<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
----------------
METROMAIL CORPORATION
(NAME OF SUBJECT COMPANY)
GREAT UNIVERSAL ACQUISITION CORP.
THE GREAT UNIVERSAL STORES P.L.C.
(BIDDERS)
----------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
----------------
591680 103
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
JOHN W. PEACE
EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER
OF EXPERIAN INFORMATION SERVICES DIVISION
THE GREAT UNIVERSAL STORES P.L.C.
LECONFIELD HOUSE CURZON STREET
LONDON, ENGLAND W1Y7FL
(44) 171 495-0070
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
----------------
COPY TO:
DONALD G. LUBIN, ESQ.
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60606
CALCULATION OF FILING FEE
(312) 876-8000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MARCH 12, 1998
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------
<S> <C>
$734,793,239 $146,959
</TABLE>
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
* Estimated for purposes of calculating the filing fee only. This amount
assumes the purchase of 22,516,996 shares of Metromail Corporation Common
Stock, including the associated preferred stock purchase rights ("Shares"),
which are outstanding at $31.50 per Share, and 2,087,119 Shares which are
subject to outstanding options at $31.50 per Share less the exercise price
of such options. The amount of the filing fee, calculated in accordance
with Rule 0-11(d) under the Securities Exchange Act of 1934, as amended,
equals 1/50 of one percent of the value of the Shares to be purchased.
[_]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: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PAGE 1 OF 9 PAGES EXHIBIT INDEX ON PAGE 9
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 2 of 9 Pages
CUSIP NO. 591680 103
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS: THE GREAT UNIVERSAL STORES P.L.C.
I.R.S. IDENTIFICATION NUMBER: N/A
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP;
(A)[_]
(B) [_]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS:
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(D) OR 2(E):
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
ENGLAND
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
9,093,634*
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES:
[_]
- -------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
40.4%*
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON;
HC AND CO
- -------------------------------------------------------------------------------
* On March 12, 1998, The Great Universal Stores P.L.C., a corporation
organized under the laws of England ("Parent"), and Great Universal
Acquisition Corp., a Delaware corporation and an indirect wholly-owned
subsidiary of Parent ("Purchaser"), entered into (i) a Stock Purchase
Agreement (the "Donnelley Stock Purchase Agreement"), with R.R. Donnelley &
Sons Inc. ("Donnelley"), the beneficial owner of 8,600,000 Shares, or
approximately 38.2% of the Shares outstanding on March 6, 1998, pursuant to
which Donnelley agreed, upon the terms and conditions set forth therein, to
sell such Shares to Purchaser, to vote such Shares in the manner specified
in the Donnelley Stock Purchase Agreement with respect to certain matters
and to appoint Parent as Donnelley's proxy to vote such Shares in certain
circumstances, and (ii) Stock Purchase Agreements (the "Executive Stock
Purchase Agreements") with Barton L. Faber, Chairman of the Board of
Metromail Corporation (the "Company"), Thomas J. Quarles, Senior Vice
President, General Counsel, Chief Administrative Officer and Secretary of
the Company, and Ronald G. Eidell, the Senior Vice President and Chief
Financial Officer of the Company (the "Executives") who beneficially own an
aggregate of 493,634 Shares, or approximately 2.2% of the Shares
outstanding on March 6, 1998, pursuant to which the Executives agreed, upon
the terms and conditions set forth therein, to tender or otherwise sell to
Purchaser the Shares beneficially owned by them, to vote such Shares in the
manner specified in the Executive Stock Purchase Agreements with respect to
certain matters and to appoint Parent as Donnelley's proxy to vote such
Shares in certain circumstances. Parent also entered into a Stock Purchase
Agreement, dated as of March 12, 1998 (the "Company Stock Purchase
Agreement"), with the Company. Upon the terms and conditions set forth in
the Company Stock Purchase Agreement, the Company agreed to issue and sell
to Parent, that number of Shares, if any (the "Company Shares"), equal to
the number of Shares that when added to the sum of the number of Shares (a)
the number of Shares accepted for purchase by Purchaser pursuant to the
Offer, (b) the number of Shares, if any, purchased by Parent from Donnelley
pursuant to the Donnelley Stock Purchase Agreement simultaneously with the
acceptance of Shares for payment pursuant to the Offer, and (c) the number
of Shares, if any, purchased by Parent from the Executives pursuant to the
Executive Stock Purchase Agreements simultaneously with the acceptance of
Shares for payment pursuant to the Offer, constitutes 51% of the
outstanding Shares on a fully-diluted basis giving effect to the issuance
of the Company Shares, at a per share purchase price equal to the Offer
Price. The Donnelley Stock Purchase Agreement, the Executive Stock Purchase
Agreements and the Company Stock Purchase Agreement are described more
fully in Section 11 of the Offer to Purchase dated March 16, 1998.
2
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 3 of 9 Pages
CUSIP NO. 591680 103
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: GREAT UNIVERSAL ACQUISITION CORP.
S.S. OR I.R.S. IDENTIFICATION NO.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A)[_]
(B) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F):
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
STATE OF DELAWARE
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
9,093,634*
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED TO AMOUNT IN ROW (7):
40.4%*
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
- --------
*The footnote on page 2 is incorporated by reference herein.
3
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 4 of 9 Pages
CUSIP NO. 591680 103
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Great Universal Acquisition Corp., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of The Great Universal
Stores P.L.C., a corporation organized under the laws of England ("Parent"), to
purchase all outstanding shares of Common Stock, par value $.01 per share (the
"Common Stock"), including the associated preferred share purchase rights (the
"Rights", and together with the Common Stock, the "Shares"), of Metromail
Corporation, a Delaware corporation (the "Company"), at $31.50 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated March 16, 1998 (the "Offer to Purchase"), a copy
of which is attached hereto as Exhibit (a)(1), and in the related Letter of
Transmittal, a copy of which is attached hereto as Exhibit (a)(2) (which
together constitute the "Offer").
This Tender Offer Statement on Schedule 14D-1 also constitutes a Statement on
Schedule 13D with respect to the Donnelley Stock Purchase Agreement, the
Executive Stock Purchase Agreements and the Company Stock Purchase Agreement as
described above. The item numbers and responses thereto below are in accordance
with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Metromail Corporation and the address
of its principal executive offices is 360 East 22nd Street, Lombard, Illinois
60148-4989.
(b) The class of securities to which this Statement relates is the Common
Stock, par value $.01 per share (including the associated preferred share
purchase rights), of the Company. The information set forth in the
"Introduction" and Section 1, "Terms of the Offer" of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6, "Price Range of the Shares;
Dividends on the Shares" of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) The information set forth in the "Introduction" and Section 9,
"Certain Information Concerning Parent and the Purchaser" of the Offer to
Purchase is incorporated herein by reference. The name, business address,
present principal occupation or employment, the material occupations,
positions, offices or employments for the past five years and citizenship of
each director and executive officer of the Purchaser and Parent and the name,
principal business and address of any corporation or other organization in
which such occupations, positions, offices and employments are or were carried
on are set forth in Schedule I of the Offer to Purchase and incorporated herein
by reference.
(e) and (f) During the last five years, none of the Purchaser or Parent or,
to the best of the Purchaser's knowledge, any of the directors or executive
officers of the Purchaser or Parent has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which any such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) The information set forth in Section 9, "Certain Information
Concerning Parent and the Purchaser" of the Offer to Purchase is incorporated
herein by reference. Except as described therein, neither the Purchaser nor
Parent, nor to the best of the knowledge of the Purchaser and Parent, any of
the persons listed in Schedule I of the Offer to Purchase, has entered into any
transaction with the Company, or any of the Company's affiliates which are
corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal
to or greater than one percent of the consolidated revenues of the Company for
(i) the fiscal year in which such transaction occurred, or (ii) the portion of
the current fiscal year which has occurred if the transaction occurred in such
year.
4
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 5 of 9 Pages
CUSIP NO. 591680 103
(a)(2) Neither the Purchaser nor Parent, nor to the best of the knowledge of
the Purchaser and Parent, any of the persons listed in Schedule I of the Offer
to Purchase, has entered into any transaction since the commencement of the
Company's third full fiscal year preceding the date of this Statement, with the
executive officers, directors or affiliates of the Company which are not
corporations, in which the aggregate amount involved in such transaction or in
a series of similar transactions, including all periodic installments in the
case of any lease or other agreement providing for periodic payments or
installments, exceeded $40,000.
(b) The information set forth in the "Introduction," Section 9, "Certain
Information Concerning Parent and the Purchaser," Section 11, "Background of
the Offer; the Merger Agreement and Certain Other Agreements" and Section 12,
"Purpose of the Offer and the Merger; Plans for the Company; Other Matters" of
the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10, "Source and Amount of Funds"
and Section 12, "Purpose of the Offer and the Merger; Plans for the Company;
Other Matters" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the "Introduction," Section 11,
"Background of the Offer; the Merger Agreement and Certain Other Agreements,"
and Section 12, "Purpose of the Offer and the Merger; Plans for the Company;
Other Matters" of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7, "Effect of the Offer on
the Market for Shares; Stock Listing; Exchange Act Registration; Margin
Regulations" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the "Introduction," Section 9, "Certain
Information Concerning Parent and the Purchaser," Section 11, "Background of
the Offer; the Merger Agreement and Certain Other Agreements," and Section 12,
"Purpose of the Offer and the Merger; Plans for the Company; Other Matters" of
the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT
COMPANY'S SECURITIES.
The information set forth in the "Introduction," Section 10, "Source and
Amount of Funds," Section 11, "Background of the Offer; the Merger Agreement
and Certain Other Agreements," Section 12, "Purpose of the Offer and the
Merger; Plans for the Company; Other Matters," Section 13, "Dividends and
Distributions" and Section 16, "Fees and Expenses" of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" and in Section 16, "Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9, "Certain Information Concerning
Parent and the Purchaser" of the Offer to Purchase is incorporated herein by
reference.
5
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 6 of 9 Pages
CUSIP NO. 591680 103
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the "Introduction," Section 11, "Background
of the Offer; the Merger Agreement and Certain Other Agreements," and Section
12, "Purpose of the Offer and the Merger; Plans for the Company; Other Matters"
of the Offer to Purchase is incorporated herein by reference. Except as
described therein, there are no present or proposed material contracts,
arrangements, understandings or relationships between the Purchaser or Parent,
or to the best of the knowledge of the Purchaser and Parent, any of the persons
listed in Schedule I of the Offer to Purchase, and the Company, or any of its
executive officers, directors, controlling persons or subsidiaries.
(b) and (c) The information set forth in Section 15, "Certain Legal Matters"
of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7, "Effect of the Offer on the
Market for Shares; Stock Listing; Exchange Act Registration; Margin
Regulations," and Section 15, "Certain Legal Matters" of the Offer to Purchase
is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1)Offer to Purchase, dated March 16, 1998.
(a)(2)Letter of Transmittal with respect to the Shares.
(a)(3) Letter, dated March 16, 1998, from Bear, Stearns & Co. Inc. to
Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(4) Letter for use by Brokers, Dealers, Banks, Trust Companies and
Nominees to their Clients.
(a)(5) Notice of Guaranteed Delivery with respect to the Shares.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Press Release jointly issued by Parent and the Company, dated March
13, 1998.
(a)(8) Form of Summary Advertisement, dated March 13, 1998.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of March 12, 1998, by and among
Parent, the Purchaser and the Company.
(c)(2) Stock Purchase Agreement, dated as of March 12, 1998, by and between
Parent and R.R. Donnelley & Sons Company
(c)(3) Form of Stock Purchase Agreement, dated as of March 12, 1998, by and
between Parent and certain executives of the Company.
(c)(4) Stock Purchase Agreement, dated as of March 12, 1998, by and between
Parent and the Company.
(c)(5) Confidentiality Agreement, dated as of February 6, 1998, by and
between Experian Corporation and Lehman Brothers Inc., as financial
advisor to, and on behalf of, the Company.
(c)(6) Amendment, dated as of March 12, 1998, to Sales Agreement, dated as of
June 19, 1996, by and between the Company and R.R. Donnelley & Sons
Company.
(c)(7) Amendment, dated as of March 12, 1998, to Data Center Services
Agreement, dated as of June 19, 1996, by and between the Company and
R.R. Donnelley & Sons Company.
(c)(8) Letter Agreement, dated as of March 12, 1998, by and between the
Company and R.R. Donnelley & Sons Company.
(d) None.
(e) Not applicable.
(f) None.
6
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 7 of 9 Pages
CUSIP NO. 591680 103
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.
Great Universal Acquisition Corp.
/s/ Thomas A. Gasparini
By: _________________________________
Name: Thomas A. Gasparini
Title:Vice President and General
Counsel
Date: March 16, 1998
7
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 8 of 9 Pages
CUSIP NO. 591680 103
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.
Great Universal Stores P.L.C.
/s/ John W. Peace
By: _________________________________
Name: John W. Peace
Title:Director
Date: March 16, 1998
8
<PAGE>
SCHEDULE 14D-1 AND 13D
Page 9 of 9 Pages
CUSIP NO. 591680 103
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S> <C>
(a)(1) Offer to Purchase, dated March 16, 1998.
(a)(2) Letter of Transmittal with respect to the Shares.
(a)(3) Letter, dated March 16, 1998, from Bear, Stearns & Co. Inc. to
Brokers, Dealers, Banks, Trust Companies and Nominees.
(a)(4) Letter for use by Brokers, Dealers, Banks, Trust Companies and
Nominees to their Clients.
(a)(5) Notice of Guaranteed Delivery with respect to the Shares.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Press Release jointly issued by Parent and the Company, dated
March 13, 1998.
(a)(8) Form of summary advertisement, dated March 13, 1998.
(c)(1) Agreement and Plan of Merger, dated as of March 12, 1998, by
and among Parent, the Purchaser and the Company.
(c)(2) Stock Purchase Agreement, dated as of March 12, 1998, by and
between Parent and
R.R. Donnelley & Sons Company.
(c)(3) Form of Stock Purchase Agreement, dated as of March 12, 1998,
by and between Parent and certain executives of the Company.
(c)(4) Stock Purchase Agreement, dated as of March 12, 1998, by and
between Parent and the Company.
(c)(5) Confidentiality Agreement, dated as of February 6, 1998, by
and between Experian Corporation and Lehman Brothers Inc., as
financial advisor to, and on behalf of, the Company.
(c)(6) Amendment, dated as of March 12, 1998, to Sales Agreement,
dated as of June 19, 1996, by and between the Company and R.R.
Donnelley & Sons Company.
(c)(7) Amendment, dated as of March 12, 1998, to Data Center Services
Agreement, dated as of June 19, 1996, by and between the Com-
pany and R.R. Donnelley & Sons Company.
(c)(8) Letter Agreement, dated as of March 12, 1998, by and between
the Company and R.R. Donnelley & Sons Company.
</TABLE>
9
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
BY
GREAT UNIVERSAL ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THE GREAT UNIVERSAL STORES P.L.C.
AT
$31.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 10, 1998, UNLESS THE OFFER
IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO ANY SHARES ACQUIRED PURSUANT TO THE STOCK PURCHASE
AGREEMENTS (AS DEFINED HEREIN) SIMULTANEOUSLY WITH THE ACCEPTANCE OF SHARES
FOR PAYMENT PURSUANT TO THE OFFER, REPRESENTS AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION
14.
IN CONNECTION WITH THE MERGER AGREEMENT, PARENT ENTERED INTO STOCK PURCHASE
AGREEMENTS (AS DEFINED HEREIN) WITH CERTAIN STOCKHOLDERS OF THE COMPANY WHO
COLLECTIVELY OWN APPROXIMATELY 40.4% OF THE OUTSTANDING SHARES, PURSUANT TO
WHICH SUCH STOCKHOLDERS AGREED, AMONG OTHER THINGS, TO SELL THEIR SHARES TO
PARENT AT THE OFFER PRICE (AS DEFINED HEREIN). PARENT ALSO ENTERED INTO AN
AGREEMENT TO PURCHASE FROM THE COMPANY PREVIOUSLY UNISSUED SHARES AT THE OFFER
PRICE IN AN AMOUNT THAT, TOGETHER WITH THE SHARES OWNED BY PARENT AND ITS
AFFILIATES IMMEDIATELY AFTER THE OFFER AND THE ACQUISITION OF SHARES PURSUANT
TO SUCH STOCKHOLDER AGREEMENTS, REPRESENTS 51% OF THE OUTSTANDING SHARES ON A
FULLY-DILUTED BASIS. THESE AGREEMENTS ARE SUBJECT TO CERTAIN TERMINATION
RIGHTS WHICH GENERALLY EXPIRE ON MARCH 30, 1998 IF THE APPLICABLE WAITING
PERIOD UNDER THE HSR ACT (AS DEFINED HEREIN) EXPIRES OR IS TERMINATED ON OR
BEFORE MARCH 30, 1998.
THE BOARD OF DIRECTORS OF THE COMPANY 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'S STOCKHOLDERS, AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
--------------
IMPORTANT
Any stockholder who desires to tender all or any portion of his Shares
should either (1) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 2 or (2) request his broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
him. Any stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if he desires
to tender such Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in
Section 2.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase, the Letter of Transmittal and the
Notice of Guaranteed Delivery may be directed to the Information Agent, the
Dealer Manager, the Depositary, or to brokers, dealers, commercial banks or
trust companies. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
--------------
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
March 16, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION.............................................................. 1
THE OFFER................................................................. 4
1. Terms of the Offer.................................................. 4
2. Procedure for Tendering Shares...................................... 5
3. Withdrawal Rights................................................... 8
4. Acceptance for Payment and Payment.................................. 8
5. Certain Federal Income Tax Consequences............................. 9
6. Price Range of the Shares; Dividends on the Shares.................. 10
7. Effect of the Offer on the Market for the Shares; Stock Listing;
Exchange Act Registration; Margin Regulations......................... 10
8. Certain Information Concerning the Company.......................... 11
9. Certain Information Concerning Parent and the Purchaser............. 14
10. Source and Amount of Funds.......................................... 17
11. Background of the Offer; the Merger Agreement and Certain Other
Agreements............................................................. 17
12. Purpose of the Offer and the Merger; Plans for the Company; Other
Matters................................................................ 33
13. Dividends and Distributions......................................... 35
14. Conditions of the Offer............................................. 35
15. Certain Legal Matters............................................... 37
16. Fees and Expenses................................................... 40
17. Miscellaneous....................................................... 40
SCHEDULE I--Directors and Executive Officers of Parent and Purchaser...... I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
METROMAIL CORPORATION:
INTRODUCTION
Great Universal Acquisition Corp., a Delaware corporation (the "Purchaser")
and an indirect wholly-owned subsidiary of The Great Universal Stores P.L.C.,
a corporation organized under the laws of England ("Parent"), hereby offers to
purchase all outstanding shares of Common Stock, par value $.01 per share (the
"Common Stock"), including the associated preferred share purchase rights (the
"Rights" and together with the Common Stock, the "Shares"), issued pursuant to
the Rights Agreement (as defined below), of Metromail Corporation, a Delaware
corporation (the "Company"), at $31.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the
"Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all fees and expenses of Bear, Stearns & Co. Inc.
("Bear Stearns"), which is acting as the Dealer Manager (the "Dealer
Manager"), ChaseMellon Shareholder Services, L.L.C., which is acting as the
Depositary (the "Depositary"), and Georgeson & Company Inc. which is acting as
the Information Agent (the "Information Agent"), incurred in connection with
the Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 12, 1998 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company pursuant to which, as soon as practicable after the
completion of the Offer and satisfaction or waiver, if permissible, of all
conditions to the Merger (as defined below), the Purchaser will be merged with
and into the Company (the "Merger") and the Company will become an indirect
wholly-owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), each Share then outstanding (other than Shares held by
Parent, the Purchaser, any wholly-owned subsidiary of Parent or Purchaser, any
wholly-owned subsidiary of the Company, in the treasury of the Company and
Shares held by stockholders who perfect their dissenters' rights under
Delaware law) will be converted into the right to receive $31.50 in cash or
any higher price per Share paid in the Offer (the "Offer Price"). The Merger
Agreement is more fully described in Section 11, and is set forth in full as
an annex to the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders of the
Company herewith. The Offer and the Merger are sometimes collectively referred
to herein as the "Transaction."
