority,
required under any Environmental Law or voluntarily undertaken to
(A) clean up, remediate, remove, treat or in any other way
ameliorate or address any Hazardous Materials Released into the
environment; (B) prevent the Release, or minimize the further
Release of any Hazardous Material so it does not endanger or
threaten to endanger public health or the environment; (C) perform
pre-remedial studies and investigations or post-remedial monitoring
and care relating to a Release; or (D) bring the applicable party
into compliance with any Environmental Law.
3.15 Compliance with Laws in General.
Except as set forth on Exhibit 3.15 to the Disclosure Schedule or
disclosed in Target Documents, Target is not in violation or received any
notices of violations of any federal, state and local laws, regulations and
ordinances relating to its business and operations, including,
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without limitation, the Occupational Safety and Health Act, the Americans with
Disabilities Act, and any Environmental Laws, except for any violation as would
not, individually or in the aggregate, have a Material Adverse Effect on Target
and no notice of any pending inspection or investigation of any such law,
regulation or ordinance has been received by Target which, if it were determined
that a violation had occurred, would have a Material Adverse Effect on Target.
3.16 Licenses, Accreditation and Regulatory Approvals.
Except as disclosed in Target Documents or set forth on Exhibit 3.16 to
the Disclosure Schedule, Target holds all licenses, permits and other regulatory
approvals which are needed or required by law with respect to its business,
operations and facilities as they are currently or presently conducted
(collectively, the "Licenses"), except where the failure to possess such
Licenses does not have a Material Adverse Effect on Target. All such Licenses
are in full force and effect, and Target is in compliance in all material
respects with all conditions and requirements of the Licenses and with all rules
and regulations relating thereto. Subject to compliance with applicable
securities laws, the Hart Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and state or local statutes, rules or regulations
requiring notice, approval, or other action upon the occurrence of a change in
control of Target, the consummation of the Merger will not violate any law or
regulation to which Target is subject which, if violated, would have a Material
Adverse Effect on Target.
3.17 Real Property.
(a) Exhibit 3.17 of the Disclosure Schedule contains a list of all
real property owned by Target. Exhibit 3.17 of the Disclosure Schedule contains
a list of all real property or interests in real property leased by Target.
Complete and correct copies of all leases so listed, including all
modifications, amendments and supplements thereto, have heretofore been made
available to Acquirer and all such leases are in full force and effect in
accordance with their respective terms.
(b) Target has, except with respect to assets disposed of for
adequate consideration in the ordinary course of business (none of which are
material to the operations of its business), title to all real property and all
other properties and assets reflected in the Target Balance Sheet free and clear
of all pledges, liens, defects, leases, licenses, equities, conditional sales
contracts, charges, claims, encumbrances, security interests, chattel mortgages,
mortgages or deeds of trust (collectively, "Liens"), except for (i) Liens that
secure indebtedness that is properly reflected in the Target Balance Sheet, (ii)
Liens for Taxes accrued but not yet payable; (iii) mechanic's, worker's,
materialmen's, operator's or other Liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred after the date
of the Target Balance Sheet, provided that the obligations secured by such Liens
are not delinquent; and (iv) capital leases, leases and licenses of such
properties, if any, to third parties for fair and adequate consideration. Except
to the extent that the absence of such an interest would not have a Material
Adverse Effect on Target's business or its ability to conduct its operations,
Target owns, or has valid leasehold interests in, all properties and assets used
in the conduct of its business.
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(c) There are no existing defaults or events that, with notice or
lapse of time or both, would constitute defaults under any such leases, except
for defaults that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on Target.
(d) Except as set forth on Exhibit 3.17 of the Disclosure Schedule,
Target enjoys peaceful and undisturbed possession of its leased properties.
Target has good and valid title to the leasehold estate in each property leased
by it, except for (i) mortgages and encumbrances that secure indebtedness
properly reflected on the financial statements of Target in Target Documents
made prior to the date hereof; (ii) liens for taxes accrued but not yet payable;
(iii) liens arising as a matter of Law in the ordinary course of business with
respect to obligations incurred after February 28, 1998, provided that the
obligations secured by such liens are not delinquent or are being contested in
good faith; and (iv) such imperfections of title and encumbrances, if any, as do
not, individually or in the aggregate, materially detract from the value or
materially interfere with the present use of such property or are listed in
Exhibit 3.17 of the Disclosure Schedule. Target is making no representations or
warranties as to the underlying title of the landlord or the status of any
mortgages granted by any landlord of property leased by Target.
(e) Target is not in violation of any zoning, building or safety
Law or Order applicable to the operation of its owned or leased properties that
is likely to impede the normal operation of the business of Target or to have,
individually or in the aggregate, a Material Adverse Effect on Target.
(f) Except as set forth on Exhibit 3.17 of the Disclosure Schedule,
there are no pending or, to the Knowledge of Target, threatened condemnation or
similar proceedings relating to any of the leased properties of Target.
3.18 Vote Required.
The affirmative vote of the holders of a majority of the outstanding
Shares of Target Common Stock entitled to vote thereon is the only vote of the
holders of any class or series of Target capital stock necessary to approve this
Plan of Merger, the Merger and the transactions contemplated hereby.
3.19 Opinion of Financial Advisor.
The Board of Directors of Target has received the oral opinion of Wheat
First Union to the effect that, as of the date of this Plan of Merger, the
Merger Consideration is fair to the holders of Target Common Stock from a
financial point of view, a written copy of which opinion will be delivered by
Target to Acquirer prior to the date on which the definitive tender offer
materials for the Offer are filed with the SEC.
3.20 Takeover Statutes.
Sections 14-2-1111 and 14-2-1132 of the GBCC are inapplicable to the
Offer, the Merger and this Plan of Merger, as Target's bylaws do not incorporate
such Sections.
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3.21 Rights Agreement.
The execution and delivery of the Plan of Merger and the consummation
of the transactions contemplated hereby, including the Offer and the Merger,
will not result in the occurrence of a "Distribution Date" or "Stock Acquisition
Date" or "Triggering Event" under the Rights Agreement and will not result in
any person becoming an "Acquiring Person" (as such terms are defined in the
Rights Agreement). All outstanding Rights will be retired or expire at the
Effective Time.
3.22 No Untrue Representations; Information Supplied.
(a) No representation or warranty by Target in this Plan of Merger,
and no Exhibit or certificate issued by Target and furnished or to be furnished
to Acquirer pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact in
response to the disclosure requested, or omits or will omit to state a material
fact necessary to make the statements or facts contained therein in response to
the disclosure requested not misleading in light of all of the circumstances
then prevailing.
(b) The Schedule 14D-9 (and any amendment or supplement thereto)
will not, on the date of its filing with the Commission and the date it is first
published, sent or given to shareholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by Target with respect to information supplied in writing
by or on behalf of Acquirer or Subsidiary expressly for inclusion therein. The
Schedule 14D-9 will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder. (c)
The information supplied or to be supplied in writing by or on behalf of Target
for inclusion in the Schedule 14D-1 will not, on the date the Schedule 14D-1
(and any amendment or supplement thereto) is filed with the Commission or on the
date it is first published, sent or given to shareholders, 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.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY AND ACQUIRER Subsidiary and
Acquirer, jointly and severally, hereby represent and warrant to Target
as follows:
4.1 Organization, Existence and Capital Stock.
Subsidiary is a corporation duly organized and validly existing and is
in good standing under the laws of the State of Georgia. Subsidiary's authorized
capital consists of 1,000 shares
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of Common Stock, par value $.01 per share, all of which shares are issued and
registered in the name of Acquirer.
