<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
-------------------
HUDSON GENERAL CORPORATION
(Name of Subject Company)
GLGR ACQUISITION CORPORATION
GLOBEGROUND GMBH
DEUTSCHE LUFTHANSA AG
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
443784 10 3
(CUSIP Number of Class of Securities)
-------------------
<TABLE>
<S> <C>
PETER BLUTH Copies to:
PRESIDENT ARTHUR MOLINS
GLOBEGROUND GMBH GENERAL COUNSEL - NORTH AMERICA
C/O LUFTHANSA-BASIS, GEB. 357 LUFTHANSA GERMAN AIRLINES
D-60546 FRANKFURT AM MAIN 1640 HEMPSTEAD TURNPIKE
GERMANY EAST MEADOW, NEW YORK 11554
49-69-696-19 (516) 296-9200
(Name, Address and Telephone Number of AND
Person Authorized to Receive Notices and BONNIE A. BARSAMIAN, ESQ.
Communications on Behalf of Bidder) DAVID W. BERNSTEIN, ESQ.
ROGERS & WELLS LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8000
</TABLE>
-------------------
CALCULATION OF FILING FEE
Transaction Value *: $132,616,124 Amount of Filing Fee: $26,523.22
* For purposes of calculating the fee only. This amount assumes the purchase
of 1,744,949 shares of common stock, $1.00 par value per share (the
"Shares") of Hudson General Corporation at a price per share of $76 in
cash. The number of Shares outstanding as of December 31, 1998 is
1,744,949. The amount of the filing fee, calculated in accordance with
Section 14(g)(3) and Rule 0-11(d) under the Securities and Exchange Act of
1934, as amended, equals 1/50th of one percent of the aggregate of the cash
offered by the Bidders.
[ ] 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: N/A Filing Party: N/A
Form or registration no.: N/A Date filed: N/A
<PAGE> 2
[ ] 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: N/A Filing Party: N/A
Form or registration no.: N/A Date filed: N/A
<PAGE> 3
SCHEDULE 14D
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Hudson General Corporation, a
Delaware corporation (the "Company"). The address of the Company's principal
executive offices is 111 Great Neck Road, Great Neck, New York 11021.
(b) This Statement relates to the offer by GLGR Acquisition
Corporation, a Delaware corporation (the "Purchaser"), to purchase all the
outstanding shares of common stock, par value $1.00 per share (the "Shares") of
the Company at a purchase price of $76 per Share, net to the seller in cash (the
"Tender Offer Price"), upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated February 19, 1999 (the "Offer to Purchase") and the
related Letter of Transmittal (which, together with any supplements or
amendments, collectively constitute the "Offer"), copies of which are filed as
Exhibits (a)(1) and (a)(2) hereto, respectively. As of December 31, 1998, there
were 1,744,949 Shares outstanding.
(c) The information set forth in the Offer to Purchase in Section 6
("Price Range of Shares; Dividends") is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d), (g) This Statement is being filed by the Purchaser, which is
indirectly wholly owned by GlobeGround GmbH ("GlobeGround"), a German company
that is an indirect wholly-owned subsidiary of Deutsche Lufthansa AG, a German
company ("Lufthansa", and together with GlobeGround and the Purchaser, the
"Bidders"). The information set forth in the Offer to Purchase in Section 9
("Certain Information Concerning the Purchaser, LAGS, GlobeGround and the
Parent") and in Schedule I to the Offer to Purchase is incorporated herein by
reference.
(e) - (f) During the last five years, none of the Bidders nor to the
best of their knowledge, 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
further 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) - (b) The information set forth in the Offer to Purchase in Section
9 ("Certain Information Concerning the Purchaser, LAGS, GlobeGround and the
Parent") and in Section 11 ("Background of the Offer; Contacts with the
Company") is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) - (c) The information set forth in the Offer to Purchase in Section
10 ("Source and Amount of Funds") is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (e) The information set forth in the Offer to Purchase in Section
12 ("Purpose of the Offer and the Proposed Merger; Plans for the Company; The
Merger Agreement") is incorporated herein by reference.
(f) - (g) The information set forth in the Offer to Purchase in Section
7 ("Certain Effects of the Transaction") is incorporated herein by reference.
<PAGE> 4
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in the Offer to Purchase under
"Introduction" and in Section 9 ("Certain Information Concerning the Purchaser,
LAGS, GlobeGround and the Parent") and in Section 12 ("Purpose of the Offer and
the Proposed Merger; Plans for the Company; The Merger Agreement") is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Offer to Purchase under "Introduction"
and in Section 9 ("Certain Information Concerning the Purchaser, LAGS,
GlobeGround and the Parent"), Section 11 ("Background of the Offer; Contacts
with the Company") and in Section 12 ("Purpose of the Offer and the Proposed
Merger; Plans for the Company; The Merger Agreement") is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "Introduction"
and in Section 16 ("Fees and Expenses") is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in the Offer to Purchase in Section 9
("Certain Information Concerning the Purchaser, LAGS, GlobeGround and the
Parent") is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase in Section 11
("Background of the Offer; Contacts with the Company") and in Section 12
("Purpose of the Offer and the Proposed Merger; Plans for the Company; The
Merger Agreement") is incorporated herein by reference.
(b) - (c) The information set forth in the Offer to Purchase in Section
15 ("Certain Legal Matters; Regulatory Approvals") is incorporated herein by
reference.
(d) The information set forth in the Offer to Purchase in Section 7
("Certain Effects of the Transaction") is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Agreement and Plan of Merger, dated as of February 15, 1999,
copies of which are filed as Exhibits (a)(1), (a)(2) and (c)(1) hereto,
respectively, is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated February 19, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated February 19, 1999, to
brokers, dealers, commercial banks, trust
companies and other nominees.
(a)(5) Form of letter to be used by brokers, dealers,
commercial banks, trust companies and nominees to
their clients.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) Form of Summary Advertisement, dated February 19, 1999.
(a)(8) Press Release, dated February 16, 1999.
(b) Not Applicable.
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
(c)(1) Agreement and Plan of Merger, dated as of February 15, 1999, by and between the
Company and the Purchaser.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
</TABLE>
<PAGE> 6
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: February 19, 1999
DEUTSCHE LUFTHANSA AG
By: /s/ Dr. Karl Ludwig Kley
--------------------------------
Name: Dr. Karl Ludwig Kley
Title: Member, Executive Board
GLGR ACQUISITION CORPORATION
By: /s/ Peter Bluth
--------------------------------
Name: Peter Bluth
Title: President
GLOBEGROUND GMBH
By: /s/ Peter Bluth
--------------------------------
Name: Peter Bluth
Title: Managing Director
<PAGE> 7
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints David W. Bernstein, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
to sign in any and all capacities any and all amendments to this Statement on
Schedule 14D-1 and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting to such attorney-in-fact and agent full power and authority to do all
such other acts and execute all such other documents as he may deem necessary or
desirable in connection with the foregoing, as fully as the undersigned might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
DEUTSCHE LUFTHANSA AG
By: /s/ Dr. Karl Ludwig Kley
--------------------------------
Name: Dr. Karl Ludwig Kley
Title: Member, Executive Board
GLGR ACQUISITION CORPORATION
By: /s/ Peter Bluth
--------------------------------
Name: Peter Bluth
Title: President
GLOBEGROUND GMBH
By: /s/ Peter Bluth
--------------------------------
Name: Peter Bluth
Title: Managing Director
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated February 19, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated February 19, 1999, to
brokers, dealers, commercial banks, trust
companies and other nominees.
(a)(5) Form of letter to be used by brokers, dealers,
commercial banks, trust companies and nominees to
their clients.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) Form of Summary Advertisement, dated February 19, 1999.
(a)(8) Press Release, dated February 16, 1999.
(c)(1) Agreement and Plan of Merger, dated as of February 15, 1999, by and between the
Company and the Purchaser.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
FOR
$76.00 NET PER SHARE IN CASH
BY
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DEUTSCHE LUFTHANSA AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE IN ACCORDANCE WITH AN AGREEMENT AND PLAN OF MERGER
(THE "MERGER AGREEMENT"), DATED AS OF FEBRUARY 15, 1999, BETWEEN HUDSON GENERAL
CORPORATION (THE "COMPANY") AND GLGR ACQUISITION CORPORATION (THE "PURCHASER").
THE BOARD OF DIRECTORS OF THE COMPANY, BASED UPON THE UNANIMOUS RECOMMENDATION
OF A SPECIAL COMMITTEE OF THAT BOARD CREATED TO CONSIDER ACQUISITION PROPOSALS,
(1) HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND A MERGER OF THE
COMPANY AND THE PURCHASER (THE "MERGER") IN WHICH, IF THE MERGER TAKES PLACE,
THE STOCKHOLDER OF THE PURCHASER WILL BECOME THE SOLE STOCKHOLDER OF THE MERGED
COMPANY AND THE STOCKHOLDERS OF THE COMPANY (OTHER THAN THE PURCHASER) WILL
RECEIVE THE SAME AMOUNT OF CASH PER SHARE AS IS PAID FOR SHARES PURCHASED
THROUGH THE OFFER, (2) HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE COMPANY'S
STOCKHOLDERS AND (3) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN RESPONSE TO THE OFFER. GLOBEGROUND GMBH, A GERMAN
COMPANY AND AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF DEUTSCHE LUFTHANSA AG, A
GERMAN COMPANY (THE "PARENT"), OWNS THROUGH LAGS (USA) INC., ITS WHOLLY-OWNED
DELAWARE SUBSIDIARY, ALL OF THE STOCK OF THE PURCHASER, HAS GUARANTEED THE
PURCHASER'S OBLIGATIONS UNDER THE MERGER AGREEMENT AND HAS AGREED TO PROVIDE ALL
FUNDS NECESSARY TO PAY FOR THE SHARES IN THE OFFER AND THE MERGER.
THIS OFFER IS NOT CONDITIONED ON THE ABILITY OF THE PURCHASER TO OBTAIN
FINANCING. HOWEVER, IT IS CONDITIONED UPON (1) THERE BEING VALIDLY TENDERED AND
NOT WITHDRAWN A NUMBER OF SHARES CONSTITUTING AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES OF THE COMPANY ON A FULLY DILUTED BASIS AND (2) APPROVAL OF
THE MERGER AGREEMENT, THE OFFER AND THE MERGER BY THE SUPERVISORY BOARD OF THE
PARENT BY MARCH 15, 1999. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND
CONDITIONS. SEE INTRODUCTION AND SECTION 14.
------------------------
IMPORTANT
------------------------
Any stockholder who wishes to tender Shares should complete and sign a
Letter of Transmittal (or a facsimile of one) in accordance with the
instructions set forth in the Letter of Transmittal and (A) mail or deliver it,
together with the certificate(s) representing the tendered Shares and any other
required documents, to the Depositary named on the back cover of this Offer to
Purchase or (B) tender the Shares using the procedures for book-entry transfer
described in Section 3. A stockholder whose Shares are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee must contact
the broker, dealer, commercial bank, trust company or other nominee if the
stockholder wishes to tender Shares.
A stockholder who wishes to tender Shares but whose certificates are not
immediately available, or who cannot comply with the procedures for book-entry
transfer described in this Offer to Purchase on a timely basis, may tender the
Shares by following the procedures for guaranteed delivery described in Section
3.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal, or other tender offer materials,
may be directed to the Information Agent at its address and telephone number set
forth on the back cover of this Offer to Purchase. Holders of Shares may also
contact brokers, dealers or banks for additional copies of this Offer to
Purchase, the Letter of Transmittal or other tender offer materials.
------------------------
February 19, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................ 1
THE TENDER OFFER............................................ 3
1. Terms of the Offer..................................... 3
2. Acceptance for Payment and Payment for Shares.......... 4
3. Procedures for Tendering Shares........................ 5
4. Withdrawal Rights...................................... 8
5. Certain United States Federal Income Tax
Consequences.............................................. 8
6. Price Range of Shares; Dividends....................... 9
7. Certain Effects of the Transaction..................... 10
8. Certain Information Concerning the Company............. 11
9. Certain Information Concerning the Purchaser, LAGS,
GlobeGround and the Parent................................ 12
10. Source and Amount of Funds............................. 14
11. Background of the Offer; Contacts with the Company..... 14
12. Purpose of the Offer and the Proposed Merger; Plans for
the Company; The Merger Agreement...................... 17
13. Dividends and Distributions............................ 21
14. Conditions of the Offer................................ 21
15. Certain Legal Matters; Regulatory Approvals............ 22
16. Fees and Expenses...................................... 23
17. Miscellaneous.......................................... 24
SCHEDULE I -- CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF THE PARENT, GLOBEGROUND AND THE
PURCHASER................................................. I-1
SCHEDULE II -- SECTION 262 OF THE DELAWARE GENERAL
CORPORATION LAW........................................... II-1
</TABLE>
<PAGE> 3
TO THE HOLDERS OF SHARES OF COMMON STOCK OF HUDSON GENERAL CORPORATION:
INTRODUCTION
GLGR Acquisition Corporation (the "Purchaser"), a Delaware corporation
which is indirectly wholly-owned by GlobeGround GmbH ("GlobeGround"), a German
company that is an indirect wholly-owned subsidiary of Deutsche Lufthansa AG
(the "Parent"), a German company, hereby offers to purchase all the outstanding
shares of common stock, par value $1.00 per share ("Common Shares" or "Shares"),
of Hudson General Corporation (the "Company"), a Delaware corporation, for
$76.00 per Common Share, net to the seller in cash, without interest (the "Offer
Price"), upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which terms and conditions,
together with any supplements or amendments thereto, constitute the "Offer").
The Offer will expire at 12:00 Midnight, New York City time, on Friday, March
19, 1999 (the "Expiration Time") unless the Purchaser extends the time during
which the Offer is open, in which event the term "Expiration Time" means the
latest time and date at which the Offer, as extended, will expire.
The Offer is being made in accordance with an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February 15, 1999, between the Company and
the Purchaser. After the Purchaser purchases all the Shares which are properly
tendered in response to the Offer and not withdrawn, the Purchaser will take all
steps in its power (including voting its Common Shares) to cause the Purchaser
to be merged with the Company (the "Merger") in a transaction in which the
stockholder of the Purchaser will own all the stock of the corporation which
results from the Merger (essentially, the Company), and the other stockholders
of the Company will receive the same amount of cash per Share as is paid for
Shares tendered in response to the Offer (unless particular stockholders elect
to exercise statutory rights to demand appraisal of their Common Shares).
ALLEN & COMPANY INCORPORATED, FINANCIAL ADVISOR TO A SPECIAL COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS, HAS DELIVERED TO THE SPECIAL COMMITTEE ITS
WRITTEN OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT, THE
$76.00 IN CASH TO BE RECEIVED BY THE HOLDERS OF COMMON SHARES AS A RESULT OF THE
OFFER AND THE MERGER IS FAIR FROM A FINANCIAL POINT OF VIEW. THE FULL TEXT OF
THE WRITTEN OPINION OF ALLEN & COMPANY INCORPORATED CONTAINING THE ASSUMPTIONS
MADE, THE MATTERS CONSIDERED AND THE SCOPE OF THE OPINION IS INCLUDED WITH THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE
14D-9") WHICH IS BEING MAILED TO STOCKHOLDERS TOGETHER WITH THIS OFFER TO
PURCHASE. STOCKHOLDERS ARE URGED TO READ THE ALLEN & COMPANY INCORPORATED
OPINION IN ITS ENTIRETY.
Tendering stockholders will not be required to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes as a result of the sale of Shares to the
Purchaser in response to the Offer.
Any tendering stockholder who fails to complete and sign the Substitute
Form W-9 included in the Letter of Transmittal may be subject to a required
backup Federal income tax withholding of 31% of the gross proceeds payable to
the stockholder or another payee pursuant to the Offer. See Section 5. The
Purchaser will pay all charges and expenses of The Bank of New York, as
Depositary (the "Depositary"), and Morrow & Co., Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY, BASED UPON THE UNANIMOUS
RECOMMENDATION OF A SPECIAL COMMITTEE OF THAT BOARD CREATED TO CONSIDER
ACQUISITION PROPOSALS, (1) HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER
WHICH MAY FOLLOW THE OFFER, (2) HAS DETERMINED THAT THE TERMS OF THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
1
<PAGE> 4
COMPANY AND THE COMPANY'S STOCKHOLDERS, AND (3) RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN RESPONSE TO
THE OFFER.
The Offer is conditioned upon (1) there being validly tendered and not
withdrawn prior to the Expiration Time such number of Shares that, together with
any Shares beneficially owned by the Purchaser or its affiliates, would
constitute at least a majority of the outstanding Shares, determined on a fully
diluted basis (the "Minimum Condition"), (2) approval by the Supervisory Board
of the Parent of the Merger Agreement, the Offer and the Merger by March 15,
1999 (the "Parent Board Condition"), and (3) the expiration or termination of
any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Condition"). The Offer is also subject to
certain other conditions as described in Section 14. The Purchaser expressly
reserves the right, in its sole discretion, to waive any of the conditions to
the Offer, except the Minimum Condition. See Section 14. The transactions
contemplated by the Merger Agreement have been approved by the Executive Board
of the Parent and the Supervisory Board of the Parent is currently scheduled to
meet on March 10, 1999.
The Merger is subject to the Purchaser's accepting and paying for the
Shares which are properly tendered in response to the Offer and not withdrawn
and to the satisfaction or waiver of certain conditions, including, if required
by law, the approval and adoption of the Merger Agreement by the requisite vote
of the stockholders of the Company. Under the Company's Certificate of
Incorporation and the Delaware General Corporation Law (the "DGCL"), except as
otherwise described below, the affirmative vote of the holders of a majority of
the outstanding Shares is required to approve and adopt the Merger Agreement and
the Merger. Consequently, if the Purchaser acquires (pursuant to the Offer or
otherwise) at least a majority of the then outstanding Shares, calculated on a
fully diluted basis, the Purchaser will have sufficient voting power to approve
and adopt the Merger Agreement and the Merger without the vote of any other
stockholder. See Section 12.
If the Purchaser increases the price it will pay for the tendered Shares,
that increase will apply to all Shares which are purchased through the Offer,
including Shares which are tendered before the price is increased.
Under the DGCL, if the Purchaser acquires (through the Offer or otherwise)
at least 90% of the then outstanding Shares, the Purchaser will be able to
approve and adopt the Merger Agreement and the Merger without a vote of the
Company's stockholders. If that occurs, the Purchaser intends to take the action
which will cause the Merger to become effective as soon as practicable without a
meeting of the Company's stockholders. If, however, the Purchaser does not
acquire at least 90% of the then outstanding Shares and a vote of the Company's
stockholders is required under Delaware law, a longer period of time will be
required to effect the Merger. See Section 12.
The Company has informed the Purchaser that as of the close of business on
December 31, 1998, there were 1,744,949 outstanding Common Shares and 37,100
Shares reserved for issuance upon the exercise of outstanding options. At the
date of this Offer to Purchase, neither Purchaser nor any of its affiliates own
any Shares. Therefore, the Minimum Condition will be satisfied if at least
891,025 shares are validly tendered and not withdrawn prior to the Expiration
Time. According to information filed with the Securities and Exchange
Commission, Mario J. Gabelli, Marc J. Gabelli and various entities which they
either directly or indirectly control or for which either one acts as chief
investment officer beneficially own 864,939 Common Shares (the "Gabelli Shares")
which is 48.5% of the fully diluted Common Shares, and, officers and directors
of the Company who have stated they intend to tender their shares, beneficially
own an additional 326,606 Common Shares, which is 18.3% of the fully diluted
Common Shares. Therefore, if the Gabelli Shares and the Shares owned by those
officers and directors are tendered and not withdrawn, the Minimum Condition
will be satisfied, even if no other Shares are tendered. Conversely, if the
Gabelli Shares are not tendered, it is very unlikely the Minimum Condition will
be satisfied.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH
RESPECT TO THE OFFER.
2
<PAGE> 5
THE TENDER OFFER
1. TERMS OF THE OFFER. On the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of the extension or amendment), the Purchaser will accept for payment and pay
for all Common Shares which are validly tendered prior to the Expiration Time
and not withdrawn in accordance with Section 4. The term "Expiration Time" means
12:00 midnight, New York City time, on Friday, March 19, 1999, unless the
Purchaser extends the period during which the Offer is open, in which event the
term "Expiration Time" will mean the time and date at which the Offer, as
extended, will expire.
In the Merger Agreement, the Purchaser has agreed that it will not (a)
waive the Minimum Condition, (b) reduce the Offer Price, (c) decrease the number
of Common Shares it is offering to purchase, (d) change the form of
consideration it is offering, or (e) modify or add to the conditions described
in Section 14 or otherwise modify the terms of the Offer.
The Purchaser reserves the right, at any time and from time to time (except
as limited by the Merger Agreement), to extend the period during which the Offer
is open, by giving oral or written notice of the extension to the Depositary and
by making a public announcement of it as described below. The Merger Agreement
requires the Purchaser to extend the Expiration Time for successive periods of
not more than 10 days, the last of which may not end later than May 31, 1999,
if, at the initial expiration date of the Offer, or any extension of that date,
the Minimum Condition or the HSR Condition is not satisfied. In addition, (i) if
the Purchaser increases the Offer Price or modifies the Offer in any other
manner permitted by the Merger Agreement, the Purchaser may extend the Offer
until not more than 10 business days after the date on which the Purchaser makes
a public announcement of the increase in the Offer Price or other modification;
(ii) if anyone other than the Purchaser makes a tender offer for the Shares
before the Expiration Time, the Purchaser may extend the Offer until not more
than 10 business days after the other tender offer expires, and (iii) if the
Purchaser is prevented by an order of a court or other governmental agency from
accepting the Shares which are tendered in response to the Offer, the Purchaser
may extend the Offer until 10 business days after the Purchaser is able to
accept the Shares without violating any order of any court or other governmental
agency. During any extension, all Shares previously tendered and not withdrawn
will remain tendered in response to the Offer, subject to the rights of a
tendering stockholder to withdraw tendered Shares. See Section 4.
Consummation of the Offer is conditioned upon, among other things,
satisfaction of each of the Minimum Condition, the Parent Board Condition and
the HSR Condition. The Offer is also subject to other conditions set forth in
Section 14. Subject to the Merger Agreement and the applicable regulations of
the Securities and Exchange Commission (the "SEC"), the Purchaser reserves the
right, at any time and from time to time, to (i) delay acceptance for payment
of, or, regardless of whether Shares were already accepted for payment, payment
for, Shares pending receipt of any regulatory or third-party approval described
in Section 15 or in order to comply in whole or in part with any other
applicable law, (ii) terminate the Offer and not accept for payment any Shares
if any of the conditions described in Section 14 are not satisfied or upon the
occurrence of any of the events described in Section 14 or (iii) waive any
condition (except the Minimum Condition) or otherwise amend the Offer in any
respect, subject to the terms of the Merger Agreement, in each case, by giving
oral or written notice of the delay, termination, waiver or amendment to the
Depositary and by making a public announcement of it, as described below.
If the Purchaser extends the Offer or is delayed in accepting or paying for
Shares, the Depositary may retain the tendered Shares, subject to the right of
stockholders to withdraw Shares to the extent described in Section 4. The
Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act requires
the Purchaser to pay the consideration offered or return the tendered Shares
promptly after the termination or withdrawal of the Offer and (ii) the Purchaser
may not delay acceptance for payment of, or payment for (except as provided in
clause (i) of the first sentence of the preceding paragraph), any Shares upon
the occurrence of any of the events described in Section 14 without extending
the period of time during which the Offer is open.
3
<PAGE> 6
The Purchaser will make a public announcement of any extension, delay,
termination, waiver or amendment as promptly as practicable after it takes
place. In the case of an extension, the Purchaser will make a public
announcement no later than 9:00 a.m., New York City time, on the business day
after the day of the previously scheduled Expiration Time. Subject to applicable
law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which
require that material changes be promptly disseminated to stockholders in a
manner reasonably designed to inform them of the changes), the Purchaser will
have no obligation to publish, advertise or otherwise communicate any public
announcement other than by issuing a press release.
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 to the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. Consummation of the Offer
is conditioned upon satisfaction of the conditions set forth in Section 14. The
Purchaser reserves the right (but will not be obligated) to waive any or all of
those conditions (except the Minimum Condition, which may not be waived). The
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer, other than a
change in price or a change in the percentage of securities sought, will depend
upon the facts and circumstances then existing, including the materiality of the
changed terms or information. With respect to a change in price or a change in
the percentage of securities sought, a minimum of 10 business days generally is
required to allow for adequate dissemination to stockholders.
If the Purchaser increases the price it will pay for tendered Shares, that
increase will apply to all Shares which are purchased through the Offer,
including Shares which are tendered before the price is increased.
The Company has given the Purchaser a stockholder list and security
position listings for the purpose of enabling the Purchaser to disseminate the
Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares and to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Company's
stockholder list, or 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. On the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of the extension or amendment), the Purchaser
will purchase, by accepting for payment, and will pay for, all Shares which are
validly tendered (and not properly withdrawn in accordance with Section 4) prior
to the Expiration Time. Shares will be accepted as soon as practicable after the
later to occur of (i) the Expiration Time and (ii) the satisfaction or waiver of
the conditions set forth in Section 14. Any determination concerning the
satisfaction of the terms and conditions of the Offer will be in the sole
discretion of the Purchaser. See Section 14. The Purchaser expressly reserves
the right, in its sole discretion, to delay acceptance for payment of, or,
subject to the applicable SEC rules, payment for, Shares in order to comply in
whole or in part with any applicable law. See Section 15.