IN CONNECTION WITH THE MERGER AGREEMENT, PARENT ENTERED INTO STOCK PURCHASE
AGREEMENTS WITH CERTAIN STOCKHOLDERS OF THE COMPANY (R.R. DONNELLEY & SONS
COMPANY AND CERTAIN MEMBERS OF THE COMPANY'S MANAGEMENT) WHO COLLECTIVELY OWN
APPROXIMATELY 40.4% OF THE OUTSTANDING SHARES, PURSUANT TO WHICH SUCH
STOCKHOLDERS AGREED, AMONG OTHER THINGS, TO SELL THEIR SHARES TO PARENT AT THE
OFFER PRICE. PARENT ALSO ENTERED INTO AN AGREEMENT TO PURCHASE FROM THE
COMPANY PREVIOUSLY UNISSUED SHARES AT THE OFFER PRICE IN AN AMOUNT THAT,
TOGETHER WITH THE SHARES OWNED BY PARENT AND ITS AFFILIATES IMMEDIATELY AFTER
THE OFFER AND THE ACQUISITION OF SHARES PURSUANT TO SUCH STOCKHOLDER
AGREEMENTS, REPRESENTS 51% OF THE OUTSTANDING SHARES ON A FULLY-DILUTED BASIS.
THESE AGREEMENTS ARE SUBJECT TO CERTAIN TERMINATION RIGHTS WHICH GENERALLY
EXPIRE ON MARCH 30, 1998 IF THE APPLICABLE WAITING PERIOD UNDER THE HSR ACT
EXPIRES OR IS TERMINATED ON OR BEFORE MARCH 30, 1998.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO ANY SHARES ACQUIRED PURSUANT TO THE STOCK PURCHASE
AGREEMENTS SIMULTANEOUSLY WITH THE ACCEPTANCE OF SHARES FOR PAYMENT PURSUANT
TO THE OFFER, REPRESENTS AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A
FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION
14.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") 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'S STOCKHOLDERS,
AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES. SEE SECTION 11.
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Lehman Brothers Inc., the Company's financial advisor ("Lehman Brothers"),
has delivered to the Board of Directors of the Company its written opinion to
the effect that, as of the date of such opinion, the consideration to be
offered to the holders of Shares pursuant to the Offer and the Merger is fair
from a financial point of view to such holders. Such opinion is set forth in
full as an annex to the Company's Schedule 14D-9 which is being mailed to
stockholders of the Company herewith.
The Merger Agreement provides that, except as provided therein, following
satisfaction or waiver, if permissible, of the conditions to the Offer and
subject to the terms and conditions thereof, the Purchaser will accept for
payment, in accordance with the terms of the Offer, all Shares validly
tendered pursuant to the Offer and not withdrawn as soon as it is permitted to
do so pursuant to applicable law. The Offer will not remain open following the
time Shares are accepted for payment.
Under the General Corporation Law of the State of Delaware (the "DGCL"), if
the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of
the outstanding Shares, the Purchaser will be able to approve the Merger
Agreement and the transactions contemplated thereby without a vote of the
stockholders. In such event, Parent, the Purchaser and the Company have agreed
in the Merger Agreement to take, at the request of Parent and subject to the
satisfaction of the conditions set forth in the Merger Agreement, all
necessary and appropriate action to cause the Merger to become effective as
soon as reasonably practicable after such acquisition, without a meeting of
the stockholders, in accordance with Section 253 of the DGCL. If, however, the
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of the Stockholders is required under the
DGCL, a significantly longer period of time would be required to effect the
Merger. In the Merger Agreement, Parent, Purchaser and the Company have agreed
that if immediately prior to the scheduled Expiration Date (as defined below)
the Shares tendered pursuant to the Offer are less than 90% of the outstanding
Shares, Purchaser may extend the Offer for a period not to exceed 10 business
days.
It is the present intention of the Purchaser to seek to cause the Company to
make an application for the termination of the registration of the Shares
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
soon as possible after the purchase of all validly tendered Shares pursuant to
the Offer if the requirements for termination of registration are met. See
Section 7.
In connection with the execution of the Merger Agreement, Parent (i) entered
into a Stock Purchase Agreement, dated as of March 12, 1998 (the "Donnelley
Stock Purchase Agreement"), with R.R. Donnelley & Sons Company ("Donnelley"),
the beneficial owner of 8,600,000 Shares, or approximately 38.2% of the Shares
outstanding on March 6, 1998, pursuant to which Donnelley agreed, among other
things and upon the terms and conditions set forth therein, to sell such
Shares to Purchaser, to vote such Shares in the manner specified in the
Donnelley Stock Purchase Agreement with respect to certain matters and to
appoint Parent as Donnelley's proxy to vote such Shares in certain
circumstances and (ii) entered into Stock Purchase Agreements, dated as of
March 12, 1998 (the "Executive Stock Purchase Agreements"), with each of
Barton L. Faber, Chairman, President and Chief Executive Officer of the
Company, Thomas J. Quarles, Senior Vice President, General Counsel, Chief
Administrative Officer and Secretary of the Company, and Ronald G. Eidell,
Senior Vice President and Chief Financial Officer of the Company (the
"Executive Stockholders") who beneficially own an aggregate of 493,634 Shares,
or approximately 2.2% of the Shares outstanding on March 6, 1998, pursuant to
which the Executive Stockholders agreed, among other things and upon the terms
and conditions set forth therein, to tender or otherwise sell to Purchaser the
Shares beneficially owned by them, to vote such Shares in the manner specified
in the Executive Stock Purchase Agreements with respect to certain matters and
to appoint Parent as the Executive Stockholders' proxy to vote such Shares in
certain circumstances. The Donnelley Stock Purchase Agreement and the
Executive Stock Purchase Agreements are more fully described in Section 11.
In connection with the execution of the Merger Agreement, Parent also
entered into a Stock Purchase Agreement, dated as of March 12, 1998 (the
"Company Stock Purchase Agreement" and collectively with the Donnelley Stock
Purchase Agreement and the Executive Stock Purchase Agreements, the "Stock
Purchase Agreements"), with the Company. Pursuant to the Company Stock
Purchase Agreement, upon the terms and conditions set forth therein, the
Company agreed, among other things, to issue and sell to Parent that number of
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Shares, if any (the "Company Shares"), equal to the number of Shares that,
when added to the sum of (a) the number of Shares accepted for purchase by
Purchaser pursuant to the Offer, (b) the number of Shares, if any, purchased
by Parent from Donnelley pursuant to the Donnelley Stock Purchase Agreement
simultaneously with the acceptance of Shares for payment pursuant to the
Offer, and (c) the number of Shares, if any, purchased by Parent from the
Executive Stockholders pursuant to the Executive Stock Purchase Agreements
simultaneously with the acceptance of Shares for payment pursuant to the
Offer, constitutes 51% of the outstanding Shares on a fully-diluted basis
giving effect to the issuance of the Company Shares, at a per share purchase
price equal to the Offer Price. The Company Stock Purchase Agreement is more
fully described in Section 11.
The Minimum Condition requires that the number of Shares validly tendered
and not withdrawn prior to the expiration of the Offer, when added to any
Shares acquired pursuant to the Stock Purchase Agreements simultaneously with
the acceptance of Shares for payment pursuant to the Offer, represent at least
a majority of the Shares outstanding on a fully diluted basis. According to
the Company, as of March 6, 1998, there were 22,516,996 Shares issued and
outstanding, and there were outstanding options to purchase an aggregate of
2,087,119 Shares. The Merger Agreement provides, among other things, that the
Company will not, without the prior written consent of Parent, issue any
additional Shares (except on the exercise of outstanding options and as
otherwise permitted under the Merger Agreement). Based on the foregoing and
assuming that all outstanding options are exercised, the Minimum Condition
will be satisfied if 12,308,808 Shares are either validly tendered and not
withdrawn prior to the expiration of the Offer or acquired pursuant to the
Stock Purchase Agreements simultaneously with the acceptance of Shares for
payment pursuant to the Offer. Therefore, unless the Stock Purchase Agreements
have been terminated in accordance with their respective terms, the Minimum
Condition would be satisfied upon the purchase of Shares by Parent in
accordance with the terms of such agreements without taking into account any
Shares acquired pursuant to the Offer; provided, however, that the purchases
pursuant to the Stock Purchase Agreements may only be consummated if Shares
are accepted for payment pursuant to the Offer. If the Minimum Condition is
satisfied, Parent would be able to effect the Merger without the affirmative
vote of any other stockholder of the Company.
The Company has distributed one Right for each outstanding Share pursuant to
the Rights Agreement, dated as of February 24, 1997, between the Company and
American Stock Transfer & Trust Company, as Rights Agent, as amended (the
"Rights Agreement"). Based on the information disclosed by the Company in
connection with and prior to the Company entering the Merger Agreement, on
March 12, 1998, the Company amended the Rights Agreement to provide that the
execution of the Merger Agreement and any amendments thereto and the Stock
Purchase Agreements and the consummation of the transactions contemplated by
such agreements will not cause (i) Parent and/or the Purchaser or their
respective Affiliates or Associates to become an Acquiring Person (as such
terms are defined in the Rights Agreement) unless the Merger Agreement and the
Stock Purchase Agreements have been terminated in accordance with their
respective terms, or (ii) a Distribution Date, a Stock Acquisition Date or a
Triggering Event (as such terms are defined in the Rights Agreement) to occur,
irrespective of the number of Shares acquired pursuant to the Offer, the
Merger or the transactions contemplated by the Merger Agreement and the Stock
Purchase Agreements.
The Merger Agreement provides that, promptly upon the purchase of Shares by
Parent, the Purchaser or any of its subsidiaries pursuant to the Offer and/or
pursuant to the Stock Purchase Agreements which represents at least a majority
of the outstanding Shares, Purchaser will be entitled to designate such number
of directors, rounded up to the next whole number, to the Board as will give
it representation equal to the product of the total number of directors on the
Board (giving effect to the directors designated by Purchaser) multiplied by
the percentage that the number of Shares so purchased bears to the total
number of Shares then outstanding. In the Merger Agreement, the Company has
agreed, upon the request of Purchaser, to use its reasonable best efforts
promptly either to increase the size of the Board or secure the resignation of
such number of incumbent directors, or both, as is necessary to enable
Purchaser's designees to be so elected to the Board, and to take all actions
available to the Company to cause Purchaser's designees to be so elected.
However, until the Effective Time, the Board must include at least two
directors who are directors on the date of the Merger Agreement or who are not
affiliated with Parent and are designated in accordance with the terms of the
Merger Agreement.
The Purchaser estimates that the total funds required to purchase all Shares
validly tendered pursuant to the Offer, consummate the Merger and pay all
related costs and expenses will be approximately $830 million, including the
repayment of certain of the Company's indebtedness. The Purchaser will obtain
such funds from
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Parent by means of capital contributions, loans or a combination thereof.
Parent plans to obtain the funds for such capital contributions or loans from
its available cash and working capital. See Section 10.
The information contained in this Offer to Purchase concerning the Company
was supplied by the Company, and Parent and the Purchaser take no
responsibility for the accuracy of such information. The information contained
in this Offer to Purchase concerning the Offer, the Merger, Parent and the
Purchaser was supplied by Parent and the Purchaser, and the Company takes no
responsibility for the accuracy of such information.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3 of
this Offer to Purchase. The term "Expiration Date" shall mean 12:00 Midnight,
New York City time, on Friday, April 10, 1998, unless and until the Purchaser,
in accordance with the terms of the Merger Agreement, shall have extended the
period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and 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 (the "HSR Act"). See Section 14. If
such conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the Merger Agreement, and,
subject to complying with applicable rules and regulations of the Securities
and Exchange Commission (the "Commission"), purchase all Shares validly
tendered or (iii) extend the Offer and, subject to the right of stockholders
to withdraw Shares until the Expiration Date, retain the Shares which will
have been tendered during the period or periods for which the Offer is
extended.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
(i) to extend the Offer on one or more occasions for up to 10 business days
for each such extension beyond the then-scheduled Expiration Date, if at the
then-scheduled Expiration Date of the Offer any of the conditions to
Purchaser's obligation to accept for payment and pay for the Shares have not
been satisfied or waived, until such time as such conditions are satisfied or
waived, (ii) increase the Offer Price payable pursuant to the Offer and extend
the Offer for any period required by any rule, regulation, interpretation or
provision of the Commission or the staff thereof applicable to the Offer, and
(iii) extend the Offer for an aggregate period of not more than 10 business
days beyond the latest Expiration Date that would otherwise be permitted under
clause (i) or (ii) of this sentence if there shall not have been validly
tendered and not withdrawn pursuant to the Offer at least 90% of the
outstanding Shares. The rights reserved by the Purchaser in this paragraph are
in addition to the Purchaser's rights to terminate the Offer as described in
Section 14. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement thereof, the announcement in
the case of an extension to be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date
in accordance with the public announcement requirements of Rule 14d-4(c) under
the Exchange Act. Without limiting the obligation of the Purchaser under such
Rule or the manner in which the Purchaser may choose to make any public
announcement, the Purchaser currently intends to make announcements by issuing
a release to the Dow Jones News Service.
The Merger Agreement provides that, without the prior written consent of the
Company, neither Parent nor the Purchaser will decrease the Offer Price or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased pursuant to the Offer, change the conditions
described in Section 14, impose additional conditions to the Offer or amend
any other term of the Offer in any manner materially adverse to the holders of
Shares.
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If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 3. However, the ability
of the Purchaser to delay the payment for Shares which the Purchaser has
accepted for payment is limited by Rule 14e-l(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In a
public release, the Commission has stated that in its view an offer must
remain open for a minimum period of time following a material change in the
terms of the Offer and that waiver of a material condition, such as the
Minimum Condition, is a material change in the terms of the Offer. The release
states that an offer should remain open for a minimum of five business days
from the date a material change is first published, sent or given to security
holders and that, if material changes are made with respect to information not
materially less significant than the offer price and the number of shares
being sought, a minimum of ten business days may be required to allow adequate
dissemination and investor response. The requirement to extend the Offer will
not apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. As used in this Offer to Purchase, "business day" has the meaning
set forth in Rule 14d-1 under the Exchange Act.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed by the Purchaser to record holders of Shares and
will be furnished by the Purchaser to brokers, dealers, banks and similar
persons whose names, or the names of whose nominees, appear on the stockholder
lists or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
2. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), 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 Date and either certificates for tendered Shares must be received
by the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in
each case prior to the Expiration Date, or (ii) the tendering stockholder must
comply with the guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at The
Depository Trust Company and the Philadelphia Depository Trust Company (each,
a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
any of the Book-Entry Transfer Facilities' systems may make book-entry
delivery of Shares by causing a Book-Entry Transfer Facility to transfer such
Shares into the Depositary's account in accordance with that Book-Entry
Transfer Facility's procedure for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's
account
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at a Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message, and any other required documents must, in
any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-
ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
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 acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant
in any of the Book Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions").
In all other cases, all signatures on Letters of Transmittal must be
guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter
of Transmittal. If the certificates for Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Shares not tendered or not accepted for payment
are to be returned to a person other than the registered holder of the
certificates surrendered, then the tendered certificates for such Shares must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or stock powers
guaranteed as aforesaid. See Instructions 1 and 5 to the Letter of
Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all physically tendered Shares, in proper form
for transfer (or a Book-Entry Confirmation with respect to all such
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry
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transfer, an Agent's Message, and any other required documents are received
by the Depositary within three trading days after the date of execution of
such Notice of Guaranteed Delivery. A "trading day" is any day on which the
New York Stock Exchange (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser, and
each of them, as such stockholder's attorneys-in-fact and proxies in the
manner set forth in the Letter of Transmittal, each with full power of
substitution, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by the
Purchaser and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after March 16,
1998. All such proxies will be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the
extent that, the Purchaser accepts for payment Shares tendered by such
stockholder as provided herein. Upon such appointment, all prior powers of
attorney, proxies and consents given by such stockholder with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given by such stockholder (and, if given, will not be deemed effective). The
designees of the Purchaser will thereby be empowered to exercise all voting
and other rights with respect to such Shares and other securities or rights,
including, without limitation, in respect of any annual, special or adjourned
meeting of the Company's stockholders, actions by written consent in lieu of
any such meeting or otherwise, as they in their sole discretion deem proper.
The Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting,
consent and other rights with respect to such Shares and other related
securities or rights, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders of any Shares determined by it not to be in
proper form or the acceptance for payment of, or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right, subject to the provisions of the Merger Agreement, to
waive any of the conditions of the Offer or any defect or irregularity in the
tender of any 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 or
irregularities relating thereto have been cured or waived. None of the
Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any
such notification. The Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding.
7
<PAGE>
Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide
the Depositary with such stockholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such stockholder is not subject to backup
withholding. If a stockholder does not provide such stockholder's correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a penalty on such stockholder and payment of
cash to such stockholder pursuant to the Offer may be subject to backup
withholding of 31%. All stockholders surrendering Shares pursuant to the Offer
should complete and sign the main signature form and the Substitute Form W-9
included as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchaser and
the Depositary). Certain stockholders (including, among others, all
corporations and certain foreign individuals and entities) are not subject to
backup withholding. Foreign stockholders, if exempt, should complete and sign
the main signature form and a Form W-8, Certificate of Foreign Status, a copy
of which may be obtained from the Depositary, in order to avoid backup
withholding. See Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date
and, unless theretofore accepted for payment and paid for by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after Thursday, May
14, 1998.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If certificates for Shares have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant
to the procedures for book-entry transfer as set forth in Section 2, any
notice of withdrawal must also specify the name and number of the account at
the appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 any time on or prior to
the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defects
or irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay, promptly
after the Expiration Date, for all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 3. All
determinations concerning the satisfaction of such terms and conditions will
be within the Purchaser's discretion, which determinations will be final and
binding. See Sections 1 and 14. The Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for
8
<PAGE>
payment of or payment for Shares in order to comply in whole or in part with
any applicable law, including, without limitation, the HSR Act. Any such
delays will be effected in compliance with Rule 14e-l(c) under the Exchange
Act (relating to a bidder's obligation to pay for or return tendered
securities promptly after the termination or withdrawal of such bidder's
offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares (or a timely Book-Entry Confirmation with respect thereto),
(ii) a Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (iii) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
stockholder pursuant to the Offer will be the highest per Share consideration
paid to any other stockholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE
PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer (including such rights as are set forth in Sections 1 and 14)
(but subject to compliance with Rule 14e-1(c) under the Exchange Act), the
Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 2, such Shares will
be credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly-
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under state, local or foreign tax laws. Accordingly, a
stockholder who tenders Shares in the Offer or receives cash in exchange for
Shares in the Merger (including as a result of perfecting his dissenters'
rights under the DGCL) will recognize gain or loss for federal income tax
purposes equal to the difference, if any, between the amount of cash received
and the stockholder's tax basis in the Shares sold. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same time and price) exchanged pursuant to the Offer or the Merger. Such gain
or loss generally will be capital gain or loss if the Shares disposed of were
held as capital assets by the stockholder, and will be long-term capital gain
or loss if the Shares disposed of were held for more than one year at the date
of sale or the Expiration Date (in the case of the Offer) or on the date of
the Merger (in the case of the Merger), as the case may be. In addition, the
recently enacted Taxpayer Relief Act of 1997 could affect the federal income
tax consequences of the Offer and Merger in that, among other things, it
reduces the maximum rate of federal income
9
<PAGE>
tax on capital gains of individual taxpayers for capital assets held more than
18 months. Shares held less than one year may be subject to ordinary income
tax rates of up to 39.6% for individuals.