4.2 Power and Authority.
Subsidiary has corporate power to execute, deliver and perform the Plan
of Merger and all agreements and other documents executed and delivered, or to
be executed and delivered, by it pursuant to the Plan of Merger, and, subject to
the satisfaction of the conditions precedent set forth herein, has taken all
actions required by law, its Articles of Incorporation, its Bylaws or otherwise,
to authorize the execution and delivery of the Plan of Merger and such related
documents. The execution and delivery of the Plan of Merger does not and,
subject to the receipt of required shareholder and regulatory approvals and any
other required third-party consents or approvals, the consummation of the Merger
contemplated hereby will not, violate any provisions of the Articles of
Incorporation or Bylaws of Subsidiary, or any agreement, instrument, order,
judgment or decree to which Subsidiary is a party or by which it is bound,
violate any restrictions of any kind to which Subsidiary is subject, or result
in the creation of any lien, charge or encumbrance upon any of the property or
assets of Subsidiary.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF ACQUIRER
Acquirer hereby represents and warrants to Target as follows:
5.1 Organization, Existence and Good Standing.
Acquirer is a corporation duly organized and validly existing and is in
good standing under the laws of the State of Louisiana. Acquirer has all
necessary corporate power to own its properties and assets and to carry on its
business as presently conducted. Acquirer is duly qualified to do business and
is in good standing in all jurisdictions in which the character of the property
owned, leased or operated or the nature of the business transacted by it makes
qualification necessary.
5.2 Power and Authority.
Acquirer has corporate power to execute, deliver and perform the Plan
of Merger and all agreements and other documents executed and delivered, or to
be executed and delivered, by it pursuant to the Plan of Merger, and, subject to
the satisfaction of the conditions precedent set forth herein has taken all
actions required by law, its Certificate of Incorporation, its Bylaws or
otherwise, to authorize the execution and delivery of the Plan of Merger and
such related documents. The execution and delivery of the Plan of Merger does
not and, subject to the receipt of required shareholder and regulatory approvals
and any other required third-party consents or approvals, the consummation of
the Merger contemplated hereby will not, violate any provisions of the
Certificate of Incorporation or Bylaws of Acquirer, or any provision of, or
result in the acceleration of any obligation under, any material mortgage, lien,
lease, agreement, instrument, order, arbitration award, judgment or decree to
which Acquirer is a party or by which it is bound, or violate any restrictions
of any kind to which Acquirer is subject. The execution and delivery
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of this Plan of Merger has been approved by the Board of Directors of Acquirer.
This Plan of Merger has been duly executed and delivered by Acquirer and
Subsidiary and, assuming this Plan of Merger constitutes a valid and binding
obligation of Target, constitutes a valid and binding obligation of Acquirer and
Subsidiary, enforceable against Acquirer and Subsidiary in accordance with its
terms.
5.3 Subsidiary Common Stock.
Acquirer owns, beneficially and of record, all of the issued and
outstanding shares of Subsidiary Common Stock, which are duly authorized,
validly issued and outstanding, fully paid and nonassessable, free and clear of
all liens and encumbrances. Acquirer has the corporate power to endorse and
surrender such Subsidiary Shares for cancellation pursuant to the Plan of
Merger. At or prior to consummation of the Merger, Acquirer will have taken all
such actions as may be required in its capacity as the sole shareholder of
Subsidiary to approve the Merger.
5.4 Solvency.
At the Effective Time and after giving effect to any changes in the
Surviving Corporation's assets and liabilities as a result of the Merger, the
Surviving Corporation will not (a) be insolvent (either because its financial
condition is such that the sum of its debts is greater than the fair value of
its assets or because the present fair salable value of its assets will be less
than the amount required to pay its probable liability on its debts as they
become absolute and matured), or (b) have unreasonably small capital with which
to engage in its business, or (c) have incurred or plan to incur debts beyond
its ability to pay as they become due.
5.5 Financing.
At or prior to the date of the scheduled commencement of the Offer,
Acquirer will have received, and will have delivered to Target a copy of, a
binding commitment from a reputable financial institution to provide financing
sufficient to fund the cash necessary to consummate the Offer and the Merger. At
or prior to completion of the Offer and the Merger, Acquirer will have, or will
have available to it pursuant to credit facilities, and will provide, or will
cause to be provided to Subsidiary, the funds necessary to consummate the Offer
and the Merger.
5.6 No Violations.
Subject to compliance with applicable securities laws and the HSR Act,
the consummation of the Merger will not violate any law or restriction to which
Acquirer is subject.
5.7 No Untrue Representation; Information Supplied.
(a) No representation or warranty by Acquirer in this Plan of
Merger, and no Exhibit or certificate issued by Acquirer and furnished or to be
furnished to Target pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact in response to the disclosure requested, or omits or will omit to state a
material fact necessary to make the statement or facts contained therein in
response to the disclosure requested not misleading in light of all of the
circumstances then prevailing.
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(b) The Schedule 14D-1 (and any amendments or supplements thereto)
will not, on the date filed with the Commission and first published, sent or
given to shareholders of Target, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, except that no representation is made by Acquirer
or Subsidiary with respect to information supplied in writing by or on behalf of
Target expressly for inclusion therein and information derived from documents
filed by Target with the Commission. The Schedule 14D-1 will comply as to form
in all material respects with the requirements of the Exchange Act and the
regulations thereunder.
(c) The information supplied or to be supplied in writing by or on
behalf of Acquirer or Subsidiary for inclusion in the Schedule 14D-9 (and any
amendments or supplements thereto) will not, on the date the Schedule 14D-9 is
filed with the Commission and is first published, sent or given to shareholders
of Target, 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.
5.8 Commencement of Tender.
Acquirer shall commence the Offer strictly in compliance with the first
sentence of Section 1.1 hereof.
SECTION 6
ACCESS TO INFORMATION AND DOCUMENTS
6.1 Access to Information.
Between the date hereof and the Closing Date, each of Target and
Acquirer will give to the other party and its counsel, accountants and other
representatives full access to all the properties, documents, contracts,
personnel files and other records of such party and shall furnish the other
party with copies of such documents and with such information with respect to
the affairs of such party as the other party may from time to time reasonably
request. Each party will disclose and make available to the other party and its
representatives all books, contracts, accounts, personnel records, letters of
intent, papers, records, communications with regulatory authorities and other
documents relating to the business and operations of such party. In addition,
Target shall make available to Acquirer all such banking, investment and
financial information as shall be necessary to allow for the efficient
integration of Target banking, investment and financial arrangements with those
of Acquirer at the Effective Time.