The Parent will file a Notification and Report Form with respect to the
Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"). The waiting period under the HSR Act with respect to the Offer
will expire at 11:59 p.m., New York City time, on the 15th day after the
Notification and Report Form is filed, unless that waiting period is terminated
before then. Either the Antitrust Division of the United States Department of
Justice or the United States Federal Trade Commission may extend the waiting
period by requesting additional information or documentary material. If there is
such a request, the waiting period will expire at 11:59 p.m., New York City
time, on the 10th day after there has been substantial compliance with the
request. See Section 15 for additional information concerning the HSR Act and
the applicability of the antitrust laws to the Offer.
In all cases, payment for Shares which are tendered in response to the
Offer and accepted for payment will be made only after timely receipt by the
Depositary of (a) the certificate(s) representing the tendered Shares, or timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of the
Shares (if that procedure is available) into the Depositary's account at The
Depository Trust Company (the "Book-Entry
4
<PAGE> 7
Transfer Facility"), as described in Section 3, (b) a properly completed and
duly executed Letter of Transmittal (or facsimile of one), or an Agent's Message
(as defined below) in connection with a book-entry transfer, and (c) any other
documents required by the Letter of Transmittal.
An "Agent's Message" is a message, transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant in the Book-Entry Transfer
Facility which is tendering Shares that the participant has received, and agrees
to be bound by the terms of, the Letter of Transmittal and that the Purchaser
may enforce that agreement against the participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, tendered Shares when the Purchaser gives
oral or written notice to the Depositary of the Purchaser's acceptance of the
Shares for payment. Payment for Shares which are accepted will be made by
deposit of the aggregate purchase price for all the Shares which are accepted
for payment with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to the tendering stockholders. UNDER NO CIRCUMSTANCES WILL
THE PURCHASER PAY INTEREST ON THE OFFER PRICE BY REASON OF ANY DELAY IN PAYING
FOR SHARES. Upon the deposit of funds with the Depositary for the purpose of
making payments to tendering stockholders, the Purchaser's obligation to pay for
Shares will be satisfied and tendering stockholders must look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance of
their Shares pursuant to the Offer. If, for any reason, acceptance for payment
of or payment for any Shares tendered in response to the Offer is delayed, or
the Purchaser is prevented from accepting for payment or paying for Shares which
are tendered in response to the Offer, the Depositary nevertheless may retain,
subject to applicable SEC rules, tendered Shares on behalf of the Purchaser and
those Shares may not be withdrawn, except to the extent the tendering
stockholder exercises withdrawal rights as described in Section 4. The Purchaser
will pay any stock transfer taxes incident to the transfer to it of validly
tendered Shares, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, as well as the charges and expenses of the Depositary and the
Information Agent.
If any tendered Shares are not accepted for payment for any reason, or if
certificates which are submitted evidence more Shares than are tendered,
certificates representing unpurchased or untendered Shares will be returned or
sent, without expense to the tendering stockholder (or, in the case of Shares
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, Shares which are not purchased will be credited to an account
at that Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Subject to the provisions of the Merger Agreement, the Purchaser reserves
the right to transfer or assign, in whole, or in part from time to time, to one
or more of its affiliates the right to purchase all or any portion of the Shares
which are tendered in response to the Offer, but such a transfer or assignment
will not relieve the Purchaser of its obligations under the Offer and will in no
way prejudice the rights of tendering stockholders to receive payment for Shares
which are validly tendered in response to the Offer and accepted for payment.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to
be validly tendered in response to the Offer, (a) a Letter of Transmittal or a
facsimile of one, properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Time and (b) either (i) the certificates
representing the tendered Shares must be received by the Depositary along with
the Letter of Transmittal, (ii) the Shares must be tendered using the procedure
for book-entry transfer described below, and the Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Time, or (iii) the tendering
stockholder must comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL,
AND OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-
5
<PAGE> 8
ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER.
ITEMS WILL BE DEEMED DELIVERED ONLY WHEN THEY ARE ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer the Shares into the Depositary's
account at the Book-Entry Transfer Facility. Although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
Letter of Transmittal or a facsimile of one, with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other required documents, as well as the Book Entry Confirmation
relating to the Shares, must be transmitted to and received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Time or the guaranteed delivery procedures described below
must be followed.
REQUIRED DOCUMENTS MUST BE TRANSMITTED TO AND RECEIVED BY THE DEPOSITARY AT
ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY OR TO THE PURCHASER
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on Letters of Transmittal need not be
guaranteed, unless, in the case of the Letter of Transmittal, the Shares to
which they relate are being tendered by a registered holder of Shares who has
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on the Letter of Transmittal. Signatures
on Letters of Transmittal on which either of those boxes has been completed must
be tendered for the account of a member firm of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
by a commercial bank or trust company which has an office or correspondent in
the United States (each an "Eligible Institution"). See Instruction 1 on the
Letter of Transmittal.
If a Share certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or
certificates representing Shares which are not tendered or are not accepted for
payment are to be returned, to a person other than the registered holder(s),
then the Share certificate 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 Share certificate, with the signature(s) on the Share
certificate or stock powers guaranteed. See Instructions 1 and 5 of the Letter
of Transmittal.
If Share certificates are delivered to the Depositary at different times, a
properly completed and duly executed Letter of Transmittal (or facsimile of one)
must accompany each delivery.
Guaranteed Delivery. If a stockholder wishes to tender Shares in response
to the Offer, but the Share certificates are not immediately available or time
will not permit all required documents to reach the Depositary prior to the
Expiration Time, or the procedure for book-entry transfer cannot be completed on
a timely basis, the Shares may nevertheless be tendered as follows:
(i) the tender must be made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided with this Offer to Purchase,
must be received by the Depositary before the Expiration Time; and
(iii) the Share certificates representing all tendered Shares, in
proper form for transfer, or the Book-Entry Confirmation, together with a
properly completed and duly executed Letter of Transmittal (or facsimile of
one), 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 must be received by
6
<PAGE> 9
the Depositary within three American Stock Exchange trading days after the
date of execution of the Notice of Guaranteed Delivery.
A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary, but must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery distributed with this Offer to Purchase.
Payment for Shares which are accepted for payment will be made only after
(i) timely receipt by the Depositary of Share certificates for, or of Book-Entry
Confirmation with respect to, the Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile of one), together with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
Accordingly, it is possible that payment will not be made to all tendering
stockholders at the same time.
Backup United States Federal Withholding Tax. Under the United States
Federal income tax laws, the Depositary may be required to withhold 31% of the
amount of any payments made to certain stockholders. To prevent backup Federal
income tax withholding, each tendering stockholder must provide the Depositary
with the stockholder's correct taxpayer identification number, or certify that
the stockholder is exempt from backup Federal income tax withholding, by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 10 of the Letter of Transmittal.
Appointment as Proxy. By executing a Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as the tendering
stockholder's attorneys-in-fact and proxies, in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of the stockholder's rights with respect to the Shares tendered by the
stockholder and accepted for payment by the Purchaser (and with respect to any
other securities issued in respect of those Shares on or after the date of this
Offer to Purchase). That proxy is considered coupled with an interest in the
tendered Shares. This appointment will be effective if, when and to the extent
that the Purchaser accepts the tendered Shares for payment pursuant to the
Offer. When tendered Shares are accepted for payment, all prior proxies given by
the stockholder with respect to the tendered Shares and any other securities
issued in respect of them will, without further action, be revoked, and no
subsequent proxies may be given. The designees of the Purchaser will, with
respect to the tendered Shares and any other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
of the tendering stockholder as they, in their sole discretion, deem proper at
any annual, special, adjourned or postponed meeting of the Company's
stockholders, and the Purchaser reserves the right to require that in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of the Shares, the Purchaser will be able to
exercise full voting rights with respect to the Shares.
Proxies are effective only as to Shares accepted for payment pursuant to
the Offer. The Offer does not constitute a solicitation of proxies, absent a
purchase of Shares, for any meeting of the Company's stockholders. Any
solicitation of proxies will be made only pursuant to separate proxy soliciting
materials complying with the Exchange Act.
Determinations Regarding Tenders. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any Shares
using any of the procedures described above will be determined by the Purchaser,
in its sole discretion, and the Purchaser's determination will be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
or all tenders of Shares which it determines were not in proper form or if the
acceptance for payment of, or payment for, the Shares may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, to waive any of the conditions of the Offer
(except the Minimum Condition) or any defect or irregularity in any tender with
respect to Shares of any particular stockholder, whether or not similar defects
or irregularities are waived in the case of other stockholders. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions to it) will be final
and binding. None of the Purchaser, the Depositary, the
7
<PAGE> 10
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification.
Binding Agreement. The Purchaser's acceptance for payment of Shares
tendered in response to the Offer will constitute a binding agreement by the
tendering stockholder to sell, and by the Purchaser to purchase, the tendered
Shares on the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made in response to the Offer are irrevocable. Shares tendered
in response to the Offer may be withdrawn at any time prior to the Expiration
Time and, unless they have been accepted for payment by the Purchaser, may also
be withdrawn at any time after April 20, 1999.
If the Purchaser extends the Offer, is delayed in its acceptance of Shares
for payment or is unable to accept Shares for payment for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary may,
nevertheless, retain tendered Shares on behalf of the Purchaser, and those
Shares may not be withdrawn except to the extent that tendering stockholders are
entitled to withdraw them as described in this Section 4. Any such delay will be
accompanied by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written or facsimile transmission of a
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. A notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and (if Share certificates have
been tendered) the name of the registered holder, if different from that of the
person who tendered the Shares. If Share certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then
prior to the release of those Share certificates, the serial numbers shown on
the particular Share certificates to be withdrawn must be submitted to the
Depositary, and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless the Shares have been tendered for the account
of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares. Withdrawals of Shares may not be rescinded.
After Shares are properly withdrawn, they will be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered at any time prior to the Expiration Time using one of the procedures
described in Section 3.
All questions as to the form and validity (including, without limitation,
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in its sole discretion, and its determination will be final and binding. None of
the Purchaser, 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 will incur any liability for failure to give any such
notification.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following
summary is a general discussion of certain of the expected Federal income tax
consequences of the Offer. The summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), and published regulations, rulings and judicial
decisions in effect at the date of this Offer to Purchase, all of which are
subject to change. The summary does not discuss all aspects of Federal income
taxation that may be relevant to a particular holder in light of his or her
personal circumstances or to certain types of holders subject to special
treatment under the Federal income tax laws, such as life insurance companies,
financial institutions, tax-exempt organizations and non-U.S. persons. The
following summary may not be applicable with respect to Shares acquired through
exercise of employee stock options or otherwise as compensation. It also does
not discuss any aspects of state or local tax laws or of tax laws of
jurisdictions outside the United States of America.
THE DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS FOR
GENERAL INFORMATION ONLY. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE SALE OF THEIR SHARES, INCLUDING
THE APPLICATION OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS AND POSSIBLE
CHANGES IN TAX LAWS.
8
<PAGE> 11
Sales of Shares in response to the Offer will be taxable transactions for
Federal income tax purposes, and may also be taxable transactions under
applicable state, local, foreign and other tax laws. For Federal income tax
purposes, a tendering stockholder will generally recognize gain or loss equal to
the difference between the amount of cash received by the stockholder upon sale
of the Shares and the stockholder's tax basis in the Shares which are sold.
Under present law, gain or loss will be calculated separately for each block of
Shares tendered and purchased pursuant to the Offer.
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term or short term depending on whether the tendering
stockholder's holding period for the Shares exceeds one year. Long-term capital
gains recognized by a stockholder who is an individual will generally be taxed
at a maximum Federal marginal tax rate of 20%. Short term capital gains
recognized by an individual will generally be taxed at the individual's ordinary
income tax rate. Capital gains recognized by a tendering corporate stockholder
will be taxed at a maximum Federal marginal tax rate of 35%.
A stockholder (other than certain exempt stockholders, including all
corporations and certain foreign individuals) who tenders Shares may be subject
to 31% backup withholding unless the stockholder provides its taxpayer
identification number ("TIN") and certifies that the TIN is correct or properly
certifies that it is awaiting a TIN. This should be done by completing and
signing the Substitute Form W-9 included as part of the Letter of Transmittal. A
stockholder that does not furnish its TIN also may be subject to a penalty
imposed by the IRS.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from each payment to that stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares trade on the American
Stock Exchange under the symbol "HGC." The following table sets forth, for the
periods indicated, the high and low sales prices per Share on the American Stock
Exchange as reported by the Dow Jones News Retrieval Service and dividends paid
per Share:
<TABLE>
<CAPTION>
SALES PRICE
-------------
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
FISCAL YEAR ENDING JUNE 30, 1997
First Quarter.......................................... $40 1/8 $32 1/2 $.50
Second Quarter......................................... 39 3/4 33 3/4
Third Quarter.......................................... 41 3/4 35 3/4 .50
Fourth Quarter......................................... 40 5/8 35 5/8
FISCAL YEAR ENDING JUNE 30, 1998
First Quarter.......................................... $44 3/4 $38 $.50
Second Quarter......................................... 48 3/4 42 1/4
Third Quarter.......................................... 49 42 3/4 .50
Fourth Quarter......................................... 50 5/8 45 1/2
FISCAL YEAR ENDING JUNE 30, 1999
First Quarter.......................................... $52 7/8 $48 3/4 $.50
Second Quarter......................................... 63 1/4 48 3/8
Third Quarter, (through February 18, 1999)............. 77 60 1/8
</TABLE>
On February 12, 1999, the last full day of trading before the day on which
the Purchaser and the Company signed the Merger Agreement, the last sale price
of the Shares reported on the American Stock Exchange was $73.50 per Share. On
February 18, 1999, the last full day of trading prior to the commencement of the
Offer, the last sale price reported on the American Stock Exchange was $76.00
per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
9
<PAGE> 12
7. CERTAIN EFFECTS OF THE TRANSACTION.
American Stock Exchange. The purchase of the Shares tendered in response
to the Offer will reduce the number of Shares that might otherwise trade
publicly and probably will significantly reduce the number of holders of Shares,
which could adversely affect the liquidity and market value of the remaining
Shares held by the public. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Shares may no longer meet the standards of the
American Stock Exchange for continued inclusion on the American Stock Exchange.
The American Stock Exchange will normally consider suspending dealings in, or
removing from the list, the common stock of a company which (i) has fewer than
200,000 publicly held shares, (ii) has fewer than 300 public stockholders, or
(iii) has an aggregate market value of publicly held shares of less than
$1,000,000. Common Shares held by officers, directors or controlling
shareholders of the Company, or other family or consolidated holdings,
ordinarily will not be considered as being publicly held for this purpose.
According to the Company, as of June 30, 1998, there were approximately 182
holders of record of Common Shares and 1,744,949 Common Shares were outstanding.
If, as a result of the purchase of Common Shares pursuant to the Offer or
otherwise, the Common Shares no longer meet the American Stock Exchange
requirements for continued listing, the market for the Common Shares could be
adversely affected.
If the Common Shares no longer meet the requirements for listing on the
American Stock Exchange, quotations might or might not still be available from
other sources. The extent of the public market, and availability of quotations,
for the Common Shares would depend upon the number of holders of Common Shares
after the purchase of the Shares tendered in response to the Offer, whether
securities firms are interested in maintaining a market in the Common Shares,
the possible termination of registration under the Exchange Act as described
below, and other factors.
Exchange Act Registration. The Common Shares are currently registered
under the Exchange Act. That registration may be terminated upon application of
the Company to the Securities and Exchange Commission if the Shares are not
listed on a national securities exchange or quoted on NASDAQ and there are fewer
than 300 record holders of the Common Shares. The termination of the
registration of the Common Shares under the Exchange Act would substantially
reduce the information the Company would be required to furnish to holders of
Common Shares and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b) of the
Exchange Act, the requirement that the Company furnish a proxy statement or
information statement in connection with stockholder actions pursuant to Section
14 of the Exchange Act, and the requirements of Rule 13e-3 under the Exchange
Act with respect to "going-private" transactions, no longer applicable to the
Company. See Section 15. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability to
dispose of those securities pursuant to Rule 144 under the Securities Act of
1933, as amended. The Purchaser intends to seek to cause the Company to
terminate the listing of the Common Shares on the American Stock Exchange and to
apply to terminate the registration of the Common Shares under the Exchange Act
as soon as practicable. As a result, the Purchaser may be able to give the
required stockholder approval of the Merger (if stockholder approval is
required) without the Company's sending a proxy statement or an information
statement to its stockholders. After the Purchaser purchases Shares through the
Offer, the Common Shares may no longer be eligible for inclusion on the American
Stock Exchange and the Company may be able to terminate the registration of the
Common Shares under the Exchange Act. If that is the case, the Purchaser will
seek to cause the Company to terminate the registration of the Common Shares
under the Exchange Act as soon as practicable after they are no longer quoted on
the American Stock Exchange.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System which has
the effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
the Offer, the Common Shares would no longer be "margin securities" and
therefore could no longer be used as collateral for loans made by brokers.
10
<PAGE> 13
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or is based upon publicly available documents
and records on file with the SEC and other public sources. Neither the Purchaser
nor its parents assume any responsibility for the accuracy or completeness of
the information concerning the Company contained in those documents and records
or for any failure by the Company to disclose events which may affect the
significance or accuracy of that information of which neither the Purchaser nor
the Parent is aware.
General. The Company is a Delaware corporation with its principal
executive offices at 111 Great Neck Road, Great Neck, New York 11021. According
to the Company's Annual Report on Form 10-K for the year ended June 30, 1998
(the "Company 10-K"), the Company is principally engaged in providing a broad
range of services to the aviation industry. The services, which are conducted by
Hudson General LLC and its subsidiaries, include aircraft ground handling;
aircraft fueling; fuel management; ground transportation; snow removal; cargo
warehousing; and sale, leasing and maintenance of airline ground support
equipment. In addition to its interest in Hudson General LLC, the Company is a
50% partner with Oxford First Corporation in a joint venture for the development
and sale of land on the Island of Hawaii. Hudson General LLC is a limited
liability company, 51% of which is owned by the Company and 49% of which is
owned by LAGS (USA) Inc. ("LAGS"), the immediate parent of the Purchaser (and a
wholly-owned subsidiary of GlobeGround).
Financial Information. The following selected consolidated financial data
relating to the Company and its subsidiaries has been taken or derived from the
audited financial statements contained in the Company 10-K, the unaudited
financial statements contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1998 and the unaudited financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1997 (the "Company 10-Qs"). More comprehensive financial
information is included in the Company 10-K and the Company 10-Qs and the other
documents filed by the Company with the SEC, and the financial data set forth
below is qualified in its entirety by reference to those reports and other
documents. They may be examined and copies may be obtained from the SEC's
offices in the manner described below.
HUDSON GENERAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SIX MONTHS ENDED
FISCAL YEARS ENDED JUNE 30, DECEMBER 31,
---------------------------------------------------- ------------------
1998(A) 1997(A) 1996(A) 1995 1994 1998 1997
------- ------- ------- ------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................................. $5,783 $5,064 $157,100 $134,862 $141,784 $ 2,819 $ 2,765
Net earnings............................. $5,256 $ 475(b) $10,466 $ 4,593 $ 7,760 $ 1,244 $ 2,165
------- ------- ------- ------- -------- ------- -------
Net earnings per common share:
Basic.................................. $ 3.02 $ .26 $ 9.09 $ 3.72 $ 6.23 $ .71 $ 1.24
Diluted................................ $ 2.99 $ .26 $ 5.60 $ 2.70 $ 4.17 $ .71 $ 1.23
BALANCE SHEET DATA (END OF PERIOD):
Total assets............................. $73,466 $68,188 $48,776 $87,568 $ 77,889 $98,841 $70,374
Long-term obligations (excluding current
portion)............................... -- -- -- $29,000 $ 29,000 -- --
Stockholders' equity..................... $68,441 $65,384 $43,895 $21,616 $ 19,223 $80,999 $66,777
</TABLE>
- ---------------
(a) As a result of a transaction with GlobeGround, effective June 1, 1996 the
Company's interest in its aviation services business is accounted for under
the equity method.
(b) Includes a pre-tax charge of $8.5 million related to the Company's
investment in the Kohala Joint Venture formed to acquire, develop and sell
land on the Island of Hawaii.
Available Information. The Company is subject to the informational and
reporting requirements of the Exchange Act and is required to file reports and
other information with the SEC relating to its business,
11
<PAGE> 14
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities, any
material interests of those persons in transactions with the Company and other
matters is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the SEC. These reports, proxy statements
and other information can be inspected and copied at the public reference
facilities of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the SEC:
Seven World Trade Center, New York, New York 10048; and Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661. Copies of this material may be
obtained by mail, upon payment of the SEC's customary fees, from the SEC's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also
maintains an Internet site on the world wide web at http://www.sec.gov that
contains reports, proxy statements and other information. Reports, proxy
statements and other information concerning the Company should also be available
for inspection at the offices of the American Stock Exchange, 86 Trinity Place,
New York, New York 10006. All of the information with respect to the Company and
its affiliates set forth in this Offer to Purchase has been derived from
publicly available information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, LAGS, GLOBEGROUND AND THE
PARENT.
The Purchaser. The Purchaser is a Delaware corporation organized in order
to enter into the transactions which are the subject of the Merger Agreement
(including the Offer). The principal executive offices of the Purchaser are
located at 1640 Hempstead Turnpike, East Meadow, New York 11554. The Purchaser
is a wholly-owned subsidiary of LAGS, a wholly-owned subsidiary of GlobeGround.
GlobeGround itself is an indirect wholly-owned subsidiary of the Parent. The
Purchaser does not have any significant assets or liabilities and has not
engaged in activities other than those incidental to its formation and
capitalization, its execution of the Merger Agreement and preparation for the
Offer and the Merger. Because the Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding the
Purchaser is available.
LAGS. LAGS, a Delaware corporation, and a wholly-owned subsidiary of
GlobeGround, holds a 49% interest in Hudson General LLC. It has minimal
activities other than its ownership of an interest in Hudson General LLC. For
information concerning Hudson General LLC, see Section 8. The principal
executive offices of LAGS are located at 1640 Hempstead Turnpike, East Meadow,
New York 11554.
GlobeGround. GlobeGround, a German company and an indirect wholly-owned
subsidiary of Parent, wholly or partially owns a network of companies that
provide ground handling and fueling services at approximately 80 airports in 26
countries around the world. Its principal executive offices are located at
Lufthansa-Basis, Geb. 357, D-60546 Frankfurt am Main, Germany.
Parent. Parent, a German company, provides a range of services to the
aviation industry, including passenger air transportation, air cargo
transportation, aircraft maintenance and repair, ground handing and fueling
services, aircraft catering services and information and technology services.
The principal executive offices of the Parent are located at Von-Gablenz-Strasse
2-6, D-50679 Cologne, Germany.
Financial Information. The Parent is not subject to the informational and
reporting requirements of the Exchange Act and is not required to file reports
and other information with the SEC relating to its businesses, financial
condition or other matters. The following selected consolidated financial data
relating to Parent and its subsidiaries has been taken from or derived from
audited financial information presented in Parent's Annual Report for the fiscal
year ended December 31, 1997. Because the Parent is a German company, this
information has been prepared in accordance with German generally accepted
accounting principles, which are different from United States generally accepted
accounting principles. The differences between United States and German
generally accepted accounting principles relate to, among other things,
translation, recognition and measurement criteria. However, the Purchaser
believes that the differences are not material to a decision by a stockholder of
the Company whether to sell, transfer or hold any Shares, since the differences
12
<PAGE> 15
would not affect the ability of GlobeGround or the Parent to provide the funds
the Purchaser will need to pay for the Shares it will acquire pursuant to the
Offer and the Merger. See Section 10.
The consolidated financial statements of the Parent are published in
Deutsche Marks ("DM").
DEUTSCHE LUFTHANSA AG
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS OF DM OR U.S. DOLLARS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1997 1997(A) 1996
--------- ------- ---------
<S> <C> <C> <C>
Turnover.................................................... DM 23,149 $12,867 DM 20,863
Profit on Ordinary Activities before Taxation............... 1,649 917 686
Net Profit.................................................. 835 464 558
Total Assets................................................ 21,328 11,855 18,692
Equity...................................................... 5,908 3,284 5,353
Per Share Profit on Ordinary Activities before Taxation..... 4.32 2.40 1.80
</TABLE>
- ---------------
(a) Deutsche Marks have been translated into U.S. Dollars solely for the
convenience of the reader on the basis of the noon buying rate for cable
transfers in foreign currencies as certified for customs purposes by the
Federal Reserve Bank in New York City on December 31, 1997 which was
$1.00=DM1.7991. For the period ended December 31, 1996, the average noon
buying rate was $1.00=DM1.5387.
The name, citizenship, business address, principal occupation or employment
and employment information for each of the directors and executive officers of
the Purchaser, GlobeGround and the Parent are set forth in Schedule I.
Except as described in this Offer to Purchase, none of the Purchaser,
GlobeGround, the Parent or, to the best of their knowledge, any of the persons
listed on Schedule I or any associate or majority owned subsidiary of any of
those persons beneficially owns any equity security of the Company, and none of
the Purchaser, the Parent or, to the best of their knowledge, any of the other
persons referred to above, or any of their respective directors, executive
officers or subsidiaries, has effected any transaction in any equity security of
the Company during the past 60 days.
During the last 5 years, none of the Purchaser's, GlobeGround's or the
Parent's officers or directors was (1) convicted in a criminal proceeding or (2)
party to a civil proceeding of a judicial or administrative body and as a result
of the proceeding was or is subject to a judgment enjoining future violations
of, or prohibiting activities subject to, Federal or state securities laws or
finding any violation of such laws.