The foregoing summary constitutes a general description of certain U.S.
federal income tax consequences of the Offer and the Merger without regard to
the particular facts and circumstances of each stockholder of the Company and
is based on the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Department Regulations issued pursuant thereto and
published rulings and court decisions in effect as of the date hereof, all of
which are subject to change, possibly with retroactive effect. Special tax
consequences not described herein may be applicable to certain stockholders
subject to special tax treatment (including insurance companies, tax-exempt
organizations, financial institutions or broker dealers, foreign stockholders
and stockholders who have acquired their Shares pursuant to the exercise of
employee stock options or otherwise as compensation). ALL STOCKHOLDERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO SPECIFIC TAX EFFECTS APPLICABLE TO
THEM OF THE OFFER AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF
THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.
The Shares are traded on the NYSE under the symbol "ML". The following table
sets forth, for each of the periods indicated, the high and low reported sale
price per Share as reported by the NYSE Composite Transactions Tape.
<TABLE>
<CAPTION>
HIGH LOW
1996: ------ ------
<S> <C> <C>
Second Quarter (June 14 through June 30)................. $22.75 $19.75
Third Quarter............................................ 22.50 16.00
Fourth Quarter........................................... 23.38 16.00
1997:
First Quarter............................................ $22.25 $15.50
Second Quarter........................................... 24.88 16.88
Third Quarter............................................ 24.75 18.13
Fourth Quarter........................................... 23.06 17.88
1998:
First Quarter (through March 13, 1998)................... $32.13 $15.00
</TABLE>
On February 10, 1998, the last full trading day prior to the first public
announcement by the Company that it had received written, unsolicited
indications of interest to acquire or merge with the Company at substantial
premiums to the then-current market price, the last reported sale price of the
Shares on the NYSE was $17.75 per Share. On March 13, 1998, prior to the
commencement of trading, Parent and the Company announced the execution of the
definitive Merger Agreement. On March 13, 1998, the last full trading day
prior to the commencement of the Offer, the last reported sale price of the
Shares on the NYSE was $31.50 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
The Company has never paid any cash dividends on the Shares. The Merger
Agreement provides that, without the prior written consent of Parent, the
Company will not declare, set aside or pay any dividend on or make any other
distribution in respect of its capital stock. See Section 11. The Company has
advised the Purchaser that the Company currently intends to retain earnings to
finance the growth of its business and therefore does not intend to pay any
cash dividends for the foreseeable future. Payment of any cash dividends in
the future will depend on the Company's results of operations, financial
condition, cash requirements and other factors deemed relevant by Board of
Directors of the Company.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so
purchased, could adversely effect the liquidity and market value of the
remaining Shares held by the public.
10
<PAGE>
Stock Listing. Depending upon the number of Shares purchased pursuant to the
Offer, the Shares may no longer meet the requirements of the NYSE for
continued listing. According to the NYSE's published guidelines, the NYSE
could consider delisting the Shares if, among other things, the number of
holders of at least 100 Shares were to fall below 1,200, the number of
publicly held Shares (exclusive of management or other concentrated holdings)
were to fall below 600,000 or the aggregate market value of publicly held
Shares were to not exceed $5.0 million. According to the Company, as of
January 30, 1998, there were 208 holders of record of Shares and, as of March
6, 1998, there were 22,516,996 Shares outstanding. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Company does not
meet the requirements for continued listing on the NYSE, and the Shares are no
longer included on the NYSE, the market for Shares could be adversely
affected.
In the event that the Company at any time does not meet the requirements for
continued listing on the NYSE, it is possible that the Shares would continue
to trade in the over-the-counter market and that price quotations would be
reported by other sources. The extent of the public market for the Shares and
the availability of such quotations would, however, depend upon the number of
holders of Shares remaining at such time, the interest in maintaining a market
in Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act, as described below, and
other factors.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would
no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
Exchange Act Registration. The Shares currently are registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and to the Commission and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement pursuant to Section 14(a) in connection with stockholders' meetings
and the related requirement of furnishing an annual report to stockholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
or Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or be eligible for continued listing on the NYSE. The
Purchaser intends to seek to cause the Company to apply for termination of
registration of the Shares under the Exchange Act as soon after the completion
of the Offer as the requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of
the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
at 360 East 22nd Street, Lombard, Illinois 60148-4989. The telephone number of
the Company at such offices is (630) 620-3300. According to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"Company 1996 10-K"), the Company provides database marketing, direct
marketing and reference products and services in the United States and the
United Kingdom.
11
<PAGE>
Selected Financial Information
The following table sets forth selected historical consolidated and combined
financial data of the Company. Statement of operations data for each of the
five years in the period ended December 31, 1997 and balance sheet data as of
December 31, 1994, 1995, 1996 and 1997 have been derived from the audited
consolidated and combined financial statements of the Company provided to
Parent. Balance sheet data as of December 31, 1993 is derived from unaudited
information of the Company provided to Parent. The unaudited financial data
includes all adjustments that the Company considers necessary for a fair
presentation of the consolidated and combined financial position and
consolidated and combined results of operations for the period reflected
therein.
More comprehensive financial information is included in reports and in other
documents filed by the Company with the Commission. The information set forth
below should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations," the Company's financial
statements and other financial information included in such reports and
documents. The following summary is qualified in its entirety by reference to
such reports and other documents and all of the financial information
(including any related notes) contained therein. Such reports and other
documents may be inspected and copies may be obtained from the Commission in
the manner set forth below.
METROMAIL CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1993 1994(1) 1995(1) 1996 1997(1)
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Direct marketing sales........ $ 84,904 $100,060 $122,303 $149,056 $185,106
Database marketing sales...... 42,779 56,746 67,410 77,967 78,996
Reference sales............... 36,032 38,665 47,474 54,422 64,285
-------- -------- -------- -------- --------
Total net sales........... 163,715 195,471 237,187 281,445 328,387
Database and production costs. 95,016 108,806 134,361 155,708 202,166
Write-off of in-process
research and
development costs............ -- -- -- -- 23,000
Amortization of goodwill...... 6,054 6,608 7,446 7,572 8,142
Selling expenses.............. 29,625 37,107 45,913 53,240 60,230
General and administrative
expenses..................... 12,372 14,408 16,645 25,524 31,298
Provisions for doubtful
accounts..................... 1,959 1,848 2,180 2,143 4,965
-------- -------- -------- -------- --------
Earnings (loss) from
operations................... 18,689 26,694 30,642 37,258 (1,414)
Interest expense--related
party........................ 22,112 18,999 21,329 10,178 --
Interest expense.............. -- -- 80 776 2,761
Other expense (income)--net... (138) 24 (87) (207) (1,226)
-------- -------- -------- -------- --------
Earnings (loss) before income
taxes........................ (3,285) 7,671 9,320 26,511 (2,949)
Income taxes.................. 1,181 5,684 6,585 12,649 1,084
-------- -------- -------- -------- --------
Net income (loss) from
operations before cumulative
effect of accounting change.. (4,466) 1,987 2,735 13,862 (4,033)
Cumulative after-tax effect of
change in accounting for
post-retirement benefits
other than pensions.......... 4,388 -- -- -- 4,488
-------- -------- -------- -------- --------
Net income (loss)............. $ (8,854) $ 1,987 $ 2,735 $ 13,862 $ (8,521)
======== ======== ======== ======== ========
BALANCE SHEET DATA (AT PERIOD
END):
Total assets.................. $293,691 $328,768 $378,721 $443,406 $491,165
Total debt.................... 202,503 219,737 250,376 21,468 61,222
Total stockholders' equity.... 75,872 78,939 85,392 360,548 359,287
</TABLE>
- --------
(1) In 1994, the Company purchased Customer Insight Corporation for
approximately $20.0 million. In May 1995, an affiliate of R.R. Donnelley &
Sons Company acquired International Communication & Data Plc for
approximately $15.3 million. See Notes 1 and 14 of Notes to Consolidated
and Combined Financial Statements of the Company included in the Company
1996 10-K. The Company acquired Atlantes Corporation, Marketing
Information Technologies, Inc. and Saxe, Inc. in the third quarter of
1997.
12
<PAGE>
Certain Estimates Prepared by the Company. During the course of the
discussions between Parent and the Company that led to the execution of the
Merger Agreement, the Company provided Parent with certain information about
the Company which is not publicly available. The information provided included
financial forecasts which contain, among other things, the summary financial
information set forth below.
The Company does not, as a matter of course, publicly disclose forward-
looking information (such as the financial forecasts referred to below) as to
future revenues, earnings or other financial information. Such forward-looking
information was prepared by the Company solely for internal use and not for
publication or with a view to complying with the published guidelines of the
Commission regarding projections or with the American Institute of Certified
Public Accountants Guide for Prospective Financial Statements and are included
in this Offer to Purchase only because they were furnished to Parent. The
financial forecasts necessarily make numerous assumptions with respect to
industry performance, general business and economic conditions, access to
markets and distribution channels, availability and pricing of raw materials,
foreign currency rates and other matters, all of which are inherently subject
to significant uncertainties and contingencies and many of which are beyond
the Company's control. One cannot predict whether the assumptions made in
preparing the financial forecasts will be accurate, and actual results may be
materially higher or lower than those contained in the forecasts. THE
INCLUSION OF THIS FORWARD-LOOKING INFORMATION SHOULD NOT BE REGARDED AS FACT
OR AN INDICATION THAT PARENT, THE PURCHASER, THE COMPANY OR ANYONE WHO
RECEIVED THIS INFORMATION CONSIDERED IT A RELIABLE PREDICTOR OF FUTURE
RESULTS, AND THIS INFORMATION SHOULD NOT BE RELIED ON AS SUCH. NONE OF PARENT,
THE PURCHASER OR THE COMPANY ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY,
REASONABLENESS, ACCURACY OR COMPLETENESS OF THE FORECASTS.
METROMAIL CORPORATION
SELECTED ESTIMATED CONSOLIDATED FINANCIAL INFORMATION
(Prepared by Metromail Corporation)
(dollars in millions)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1998 1999 2000
(ESTIMATED) (ESTIMATED) (ESTIMATED)
----------- ----------- -----------
<S> <C> <C> <C>
Total net sales............................. $407.0 $486.9 $579.4
Earnings from operations ................... 54.6 64.7 78.4
Net Income ................................. 28.6 35.5 44.9
</TABLE>
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549 and at the regional offices of the Commission located
at Seven World Trade Center, 13th Floor, Suite 1300, New York, New York 10048
and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates by writing to the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, such
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. The Commission maintains a Web site (located
at http://www.sec.gov) which includes reports, proxy statements and other
information filed electronically by registrants with the Commission.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although neither the Purchaser nor Parent has any
knowledge that any information acquired from publicly available documents or
directly from the Company is untrue, neither the Purchaser nor Parent takes
any responsibility for the accuracy or completeness of such information or for
any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information but which are
unknown to the Purchaser and Parent.
13
<PAGE>
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
The Purchaser, a Delaware corporation and an indirect wholly-owned
subsidiary of Parent, was organized to acquire the Company and has conducted
no activities unrelated to such purpose since its organization. All of the
issued and outstanding shares of capital stock of the Purchaser are
beneficially owned by Parent. The principal executive offices of the Purchaser
are located at the principal executive offices of Experian Corporation, a
wholly-owned subsidiary of Parent, at 505 City Parkway West, Orange,
California 92668. The telephone number of the Purchaser at such offices is
(714) 385-7000.
Parent is the holding company of a group of companies involved in home
shopping, Burberry's products and retailing, overseas retailing, information
services, finance and property investment. At the close of business on
February 13, 1998, Parent's market capitalization was approximately
(Pounds)7.5 billion. The home shopping division combines the United Kingdom's
leading agency catalogue business (Kays, Great Universal and Choice) with the
United Kingdom's fourth largest direct catalogue business (Marshall Ward and
Innovations). Parent also has home shopping companies in Holland, Sweden,
Switzerland, Austria and the Republic of Ireland. Burberry's is one of
Britain's leading luxury brands, offering men's clothing, women's clothing and
a wide range of accessories and has 66 retail outlets in the United Kingdom,
Continental Europe and the United States. Overseas retailing consists of Lewis
Stores with 424 outlets in South Africa and a retail business in Canada with
68 outlets. The Experian information services division is a major information
provider on consumers, businesses, motor vehicles and property. The division
was expanded by the acquisitions of Experian Corporation in November 1996 and
Direct Marketing Technology Inc. in April 1997. The finance division conducts
Parent's activities in hire purchase and leasing finance, vehicle contract
hire, insurance and banking. The property division consists of a joint venture
with The British Land Company PLC and certain properties occupied by Parent.
Parent is currently seeking to acquire Argos plc, a United Kingdom-based
corporation engaged in the business of retailing consumer durable goods
through catalogue stores located throughout the United Kingdom and the
Republic of Ireland, in a separate transaction for aggregate cash
consideration of approximately (Pounds)1.6 billion. There can be no assurance
that Parent's proposed acquisition of Argos plc will be consummated or, if
consummated, as to the terms or timing of such transaction.
The principal executive offices of Parent are located at Leconfield House,
Curzon Street, London WIY7FL. Its telephone number at such address is (44) 171
495-0070.
14
<PAGE>
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to Parent for each of the
three fiscal years ending March 31, 1997. Such selected consolidated financial
data has been derived from Parent's audited consolidated financial statements
which are not set forth herein. Parent's consolidated financial statements
were prepared in accordance with United Kingdom accounting practices ("U.K.
GAAP") which practices are described in the notes to such statements. U.K.
GAAP is not the same as generally accepted accounting principles in the United
States ("U.S. GAAP"). Parent has not determined its financial position or
results of operations for any period under U.S. GAAP. See below for a summary
description of certain material differences between U.K. GAAP and U.S. GAAP.
The Purchaser believes that the differences between U.S. GAAP and U.K. GAAP
are not, for purposes of this Offer, material to a decision by a stockholder
of the Company whether to sell, tender or hold any Shares since any such
differences would not affect the ability of Purchaser to obtain all funds
necessary to pay for Shares to be acquired pursuant to the Offer and the
Merger.
THE GREAT UNIVERSAL STORES P.L.C.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------------
1995 1996 1997(1) 1997(1)(2)
---------------- ---------------- ---------------- ----------
(U.S.
(POUNDS) (POUNDS) (POUNDS) DOLLARS)
<S> <C> <C> <C> <C>
CONSOLIDATED PROFIT AND
LOSS ACCOUNTS DATA:
Turnover.............. (Pounds) 2,664.1 (Pounds) 2,757.6 (Pounds) 2,855.3 $ 4,696.4
Cost of sales......... (1,460.4) (1,508.3) (1,583.0) (2,603.7)
---------------- ---------------- ---------------- ---------
Gross profit.......... 1,203.7 1,249.3 1,272.3 2,092.7
Net operating
expenses............. (800.5) (823.8) (841.2) (1,383.6)
Group property income. 67.7 70.5 71.4 117.4
---------------- ---------------- ---------------- ---------
Operating profit...... 470.9 496.0 502.5 826.5
Net interest income... 91.9 85.1 68.1 112.0
---------------- ---------------- ---------------- ---------
Profit before
taxation............. 562.8 581.1 570.6 938.5
Tax on profit on
ordinary activities.. (191.7) (194.8) (192.1) (316.0)
---------------- ---------------- ---------------- ---------
Profit for the
financial year....... (Pounds) 371.1 (Pounds) 386.3 (Pounds) 378.5 $ 622.5
================ ================ ================ =========
BALANCE SHEET DATA (AT
PERIOD END):
Total assets.......... (Pounds) 4,578.3 (Pounds) 4,805.4 (Pounds) 4,620.1 $ 7,599.1
Total debt............ 3.7 3.7 491.2 807.9
Equity shareholders'
funds................ 3,540.6 3,758.3 2,859.0 4,702.5
</TABLE>
- --------
(1) Parent acquired Experian Corporation in November 1996.
(2) See the description of certain differences between U.K. GAAP and U.S. GAAP
set forth below. Pounds Sterling ("(Pounds)") are translated into U.S.
Dollars at (Pounds)1-$1.6448, the Noon Buying Rate of the Federal Reserve
Bank of New York on March 31, 1997. The presentation of the U.S. Dollar
amounts should not be construed as a representation that the Pounds
Sterling amounts could be so converted into U.S. Dollars at the rate
indicated or at any other rate.
For the six months ended September 30, 1997, Parent reported an unaudited
consolidated operating profit of (Pounds)226.5 million (six months ended
September 30, 1996: (Pounds)192.8 million) and unaudited consolidated profit
before tax of (Pounds)254.1 million (1996: (Pounds)236.8 million) on unaudited
consolidated sales of (Pounds)1,503.7 million (1996: (Pounds)1,219.6 million).
As of that date, unaudited consolidated net assets were (Pounds)2,787.3
million (1996: (Pounds)3,812.5 million). Parent acquired Direct Marketing
Technology Inc. in April 1997. For informational purposes only, the Noon
Buying Rates relating to the exchange of Pounds Sterling for U.S. Dollars in
effect on September 30, 1996 was (Pounds)1-$1.5653 and on September 30, 1997
was (Pounds)1-$1.6117. The presentation of such exchange rates should not be
construed as a representation that the Pounds Sterling amounts could be so
converted into U.S. Dollars at the rate indicated or at any other rate. See
the description of certain differences between U.K. GAAP and U.S. GAAP set
forth below.
15
<PAGE>
Certain Differences Between U.K. GAAP and U.S. GAAP. Although U.K. GAAP
differs in certain significant respects from U.S. GAAP, Parent believes that
the differences are not material to a decision by a holder of Shares whether
to sell, tender or hold any Shares because any such differences would not
affect the ability of the Purchaser to obtain sufficient funds to pay for the
Shares to be acquired pursuant to the Offer. While the following is not a
comprehensive summary of all the differences between U.K. GAAP and U.S. GAAP,
other differences are believed to be unlikely to have a material effect on the
consolidated income or equity shareholder's funds of the Purchaser.
Goodwill and U.S. Purchase Accounting. Under U.S. GAAP and U.K. GAAP,
purchase consideration in respect of subsidiaries acquired is allocated on the
basis of appraised values to the various net assets of the subsidiaries at the
dates of acquisition and any net balance is treated as goodwill. However, U.S.
GAAP also requires value to be assigned to any separately identifiable
intangible assets--which would be amortized over their estimated useful lives
not to exceed 40 years--and to acquired in-process research and development
which would be written off to the profit and loss account in the period of the
acquisition. Also, U.S. GAAP requires goodwill to be recognized as an asset
and amortized over its estimated useful life not to exceed 40 years. Under
U.K. GAAP applicable to Parent's consolidated financial statements for the
fiscal year ended March 31, 1998, goodwill is normally written off directly
against reserves. Any acquisition related expenses are considered part of the
purchase consideration under U.S. GAAP and effectively added to goodwill. Such
costs are either written off on the income statement or against reserves under
U.K. GAAP in the period of acquisition.
For fiscal years commencing on or after January 1, 1998, U.K. GAAP will
generally require goodwill to be amortized over a period of not more than 20
years. Parent believes that since the termination rights to the Merger
Agreement and the Stock Purchase Agreements generally expire on March 30, 1998
if the applicable waiting period under the HSR Act expires on or before March
30, 1998, it should be able to include the Company in its consolidated
financial statements for the fiscal year ended March 31, 1998 if the
applicable waiting period under the HSR Act expires on or before March 30,
1998. In such event, Parent should be able to write off the goodwill in
connection with the acquisition of the Company directly against reserves.