6.2 Return of Records.
If the transactions contemplated hereby are not consummated and this
Plan of Merger terminates, each party agrees to promptly return all documents,
contracts, records or properties of the other party and all copies thereof
furnished pursuant to this Section 6 or otherwise. All information disclosed by
any party or any affiliate or representative of any party shall be deemed
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to be "Confidential Information" under the terms of the Confidentiality
Agreement dated December 29, 1997, between Target and Acquirer (the
"Confidentiality Agreement").
6.3 Effect of Access.
(a) Nothing contained in this Section 6 shall be deemed to create
any duty or responsibility on the part of either party to investigate or
evaluate the value, validity or enforceability of any contract, lease or other
asset included in the assets of the other party.
(b) With respect to matters as to which any party has made express
representations or warranties herein, the parties shall be entitled to rely upon
such express representations and warranties irrespective of any investigations
made by such parties.
SECTION 7
COVENANTS
7.1 Preservation of Business.
Target will use reasonable commercial efforts to preserve the business
organization of Target intact, to keep available to Acquirer and the Surviving
Corporation the services of the present employees of Target, and to preserve for
Acquirer and the Surviving Corporation the goodwill of the suppliers, customers
and others having business relations with Target.
7.2 Material Transactions.
Prior to the Effective Time, Target will not (other than as required
pursuant to the terms of the Plan of Merger and the related documents, and other
than with respect to transactions for which binding commitments have been
entered into prior to the date hereof which are described on Exhibit 7.2 to the
Disclosure Schedule), without first obtaining the written consent of Acquirer
and the consent of a majority of Independent Directors:
(a) Encumber any asset or enter into any transaction or make any
contract or commitment relating to the properties, assets and business of
Target, other than in the ordinary course of business or as otherwise disclosed
herein.
(b) Enter into any employment contract which is not terminable upon
notice of 30 days or less, at will, and without penalty to Target except as
provided herein.
(c) Make any capital expenditure or commitment therefor or enter
into any contract or agreement (i) which cannot be performed within three months
or less, or (ii) which involves the expenditure of over $250,000.
(d) Issue or sell, or agree to issue or sell, any shares of capital
stock or other securities of Target, other than pursuant to the stock options
outstanding as of the date hereof.
(e) Make any contribution, payment or distribution to the trustee
under any bonus, pension, profit-sharing or retirement plan or incur any
obligation to make any such
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payment or contribution which is not in accordance with Target's usual past
practice, or establish or enter into any new plan or contract or arrangement or
make any change in any existing plan, contract or arrangement providing for
bonuses, executive incentive compensation, pensions, deferred compensation,
retirement payments, profit-sharing or the like, or terminate any Plan.
(f) Increase indebtedness for borrowed money or extend a material
amount of credit to anyone, except in the ordinary course of business consistent
with prior practices.
(g) Guarantee the material obligation of any person, firm or
corporation, except in the ordinary course of business consistent with prior
practices.
(h) Amend its Articles of Incorporation or Bylaws.
(i) Enter into any option to purchase or purchase agreement or buy
any real property, or enter into any new leases or renewals of existing leases
on real property, or open new restaurant locations (unless contractually
committed to do so).
(j) Take any action of a character described in Section 3.9(b)(i)
to 3.9(b)(ix), inclusive.
7.3 Meeting of Target Shareholders.
(a) Promptly after consummation of the Offer, Target shall prepare
and file with the Commission, if required by federal securities laws, a
preliminary form of the proxy statement (the "Proxy Statement") to be mailed to
the shareholders of Target in connection with the meeting of such shareholders
to consider and vote upon the Merger (the "Special Meeting"). Target will cause
the Proxy Statement to comply as to form in all material respects with the
applicable provisions of the Exchange Act. Target will notify Acquirer of the
receipt of any comments from the Commission or its staff and of any request by
the Commission or its staff for amendments or supplements to the Proxy Statement
or for additional information and will supply Acquirer with copies of all
correspondence between Target or any of its representatives, on the one hand,
and the Commission or its staff, on the other hand, with respect to the Proxy
Statement prior to its being filed with the Commission and shall give Acquirer
and its counsel the reasonable opportunity to review all amendments and
supplements to the Proxy Statement and all responses to requests for additional
information and replies to comments prior to their being filed with or sent to
the Commission. Target agrees to use its commercially reasonable best efforts,
after consultation with the other parties hereto, to respond promptly to all
such comments of and requests by the Commission. As promptly as practicable
after the Proxy Statement has been cleared by the Commission, Target shall mail
the Proxy Statement to its shareholders. If at any time prior to the approval of
this Plan of Merger by Target's shareholders there shall occur any event that
should be set forth in an amendment or supplement to the Proxy Statement, Target
will prepare and mail to its shareholders such an amendment or supplement.
(b) If necessary to consummate the Merger, Target will take all
steps necessary in accordance with its Articles of Incorporation and Bylaws to
call, give notice of, convene and hold a meeting of its shareholders (the
"Special Meeting") as soon as reasonably
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appropriate, for the purpose of approving this Plan of Merger and for such other
purposes as may be necessary. Unless this Plan of Merger shall have been validly
terminated as provided herein, the Board of Directors of Target (subject to the
provisions of Section 8.1(d) hereof) will (i) recommend to Target shareholders
the approval of this Plan of Merger, the transactions contemplated hereby and
any other matters to be submitted to the shareholders in connection therewith,
to the extent that such approval is required by applicable law in order to
consummate the Merger, and (ii) use reasonable, good faith efforts to obtain the
approval by Target's shareholders of this Plan of Merger and the transactions
contemplated hereby.
(c) At the Special Meeting, Acquirer and Subsidiary and its direct
and indirect subsidiaries shall vote, or cause to be voted, all Shares owned by
them in favor of the Merger.
7.4 Exemption from State Takeover Laws.
Target shall take all reasonable steps necessary to exempt the Merger
from the requirements of any state takeover statute or other similar state law
which would prevent or impede the consummation of the transactions contemplated
hereby, by action of Target's Board of Directors or otherwise.
7.5 HSR Act Compliance.
Acquirer and Target shall promptly make their respective filings, and
shall thereafter use their reasonable, good faith efforts to promptly make any
required submissions, under the HSR Act with respect to the Merger and the
transactions contemplated hereby. Acquirer and Target will use their respective
reasonable, good faith efforts to obtain all other permits, authorizations,
consents and approvals from third parties and governmental authorities necessary
to consummate the Merger and the transactions contemplated hereby.
7.6 Public Disclosures.
Acquirer and Target will consult with each other before issuing any
press release or otherwise making any public statement with respect to the
transactions contemplated by this Plan of Merger, and shall not issue any such
press release or make any such public statement prior to such consultation
except as may be required by applicable law or requirements of the New York
Stock Exchange. The parties shall issue a joint press release, mutually
acceptable to Acquirer and Target, promptly upon execution and delivery of this
Plan of Merger.
7.7 Resignation of Target Directors.
On or prior to the Closing Date, Target shall deliver to Acquirer
evidence satisfactory to Acquirer of the resignation of the Directors of Target,
such resignations to be effective on the Closing Date.