On June 1, 1996, LAGS purchased a 26% interest in Hudson General LLC, to
which the Company had transferred its airport ground services business, for
$23,686,000 in cash, of which $15,848,000 was paid at the closing, and deferred
payments of $2,650,000 and $5,188,000, plus interest, were made in September
1996 and December 1996. In November 1998 LAGS increased its interest in Hudson
General LLC from 26% to 49%, effective July 1, 1998, through the exercise of an
option that it had been granted in connection with the original purchase. It
paid Hudson General LLC $30,750,000 (including interest from July 1, 1998) to
exercise the option. The Company owns the other 51% of Hudson General LLC. Peter
Bluth, President of GlobeGround and a director and President of LAGS and the
Purchaser and Arthur Molins, a director of the Purchaser and LAGS, are members
of the Board of Directors of Hudson General LLC.
Except as described above, none of the Purchaser, GlobeGround, the Parent
or, to the best of their knowledge, any of the persons listed on Schedule I has
any contract, arrangement, understanding or relationship with any other person
with respect to any securities of the Company, including, without limitation,
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 or withholding of proxies. Except as described in this Offer to Purchase,
none of the Purchaser, the Parent or, to the best of their knowledge, any of the
persons listed on Schedule I has had any
13
<PAGE> 16
transactions with the Company or any of its executive officers, directors or
affiliates that would require reporting under the rules of the SEC.
Except as described in this Offer to Purchase, since July 1, 1995, there
have been no contacts, negotiations or transactions between the Parent,
GlobeGround or the Purchaser, or their respective subsidiaries, or, to the best
of their knowledge, any of the persons listed in Schedule I, on the one hand,
and the Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors or a sale or other transfer of
a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS. If all the outstanding Shares are
tendered in response to the Offer, the Purchaser would be required to pay a
total of approximately $136 million to purchase the tendered Shares and pay the
fees and other expenses related to the Offer. See Section 16. The Offer is not
conditioned on any financing arrangements. The Purchaser expects to obtain the
funds required to consummate the Offer through capital contributions or advances
made by GlobeGround. GlobeGround has guaranteed the Purchaser's obligations
under the Merger Agreement and has agreed to provide all funds necessary to pay
for the Shares in the Offer and the Merger. The required funds will be provided
to GlobeGround by the Parent.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In 1996, the Company transferred its airport ground services business to
Hudson General LLC, and a GlobeGround subsidiary purchased a 26% interest in
Hudson General LLC. Since then, Hudson General LLC has been included in a group
of airport ground services companies throughout the world which are wholly or
partially owned by GlobeGround and cooperate in marketing and other activities.
In November 1998, GlobeGround increased its ownership of Hudson General LLC to
49% by the exercise of an option which was part of the 1996 transaction. The
Company owns the other 51% and has been managing the operations of Hudson
General LLC. Since 1996, there have been frequent meetings and other
communications between members of the management of GlobeGround and members of
the Company's management regarding Hudson General LLC.
On November 22, 1998, Jay Langner, the Chairman of the Board and Chief
Executive Officer of the Company, told Peter Bluth, a Managing Director of
GlobeGround, by telephone that members of the management of the Company,
including Mr. Langner, had offered to acquire the Company on a basis which would
result in payment to the Company's stockholders of $57.25 per share of common
stock.
On December 3 and 4, 1998, a representative of GlobeGround met in New York
with members of the management of the Company and a representative of Lazard
Freres & Co., and discussed what might happen if the Company received an
unsolicited offer from someone other than the management group. This was a
concern to GlobeGround, because whoever owned the Company would control Hudson
General LLC.
On December 11, 1998, Mr. Langner informed Mr. Bluth that the Board of
Directors of the Company had received a letter from ASIG/Ranger Aerospace, in
which Ranger had indicated a desire to acquire all the outstanding shares of the
Company and had requested access to information about the Company so it could
conduct a due diligence review. GlobeGround was aware that Ranger, like Hudson
General LLC, is engaged in the airport ground services business in the United
States. On December 15, 1998, LAGS, the GlobeGround subsidiary which owns the
49% interest in Hudson General LLC, sent a letter to the Company in which, after
referring to a press release in which the Company said a Special Committee of
its Board of Directors had determined that the Company would furnish information
to a third party and engage in discussions related thereto, LAGS reminded the
Company that the Limited Liability Company Agreement of Hudson General LLC
requires each Member to hold all information it receives as a result of its
access to the properties, books and records of Hudson General LLC or its
subsidiaries in confidence. The letter asked the Company to keep those
obligations in mind in providing information to anyone who may be interested in
acquiring the Company, and said it is particularly important if, as may be the
case, the person seeking to purchase the Company is a competitor or a potential
competitor, of Hudson General LLC.
Between December 11, 1998 and December 25, 1998, there were a number of
telephone conversations in which representatives of GlobeGround discussed with
members of the management group the possibility that
14
<PAGE> 17
GlobeGround might participate in the management group's offer to purchase the
Company in order to increase the price per share the management group could pay,
or that GlobeGround might attempt to purchase the Company itself, in order to
ensure that Hudson General LLC would continue to be managed by the management of
the Company or other people satisfactory to GlobeGround.
In mid-January 1999, Mr. Langner told Mr. Bluth that it appeared likely
that Ranger would be making a proposal to purchase the Company. Mr. Langner said
it was likely that the price Ranger would offer would exceed the maximum amount
the management group could pay, based upon the financing it had arranged or felt
it could arrange. Near the end of January, representatives of GlobeGround told
representatives of the Company it was likely that, if Ranger made an offer to
purchase the Company for an amount which exceeded that which the management
group could pay, GlobeGround would propose to purchase the Company. However, the
GlobeGround representatives said any offer by GlobeGround would have to be
approved both by the Executive Board and by the Supervisory Board of the Parent.
The Executive Board was not scheduled to consider a possible purchase of the
Company until February 9, 1999. However, key members of the Executive Board were
in favor of GlobeGround's purchasing the Company if anyone other than the
management group tried to purchase it. The representatives of GlobeGround said
that if a proposal was received from Ranger or anyone else sufficiently before
February 9, 1999 to require the Company's Board (or the Special Committee of
that Board) to consider the proposal before February 9, 1999, GlobeGround would
inform the Company's Board that GlobeGround expected to make a proposal to
purchase the Company, but that GlobeGround would not submit a proposal until it
had been approved by the Parent's Executive Board. The GlobeGround
representatives also said that any proposal GlobeGround made would be subject to
approval by the Parent's Supervisory Board, which was schedule to meet on March
10, 1999.
On January 15, 1999, Steven Townes, the Chief Executive Officer of Ranger,
met in Frankfurt with Peter Bluth. Mr. Townes said Ranger would probably make an
offer to purchase the Company and discussed the relationship regarding Hudson
General LLC if Ranger acquired the Company. This included the possibility of
combining Ranger's airport ground services operations with those of the Company.
Mr. Bluth subsequently informed Mr. Langner, as the Chief Executive Officer of
the Company, about Mr. Townes' visit.
On February 1, 1999, Ranger offered to purchase the Company for $62 per
share.
On February 3, 1999, counsel for GlobeGround pointed out to counsel for the
Special Committee of the Company's Board of Directors that the agreement by
which a GlobeGround subsidiary had acquired its interest in Hudson General LLC
prohibited GlobeGround from acquiring, or proposing or agreeing to acquire,
voting securities of the Company without the prior written consent of the
Company's Board of Directors specifically expressed in a resolution. Counsel for
the Special Committee said the Special Committee was aware of that, and that the
Company's Board of Directors would consider giving the consent at a meeting
which was being held on February 5, 1999. Subsequently, counsel for the Special
Committee sent counsel for GlobeGround a written consent of the Company's Board,
accompanied by a copy of the resolution regarding it.
On February 8, 1999, Mr. Bluth informed Mr. Langner that GlobeGround would
make an offer to acquire the Company on the following day if it received an
expected approval by the Parent's Executive Board.
On February 9, 1999, GlobeGround sent a letter to the Company's Board of
Directors in which it offered to acquire the Company in a cash merger which
would result in the Company's stockholders receiving $67 per share in cash. The
letter said the offer would remain open until 5:00 p.m. New York City time on
February 16, 1999, and would be deemed accepted when the transaction was
approved by the Company's Board and a definitive agreement was executed. On the
same day, GlobeGround learned, first from Mr. Langner and then from press
reports, that Ogden Corporation had offered to purchase the Company for $65 per
share in either cash or common shares of Ogden, subject to a customary due
diligence review regarding the Company and its business prospects and approval
of Ogden's Board of Directors.
GlobeGround's offer was accompanied by a draft of an Agreement and Plan of
Merger which contemplated a merger of a newly formed GlobeGround subsidiary into
the Company in a transaction in which the stockholders of the Company would
receive $67 per share in cash and the stockholder of the GlobeGround subsidiary
(LAGS, which is wholly owned by GlobeGround) would become the sole
15
<PAGE> 18
stockholder of the Company. During the next several days, however, GlobeGround
suggested that the transaction be changed to a tender offer by the GlobeGround
subsidiary for $67 per share, followed by a merger as a result of which the
stockholders of the Company other than the GlobeGround subsidiary would receive
$67 per share in cash and LAGS would own all the stock of the Company. The
Special Committee's counsel informed GlobeGround's counsel that the Special
Committee would probably view that structure as more beneficial to the Company's
stockholders than the originally contemplated cash merger without a preceding
tender offer.
After GlobeGround made its offer, Steven Townes, the chief executive
officer of Ranger, spoke on the telephone with Mr. Bluth of GlobeGround, and
discussed the possibility that if Ranger increased its offer and acquired the
Company, then Ranger would combine the Company's airport services operations
with Ranger's and conduct the combined operations, other than fueling, under the
GlobeGround name. Mr. Bluth said that if there were a combined operation,
GlobeGround would want majority ownership and operating control of it.
GlobeGround informed Mr. Langner, as the chief executive officer of the Company,
about the conversation.
On February 12, 1999, Ranger increased the price it was proposing to pay to
$72 per share of common stock, but said its revised proposal was subject to the
receipt of financing and satisfactory completion of its due diligence review.
GlobeGround learned of the revised Ranger proposal from counsel to the Special
Committee and from press reports.
On the afternoon of February 12, 1999, GlobeGround sent the Company's Board
a letter in which GlobeGround submitted a revised offer under which it would
acquire the Company through a tender offer followed by a cash merger either (a)
for $73 per share or (b) for $76 per share under a Merger Agreement which (i)
would include an option for GlobeGround to purchase for $9.16 million an
additional interest in Hudson General LLC which would increase GlobeGround's
ownership to 54% and (ii) would require that if the option were exercised,
Hudson General LLC's Limited Liability Company Agreement would be amended to
enable GlobeGround to control Hudson General LLC. Under the revised GlobeGround
proposal, in order for the Company to terminate the Merger Agreement because of
what its Board viewed as a superior proposal, the Company would have to pay
GlobeGround $3,800,000 if the Company's Board had elected the $73 per share
offer or $3,900,000 if the Board had elected the $76 per share offer. That
payment would be in addition to reimbursement of GlobeGround's expenses, up to
$875,000 if the Merger Agreement were terminated before it had been approved by
the Parent's Supervisory Board, and $1,750,00 if the termination came after that
approval. GlobeGround said its revised offer would remain open until 5:00 P.M.
New York City time on February 16, 1999, and would be deemed accepted when it
was approved by the Company's Board of Directors and a definitive agreement was
executed.
On the evening of February 12, 1999, counsel for the Company informed
counsel for GlobeGround that, although the Special Committee would not be
meeting to consider GlobeGround's proposal until the next afternoon, it was
unlikely that either the chairman of the Special Committee or its legal or
financial advisors would recommend a transaction which included an option for
GlobeGround to acquire majority ownership of Hudson General LLC. He said they
would be likely to recommend a transaction at $76 per share even if it required
that GlobeGround receive a payment (although not the sum GlobeGround had
sought), in addition to reimbursement of its expenses, if the Company terminated
its agreement with GlobeGround because of what its Board determined it to be a
superior proposal, but would not be likely to recommend a transaction at $73 per
share which included a termination payment.
On the morning of February 13, counsel for GlobeGround told counsel for the
Company that GlobeGround would be willing to modify what it had proposed the
previous day so that (a) GlobeGround would agree to a tender offer and merger at
$73 per share, without the Merger Agreement's requiring a payment if it were
terminated so the Company could accept what its Board deemed to be a superior
proposal or (b) GlobeGround would agree to a tender offer and merger at $75 per
share if (i) the Company would agree to make a $3,800,000 payment to GlobeGround
if the Company terminated the Merger Agreement in order to accept what it's
Board determined to be a superior proposal or GlobeGround terminated the Merger
Agreement because the Board had withdrawn its recommendation of the transactions
contemplated by it and (b) the Company would not be able to terminate the Merger
Agreement because of what its Board deemed to
16
<PAGE> 19
be a superior proposal unless the Company had notified GlobeGround that the
Company might terminate the Merger Agreement unless GlobeGround increased the
price it would pay to an amount at least equal to that being paid in what the
Board had deemed to be a superior proposal and GlobeGround did not within two
business days increase what it would pay to that amount. Later in the day on
February 13, 1999, following a request conveyed by counsel for the Special
Committee, GlobeGround reduced the termination payment it was requesting to
$2,625,000 if the termination was before the Parent's Supervisory Board approved
the transaction and $3,500,000 if the termination was after that approval. At
another point, counsel for the Special Committee asked counsel for GlobeGround
whether GlobeGround would agree to make a payment to the Company if the Parent's
Supervisory Board did not approve the transaction. Counsel for GlobeGround
responded that GlobeGround did not have authorization to make that type of
agreement. Approximately an hour later, counsel for the Company told counsel for
GlobeGround that the Special Committee had indicated it would approve the second
of the two alternatives GlobeGround had proposed earlier in the day if
GlobeGround would increase the price it would pay in the tender offer and merger
to $76 per share. GlobeGround agreed to this.
During the day on February 14, 1999, counsel for the Special Committee and
counsel for GlobeGround worked on finalizing an Agreement and Plan of Merger
embodying the terms the Special Committee had indicated it would approve. On the
morning of February 15, 1999, the Company's Board of Directors, based upon the
unanimous recommendation of the Special Committee, approved the Merger
Agreement. It was signed immediately following the Board of Directors' meeting.
12. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR THE COMPANY;
THE MERGER AGREEMENT.
Purpose. The purpose of the Offer and the Merger is to enable GlobeGround
to acquire all the outstanding Shares. The directors and executive officers of
the Company, who together own slightly more than 18.3% of the fully diluted
Common Shares, have indicated to the Company that they intend to tender their
Shares in response to the Offer (unless a tender by a particular director or
officer might lead to liability under Section 16(b) of the Securities Exchange
Act of 1934, as amended, in which case the director or officer intends to vote
in favor of the Merger). Following the Offer, Parent and the Purchaser intend to
acquire any Common Shares which are not acquired through the Offer by
consummating the Merger. Upon consummation of the Merger, the Company will
become an indirect wholly-owned subsidiary of the Parent.
Plans for the Company. It is expected that, initially following the
Merger, the business and operations of Hudson General LLC will continue without
substantial change. However, GlobeGround will consider causing the Company to
seek to dispose of its interest in the Hawaiian real estate joint venture. Also,
GlobeGround may consider whether to continue Hudson General LLC as a separate
entity or to combine it with the Company. In the future, GlobeGround may take
steps which alter the Company's capital structure, combine the Company's
operations with those of other companies, or otherwise change the business or
structure of the Company.
The Company may not, and may not authorize or permit its or any of its
officers, directors, employees or agents directly or indirectly to solicit,
encourage, participate in or initiate discussions or negotiations with, or
provide any information to, any person, entity or group concerning a merger,
tender offer, share exchange, consolidation or similar transaction involving the
Company, or any purchase of or tender for, all or any significant portion of the
Company's equity securities or any significant portion of the assets of the
Company and its subsidiaries on a consolidated basis. However, (i) if the
Company or the Special Committee of the Company's Board of Directors receives an
unsolicited, written indication of a willingness to make an acquisition proposal
at a price per Share which the Special Committee reasonably concludes is in
excess of the Offer Price and if the Special Committee reasonably concludes,
based upon advice of its independent financial advisor, that the person
delivering such indication is capable of consummating such acquisition proposal,
the Company or the Special Committee may furnish non-public information to the
person, entity or group which makes the indication pursuant to an appropriate
confidentiality agreement and may enter into discussions and negotiations with
the potential acquirer and (ii) the Company or the Special Committee may
participate in and engage in discussions and negotiations with any person or
entity meeting the requirement set forth in clause (i) above in response to a
written acquisition proposal, if the Special Committee concludes, upon the
17
<PAGE> 20
advice of its legal counsel, that the failure to engage in such discussions or
negotiations would be inconsistent with the Special Committee's (and the
Board's) fiduciary duties to the Company's stockholders under applicable law.
If the Company receives an acquisition proposal or any inquiry regarding
the making of an acquisition proposal, including any request for information,
the Company has agreed promptly to notify the Purchaser of that fact and to
provide the Purchaser with the material terms and conditions of the acquisition
proposal, inquiry or request and the identity of the person making the
acquisition proposal, inquiry or request. In addition, the Company will, to the
extent reasonably practicable, keep the Purchaser fully informed of the status
and details of the acquisition proposal, inquiry or request.
If the Company receives an acquisition proposal and prior to the purchase
by the Purchaser of Common Shares pursuant to the Offer, the Special Committee
determines in good faith, and upon the advice of its financial advisor and legal
counsel, that it is necessary to do so in order to comply with its fiduciary
duties to the Company's stockholders under applicable law, the Special Committee
may do either or both of the following: (x) withdraw or modify the Board of
Directors' approval or recommendation of the Offer, the Merger or the Merger
Agreement, and (y) terminate the Merger Agreement. However, the Company may only
terminate the Merger Agreement if, after the Company has received the proposal
and given the Purchaser at least two business days' prior notice that the Merger
Agreement may terminate if the Purchaser does not increase the Offer Price to an
amount at least as great as the amount per share the Company's stockholders
would receive under the proposal or tender offer by the other person, (valuing
non-cash consideration at its fair market value as determined by the Special
Committee in good faith after consultation with its financial advisor) (A) the
Purchaser does not increase the Offer Price to an amount at least as great as
the amount per share the Company's stockholders would receive as a result of the
proposal or tender offer by the other person without changing or modifying any
other terms or conditions of the Merger Agreement, and (B) the Company has (1)
paid the Purchaser $3,500,000 ($2,625,000 if the Merger Agreement is terminated
before the Parent's Supervisory Board approves the Merger Agreement and the
transactions contemplated by the Merger Agreement) and (2) reimbursed the
Purchaser (or agreed in writing to reimburse the Purchaser) for reasonable
expenses related to the transactions which are the subject of the Merger
Agreement for which the Company receives reasonable supporting documentation; up
to a maximum of $1,750,000 of expenses (or a maximum of $875,000 if the Merger
Agreement is terminated before the Parent's Supervisory Board approves the
Merger Agreement and the transactions contemplated by the Merger Agreement).
The Merger Agreement. The following is a summary of certain provisions of
the Merger Agreement. The summary is qualified in its entirety by reference to
the Merger Agreement, a copy of which has been filed with the SEC as an exhibit
to the Schedule 14D-1 relating to the Offer. The Merger Agreement may be
examined and copies may be obtained at the place and in the manner set forth in
Section 8 of this Offer to Purchase.
The Merger. The Merger Agreement requires that as soon as practicable
after the purchase of Shares pursuant to the Offer and the satisfaction or
waiver of the conditions set forth in the Merger Agreement, the Purchaser will
take all steps in its power (including voting its Common Shares) to cause the
Purchaser to be merged with the Company, which will be the surviving corporation
of the Merger (the "Surviving Corporation"). As a result of the Merger (i) the
stockholder of the Purchaser will become the sole stockholder of the Company,
and (ii) all the pre-Merger stockholders of the Company, other than the
Purchaser, will receive cash equal to the Offer Price.
Recommendation. The Merger Agreement states that the Company's Board of
Directors (i) has determined that the Merger Agreement and the transactions
contemplated by it are fair to and in the best interests of the Company and its
stockholders and (ii) recommends that the Company's stockholders accept the
Offer, tender their Shares in response to the Offer and adopt and approve the
Merger Agreement and the Merger. The Board may withdraw, modify or amend its
recommendation that the stockholders vote in favor of the Merger Agreement if
its legal counsel advises the Board in writing that its failure to do so could
reasonably be expected to be a breach of the directors' fiduciary duties under
applicable law. Each of the directors and
18
<PAGE> 21
executive officers of the Company has indicated to the Company that he or she
intends to tender and sell his or her Shares in response to the Offer, except
that directors and executive officers whose sales might result in liability
under Section 16(b) of the Exchange Act have agreed that if they do not tender
and sell their Shares in response to the Offer, they intend to vote their Shares
in favor of the Merger.
Stock of the Company. At the effective date of the Merger, (a) each Common
Share which is not owned by the Purchaser will become the right to receive
$76.00 in cash, or any other price per share paid with regard to the Common
Shares tendered in response to the Offer (which may not be less than $76.00 per
share) and (b) each Share owned by the Purchaser (or by the Company or its
subsidiaries) will be cancelled and no payment will be made with respect to
those Shares.
Stock of the Purchaser. At the effective date of the Merger, each share of
common stock of the Purchaser which is outstanding immediately before the
effective date of the Merger will be converted into and become one share of
common stock of the Surviving Corporation. Therefore, the stockholder of the
Purchaser will become the sole stockholder of the Company.
Company Option and Warrants. At the effective date of the Merger, each
outstanding option or warrant issued by the Company will become the right to
receive in cash (i) the amount, if any, by which the Offer Price exceeds the
exercise price of the option or warrant, times (ii) the number of Common Shares
issuable upon exercise of the option or warrant in full.
Stockholder Vote Required to Approve Merger. Under the DGCL, the
affirmative vote of holders of a majority of the outstanding Shares (including
any Shares owned by the Purchaser) is required to approve the Merger. If the
Purchaser acquires at least 90% of the outstanding shares, stockholder approval
will not be required under Section 253 of the DGCL.
Stockholders Meeting. If approval by the Company's stockholders is
required in order to consummate the Merger, the Company will hold a special
meeting of its stockholders as soon as practicable after the Expiration Time for
the purpose of adopting the Merger Agreement and approving the Merger.
Conditions to the Merger. The respective obligations of the Company and
the Purchaser to carry out the Merger are subject to the following conditions:
(i) the approval of the Company's stockholders, if required by applicable law or
by the rules of the American Stock Exchange (if they are applicable); (ii) no
order will have been entered by any court or governmental authority and be in
force which materially restricts, prevents or prohibits consummation of the
Merger or restrains the Company or the Purchaser from completing the
transactions contemplated by the Merger Agreement; (iii) any applicable waiting
period under the HSR Act shall have expired or been terminated, and no action
shall have been instituted by the Antitrust Division of the United States
Department of Justice or the United States Federal Trade Commission challenging
or seeking to enjoin the consummation of the Merger, which action shall not have
been withdrawn or terminated; (iv) the Parent's Supervisory Board shall have
approved the Merger Agreement and the transactions contemplated by the Merger
Agreement not later than March 15, 1999; and (v) the Purchaser or its affiliates
shall have purchased all the Shares which are properly tendered in response to
the Offer and not withdrawn.
Termination of the Merger Agreement. The Merger Agreement may be
terminated at any time prior to the effective date of the Merger, whether before
or after approval of the terms of the Merger Agreement by the stockholders of
the Company:
(1) by mutual consent of the Company (acting through the Special
Committee) and the Purchaser;
(2) by the Purchaser, before the purchase of Shares pursuant to the
Offer, upon a material breach of any covenant or agreement on the part of
the Company set forth in the Merger Agreement which has not been cured, or
if any representation or warranty of the Company shall have become untrue
in any material respect, in either case such that such breach or untruth is
incapable of being cured prior to May 31, 1999;
(3) by the Company, before the purchase of Shares by the Purchaser
pursuant to the Offer, upon a material breach of any covenant or agreement
on the part of the Purchaser set forth in the Merger Agreement which has
not been cured, or if any representation or warranty of the Company or the
19
<PAGE> 22
Purchaser shall have become untrue in any material respect, in either case
such that such breach or untruth is incapable of being cured prior to May
31, 1999;
(4) by either the Purchaser or the Company, if any permanent
injunction, order, decree, ruling or other action by any governmental
entity preventing the consummation of the Merger shall have become final
and nonappealable;
(5) by either the Purchaser or the Company, if the Expiration Time is
later than May 31, 1999 (provided that such right to terminate the Merger
Agreement shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of or resulted in
the failure of the Effective Time to occur on or before such date);
(6) by the Purchaser if: (a) the Board of Directors of the Company
(acting through the Special Committee) shall withdraw, modify or change its
recommendation so that it is not in favor of the Merger Agreement or the
Merger (or shall have resolved to do any of the foregoing); or (b) the
Board of Directors of the Company (acting through the Special Committee)
shall have recommended or resolved to recommend to its stockholders an
acquisition proposal from someone other than the Purchaser;
(7) by the Company, if (a) the Company receives a Superior Proposal
(as defined below) (b) the Company notifies the Purchaser that the Company
has received a Superior Proposal, stating in the notice (A) the material
terms of the Superior Proposal, including the amount per Share the
Company's stockholders will receive per Common Share (valuing any non-cash
consideration at what the Company's Special Committee determines in good
faith, after consultation with its independent financial advisor, to be the
fair value of the non-cash consideration) and (B) that, unless the
Purchaser increases the Offer Price to an amount at least as great as the
amount per Share the Company's stockholders would receive as a result of
the Superior Proposal, the Company may terminate the Merger Agreement, (c)
the Purchaser does not, by 5:00 p.m., New York City time, on the second
business day after the day on which the Company notifies the Purchaser of
the Superior Proposal, increase the Offer Price to an amount at least as
great as the amount per Share the Company's stockholders would receive as a
result of the Superior Proposal, as set forth in the notice from the
Company, without changing or modifying any other of the terms and
conditions of the Merger Agreement and (d) the Company has paid the
Purchaser the sums (including reimbursement of expenses), and delivered to
the Purchaser the agreement regarding further reimbursement of expenses,
described above. A Superior Proposal is an acquisition proposal or
unsolicited tender offer which (1) would result in the Company's
stockholders receiving an amount per Share which is greater than the Offer
Price, (2) is not subject to the outcome of a due diligence review of the
Company's business or financial condition, (3) is not subject to a
financing contingency and is from a potential acquiror which the Special
Committee reasonably concludes, based upon advice of its financial advisor,
is capable of consummating the acquisition proposal or, if it is subject to
a financing contingency, the Special Committee concludes, based on advice
of its financial advisor, it is reasonably likely that the financing
contingency will be fulfilled and (4) the Special Committee determines in
good faith, after consultation with its financial advisor, to be more
favorable to the Company's stockholders than the Offer and Merger
contemplated by the Merger Agreement;
(8) by either the Company (acting through the Special Committee) or
the Purchaser, if the Supervisory Board of the Parent shall not have
approved the Merger and the transactions contemplated by the Merger
Agreement by March 15, 1999;
(9) by the Company, if the Purchaser shall have terminated the Offer,
or the Offer shall have expired, without the Purchaser purchasing any
Common Shares pursuant thereto, provided that the Company may not terminate
the Merger Agreement if the Company is in material breach of the Merger
Agreement; and
(10) by the Company, if the Parent's Executive Board shall have
withdrawn or negatively modified its recommendation to the Parent's
Supervisory Board that it approve the transactions which are the subject of
the Merger Agreement.