Ordinary Dividends. Under U.K. GAAP, final ordinary dividends are provided
for in the fiscal year in respect of which they are recommended by the board
of directors for approval by the shareholders. Under U.S. GAAP, such dividends
are not provided for until declared by the board of directors.
Deferred Taxation. Under U.K. GAAP, no provision is made for deferred
taxation if there is reasonable evidence that such deferred taxation will not
be payable in the foreseeable future, deferred tax assets are generally not
recognized under U.K. GAAP unless they are likely to be recovered in the
foreseeable future (i.e. one year from the balance sheet date). Under U.S.
GAAP, deferred tax assets and liabilities are recognized in full and any net
deferred tax assets are then assessed for probable recoverability. As long as
it is more likely than not that sufficient future taxable income will be
available to utilize the deferred tax assets, no valuation allowance is
provided.
Depreciation on Freehold Buildings. Under U.K. GAAP, companies are permitted
to carry freehold buildings at undepreciated historical cost or valuation so
long as these buildings are "well-maintained". U.S. GAAP requires that all
tangible fixed assets in service, other than freehold land, be depreciated
over their estimated useful lives.
Investment Securities. Under U.K. GAAP, trade investments are carried at
cost, reduced for any permanent diminution in value. Under U.S. GAAP,
investments in marketable equity securities and all debt securities would be
classified as "available for sale" securities and recorded at fair value, with
unrealized gains and losses, net of tax, presented as a component of equity.
Certain Background Information. The name, citizenship, business address,
present principal occupation or employment and five-year employment history of
each of the directors and executive officers of the Purchaser and Parent are
set forth in Schedule I hereto.
16
<PAGE>
Pursuant to the Stock Purchase Agreements, Parent may be deemed to
beneficially own Shares constituting up to 51% of the outstanding Shares on a
fully-diluted basis. See Section 11. Except as set forth in this Offer to
Purchase, neither the Purchaser nor any of its affiliates nor, to the best of
their knowledge, any of the persons listed on Schedule I, nor any associate or
majority owned subsidiary of any of the foregoing, beneficially owns or has a
right to acquire any Shares, and neither the Purchaser nor any of its
affiliates nor, to the best of their knowledge, any of the persons or entities
referred to above, nor any of the respective executive officers, directors or
subsidiaries of any of the foregoing, has effected any transactions in Shares
during the past 60 days.
Except as set forth in this Offer to Purchase, neither the Purchaser,
Parent, any of their respective affiliates nor, to the best of their
knowledge, any of the persons listed on Schedule I, has any contract,
arrangement, understanding or relationship with any other person with respect
to any securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss, or
the giving or withholding of proxies. The Company and certain subsidiaries of
Parent have from time to time engaged in commercial transactions in the
ordinary course of their respective businesses. Except as set forth in this
Offer to Purchase, neither the Purchaser nor Parent, nor to the best of the
knowledge of the Purchaser and Parent, any of the persons listed on Schedule
I, has entered into any transaction with the Company, or any of the Company's
affiliates which are corporations, since the commencement of the Company's
third full fiscal year preceding the date of this Statement, the aggregate
amount of which was equal to or greater than one percent of the consolidated
revenues of the Company for (i) the fiscal year in which such transaction
occurred, or (ii) the portion of the current fiscal year which has occurred if
the transaction occurred in such year. Except as set forth in this Offer to
Purchase, neither the Purchaser, Parent, any of their respective affiliates,
nor, to the best of their knowledge, any of the persons listed on Schedule I,
has had, since December 31, 1994, any business relationships or transactions
with the Company or any of its executive officers, directors or affiliates
that would require reporting under the rules of the Commission. Except as set
forth in this Offer to Purchase, since December 31, 1994, there have been no
contacts, negotiations or transactions between the Purchaser, Parent, any of
their respective affiliates or, to the best of their knowledge, any of the
persons listed on Schedule I, and the Company or its affiliates concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets.
Parent acquired Direct Marketing Technology Inc. ("DMT") in April 1997, and
DMT is now an indirect wholly-owned subsidiary of Parent. Prior to its
acquisition by Parent, DMT engaged in substantive discussions in late 1996 and
early 1997 with the Company regarding the possible acquisition of DMT by the
Company.
10. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total funds required to purchase all Shares
validly tendered pursuant to the Offer, consummate the Merger and pay all
related costs and expenses will be approximately $830 million, including the
repayment of certain of the Company's indebtedness. The Purchaser will obtain
such funds from Parent by means of capital contributions, loans or a
combination thereof. Parent plans to obtain the funds for such capital
contributions or loans from its available cash and working capital. It is
anticipated that any borrowings incurred by the Purchaser in connection with
the Offer will be repaid from internally generated funds of the Purchaser and
the Company and/or refinanced in the private or public markets.
11. BACKGROUND OF THE OFFER; THE MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS
The following description was prepared by Parent and the Company.
Information about the Company was provided by the Company and neither the
Purchaser nor Parent takes any responsibility for the accuracy or completeness
of any information regarding meetings or discussions in which Purchaser,
Parent or their representatives did not participate.
17
<PAGE>
BACKGROUND OF THE OFFER
The initial public offering ("IPO") of Shares in June 1996 by the Company's
former parent corporation, Donnelley, was part of a divestiture process
initiated by Donnelley and a sale of the Company was also considered and
pursued on a limited basis simultaneously with the IPO. This process included
contacts with some potential purchasers. One such candidate was the
predecessor of Experian, which is in the direct marketing services business
and was at the time being acquired by a financial buyer (which later sold
Experian to Parent). After the IPO, the Company was contacted from time to
time by such potential purchasers and others regarding their possible interest
in a business combination.
Beginning in October 1997, the number and frequency of such contacts
increased. This increase may have been related to declines in the market price
of the Shares in the summer and fall of 1997 and the announcement by
Donnelley's new Chairman and Chief Executive Officer in October 1997 that his
company was going to focus on its core commercial printing business. At the
Direct Marketing Association trade show in Chicago in October 1997, senior
management of the Company was approached by senior officers of two companies
who expressed continued interest in a business combination (those companies
had previously expressed interest) and by another which expressed interest for
the first time. After the trade show, two other companies expressed interest
in a business combination in October and November 1997 and Company management
met with one of them. During the same period, Donnelley advised the Company of
several indications of interest it was receiving as the major stockholder of
the Company.
The Company engaged Lehman Brothers on November 13, 1997 to render financial
advisory services to the Company. This engagement included evaluating the
Company's posture with respect to unsolicited and other acquisition proposals
(see Item 5 of the Company's Schedule 14D-9). At its December 15, 1997 meeting
in Chicago, the Board was presented with information by Lehman Brothers and
management with respect to how a process could be organized to better
determine the interest in a business combination of the Company with the
entities that had been contacting Company management and others, as well as
information with respect to possible acquirors of the Company, the historical
market prices of the Shares and the Company's earnings performance compared to
analysts' expectations since the IPO and the Company's public market trading
valuation compared to other companies in the direct marketing services
industry. Lehman Brothers also described recent acquisition activity in such
industry and gave a general summary of potential revenue and cost synergies
that might be realized through a business combination with some of the
potential acquirors. At that meeting, the Board authorized management to
continue to explore whether to embark on such process and report further on it
at the February 10, 1998 Board meeting.
In December 1997 and the first part of January 1998, Company representatives
met three times with personnel from the company that had expressed interest
for the first time at the Direct Marketing Association trade show to explore
how the two companies could be combined. At a fourth meeting with such company
late in January 1998, Company management told the representatives of such
company that a combination did not appear to be as attractive as other
alternatives the Company might have. At a meeting with a second company late
in January 1998 held for other purposes, such second company expressed for the
first time its conditional interest in a business combination.
On January 21, 1998, the Chairman of the Company met in Chicago with the
Chairman of Experian North America, at his request. At such meeting, the
Company's Chairman was advised that Experian and Parent were interested in
acquiring the Company. Parent communicated to the Company that it was
important that an acquisition be structured so that Parent could include the
Company in its consolidated financial statements for the fiscal year ending
March 31, 1998 such that goodwill arising from the acquisition could be
accounted for under U.K. GAAP applicable to Parent's financial statements for
such fiscal year. On January 27, 1998, the Company received a letter from a
third company expressing a conditional interest in purchasing the Company. On
January 29, 1998, the Company received a letter to that effect from a fourth
company. On February 4, 1998, the Company's Chairman, its Senior Vice
President and Chief Financial Officer and its Senior Vice President, Corporate
Development met in Chicago with the Chairman of Experian North America, a
director of Parent and
18
<PAGE>
the Chief Executive of its Information Services Division, and the Deputy
Chairman of Parent and Chairman of its Information Services Division to
further discuss a possible acquisition of the Company. On February 6, 1998,
Parent engaged Bear Stearns to provide certain financial advisory services in
connection with the proposed acquisition of the Company. Also on February 6,
1998, Experian entered into a Confidentiality Agreement with Lehman Brothers
on behalf of the Company. See Section 11.
On February 10, 1998, the Board met and, after presentations by Lehman
Brothers and management, determined to evaluate the Company's strategic
alternatives, including through a controlled, publicly announced process
intended to determine the level of interest of all potential acquirors of the
Company, and authorized the engagement of Lehman Brothers pursuant to an
agreement dated that date (see Item 5 of the Company's Schedule 14D-9). These
actions were publicly announced following the Board meeting. On the same day,
the Company received a letter from Experian indicating an interest in
acquiring the Company for cash at a price in the range of $26 to $31 per
Share. On the next day, Experian sent another letter increasing its price
range for a possible transaction to $28 to $32 per Share. Beginning on
February 11, 1998, Lehman Brothers began the process authorized by the Board,
including obtaining confidentiality agreements (substantially similar to the
Confidentiality Agreement described in Section 11) from 30 other potentially
interested parties, including those referred to above. On February 12, 1998,
there was a conference call between members of senior management of the
Company and Experian and Parent, as well as Lehman Brothers and counsel to the
parties, in which the timing of the due diligence process and other timing
issues were discussed. Management of the Company met in Chicago on February
13, 1998 with representatives of Experian and Parent to provide information
about the Company's business. During the next two weeks, representatives of
Experian and Parent reviewed due diligence materials provided by the Company
and held further meetings with Company management, and Lehman Brothers
distributed confidential information to other third parties, responded to
questions in order to assist such parties in their review of the Company and
scheduled meetings between Company management and such third parties. The
Company, through Lehman Brothers, also received written and oral conditional
indications of interest from certain of these parties as to the price levels
such parties might be willing to consider for an acquisition of the Company.
Outside counsel for the Company provided a draft of the Merger Agreement to
outside counsel for Parent and received and discussed comments on such draft
during these two weeks.
On February 25, 1998, representatives of Parent called Lehman Brothers and
said that Parent wished to acquire the Company, but that this was contingent
on the satisfactory resolution of certain issues, including issues related to
a lawsuit involving the Company, the Company's projected operating plan, a
provision in an agreement under which the Company had previously acquired
another business and the extension of certain commercial arrangements between
the Company and Donnelley. On that day, the Company began discussing such
extension with Donnelley and providing additional information and working
towards a resolution regarding the other issues raised by Parent.
On February 27, 1998, the Chief Executive of Parent's Information Services
Division advised the Company that Parent did not wish to proceed with a
transaction with the Company because it determined that it would be unable to
resolve certain issues. The Company then began exploring additional means by
which to resolve these issues and scheduled management presentations to, and
due diligence access for, five other companies which had expressed possible
interest in a transaction. Such parties met with Company management and
conducted due diligence investigations of the Company from March 2 through
March 10, 1998. On March 5, 1998, such parties were sent draft merger
agreements by the Company. On March 6, 1998, Parent indicated that if it went
forward with a transaction, it would only be willing to do so if, among other
things, the Company, Donnelley and the Executives were willing to enter into
the Stock Purchase Agreements. On March 8, 1998, the Company's Chairman met
with the Chief Executive of Parent's Information Services Division and was
advised that, subject to reaching a resolution concerning the lawsuit
satisfactory to Parent, the requested extension of the Donnelley commercial
arrangements and execution of the Stock Purchase Agreements, Parent was
willing to acquire the Company for $31.50 in cash per Share. The next day,
Lehman Brothers advised the other five interested parties that they should
indicate in the next two days at what price and on what terms they were
interested in acquiring the Company. From March 10 up to the time of the Board
meeting on March 12, the Merger Agreement, the
19
<PAGE>
Stock Purchase Agreements, the Donnelley extension and other documents were
negotiated with Parent. From March 10 until the March 12, 1998 Board meeting
described below, the Company and Lehman Brothers did not receive any
indications of price or expressions of interest from such other interested
parties that were more definitive or more favorable than those previously
received. Certain of the expressions of interest which had previously been
received from such parties were subject to financing contingencies.
On March 12, 1998, the Board met and approved the Merger Agreement and the
transactions contemplated thereby.
Also on March 12, 1998, the Board of Directors of each of Parent and
Purchaser held a telephonic meeting to consider the proposed terms of the
Merger Agreement, including the Offer and the Merger and the Stock Purchase
Agreements. At their respective meetings, the Board of Directors of each of
Parent and Purchaser approved the Merger Agreement, the Stock Purchase
Agreements and the transactions contemplated thereby. Following the approval
of the respective Boards of Directors, Parent, the Purchaser and the Company
executed the Merger Agreement and the Stock Purchase Agreements were executed
by the parties thereto.
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
which is incorporated herein by reference and a copy of which has been filed
with the Commission as an exhibit to the Schedule 14D-1. The Merger Agreement
is set forth in full as an annex to the Company's Schedule 14D-9 which is
being mailed to stockholders of the Company herewith. The Merger Agreement
also may be examined and copies may be obtained at the places and in the
manner set forth in Section 8 of this Offer to Purchase. Capitalized terms
used but not defined in this summary of the Merger Agreement have the meanings
given to such terms in the Merger Agreement.
The Offer. The Merger Agreement provides that Parent and Purchaser will
commence the Offer and that, upon the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, Purchaser and/or Parent
will purchase all Shares validly tendered and not properly withdrawn pursuant
to the Offer as soon as practicable after the expiration date of the Offer.
The Merger Agreement provides that, without the prior written consent of the
Company, neither Purchaser nor Parent may decrease the price per Share or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased in the Offer, change any of the conditions set
forth in Annex I to the Merger Agreement (which conditions are described in
Section 14 below), impose additional conditions to the Offer or amend any
other term of the Offer in any manner materially adverse to the holders of the
Shares; provided that Purchaser may, without the consent of the Company,
(i) extend the Offer on one or more occasions for up to ten business days for
each such extension beyond the then scheduled expiration date (the initial
scheduled expiration date being 20 business days following commencement of the
Offer), if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligation to accept for payment and pay for the
Shares shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, (ii) increase the Purchase Price and extend the Offer
for any period required by any rule, regulation, interpretation or provision
of the Commission or the staff thereof applicable to the Offer and (iii)
extend the Offer for an aggregate period of not more than 10 business days
beyond the latest expiration date that would otherwise be permitted under
clause (i) or (ii) of this sentence if there shall not have been tendered and
not withdrawn pursuant to the Offer at least 90% of the outstanding Shares.
Board of Directors. Promptly upon the purchase of Shares by Parent or
Purchaser or any of its Subsidiaries pursuant to the Offer and/or pursuant to
any of the Stock Purchase Agreements which represents at least a majority of
the outstanding Shares, Purchaser will be entitled to designate such number of
directors, rounded up to the next whole number, on the Board as is equal to
the number of directors which is the product of (i) the total number of
directors on the Board (giving effect to the directors designated by Purchaser
pursuant to this sentence) multiplied by (ii) the percentage that the number
of Shares so accepted for payment bears to the
20
<PAGE>
total number of Shares then outstanding. In furtherance thereof, the Company
will, upon request of the Purchaser, use its reasonable best efforts promptly
either to increase the size of its Board or secure the resignations of such
number of its incumbent directors, or both, as is necessary to enable
Purchaser's designees to be so elected to the Board, and shall take all
actions available to the Company to cause Purchaser's designees to be so
elected. At such time, the Company will, if requested by Purchaser, also cause
persons designated by Purchaser to constitute at least the same percentage
(rounded up to the next whole number) as is on the Board of (i) each committee
of the Board, (ii) each board of directors (or similar body) of each
Subsidiary of the Company and (iii) each committee (or similar body) of each
such board. Notwithstanding the foregoing, the Company, Parent and Purchaser
have agreed that, until the Effective Time, the Board shall have at least two
directors who are directors on the date of the Merger Agreement (the
"Independent Directors"); provided, however, that, in such event, if the
number of Independent Directors shall be reduced below two, the remaining
Independent Director will be entitled to designate a person to fill such
vacancy who shall be deemed to be an Independent Director for purposes of the
Merger Agreement or, if no Independent Director then remains, the other
directors will designate two persons to fill such vacancies who shall not be
stockholders, affiliates or associates of Purchaser or Parent and such persons
shall be deemed to be Independent Directors for purposes of the Merger
Agreement. In the Merger Agreement, the Company has agreed to promptly take
all actions required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations under the
Merger Agreement, including mailing to stockholders the information required
by such Section 14(f) and Rule 14f-1 as is necessary to enable Purchaser's
designees to be elected to the Board. Purchaser or Parent will supply the
Company and be solely responsible for any information with respect to either
of them and their nominees, officers, directors and affiliates required by
such Section 14(f) and Rule 14f-1.
Following the election of Parent's designees to the Company's Board of
Directors and prior to the Effective Time, the affirmative vote of a majority
of the Independent Directors shall be required to (i) amend or terminate the
Merger Agreement on behalf of the Company, (ii) exercise or waive any of the
Company's rights, benefits or remedies under the Merger Agreement or (iii)
take any other action by the Company's Board of Directors under or in
connection with the Merger Agreement which would adversely affect the rights
of the Company's shareholders under the Merger Agreement.
The Merger. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, at the Effective
Time, Purchaser will be merged with and into the Company. Following the
Merger, the separate corporate existence of Purchaser will cease and the
Company will continue as the surviving corporation (the "Surviving
Corporation"). As soon as practicable after the satisfaction or waiver (to the
extent permitted under the Merger Agreement) of the conditions set forth in
the Merger Agreement, the Company will execute in the manner required by the
General Corporation Law of the State of Delaware ("GCL") and deliver to the
Secretary of State of the State of Delaware a duly executed and verified
certificate of merger, or, if permitted, a certificate of ownership and
merger, and the parties will take such other and further actions as may be
required by law to make the Merger effective.
The Merger Agreement provides that, at the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Purchaser, the Company or
the holders of the Shares issued and outstanding immediately
prior to the Effective Time (other than any Shares held by Parent, Purchaser,
any wholly-owned subsidiary of Parent or Purchaser, in the treasury of the
Company or by any wholly-owned Subsidiary of the Company, which Shares, by
virtue of the Merger and without any action on the part of the holder thereof,
shall be canceled and retired and shall cease to exist with no payment being
made with respect thereto, and other than Dissenting Shares) will be converted
into the right to receive the Purchase Price in cash, without interest
thereon, upon surrender of the certificate formerly representing such Share.
At the Effective Time, each share of common stock, par value $.01 per share,
of Purchaser issued and outstanding immediately prior to the Effective Time
will, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and non-
assessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
The Merger Agreement provides that the Certificate of Incorporation of the
Company, as in effect immediately prior to the Effective Time, will be the
Certificate of Incorporation of the Surviving Corporation,
21
<PAGE>
until thereafter amended in accordance with the provisions thereof and the
Merger Agreement and applicable law. The By-Laws of Purchaser in effect at the
Effective Time will be the By-Laws of the Surviving Corporation, until
thereafter amended in accordance with the provisions thereof and the Merger
Agreement and applicable law.