7.8 Notice of Subsequent Events.
Each party hereto shall notify the other parties of any changes,
additions or events which would cause any material change in or material
addition to any Exhibit to the Disclosure Schedule delivered by the notifying
party under this Plan of Merger, promptly after the
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occurrence of the same. If the effect of such change or addition would,
individually or in the aggregate with the effect of changes or additions
previously disclosed pursuant to this Section 7.8, cause the conditions set
forth in Section 9.2(b) or 9.3(b) not to be met, the non-notifying party may,
within ten days after receipt of such notice, elect to terminate this Plan of
Merger. If the non-notifying party does not give written notice of such
termination within such 10-day period, the non-notifying party shall be deemed
to have consented to such change or addition and shall not be entitled to
terminate this Plan of Merger by reason thereof.
7.9 No Solicitation.
(a) From and after the date hereof, Target shall not, and shall not
permit any of its directors, officers, attorneys, financial advisors, agents or
other representatives to, directly or indirectly, solicit, initiate or encourage
(including by way of furnishing information) the making of any proposal or offer
that constitutes, or may reasonably be expected to lead to, any Takeover
Proposal (as hereinafter defined) from any person. In addition, Target shall,
and shall cause its directors, officers, attorneys, financial advisors, agents
and other representatives to, immediately cease any existing discussions or
negotiations, or other activities referred to in the immediately preceding
sentence, with any person conducted heretofore with respect to any of the
foregoing matters referred to in the immediately preceding sentence.
Notwithstanding the foregoing, Target may (i) furnish information pursuant to a
customary confidentiality agreement concerning Target and its businesses,
properties or assets to a third party who has, without solicitation by Target,
indicated that it is interested in making a Takeover Proposal after the date
hereof, (ii) engage in discussions or negotiations with such a third party who
has made an unsolicited Superior Proposal after the date hereof, and/or (iii)
following receipt of an unsolicited Superior Proposal after the date hereof,
take and disclose to its shareholders a position contemplated by Rule 14e-2 (a)
under the Exchange Act or otherwise make disclosure to its shareholders, but in
each case referred to in the foregoing clauses (i) through (iii) only to the
extent that the Board of Directors of Target shall have concluded in good faith,
after consultation with its outside counsel, that such action is a necessary
exercise of its fiduciary duties to the shareholders of Target under Georgia
law; provided that the Board of Directors of Target shall not take any of the
actions referred to in clauses (i) through (iii) above until after it has
delivered notice of such actions to Acquirer. As used in this Plan of Merger:
(i) "Takeover Proposal" means any proposal or offer, or any expression of
interest by any person relating to Target's willingness or ability to receive or
discuss any proposal or offer (other than a proposal or offer by Acquirer or
Subsidiary), for any tender or exchange offer, merger, consolidation,
recapitalization or other business combination involving Target or the
acquisition in any manner of a substantial equity interest in (10% or more), or
a substantial portion of the assets of, Target or any other similar transaction
the consummation of which would or could reasonably be expected to impede,
interfere with, prevent or materially delay the Offer, the purchase of Shares
pursuant to the Offer or the Merger; and (ii) "Superior Proposal" means a bona
fide written proposal or offer made by any person to acquire Target pursuant to
any tender or exchange offer, merger, consolidation, recapitalization or other
business combination or acquisition of all or substantially all of the assets of
Target on terms that the Board determines in good faith, and in the exercise of
sound and reasonable judgment (after consultation with outside legal counsel and
independent financial advisors), to be more favorable to Target and its
shareholders than the transaction contemplated hereby (taking into account any
fees or expenses payable hereunder or thereunder
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and conditions to consummation) and for which any required financing is
committed or that, in the good faith judgment of the Board (after consultation
with independent financial advisors), is reasonably capable of being financed by
such person. Without limiting any other remedies available to Target, the
provisions of this paragraph (a) shall be suspended for so long as Acquirer may
be in breach of its obligations under Section 5.8 of this Agreement.
(b) Target shall promptly advise Acquirer orally and in writing of
the receipt of any proposal it believes to be a Takeover Proposal, the material
terms and conditions thereof, and the identity of the person making any such
proposal or inquiry (the "Notice of Takeover Proposal"). Target will keep
Acquirer fully informed of the status and details of any such proposal or
inquiry. The parties understand and agree that Target shall be entitled to
disclose to its shareholders any information that is required by applicable Law
(including without limitation the Exchange Act) regarding any such proposal or
inquiry.
(c) Target agrees not to release any third party from, or waive any
provisions of, any confidentiality or standstill agreement to which Target is a
party.
7.10 Other Actions.
Subject to the provisions of Section 7.9 hereof, none of Target,
Acquirer and Subsidiary shall knowingly or intentionally take any action, or
omit to take any action, if such action or omission would, or reasonably might
be expected to, result in any of its representations and warranties set forth
herein being or becoming untrue in any material respect, or in any of the
conditions to the Merger set forth in this Plan of Merger not being satisfied,
or (unless such action is required by applicable law) which would materially
adversely affect the ability of Target or Acquirer to obtain any consents or
approvals required for the consummation of the Merger without imposition of a
condition or restriction which would have a Material Adverse Effect on the
Surviving Corporation or which would otherwise materially impair the ability of
Target or Acquirer to consummate the Merger in accordance with the terms of this
Plan of Merger or materially delay such consummation.
7.11 Cooperation.
(a) Acquirer and Target shall together, or pursuant to an
allocation of responsibility agreed to between them, (i) cooperate with one
another in determining whether any filings required to be made or consents
required to be obtained in any jurisdiction prior to the Effective Time in
connection with the consummation of the transactions contemplated hereby and
cooperate in making any such filings promptly and in seeking to obtain timely
any such consents, (ii) use their respective best efforts to cause to be lifted
any injunction prohibiting the Merger, or any part thereof, or the other
transactions contemplated hereby, and (iii) furnish to one another and to one
another's counsel all such information as may be required to effect the
foregoing actions.
(b) Subject to the terms and conditions herein provided, and unless
this Plan of Merger shall have been validly terminated as provided herein, each
of Acquirer and Target shall use all reasonable efforts (i) to take, or cause to
be taken, all actions necessary to comply promptly with all legal requirements
which may be imposed on such party (or any subsidiaries or
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affiliates of such party) with respect to the Plan of Merger and to consummate
the transactions contemplated hereby, subject to the vote of Target's
shareholders described above, and (ii) to obtain (and to cooperate with the
other party to obtain) any consent, authorization, order or approval of, or any
exemption by, any governmental entity and/or any other public or private third
party which is required to be obtained or made by such party or any of its
subsidiaries or affiliates in connection with this Plan of Merger and the
transactions contemplated hereby. Each of Acquirer and Target will promptly
cooperate with and furnish information to the other in connection with any such
burden suffered by, or requirement imposed upon, either of them or any of their
subsidiaries or affiliates in connection with the foregoing.
7.12 Target Employees.
Acquirer shall retain all employees of Target who are employed at the
Effective Time as employees-at-will (except to the extent that such employees
are parties to contracts providing for other employment terms, in which case
such employees shall be retained in accordance with the terms of such contracts)
and shall provide such employees with the same customary employee benefits as
Acquirer provides its existing employees. Acquirer shall cause Target to honor
Target stay bonus arrangements as in effect immediately prior to the date
hereof, copies of which have been provided to Acquirer. Exhibit 7.12 describes
the parties to whom such stay bonus letters have been delivered. Acquirer shall
give employees of Target credit for their respective periods of employment with
Target prior to the Effective Time for purposes of determining their eligibility
for vesting, level of participation, and benefit accrual (other than benefit
accrual under Acquirer's defined benefit pension plan) in any employee benefit
program, plan or arrangement which the Surviving Corporation adopts, maintains
or contributes to following the Effective Time.