20
<PAGE> 23
Effect of Termination of the Merger Agreement. If the Merger Agreement is
terminated, neither the Company nor the Purchaser will be required to complete
the Merger. Termination of the Merger Agreement will not relieve either party of
liability for any breach of the Merger Agreement which occurs before the Merger
Agreement is terminated. If the Merger Agreement is terminated after the
Purchaser purchases Shares tendered in response to the Offer, but before the
effective date of the Merger, the termination will not affect the provisions of
the Merger Agreement relating to the Offer.
Acquisition Proposals. The Merger Agreement contains prohibitions against
the Company's soliciting, or authorizing its officers, directors, employees or
agents to solicit, acquisition proposals, and regarding what the Company may do
if it receives unsolicited acquisition proposals. See "Plans for the Company"
above.
Board of Directors. If the Merger is consummated, the directors of the
Purchaser will be the directors of the Surviving Corporation.
Officers. If the Merger is consummated, the officers of the Company will
be the officers of the Surviving Corporation.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties.
Other provisions. The Merger Agreement also contains provisions (i)
requiring the Company to operate its business in the ordinary course, including
precluding the Company from issuing stock, precluding the Company from amending
its certificate of incorporation or by-laws, precluding the Company from paying
dividends (other than regular semi-annual dividends by subsidiaries of the
Company to the Company and also to LAGS in the case of Hudson General LLC) or
taking other steps regarding its stock, precluding the Company from taking any
action with respect to its accounting policies or procedures, and precluding any
action which would result in any of the representations or warranties or the
Merger Agreement being untrue or in any of the conditions to the Merger set
forth in the Merger Agreement not being satisfied until the Effective Time and
(ii) requiring the Purchaser (and the Surviving Corporation) to indemnify
directors, officers, employees, fiduciaries and agents of the Company and its
subsidiaries against liability rising out of their service as directors,
officers, employees or agents of the Company or its subsidiaries, or of
companies with regard to which they served as directors, officers, employees or
agents at the request of the Company or its subsidiaries.
Appraisal Rights. If the Merger is consummated, holders of Shares at the
effective date of the Merger will have rights pursuant to the provisions of
Section 262 of the DGCL to dissent and demand appraisal of their Shares. Under
Section 262, dissenting stockholders who 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
Merger) and to receive payment of that fair value in cash, together with a fair
rate of interest, if any. The statutory procedures include notifying the Company
prior to the meeting at which the Company's stockholders vote on the Merger that
the particular stockholder intends to exercise dissenter's rights and giving
that stockholder's name and address. Any judicial determination of the fair
value of Shares could be more or less than the price per Share to be paid in the
Merger.
The foregoing summary of Section 262 is not complete. A copy of Section 262
is reprinted as Schedule II to this Offer to Purchase. You should read Section
262 in its entirety if you are considering the possibility of seeking appraisal
of your Shares.
13. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement prohibits the
Company from paying any dividends or making other distributions with regard to
its stock or from issuing any Common Shares, until the effective date of the
Merger (other than regular semi-annual dividends by subsidiaries of the Company
to the Company and also to LAGS in the case of Hudson General LLC).
14. CONDITIONS OF THE OFFER. Notwithstanding any other provisions of the
Offer, and in addition to (and not in limitation of) the Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), the Purchaser will not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the
21
<PAGE> 24
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered Shares and may terminate the
Offer if (i) any applicable waiting period under the HSR Act has not expired or
terminated prior to the expiration of the Offer, (ii) the Minimum Condition has
not been satisfied, or (iii) at any time on or after February 15, 1999 and
before the time of acceptance of Shares for payment pursuant to the Offer, any
of the following events shall occur:
(a) the Supervisory Board of the Parent does not approve the Merger
Agreement, the Offer and the Merger by March 15, 1999;
(b) any statute, rule, regulation, order or injunction enacted,
promulgated, entered or enforced by any national or state government or
governmental authority or by any United States court of competent
jurisdiction, which (i) prohibits, or imposes any material limitations on,
the Purchaser's or its parent's ownership or operation of all or a material
portion of the Company's businesses or assets, (ii) prohibits, or makes
illegal the acceptance for payment, payment for or purchase of Shares or
the consummation of the Offer or the Merger, (iii) results in a material
delay in or restricts the ability of the Purchaser, or renders the
Purchaser unable, to accept for payment, pay for or purchase some or all of
the tendered Shares, or (iv) imposes material limitations on the ability of
the Purchaser or its parent effectively to exercise full rights of
ownership of the tendered Shares, including, without limitation, the right
to vote the tendered Shares purchased by it on all matters properly
presented to the Company's stockholders, provided that the Purchaser shall
have used all reasonable efforts to cause any such judgment, order or
injunction to be vacated or lifted; provided further that the condition
specified in this paragraph (b) shall not be deemed to exist by reason of
any court proceeding pending on the date of the Merger Agreement and known
to the Purchaser, unless in the reasonable judgment of its parents there is
any material adverse development in any such proceeding after the date of
the Merger Agreement, or before the date of the Merger Agreement if not
known to the Purchaser on the date of the Merger Agreement, which would
result in any of the consequences referred to in clauses (i) through (iv)
above;
(c) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct in any material respect as
of the date of consummation of the Offer as though made on or as of such
date or the Company shall have breached or failed in any material respect
to perform or comply with any material obligation, agreement or covenant
required by the Merger Agreement to be performed or complied with by it
except, in each case, (i) for changes specifically permitted by the Merger
Agreement and (ii) (A) those representations and warranties that address
matters only as of a particular date which are true and correct as of such
date or (B) where the failure of such representations and warranties to be
true and correct, or the performance or compliance with such obligations,
agreements or covenants, do not, individually or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(d) the Company shall have entered into a definitive agreement or
agreement in principle with any person with respect to an Acquisition
Proposal or similar business combination with the Company;
(e) the Merger Agreement has been terminated in accordance with its
terms; or
(f) the Board of Directors or the Special Committee of the Company has
withdrawn or modified in a manner adverse to the Purchaser the Board's
approval or recommendation of the Offer or the Merger.
The conditions set forth above are for the sole benefit of the Purchaser,
and may be waived by the Purchaser, in whole or in part (with the exception of
the Minimum Condition which may only waived with the consent of the Company).
Any delay by the Purchaser in exercising the right to terminate the Offer
because any of the conditions are not fulfilled will not be deemed a waiver of
its right to do so.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
General. Except as otherwise disclosed in this Offer to Purchase, based on
the Company's representations and warranties in the Merger Agreement and a
review of publicly available filings by the Company with
22
<PAGE> 25
the SEC, the Purchaser is not aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Shares
by the Purchaser pursuant to the Offer or by the Merger or (ii) any approval or
other action by any governmental, administrative or regulatory agency or
authority, domestic or foreign, that would be required for the Purchaser to
acquire and own Shares.
Required Approvals. Hudson General LLC has permits from certain
governmental authorities to provide ground services at a number of airports. The
Company and Hudson General LLC may need approval to continue those permits after
a change of control of the Company.
Going Private Transactions. The SEC has adopted Rule 13e-3 under the
Exchange Act, which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. The
Purchaser believes, however, that Rule 13e-3 will not be applicable to the
Merger. Rule 13e-3 requires, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the SEC and disclosed to
stockholders prior to consummation of the transaction.
Antitrust Compliance. The Company and the Parent are required to make a
filing with the United States Federal Trade Commission under the HSR Act. The
HSR Act requires that, before an acquisition involving companies which exceed
specified sizes can take place, information must be provided to the United
States Federal Trade Commission and to the Antitrust Division of the United
States Department of Justice, and specified waiting periods must expire or be
terminated by the United States Federal Trade Commission or the Antitrust
Division of the United States Department of Justice.
State Takeover Statutes. The Company is incorporated under the laws of
Delaware. Section 203 of the DGCL limits ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting stock
of the corporation) unless, among other things, the corporation's board of
directors has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." Prior to the execution of the Merger Agreement, the Company's
Board of Directors approved the Offer and the Merger, and, therefore, Section
203 of the DGCL is inapplicable to the Purchaser's acquiring Shares through the
Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
the State of Indiana may, as a matter of corporate law, and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there.
16. FEES AND EXPENSES. Except as set forth below, neither the Purchaser
nor Parent will pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of Shares pursuant to the Offer.
The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, facsimile, telegraph and personal interviews and may
request brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners of Shares. The Information Agent will
receive reasonable and customary compensation together with reimbursement for
its reasonable out-of-pocket expenses and will be
23
<PAGE> 26
indemnified against certain liabilities and expenses, including certain
liabilities under the federal securities laws.
In addition, the Purchaser has retained The Bank of New York as the
Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses. Brokers, dealers, commercial banks and trust
companies will be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding offering material to their customers.
17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction where
the making of the Offer is prohibited by any administrative or judicial action
or pursuant to any state statute. If the Purchaser becomes aware of any state
statute prohibiting the making of the Offer or the acceptance of the Shares
which are tendered in response to the Offer, the Purchaser will make a good
faith effort to comply with that state statute. If, after a good faith effort
the Purchaser cannot comply with any such state statute, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER WHICH IS NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, THAT
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Parent, GlobeGround and the Purchaser have filed with the SEC a Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"), together with
exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, containing additional information with respect to the Offer, and
the Parent, GlobeGround or the Purchaser may file amendments to the Schedule
14D-1. The Schedule 14D-1 and any amendments to it, including exhibits, may be
inspected at, and copies may be obtained from, the places described in Section 8
(except that they will not be available at the regional offices of the SEC).
GLGR ACQUISITION CORPORATION
February 19, 1999
24
<PAGE> 27
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE PARENT, GLOBEGROUND AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of the directors and executive officers of the Parent. The
principal address of the Parent and, unless otherwise indicated below, the
current business address or a business address to which communications can be
sent, for each individual listed below is Von-Gablenz-Strasse 2-6, D-50679
Cologne, Federal Republic of Germany. Unless otherwise indicated, each such
person is a citizen of Germany.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
NAME FIVE YEARS, POSITIONS WITH THE PARENT AND CERTAIN DIRECTORSHIPS
- ---- ---------------------------------------------------------------
<S> <C>
Dr. Klaus G. Schlede Dr. Schlede is the Chairman of the Supervisory Board.
Jan G. Stenberg Mr. Stenberg is a member of the Supervisory Board. He is also
President and Chief Executive Officer of SAS Skandinavian
Airlines System. Mr. Stenberg is a citizen of Sweden.
Berhard Walter Mr. Walter is a member of the Supervisory Board. He is also
Chairman of the Executive Board of Dresdner Bank AG, Frankfurt
am Main.
Dr. Hans-Dietrich Winkhaus Dr. Winkhaus is a member of the Supervisory Board. He is also
the Chairman of the Managing Board of Henkel KGaA, Dusseldorf.
Dr. Klaus Zumwinkel Dr. Zumwinkel is a member of the Supervisory Board. He is also
Chairman of the Executive Board of Deutsche Post AG, Cologne.
Dr. Rolf E. Breuer Dr. Breuer is a member of the Supervisory Board. He is also
Chairman of the Executive Board of Deutsche Bank AG, Frankfurt
am Main.
Dr. Otto Graf Lambsdorff Dr. Lambsdorff is a member of the Supervisory Board. He is also
President of Deutsche Schutzvereinigung fur Wertpapierbesitz
e.V., Bad Munstereifel.
Ulrich Hartman Mr. Hartmann is a member of the Supervisory Board. He is also a
member of the Executive Board of VEBA AG, Dusseldorf.
Franz Ludwig Neubauer Mr. Neubauer is a member of the Supervisory Board. Mr. Neubauer
was formerly Chairman of the Executive Board of Bayerische
Landesbank Girozentrale, Stephanskirchen.
Dr. Wolfgang Peiner Dr. Peiner is a member of the Supervisory Board. He is also
Chairman of the Executive Board of each of Parion OHG and
Parion Finanzholding AG, Cologne.
Herbert Mai Mr. Mai is an employee representative on the Supervisory Board.
He is also Chairman of the Union of Public Services and
Transport Employees (OTV).
</TABLE>
I-1
<PAGE> 28
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
NAME FIVE YEARS, POSITIONS WITH THE PARENT AND CERTAIN DIRECTORSHIPS
- ---- ---------------------------------------------------------------
<S> <C>
Peter Geisinger Mr. Geisinger is an employee representative on the Supervisory
Board. He is currently employed as a pilot by Lufthansa German
Airlines.
Holger Hagge Mr. Hagge is an employee representative on the Supervisory
Board. He is currently employed as a lathe operator.
Andreas HeSS Mr. HeSS is an employee representative on the Supervisory
Board. He also works for the Union of Public Services and
Transport Employees (OTV).
Roland Issen Mr. Issen is an employee representative on the Supervisory
Board. He is also the Head of the German Union of Salaried
Employees (DAG).
Franz-Eduard Macht Mr. Macht is an employee representative on the Supervisory
Board. He is currently a member of Luthansa's office staff.
Ingo Marowsky Mr. Marowsky is an employee representative on the Supervisory
Board. He is currently employed as a flight attendant by
Lufthansa German Airlines.
Patricia Windaus Ms. Windaus is an employee representative on the Supervisory
Board. She is currently employed as a flight attendant by
Lufthansa German Airlines.
Dr. Michael Wollstadt Dr. Wollstadt is an employee representative on the Supervisory
Board.
Richard Bornheimer Mr. Bornheimer is an employee representative on the Supervisory
Board. He is currently employed as an automobile mechanic.
Dipl-Ing., Jurgen Weber Dipl.-Ing. Jurgen Weber is the Chairman of the Executive Board,
a position he has held since 1991. Dipl-Ing. Weber joined the
Parent's engineering division in 1967 and has held various
executive positions with the Parent since that date.
Dr. Karl-Ludwig Kley Dr. Kley is a member of the Executive Board and the Chief
Financial Officer. Dr. Kley joined the Parent in 1998. Dr. Kley
is also a director of Bayer AG, Leverkusen, Germany where he is
responsible for finance and investor relations. From 1994 to
1997, he was general manager of Pharma Co. in Milan, a
subsidiary of Bayer AG.
Dr. Heiko Lange Dr. Lange is a member of the Executive Board and Chief
Executive, Human Resources. Dr. Lange is a member of the
Executive Board of Lufthansa's Employer's Association and is
also President of the (worldwide) Airlines Personnel Directors'
Conference and Chairman of the Board of the German Association
of Personnel Management.
</TABLE>
I-2
<PAGE> 29
2. DIRECTORS AND EXECUTIVE OFFICERS OF GLOBEGROUND. Set forth below is
the name, current business address, citizenship and the present principal
occupation or employment and material occupations, positions, offices or
employments for the past five years of the directors and executive officers of
GlobeGround. The principal address of GlobeGround and, unless otherwise
indicated below, the current business address for each individual listed below
is Lufthansa-Basis, Geb. 357, D-60546 Frankfurt am Main, Germany. Unless
otherwise indicated, each such person is a citizen of Germany.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH GLOBEGROUND AND CERTAIN DIRECTORSHIPS
- ---- ----------------------------------------------------------
<S> <C>
Dr. Karl-Friedrich Rausch Dr. Rausch is a member of the Executive Board and has been
the Executive Vice President, Product Development and
Service of Lufthansa German Airlines since April 1997. Dr.
Rausch has been employed by the Lufthansa Group since
April 1985.
Werner Schoemig Mr. Schoemig is a member of the Executive Board. He has
been employed by the Lufthansa Group since January 1971
and has been Senior Vice President, Subsidiaries and
Economic Operation of Lufthansa German Airlines since
1993.
Karl-Heinz Koepfle Mr. Koepfle is a member of the Executive Board. He has
been employed by the Lufthansa Group since September 1968
and in 1997 was appointed Managing Director of Lufthansa
CityLine GmbH.
Marc Bamberger Mr. Bamberger is a member of the Executive Board. He has
been employed by the Lufthansa Group since April 1989.
Stefan Pichler Mr. Pichler is a member of the Executive Board and has
been Executive Vice President, Sales for Lufthansa German
Airlines since April 1997. He has been employed by the
Lufthansa Group since January 1989. Mr. Pichler is also
Chairman of the Supervisory Boards of the Federal
Association of the German Tourism Industry, Lufthansa
CityCenter Reiseburopartner GmbH, Lufthansa Partner Tours
GmbH, C&N Touristic AG and Lufthansa Airplus Servicekarten
GmbH. Mr. Pichler is also a director of the German Tourism
Board (DZT) and the Willy Scharnow Foundation.
Werner Schuessler Mr. Schuessler is a member of the Executive Board. He has
been employed by the Lufthansa Group since January 1971
and since December, 1998 has been Vice President, Ground
Operations of Lufthansa Cargo AG.
Peter Bluth Mr. Bluth is the President and Chief Executive Officer of
GlobeGround. Mr. Bluth joined Lufthansa German Airlines in
1970. He has been a Managing Director of GlobeGround since
1990. Mr. Bluth is also a member of the Board of Directors
of Hudson General LLC.
Wilhelm Werner Dresser Mr. Dresser is a Managing Director of GlobeGround. He has
been employed by the Lufthansa Group since 1964.
</TABLE>
I-3
<PAGE> 30
3. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of each director and executive officer of Purchaser. The
principal address of Purchaser and, unless otherwise indicated below, the
current business address for each individual listed below is 1640 Hempstead
Turnpike, East Meadow, New York 11554. Unless otherwise indicated, such person
is a citizen of the United States.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH THE PURCHASER AND CERTAIN DIRECTORSHIPS
- ---- ----------------------------------------------------------
<S> <C>
Peter Bluth Mr. Bluth is a director, the President and the Treasurer.
Mr. Bluth's business address and biographical information
is set forth above. Mr. Bluth is a citizen of Germany.
Arthur Molins Mr. Molins is a director, the Vice President and the
Secretary. He has been employed by the Lufthansa Group
since June 1982 as the General Counsel for North America.
Mr. Molins is also a member of the Board of Directors of
Hudson General LLC.
</TABLE>
I-4
<PAGE> 31
SCHEDULE II
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS. -- (a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to sec.228 of this title shall be entitled to an appraisal by the Court
of Chancery of the fair value of the stockholders' shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec.251 (other than a merger effected pursuant to
sec.251(g) of this title), sec.252, sec.254, sec.257, sec.258, sec.263 or
sec.264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec.251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec.251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts at the effective
date of the merger or consolidation will be either listed on a national
securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec.253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares
of any class or series of its stock as a result of an amendment to its
II-1
<PAGE> 32
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal
rights are provided under this section is to be submitted for approval
at a meeting of stockholders, the corporation, not less than 20 days
prior to the meeting, shall notify each of its stockholders who was such
on the record date for such meeting with respect to shares for which
appraisal rights are available pursuant to subsections (b) or (c) hereof
that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of
this section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking
of the vote on the merger or consolidation, a written demand for
appraisal of such stockholder's shares. Such demand will be sufficient
if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such stockholder's shares. A proxy or vote against the
merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate
written demand as herein provided. Within 10 days after the effective
date of such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that
the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec.228
or sec.253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that appraisal
rights are available for any or all shares of such class or series of
stock of such constituent corporation, and shall include in such notice
a copy of this section; provided that, if the notice is given on or
after the effective date of the merger or consolidation, such notice
shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation
that are entitled to appraisal rights. Such notice may, and, if given on
or after the effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may, within
20 days after the date of mailing of such notice, demand in writing from
the surviving or resulting corporation the appraisal of such holder's
shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger
or consolidation, either (i) each such constituent corporation shall
send a second notice before the effective date of the merger or
consolidation notifying each of the holders of any class or series of
stock of such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second notice to
all such holders on or within 10 days after such effective date;
provided, however, that if such second notice is sent more than 20 days
following the sending of the first notice, such second notice need only
be sent to each stockholder who is entitled to appraisal rights and who
has demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of the merger
or consolidation, the record date shall be such effective date. If no
record
II-2
<PAGE> 33
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder
who has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw such stockholder's demand for appraisal
and to accept the terms offered upon the merger or consolidation. Within
120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and
(d) hereof, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor
of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10
days after such stockholder's written request for such a statement is
received by the surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal under
subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of
a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and
place fixed for the hearing of such petition by registered or certified
mail to the surviving or resulting corporation and to the stockholders
shown on the list at the addresses therein stated. Such notice shall also
be given by 1 or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The
forms of the notices by mail and by publication shall be approved by the
Court, and the costs thereof shall be borne by the surviving or resulting
corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitle to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates of stock to the Register in
Chancery for notation thereon of the pendency of the appraisal proceedings;
and if any stockholder fails to comply with such direction, the Court may
dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In determining
such fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of
the proceeding. Upon application by the surviving or resulting corporation
or by any stockholder entitled to participate in the appraisal proceeding,
the Court may, in its discretion, permit discovery or other pretrial
proceedings and may proceed to trial upon the appraisal prior to the final
determination of the stockholder entitled to an appraisal. Any stockholder
whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has
submitted such stockholder's certificates of stock to the Register in
Chancery, if such is required, may participate fully in all proceedings
until it is finally determined that such stockholder is not entitled to
appraisal rights under this section.
II-3
<PAGE> 34
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value
of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or
to receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed
within the time provided in subsection (e) of this section, or if such
stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e)
of this section or thereafter with the written approval of the corporation,
then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms as the
Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.
II-4
<PAGE> 35
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent by each stockholder of the Company
or the stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
<S> <C> <C>
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation By Telephone:
(800) 507-9357
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at the telephone numbers and location
listed below. You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[MORROW & CO., INC. LOGO]
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
FOR
$76.00 NET PER SHARE
IN RESPONSE TO THE OFFER TO PURCHASE DATED FEBRUARY 19, 1999
OF
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
DEUTSCHE LUFTHANSA AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MARCH 19, 1999 UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Delivery Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSIONS OF INSTRUCTIONS VIA A TELEX OR FACSIMILE NUMBER OTHER THAN THE
ONES LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
INSTRUMENT WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED
BELOW.
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 used to tender shares of common stock,
par value $1.00 per share ("Shares"), of Hudson General Corporation (the
"Company") in response to a solicitation of tenders by GLGR Acquisition
Corporation (the "Purchaser"). It must be used whether certificates evidencing
Shares are to be forwarded with this Letter of Transmittal or whether delivery
of the Shares is to be made by book-entry transfer to the account maintained by
the Depositary at The Depository Trust Company (the "Book-Entry Transfer
Facility") as described in Section 3 of the Offer to Purchase. Stockholders
whose certificates are not immediately available or who cannot deliver their
conformation of the book-entry transfer of their Shares into the Depositary's
account at the Book-Entry Transfer Facility ("Book-Entry Conformation") on or
before the Expiration Time may use the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase to tender their Shares. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
<PAGE> 2
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Account Number:
Transaction Code Number:
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING.
Name(s) of Registered Holder(s):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF TENDERED SHARES
- -------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATES) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES TOTAL NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- -------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction
4.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to GLGR Acquisition Corporation, a Delaware
corporation (the "Purchaser"), that is an indirect wholly-owned subsidiary of
GlobeGround GmbH, a German company that is an indirect wholly-owned subsidiary
of Deutsche Lufthansa AG, a German company, the shares of common stock, par
value $1.00 per share (the "Shares"), of Hudson General Corporation, a Delaware
corporation (the "Company"), listed above, in response to the Purchaser's offer
to purchase all of the outstanding Shares at a price of $76.00 net per Share in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated February 19, 1999 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which terms and
conditions constitute the "Offer"). 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 of its subsidiaries or affiliates the right to
purchase all or any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance of the Shares tendered with this
Letter of Transmittal for payment in accordance with the Offer, the undersigned
hereby sells, assigns, and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all the Shares that are being tendered with
this Letter of Transmittal (and any and all other Shares or other securities
issued or issuable in respect of those shares after February 19, 1999) and
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to those Shares (and any
such other Shares or securities) to (a) deliver certificates for the Shares (and
any such other Shares or securities) or transfer ownership of the Shares (and
any such other Shares or securities) on the account books maintained by the
Book-Entry Transfer Facility, together in either case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price (adjusted, if appropriate, as provided in the Offer to Purchase), (b)
present those Shares (and any such other Shares or securities) for transfer on
the books of the Company and (c) otherwise exercise all rights of beneficial
ownership of the Shares (and any such other Shares or securities), all in
accordance with the terms of the Offer.