Vote Required to Approve the Merger. Pursuant to the Merger Agreement, the
Company will, if required by the GCL in order to consummate the Merger, duly
call, give notice of, convene and hold a special meeting of its stockholders
(the "Stockholders' Meeting") as soon as practicable following the acceptance
for payment and purchase of Shares by Parent and/or the Purchaser pursuant to
the Offer for the purpose of considering and taking action upon the Merger
Agreement. The Merger Agreement provides that the Company will, if required by
applicable law in order to consummate the Merger, prepare and file with the
Commission a preliminary proxy or information statement (the "Proxy
Statement") relating to the Merger and the Merger Agreement and use its
reasonable best efforts (i) to obtain and furnish the information required to
be included by the Commission in the Proxy Statement and, after consultation
with Parent, to respond promptly to any comments made by the Commission with
respect to the preliminary Proxy Statement and cause a definitive Proxy
Statement to be mailed to its stockholders, provided that no amendment or
supplement to the Proxy Statement will be made by the Company without
consultation with Parent and its counsel and (ii) to obtain the necessary
approvals of the Merger and the Merger Agreement by its stockholders. If the
Purchaser acquires at least a majority of the outstanding Shares, the
Purchaser will have sufficient voting power to approve the Merger, even if no
other stockholder votes in favor of the Merger.
The Merger Agreement provides that in the event that Parent, the Purchaser
or any other subsidiary of Parent acquires at least 90% of the outstanding
Shares pursuant to the Offer and the Stock Purchase Agreements, the Purchaser
and the Company will take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with the GCL.
Conditions to the Merger. The respective obligations of Parent, Purchaser
and the Company to consummate the Merger and the transactions contemplated
thereby are subject to the satisfaction, at or before the Effective Time, of
certain conditions, including: (i) if required by the GCL, the stockholders of
the Company shall have duly approved the transactions contemplated by the
Merger Agreement; (ii) the consummation of the Merger shall not be restrained,
enjoined or prohibited by any order, judgment, decree, injunction or ruling of
a court of competent jurisdiction or any Governmental Entity and there shall
not have been any statute, rule or regulation enacted, promulgated or deemed
applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger; and (iii) Parent and/or Purchaser shall have
purchased all Shares validly tendered and not withdrawn pursuant to the Offer
(however, this condition is not applicable to the obligations of Parent or
Purchaser if Parent and/or Purchaser fails to purchase Shares tendered
pursuant to the Offer in violation of the terms of the Merger Agreement or the
Offer).
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto, including
representations by the Company as to, among other things, (i) organization and
qualification of the Company, (ii) charter and by-laws of the Company, (iii)
capitalization, (iv) authority of the Company relative to the Merger Agreement
and the Company Stock Purchase Agreement, (v) the absence of conflict of the
Merger Agreement, the Company Stock Purchase Agreement and the transactions
contemplated thereby with the Company's organizational documents, certain
agreements and applicable laws, (vi) Commission reports and financial
statements, (vii) information provided by the Company, (viii) changes since
December 31, 1997, (ix) the Lehman Brothers' fairness opinion, (x) the Rights
Agreement, (xi) Section 203 of the GCL, (xii) litigation, (xiii) employee
plans and arrangements, (xiv) assets, (xv) intellectual property, (xvi) taxes,
(xvii) environmental laws and regulations and (xviii) brokers' fees. In
addition, Parent and Purchaser represented as to, among other things, (i)
organization and qualification of Parent and Purchaser, (ii) authority of
Parent and Purchaser relative to the Merger Agreement and the Stock Purchase
Agreements, (iii) the absence of conflict of the Merger Agreement, the Stock
Purchase Agreements and the transactions contemplated thereby with the
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organizational documents of Parent and Purchaser, certain agreements and
applicable laws, (iv) information provided by Parent and Purchaser, (v)
financing and (vi) brokers' fees.
Covenants. The Merger Agreement contains various covenants of the parties
thereto, including covenants as to, among other things, during the period from
the date of the Merger Agreement to the Effective Time relating to (i) the
conduct of the business of the Company as described in further detail below,
(ii) access to information of the Company by Parent and Purchaser, (iii)
reasonable best efforts by the parties to the Merger Agreement to consummate
and make effective the transactions contemplated by the Merger Agreement, (iv)
the obtaining of required consents to the transactions, (v) public
announcements, (vi) notification of certain matters and (vii) certain real
estate.
Interim Covenants. Pursuant to the Merger Agreement, the Company has agreed
that, except as expressly contemplated by the Merger Agreement or with the
prior written consent of Parent, during the period from the date of the Merger
Agreement to the Effective Time, the Company will, and will cause each of its
Subsidiaries to, conduct its operations only in the ordinary and usual course
of business consistent with past practice and will use its best reasonable
efforts, and will cause each of its Subsidiaries to use its reasonable best
efforts, to preserve intact the business organization of the Company and each
of its Subsidiaries, to keep available the services of its and their present
officers and key employees, and to preserve the good will of those having
business relationships with it. The Merger Agreement further provides that,
except as otherwise expressly contemplated by the Merger Agreement, the
Company will not, and will not permit any of its Subsidiaries to, prior to the
Effective Time, without the prior written consent of Parent: (a) adopt any
amendment to its Certificate of Incorporation or By-laws or comparable
organizational documents; (b) except for issuances of capital stock of the
Company's Subsidiaries to the Company or a wholly-owned Subsidiary of the
Company, issue, reissue, pledge or sell, or authorize the issuance,
reissuance, pledge or sale of (i) additional shares of capital stock of any
class, or securities convertible into, exchangeable for or evidencing the
right to substitute for, capital stock of any class, or any rights, warrants,
options, calls, commitments or any other agreements of any character, to
purchase or acquire any capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, capital
stock, other than the issuance of Shares pursuant to the exercise of Options
outstanding on the date of the Merger Agreement, or (ii) any other securities
in respect of, in lieu of, or in substitution for, Shares outstanding on the
date of the Merger Agreement; (c) declare, set aside or pay any dividend or
other distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between the Company and any of its wholly-owned Subsidiaries; (d) split,
combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or
propose to redeem or purchase or otherwise acquire, any shares of its capital
stock, or any of its other securities; (e) except for (i) increases in salary
and wages granted to officers and employees of the Company or its Subsidiaries
in conjunction with promotions or other changes in job status or normal
compensation reviews (within the amounts projected in the Company's 1998
operating plan previously provided to Parent) in the ordinary course of
business consistent with past practice, or (ii) increases in salary, wages and
benefits to employees of the Company pursuant to collective bargaining
agreements in effect on the date of the Merger Agreement, increase the
compensation or fringe benefits payable or to become payable to its directors,
officers or employees (whether from the Company or any of its Subsidiaries),
or pay or award any benefit not required by any existing plan or arrangement
(including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant
to the Option Plans or otherwise) or grant any additional severance or
termination pay to (other than as required by existing agreements or policies
set forth on the applicable schedule to the Merger Agreement), or enter into
any employment or severance agreement with, any director, officer or other
employee of the Company or any of its Subsidiaries or, except pursuant to
arrangements disclosed in the applicable schedule to the Merger Agreement,
establish, adopt, enter into, amend, accelerate any rights or benefits or
waive any performance or vesting criteria under any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, savings, welfare, deferred compensation, employment,
termination, severance or other employee benefit plan, agreement, trust, fund,
policy or arrangement for the benefit or welfare of any directors, officers or
current or former employees (any of the foregoing being an "Employee Benefit
Arrangement"), except in each case to the extent required by applicable
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law or regulation; provided, however, that the foregoing will not be deemed to
prohibit the payment of benefits as they become payable; (f) acquire, sell,
lease, or dispose of any assets or securities which are material to the
Company and its Subsidiaries, or enter into any commitment to do any of the
foregoing or enter into any material commitment or transaction, in each case
outside the ordinary course of business consistent with past practice other
than transactions between a wholly owned Subsidiary of the Company and the
Company or another wholly owned Subsidiary of the Company; (g) (i) incur,
assume or prepay any long-term debt or incur or assume any short-term debt,
except that the Company and its Subsidiaries may incur or prepay debt in the
ordinary course of business in amounts and for purposes consistent with past
practice under existing lines of credit, (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person except in the ordinary
course of business consistent with past practice, or (iii) make any loans,
advances or capital contributions to, or investments in, any other person
except in the ordinary course of business consistent with past practice and
except for loans, advances, capital contributions or investments between any
wholly owned Subsidiary of the Company and the Company or another wholly owned
Subsidiary of the Company; (h) settle or compromise any material suit or claim
or material threatened suit or claim; (i) other than in the ordinary course of
business consistent with past practice, (i) modify, amend or terminate any
contract, (ii) waive, release, relinquish or assign any contract (or any of
the Company's rights thereunder), right or claim, or (iii) cancel or forgive
any indebtedness owed to the Company or any of its Subsidiaries; (j) make any
tax election not required by law or settle or compromise any tax liability, in
either case that is material to the Company and its Subsidiaries; (k) make any
material change in accounting principles, other than in the ordinary course of
business and consistent with past practice or as required by applicable law,
regulation or change in generally accepted accounting principles, applied by
the Company (including tax accounting principles); (l) release any person or
entity from, or waive any provision of, any standstill agreement to which it
is a party or any confidentiality agreement between it and another person or
entity; or (m) agree in writing or otherwise to take any of the foregoing
actions or any action which would cause any representation or warranty in the
Merger Agreement to be or become untrue or incorrect in any material respect.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
that neither the Company nor any of its Subsidiaries will (and the Company and
its Subsidiaries will use their reasonable best efforts to cause their
respective officers, directors, employees, representatives and agents,
including, but not limited to, investment bankers, attorneys and accountants,
not to), directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than
Purchaser, any of its affiliates or representatives) concerning any proposal
or offer to acquire all or a substantial part of the business and properties
of the Company or any of its Subsidiaries or any capital stock of the Company
or any of its Subsidiaries, whether by merger, tender offer, exchange offer,
sale of assets or similar transaction involving the Company or any Subsidiary,
division or operating or principal business unit of the Company (an
"Acquisition Proposal"), except that the Company and the Board are not
prohibited from (i) 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 promulgated under the Exchange Act, or (ii) making
such disclosure to the Company's stockholders as, in the good faith judgment
of the Board, after receiving advice from outside counsel, is required under
applicable law, provided that the Company may not, except as described below,
withdraw or modify its position with respect to the Offer or the Merger or
approve or recommend, or propose to approve or recommend, any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition
Proposal. Except as described below, the Company also agreed, and agreed to
cause each of its Subsidiaries to, immediately cease and cause to be
terminated any existing activities, discussions or negotiations by the
Company, any of its Subsidiaries or any officer, director, employee or
affiliate of, or investment banker, attorney, accountant or other adviser or
representative of, the Company or any of its Subsidiaries with any parties
conducted prior to the date of the Merger Agreement with respect to any of the
foregoing. The Merger Agreement provides that the Company, prior to the later
of (i) 11:59 P.M. Chicago time March 30, 1998 and (ii) the expiration of the
applicable waiting periods under the HSR Act, may furnish information
concerning the Company and its Subsidiaries to any corporation, partnership,
person or other entity or group pursuant to appropriate confidentiality
agreements with terms substantially similar to the Confidentiality Agreement
(as defined below), and may negotiate and participate in discussions and
negotiations with such entity
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or group concerning an Acquisition Proposal if (i) such entity or group, which
has not been solicited by or on behalf of the Company after the date of the
Merger Agreement, has submitted a bona fide written proposal to the Company
relating to any such transaction which the Board concludes in good faith,
after consulting with a nationally recognized investment banking firm, (A) is
more favorable to the Company's stockholders (in their capacities as
stockholders), from a financial point of view, than the Offer and the Merger
and (B) is reasonably capable of being completed and (ii) in the good faith
opinion of the Board, only after receipt of advice from outside legal counsel,
the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Board to violate its fiduciary
duties to the Company's stockholders under applicable law (an Acquisition
Proposal which satisfies clauses (i) and (ii) is referred to in the Merger
Agreement as a "Superior Proposal"). The Company will provide reasonable
notice to Purchaser to the effect that it has received an Acquisition
Proposal, including its terms and conditions (but excluding the identity of
the party or parties making such Acquisition Proposal unless the terms and
conditions of such Acquisition Proposal contain a purchase price that includes
stock of such party or parties). At any time after 48 hours following
notification to Purchaser of the Company's intent to do so (which notification
shall include the identity of the bidder and the material terms and conditions
of the proposal) and if permitted to do so pursuant to the terms of the Merger
Agreement, the Board may withdraw or modify its approval or recommendation of
the Offer and may cause the Company to enter into an agreement with respect to
a Superior Proposal, provided it concurrently with entering into such
agreement pays or causes to be paid to Purchaser the Termination Fee (as
defined below) plus any amount payable at the time for reimbursement of
expenses. If the Company has notified Purchaser of its intent to enter into an
agreement with respect to a Superior Proposal in compliance with the preceding
sentence and has otherwise complied with such sentence, the Company may enter
into an agreement with respect to such Superior Proposal (with the bidder and
on terms no less favorable than those specified in such notification to
Purchaser) after the expiration of the 48 hour period.
Termination; Fees. The Merger Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval of the stockholders of the Company: (a) by the mutual written consent
of Parent and the Company; (b) by either the Company or Parent (i) if any
court or Governmental Entity has issued an order, decree or ruling or taken
any other action (which order, decree, ruling or action the parties have
agreed to use reasonable efforts to lift) restraining, enjoining or otherwise
prohibiting the Merger and such order, decree or other action has become final
and nonappealable, or (ii) if (x) the Offer has expired without any Shares
being purchased therein or (y) Purchaser has not accepted for payment all
Shares tendered pursuant to the Offer by September 30, 1998, provided,
however, that the right to terminate the Merger Agreement under such provision
is not available to any party whose failure to fulfill any obligation under
the Merger Agreement is the cause of, or results in, the failure of Purchaser
to purchase the Shares pursuant to the Offer on or prior to such date; (c) by
the Company, (i) if Parent and/or Purchaser fails to commence the Offer as
provided in the Merger Agreement, provided, that the Company may not terminate
the Merger Agreement pursuant to such provision if the Company is at such time
in breach of its obligations under the Merger Agreement such as to cause a
Material Adverse Effect on the Company, (ii) in connection with entering into
a definitive agreement with respect to a Superior Proposal, provided the
Company has complied with all of the applicable provisions of the Merger
Agreement, including the notice provisions described under "No
Solicitation"above, and that it makes simultaneous payment of the Termination
Fee plus any amounts then due as a reimbursement of expenses, or (iii) if
Parent or the Purchaser has made a material misrepresentation or has breached
in any material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which breach
cannot be or has not been cured, in all material respects, within 30 days
after the giving of written notice to Parent or the Purchaser, as applicable
provided, however, that the right to terminate the Merger Agreement under this
provision shall not be available (other than as a result of any breach of
covenants or other agreements contained in the Merger Agreement) after 11:59
P.M. Chicago time on March 30, 1998 unless the expiration of applicable
waiting periods under the HSR Act shall not have occurred at or prior to such
time; or (d) by Parent (i) if, due to an occurrence, not involving a breach by
Parent or the Purchaser of their obligations under the Merger Agreement, which
makes it impossible to satisfy any of the conditions to the Offer, Parent or
the Purchaser fail to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer, (ii) if
prior to the purchase of Shares
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pursuant to the Offer, the Company has breached any representation, warranty,
covenant or other agreement contained in the Merger Agreement which (x) would
give rise to the failure of a condition described in paragraph (f) or (g)
under Annex I to the Merger Agreement (which are set forth in clauses (f) and
(g) of Section 14 below) and (y) cannot be or has not been cured, in all
material respects, within 30 days after the giving of written notice to the
Company, provided, however, that the right to terminate the Merger Agreement
under this provision shall not be available (other than as a result of any
breach of covenants or other agreements contained in the Merger Agreement)
after 11:59 P.M. Chicago time on March 30, 1998 unless the expiration of
applicable waiting periods under the HSR Act shall not have occurred at or
prior to such time, (iii) if either Parent or the Purchaser is entitled to
terminate the Offer as a result of the occurrence of any event set forth in
paragraph (e) under Annex I to the Merger Agreement (which is set forth in
clause (e) of Section 14 below) or (iv) if the condition set forth paragraph
(j) of Annex I to the Merger Agreement (which is set forth in clause (j) of
Section 14 below) fails to be fulfilled by March 20, 1998.
In accordance with the Merger Agreement, if (w) the Company terminates the
Merger Agreement pursuant to clause (c)(ii) of the immediately preceding
paragraph, (x) Parent terminates the Merger Agreement pursuant to clause
(d)(iii) of the immediately preceding paragraph, (y) either the Company or
Parent terminates the Merger Agreement pursuant to clause (b)(ii) of the
immediately preceding paragraph and (a) prior thereto there has been publicly
announced another Acquisition Proposal (provided, however, that solely for
purposes of this clause (a), the term Acquisition Proposal shall not include
(1) the purchase of less than 5% of any class or series of capital stock of
the Company if such purchase does not involve an offer to acquire additional
shares of capital stock of the Company that could cause any person, entity or
"group" (as defined in Section 13(d)(3) of the Exchange Act), other than
Purchaser or its affiliates or any group of which any of them is a member, to
beneficially own 5% or more of any such class or series or (2) any purchase of
5% or more of any class or series of capital stock of the Company which can
properly be reported on a Schedule 13G) or an event set forth in paragraph (h)
of Annex I to the Merger Agreement (which is set forth in clause (h) of
Section 14 below) has occurred and (b) an Acquisition Proposal pursuant to
which any Person acquires all or a substantial part of the business or
properties of the Company or any of its Subsidiaries, any of the capital stock
(or securities exercisable for or convertible into such capital stock) of any
of the Subsidiaries of the Company or any capital stock (or securities
exercisable for or convertible into such capital stock) of the Company which
represents 20% or more of the equity interest or voting power of the Company
is consummated on or prior to December 31, 1998 or (z) Parent terminates the
Merger Agreement pursuant to clause (d)(iv) of the preceding paragraph and an
Acquisition Proposal pursuant to which any Person acquires all or a
substantial part of the business or properties of the Company or any of its
Subsidiaries, any of the capital stock (or securities exercisable for or
convertible into such capital stock) of any of the Subsidiaries of the Company
or any capital stock (or securities exercisable for or convertible into such
capital stock) of the Company which represents 20% or more of the equity
interest or voting power of the Company is consummated on or prior to December
31, 1998, then the Company has agreed to pay to Purchaser an amount equal to
$15,000,000 (the "Termination Fee") plus an amount equal to Purchaser's actual
documented out-of-pocket fees and expenses (including reasonable legal,
investment banking, financing commitment fees and commercial banking fees and
expenses) incurred by Parent and Purchaser in connection with the due
diligence investigation, Offer, the Merger, the Merger Agreement and the
consummation of the transactions contemplated by the Merger Agreement (the
"Reimbursable Expenses"). The Company is also obligated to pay to Purchaser
the Reimbursable Expenses in such manner if Parent terminates the Merger
Agreement pursuant to clause (d)(iv) of the preceding paragraph (regardless of
whether an Acquisition Proposal is consummated thereafter). The Termination
Fee and Purchaser's good faith estimate of its Reimbursable Expenses will be
paid concurrently with any such termination, together with delivery of a
written acknowledgment by the Company of its obligation to reimburse Purchaser
for its actual expenses in excess of such estimated expenses payment, except
that the Termination Fee and such expenses will be payable in connection with
a termination described in clauses (x) or (y) above upon the consummation of
an Acquisition Proposal referenced in such clauses.
The Merger Agreement provides that, except as contemplated by the Merger
Agreement, each party thereto will bear its own expenses and costs in
connection with the Merger Agreement and the transactions contemplated
thereby.
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Amendments and Modification. The Merger Agreement may be amended by Parent
and the Company at any time before or after any approval of the Merger
Agreement by the stockholders of the Company but, after any such approval, no
amendment may be made which decreases the Purchase Price or changes the form
thereof without the approval of such stockholders. The Merger Agreement may
not be amended except by an instrument in writing signed on behalf of all the
parties.