7.13 Indemnification.
(a) Target shall, and from and after the Effective Time, Acquirer
and the Surviving Corporation shall, indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date of this Plan of
Merger an officer or director of Target (the "Indemnified Parties") against (i)
all losses, claims, damages, costs, expenses, liabilities or judgments, or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld) of, or in connection with,
any claim, action, suit, proceeding or investigation based in whole or in part
on or arising in whole or in part out of the fact that such person is or was a
director or officer of Target pertaining to any matter existing or occurring at
or prior to the Effective Time ("Indemnified Liabilities") and (ii) all
Indemnified Liabilities based in whole or in part on, or arising in whole or in
part out of, or pertaining to this Plan of Merger, the Merger or any other
transactions contemplated hereby or thereby, in each case to the same extent as
such Indemnified Parties were entitled to be indemnified under the articles of
incorporation and bylaws of Target as in effect on December 31, 1997 (and
Acquirer and the Surviving Corporation, as the case may be, will pay expenses,
including through advancement to the full extent provided in Target's articles
of incorporation or bylaws as in effect on December 31, 1997. Without limiting
the foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether arising before
or after the Effective Time), (i) the Indemnified Parties may retain counsel
satisfactory to them and Target (or them and Acquirer and the Surviving
Corporation after the
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Effective Time), (ii) Target (or after the Effective Time, Acquirer and the
Surviving Corporation) shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are received
and (iii) Target (or after the Effective Time, Acquirer and the Surviving
Corporation) will use all reasonable efforts to assist in the vigorous defense
of any such matter, provided that none of Target, Acquirer or the Surviving
Corporation shall be liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 7.13, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify Target, Acquirer or the Surviving Corporation (but the failure so to
notify an Indemnifying Party shall not relieve it from any liability which it
may have under this Section 7.13 except to the extent such failure prejudices
such party), and shall deliver to Target (or after the Effective Time, Acquirer
and the Surviving Corporation) the undertaking contemplated by Section 14-2-855
of the GBCC. The Indemnified Parties as a group may retain only one law firm to
represent them with respect to such matter unless there is, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more Indemnified Parties.
(b) The provisions of this Section 7.13 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
(c) Acquirer shall pay for the insurance premiums required for any
extension of Target's D&O insurance policy following the Closing Date for a
"discovery" period elected under such insurance policy covering the officers and
directors of Target for a period of six years or shall provide comparable
coverage for the same period under Acquirer's D&O insurance policy for all
directors and officers of Target, covered by Target's policy.
(d) The rights to indemnification granted by this Section 7.13 are
subject to the following limitations: (i) the total aggregate indemnification to
be provided by Acquirer and/or Surviving Corporation (exclusive of insurance
coverage available) pursuant to this Section 7.13 will not exceed, as to all of
the Indemnified Parties described herein as a group, the sum of $10 million, and
Acquirer shall have no responsibility to any Indemnified Party for the manner in
which such sum is allocated among that group (but the Indemnified Parties may
seek reallocation among themselves); (ii) amounts otherwise required to be paid
by Acquirer to an Indemnified Party pursuant to this Section 7.13 shall be
reduced by any amounts that such Indemnified Party has recovered by virtue of
the claim for which indemnification is sought and Acquirer shall be reimbursed
for any amounts paid by Acquirer that such Indemnified Party subsequently
recovers by virtue of such claim; (iii) no Indemnified Party shall be entitled
to indemnification for any claim made or threatened prior to the Closing Date of
which such Indemnified Party or Target was aware but did not promptly disclose
to Acquirer prior to the execution of this Plan of Merger, if the claim or
threatened claim was known on or before such time, or prior to the Closing Date,
if such claim became known after execution of this Plan of Merger, provided that
all matters disclosed in the Disclosure Schedule to this Plan of Merger shall be
deemed to have been disclosed to Acquirer by all of such Indemnified Parties for
purposes of this Section 7.13(d); and (iv) any claim for indemnification
pursuant to this Section 7.13 must be submitted in writing to the Chief
Executive Officer of Acquirer promptly upon such Indemnified Party becoming
aware of such claim and, in no event, more than ten years from the
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Effective Date, provided that any such failure to advise promptly has a
prejudicial effect on Acquirer.
7.14 Termination of Plans.
(a) No further discount stock purchases shall be permitted with
director fees through the Morrison Fresh Cooking, Inc. Stock Incentive and
Deferred Compensation Plan for Directors.
(b) All changes of control agreements between Target and any
officer or director of Target shall be terminated at or prior to the Effective
Date.
SECTION 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination.
This Plan of Merger may be terminated at any time prior to the
Effective Time, whether before or after approval of matters presented in
connection with the Merger by the holders of shares of Target Common Stock:
(a) by mutual written consent of Acquirer and Target;
(b) by either Acquirer or Target:
(i) if, upon a vote at a duly held meeting of shareholders or
any adjournment thereof, any required approval of the holders of
shares of Target Common Stock shall not have been obtained;
(ii) if the Merger shall not have been consummated on or before
October 31, 1998, unless the failure to consummate the Merger is
the result of a willful and material breach of this Plan of Merger
by the party seeking to terminate this Plan of Merger; provided,
however, that the passage of such period shall be tolled for any
part thereof (but not exceeding 60 days in the aggregate) during
which any party shall be subject to a nonfinal order, decree,
ruling or action restraining, enjoining or otherwise prohibiting
the consummation of the Merger or the calling or holding of a
meeting of shareholders;
(iii) if any court of competent jurisdiction or other
Governmental or Regulatory Authority shall have issued an Order or
taken any other action permanently enjoining, restraining or
otherwise prohibited the Merger and such Order or other action
shall have become final and nonappealable;
(iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in
this Plan of Merger which (A) would give rise to the failure of a
condition set forth in Section 9.2(a) or (b) or Section 9.3(a) or
(b), as applicable, and (B) cannot be or has not been cured within
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30 days after the giving of written notice to the breaching party
of such breach (a "Material Breach") (provided that the terminating
party is not then in Material Breach of any representation,
warranty, covenant or other agreement contained in this Plan of
Merger); or
(v) if either Acquirer or Target gives notice of termination as
a non-notifying party pursuant to Section 7.8;
(vi) the Offer shall be terminated or expire in accordance with
its terms without the purchase of Shares pursuant thereto; provide,
however, that neither party shall be entitled to terminate for such
reason if the cause thereof is a breach by such party of any of its
obligations under this Plan of Merger;
(vii) if (a) all of the conditions to the obligation of such
party to effect the Merger set forth in Section 9.1 shall have been
satisfied and (b) any condition to the obligation of such party to
effect the Merger set forth in Section 9.2 (in the case of
Acquirer) or Section 9.3 (in the case of Target) is not capable of
being satisfied prior to the end of the period referred to in
Section 8.1(b)(ii);
(c) by Target if:
(i) Target receives a Superior Proposal (defined in Section
7.9) prior to the consummation of the Offer; provided that, prior
to terminating this Plan of Merger, (A) Target shall have provided
the Notice of Takeover Proposal in accordance with the first
sentence of Section 7.9(b), and (B) Target shall have paid to
Acquirer the Fee required pursuant to Section 8.6; or
(ii) the Offer has not been timely commenced in accordance with
Section 1.1; or
(d) by Acquirer and Subsidiary, if:
(i) the Board shall have withdrawn or modified, in any manner
adverse to Acquirer and Subsidiary, the approval or recommendation
by the Board of this Plan of Merger, the Offer or the Merger or
approved or recommended any Takeover Proposal (defined in Section
7.9), or shall have resolved to do any of the foregoing; or
(ii) (A) a Takeover Proposal that is publicly disclosed shall
have been commenced, publicly proposed or communicated to Target
and (B) Target shall not have rejected such Takeover Proposal
within 15 business days (or 10 business days if required by the
federal securities laws) after the earlier of its receipt thereof
or the date its existence first becomes publicly disclosed.