The undersigned irrevocably appoints Purchaser, it officers and its
designees, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney-in-fact and proxy or his or its substitute, in his or its
sole discretion deems proper, and otherwise act (including acting by written
consent without a meeting) with respect to, all the Shares tendered by this
Letter of Transmittal which have been accepted for payment by the Purchaser
prior to the time of the vote or action (and any other Shares or securities
issued in respect of those Shares after February 19, 1999). This proxy is
irrevocable and is granted in consideration of, and is effective upon, the
deposit by the Purchaser with the Depositary of the purchase price for the
Shares to which it relates, and acceptance of those Shares for payment, in
accordance with the Offer. That acceptance for payment will revoke all prior
proxies granted by the undersigned with regard to those Shares (and any such
other Shares or other securities) and the undersigned will not give any
subsequent proxies with respect to those Shares. The undersigned understands
that the Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of such Shares, the Purchaser is able to exercise full voting rights with
respect to such Shares and other securities, including voting at any meeting of
stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered by this Letter of Transmittal (and any and all other Shares or other
securities issued in respect of those Shares after February 19, 1999) and that,
when those Shares are accepted for payment by the Purchaser, the Purchaser will
acquire good, marketable and unencumbered title to the Shares (and any such
other Shares or securities), free and clear of all liens, restrictions, charges,
encumbrances or adverse claims. 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 tendered by this Letter of Transmittal (and any such other Shares or
securities) to the Purchaser.
The authority conferred in this Letter of Transmittal will not be affected
by, and will survive, the death or incapacity of the undersigned, and any
obligation of the undersigned under this Letter of Transmittal or otherwise
resulting from the tender of the Shares to which this Letter of Transmittal
relates will be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender made by this Letter of Transmittal is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions to this Letter of Transmittal will constitute a binding agreement
between the undersigned and the Purchaser upon the terms and subject to the
conditions of the Offer.
<PAGE> 4
Unless otherwise indicated in the box below captioned "Special Payment
Instructions," please issue the check for the purchase price of the Shares
tendered by this Letter of Transmittal, and return any Shares represented by
certificates accompanying this Letter of Transmittal which are not being
tendered, or are not accepted for payment, in the name(s) of the undersigned.
Similarly, unless otherwise indicated in the box below captioned "Special
Delivery Instructions," please mail the check for the purchase price and deliver
certificates representing any Shares which are not being tendered or are not
accepted for payment (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature. If both the
Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and return any
certificates for any Shares which are not being tendered, or are not accepted
for payment, in the name of, and deliver the check and certificates, or
confirmation of transfer of the Shares at the Book-Entry Transfer Facility, to
the person or persons indicated. Stockholders delivering Shares by book-entry
transfer may request that any Shares not accepted for payment be returned by
crediting an account at the Book-Entry Transfer Facility, by making an
appropriate entry under "Special Payment Instructions." The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special Payment
Instructions or otherwise to transfer any tendered Shares which are not accepted
for payment from the name of the registered holder of the Shares to the name of
another person.
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares which are not
tendered or not purchased and the check for the purchase price of Shares
which are purchased are to be issued in the name of someone other than the
undersigned, or if Shares delivered by book-entry which are not purchased
are to be returned by credit to an account maintained at a Book-Entry
Transfer Facility other than that designated above:
Issue: [ ] Check [ ] Certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------------
----------------------------------------------------
(INCLUDE ZIP CODE)
----------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
[ ] Check unpurchased Shares delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
-----------------------------------------------------
(ACCOUNT NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares which are not
tendered or are not purchased and the check for the purchase price of
Shares which are purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown
after the undersigned's signature below.
Mail: [ ] Check [ ] Certificate(s) to:
Name
-----------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
-----------------------------------------------------
(TAX IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
<PAGE> 5
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
DATED:
- --------------------------- , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted with this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-at-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity, please
provide the necessary information described in Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
- ---------------------------------------------------------------------
Tax Identification or Social Security No.
- ---------------------------------------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Title
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
Area Code and Telephone Number: ( )
- ---------------------------------------------------------------------
Dated:
- --------------------------- , 1999
<PAGE> 6
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 (i) if this Letter of Transmittal is signed by the
registered holder of the Shares tendered by it (which, for purposes of this
document, includes any participant in the Book-Entry Transfer Facility whose
name appears on a security position listing as the owner of Shares) unless the
holder has completed either the box entitled "Special Delivery Instructions" or
the box entitled "Special Payment Instructions" on the reverse of this Letter of
Transmittal or (ii) if those Shares are tendered for the account of a member
firm of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
which has an office or correspondent in the United States (collectively,
"Eligible Institutions"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates are being
forwarded with it or, unless an Agent's Message (as defined below) is utilized,
tenders of Shares are being made in accordance with the procedures for delivery
by book-entry transfer set forth in Section 3 of the Offer to Purchase.
Certificates for all physically tendered Shares, or a Book-Entry Confirmation
confirming book-entry transfer of Shares to an account of the Depositary, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile of one) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth above prior to the Expiration Date (as defined in the Offer
to Purchase). Stockholders whose certificates for Shares are not immediately
available, or who cannot deliver Book-Entry Confirmation of a book entry
transfer of the Shares to the Depositary on or prior to the Expiration Date, may
tender their Shares by properly completing and executing a Notice of Guaranteed
Delivery in accordance with the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. Pursuant to that procedure, (i) the tender
must be made by or through an Eligible Institution, (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form
provided by the Purchaser, must be received by the Depositary prior to the
Expiration Date and (iii) the certificates for all physically tendered Shares,
or Book-Entry Confirmation of Shares tendered by book-entry transfer, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile of one) and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three American
Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. If
certificates for Shares are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or facsimile of one) must
accompany each such delivery.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of this Letter of Transmittal, the certificates for
Shares and all other required documents, including delivery through the
Book-Entry Transfer Facility, is at the option and risk of the tendering
stockholder and, except as otherwise provided in this Instruction 2, the
delivery will be deemed made only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile of it), waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided in this Letter of Transmittal
is inadequate, the certificate numbers and the numbers of Shares being tendered
should be listed on a separate signed schedule which should be attached to this
Letter of Transmittal.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by a certificate
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 case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) 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 certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered, the signature(s) must correspond exactly with the name(s) as written
on the face of the certificate(s), without alteration, enlargement or any change
whatsoever.
<PAGE> 7
If any of the tendered Shares are owned of record by two or more joint
owners, all the owners must sign this Letter of Transmittal.
IF TENDERED SHARES ARE REGISTERED IN DIFFERENT NAMES ON DIFFERENT
CERTIFICATES, IT WILL BE NECESSARY TO COMPLETE, SIGN AND SUBMIT AS MANY SEPARATE
LETTERS OF TRANSMITTAL AS THERE ARE DIFFERENT REGISTRATIONS ON CERTIFICATES.
If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of corporations or other person acting in a fiduciary or representative
capacity, that persons should so indicate when signing, and may be required to
submit evidence satisfactory to the Purchaser of the person's authority to so
act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares being tendered, no endorsements of certificates or separate stock powers
are required, unless payment or certificates for Shares which are not tendered
or purchased are to be issued to a person other than the registered owner(s), in
which case, endorsements of certificates or stock powers are required and the
signatures on those 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 owner(s) of the Shares being tendered, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered owner(s) appear on the certificates.
Signatures on the certificates or stock powers must be guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale to it of Shares it purchases pursuant to the Offer. If
payment of the purchase price is to be made to, or if certificates for Shares
which are not tendered or are not purchased are to be registered in the name of,
any person other than the registered holder, or if tendered certificates are
registered in the name of anyone other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes payable on account of the
transfer to another person (whether imposed on the registered holder or on the
other person) will be deducted from the purchase price unless satisfactory
evidence of the payment of, or exemption from the need to pay, stock transfer
taxes is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check or certificates
for unpurchased Shares are to be issued in the name of a person other than the
signer of this Letter of Transmittal, or if a check is to be sent or
certificates are to be returned to someone other than the signer of this Letter
of Transmittal or to an address other than the signer's shown above, the
appropriate boxes on this Letter of Transmittal must be completed. Stockholders
tendering Shares by book-entry transfer may request that any Shares which are
not purchased be credited to an account maintained at the Book-Entry Transfer
Facility which the stockholder designates. If no such instructions are given,
Shares tendered by book-entry transfer which are not purchased will be returned
by crediting the account at the Book-Entry Transfer Facility designated above.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to, or additional copies of the Offer to Purchase and this
Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained from, the Information Agent at its address set forth below or from your
broker, dealer, commercial bank or trust company.
9. WAIVER OF CONDITIONS. Subject to the terms of the Merger Agreement, the
conditions of the Offer may be waived by the Purchaser, in whole or in part, at
any time and from time to time in the Purchaser's sole discretion, as to any
Shares which are tendered.
10. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
for Shares 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(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
<PAGE> 8
11. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to indicate that the stockholder is not subject to backup withholding by
checking the box in Part 2 of the Substitute Form W-9. Failure to provide the
information on Substitute Form W-9 may subject the tendering stockholder to 31%
Federal Income tax withholding from the payment of the purchase price. 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 number or intends to apply for a
number 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. If the box in
Part 3 is checked and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% from all payments of the purchase price to be
made after expiration of that 60 day period until a TIN is provided to the
Depositary.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
(DO NOT WRITE IN THE SPACES BELOW)
Date Received --------------- Accepted by --------------- Checked by
---------------
------------------------------------------------------------------------------------------------------------
CERTIFICATES SHARES SHARES CHECK AMOUNT OF SHARES CERTIFICATE BLOCK
SURRENDERED TENDERED ACCEPTED NO. CHECK RETURNED NO. NO.
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Delivery Prepared by --------------- Checked by --------------- Date ---------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with the
stockholder's correct TIN on Substitute Form W-9 below. If the stockholder is an
individual, the TIN is his or her social security number. If the Depositary is
not provided with the correct TIN, the stockholder may be subject, among other
things, to penalties imposed by the Internal Revenue Service. In addition,
payments that are made to the stockholder with respect to Shares purchased
pursuant to the Offer may be subject to 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, that individual must submit a Form W-8, signed under penalties of
perjury, attesting to the 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 additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. 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.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of the stockholder's correct TIN by completing
the form below certifying that the TIN provided on the Substitute Form W-9 is
correct (or that the stockholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares being tendered 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 guidelines on which
number to report.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE OF IT), TOGETHER WITH
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS, OR A NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION TIME.
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW OR
-------------------------------------
Employer Identification Number
------------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2 -- Check the box if you are NOT subject to backup withholding under the provisions of
INTERNAL REVENUE SERVICE Section 3406(a)(1)(C) of the Internal Revenue Code because (1) you are exempt from backup
withholding, or (2) you have not been notified that you are subject to backup withholding as
a result of failure to report all interest or dividends or (3) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. [ ]
------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE PART 3 --
IDENTIFICATION NUMBER (TIN) INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE _________________________ DATE_____________________ 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 CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
<PAGE> 10
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
payments made to me will be withheld, but that such amounts will be refunded to
me if I then provide a Taxpayer Identification Number within sixty (60) days.
<TABLE>
<S> <C>
- --------------------------------------------------------- ------------------------------------------------
Signature Date
</TABLE>
THE INFORMATION AGENT FOR THE OFFER IS:
[MORROW & CO., INC. LOGO]
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 19, 1999
BY
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
DEUTSCHE LUFTHANSA AG
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of common stock, par value $1.00 per
share (the "Shares"), of Hudson General Corporation, a Delaware corporation (the
"Company"), are not immediately available, (ii) if Share Certificates and all
other required documents cannot be delivered to The Bank of New York, as
Depositary (the "Depositary"), prior to the Expiration Time (as defined in the
Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram
or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 For Confirmation Telephone: New York, New York 10286
(800) 507-9357
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
SHARES MAY NOT BE TENDERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to GLGR Acquisition Corporation, a Delaware
corporation, an indirect wholly-owned subsidiary of GlobeGround GmbH, a German
company that is an indirect wholly-owned subsidiary of Deutsche Lufthansa AG, a
German company, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated February 19, 1999 (the "Offer to Purchase"), and the
related Letter of Transmittal (the terms and conditions of which, as amended or
supplemented from time to time, together constitute the "Offer"), receipt of
each of which is hereby acknowledged, the number of Shares specified below
pursuant to the guarantee delivery procedures described in Section 3 of the
Offer to Purchase.
Number of Shares:
-----------------------------------------------------------------------------
Name(s) of Record Holder(s):
-----------------------------------------------------------------------------
(PLEASE PRINT)
Address(es):
-----------------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No:
-----------------------------------------------------------------------------
Certificate Nos. (if available):
-----------------------------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
Signature(s):
-----------------------------------------------------------------------------
Account Number:
-----------------------------------------------------------------------------
Dated:
------------------------------------------------, 1999
THE GUARANTEE ON THE OPPOSITE PAGE MUST BE COMPLETED
<PAGE> 3
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, hereby guarantees to deliver to the Depositary, at one of its addresses
set forth above, either the certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation (as defined in
Section 2 of the Offer to Purchase) of a transfer of such Shares into the
Depositary's account at The Depository Trust Company, in any such case together
with a properly completed and duly executed Letter of Transmittal, or a manually
signed facsimile thereof, with any required signature guarantees, or an Agent's
Message (as defined in Section 2 of the Offer to Purchase), and any other
documents required by the Letter of Transmittal within three American Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
Name of Firm:
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Date:
- ---------------- , 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
FOR
$76.00 NET PER SHARE IN CASH
BY
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DEUTSCHE LUFTHANSA AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by GLGR Acquisition Corporation, a Delaware
corporation (the "Purchaser") that is an indirect wholly-owned subsidiary of
GlobeGround GmbH, a German company that is an indirect wholly-owned subsidiary
of Deutsche Lufthansa AG, a German company (the "Parent"), to act as Information
Agent in connection with the Purchaser's offer to purchase all outstanding
shares of common stock, par value $1.00 per share (the "Shares"), of Hudson
General Corporation, a Delaware corporation (the "Company"), at a price of
$76.00 per Share, net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated February
19, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (the
terms and conditions of which, as amended or supplemented from time to time,
together constitute the "Offer") enclosed herewith. 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.
The Offer is conditioned upon (i) there being validly tendered and not
withdrawn a number of Shares constituting at least a majority of the outstanding
Shares of the Company (determined on a fully-diluted basis), (ii) approval of
the Merger Agreement (as defined below), the Offer and the Merger (as defined
below) by the Supervisory Board of the Parent by March 15, 1999, (iii) the
expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder, and (iv) the satisfaction or waiver of certain
conditions to the obligations of the Purchaser to consummate the Offer and the
transactions contemplated by the Merger Agreement.
Enclosed for your information and use are copies of the following
documents:
1. The Offer to Purchase, dated February 19, 1999;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. The Company's Solicitation/Recommendation Statement on Schedule
14D-9 filed with the Securities and Exchange Commission by the Company;
<PAGE> 2
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available, or if such
certificates and all other required documents cannot be delivered to The
Bank of New York (the "Depositary") by the Expiration Date (as defined in
the Offer to Purchase), or if the procedure for book-entry transfer cannot
be completed by the Expiration Date;
5. A 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; and
7. Return envelope addressed to the Depositary.
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 FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made in accordance with an Agreement and Plan of Merger,
dated as of February 15, 1999 (the "Merger Agreement"), between the Company and
the Purchaser. The Merger Agreement provides, among other things, that, after
the Purchaser purchases all the Shares which are properly tendered in response
to the Offer and not withdrawn, the Purchaser will take all steps in its power
(including voting its Shares) to cause the Purchaser to be merged with the
Company (the "Merger") in a transaction in which the stockholder of the
Purchaser will own all the stock of the corporation which results from the
Merger (essentially, the Company), and the other stockholders of the Company
will receive the same amount of cash per Share as is paid for Shares tendered in
response to the Offer (unless particular stockholders elect to exercise
statutory rights to demand appraisal of their Shares). GlobeGround GmbH has
guaranteed the Purchaser's obligations under the Merger Agreement and has agreed
to provide all funds necessary to pay for the Shares in the Offer and the
Merger.
The Board of Directors of the Company, based on the unanimous
recommendation of a special committee of the Board of Directors created to
consider acquisition proposals, has unanimously approved 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 stockholders of the Company and unanimously
recommends that the stockholders of the Company accept the Offer and tender
their Shares.
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 the
certificates evidencing such Shares or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Facility
(as defined in the Offer to Purchase) pursuant to the procedures set forth in
the Offer to Purchase, a Letter of Transmittal (or a facsimile of one), properly
completed and duly executed, with any required signature guarantees or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer, and any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or Book-Entry
Confirmations into the Depositary's account at the Book-Entry Facility are
actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Information Agent as described in the Offer to
Purchase) in connection with the solicitation of tenders of Shares pursuant to
the Offer. However, the Purchaser will reimburse you for customary mailing and
handling 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 with respect to the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
<PAGE> 3
Any questions or requests for assistance may be directed to the Information
Agent at its telephone numbers and address set forth on the back cover of the
Offer to Purchase. Additional copies of the enclosed material may be obtained
from the Information Agent at its address and telephone numbers set forth on the
back cover of the Offer to Purchase.
Very truly yours,
Morrow & Co., Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PARENT, THE PURCHASER, THE COMPANY, THE
INFORMATION AGENT, OR THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
FOR
$76.00 NET PER SHARE IN CASH
BY
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DEUTSCHE LUFTHANSA AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated February 19,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (the terms
and conditions of which, together with any supplements or amendments thereto,
collectively constitute the "Offer") relating to the offer by GLGR Acquisition
Corporation, a Delaware corporation (the "Purchaser"), that is an indirect
wholly-owned subsidiary of GlobeGround GmbH, a German company, that is an
indirect wholly-owned subsidiary of Deutsche Lufthansa AG, a German company (the
"Parent"), to purchase all outstanding shares of common stock, par value $1.00
per share (the "Shares"), of Hudson General Corporation, a Delaware corporation
(the "Company"), at a price of $76.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
in the related Letter of Transmittal.
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.
Accordingly, we request instructions as to whether you wish to have us
tender, on your behalf, any or all Shares held by us for your account pursuant
to the terms and conditions set forth in the Offer.
Please note the following:
1. The Offer Price is $76.00 per Share, net to you in cash without
interest, upon the terms and subject to the conditions set forth in the
Offer.
2. The Board of Directors of the Company, based on the unanimous
recommendation of a special committee of the Board of Directors created to
consider acquisition proposals, has unanimously approved 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 stockholders of
the Company and unanimously recommends that the stockholders of the Company
accept the Offer and tender their Shares.
3. The Offer is being made for all outstanding Shares.
<PAGE> 2
4. The Offer is being made in accordance with an Agreement and Plan of
Merger, dated as of February 15, 1999 (the "Merger Agreement"), between
Company and the Purchaser. After the Purchaser purchases all the Shares
which are properly tendered in response to the Offer and not withdrawn, the
Purchaser will take all steps in its power (including voting its Shares) to
cause the Purchaser to be merged with the Company (the "Merger") in a
transaction in which the stockholder of the Purchaser will own all the
stock of the corporation which results from the Merger (essentially, the
Company), and the other stockholders of the Company will receive the same
amount of cash per Share as is paid for Shares tendered in response to the
Offer (unless particular stockholders elect to exercise statutory rights to
demand appraisal of their Shares). GlobeGround GmbH has guaranteed the
Purchaser's obligations under the Merger Agreement and has agreed to
provide all funds necessary to pay for the Shares in the Offer and the
Merger.
5. The Offer is conditioned upon (i) there being validly tendered and
not withdrawn a number of Shares constituting at least a majority of the
outstanding Shares of the Company (determined on a fully-diluted basis),
(ii) approval of the Merger Agreement, the Offer and the Merger by the
Supervisory Board of the Parent by March 15, 1999, (iii) the expiration or
termination of all waiting periods imposed by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder, and (iv) the satisfaction or waiver of certain conditions to
the obligations of the Purchaser to consummate the Offer and the
transactions contemplated by the Merger Agreement.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by
the Purchaser pursuant to the Offer.
7. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time on Friday, March 19, 1999, unless the Offer is extended in
accordance with the terms of the Merger Agreement.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. An
envelope to return your instructions to us is enclosed. 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.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment, and thereby purchased, tendered Shares, if, as and when the
Purchaser gives oral or written notice to The Bank of New York (the
"Depositary") of the Purchaser's acceptance of such Shares for payment. Upon the
terms and subject to the conditions of the Offer, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by the
Depositary of (a) certificates representing Shares ("Share Certificates") (or a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to such Shares) into the account maintained by the Depositary at The
Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter of
Transmittal (or a facsimile of one), properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined in the Offer
to Purchase), in connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may not be
made to all tendering stockholders at the same time depending upon when
certificates for or Book-Entry Confirmations into the Depositary's account at
the Book-Entry Transfer Facility are actually received by the Depositary. UNDER
NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. In any jurisdiction where securities, blue-sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated February 19, 1999, and the related Letter of
Transmittal in connection with the offer (the "Offer") by GLGR Acquisition
Corporation, a Delaware corporation (the "Purchaser"), that is an indirect
wholly-owned subsidiary of GlobeGround GmbH, a German company, that is an
indirect wholly-owned subsidiary of Deutsche Lufthansa AG, a German company, to
purchase all outstanding shares of common stock, par value $1.00 per share (the
"Shares"), of Hudson General Corporation, a Delaware corporation.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: Date:
----------------------- -------------
SIGN HERE
Signature(s)
--------------------------------------------------------------------------
Print Name(s)
--------------------------------------------------------------------------
Print Address(es)
--------------------------------------------------------------------------
Area Code and Telephone Number(s)
--------------------------------------------------------------------------
Taxpayer Identification
or Social Security Numbers(s)
--------------------------------------------------------------------------
<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: 00-0000000. THE TABLE BELOW WILL HELP DETERMINE THE NUMBER TO GIVE
THE PAYER.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
5. Sole proprietorship account The owner(3)
6. Sole proprietorship The owner(3)
7. A valid, estate, or pension trust The legal entity
(Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
8. Corporate account The corporation
9. Religious, charitable or The organization
educational organization account
10. Partnership account held in the The partnership
name of the partnership
11. Association, club, or other tax- The organization
exempt organization
12. A broker or registered nominee The broker or
nominee
13. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state or
local government, school district
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
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
business and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9 if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding. For interest
and dividends, all listed payees are exempt except item (9). For broker
transactions, payees listed in items (1) through (13) and a person registered
under the Investment Advisers Act of 1940 who regularly acts as a broker are
exempt. Payments subject to reporting under sections 6041 and 6041A are
generally exempt from backup withholding only if made to payees described in
items (1) through (7), except a corporation that provides medical and health
care services or bills and collects payments for such services is not exempt
from backup withholding. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions, patronage
dividends, and payments by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Securities, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnership not engaged in a trade or business in the United
States 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 of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE SUBSTITUTE FORM W-9 TO AVOID POSSIBLE
ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
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, 6041(a), 6042, 6044, 6045, 6049 and
6050A and 6050N of the Code and the regulations promulgated therein.
PRIVACY ACT NOTICE.--Section 6109 requires recipients of dividends, interest, or
other payments to give taxpayer identification numbers to payers who must report
the payments to IRS. The IRS uses the numbers for identification purposes and to
help verify the accuracy of your tax return. 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 which results in no imposition
of backup withholding, you are subject to 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
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated February
19, 1999, and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HUDSON GENERAL CORPORATION
FOR
$76.00 NET PER SHARE IN CASH
BY
GLGR ACQUISITION CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
GLOBEGROUND GMBH
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DEUTSCHE LUFTHANSA AG
GLGR Acquisition Corporation, a Delaware corporation (the "Purchaser")
which is indirectly wholly-owned by GlobeGround GmbH, a German company that is
an indirect wholly-owned subsidiary of Deutsche Lufthansa AG, a German company
(the "Parent"), is offering to purchase for cash all outstanding shares of
common stock, par value $1.00 per share (the "Shares"), of Hudson General
Corporation, a Delaware corporation (the "Company"), at a price of $76.00 per
Share, net to the seller in cash, without interest, on the terms and subject to
the conditions set forth in the Offer to Purchase, dated February 19, 1999 (the
"Offer to Purchase") and in the related Letter of Transmittal (the terms and
conditions of which, together with any supplements or amendments thereto,
collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon (i) there being validly tendered and not
withdrawn a number of Shares constituting at least a majority of the outstanding
Shares of the Company (determined on a fully-diluted basis), (ii) approval of
the Merger Agreement, the Offer and the Merger by the Supervisory Board of
Parent by March 15, 1999, (iii) the expiration or termination of all waiting
periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder, and (iv) the satisfaction or waiver of
certain other conditions to the obligations of the Purchaser to consummate the
Offer and the transactions contemplated by the Merger Agreement.