Stock Options. The Merger Agreement provides that the Company will (i)
terminate its Option Plans immediately prior to the Effective Time without
prejudice to the rights of the holders of Options awarded pursuant thereto and
(ii) grant no additional Options, restricted stock, stock units, performance
units, performance shares, fixed awards or similar rights or awards under the
Option Plans or otherwise on or after the date of the Merger Agreement. The
Merger Agreement also provides that the Company will (i) use its reasonable
best efforts to obtain from each holder of any Option that it does not have
the right to cancel the consent of such holder to the cancellation of each
such Option, and (ii) cancel each Option that the Company has the right to
cancel or as to which the Company has obtained the consent of the holder
thereof to such cancellation, each such cancellation (whether or not a consent
is required therefor) to take effect immediately after the Effective Time. In
consideration of each cancellation of an Option, the Company will pay to the
holder of such Option, promptly after such cancellation, in respect of such
Option, an amount equal to the excess, if any, of the Purchase Price over the
per Share exercise price of such Option, multiplied by the number of Shares
subject to such Option. The Merger Agreement also provides that the Company
will suspend its 1997 Employee Stock Purchase Plan (the "Purchase Plan") so as
to provide that no purchase period shall begin after March 31, 1998, and that
the Company will terminate the Purchase Plan prior to the Effective Time.
Indemnification; Directors' and Officers' Insurance. Pursuant to the Merger
Agreement, Parent and Purchaser will indemnify the present and former
officers, directors or employees of the Company and its Subsidiaries (the
"Indemnified Parties") against all losses, liabilities, expenses, claims or
damages in connection with any claim, suit, action, proceeding or
investigation based in whole or in part on the fact that such Indemnified
Party is or was an officer, director or employee of the Company or any of its
Subsidiaries and arising out of acts or omissions occurring prior to and
including the Effective Time (including but not limited to the transactions
contemplated by the Merger Agreement) to fullest extent permitted by the GCL,
for a period of not less than six years following the Effective Time;
provided, however, that in the event that 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 will continue until final disposition of any and all
such claims.
The Merger Agreement provides that Parent will cause the Certificate of
Incorporation and By-Laws of the Surviving Corporation and its Subsidiaries to
include provisions for the limitation of liability of directors and
indemnification of the Indemnified Parties to the fullest extent permitted
under applicable law and will not permit the amendment of such provisions in
any manner adverse to the Indemnified Parties, as the case may be, without the
prior written consent of such persons, for a period of six years from and
after the date thereof.
Without limitation of the foregoing, in the event any such Indemnified Party
is or becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter, including, without limitation,
the transactions contemplated by the Merger Agreement, occurring prior to, and
including, the Effective Time, Parent will pay as incurred such Indemnified
Party's 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 such payments in the
event of a final determination by a court of competent jurisdiction that such
Indemnified Party is not entitled thereto. Parent will pay all expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity and other obligations provided for in the Merger
Agreement or any action involving an Indemnified Party resulting from the
transactions contemplated by the Merger Agreement. For six years after the
Effective Time, the Surviving Corporation will cause to be maintained policies
of directors and officers' liability insurance comparable to those currently
maintained by the Company for the benefit of directors and officers of the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which
are substantially equivalent) with respect to matters occurring prior to the
Effective Time. Notwithstanding the
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foregoing, in no case will the Surviving Corporation be required to pay an
annual premium for such insurance greater than 300% of the last annual premium
paid prior to the date of the Merger Agreement.
DONNELLEY STOCK PURCHASE AGREEMENT
The following is a summary of the material terms of the Donnelley Stock
Purchase Agreement. This summary is qualified in its entirety by reference to
the Donnelley Stock Purchase Agreement, which is incorporated herein by
reference and a copy of which has been filed with the Commission as an exhibit
to the Schedule 14D-1. The Donnelley Stock Purchase Agreement may be examined
and a copy of which may be obtained at the place and in the manner set forth
in Section 8 of this Offer to Purchase.
Purchase of Shares. On the terms and subject to the conditions set forth in
the Donnelley Stock Purchase Agreement, Donnelley agreed to sell and transfer
to Parent all of the Shares beneficially owned by it at a purchase price per
share equal to the Offer Price, free and clear of all mortgages, pledges,
security interests, encumbrances, liens, options, debts, charges, claims and
restrictions of any kind, with the closing of such sale to occur
simultaneously with the acceptance by Purchaser of the Shares validly tendered
and not withdrawn pursuant to the terms of the Offer in accordance with the
terms and conditions of the Offer and the Merger Agreement.
Conditions to Closing. The obligations of the parties to consummate the
transactions described in the preceding paragraph are subject to the following
conditions: (a) any waiting period under the HSR Act applicable to the
delivery of the Shares pursuant to the Donnelley Stock Purchase Agreement
shall have expired or been terminated; and (b) there shall be no preliminary
or permanent injunction or other order by any court of competent jurisdiction
restricting, preventing or prohibiting the delivery of such Shares.
Voting Agreement; Proxy. Pursuant to the Donnelley Stock Purchase Agreement,
Donnelley agreed that, so long as such Agreement is in effect, at any meeting
of the stockholders of the Company and in any action by written consent of the
stockholders of the Company, Donnelley will, to the extent applicable, (a)
vote (or execute a consent in respect of) all of the Shares and any Shares or
other securities acquired of record or beneficially by Donnelley after the
date of the Donnelley Stock Purchase Agreement (the "Donnelley Shares") in
favor of the Merger, the Merger Agreement (as amended from time to time) and
any of the transactions contemplated by the Merger Agreement; and (b) vote (or
execute a consent in respect of) the Donnelley Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay
or attempt to discourage the Offer or the Merger, including, but not limited
to: (i) any extraordinary corporate transaction (other than the Merger), such
as a merger, reorganization, recapitalization or liquidation involving the
Company or any of its subsidiaries or any proposal made in opposition to or in
competition with the Merger; (ii) a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed to
in writing by Parent; (iv) any material change in the present capitalization
or dividend policy of the Company; or (v) any other material change in the
corporate structure or business of the Company or any of its subsidiaries.
Donnelley further agreed pursuant to the Donnelley Stock Purchase Agreement,
that, in the event that it fails to comply with the provisions described in
the preceding paragraph (as determined by Parent in its sole discretion), such
failure will result, without any further action by Donnelley, in the
irrevocable appointment of Parent as the attorney and proxy of Donnelley, with
full power of substitution, to vote, and otherwise act (by written consent or
otherwise) with respect to all Shares and other securities that Donnelley is
entitled to vote at any meeting of stockholders of the Company (whether annual
or special and whether or not an adjourned or postponed meeting) or consent in
lieu of any such meeting or otherwise, on the matters and in the manner
specified in the preceding paragraph. Such proxy and power of attorney is
irrevocable and coupled with an interest and is executed and intended to be
irrevocable in accordance with the provisions of Section 212(e) of the DGCL.
Pursuant to the Donnelley Stock Purchase Agreement, Donnelley also revoked,
effective upon the execution and delivery of the Merger Agreement by the
parties thereto, all other proxies and powers of attorney with respect to the
Donnelley Shares that Donnelley may have theretofore appointed or granted, and
no
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subsequent proxy or power of attorney (except in furtherance of Donnelley's
obligations described in the preceding paragraph hereof) shall be given or
written consent executed (and if given or executed, shall not be effective) by
Donnelley with respect thereto so long as the Donnelley Stock Purchase
Agreement is in effect.
Certain Representations and Warranties. In connection with the Donnelley
Stock Purchase Agreement, Donnelley made certain customary representations and
warranties, including with respect to (i) ownership of Shares and the absence
of encumbrances on and in respect of such Shares, (ii) Donnelley's authority
to enter into and perform its obligations under the Donnelley Stock Purchase
Agreement, (iii) the absence of conflicts and requisite governmental consents
and approvals, and (iv) the absence of any broker, finder or investment banker
relationship with respect to the transactions contemplated by the Donnelley
Stock Purchase Agreement. In connection with the Donnelley Stock Purchase
Agreements, Parent made certain customary representations and warranties to
Donnelley, including with respect to (i) authority to enter into and perform
is obligations under the Donnelley Stock Purchase Agreement, (ii) absence of
conflicts and requisite governmental consents and approvals, (iii) the absence
of any broker, finder or investment banker relationship with respect to the
transactions contemplated by the Donnelley Stock Purchase Agreement except for
the engagement of Bear Stearns by Parent, (iv) the investment intent of Parent
and (v) availability of funds.
Certain Covenants. Pursuant to the Donnelley Stock Purchase Agreement,
Donnelley covenanted and agreed that, except as contemplated by such
Agreement, it will not, and will not offer or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of, or create or permit to
exist any security interest, lien, claim, pledge, option, right of first
refusal, agreement, limitation on its voting rights, charge or other
encumbrance of any nature whatsoever with respect to the Shares now owned or
that may be acquired by Donnelley.
Pursuant to the Donnelley Stock Purchase Agreement, Donnelley also agreed
that it and its affiliates would not, and it and its affiliates would use
their reasonable best efforts to ensure that their respective officers,
directors, employees, representatives and agents (including, but not limited
to, investment bankers, attorneys and accountants) do not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation,
partnership, person or other entity or group (other than Parent, any of its
affiliates or representatives) concerning any proposal or offer to acquire all
or a substantial part of the business or properties of the Company or any of
its subsidiaries or any capital stock of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets
or similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company, unless the Company is
permitted to do so in accordance under the terms of the Merger Agreement;
provided, that the foregoing does not apply to any directors of the Company in
their capacity as such who are also directors, officers, employees,
representatives or agents of Donnelley (the "Donnelley Directors"), it being
acknowledged and agreed that the Donnelley Directors are subject to the terms
and conditions set forth in the Merger Agreement in their capacity as such.
Notwithstanding the foregoing, prior to the later of (i) 11:59 p.m., Chicago
time, on March 30, 1998 and (ii) the expiration of the applicable waiting
periods under the HSR Act, Donnelley may furnish information concerning the
Company and its subsidiaries to any corporation, partnership, person or other
entity or group pursuant to appropriate confidential agreements with terms
substantially similar to those contained in the Confidentiality Agreement, and
may negotiate and participate in discussions and negotiations with such entity
or group concerning an Acquisition Proposal that constitutes a Superior
Proposal (as defined in the Merger Agreement). Donnelley shall, and shall
cause each of its affiliates to, immediately cease and cause to be terminated
any existing activities, discussions or negotiations by Donnelley, any of its
affiliates or any officer, director, employee or affiliate of, or investment
banker, attorney, accountant or other advisor or representative of, Donnelley
or any of its affiliates with parties conducted prior to the date of the
Donnelley Stock Purchase Agreement with respect to any of the foregoing. The
parties acknowledged and agreed that the Company shall not be deemed an
affiliate of Donnelley for purposes of such provisions.
Termination. The Donnelley Stock Purchase Agreement (including any power of
attorney and proxy granted pursuant to the terms thereof or otherwise)
terminates automatically on the earlier of (i) the termination of the Merger
Agreement in accordance with the terms and conditions thereof and (ii)
September 30, 1998.
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EXECUTIVE STOCK PURCHASE AGREEMENTS
The following is a summary of the material terms of the Executive Stock
Purchase Agreements. This summary is qualified in its entirety by reference to
the Executive Stock Purchase Agreements, each of which is incorporated herein
by reference and a form of which has been filed with the Commission as an
exhibit to the Schedule 14D-1. The Executive Stock Purchase Agreements may be
examined and a copy of each may be obtained at the place and in the manner set
forth in Section 8 of this Offer to Purchase.
Exercise of Options. On the terms and subject to the conditions set forth in
the Executive Stock Purchase Agreements, each of the Executive Stockholders
agreed to exercise all Options held by him and to pay the Company the
aggregate exercise price thereof in cash (the shares issuable upon exercise of
the Options are referred to herein as the "Option Shares").
Purchase of Shares. On the terms and subject to the conditions set forth in
the Executive Stock Purchase Agreements, each of the Executive Stockholders,
upon the request of Parent after 11:59 p.m., Chicago time, on March 30, 1998,
agreed to tender and sell to Purchaser pursuant to the Offer all of the Shares
beneficially owned by such Executive Stockholder (including the Option
Shares). On the terms and subject to the conditions set forth in the Executive
Stock Purchase Agreements, if such Shares are not purchased pursuant to the
Offer, each Executive Stockholder agreed to sell and transfer to the Parent
all of the Shares (including the Option Shares) beneficially owned by such
Executive Stockholder at a purchase price per share equal to the Offer Price,
free and clear of all mortgages, pledges, security interests, encumbrances,
liens, options, debts, charges, claims and restrictions of any kind, with the
closing of such sale to occur simultaneously with the acceptance by Purchaser
of the Shares validly tendered and not withdrawn pursuant to the terms of the
Offer in accordance with the terms and conditions of the Offer and the Merger
Agreement.
Conditions to Closing. The obligations of the parties to consummate the
transactions described in the preceding paragraph are subject to the following
conditions: (a) any waiting period under the HSR Act applicable to the
delivery of the Shares (including the Option Shares) pursuant to the Executive
Stock Purchase Agreements shall have expired or been terminated; and (b) there
shall be no preliminary or permanent injunction or other order by any court of
competent jurisdiction restricting, preventing or prohibiting the delivery of
such Shares (including the Option Shares).
Voting Agreement; Proxy. Pursuant to the Executive Stock Purchase
Agreements, each of the Executive Stockholders agreed that, so long as such
Agreements are in effect, at any meeting of the stockholders of the Company
and in any action by written consent of the stockholders of the Company, such
Executive Stockholder will, to the extent applicable, (a) vote (or execute a
consent in respect of) all of the Shares owned by such Executive Stockholder
and any Shares (including the Option Shares) or other securities acquired of
record or beneficially by such Executive Stockholder after the date of the
applicable Executive Stock Purchase Agreement (the "Executive Stockholder
Shares") in favor of the Merger, the Merger Agreement (as amended from time to
time) and any of the transactions contemplated by the Merger Agreement; (b)
vote (or execute a consent in respect of) the Executive Stockholder Shares
against any action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation of the Company under the
Merger Agreement; and (c) vote (or execute a consent in respect of) the
Shares, the Option Shares and the Executive Stockholder Shares against any
action or agreement that would reasonably be expected to impede, interfere
with, delay or attempt to discourage the Offer or the Merger, including, but
not limited to: (i) any extraordinary corporate transaction (other than the
Merger), such as a merger, reorganization, recapitalization or liquidation
involving the Company or any of its subsidiaries or any proposal made in
opposition to or in competition with the Merger; (ii) a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries; (iii) any
change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Parent; (iv) any material change in the
present capitalization or dividend policy of the Company; or (v) any other
material change in the corporate structure or business of the Company or any
of its subsidiaries.
Each of the Executive Stockholders further agreed pursuant to the Executive
Stock Purchase Agreements, that, in the event that such Executive Stockholder
fails to comply with the provisions described in the preceding
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paragraph (as determined by Parent in its sole discretion), such failure will
result, without any further action by the Executive Stockholder, in the
irrevocable appointment of Parent as the attorney and proxy of such Executive
Stockholder, with full power of substitution, to vote, and otherwise act (by
written consent or otherwise) with respect to all Shares and other securities
that such Executive Stockholder is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such meeting or
otherwise, on the matters and in the manner specified in the preceding
paragraph. Such proxy and power of attorney is irrevocable and coupled with an
interest and is executed and intended to be irrevocable in accordance with the
provisions of Section 212(e) of the DGCL. Pursuant to the applicable Executive
Stock Purchase Agreement, each Executive Stockholder also revoked, effective
upon the execution and delivery of the Merger Agreement by the parties
thereto, all other proxies and powers of attorney with respect to the Shares,
the Option Shares and the Executive Stockholder Shares that such Executive
Stockholder may have theretofore appointed or granted, and no subsequent proxy
or power of attorney (except in furtherance of the Executive Stockholders's
obligations described in the preceding paragraph hereof) shall be given or
written consent executed (and if given or executed, shall not be effective) by
Executive Stockholders with respect thereto so long as such Executive Stock
Purchase Agreement is in effect.
Certain Representations and Warranties. In connection with the Executive
Stock Purchase Agreements, the Executive Stockholders each made certain
customary representations and warranties, including with respect to (i)
ownership of the Shares and the Options and the absence of encumbrances on and
in respect of the Executive Stockholder's Shares, (ii) the Executive
Stockholder's authority to enter into and perform its obligations under the
applicable Executive Stock Purchase Agreement, (iii) the absence of conflicts
and requisite governmental consents and approvals, and (iv) the absence of any
broker, finder or investment banker relationship with respect to the
transactions contemplated by the applicable Executive Stock Purchase Agreement
except for the engagement of Lehman Brothers by the Company. In connection
with the Executive Stock Purchase Agreements, Parent made certain customary
representations and warranties to the Executive Stockholders, including with
respect to (i) authority to enter into and perform is obligations under the
applicable Executive Stock Purchase Agreement, (ii) absence of conflicts and
requisite governmental consents and approvals, (iii) the absence of any
broker, finder or investment banker relationship with respect to the
transactions contemplated by the Executive Stock Purchase Agreements except
for the engagement of Bear Stearns by Parent, and (iv) the investment intent
of Parent.
Certain Covenants. Pursuant to the Executive Stock Purchase Agreements, each
Executive Stockholder covenanted and agreed that, except as contemplated by
such Agreement and except pursuant to the Offer, the Executive Stockholder
will not, and will not offer or agree to, sell, transfer, tender, assign,
hypothecate or otherwise dispose of, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Executive Stockholder's voting rights, charge or other
encumbrance of any nature whatsoever with respect to the Shares or Option
Shares now owned or that may be acquired by such Executive Stockholder.
Pursuant to the Executive Stock Purchase Agreements, each of the Executive
Stockholders also agreed that he and his affiliates would not, and the
Executive Stockholder and his affiliates would use their best efforts to
ensure that the Executive Stockholder's representatives and agents (including,
but not limited to, investment bankers, attorneys and accountants) and his
affiliates' officers, directors, employees, representatives and agents
(including, but not limited to, investment bankers, attorneys and accountants)
do not, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent,
any of its affiliates or representatives) concerning any proposal or offer to
acquire all or a substantial part of the business or properties of the Company
or any of its subsidiaries or any capital stock of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets
or similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company, unless the Company is
permitted to do so in accordance under the terms of the Merger Agreement. The
Executive Stockholders also agreed to immediately cease and cause to be
terminated any existing activities, discussions or negotiations by Executive
or his affiliates or any investment banker, attorney, accountant or other
advisor or representative of, Executive or his affiliates with parties
conducted prior to the date of the Executive Stock Purchase Agreements with
respect to any of the foregoing.
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Termination. The Executive Stock Purchase Agreements each terminate
automatically in the event that the Merger Agreement is terminated in
accordance with the terms and conditions thereof.
COMPANY STOCK PURCHASE AGREEMENT
The following is a summary of the material terms of the Company Stock
Purchase Agreement. This summary is qualified in its entirety by reference to
the Company Stock Purchase Agreement, which is incorporated herein by
reference and a copy of which has been filed with the Commission as an exhibit
to the Schedule 14D-1. The Company Stock Purchase Agreement may be examined
and a copy of it may be obtained at the place and in the manner set forth in
Section 8.