8.2 Effect of Termination.
In the event of termination of this Plan of Merger as provided in
Section 8.1, this Plan of Merger shall forthwith become void and have no effect,
without any liability or obligation on the
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part of any party, other than the provisions of Sections 6.2, 8.2 and 8.6, and
except to the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants or other
agreements set forth in this Plan of Merger.
8.3 Amendment.
This Plan of Merger may be amended by the parties at any time before or
after any required approval of matters presented in connection with the Merger
by the holders of shares of Target Common Stock; provided, however, that after
any such approval, there shall be made no amendment that requires further
approval by such shareholders without the further approval of such shareholders.
This Plan of Merger may not be amended except by an instrument in writing signed
on behalf of each of the parties.
8.4 Extension; Waiver.
At any time prior to the Effective Time of the Merger, the parties may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Plan of Merger or in any document delivered
pursuant to this Plan of Merger or (c) subject to the proviso of Section 8.3,
waive compliance with any of the agreements or conditions contained in this Plan
of Merger. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Plan of Merger to assert any of its
rights under this Plan of Merger or otherwise shall not constitute a waiver of
such rights, except as otherwise provided in Section 7.8.
8.5 Procedure for Termination, Amendment, Extension or Waiver.
A termination of this Plan of Merger pursuant to Section 8.1, an
amendment of this Plan of Merger pursuant to Section 8.3, or an extension or
waiver pursuant to Section 8.4 shall, in order to be effective, require in the
case of Acquirer, Subsidiary or Target, action by its Board of Directors or the
duly authorized designee of the Board of Directors.
8.6 Expenses; Break-up Fees.
(a) All costs and expenses incurred in connection with this Plan of
Merger and the transactions contemplated hereby shall be paid by the party
incurring such expense.
(b) If:
(i) this Plan of Merger is terminated by Acquirer and
Subsidiary pursuant to Section 8.1(d)(i) hereof or by Target
pursuant to Section 8.1(c)(i); or
(ii) (A) this Plan of Merger is terminated (1) by Acquirer and
Subsidiary pursuant to Section 8.1(d)(ii), or 8.1(b)(iv), (v) or
(vii) hereof, or (2) by Acquirer and Subsidiary or by Target
pursuant to Section 8.1(b)(iii) hereof, but only if the Order,
ruling or other action by the Governmental or Regulatory Authority
giving rise thereto is issued or taken as a result of an action,
suit or proceeding in which a Third Party
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who has made a Takeover Proposal or Superior Proposal is a
participant or which involves issues arising out of a Takeover
Proposal or Superior Proposal, and, ---
(B) within 12 months thereafter, either (1) Target enters into
an agreement with respect to any Third Party Acquisition or (2) any
Third Party Acquisition occurs, and,
(C) after the execution and delivery of this Plan of Merger but
prior to such termination, (1) Target (or its agents) had
discussions with respect to such Third Party Acquisition, (2)
Target (or its agents) furnished information with respect to or
with a view to such Third Party Acquisition or (3) a Third Party
announced an interest publicly with respect to any Third Party
Acquisition, or indicated an interest or made a proposal with
respect to any Third Party Acquisition and thereafter such
indication or proposal became public, or, with respect to any Third
Party that announced an interest publicly prior to the date hereof
with respect to any Third Party Acquisition, or indicated an
interest or made a proposal prior to the date hereof with respect
to any Third Party Acquisition, such Third Party indicated publicly
its continued interest with respect to such Third Party
Acquisition, or indicated its continued interest or amended any
previous proposal with respect to such Third Party Acquisition and
thereafter such indication or amendment became public;
then Target shall pay to Acquirer within two business days following
any such termination under paragraph (i) above or within two business
days following the closing of a Third Party Acquisition described in
paragraph (ii)(B) in the event of any such termination under paragraph
(ii) above, a fee, in cash and in immediately available funds, of $2.6
million (inclusive of all out-of-pocket expenses) (the "Fee");
provided, however, that Target in no event shall be obligated to pay
more than one Fee with respect to all such terminations; provided,
further, that Target shall not be obligated to pay the Fee pursuant to
this Section if Acquirer or Subsidiary shall be in material breach of
its covenants or agreements in this Plan of Merger, and, provided,
further, that Target shall reimburse Acquirer for all reasonable
attorneys' fees and other out-of-pocket expenses incurred with
collecting a Fee hereunder if it is ultimately determined that a Fee is
payable by Target hereunder.
(c) For purposes of this Section:
"Third Party" means any person other than Acquirer or Subsidiary or
any affiliate thereof.
"Third Party Acquisition" means the occurrence of any of the
following events, in a single transaction or a series of related
transactions: (i) the acquisition of Target by merger, tender offer,
exchange offer or otherwise by any Third Party; (ii) the acquisition by
a Third Party of 30% or more of the assets of Target and its
subsidiaries, taken as a
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whole, (iii) the acquisition by a Third Party or Target of more than
30% of the outstanding Shares; or (iv) the adoption by Target of a plan
of liquidation or the declaration or payment of an extraordinary
dividend. Target acknowledges that the provisions contained in this
Section 8.6 are an integral part of the transactions contemplated by
this Plan of Merger, and that, without these provisions, Acquirer would
not enter into this Plan of Merger.
SECTION 9
CONDITIONS TO CLOSING
9.1 Mutual Conditions.
The respective obligations of each party to effect the Merger shall be
subject to the satisfaction, at or prior to the Closing Date of the following
conditions (any of which may be waived in writing by Acquirer and Target):
(a) None of Acquirer, Subsidiary or Target nor any of their
respective subsidiaries shall be subject to any order, decree or injunction by a
court of competent jurisdiction which (i) prevents or materially delays the
consummation of the Merger or (ii) would impose any material limitation on the
ability of Acquirer effectively to exercise full rights of ownership of the
Common Stock of the Surviving Corporation or any material portion of the assets
or business of Target.
(b) No statute, rule or regulation shall have been enacted by the
government (or any governmental agency) of the United States or any state,
municipality or other political subdivision thereof that makes the consummation
of the Merger and any other transaction contemplated hereby illegal.
(c) Any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated.