The Offer is being made in accordance with an Agreement and Plan of
Merger, dated as of February 15, 1999 (the "Merger Agreement") between the
Company and the Purchaser. After the Purchaser purchases all the Shares which
are tendered in response to the Offer, the Purchaser will take all steps in its
power (including voting its Shares) to cause the Purchaser to be merged into the
Company in a transaction in which the stockholder of the Purchaser will own all
the stock of the corporation which results from the Merger (essentially, the
Company) and the other stockholders of the Company will receive the same amount
of cash per Share as is paid for Shares tendered in response to the Offer
(unless particular stockholders elect to exercise statutory rights to demand
appraisal of their Shares).
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD"), BASED ON THE
UNANIMOUS RECOMMENDATION OF A SPECIAL COMMITTEE OF THE BOARD CREATED TO CONSIDER
ACQUISITION PROPOSALS, HAS UNANIMOUSLY APPROVED 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 COMPANY AND THE STOCKHOLDERS OF THE COMPANY. THE BOARD
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES.
For purposes of the Offer, the Purchaser will be deemed to accept for
payment, and thereby purchase, all Shares which are properly tendered and not
properly withdrawn when and if the Purchaser gives oral or written notice to The
Bank of New York (the "Depositary") that the Purchaser is accepting those Shares
for payment. Payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders whose Shares have been
accepted for payment. In all cases, payment for Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of (a)
certificates representing Shares ("Share Certificates") (or a timely Book-Entry
Confirmation of the book-entry transfer of Shares into an account maintained by
the Depositary at The Depository Trust Company), pursuant to the procedures set
forth in Section 3 of the Offer to Purchase, (b) the Letter of Transmittal (or a
facsimile of one), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to
Purchase), in connection with a book-entry delivery, and (c) any other documents
required by the Letter of Transmittal. Accordingly, payment may not be made to
all tendering stockholders at the same time, depending upon when certificates or
Book-Entry Confirmations are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN PAYING FOR SHARES.
The term "Expiration Time" means 12:00 midnight, New York City time, on
March 19, 1999, unless and until the Purchaser, in its sole discretion, but
subject to the terms of the Merger Agreement, shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Time"
shall mean the latest time and date on which the Offer, as so extended by the
Purchaser, shall expire. The Purchaser expressly reserves the right, in its sole
discretion (but subject to the terms of the Merger Agreement), at any time or
from time to time, and regardless of whether or not any of the events set forth
in Section 14 of the Offer to Purchase shall have occurred, (i) to extend the
period of time during which the Offer is open and thereby delay acceptance for
payment of, and the payment for, any Shares, by giving oral or written notice of
such extension to the Depositary. The Purchaser shall not have any obligation to
pay interest on the purchase price for tendered Shares, whether or not the
Purchaser exercises its rights to extend the Offer. Any such extension will be
followed by a public announcement thereof no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Time.
During any such extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
<PAGE> 2
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Time and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after April
20, 1999. For a withdrawal to be effective, a written or facsimile transmission
of a notice of withdrawal must be timely received by the Depositary at one of
its addresses set forth on the back cover of the Offer to Purchase and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and (if Share Certificates have been tendered)
the name of the registered holder of the Shares to be withdrawn, if different
from the name of the person who tendered the Shares. If Share Certificates
evidencing Shares to be withdrawn have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of those Share Certificates,
the serial numbers shown on the particular Share Certificates to be withdrawn
must be submitted to the Depositary and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (as such term is
defined in the Offer to Purchase), unless the Shares have been tendered for the
account of an Eligible Institution. If Shares have been delivered pursuant to
the procedures for book-entry transfer as set forth in Section 3 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 of the Offer to Purchase at any time prior to
the Expiration Time. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Questions and requests for assistance may be directed 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, 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 Information Agent) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
February 19, 1999
<PAGE> 1
FOR RELEASE FEBRUARY 16, 1999-8:00 A.M.
Contact: Arthur Molins (516) 296-9234
GLOBEGROUND AGREES TO ACQUIRE HUDSON GENERAL
Frankfurt - February 16, 1999 -- GlobeGround GmbH, the airport ground
services subsidiary of Deutsche Lufthansa AG, announced that it has signed an
agreement to acquire Hudson General Corporation (AMEX:HGC) through a tender
offer and merger in which the Hudson General stockholders will receive $76 per
share in cash.
Under the agreement, a GlobeGround subsidiary will promptly begin a
tender offer for all Hudson General's shares at $76 per share. The tender offer
will be conditioned upon a majority of the outstanding shares' being tendered
and upon the entire transaction's being approved by the Supervisory Board of
Deutsche Lufthansa at a meeting scheduled to be held on March 10, 1999. It also
will be conditioned on expiration or termination of waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and satisfaction of other
customary conditions.
If the tender offer is completed, after the GlobeGround subsidiary
purchases the tendered shares, it will be merged into Hudson General, with the
Hudson General stockholders who did not tender their shares receiving the same
$76 per share as will be paid in the tender offer.
Peter Bluth, a Managing Director of GlobeGround, said "Since
GlobeGround became a part owner of Hudson General's airport ground services
business in 1996, we have been very pleased with the performance of that
business and the way Hudson General has operated it. It is the North American
link in our worldwide network of ground services companies. GlobeGround became
concerned that if somebody acquired Hudson General, there likely would be a
change in the management of its airport ground services business. We felt that
the best way to ensure that we would be able to select who would manage the
North American part of our airport ground services network would be to own
Hudson General."
GlobeGround acquired a 26% interest in Hudson General's airport ground
services affiliate in 1996. In the summer of 1998, GlobeGround exercised an
option to increase its ownership to 49%. Hudson General owns the other 51%.
Hudson General provides airport ground services, including fueling,
de-icing and baggage handling, at a number of airports in the United States and
Canada, including the three major New York City airports. GlobeGround has a
network of wholly or partly owned companies which provide ground services at
approximately 80 airports in 26 countries around the world.
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 15, 1999
BETWEEN
HUDSON GENERAL CORPORATION
AND
GLGR ACQUISITION CORP.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I THE TENDER OFFER..................................................... 1
SECTION 1.01. The Tender Offer................................................. 1
SECTION 1.02. Company Action................................................... 2
ARTICLE II THE MERGER........................................................... 3
SECTION 2.01. Agreement to Effect Merger....................................... 3
SECTION 2.02. The Merger....................................................... 3
SECTION 2.03. Effective Time................................................... 3
SECTION 2.04. Effects of the Merger............................................ 4
SECTION 2.05. Certificate of Incorporation..................................... 4
SECTION 2.06. Bylaws........................................................... 4
SECTION 2.07. Directors and Officers........................................... 4
SECTION 2.08. Stockholders Meeting............................................. 4
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES................... 5
SECTION 3.01. Conversion of Securities......................................... 5
SECTION 3.02. Exchange of Certificates and Cash................................ 5
SECTION 3.03. Stock Transfer Books............................................. 7
SECTION 3.04. Stock Options; Payment Rights.................................... 7
SECTION 3.05. Dissenting Shares................................................ 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 7
SECTION 4.01. Organization and Qualifications; Subsidiaries.................... 7
SECTION 4.02. Certificate of Incorporation and Bylaws.......................... 8
SECTION 4.03. Capitalization................................................... 8
SECTION 4.04. Authority Relative to This Agreement............................. 8
SECTION 4.05. No Conflict; Required Filings and Consents....................... 9
SECTION 4.06. Opinion of Financial Advisor..................................... 9
SECTION 4.07. Board Approval................................................... 10
SECTION 4.08. Brokers.......................................................... 10
SECTION 4.09. SEC Filings...................................................... 10
SECTION 4.10. Schedule 14D-9................................................... 10
SECTION 4.11. Cash and Investment Securities................................... 11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUISITION........................ 11
SECTION 5.01. Organization and Qualification................................... 11
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 5.02. Authority Relative to This Agreement............................. 11
SECTION 5.03. No Conflict; Required Filings and Consents....................... 11
SECTION 5.04. Brokers.......................................................... 12
SECTION 5.05. Financial Capability............................................. 12
SECTION 5.06. Capitalization of Acquisition.................................... 12
SECTION 5.07. Offer Document................................................... 12
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER............................... 13
SECTION 6.01. Conduct of Business by the Company Pending the Merger............ 13
ARTICLE VII ADDITIONAL COVENANTS................................................. 14
SECTION 7.01. Access to Information; Confidentiality........................... 14
SECTION 7.02. Proxy Statement.................................................. 14
SECTION 7.03. Action by Stockholders........................................... 14
SECTION 7.04. No Solicitation.................................................. 15
SECTION 7.05. Directors' and Officers' Insurance and Indemnification........... 16
SECTION 7.06. Further Action; Best Efforts..................................... 17
SECTION 7.07. Public Announcements............................................. 17
SECTION 7.08. Conveyance Taxes................................................. 18
SECTION 7.09. Employee Benefits................................................ 18
SECTION 7.10. Knowledge of Breach.............................................. 18
ARTICLE VIII CLOSING CONDITIONS................................................... 19
SECTION 8.01. Conditions to Obligations of Each Party to Effect the Merger..... 19
SECTION 8.02. Additional Conditions to Obligations of Acquisition.............. 19
SECTION 8.03. Additional Conditions to Obligations of the Company.............. 20
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER.................................... 20
SECTION 9.01. Termination...................................................... 20
SECTION 9.02. Effect of Termination............................................ 21
SECTION 9.03. Amendment........................................................ 21
SECTION 9.04. Waiver........................................................... 22
SECTION 9.05. Fees, Expenses and Other Payments................................ 22
ARTICLE X GENERAL PROVISIONS................................................... 22
SECTION 10.01. Effectiveness of Representations, Warranties and Agreements...... 22
SECTION 10.02. Notices.......................................................... 22
</TABLE>
-ii-
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 10.03. Certain Definitions.............................................. 23
SECTION 10.04. Headings......................................................... 24
SECTION 10.05. Severability..................................................... 24
SECTION 10.06. Entire Agreement................................................. 24
SECTION 10.07. Assignment....................................................... 24
SECTION 10.08. Parties in Interest.............................................. 24
SECTION 10.09. Governing Law.................................................... 24
SECTION 10.10. Submission to Jurisdiction; Waivers.............................. 24
SECTION 10.11. Enforcement of this Agreement.................................... 25
SECTION 10.12. Counterparts..................................................... 25
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 15, 1999 (the
"Agreement"), between HUDSON GENERAL CORPORATION, a Delaware corporation (the
"Company"), and GLGR ACQUISITION CORP., a Delaware corporation (the
"Acquisition").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this Agreement
(a) Acquisition will offer (the "Tender Offer") to purchase all the outstanding
common stock, par value $1.00 per share, of the Company ("Common Stock") at a
price per share, net to the seller, in cash of $76.00 per share of Common Stock
(that price, or any greater amount per share Acquisition pays pursuant to the
Tender Offer, being the "Tender Offer Price"), and (b) if Acquisition purchases
the shares which are tendered in response to the Tender Offer, as promptly as
practicable, in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), Acquisition will merge with and into the Company in a
transaction (the "Merger") pursuant to which each outstanding share of Common
Stock (other than shares owned by Acquisition) shall be converted into the right
to receive in cash per share of Common Stock an amount equal to the Tender Offer
Price, each as more fully set forth herein;
WHEREAS, the Board of Directors of the Company, based on the unanimous
recommendation of the Special Committee (as defined in Section 1.01(d)), has
determined that the Tender Offer and the Merger are fair to and in the best
interests of the Company and its stockholders and would be more beneficial to
the Company and its stockholders than either the transaction (the "Proposed
Management Transaction") which was the subject of an Agreement and Plan of
Merger dated as of November 22, 1998, as amended on February 9, 1999 (the "River
Acquisition Agreement") or any other proposal to acquire the Company or its
Common Stock which has been received by the Company as of the date hereof, and
has approved this Agreement, Acquisition's purchasing the shares which are
tendered in response to the Tender Offer, the Merger and the other transactions
contemplated hereby and has recommended approval and adoption of this Agreement
by the stockholders of the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE TENDER OFFER
SECTION 1.01. The Tender Offer. (a) Not later than the first business
day after the date of this Agreement, Acquisition will make a public
announcement of the Tender Offer.
(b) Within five business days after Acquisition makes a public
announcement of the Tender Offer, Acquisition will file with the Securities and
Exchange Commission ("SEC") a Tender Offer Statement on Schedule 14D-1 with
respect to the Tender Offer (together with any amendments or supplements, the
"Schedule 14D-1"), including forms of an offer to purchase, a letter of
transmittal and a summary advertisement (the Schedule 14D-1 and the documents
included in it by which the Tender Offer will be made, as they may be
supplemented or amended, being the "Offer Documents") to purchase for cash all
outstanding shares of Common Stock at the Tender Offer Price, subject to there
being validly tendered and not withdrawn prior to the expiration of the Tender
Offer, that number of shares of Common Stock which, together with the Shares
beneficially owned by Acquisition or its affiliates, constitute at least a
majority of the shares of Common Stock outstanding on a fully diluted basis (the
"Minimum
<PAGE> 6
Condition") and to the other conditions set forth in Annex A hereto. Promptly
after that, Acquisition will communicate the Tender Offer to the record holders
and beneficial owners of the Common Stock. Each of Acquisition and the Company
will promptly correct any information provided by it for use in the Offer
Documents if and to the extent that information becomes incomplete or inaccurate
in any material respect, and Acquisition will supplement or amend the Offer
Documents to the extent required by the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules and regulations thereunder, file the
amended or supplemented Offer Documents with the SEC and, if required,
disseminate the amended Offer Documents to the Company's stockholders. The
Company and its counsel will be given a reasonable opportunity to review the
Offer Documents and any amendments or supplements to them before they are filed
with the SEC or disseminated to the Company's stockholders.
(c) The day on which the Tender Offer expires (the "Expiration
Date") will not be earlier than 20 business days, and (except as provided in
Section 1.01(d)) will not be later than 30 business days, after the day on which
the Schedule 14D-1 is filed with the SEC.
(d) Subject to the conditions to the Tender Offer set forth on
Annex A and the other conditions set forth in this Agreement, Acquisition will,
promptly after the initial Expiration Date or any permitted extended Expiration
Date, accept for payment and pay for all the shares of Common Stock which are
properly tendered in response to the Tender Offer and not withdrawn. The
obligation of Acquisition to accept for payment and pay for shares which are
properly tendered and not withdrawn will not be subject to any conditions other
than the Minimum Condition (which may not be waived) and those set forth on
Annex A. Acquisition will not, without the consent of the Company acting through
the Special Committee of its Board of Directors (the "Special Committee"), (i)
decrease the Tender Offer Price below that described in the first "Whereas"
clause, (ii) decrease the number of shares being solicited in the Tender Offer,
(iii) change the form of consideration payable in the Tender Offer, or (iv)
modify or add to the conditions set forth on Annex A or otherwise modify the
terms of the Tender Offer set forth in this Agreement. Notwithstanding the
foregoing, Acquisition agrees to extend the Tender Offer for one or more periods
of not more than 10 business days, the last of which will end no later than May
31, 1999, if at the initial expiration date of the Tender Offer, or any
extension thereof, the Minimum Condition or the condition to the Tender Offer
requiring the expiration or termination of any applicable waiting periods under
the HSR Act is not satisfied. If (A) the Tender Offer is modified to increase
the Tender Offer Price or in any other manner permitted by this Agreement,
Acquisition may extend the Expiration Date until not more than 10 business days
after the day on which Acquisition makes a public announcement of the
modification, (B) anyone other than Acquisition makes a tender offer for Common
Stock before the Tender Offer expires, Acquisition may extend the Expiration
Date until not more than 10 business days after the other tender offer expires,
or (C) Acquisition is prevented by an order of a court or other governmental
agency from accepting shares which are tendered in response to the Tender Offer,
Acquisition may extend the Expiration Date until 10 business days after
Acquisition is able to accept shares without violating any order of any court or
other governmental agency.
SECTION 1.02. Company Action. (a) The Company approves of and consents
to the Tender Offer and represents and warrants that its Board of Directors,
based on a recommendation of the Special Committee, has (i) determined that this
Agreement and the transactions contemplated by it are fair to and in the best
interests of the Company and its stockholders, (ii) approved this Agreement and
the transactions contemplated by it, including the Tender Offer and the Merger,
and (iii) resolved to recommend that the Company's stockholders accept the
Tender Offer, tender their shares in response to the Tender Offer, and adopt and
approve this Agreement and the Merger. Simultaneously with the execution of this
Agreement, each of the directors and executive officers of the Company has
indicated to the Company that he or she intends to tender and sell his or her
shares of Common Stock in response to the Tender Offer, except that directors
and executive officers whose sales of their shares in response to the Tender
Offer might result in liability under Section 16(b) of the Exchange Act intend
that if they do
2
<PAGE> 7
not tender and sell their shares in response to the Tender Offer, they will vote
their shares in favor of the Merger. Notwithstanding anything contained in this
subparagraph (a) or elsewhere in this Agreement, if the Board, based on a
recommendation of the Special Committee after consultation with independent
legal counsel, determines, in good faith to withdraw, modify or amend the
recommendation, because the failure to do so could reasonably be expected to be
a breach of the directors' fiduciary duties under applicable law, that
withdrawal, modification or amendment will not constitute a breach of this
Agreement.
(b) The Company will file with the SEC, promptly after
Acquisition files the Schedule 14D-1, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements, the "Schedule
14D-9") containing the recommendations described in subparagraph (a) and will
disseminate the Schedule 14D-9 as required by Rule 14d-9 under the Exchange Act.
The Company and Acquisition each agrees to correct promptly any information
provided by it for use in the Schedule 14D-9 if and to the extent that
information is or becomes incomplete or inaccurate in any material respect and
the Company will file any corrected Schedule 14D-9 with the SEC and disseminate
the corrected Schedule 14D-9 to the Company's stockholders to the extent
required by the Exchange Act or the rules and regulations under it.
(c) In connection with the Tender Offer, the Company will
promptly furnish Acquisition with mailing labels, security position listings and
any other available listing or computer files containing the names and addresses
of the record holders or beneficial owners of shares of Common Stock as of a
recent date and the Company will furnish Acquisition with such additional
information and assistance (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) as Acquisition
or its representatives may reasonably request in order to communicate the Tender
Offer to the record holders and beneficial owners of the Common Stock. Subject
to the requirements of applicable law, Acquisition will hold in confidence the
information contained in any such labels, listings or files, and will use that
information only in connection with the Tender Offer and the Merger. If this
Agreement is terminated, Acquisition will return to the Company the originals
and all copies of that information which are in Acquisition's possession.
ARTICLE II
THE MERGER
SECTION 2.01. Agreement to Effect Merger. If (a) Acquisition accepts
and pays for the shares which are properly tendered in response to the Tender
Offer and not withdrawn, and (b) the conditions to the Merger set forth in
Section 8.01 are satisfied or waived, Acquisition will take all steps in its
power, including voting all the Common Stock it beneficially owns or otherwise
has the power to vote in favor of adoption of this Agreement and approval of the
Merger, to cause Acquisition to be merged into the Company on the terms and with
the effects set forth in Sections 2.02 through 2.07.
SECTION 2.02. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, at the Effective
Time (as defined in Section 2.03), Acquisition shall be merged with and into the
Company. Following the Merger, the separate existence of Acquisition shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
SECTION 2.03. Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware and by making any related filings required under the
DGCL in connection with the
3
<PAGE> 8
Merger. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware or at
such later time as is agreed to by the parties hereto and as is specified in the
Certificate of Merger (the "Effective Time" or the "Closing").
SECTION 2.04. Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in the DGCL (including, without
limitation, Sections 259, 260 and 261 thereof). Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of the Company and
Acquisition shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Acquisition shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 2.05. Certificate of Incorporation. The certificate of
incorporation of the Company immediately prior to the Effective Time shall be
the certificate of incorporation of the Surviving Corporation (the "Surviving
Certificate") until thereafter amended in accordance with the DGCL.
SECTION 2.06. Bylaws. The bylaws of Acquisition immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation until
thereafter amended in accordance with the Surviving Certificate and the DGCL.
SECTION 2.07. Directors and Officers. From and after the Effective
Time, until their respective successors are duly elected or appointed and
qualified in accordance with applicable law, (a) the directors of Acquisition at
the Effective Time shall be the directors of the Surviving Corporation and (b)
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
SECTION 2.08. Stockholders Meeting. (a) If the conditions described in
clauses (a) and (b) of Section 2.01 are satisfied, and if approval by the
Company's stockholders is required by applicable law in order to consummate the
Merger, the Company will:
(i) duly call, serve notice of, convene and hold a
special meeting of its stockholders as soon as practicable following the
Expiration Date for the purpose of adopting this Agreement and approving the
Merger (the "Stockholders Meeting");
(ii) as promptly as practicable after the Expiration
Date, (A) file with the SEC a proxy statement or information statement (together
with any amendments thereof or supplements thereto, the "Proxy Statement") and
other proxy soliciting materials relating to the Stockholders Meeting, (B)
respond promptly to any comments made by the staff of the SEC with respect to
the Proxy Statement or other proxy soliciting materials, (C) cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the Expiration Date, and (D) in all other respects, use its best
efforts to cause its stockholders to adopt this Agreement and approve the
Merger; and
(iii) include in the Proxy Statement the
recommendation of the Board, based on the unanimous recommendation of the
Special Committee, that the stockholders of the Company vote in favor of the
adoption of this Agreement and approve the Merger, unless the Board, based upon
written advice from its counsel, determines in good faith that the failure to
amend or withdraw that recommendation could reasonably be expected to be a
breach of the directors' fiduciary duties under applicable law.
(b) Notwithstanding the foregoing, in the event that
Acquisition shall acquire at least 90% of the outstanding shares of Common Stock
in the Tender Offer, the parties hereto shall take all necessary actions to
cause the Merger to become effective, as soon as practicable after the
expiration of
4
<PAGE> 9
the Tender Offer, without a meeting of stockholders of Company, in accordance
with Section 253 of the DGCL.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Acquisition, the
Company or the holders of any of the following securities:
(a) Each share of the Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of Common Stock
to be canceled pursuant to Section 3.01(b) and any Dissenting Shares (as defined
below)) shall be converted into the right to receive an amount in cash equal to
the Tender Offer Price, without interest (the "Merger Consideration"). At the
Effective Time, each share of Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such share (other than shares to be
canceled pursuant to Section 3.01(b) and any Dissenting Shares) shall thereafter
represent only the right to receive, upon the surrender of such certificate in
accordance with the provisions of Section 3.02, an amount in cash per share
equal to the Merger Consideration. The holders of such certificates previously
evidencing such shares of Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares of
Common Stock except as otherwise provided herein or by law.
(b) Each share of capital stock of the Company (i) held in the
treasury of the Company or by any wholly owned subsidiary of the Company or (ii)
owned by Acquisition or any of its subsidiaries shall automatically be canceled,
retired and cease to exist without any conversion thereof and no payment shall
be made with respect thereto.
(c) Each share of common stock of Acquisition outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 3.02. Exchange of Certificates and Cash. (a) Exchange Agent. At
or before the Effective Time, Acquisition shall enter into an agreement
providing for the matters set forth in this Section 3.02 (the "Exchange Agent
Agreement") with a bank or trust company selected by Acquisition and reasonably
acceptable to the Company (the "Exchange Agent"), authorizing such Exchange
Agent to act as Exchange Agent in connection with the Merger. Immediately prior
to the Effective Time, Acquisition shall deposit or shall cause to be deposited
with or for the account of the Exchange Agent, for the benefit of the holders of
shares of Common Stock (other than Dissenting Shares and shares to be canceled
pursuant to Section 3.01(b)), an amount in cash equal to the Merger
Consideration payable pursuant to Section 3.01(a) (such cash funds are hereafter
referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Acquisition will instruct the Exchange Agent to mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time evidenced outstanding shares of Common Stock (other
than Dissenting Shares and shares to be canceled pursuant to Section 3.01(b))
(the "Certificates"), (i) a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Acquisition may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the
5
<PAGE> 10
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by
Acquisition, together with a letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such instructions
(collectively, the "Transmittal Documents"), the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each share of Common Stock formerly represented by such Certificate, without any
interest thereon, less any required withholding of taxes, and the Certificate so
surrendered shall thereupon be canceled. In the event of a transfer of ownership
of shares of Common Stock which is not registered in the transfer records of the
Company, the Merger Consideration may be issued and paid in accordance with this
Article III to the transferee of such shares if the Certificate evidencing such
shares of Common Stock is presented to the Exchange Agent and is properly
endorsed or otherwise in proper form for transfer. The signature on the
Certificate or any related stock power must be properly guaranteed and the
person requesting payment of the Merger Consideration must either pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate so surrendered or establish to the
Surviving Corporation that such tax has been paid or is not applicable. The
Merger Consideration will be delivered by the Exchange Agent as promptly as
practicable following surrender of a Certificate and the related Transmittal
Documents. Cash payments may be made by check unless otherwise required by a
depositary institution in connection with the book-entry delivery of securities.
No interest will be payable on such Merger Consideration. Until surrendered in
accordance with this Section 3.02, each Certificate shall be deemed at any time
after the Effective Time to evidence only the right to receive, upon such
surrender, the Merger Consideration for each share of Common Stock formerly
represented by such Certificate. The Exchange Fund shall not be used for any
purpose other than as set forth in this Article III. Any interest, dividends or
other income earned on the investment of cash held in the Exchange Fund shall be
for the account of the Surviving Corporation.
(c) Termination of Exchange Fund. Any portion of the Exchange
Fund (including the proceeds of any investments thereof) which remains
undistributed to the holders of Common Stock for one year following the
Effective Time shall be delivered to the Surviving Corporation, upon demand. Any
holders of Common Stock who have not theretofore complied with this Article III
shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration.