Purchase of Shares. On the terms and subject to the conditions set forth in
the Company Stock Purchase Agreement, the Company agreed to issue and sell to
Parent that number of shares of Common Stock, if any, equal to the number of
Shares that when added to the sum of (a) the number of Shares accepted for
purchase by Purchaser pursuant to the Offer, (b) the number of Shares, if any,
purchased by Parent from Donnelley pursuant to the Donnelley Stock Purchase
Agreement simultaneously with the acceptance of Shares for payment pursuant to
the Offer, and (c) the number of Shares, if any, purchased by Parent from the
Executive Stockholders pursuant to the Executive Stock Purchase Agreements
simultaneously with the acceptance of Shares for payment pursuant to the
Offer, constitutes 51% of the outstanding Shares on a fully-diluted basis
giving effect to the issuance of the Company Shares, at a per share purchase
price equal to the Offer Price. The closing of such sale of Shares shall occur
simultaneously with the acceptance by Purchaser of the Shares validly tendered
and not withdrawn pursuant to the terms of the Offer in accordance with the
terms and conditions of the Offer and the Merger Agreement.
Conditions to Closing. The obligations of the parties to consummate the
transactions described in the preceding paragraph are subject to the following
conditions: (a) any waiting period under the HSR Act applicable to the
issuance and delivery of the Shares pursuant to the Company Stock Purchase
Agreement shall have expired or been terminated; and (b) there shall be no
preliminary or permanent injunction or other order by any court of competent
jurisdiction restricting, preventing or prohibiting the issuance and delivery
of such Shares.
Covenant to Vest Options and Restricted Stock. Pursuant to the Company Stock
Purchase Agreement, the Company covenants and agrees to accelerate the vesting
of all of the Options (as defined in the Executive Stock Purchase Agreements)
and restricted Common Stock to be sold by the Executive Stockholders to Parent
pursuant to the terms of the Executive Stock Purchase Agreements (the
"Restricted Stock") prior to the closing of the transactions contemplated by
the Executive Stock Purchase Agreements. Pursuant to the Company Stock
Purchase Agreement, the Company also represents and warrants to Parent that
any acceleration of the vesting of the Options (as defined in the Executive
Stock Purchase Agreements) and the Restricted Stock has been duly and validly
authorized by all necessary corporate action on the part of the Company.
Certain Representations and Warranties. In connection with the Company Stock
Purchase Agreement, the Company made certain customary representations and
warranties to Parent, including with respect to (i) authorization, reservation
and validity of the issuance of the Shares issuable pursuant to such Agreement
and the absence of encumbrances on and in respect of such Shares and (ii) the
absence of any broker, finder or investment banker relationship with respect
to the transactions contemplated by the Company Stock Purchase Agreement
except for the engagement of Lehman Brothers by the Company. In connection
with the Company Stock Purchase Agreement, Parent made certain customary
representations and warranties to the Company, including with respect to (i)
authority to enter into and perform is obligations under the Company Stock
Purchase Agreement, (ii) absence of conflicts, (iii) the absence of any
broker, finder or investment banker relationship with respect to the
transactions contemplated by the Company Stock Purchase Agreement except for
the engagement of Bear Stearns by Parent, and (iv) the investment intent of
Parent.
Termination. The Company Stock Purchase Agreement terminates automatically
in the event that the Merger Agreement is terminated in accordance with the
terms and conditions thereof.
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CONFIDENTIALITY AGREEMENT
The following is a summary of the material terms of the Confidentiality
Agreement (the "Confidentiality Agreement"), dated as of February 6, 1998 by
and between Lehman Brothers, as financial advisor to and on behalf of the
Company, and Experian Corporation ("Experian"). Because Experian is an
affiliate of Purchaser and a wholly-owned subsidiary of Parent, the provisions
of the Confidentiality Agreement are also applicable to Parent and the
Purchaser. This summary is qualified in its entirety by reference to the
Confidentiality Agreement, which is incorporated herein by reference and a
copy of which has been filed with the Commission as an exhibit to the Schedule
14D-1. The Confidentiality Agreement may be examined and a copy of it may be
obtained at the place and in the manner set forth in Section 8.
Pursuant to the Confidentiality Agreement, Experian has agreed, among other
things, to keep confidential certain nonpublic confidential or proprietary
information of the Company furnished to Experian and its representatives by or
on behalf of the Company, including notes, analyses, compilations, studies,
interpretations or other documents prepared by Experian or its representatives
which contain, reflect or are based upon such information ("Evaluation
Material"), and to use the Evaluation Material solely for the purpose of
evaluating a possible transaction with the Company. Experian has further
agreed to maintain the confidentiality of any discussions or negotiations with
the Company and, upon request, to redeliver or destroy all the Evaluation
Material. Experian also agreed that, without the prior written consent of the
Company, Experian will not directly or indirectly, enter into any agreement,
arrangement or understanding, or any discussions which might lead to an
agreement, arrangement or understanding, with any other person regarding a
possible transaction involving the Company. The Confidentiality Agreement
further provides that, for a period of one year from the date of the
Confidentiality Agreement, without the prior written consent of the Board,
neither Experian nor any of its affiliates, acting alone or as a part of a
group, may acquire or offer to agree to acquire, directly or indirectly, by
purchase or otherwise, any voting securities (or direct or indirect rights or
options to acquire any voting securities) of the Company, or otherwise seek to
influence or control, in any manner whatsoever, the management or policies of
the Company. For a period of eighteen months from the date of the
Confidentiality Agreement, neither Experian, its affiliates or any person on
behalf of Experian or its affiliates will solicit to employ (whether as an
employee, officer, director, agent, consultant or independent contractor) any
person who is employed by the Company and its subsidiaries or affiliates.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; OTHER MATTERS
The purpose of the Offer, the Merger, the Merger Agreement and the Stock
Purchase Agreements is for Parent to acquire control of, and the entire equity
interest in, the Company. Upon consummation of the Merger, the Company will
become an indirect wholly-owned subsidiary of Parent. The Offer is intended to
increase the likelihood that the Merger will be effected.
Plans for the Company
Parent is conducting a detailed review of the Company and its assets,
corporate structure, dividend policy, capitalization, operations, properties,
policies, management and personnel and will consider, subject to the terms of
the Merger Agreement, what, if any, changes would be desirable in light of the
circumstances which exist upon completion of the Offer. Such changes could
include changes in the Company's business, corporate structure, charter, by-
laws, capitalization, Board of Directors, management or dividend policy,
although, except as noted in this Offer to Purchase, Parent has no current
plans with respect to any of such matters.
Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets,
involving the Company or any of its subsidiaries, or any material changes in
the Company's corporate structure, business or composition of its management
or personnel.
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Other Matters
Stockholder Approval. Under the DGCL and the Company's Certificate of
Incorporation, the approval of the Board of Directors of the Company, and the
affirmative vote of the holders of a majority of the outstanding Shares are
required to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger. No approval of the Offer, the
Merger, the Merger Agreement and the Stock Purchase Agreements for the
purposes of Section 203 of the DGCL is required because the Company's Third
Restated Certificate of Incorporation expressly provides that the Company is
not subject to such provisions. Section 203 of the DGCL prevents certain
"business combinations" with an "interested stockholder" (generally, any
person who owns or has the right to acquire 15% or more of a corporation's
outstanding voting stock) for a period of three years following the time such
person became an interested stockholder unless, among other things, prior to
the time the interested stockholder became such the board of directors of the
corporation approved either the business combination or the transaction in
which the interested stockholder became such.
The Board of Directors of the Company has unanimously approved the Offer,
the Merger and the Merger Agreement and the transactions contemplated thereby.
Unless the Merger is consummated pursuant to the short-form merger provisions
under the DGCL described below (in which case no further corporate action by
the stockholders of the Company will be required to complete the Merger), the
only remaining required corporate action of the Company will be the approval
and adoption of the Merger Agreement and the transactions contemplated thereby
by the affirmative vote of the holders of a majority of the Shares.
Short Form Merger. Under the DGCL, if the Purchaser acquires at least 90% of
the outstanding Shares, the Purchaser will be able to approve the Merger
without a vote of the Company's stockholders. In such event, the Purchaser
anticipates that it will take all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after such
acquisition without a meeting of the Company's stockholders. If the Purchaser
does not otherwise acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise, a significantly longer period of time may be required
to effect the Merger, because a vote or the consent of the Company's
stockholders would be required under the DGCL. Pursuant to the Merger
Agreement, the Company has agreed to take all action necessary under the DGCL
and its Certificate of Incorporation and Bylaws to convene a meeting of its
stockholders promptly following consummation of the Offer to consider and vote
on the Merger, if a stockholders' vote is required. If the Purchaser owns a
majority of the outstanding Shares, approval of the Merger can be obtained
without the affirmative vote of any other stockholder of the Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company at
the time of the Merger will have certain rights under the DGCL to dissent and
demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Such rights to dissent, if the statutory procedures are complied
with, could lead to a judicial determination of the fair value of the Shares
(excluding any element of value arising from the accomplishment or expectation
of the Merger), required to be paid in cash to such dissenting holders for
their Shares. In addition, such dissenting stockholders would be entitled to
receive payment of a fair rate of interest from the date of consummation of
the Merger on the amount determined to be the fair value of their Shares. In
determining the fair value of the Shares, a Delaware court would be required
to take into account all relevant factors. Accordingly, such determination
could be based upon considerations other than, or in addition to, the market
value of the Shares, including, among other things, asset values and earning
capacity of the Company. In Weinberger v. UOP, Inc., the Delaware Supreme
Court stated, among other things, that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding. Therefore, the value so determined in any appraisal proceeding
could be different from the price being paid in the Offer. The Delaware
Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp.
that although the remedy ordinarily available to minority stockholders in a
cash-out merger is the right to appraisal described above, a damages remedy or
injunctive relief may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.
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Rule 13e-3. The Merger would have to comply with any applicable federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions. The Purchaser does not believe that Rule
13e-3 will be applicable to the Merger. 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 a transaction, be filed
with the Commission and disclosed to minority stockholders prior to
consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that, prior to the
Purchase of Shares by Purchaser pursuant to the Offer, without the prior
written consent of Parent, the Company will not (i) declare, set aside or pay
any dividend or other distribution (whether in cash, securities or property or
any combination thereof) in respect of any series of its capital stock other
than between the Company and any of its wholly-owned Subsidiaries, (ii) except
for issuance of capital stock of the Company's Subsidiaries to the Company or
a wholly-owned Subsidiary of the Company, issue, reissue, pledge or sell, or
authorize the issuance, reissuance, pledge or sale of (A) any additional
shares of capital stock of any class or securities convertible into or
exchangeable for or evidencing the right to substitute for, capital stock of
any class, or any rights, warrants, options, calls, commitments or any other
agreements of any character, to purchase or acquire any capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to substitute for, capital stock, other than the issuance of shares
pursuant to Options outstanding on the date hereof, or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof or (iii) split, combine, subdivide, reclassify
or redeem, purchase or otherwise acquire, or propose to redeem or purchase or
otherwise acquire, any shares of its capital stock or any of its other
securities.
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 Commission, including
Rule 14e-l(c) under the 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 or amend the Offer as to any Shares not then paid
for, if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
have occurred:
(a) there shall be threatened or pending any suit, action or proceeding
by any Governmental Entity against Parent, Purchaser, the Company or any
Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Parent's or Purchaser's ownership or operation (or that of
any of their respective Subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets (or that of any of
its Subsidiaries), or to compel Parent or Purchaser or their respective
Subsidiaries and affiliates to dispose of or hold separate any material
portion of the business or assets of the Company or Parent and their
respective Subsidiaries, in each case taken as a whole, (ii) challenging
the acquisition by Parent or Purchaser of any Shares under the Offer,
seeking to restrain or prohibit the making or consummation of the Offer or
the Merger or the performance of any of the other transactions contemplated
by the Merger Agreement or the Stock Purchase Agreements, or seeking to
obtain from the Company, Parent or Purchaser any damages that are material
in relation to the Company and its Subsidiaries taken as a whole, (iii)
seeking to impose material limitations on the ability of Purchaser, or
render Purchaser unable, to accept for payment, pay for or purchase some or
all of the Shares pursuant to the Offer and the Merger, or (iv) seeking to
impose material limitations on the ability of Parent or Purchaser
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by it on all
matters properly presented to the Company's stockholders, or there shall be
pending any suit, action, or proceeding by any
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Governmental Entity against Parent, Purchaser, the Company or any
Subsidiary of the Company which is reasonably likely to have a Material
Adverse Effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by
any Governmental Entity, other than the application to the Offer or the
Merger of applicable waiting periods under HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange for
a period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges
not related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions, or (v) a change
in general financial, bank or capital market conditions which materially
and adversely affects the ability of financial institutions in the United
States to extend credit or syndicate loans or (vi) in the case of any of
the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof; provided, however, the right to
terminate the Merger Agreement pursuant to this provision shall not be
available after 11:59 P.M. Chicago time on March 30, 1998 unless the
expiration of applicable waiting periods under the HSR Act shall not have
occurred at or prior to such time;
(d) there shall have occurred any events after the date of the Merger
Agreement which would have a Material Adverse Effect on the Company;
provided, however, the right to terminate the Merger Agreement pursuant to
this provision shall not be available after 11:59 P.M. Chicago time on
March 30, 1998 unless the expiration of applicable waiting periods under
the HSR Act shall not have occurred at or prior to such time;
(e) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or Purchaser
its approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Acquisition Proposal or (ii) the
Company shall have entered into any agreement with respect to any Superior
Proposal in accordance with the terms of the Merger Agreement; provided,
however, the right to terminate the Merger Agreement pursuant to this
provision shall not be available after 11:59 P.M. Chicago time on March 30,
1998 unless the expiration of applicable waiting periods under the HSR Act
shall not have occurred at or prior to such time;
(f) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct, in each case (i) as of the
date referred to in any representation or warranty which addresses matters
as of a particular date, or (ii) as to all other representations and
warranties, as of the date of the Merger Agreement and as of the scheduled
expiration of the Offer (or if applicable waiting periods under the HSR Act
shall have expired on or before March 30, 1998, as of March 30, 1998),
unless the inaccuracies (without giving effect to any materiality or
material adverse effect qualifications or materiality exceptions contained
therein) under such representations and warranties, taking all the
inaccuracies under all such representations and warranties together in
their entirety, do not result in Material Adverse Effect on the Company;
provided, however, the right to terminate the Merger Agreement pursuant to
this provision shall not be available after 11:59 P.M. Chicago time on
March 30, 1998 unless the expiration of applicable waiting periods under
the HSR Act shall not have occurred at or prior to such time;
(g) the Company shall have failed to perform any obligation or to comply
with any agreement or covenant to be performed or complied with by it (i)
under covenants in the Merger Agreement relating to the conduct of the
business of the Company prior to the Effective Time and to the non-
solicitation of Acquisition Proposals or (ii) under any other agreement or
covenant to be performed or complied with by it
36
<PAGE>
under the Merger Agreement, unless the failure to so perform or comply
would not have a Material Adverse Effect on the Company;
(h) it shall have been publicly disclosed or Parent or Purchaser shall
have otherwise learned that any person, entity or "group" (as defined in
Section 13(d)(3) of the Exchange Act), other than Purchaser or its
affiliates or any group of which any of them is a member, shall have
acquired beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of more than 20% of the outstanding
shares of any class or series of capital stock of the Company (including
the Shares), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted an option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 20%
of any class or series of capital stock of the Company (including the
Shares); provided, however, the right to terminate the Merger Agreement
pursuant to this provision shall not be available after 11:59 P.M. Chicago
time on March 30, 1998 unless the expiration of applicable waiting periods
under the HSR Act shall not have occurred at or prior to such time;
(i) the Merger Agreement shall have been terminated in accordance with
its terms; or
(j) the Company shall have failed to obtain the irrevocable letter of
credit that is a condition precedent to the obligations of the insurer
under the insurance endorsement described in a schedule to the Merger
Agreement by March 20, 1998 in accordance with the terms of such
endorsement.
The foregoing conditions are for the benefit of Parent and the Purchaser and
may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or the
Purchaser in whole or in part at any time and from time to time in their
reasonable discretion, in each case, subject to the terms of the Merger
Agreement. The failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right and may be asserted at any
time and from time to time.
15. CERTAIN LEGAL MATTERS.
Except as described in this Section 15, based on information provided by the
Company, none of the Company, Purchaser or Parent is aware of any license or
regulatory permit that appears to be material to the business of the Company
and its subsidiaries, taken as a whole, that might be adversely affected by
the Purchaser's acquisition of Shares (and the indirect acquisition of the
stock of the Company's subsidiaries) as contemplated herein or of any approval
or other action by a domestic or foreign governmental, administrative or
regulatory agency or authority that would be required or desirable for the
acquisition and ownership of the Shares (and the indirect acquisition of the
stock of the Company's subsidiaries) by the Purchaser as contemplated herein.
Should any such approval or other action be required or desirable, the
Purchaser and Parent presently contemplate that such approval or other action
will be sought, except as described below under "State Takeover Laws." While,
except as otherwise described in this Offer to Purchase, the Purchaser does
not presently intend to delay the acceptance for payment of or payment for
Shares tendered pursuant to the Offer pending the outcome of any such matter,
there can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial conditions or that
failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of or other substantial
conditions complied with in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment or
pay for any Shares tendered. See Section 14 for certain conditions to the
Offer, including conditions with respect to governmental actions.
(a) State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (e.g., a person who owns or has the right to acquire 15% or more
of a corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other transactions) with
a Delaware corporation for a period of three
37
<PAGE>
years following the time such person became an interested stockholder unless,
among other things, the corporation's board of directors approves such
business combination or the transaction in which the interested stockholder
becomes such prior to the time the interested stockholder becomes such. The
Company's Third Restated Certificate of Incorporation expressly provides that
the Company is not subject to Section 203 of the DGCL, and the Company has
represented to Parent and Purchaser in the Merger Agreement that it is not
subject to such provision. 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
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 acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining presenting stockholders. The state law
before the Supreme Court was by its terms applicable only to corporations that
had a substantial number of stockholders in the state and were incorporated
there.
No approval of the Offer, the Merger, the Merger Agreement and the Stock
Purchase Agreement for the purposes of Section 203 of the DGCL is required
because the Company is not subject to such provisions; the Purchaser has not
attempted to comply with the takeover laws of any other state. Should any
person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity
or applicability of any such statute in appropriate court proceedings. In the
event it is asserted that one or more state takeover laws is applicable to the
Offer or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer and the Merger. In such case,
the Purchaser may not be obligated to accept for payment any Shares tendered.
See Section 14.
The Company and certain of its subsidiaries conduct business in a number of
other states throughout the United States, some of which have enacted takeover
laws and regulations. Neither Parent nor the Purchaser knows whether any or
all of these takeover laws and regulations will by their terms apply to the
Offer, and, except as set forth above, neither Parent nor the Purchaser has
currently complied with any other state takeover statute or regulation. The
Purchaser reserves the right to challenge the applicability or validity of any
state law purportedly applicable to the Offer and nothing in this Offer to
Purchase or any action taken in connection with the Offer is intended as a
waiver of such right. If it is asserted that any state takeover statute is
applicable to the Offer and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be
required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer, or may be delayed in
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or pay for any Shares tendered pursuant to the Offer. See
Section 14.
(b) Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the Federal Trade
Commission (the "FTC") and certain waiting period requirements have been
satisfied.
Parent and the Company filed their Notification and Report Forms with
respect to the Offer under the HSR Act on March 13, 1998. 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 date Parent's form is filed unless
early termination of the waiting period is granted. However, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
information or documentary material from Parent or the Company. If such a
request is made, such waiting period will expire at 11:59 p.m., New York City
time, on the tenth day after substantial
38
<PAGE>
compliance by Parent with such request. Only one extension of the waiting
period pursuant to a request for additional information is authorized by the
HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of Parent. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. The Purchaser will not accept
for payment Shares tendered pursuant to the Offer unless and until the waiting
period requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 14.