(d) The holders of Target Common Stock shall have approved the
adoption of this Plan of Merger and any other matters submitted to them in
accordance with the provisions of Section 7.3 hereof.
(e) Subsidiary shall have purchased all Shares validly tendered
pursuant to the Offer.
9.2 Conditions to Obligations of Acquirer and Subsidiary.
The obligations of Acquirer and Subsidiary to consummate the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction,
at or prior to the Closing Date, of the following conditions (any of which may
be waived by Acquirer and Subsidiary):
(a) Each of the agreements of Target to be performed at or prior to
the Closing Date pursuant to the terms hereof shall have been duly performed in
all material respects, and
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Target shall have performed, in all material respects, all of the acts required
to be performed by it at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of Target set forth in this
Plan of Merger that are qualified as to materiality shall be true and correct,
and those that are not so qualified shall be true and correct in all material
respects, as of the date of this Plan of Merger and as of the Closing as though
made at and as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality shall be
true and correct, and those that are not so qualified shall be true and correct
in all material respects, as of such earlier date); provided, however, that
Target shall not be deemed to be in breach of any such representations or
warranties by taking any action permitted (or approved by Acquirer) under
Section 7.2. Acquirer and Subsidiary shall have been furnished with a
certificate, executed by a duly authorized officer of Target, dated the Closing
Date, certifying in such detail as Acquirer and Subsidiary may reasonably
request as to the fulfillment of the foregoing conditions.
(c) Acquirer shall have received an opinion from Powell, Goldstein,
Frazer & Murphy LLP in customary form and reasonably satisfactory to Acquirer.
9.3 Conditions to Obligations of Target.
The obligations of Target to consummate the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction, at or
prior to the Closing Date, of the following conditions (any of which may be
waived by Target):
(a) Each of the agreements of Acquirer and Subsidiary to be
performed at or prior to the Closing Date pursuant to the terms hereof shall
have been duly performed, in all material respects, and Acquirer and Subsidiary
shall have performed, in all material respects, all of the acts required to be
performed by them at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of Acquirer set forth in
this Plan of Merger that are qualified as to materiality shall be true and
correct, and those that are not so qualified shall be true and correct in all
material respects, as of the date of this Plan of Merger and as of the Closing
as though made at and as of such time, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality shall be
true and correct, and those that are not so qualified shall be true and correct
in all material respects, as of such earlier date). Target shall have been
furnished with a certificate, executed by duly authorized officers of Acquirer
and Subsidiary, dated the Closing Date, certifying in such detail as Target may
reasonably request as to the fulfillment of the foregoing conditions.
(c) Target shall have received an opinion from Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P, in customary form and reasonably
satisfactory to Target.
37
<PAGE> 42
SECTION 10
MISCELLANEOUS
10.1 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Plan of Merger or in
any instrument delivered pursuant to this Plan of Merger shall survive the
Effective Time.
10.2 Notices.
Any communications required or desired to be given hereunder shall be
deemed to have been properly given if sent by hand delivery or by facsimile and
overnight courier to the parties hereto at the following addresses, or at such
other address as either party may advise the other in writing from time to time:
If to Acquirer:
Piccadilly Cafeterias, Inc.
3232 Sherwood Forest Boulevard
Baton Rouge, Louisiana 70816
Attention: Chairman
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Denegre
First NBC Center
51st Floor
201 St. Charles Avenue
New Orleans, Louisiana 70170-5100
Attention: Curtis R. Hearn
If to Target:
Morrison Restaurants Inc.
3300 Highlands Parkway
Suite 130
Atlanta, Georgia 30082
Attention: Chairman
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
16th Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Walter G. Moeling, IV
38
<PAGE> 43
All such communications shall be deemed to have been delivered on the
date of hand delivery or on the next business day following the deposit of such
communications with the overnight courier.
10.3 Further Assurances.
Each party hereby agrees to perform any further acts and to execute and
deliver any documents which may be reasonably necessary to carry out the
provisions of this Plan of Merger.
10.4 Governing Law.
This Plan of Merger shall be interpreted, construed and enforced in
accordance with the laws of the State of Georgia, applied without giving effect
to any conflicts-of-law principles.
10.5 Definitions.
"Including." The word "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific terms or matters as provided immediately following the
word "including" or to similar items or matters, whether or not non-limiting
language (such as "without limitation", "but not limited to", or words of
similar import) is used with reference to the word "including" or the similar
items or matters, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of the
general statement, term or matter.
"Knowledge." "To the knowledge", "to the best knowledge, information
and belief", or any similar phrase shall be deemed to refer to the knowledge of
the Chairman of the Board, Chief Executive Officer or Chief Financial Officer of
a party and to include the assurance that such knowledge is based upon a
reasonable investigation, unless otherwise expressly provided.
"Material Adverse Change" or "Material Adverse Effect." "Material
Adverse Change" or "Material Adverse Effect" means, when used in connection with
Target or Acquirer, any change, effect, event or occurrence that has, or is
reasonably likely to have, individually or in the aggregate, a material adverse
impact on the business or financial position of such party and its subsidiaries
taken as a whole or to the ability of such party to perform its obligations
hereunder or to consummate the transactions contemplated hereby, including the
Offer and the Merger; provided, however, that "Material Adverse Change" and
"Material Adverse Effect" shall be deemed to exclude the impact of (i) changes
in generally accepted accounting principles and (ii) the public announcement of
the Merger and compliance with the provisions of this Plan of Merger, and (iii)
any charges resulting from any restructuring or other similar charges or
write-offs taken by Target with the consent of Acquirer; provided, however, that
a decline in same store customer traffic consistent with previous quarterly
trends, which have ranged between 5.4% and 10.9% (over the previous annual
period) for the first three fiscal quarters of Target, and the corresponding
negative financial results, shall not be deemed to constitute a Material Adverse
Change or Material Adverse Effect with respect to Target.
39
<PAGE> 44
10.6 Captions.
The captions or headings in this Plan of Merger are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Plan of Merger.
10.7 Integration of Exhibits.
All Exhibits attached to this Plan of Merger are integral parts of this
Plan of Merger as if fully set forth herein, and all statements appearing
therein shall be deemed disclosed for all purposes and not only in connection
with the specific representation in which they are explicitly referenced.
10.8 Entire Agreement.
This instrument, including all Exhibits attached hereto, together with
the Confidentiality Agreement, contains the entire agreement of the parties and
supersedes any and all prior or contemporaneous agreements between the parties,
written or oral, with respect to the transactions contemplated hereby.
10.9 Counterparts.
This Plan of Merger may be executed in several counterparts, each of
which, when so executed, shall be deemed to be an original, and such
counterparts shall, together, constitute and be one and the same instrument.
10.10 Binding Effect.
This Plan of Merger shall be binding on, and shall inure to the benefit
of, the parties hereto, and their respective successors and assigns, and, except
as provided in Section 7.13, no other person shall acquire or have any right
under or by virtue of this Plan of Merger. No party may assign any right or
obligation hereunder without the prior written consent of the other parties.