(d) No Liability. None of Acquisition, the Surviving
Corporation or the Company shall be liable to any holder of shares of Common
Stock for any cash delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Withholding Rights. The Surviving Corporation and the
Exchange Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Common
Stock such amounts as the Surviving Corporation or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under
the United States Internal Revenue Code of 1986, as amended, or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Corporation or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Common Stock in respect of which such deduction and withholding
was made by the Surviving Corporation or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing shares of Common Stock shall have been lost, stolen or
destroyed, the holder of such lost, stolen or destroyed Certificate(s) shall
execute an affidavit of that fact upon request. The holder of any such lost,
stolen or destroyed Certificate(s) shall also deliver a reasonable indemnity
against any claim that may be made against Acquisition, the Surviving
Corporation or the Exchange Agent with respect to the Certificate(s) alleged to
have been lost, stolen or destroyed. The affidavit and any indemnity which may
be required
6
<PAGE> 11
hereunder shall be delivered to the Exchange Agent, who shall be responsible for
making payment for such lost, stolen or destroyed Certificates(s) pursuant to
the terms hereof.
SECTION 3.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of shares of Common Stock thereafter on the records of
the Company. Any Certificates presented to the Exchange Agent or the Surviving
Corporation for any reason at or after the Effective Time shall be exchanged for
the Merger Consideration pursuant to the terms hereof.
SECTION 3.04. Stock Options; Payment Rights. (a) Subject to Section
3.04(b), each Option (as defined below) which is outstanding immediately prior
to the Effective Time, whether or not then exercisable, shall be canceled and
the Company Option Plans (as defined below) shall be assumed by the Surviving
Corporation, in each case at and as of the Effective Time, and each holder of
such canceled Options shall be paid by the Surviving Corporation as soon as
practicable, but in any event within five days after the Effective Time, for
each such Option, an amount determined by multiplying (i) the excess, if any, of
the Merger Consideration over the applicable exercise price per share of such
Option by (ii) the number of shares issuable upon exercise of such Option,
subject to any required withholding of taxes.
(b) Prior to the Effective Time, the Company shall use its
best efforts to (i) obtain any consents from holders of the Options and (ii)
make any amendments to the terms of the Company Option Plans and any Options
granted thereunder that, in the case of either (i) or (ii) are necessary or
appropriate to give effect to the transactions contemplated by this Section
3.04.
SECTION 3.05. Dissenting Shares. (a) Notwithstanding any other
provision of this Agreement to the contrary, shares of Common Stock that are
outstanding immediately prior to the Effective Time and which are held by
stockholders (i) who shall not have voted in favor of adoption of this Agreement
and (ii) who shall be entitled to and shall have demanded properly in writing
appraisal for such shares in accordance with Section 262 of the DGCL
("Dissenting Shares"), shall not be converted into or represent the right to
receive the Merger Consideration unless such stockholders fail to perfect,
withdraw or otherwise lose their right to appraisal. Such stockholders shall be
entitled to receive payment of the appraised value of such Dissenting Shares in
accordance with the provisions of the DGCL. If, after the Effective Time, any
such stockholder fails to perfect, withdraws or loses its right to appraisal,
such shares of Common Stock shall be treated as if they had been converted as of
the Effective Time into a right to receive the Merger Consideration, without
interest thereon, upon surrender of the Certificate or Certificates that
formerly evidenced such shares of Common Stock in the manner set forth in
Section 3.02.
(b) The Company shall give Acquisition prompt notice of any
demands for appraisal received by it, withdrawals of such demands, and any other
instruments served pursuant to the DGCL and received by the Company and relating
thereto. Acquisition shall direct all negotiations and proceedings with respect
to demands for appraisal under the DGCL. The Company shall not, except with the
prior written consent of Acquisition, make any payment with respect to any
demands for appraisal, or offer to settle, or settle, any such demands.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquisition that:
7
<PAGE> 12
SECTION 4.01. Organization and Qualifications; Subsidiaries. The
Company and each significant subsidiary of the Company (a "Company Subsidiary")
within the meaning of Rule 1-02(w) of Regulation S-X under the Exchange Act is a
corporation, partnership or other legal entity duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has the requisite power and authority and all
necessary governmental approvals, to own, lease and operate its properties and
to carry on its business as it is now being conducted, except where the failure
to be so organized, existing and in good standing would not have a Company
Material Adverse Effect (as defined below). The Company and each Company
Subsidiary is duly qualified or licensed and in good standing to do business in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that would not, individually or in the aggregate, have a
material adverse effect on the business, assets, results of operations or
financial condition of the Company and the Company Subsidiaries, taken as a
whole (a "Company Material Adverse Effect").
SECTION 4.02. Certificate of Incorporation and Bylaws. Acquisition has
been given access by the Company to a complete and correct copy of the
certificate of incorporation and the bylaws or equivalent organizational
documents, each as amended to the date hereof, of the Company and each Company
Subsidiary. Such certificates of incorporation, bylaws and equivalent
organizational documents are in full force and effect. Neither the Company nor
any Company Subsidiary is in violation of any provision of its certificate of
incorporation, bylaws or equivalent organizational documents.
SECTION 4.03. Capitalization. The authorized capital stock of the
Company consists of 7,000,000 shares of Common Stock and 100,000 shares of
preferred stock, par value $1.00 per share ("Preferred Stock"). As of December
31, 1998, (a) 1,744,949 shares of Common Stock were outstanding, all of which
were validly issued, fully paid and nonassessable; (b) no shares of Preferred
Stock were issued and outstanding and no action had been taken by the Board of
Directors of the Company with respect to the designation of the rights and
preferences of any series of Preferred Stock; (c) 37,100 shares of Common Stock
were reserved for issuance upon the exercise of outstanding stock options (the
"Options") granted pursuant to the Company's 1981 Non-Qualified Stock Option and
Stock Appreciation Rights Plan and 1981 Incentive Stock Option and Stock
Appreciation Rights Plan (collectively, the "Company Option Plans"); (d) 357,311
shares of Common Stock and no shares of Preferred Stock were held in the
treasury of the Company; (e) no Company Subsidiary owns any shares of the
Company's capital stock; and (f) there are no securities of any Company
Subsidiary outstanding which are convertible into or exercisable or exchangeable
for capital stock of the Company. Except as set forth above, no shares of
capital stock or other voting securities of the Company have been issued, are
reserved for issuance or are outstanding. All shares of Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable.
SECTION 4.04. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the adoption of this Agreement by the holders of a
majority of the aggregate voting power of the issued and outstanding shares of
Common Stock the "Company Stockholder Approval"), and the filing and recordation
of appropriate merger documents as required by, and in accordance with, the
DGCL. This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by
8
<PAGE> 13
Acquisition, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement and the consummation of the transactions
contemplated hereby will not, (i) conflict with or violate the Company's
Restated Certificate of Incorporation, as amended to the date hereof (the
"Company Charter"), or its by-laws, or the certificate of incorporation, by-laws
or other equivalent organizational documents of any Company Subsidiary, or (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to the Company or any Company Subsidiary or by which any property or
asset of the Company or any Company Subsidiary is bound or affected, or (iii)
except as previously disclosed to Acquisition in a letter dated February 15,
1999, result in any breach of or constitute a default (or an event which, with
notice, lapse of time or both, would become a default) under, result in the loss
of a material benefit under or give to others any right of termination,
amendment, acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any properties or assets of the
Company or any subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or any other instrument
or obligation to which the Company or any subsidiary is a party or by which the
Company or any subsidiary, or any of their respective properties or assets, is
bound or affected, except, in the case of clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which (A) would
not prevent or delay consummation of the Merger in any material respect or
otherwise prevent the Company from performing its obligations under this
Agreement in any material respect, and (B) would not, individually or in the
aggregate, have a Company Material Adverse Effect. Without limiting what is said
above, the execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement and the consummation of the transactions
contemplated hereby will not, conflict with or violate the River Acquisition
Agreement or give anybody any rights under the River Acquisition Agreement,
except for rights to terminate the River Acquisition Agreement and rights to
reimbursement of expenses under clause (x) of Section 8.05(b) of the River
Acquisition Agreement.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement and the consummation of
the Merger and the other transactions contemplated hereby by the Company will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, domestic or
foreign (each a "Governmental Entity"), except (i) for (A) any applicable
requirements of the Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act"), (B) the pre-merger notification requirements of the HSR Act,
(C) the filing and recordation of appropriate merger and similar documents as
required by the DGCL, (D) filings under the rules and regulations of the
American Stock Exchange, Inc. and (E) filings and consents under any applicable
foreign laws, including, without limitation, the antitrust laws or laws intended
to prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade and any filings and consents which may be
required by any foreign environmental, health or safety laws or regulations
pertaining to any notification, disclosure or required approval triggered by the
Merger or the transactions contemplated by this Agreement, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, (x) would not prevent or delay consummation
of the Merger in any material respect or otherwise prevent the Company from
performing its obligations under this Agreement in any material respect, and (y)
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
SECTION 4.06. Opinion of Financial Advisor. Allen & Company
Incorporated has delivered to the Special Committee (as defined below) its
opinion substantially to the effect that, as of the date hereof,
9
<PAGE> 14
the consideration to be received by the stockholders of the Company pursuant to
the Tender Offer and the Merger is fair to such stockholders from a financial
point of view.
SECTION 4.07. Board Approval. The Board of Directors of the Company,
based on the unanimous recommendation of the Special Committee, at a meeting
duly called and held and at which a quorum was present and voting, unanimously
(a) determined that this Agreement and the Merger are fair to and in the best
interests of the Company's stockholders, (b) approved this Agreement, the Merger
and the other transactions contemplated hereby, and (c) resolved to recommend
approval and adoption of this Agreement by the Company's stockholders.
SECTION 4.08. Brokers. No broker, finder or investment banker (other
than Allen & Company Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement, the Merger and the
other transactions contemplated hereby based upon arrangements made by or on
behalf of the Company. The fees of Allen & Company Incorporated with regard to
(i) the Merger (based on a Tender Offer Price and Merger Consideration of $76.00
per share) and the other transactions contemplated hereby, (ii) the transactions
contemplated by the River Acquisition Agreement, and (iii) any other proposed
transactions relating to sale of the Company or substantially all its stock or
assets, will not in total exceed $1,650,000.
SECTION 4.09. SEC Filings.
(a) Since June 30, 1997, the Company has filed with the SEC
all forms, statements, reports and other documents it has been required to file
under the Exchange Act.
(b) The Company's Annual Report on Form 10-K for the year
ended June 30, 1998 (the "1998 10-K") and its Reports on Form 10-Q for the
periods ended September 30, 1998 and December 31, 1998 (the "10-Q's") which were
filed with the SEC, including the documents incorporated by reference in each of
them, each contained all the information required to be included in it and, when
it was filed, did not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made in it, in
light of the circumstances under which they were made, not misleading. Without
limiting what is said in the preceding sentence, the financial statements
included in the 1998 10-K all were prepared, and the financial information
included in the 10-Q's was derived from financial statements which were
prepared, in accordance with United States generally accepted accounting
principles applied on a consistent basis (except that financial information
included in the 10-Q's is subject to normal year end adjustments) and presented
fairly the consolidated financial condition and the consolidated results of
operations of the Company and its subsidiaries at the dates, and for the
periods, to which they relate. At the date of this Agreement, the Company has
not filed any reports with the SEC with regard to any period which ended, or any
event which occurred, after December 31, 1998, except a Current Report on Form
8-K filed on February 10, 1999.
SECTION 4.10. Schedule 14D-9. Neither the Schedule 14D-9 nor any
information supplied by the Company for inclusion in the Offering Documents
will, at the respective times the Schedule 14D-9 and the Schedule 14D-1 are
filed with the SEC and first published, sent or given to the Company's
stockholders, contain a false or misleading statement with respect to any
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. However, the Company
does not make any representations or warranties with respect to information
supplied by Acquisition or any of its affiliates or representatives for
inclusion in the Schedule 14D-9 or with respect to the Offering Documents
(except to the extent of information supplied by the Company for inclusion in
the Offering Documents). The Schedule 14D-9 will comply as to form in all
material respects with the requirements of the Exchange Act and the rules under
it.
10
<PAGE> 15
SECTION 4.11. Cash and Investment Securities. At the date of this
Agreement the Company and its subsidiaries (including Hudson General LLC) had,
and at the Effective Time the Company and its subsidiaries will have, cash and
cash equivalents and investment securities available for sale totaling at least
$45,000,000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Acquisition hereby makes to the Company the representations and warranties set
forth below:
SECTION 5.01. Organization and Qualification. Acquisition is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted. Acquisition is duly
qualified or licensed and in good standing to do business in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
for such failures to be so qualified or licensed and in good standing that would
not, individually or in the aggregate, have a material adverse effect on the
business, results of operations or financial condition of Acquisition and its
subsidiaries, taken as a whole ("Acquisition Material Adverse Effect").
SECTION 5.02. Authority Relative to This Agreement. (a) Acquisition has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Acquisition and the consummation by it of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of
Acquisition and no other corporate proceedings on the part of Acquisition are
necessary to authorize this Agreement or to consummate such transactions (other
than the filing and recordation of appropriate merger documents as required by
the DGCL). This Agreement has been duly and validly executed and delivered by
Acquisition and, assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of Acquisition,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
(b) The transactions which are the subject of this Agreement
have been approved by the Executive Board of Deutsche Lufthansa AG (the
"Lufthansa Executive Board") which includes the senior members of the management
of Deutsche Lufthansa AG, and the Lufthansa Executive Board has recommended to
the Supervisory Board of Deutsche Lufthansa AG (the "Lufthansa Supervisory
Board") that it approve those transactions.
SECTION 5.03. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Acquisition do not, and the
consummation of the transactions contemplated hereby will not, (i) conflict with
or violate the certificate of incorporation or by-laws of Acquisition, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Acquisition or by which any of its properties or assets are bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which, with notice, lapse of time or both, would become a default) under,
result in the loss of a material benefit under or give to others any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any properties or
assets of Acquisition pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or any other instrument
or obligation to which Acquisition is a party or by which Acquisition or any of
its properties or assets is bound or affected, except in the case of clauses
(ii) and
11
<PAGE> 16
(iii), for any such conflicts, violations, breaches, defaults or other
occurrences which (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent Acquisition from performing its
obligations under this Agreement in any material respect, or (y) would not,
individually or in the aggregate, have a Acquisition Material Adverse Effect.
(b) The execution and delivery of this Agreement by
Acquisition do not, and the performance of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby by Acquisition will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Entity, except (i) for (A) any applicable
requirements, if any, of the Exchange Act, the Securities Act and state takeover
laws, (B) the pre-merger notification requirements of the HSR Act, (C) filing
and recordation of appropriate merger and similar documents as required by the
DGCL and (D) filings and consents under applicable foreign law, including,
without limitation, the antitrust laws or laws intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade and any filings and consents which may be required by any foreign
environmental, health or safety laws or regulations pertaining to any
notification, disclosure or required approval triggered by the Merger or the
transactions contemplated by this Agreement, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not (x) prevent or delay consummation of the
Merger in any material respect or otherwise prevent Acquisition from performing
its obligations under this Agreement in any material respect, or (y) would not,
individually or in the aggregate, have a Acquisition Material Adverse Effect.
SECTION 5.04. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with this Agreement, the Merger and the other transactions contemplated hereby
based upon arrangements made by or on behalf of Acquisition and its affiliates.
SECTION 5.05. Financial Capability. GlobeGround GmbH ("GlobeGround"), a
German company, which is guaranteeing the obligations of Acquisition under this
Agreement, and is agreeing to provide the funds which Acquisition requires to
pay for the shares of Common Stock which are properly tendered in response to
the Tender Offer and not withdrawn and the funds which the Surviving Corporation
will need to pay the Merger Consideration as contemplated by this Agreement, has
adequate funds (including funds which are available from its parent, Deutsche
Lufthansa AG, and funds which are available under existing credit lines) to
enable it to provide the funds which Acquisition requires to pay for the shares
of Common Stock which are properly tendered in response to the Tender Offer and
not withdrawn and the funds which the Surviving Corporation will need to pay the
Merger Consideration and cash out all outstanding Options, and to fulfill all
GlobeGround's other obligations as guarantor of the obligations of Acquisition
under this Agreement.
SECTION 5.06. Capitalization of Acquisition. The authorized capital
stock of Acquisition consists of 1,000 shares of Common Stock, par value $.01
per share ("Acquisition Common Stock"). As of the date hereof, 200 shares of
Acquisition Common Stock are outstanding, all of which (i) were validly issued,
and are fully paid and nonassessable and (ii) are owned by LAGS (USA), Inc., a
Delaware corporation, which is a wholly owned subsidiary of GlobeGround, which
in turn is a wholly owned subsidiary of Deutsche Lufthansa AG.
SECTION 5.07. Offer Document. Neither the Offer Documents nor any
information supplied by Acquisition for inclusion in the Schedule 14D-9 will, at
the respective times the Schedule 14D-1 and the Schedule 14D-9 are filed with
the SEC and first published, sent or given to the Company's stockholders,
contain a false or misleading statement with respect to any material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If a Proxy Statement is mailed to the Company's
stockholders, on the date the Proxy Statement is mailed to the
12
<PAGE> 17
Company's stockholders and on the date of the Stockholders Meeting, if there is
one, none of the information supplied by Acquisition for inclusion in the Proxy
Statement will be false or misleading with respect to any material fact or will
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 or necessary to correct any statement in any
earlier communication with respect to the Stockholders Meeting or the
solicitation of proxies to be used at the Stockholders Meeting. However,
Acquisition does not make any representations or warranties with respect to
information supplied by the Company or any of its affiliates or representatives
for inclusion in the Offer Documents, or with respect to the Schedule 14D-9 or
the Proxy Statement (except to the extent of information supplied by Acquisition
for inclusion in the Schedule 14D-9 or the Proxy Statement). The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the Merger.
Except as required by the River Acquisition Agreement, as it is in effect on the
date of this Agreement, the Company covenants and agrees that, between the date
of this Agreement and the Effective Time, unless Acquisition shall have
consented (which consent shall not be unreasonably withheld), neither the
Company nor any Company Subsidiary shall:
(a) conduct its business in any manner other than in the
ordinary course of business consistent with past practice;
(b) amend or propose to amend its certificate of incorporation
or by-laws;
(c) authorize for issuance, issue, grant, sell, pledge, redeem
or acquire for value any of its or their securities, including options,
warrants, commitments, stock appreciation rights, subscriptions, rights to
purchase or otherwise (other than the issuance of equity securities upon the
conversion of outstanding convertible securities or in connection with any
dividend reinvestment plan or any Benefit Plan with an employee stock fund or
employee stock ownership plan feature, consistent with applicable securities
laws, or the exercise of options or warrants outstanding as of the date of this
Agreement and in accordance with the terms of such options or warrants in effect
on the date of this Agreement);
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property, or otherwise, with respect to
any of its capital stock or other equity interests, except for (i) the regular
semi-annual dividends of $.50 per share which shall be paid consistent with past
practice and (ii) dividends and other distributions declared and paid by a
Company Subsidiary only to the Company (and also to LAGS (USA) Inc. in the case
of Hudson General LLC), or subdivide, reclassify, recapitalize, split, combine
or exchange any of its shares of capital stock;
(e) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures (including tax accounting policies
and procedures);
(f) take any action that would, or could reasonably be
expected to result in, any of its representations and warranties set forth in
this Agreement being untrue or in any of the conditions to the Merger set forth
in Article VIII not being satisfied; or
(g) authorize any of, or commit or agree to take any of, the
foregoing actions.
13
<PAGE> 18
ARTICLE VII
ADDITIONAL COVENANTS
SECTION 7.01. Access to Information; Confidentiality. From the date
hereof to the Effective Time, the Company shall (and shall cause the Company
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and each of the Company Subsidiaries to) afford the officers, employees
and agents of Acquisition ("Acquisition's Representatives") reasonable access at
all reasonable times to its officers, employees, agents, properties, offices,
plants and other facilities, books and records, and shall furnish Acquisition's
Representatives with all financial, operating and other data and information as
may from time to time be reasonably requested. Acquisition agrees to, and to
cause its Representatives to, hold all information it receives as a result of
the access afforded as required by this Section in confidence, except to the
extent that information (i) is or becomes available to the public (other than
through a breach of this Agreement), (ii) becomes available to Acquisition from
a third party which, insofar as Acquisition is aware, is not under an obligation
to the Company, or to a subsidiary of the Company, to keep the information
confidential, (iii) was known to Acquisition or its affiliates (which include
GlobeGround and LAGS (USA), Inc.) before it was made available to Acquisition or
its Representatives by reason of this Section, or (iv) otherwise was
independently developed by Acquisition or its affiliates. If this Agreement is
terminated prior to the Effective Time, Acquisition will, at the request of the
Company, deliver to the Company all documents and other material obtained by
Acquisition or its Representatives from the Company or a subsidiary in
connection with the transactions which are the subject of this Agreement or
evidence that that material has been destroyed by Acquisition or its
Representatives.
SECTION 7.02. Proxy Statement. (a) Except as provided in Section
2.08(b), if Acquisition accepts and pays for the shares which are tendered in
response to the Tender Offer and stockholder approval of the Merger is required
by applicable law or by the rules of the American Stock Exchange (if they are
applicable), as soon as practicable after the Expiration Date, the Company shall
prepare the Proxy Statement in form and substance reasonably satisfactory to
Acquisition and, if required by the Exchange Act, file it with the SEC.
Acquisition shall furnish to the Company such information concerning itself and
its affiliates as the Company may reasonably request in connection with the
preparation of the Proxy Statement. The Proxy Statement will comply in all
material respects with applicable federal securities laws, except that no
representation is made by the Company with respect to information supplied by
Acquisition for inclusion in the Proxy Statement. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to its stockholders. The Proxy Statement shall include the
opinion of Allen & Company Incorporated referred to in Section 4.06 hereof.
(b) The information provided by each of the Company and
Acquisition for use in the Proxy Statement shall not, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the stockholders of the Company or (ii) the time of the Company stockholders'
meeting contemplated by such Proxy Statement, 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 not misleading. If at any
time prior to the Effective Time any event or circumstance relating to any party
hereto, or their respective officers or directors, should be discovered by such
party which should be set forth in an amendment or a supplement to the Proxy
Statement, such party shall promptly inform the Company and Acquisition thereof
and take appropriate action in respect thereof.
SECTION 7.03. Action by Stockholders. Except as otherwise provided in
Section 2.08(b) and except as otherwise required by the fiduciary duties of the
Board of Directors of the Company (as determined in good faith by the Special
Committee after consulting with its outside legal counsel): (a) the
14
<PAGE> 19
Company, acting through its Board of Directors, shall, in accordance with
applicable law, the Company Charter and the Company's bylaws, duly call, give
notice of, convene and hold the Stockholders Meeting as soon as practicable
after the Expiration Date for the purpose of adopting this Agreement and (b) the
Company will, through the Board of Directors based on the recommendation of the
Special Committee, (i) recommend to its stockholders the adoption of this
Agreement, and (ii) use its best efforts to cause the Company's stockholders to
approve and adopt this Agreement and approve the Merger (the "Company
Stockholder Approval"). Acquisition shall vote all shares of Common Stock owned
by it, if any, in favor of the adoption of this Agreement.
SECTION 7.04. No Solicitation. The Company shall not, and shall not
authorize or permit any of its officers, directors, employees or agents to
directly or indirectly, solicit, encourage, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than
Acquisition, any of its affiliates or representatives) (collectively, a
"Person") concerning any merger, consolidation, tender offer, exchange offer,
sale of all or substantially all of the Company's assets, sale of shares of
capital stock or similar business combination transaction involving the Company
or any principal operating or business unit of the Company or its Subsidiaries
(an "Acquisition Proposal"). Notwithstanding the foregoing, (i) if the Company
or the Special Committee receives an unsolicited, written indication of a
willingness to make an Acquisition Proposal at a price per share which the
Special Committee reasonably concludes is in excess of the Tender Offer Price
from any Person and if the Special Committee reasonably concludes, based upon
advice of its financial advisor, that the Person delivering such indication is
capable of consummating such an Acquisition Proposal (based upon, among other
things, the availability of financing and the capacity to obtain financing, the
expectation of receipt of required antitrust and other regulatory approvals and
the identity and background of such Person), then the Company or the Special
Committee may, directly or indirectly, provide access to or furnish or cause to
be furnished information concerning the Company's business, properties or assets
to any such Person pursuant to an appropriate confidentiality agreement and the
Company or the Special Committee may engage in discussions related thereto, and
(ii) the Company or the Special Committee may participate in and engage in
discussions and negotiations with any Person meeting the requirement set forth
in clause (i) above in response to a written Acquisition Proposal if the Special
Committee concludes, upon advice of its legal counsel, that the failure to
engage in such discussions or negotiations would be inconsistent with the
Special Committee's (and the Board's) fiduciary duties to the Company's
stockholders under applicable law. In the event that, after the Company has
received a written Acquisition Proposal (without breaching its obligations under
clause (i) or (ii) above) but prior to the purchase by Acquisition of Common
Stock pursuant to the Tender Offer, the Special Committee determines, in good
faith and upon advice of its financial advisor and legal counsel, that it is
necessary to do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Special Committee may do any or all of
the following: (x) withdraw or modify the Board of Directors' approval or
recommendation of the Tender Offer, the Merger or this Agreement and (y)
terminate this Agreement in the manner, and under the circumstances, set forth
in Section 9.01(g). Furthermore, nothing contained in this Section 7.04 shall
prohibit the Company or its Board of Directors, upon the recommendation of the
Special Committee, from taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making such
disclosure to the Company's stockholders or otherwise which, in the judgment of
the Special Committee upon advice of legal counsel, is necessary under
applicable law or rules of any stock exchange. The Company shall promptly (but
in any event within two days) advise Acquisition in writing of any Acquisition
Proposal or any inquiry regarding the making of an Acquisition Proposal
including any request for information, the material terms and conditions of such
request, Acquisition Proposal or inquiry and the identity of the Person making
such request, Acquisition Proposal or inquiry. The Company will, to the extent
reasonably practicable, keep Acquisition fully informed of the status and
details (including amendments or proposed amendments) of any such request,
Acquisition Proposal or inquiry. So long as the River Acquisition
15
<PAGE> 20
Agreement remains in effect, nothing contained in this Agreement shall prohibit
or limit the rights and obligations of the Company to take such actions as may
be required by the River Acquisition Agreement as it is in effect at the date of
this Agreement and such actions shall not constitute a breach under this
Agreement.