10.11 No Rule of Construction.
The parties acknowledge that this Plan of Merger was initially prepared
by Acquirer, and that all parties have read and negotiated the language used in
this Plan of Merger. The parties agree that, because all parties participated in
negotiating and drafting this Plan of Merger, no rule of construction shall
apply to this Plan of Merger which construes ambiguous language in favor of or
against any party by reason of that party's role in drafting this Plan of
Merger.
40
<PAGE> 45
IN WITNESS WHEREOF, Acquirer, Subsidiary and Target have caused this
Plan and Agreement of Merger to be executed by their respective duly authorized
officers, and have caused their respective corporate seals to be hereunto
affixed, all as of the day and year first above written.
MORRISON RESTAURANTS INC.
By /s/ RONNIE L. TATUM
----------------------------------------
Name: Ronnie L. Tatum
-------------------------------------
Title: Chief Executive Officer
------------------------------------
ATTEST:
/s/ MITCHELL S. BLOCK
- ----------------------------------------
Secretary
[CORPORATE SEAL]
<PAGE> 46
PICCADILLY CAFETERIAS, INC.
By /s/ RONALD A. LABORDE
----------------------------------------
Ronald A. LaBorde
President and Chief Executive Officer
ATTEST:
/s/ BRIAN VON GRUBEN
- ----------------------------------
Secretary
[CORPORATE SEAL]
PICCADILLY ACQUISITION
CORPORATION
By /s/ RONALD A. LABORDE
-----------------------------------------
Ronald A. LaBorde
President
ATTEST:
/s/ J. FRED JOHNSON
- --------------------------------------
Secretary
[CORPORATE SEAL]
<PAGE> 47
ANNEX A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Subsidiary shall not
be required to accept for payment or pay for any tendered Shares, and may
terminate or amend the Offer and may postpone the acceptance for payment and
payment for tendered Shares, if (i) there are not validly tendered prior to the
expiration of the Offer (the "Expiration Date") and not withdrawn a number of
Shares which constitutes on the date of purchase at least 66 2/3% of the
outstanding Shares on a fully diluted basis (the "Minimum Condition") or (ii) at
any time before the time of payment for such Shares (whether or not Shares have
been accepted for payment or paid for pursuant to the Offer), any of the
following events (each, an "Event") shall occur:
(a) there shall have been instituted or pending any action or
proceeding by or before any court or governmental regulatory or administrative
agency, authority or tribunal, domestic or foreign, which is reasonably likely
to (i) restrain or prohibit the consummation of the Offer or the Merger, or
obtain any material damages in connection therewith, (ii) make the purchase of
or payment for some or all of the Shares pursuant to the Offer or the Merger
illegal, (iii) impose material limitations on the ability of Acquirer or
Subsidiary (or any of their affiliates) effectively to acquire or hold, or
requiring Acquirer, Subsidiary or Target or any of their respective affiliates
or subsidiaries to dispose of or hold separate, any of the assets or the
business of Acquirer or Subsidiary and their affiliates taken as a whole or
Target or otherwise have a Material Adverse Effect on Acquirer or Target or (iv)
impose material limitations on the ability of Acquirer (or its affiliates) to
exercise full rights of ownership of the Shares purchased by it on all matters
properly presented to the shareholders of Target; or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
governmental authority or by any court, any statute, rule, regulation, judgment,
decree, order or injunction, that is reasonably likely, directly or indirectly,
to result in any of the consequences referred to in clauses (i) through (iv) of
subsection (a) above; or
(c) there shall have 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 in the United States, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States, or (iv) in the case of any of the foregoing existing at the time of the
commencement of the Offer, in the reasonable judgment of Subsidiary, a material
acceleration or worsening thereof; or
(d) the Plan of Merger shall have been terminated in accordance with
its terms; or
(e) any waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated; or
(f) any of the representations or warranties made by Target in the
Merger Agreement shall not have been true and correct in all material respects
when made, or shall thereafter have
<PAGE> 48
ceased to be true and correct in all material respects on the Expiration Date
(other than (i) changes in or disruptions of Target's business resulting from
the execution of the Plan of Merger or the announcement of the Offer and the
Merger, and (ii) representations and warranties made as of a specified date), or
Target shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with by
it under the Plan of Merger and Target fails to cure such breach within five
days after notice thereof is given by Subsidiary, but in no event later than the
Expiration Date; or
(g) a Material Adverse Change shall have occurred with respect to
Target;
(h) Target's Board shall have withdrawn or modified, in any manner
adverse to Acquirer and Subsidiary, the approval or recommendation by the Board
of the Plan of Merger, the Offer or the Merger or approved or recommended any
Takeover Proposal or shall have resolved to do any of the foregoing.
which, in the reasonable discretion of Subsidiary, in any case, giving rise to
any such condition, makes it inadvisable to proceed with the Offer or with
acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Acquirer and
Subsidiary and may be asserted by Acquirer or Subsidiary regardless of the
circumstances giving rise to any such condition and may be waived by Acquirer or
Subsidiary in whole or in part at any time and from time to time in their sole
discretion, except as otherwise provided in the Plan of Merger with respect to
the Minimum Condition and compliance with the HSR Act. Acquirer's or
Subsidiary's failure at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver with
respect to any other facts and circumstances and each such right shall be deemed
an ongoing right which may be asserted at any time and from time to time.
2
<PAGE> 1
EXHIBIT 11(c)(2)
FORM OF
SHAREHOLDERS AGREEMENT
The undersigned shareholder (the "Shareholder") of Morrison's
Restaurants Inc., a Georgia corporation ("Target"), in consideration of the
benefits to be derived by Target and its shareholders pursuant to the
transactions contemplated by the Plan and Agreement of Merger dated April 22,
1998 (the "Plan of Merger") among Target and Piccadilly Cafeterias, Inc., a
Louisiana corporation ("Acquirer") and Piccadilly Acquisition Corporation (the
"Subsidiary") (the defined terms of which are used herein as defined therein)
and the expenses to be incurred by Acquirer in connection therewith, hereby
agrees with Acquirer and Subsidiary as follows:
1. The Shareholder agrees that, so long as the Plan of Merger remains
in effect, such Shareholder, acting solely in such Shareholder's capacity as
such, with respect to all shares of Common Stock of Target as to which such
Stockholder has voting power (collectively, the "Shares") shall not make any
demand or take any action to perfect the right for appraisal of such Shares in
accordance with the provisions of Article 13 of the Georgia Business Corporation
Code.
2. The Shareholder represents and warrants to Acquirer that: (i) this
Shareholders Agreement has been duly executed and delivered by the Shareholder
and constitutes a valid and binding obligation of the Shareholder, enforceable
against it in accordance with its terms; and (ii) so long as the Plan of Merger
remains in effect, the Shareholder will not transfer the Shares or any right to
take any action to perfect the right for appraisal of such Shares, except for
bona fide sales of Shares to unaffiliated third parties.
3. The provisions of this Shareholders Agreement shall be enforceable
through an action by Acquirer for damages at law or a suit for specific
performance or other appropriate extraordinary relief, the signatory Shareholder
acknowledging that remedies at law for breach or default under this Shareholders
Agreement might be or become inadequate.
All provisions hereof shall survive the effective date of the Merger.
This Shareholders Agreement is dated April 22, 1998.
SHAREHOLDER:
--------------------------------------