SECTION 7.05. Directors' and Officers' Insurance and Indemnification.
(a) From and after the consummation of the Merger, the parties shall, and shall
cause the Surviving Corporation to, indemnify, defend and hold harmless any
person who is now, or has been at any time prior to the date hereof, or who
becomes prior to the Effective Time, an officer or director (the "Indemnified
Party") of the Company and its subsidiaries against all losses, claims, damages,
liabilities, costs and expenses (including attorneys' fees and expenses),
judgments, fines, losses, and amounts paid in settlement, with the written
approval of the Surviving Corporation (which approval shall not be unreasonably
withheld), in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any such Claim
is based on, or arises out of, (i) the fact that such person is or was a
director, officer, employee or agent of the Company or any subsidiaries or is or
was serving at the request of the Company or any of its subsidiaries as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (ii) this Agreement, or any of the
transactions contemplated hereby, in each case to the extent that any such Claim
pertains to any matter or fact arising, existing, or occurring prior to or at
the Effective Time, regardless of whether such Claim is asserted or claimed
prior to, at or after the Effective Time, to the full extent permitted under
Delaware law or the Company's Certificate of Incorporation, By-laws or
indemnification agreements in effect at the date hereof, including provisions
relating to advancement of expenses incurred in the defense of any action or
suit. Without limiting the foregoing, in the event any Indemnified Party becomes
involved in any capacity in any Claim, then from and after consummation of the
Merger, the parties shall cause the Surviving Corporation to periodically
advance to such Indemnified Party its legal and other expenses (including the
cost of any investigation and preparation incurred in connection therewith),
subject to the provision by such Indemnified Party of an undertaking to
reimburse the amounts so advanced in the event of a final non-appealable
determination by a court of competent jurisdiction that such Indemnified Party
is not entitled thereto.
(b) Acquisition and the Company agree that all rights to
indemnification and all limitations on liability existing in favor of the
Indemnified Party as provided in the Company's Certificate of Incorporation and
By-laws as in effect as of the date hereof shall survive the Merger and shall
continue in full force and effect, without any amendment thereto, for a period
of six years from the Effective Time to the extent such rights are consistent
with the DGCL; provided that in the event any claim or claims are asserted or
made within such six year period, all rights to indemnification in respect of
any such claim or claims shall continue until disposition of any and all such
claims; provided further, that any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under Delaware law, the Company's Certificate of Incorporation or
By-laws or such agreements, as the case may be, shall be made by independent
legal counsel selected by the Indemnified Party and reasonably acceptable to the
Surviving Corporation; and, provided further, that nothing in this Section 7.05
shall impair any rights or obligations of any present or former directors or
officers of the Company.
(c) In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 7.05, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 7.05 and none of
the actions described in clauses (i) or (ii) shall be taken until such provision
is made.
16
<PAGE> 21
(d) The parties shall cause the Surviving Corporation to
maintain the Company's existing officers' and directors' liability insurance
policy ("D&O Insurance") for a period of not less than six years after the
Effective Date; provided, that the Surviving Corporation may substitute therefor
policies of substantially similar coverage and amounts containing terms no less
advantageous to such former directors or officers so long as such substitution
does not result in gaps or lapses in coverage; provided, further, if the
existing D&O Insurance expires or is cancelled during such period, Acquisition
or the Surviving Corporation will use its best efforts to obtain substantially
similar D&O Insurance; provided, however, that if the aggregate annual premiums
for such D&O Insurance (or successor insurance policy) at any time during such
period exceed 200% of the per annum rate of premiums currently paid by the
Company for such insurance on the date of this Agreement, then the parties will
cause the Surviving Corporation to, and the Surviving Corporation will, provide
the maximum coverage that shall then be available at an annual premium equal to
200% of such rate.
(e) This Section 7.05 is intended to be for the benefit of,
and shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on the Surviving Corporation and its
respective successors and assigns.
SECTION 7.06. Further Action; Best Efforts. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings and thereafter make any other required
submissions under the HSR Act with respect to the Merger and the other
transactions contemplated hereby, and (ii) use its reasonable best efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations or otherwise to consummate the Tender Offer and consummate and make
effective the Merger and the other transactions contemplated hereby, including,
without limitation, using its reasonable best efforts to obtain all licenses,
permits, waivers, orders, consents, approvals, authorizations, qualifications
and orders of Governmental Entities and parties to contracts with the Company
and the Company Subsidiaries as are necessary for the consummation of the Merger
and the other transactions contemplated hereby.
(b) Notwithstanding the provisions of Section 7.06(a), nothing
contained in this Agreement shall obligate Acquisition to take any action to
consummate the Tender Offer, the Merger and the other transactions contemplated
hereby, the consummation of which is dependent or conditioned on the receipt of
any governmental or regulatory approval or consent, in the event that the
approval or consent so received specifically includes conditions or restrictions
in addition to those imposed by laws and regulations of general applicability as
in effect from time to time (including conditions in addition to those imposed
by existing laws and regulations which require the prior approval of any
governmental or regulatory agency to the taking of any action or the
consummation of any transaction), the direct or indirect effect of which is or
would be, to restrict, limit or otherwise subject to penalty Acquisition in the
ownership of its assets or the conduct of its business. For purposes of the
foregoing, a condition, restriction or limitation arising out of any such
approval or consent shall be deemed to be a restriction or limitation on
Acquisition (regardless of whether Acquisition is a party to or otherwise
legally obligated by such consent or approval) to the extent that the taking of
an action or the consummation of a transaction by Acquisition would result in
Acquisition, the Company or any Company Subsidiary being in breach or violation
of such consent or approval or otherwise causing such consent or approval to
terminate or expire.
(c) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use
their reasonable best efforts to take all such action.
17
<PAGE> 22
SECTION 7.07. Public Announcements. Acquisition and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement as may be required by law, regulation or any listing agreement
or arrangement to which the Company, Acquisition or an affiliate of Acquisition
is a party with a securities exchange or securities quotation system if it has
used all reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
SECTION 7.08. Conveyance Taxes. Acquisition and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes which become payable in connection with the transactions contemplated by
this Agreement that are required or permitted to be filed on or before the
Effective Time.
SECTION 7.09. Employee Benefits.
(a) For purposes hereof, "Affected Employees" shall mean those
individuals who are employees of the Company and its subsidiaries immediately
prior to the Effective Time.
(b) Surviving Corporation shall give the Affected Employees
full credit, for purposes of eligibility, vesting and benefits accrual under any
employee benefit plans or arrangements maintained by the Company, for the
Affected Employees' service with the Company and the Company Subsidiaries to the
same extent recognized by the Company and the Company Subsidiaries immediately
prior to the Effective Time.
(c) Surviving Corporation shall provide each Affected Employee
with credit for any co-payments and deductibles paid prior to the Effective Time
in satisfying any applicable deductible or out-of-pocket requirements under any
welfare benefit plans that the Affected Employees are eligible to participate in
after the Effective Time.
(d) For a period of one year immediately following the
Effective Time, the coverage and benefits provided to the Affected Employees
pursuant to employee benefit plans and arrangements maintained by Surviving
Corporation shall be, in the aggregate, no less favorable than those provided to
the Affected Employees immediately prior to the Effective Time.
(e) The Company and Acquisition acknowledge that the
consummation of the Merger shall constitute (i) a "Change in Control" for
purposes of employment agreements between the Company and Affected Employees and
(ii) a "change in control of the Company" for purposes of severance agreements
between the Company and Affected Employees.
SECTION 7.10. Knowledge of Breach. If prior to the Closing Acquisition
shall have actual knowledge of any breach of a representation and warranty or
covenant of the Company, Acquisition shall promptly notify the Company of such
knowledge, including the basis of such belief set forth in reasonable detail. If
an officer of Acquisition had actual knowledge prior to the execution of this
Agreement of a breach by the Company of any representation, warranty, covenant,
agreement or condition of this Agreement, such breach shall not be deemed to be
a breach of this Agreement for any purpose hereunder,
18
<PAGE> 23
and Acquisition shall not have any claim or recourse against the Company or its
directors, officers, employees, affiliates, controlling persons, agents,
advisors or representatives with respect to such breach.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01. Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part, to the extent permitted by applicable law:
(a) Stockholder Approval. If the Company Stockholder Approval
is required by applicable law or by the rules of the American Stock Exchange (if
they are applicable), the Company Stockholder Approval shall have been obtained.
(b) No Order. No Governmental Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which materially restricts, prevents or prohibits consummation of the Merger or
the other transactions contemplated by this Agreement; provided, however, that
the parties shall use their reasonable best efforts (subject to Section 7.06(b))
to cause any such decree, judgment, injunction or other order to be vacated or
lifted.
(c) HSR Act. Any waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated, and no
action shall have been instituted by the Department of Justice or the Federal
Trade Commission challenging or seeking to enjoin the consummation of the
Merger, which action shall not have been withdrawn or terminated.
(d) Lufthansa Supervisory Board. The Lufthansa Supervisory
Board shall have approved this Agreement and the transactions contemplated by it
not later than March 15, 1999.
(e) Purchase of Shares in the Tender Offer. Acquisition or its
affiliates shall have purchased all the shares of Common Stock which are
properly tendered in response to the Tender Offer and not withdrawn.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after adoption of this Agreement
by the stockholders of the Company:
(a) by mutual consent of the Company (acting through the
Special Committee) and Acquisition;
(b) by Acquisition, prior to its purchasing shares of Common
Stock pursuant to the Tender Offer, upon a material breach of any covenant or
agreement on the part of the Company set forth in this Agreement which has not
been cured, or if any representation or warranty of the Company shall have
become untrue in any material respect, in either case such that such breach or
untruth is incapable of being cured prior to May 31, 1999;
19
<PAGE> 24
(c) by the Company, prior to Acquisition's purchasing shares
of Common Stock pursuant to the Tender Offer, upon a material breach of any
covenant or agreement on the part of Acquisition set forth in this Agreement
which has not been cured, or if any representation or warranty of the Company or
Acquisition shall have become untrue in any material respect, in either case
such that such breach or untruth is incapable of being cured prior to May 31,
1999;
(d) by either Acquisition or the Company, if any permanent
injunction, order, decree, ruling or other action by any Governmental Entity
preventing the purchase of the shares of Common Stock which are tendered in
response to the Tender Offer or consummation of the Merger shall have become
final and nonappealable;
(e) by either Acquisition or the Company, if the Expiration
Date shall not be May 31, 1999 or an earlier date (provided that the right to
terminate this Agreement under this Section 9.01(e) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the Effective Time to occur on or
before such date);
(f) by Acquisition if: (i) the Board of Directors of the
Company (acting through the Special Committee) shall withdraw, modify or change
its recommendation so that it is not in favor of this Agreement or the Merger or
shall have resolved to do any of the foregoing; or (ii) the Board of Directors
of the Company (acting through the Special Committee) shall have recommended or
resolved to recommend to its stockholders an Acquisition Proposal from someone
other than Acquisition;
(g) by the Company if (i) the Company receives a Superior
Proposal, (ii) the Company notifies Acquisition that the Company has received a
Superior Proposal, stating in the notice (A) the material terms of the Superior
Proposal, including the amount per share the Company's stockholders will receive
per share of Common Stock (valuing any non-cash consideration at what the
Special Committee determines in good faith, after consultation with its
independent financial advisor, to be the fair value of the non-cash
consideration) and (B) that, unless Acquisition increases the Tender Offer Price
to an amount at least as great as the amount per share the Company's
stockholders would receive as a result of the Superior Proposal, the Company may
terminate this Agreement, (iii) Acquisition does not, by 5:00 p.m., New York
City time, on the second business day after the day on which the Company
notifies Acquisition of the Superior Proposal, increase the Tender Offer Price
to an amount at least as great as the amount per share the Company's
stockholders would receive as a result of the Superior Proposal, as set forth in
the notice from the Company, without changing or modifying any other of the
terms and conditions of this Agreement and (iv) the Company has paid Acquisition
the sums (including reimbursement of expenses), and delivered to Acquisition the
agreement regarding further reimbursement of expenses, required by Section
9.05(b). A Superior Proposal is an Acquisition Proposal or unsolicited tender
offer which (A) would result in the Company's stockholders receiving an amount
per share which is greater than the Tender Offer Price, (B) is not subject to
the outcome of a due diligence review of the Company's business or financial
condition, (C) is not subject to a financing contingency and is from a potential
acquiror which the Special Committee reasonably concludes, based upon advice of
its financial advisor, is capable of consummating the Acquisition Proposal or,
if it is subject to a financing contingency, the Special Committee concludes,
based on advice of its financial advisor, it is reasonably likely that the
financing contingency will be fulfilled and (D) the Special Committee determines
in good faith, after consultation with its financial advisor, to be more
favorable to the Company's stockholders than the Tender Offer and Merger
contemplated by this Agreement;
(h) by either the Company (acting through the Special
Committee) or Acquisition, if the Lufthansa Supervisory Board shall not have
approved this Agreement and the transactions contemplated hereby by March 15,
1999;
20
<PAGE> 25
(i) by the Company, if Acquisition shall have terminated the
Tender Offer, or the Tender Offer shall have expired, without Acquisition
purchasing any shares of Common Stock pursuant thereto, provided that the
Company may not terminate this Agreement pursuant to this Section 9.01(i) if the
Company is in material breach of this Agreement; and
(j) by the Company, if the Lufthansa Executive Board shall
have withdrawn or negatively modified its recommendation to the Lufthansa
Supervisory Board that it approve the transactions which are the subject of this
Agreement.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
SECTION 9.02. Effect of Termination. Except as provided in Section 9.05
or Section 10.01(b), in the event of the termination of this Agreement pursuant
to Section 9.01, this Agreement shall forthwith become void, there shall be no
liability on the part of any party hereto, or any of their respective officers
or directors, to the other and all rights and obligations of any party hereto
shall cease; provided, however, that (a) nothing herein shall relieve any party
from liability for the willful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement and (b) a termination of
this Agreement after Acquisition purchases shares of Common Stock pursuant to
the Tender Offer but before the Effective Time will not affect any provisions of
this Agreement relating to the Tender Offer, to the Offer Documents or to any
other documents relating to the Tender Offer which are filed with the SEC in
connection with the Tender Offer.
SECTION 9.03. Amendment. Before or after adoption of this Agreement by
the stockholders of the Company, this Agreement may be amended by the parties
hereto at any time prior to the Effective Time; provided, however, that (a) any
such amendment shall, on behalf of the Company, have been approved by the
Special Committee and (b) after adoption of this Agreement by the stockholders
of the Company, no amendment which under applicable law may not be made without
the approval of the stockholders of the Company may be made without such
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 9.04. Waiver. At any time prior to the Effective Time, either
the Company (acting through the Special Committee), on the one hand, or
Acquisition, on the other, may (a) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto and (c) waive compliance by
the other party with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party or parties to be bound thereby and, with respect to
extensions or waivers granted by the Company, if the Special Committee shall
have approved such waiver or extension.
SECTION 9.05. Expenses and Other Payments. (a) Subject to paragraph (b)
of this Section 9.05, all costs and expenses (including any expenses related to
any claims or litigation in connection with the transactions contemplated by
this Agreement, or any settlement thereof), including, without limitation, fees
and disbursements of counsel, financial advisors and accountants and other
out-of-pocket expenses, incurred or to be incurred by the parties hereto in
connection with the transactions contemplated hereby (with respect to such
party, its "Expenses"), shall be borne solely and entirely by the party which
has incurred such costs and expenses; provided, however, that all costs and
expenses related to printing and mailing the Proxy Statement shall be borne by
the Company.
21
<PAGE> 26
(b) The Company agrees that if this Agreement is terminated by
Acquisition pursuant to clause (i) or (ii) of Section 9.01(f) hereof, or if this
Agreement is terminated by the Company pursuant to Section 9.01(g) hereof, at or
before the time when this Agreement is terminated by the Company, or promptly
after this Agreement is terminated by Acquisition, the Company will (i) pay
Acquisition $3,500,000 ($2,625,000 if this Agreement is terminated before the
Lufthansa Supervisory Board approves this Agreement and the transactions
contemplated by it), (ii) reimburse Acquisition for the reasonable expenses
incurred by Acquisition in connection with the transactions which are the
subject of this Agreement for which the Company has received reasonable
supporting documentation, and (iii) agree in writing to reimburse Acquisition,
promptly after the Company receives reasonable supporting documentation, for
additional reasonable expenses which were or are incurred by Acquisition in
connection with the transactions which are the subject of this Agreement,
provided that the total reimbursement of expenses by the Company will not exceed
$875,000 if this Agreement is terminated by Acquisition pursuant to clause (i)
or (ii) of Section 9.01(f) hereof, or by the Company pursuant to Section 9.01(g)
hereof, before the Lufthansa Supervisory Board approves this Agreement and the
transactions contemplated by it, and will not exceed $1,750,000 if this
Agreement is terminated by Acquisition pursuant to clause (i) or (ii) of Section
9.01(f) hereof, or by the Company pursuant to Section 9.01(g) hereof, after the
Lufthansa Supervisory Board approves this Agreement and the transactions
contemplated by it.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Effectiveness of Representations, Warranties and
Agreements. (a) Except as set forth in Section 10.01(b), the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
respective officers or directors, whether prior to or after the execution of
this Agreement.
(b) The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Article IX, except that the agreements set forth in
Articles II, III and X and Section 7.05 shall survive the Effective Time and
those set forth in the last sentence of Section 7.01 and Sections 9.02 and 9.05
and Article X shall survive termination.
SECTION 10.02. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
(a) If to Acquisition:
c/o GlobeGround GmbH
Lufthansa-Basis, Geb. 357
D-60546 Frankfurt am Main
Germany
Attention: Peter Bluth
Telecopier No.: 46-69-696-6833
22
<PAGE> 27
with separate copies to:
Lufthansa German Airlines
1640 Hempstead Turnpike
East Meadow, New York 11554
Attention: Arthur Molins
Telecopier No.: (516) 296-9399
and
Rogers & Wells LLP
200 Park Avenue
New York, NY 10128
Attention: David W. Bernstein
Telecopier: 212-878-8375
(b) If to the Company:
Hudson General Corporation
111 Great Neck Road
P.O. Box 355
Great Neck, NY 11022
Attention: Chief Executive Officer
Telecopier No.: (516) 773-0343
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Daniel E. Stoller
Telecopier No.: (212) 735-2000
SECTION 10.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" means a person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "business day" means any day other than a day on which (i)
banks in the State of New York are authorized or obligated to be closed or (ii)
the SEC or The American Stock Exchange, Inc. is closed;
(c) "control" (including the terms "controlled," "controlled
by" and "under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management or polices of a person or entity, whether through
the ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(d) "person" means any person or any corporation, partnership,
limited liability company or other legal entity; and
23
<PAGE> 28
(e) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary) owns,
directly or indirectly, at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization.
SECTION 10.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.06. Entire Agreement. This Agreement, together with the
guaranty by GlobeGround and the other documents delivered in connection
herewith, constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof.
SECTION 10.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise and any purported assignment shall be null and
void, provided that Acquisition may assign its rights, but not its obligations,
under this Agreement to any of its subsidiaries.
SECTION 10.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied (other than the provisions of Section 7.05 and
7.09, which provisions are intended to benefit and may be enforced by the
beneficiaries thereof), is intended to or shall confer upon any person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 10.09. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to the conflict of laws rules thereof.
SECTION 10.10. Submission to Jurisdiction; Waivers. Each party hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by the other party hereto or its successors or assigns may be brought
and determined in the Court of Chancery, or other courts, of the State of
Delaware, and each party hereto hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property, generally
and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
Each party hereto hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) the defense of sovereign immunity, (b) any
claim that it is not personally subject to the jurisdiction of the courts for
any reason other than the failure to serve process in accordance with this
Section 10.10, (c) that it, or its property, is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (d) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient
24
<PAGE> 29
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
SECTION 10.11. Enforcement of this Agreement. (a) The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
(b) The parties hereto acknowledge and agree that no director,
officer, employee, stockholder, affiliate or representative of Acquisition shall
have any liability whatsoever for any obligation or liability of Acquisition.
SECTION 10.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
25
<PAGE> 30
ANNEX A
Notwithstanding any other provisions of the Tender Offer, and in
addition to (and not in limitation of) Acquisition's rights to extend and amend
the Tender Offer at any time in its sole discretion (subject to the provisions
of the Merger Agreement), Acquisition shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Acquisition's
obligation to pay for or return tendered shares of Common Stock promptly after
termination or withdrawal of the Tender Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered shares of Common Stock, and may terminate the Tender
Offer if (i) any applicable waiting period under the HSR Act has not expired or
terminated prior to the expiration of the Tender Offer, (ii) the Minimum
Condition has not been satisfied, or (iii) at any time on or after February 15,
1999 and before the time of acceptance of shares of Common Stock for payment
pursuant to the Tender Offer, any of the following events shall occur:
(a) The Lufthansa Supervisory Board does not approve this
Agreement, the Tender Offer, and the Merger by March 15, 1999;
(b) Any statute, rule, regulation, order or injunction has
been enacted, promulgated, entered or enforced by any national or state
government or governmental authority or by any United States court of competent
jurisdiction, which (i) prohibits, or imposes any material limitations on,
Acquisition's or its parent's ownership or operation of all or a material
portion of the Company's businesses or assets, (ii) prohibits, or makes illegal
the acceptance for payment, payment for or purchase of Common Stock or the
consummation of the Tender Offer or the Merger, (iii) results in a material
delay in or restricts the ability of Acquisition, or renders Acquisition unable,
to accept for payment, pay for or purchase some or all of the tendered Common
Stock, or (iv) imposes material limitations on the ability of Acquisition or its
parent effectively to exercise full rights of ownership of the tendered Common
Stock, including, without limitation, the right to vote the tendered Common
Stock purchased by it on all matters properly presented to the Company's
stockholders, provided that Acquisition shall have used all reasonable efforts
to cause any such judgment, order or injunction to be vacated or lifted;
provided further that the condition specified in this paragraph (b) shall not be
deemed to exist by reason of any court proceeding pending on the date hereof and
known to Acquisition, unless in the reasonable judgment of its parent there is
any material adverse development in any such proceeding after the date hereof,
or before the date hereof if not known to Acquisition on the date hereof, which
would result in any of the consequences referred to in clauses (i) through (iv)
above;
(c) The representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct in any material
respect as of the date of consummation of the Tender Offer as though made on or
as of such date or the Company shall have breached or failed in any material
respect to perform or comply with any material obligation, agreement or covenant
required by the Merger Agreement to be performed or complied with by it except,
in each case, (i) for changes specifically permitted by the Merger Agreement and
(ii) (A) those representations and warranties that address matters only as of a
particular date which are true and correct as of such date or (B) where the
failure of such representations and warranties to be true and correct, or the
performance or compliance with such obligations, agreements or covenants, do
not, individually or in the aggregate, have a Company Material Adverse Effect;
(d) The Company shall have entered into a definitive agreement
or agreement in principle with any person with respect to an Acquisition
Proposal or similar business combination with the Company;
1
<PAGE> 31
(e) The Agreement has been terminated in accordance with its
terms; or
(f) The Company's Board of Directors or the Special Committee
has withdrawn or modified in a manner adverse to Acquisition the Board's
approval or recommendation of the Tender Offer or the Merger.
The conditions set forth above are for the sole benefit of Acquisition,
and may be waived by Acquisition, in whole or in part. Any delay by Acquisition
in exercising the right to terminate the Tender Offer because any of the
conditions are not fulfilled will not be deemed a waiver of its right to do so.
2
<PAGE> 32
IN WITNESS WHEREOF, the Company and Acquisition have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
COMPANY:
HUDSON GENERAL CORPORATION
By: /s/ Michael Rubin
Name: Michael Rubin
Title: President
ACQUISITION:
GLGR ACQUISITION CORPORATION
By: /s/ Arthur Molins
Name: Arthur Molins
Title: Vice President
<PAGE> 33
GUARANTY
In order to induce Hudson General Corporation (the "Company") to enter
into the Agreement and Plan of Merger (the "Merger Agreement"), dated as of
February 15, 1999, between the Company and GLGR Acquisition Corp.
("Acquisition"), GlobeGround GmbH, a German company, (1) unconditionally
guarantees all the obligations of Acquisition under the Merger Agreement, (2)
agrees to provide to Acquisition all the funds Acquisition requires to pay for
shares which are properly tendered in response to the Tender Offer described in
the Merger Agreement and not withdrawn, (3) agrees to provide the Company, as
the surviving corporation of the merger which is the subject of the Merger
Agreement, all funds the Company requires to pay the Merger Consideration
specified in the Merger Agreement with regard to the Common Stock of the Company
which is issued and outstanding immediately prior to the Effective Time of that
Merger and to cash out all outstanding options pursuant to the Merger Agreement
and (4) agrees to be bound by the provisions of Section 10.10 of the Merger
Agreement.
February 15, 1999 GLOBEGROUND GmbH
By: /s/ Dr. Raoul Hille
-------------------------------
By: /s/ Peter Bluth
-------------------------------
1