As discussed below, the HSR Act requirements with respect to the Merger will
not apply if certain conditions are met. In particular, the Merger may not be
consummated until 30 calendar days after receipt by the Antitrust Division and
the FTC of the Notification and Report Forms of both Parent and the Company
unless the Purchaser acquires 50% or more of the outstanding Shares pursuant
to the Offer (which would be the case if the Minimum Condition were satisfied)
or the 30-day period is earlier terminated by the Antitrust Division and the
FTC. Within such 30 day period, the Antitrust Division or the FTC may request
additional information or documentary materials from Parent and/or the
Company. The Merger may not be consummated until 20 days after such requests
are substantially complied with by both Parent and the Company. Thereafter,
the waiting periods may be extended only by court order or with the consent of
Parent and the Company.
The FTC and the Antitrust Division periodically review the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of
Shares pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the acquisition of Shares
pursuant to the Offer or otherwise or seeking divestiture of Shares acquired
by the Purchaser or divestiture of substantial assets of Parent or its
subsidiaries. Private parties, as well as state governments, may also bring
legal action under the antitrust laws under certain circumstances. Based upon
an examination of publicly available information relating to the businesses in
which Parent and the Company are engaged, Parent and the Purchaser believe
that the acquisition of Shares by the Purchaser will not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
(c) Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or
maintenance of credit for the purpose of buying or carrying margin stock,
including the Shares, if the credit is secured directly or indirectly by
margin stock. Such secured credit may not be extended or maintained in an
amount that exceeds the maximum loan value of all the direct and indirect
collateral securing the credit, including margin stock and other collateral.
As described in Section 10 of this Offer to Purchase, the financing of the
Offer will not be directly or indirectly secured by the Shares or other
securities which constitute margin stock. Accordingly, all financing for the
Offer will be in full compliance with the Margin Regulations.
(d) Foreign Laws. According to publicly available information, the Company
owns property and conducts business in a number of other foreign countries and
jurisdictions, including, without limitation, the United Kingdom. In
connection with the acquisition of the Shares pursuant to the Offer or the
Merger, the laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval or
consent of, governmental authorities in such countries and jurisdictions. The
governments in such countries and jurisdictions might attempt to impose
additional conditions on the Company's operations conducted in such countries
and jurisdictions as a result of the acquisition of the Shares pursuant to the
Offer or the Merger. If such approvals or consents are found to be required
the parties intend to make the appropriate filings and applications. In the
event such a filing or application is made for the requisite foreign approvals
or consents, there can be no assurance that such approvals or consents will be
granted and, if such approvals or consents are
39
<PAGE>
received, there can be no assurance as to the date of such approvals or
consents. In addition, there can be no assurance that the Purchaser will be
able to cause the Company or its subsidiaries to satisfy or comply with such
laws or that compliance or noncompliance will not have adverse consequences
for the Company or any subsidiary after purchase of the Shares pursuant to the
Offer or the Merger. See Section 14.
16. FEES AND EXPENSES.
Parent has engaged Bear Stearns to act as financial advisor to Parent in
connection with the proposed acquisition of the Company and as Dealer Manager
in connection with the Offer. Parent has agreed to pay Bear Stearns a fee of
$1 million upon the earlier of the announcement of a definitive agreement to
acquire the Company or the commencement of a tender offer for the Company's
outstanding voting securities (the "Commencement Fee"). Furthermore, if Parent
acquires, through the Offer or otherwise, control of, or a material interest
in, the stock, business or assets of the Company, Parent has agreed to pay to
Bear Stearns a transaction fee of $2 million against which the Commencement
Fee shall be credited. Parent has also agreed to reimburse Bear Stearns for
all reasonable out-of-pocket fees, expenses and costs, including reasonable
fees and expenses of accountants and legal counsel, if any, and to indemnify
Bear Stearns and certain related persons against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
federal securities laws.
The Purchaser has retained Georgeson & Company Inc. to act as the
Information Agent and ChaseMellon Shareholder Services, L.L.C. to act as the
Depositary in connection with the Offer. Such firms each will receive
reasonable and customary compensation for their services. The Purchaser has
also agreed to reimburse each such firm for certain reasonable out-of-pocket
expenses and to indemnify each such firm against certain liabilities and
expenses in connection with their services, including certain liabilities
under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, banks
and trust companies will be reimbursed by the Purchaser for customary mailing
and handling expenses incurred by them in forwarding material to their
customers.
17. MISCELLANEOUS.
The Offer is being made to all holders of Shares other than the Company. The
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the tender of Shares in connection therewith would not be in compliance with
the laws of such jurisdiction. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with
any such law, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser by the Dealer Manager or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Parent or the Purchaser not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from
the offices of the Commission and the NYSE in the manner set forth in Section
8 of this Offer to Purchase (except that they will not be available at the
regional offices of the Commission).
Great Universal Acquisition Corp.
March 16, 1998
40
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
I. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, business address and present principal occupation or
employment, and material occupations, positions, offices or employments for
the past five years of each director and executive officer of Parent. Unless
otherwise indicated, each such person is a citizen of England and the business
address of each such person is c/o The Great Universal Stores P.L.C.,
Leconfield House, Curzon Street, London WIY7FL. Unless otherwise indicated,
each occupation set forth opposite an individual's name refers to employment
with Parent. Unless otherwise indicated, each such person has held his or her
present occupation as set forth below, or has been an executive officer at
Parent, or the organization indicated, for the past five years.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------- --------------------------------------------
<S> <C>
David Wolfson, The Rt. Executive Chairman of Parent; also serves as non-
Hon. Lord................ executive Chairman of Next plc.; previously served
Wolfson of Sunningdale as Executive Chairman of Next plc.
Eric M. Barnes............ Deputy Chairman of Parent; also serves as Chairman
of the Information Services Division of Parent and
as a director of Purchaser; previously served as
Chairman of Parent's Property, Finance and
Burberry's divisions.
Maurice V. Blank.......... Non-executive Deputy Chairman of Parent; previously
served as Chairman and Chief Executive Officer of
Charterhouse plc.
Victor J. Barnett......... Executive Director of Parent with responsibility for
9 East 57th Street Parent's activities in North America; also serves
New York, New York 10022 as Chairman of the Burberry's division. Citizen of
the United States of America.
David G. Bury............. Commercial Director/Treasurer of Parent; also serves
as a director of Purchaser; previously served as
Chief Financial Officer of TBG Management, a
privately owned industrial holding company based in
Monaco.
Jonathan P. Charkham...... Non-executive Director of Parent; previously served
as Advisor to the Governor of the Bank of England
and a member of the Cadbury Committee on Corporate
Governance.
Philip C. Harris, The Rt. Non-executive Director of Parent; also serves as
Hon...................... Chairman of Carpetright plc.
Lord Harris of Peckham
Amberley House, New Road
Rainham, Essex RM13 8QN
Paul M. Harris............ Executive Director of Parent; also serves as Chief
Executive Officer of the Home Shopping division of
Parent.
Louise Alexandra Virginia. Non-executive Director of Parent; also is a partner
Charlotte Patten, the of Bain & Company (strategic consultants).
Lady Patten
of Wincanton
John W. Peace............. Director of Parent since June 1997; also serves as
Chief Executive Officer of Experian, Parent's
global information services division.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------- --------------------------------------------
<S> <C>
Alan W. Rudge............. Non-executive Director of Parent; also serves a
International Financial Chairman of W.S. Atkins plc; served as Deputy Chief
Centre Executive of British Telecommunications PLC from
25 Old Broad Street January 1996 to October 1997 and as a director from
London EC2N 1HN 1989 to 1997.
Alan J. Smart............. Executive Director of Parent; also serves as
53a Victoria Road Managing Director of Parent's Overseas Retail
Woodstock 7925 division. Citizen of South Africa.
Cape Province, South
Africa
David A. Tyler............ Finance Director of Parent; previously served as
Group Finance Director of Christie's International
plc.
Peter L. Weigh............ Executive Director of Parent; also serves as
Managing Director of Parent's Finance division;
previously served as Secretary of Parent.
</TABLE>
II. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table
sets forth the name, business address and present principal occupation or
employment, and material occupations, positions, offices or employments for
the past five years of each director and executive officer of the Purchaser.
Unless otherwise indicated, each such person is a citizen of the United States
of America and the business address of each such person is c/o Experian
Corporation, 505 City Parkway West, Orange, California 92868. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with the Purchaser.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------- --------------------------------------------
<S> <C>
D. Van Skilling........... Chief Executive Officer, President and Director of
Purchaser; also serves as Chief Executive Officer,
President and Director of Experian Corporation
("Experian"); Mr. Skilling joined TRW, Inc. ("TRW")
in 1970 and, in 1989, assumed the position of
Executive Vice President and General Manager,
Information Systems and Services, Inc. ("IS&S").
Experian acquired the information services business
of TRW in connection with a recapitalization
effected in September 1996.
James Antal............... Vice President, Chief Financial Officer, Treasurer,
Assistant Secretary and Director of Purchaser; also
serves as Executive Vice President and Chief
Financial Officer of Experian. Mr. Antal joined TRW
in 1978 and, in 1994, assumed the position of Vice
President, Finance, IS&S. Previously, he served as
Director of Finance, Information Services Division,
IS&S, responsible for all division-level finance
and administration functions (1991-1994) and
Assistant Corporate Controller of TRW (1989-1990).
Thomas A. Gasparini....... Vice President, General Counsel, Secretary,
Assistant Treasurer and Director of Purchaser; also
serves as Senior Vice President, General Counsel &
Secretary of Experian. Mr. Gasparini joined TRW in
1979 and, in 1991, assumed the position of Vice
President and Assistant General Counsel, IS&S.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS
------------------------- --------------------------------------------
<S> <C>
John W. Peace.............. Director of Purchaser; also serves as Director of
Parent since June 1997 and as Chief Executive
Officer of Experian, Parent's global information
services division. Citizen of England.
Eric M. Barnes............. Director of Purchaser; also serves as Deputy
Chairman of Parent and as Chairman of the
Information Services Division of Parent; previously
served as Chairman of Parent's Property, Finance
and Burberry's divisions. Citizen of England.
David G. Bury.............. Director of Purchaser; also serves as Commercial
Director/Treasurer of Parent; previously served as
Chief Financial Officer of TBG Management, a
privately owned industrial holding company based in
Monaco. Citizen of England.
</TABLE>
I-3
<PAGE>
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 or delivered by each
stockholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary, at one of the addresses set forth
below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Reorganization Reorganization Department Reorganization Department
Department 120 Broadway, 13th Floor 85 Challenger Road--Mail
P.O. Box 3301 New York, New York 10271 Drop--Reorg
South Hackensack, New Ridgefield Park, New
Jersey 07606 Jersey 07660
By Facsimile Transmission:
(201) 329-8936
Confirm Receipt of Facsimile by Telephone:
(201) 296-4860
Questions or requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
locations and telephone numbers set forth below. Stockholders may also contact
their broker, dealer, commercial bank or trust company for assistance
concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 308-6708
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 16, 1998
BY
GREAT UNIVERSAL ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE GREAT UNIVERSAL STORES P.L.C.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEWYORK CITY
TIME, ON FRIDAY, APRIL 10, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Hand Delivery: By Overnight Delivery:
By Mail:
ChaseMellon Shareholder ChaseMellon Shareholder
ChaseMellon Shareholder Services, L.L.C. Services, L.L.C.
Services, L.L.C. Reorganization Department Reorganization Department
Reorganization Department 120 Broadway, 13th Floor 85 Challenger Road-Mail
P.O. Box 3301 New York, NY 10271 Drop-Reorg
South Hackensack, NJ Ridgefield Park, NJ 07660
07606
By Facsimile Transmission:
(201) 329-8936
Confirm Receipt of Facsimile by Telephone at:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made
by book-entry transfer to an account maintained by the Depositary at The
Depository Trust Company or the Philadelphia Depository Trust Company
(hereinafter collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase (as
defined below). Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders are
referred to herein as "Certificate Stockholders."
Stockholders whose certificates are not immediately available or who cannot
deliver their Shares and all other documents required hereby to the Depositary
or complete the procedures for book-entry transfer prior to the Expiration
Date (as defined in the Offer to Purchase) must tender their Shares according
to the guaranteed delivery procedure set forth in Section 2 of the Offer to
Purchase. See Instruction 2. Delivery of documents to a Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
<PAGE>
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
[_]The Depository Trust Company
[_]Philadelphia Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) _____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
Check Box of Applicable Book-Entry Transfer Facility, if Delivered by Book-
Entry Transfer:
[_]The Depository Trust Company
[_]Philadelphia Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
DESCRIPTION OF SHARES TENDERED
<TABLE>
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) CERTIFICATE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE EVIDENCED BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
**Unless otherwise indicated, it will be assumed that all Shares evidenced by
any certificate(s) delivered to the Depositary are being tendered. See
Instruction 4.
[_]CHECK HERE IF YOU CANNOT LOCATE YOUR CERTIFICATE(S) AND REQUIRE ASSISTANCE
IN REPLACING THEM. UPON RECEIPT OF NOTIFICATION BY THIS LETTER OF
TRANSMITTAL, THE COMPANY'S STOCK TRANSFER AGENT WILL CONTACT YOU DIRECTLY
WITH REPLACEMENT INSTRUCTIONS.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Great Universal Acquisition Corp., a
Delaware corporation (the "Purchaser"), and an indirect wholly owned
subsidiary of The Great Universal Stores P.L.C., a corporation organized under
the laws of England ("Parent"), the above-described shares of Common Stock,
par value $.01 per share the ("Common Stock"), including the associated
preferred share purchase rights (the "Rights" and, together with the Common
Stock, the "Shares"), of Metromail Corporation, a Delaware corporation (the
"Company"), pursuant to the Purchaser's offer to purchase all outstanding
Shares at a price of $31.50 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
March 16, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"). The undersigned understands that
the Purchaser reserves the right to transfer or assign, in whole or in part
from time to time, to one or more direct or indirect wholly owned subsidiaries
of Parent, the right to purchase Shares tendered pursuant to the Offer.
The Company has distributed one Right for each outstanding Share pursuant to
the Rights Agreement, dated as of February 24, 1997, as amended, between the
Company and American Stock Transfer & Trust Company, as Rights Agent. The
Rights are currently evidenced by and trade with certificates evidencing the
Common Stock. The Company has amended the Rights Agreement to make the Rights
Agreement inapplicable to Parent, Purchaser, and their respective affiliates
and associates in connection with the transactions contemplated by the Merger
Agreement and the Stock Purchase Agreements (as such terms are defined in the
Offer to Purchase).
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), subject to, and effective upon, acceptance for payment of and
payment for the Shares tendered herewith, the undersigned hereby sells,
assigns, and transfers to, or upon the order of, the Purchaser all right,
title and interest in and to all the Shares that are being tendered hereby
(and any and all other Shares or other securities issued or issuable in
respect thereof on or after March 16, 1998 (collectively, "Distributions"))
and irrevocably constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (a)
deliver certificates for such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by any of the Book-Entry Transfer Facilities, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order
of the Purchaser, upon receipt by the Depositary, as the undersigned's agent,
of the purchase price (adjusted, if appropriate, as provided in the Offer to
Purchase), (b) present such Shares and all Distributions for cancellation and
transfer on the Company's books and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
and all Distributions and that, when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary of the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the tendered Shares
and all Distributions. In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any such
Distributions issued to the undersigned, in respect of the tendered Shares,
accompanied by documentation of transfer, and pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights
and privileges as owner of any such Distributions and, subject to the terms of
the Merger Agreement (as defined in the Offer to Purchase), may withhold the
entire purchase price or deduct from the purchase price the amount or value
thereof, as determined by the Purchaser in its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
<PAGE>
The undersigned hereby irrevocably appoints D. Van Skilling, James Antal,
Thomas A. Gasparini or John W. Peace, and each of them, and any other
designees of the Purchaser, the attorneys and proxies of the undersigned, each
with full power of substitution, to vote at any annual, special or adjourned
meeting of the Company's stockholders or otherwise act (including pursuant to
written consent) in such manner as each such attorney and proxy or his
substitute shall in his sole discretion deem proper, to execute any written
consent concerning any matter as each such attorney and proxy or his
substitute shall in his sole discretion deem proper with respect to, and to
otherwise act with respect to, all the Shares tendered hereby which have been
accepted for payment by the Purchaser prior to the time any such vote or
action is taken (and any and all Distributions issued or issuable in respect
thereof) and with respect to which the undersigned is entitled to vote. This
appointment is effective when and only to the extent that the Purchaser
accepts for payment such Shares as provided in the Offer to Purchase. This
power of attorney and proxy is coupled with an interest in the tendered
Shares, is irrevocable and is granted in consideration of the acceptance for
payment of such Shares in accordance with the terms of the Offer. Such
acceptance for payment shall revoke all prior powers of attorney and proxies
given by the undersigned at any time with respect to such Shares and no
subsequent powers of attorney or proxies may be given by the undersigned (and,
if given, will not be deemed effective). 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 must
be able to exercise full voting and other rights with respect to such Shares,
including voting at any meeting of stockholders then scheduled.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 2 of the Offer to Purchaser and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, the Purchaser may not be required to accept
for payment any of the tendered Shares. The Purchaser's acceptance for payment
of Shares pursuant to the Offer will constitute a binding agreement between
the undersigned and the Purchaser upon the terms and subject to the conditions
of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased, and/or
return any certificates for Shares not tendered or accepted for payment, in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased, and/or any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price of
any Shares purchased, and/or return any certificates for Shares not tendered
or accepted for payment in the name(s) of, and mail said check and/or any
certificates to, the person or persons so indicated. In the case of a book-
entry delivery of Shares, please credit the account maintained at the Book-
Entry Transfer Facility indicated above with any Shares not accepted for
payment. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if To be completed ONLY if
certificate(s) for Shares not Certificate(s) for Shares not
tendered or not purchased and/or tendered or not purchased and/or
the check for the purchase price the check for the purchase price
of Shares purchased are to be of Shares purchased are to be
issued in the name of someone delivered to someone other than
other than the undersigned. the undersigned or to the
undersigned at an address other
than that appearing under
"Description of Shares Tendered."
Issue: [_] Check [_] Certificate(s)
to:
Name _____________________________
(Please Print) Deliver: [_] Check [_] Certificate(s)
to:
Address __________________________ Name _____________________________
---------------------------------- (Please Print)
(Include Zip Code)
---------------------------------- Address __________________________
(Tax Identification or Social
Security Number) ----------------------------------
(Include Zip Code)
(See Substitute Form W-9 Included ----------------------------------
Herein)
---------------------------------- (Tax Identification or Social
(Account Number) Security Number)
(See Substitute Form W-9 Included
Herein)
<PAGE>
^
^
^
^
STOCKHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Owner(s))
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON STOCK
CERTIFICATE(S) OR ON A SECURITY POSITION LISTING OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND DOCUMENTS TRANSMITTED HEREWITH.
IF SIGNATURE IS BY TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-
IN-FACT, OFFICERS OF CORPORATIONS OR OTHERS ACTING IN A FIDUCIARY OR REPRESEN-
TATIVE CAPACITY, PLEASE SET FORTH FULL TITLE. SEE INSTRUCTION 5. FOR INFORMA-
TION CONCERNING SIGNATURE GUARANTEES, SEE INSTRUCTION 1.)
Dated: _____________________________________________________________ , 1998
Name(s) ________________________________________________________________________
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title) __________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
Daytime Area Code and Telephone Number _________________________________________
Tax Identification or Social Security Number ___________________________________
- --------------------------------------------------------------------------------
(See Substitute Form W-9 Below)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature ___________________________________________________________
Name ___________________________________________________________________________
(Please Print)
Title __________________________________________________________________________
Name of Firm ___________________________________________________________________
Address: _______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _________________________________________________
Dated: _____________________________________________________________ , 1998
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is
a member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. ("NASD") or a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (each an
"Eligible Institution," and collectively, "Eligible Institutions"). No
signature guarantee is required on this Letter of Transmittal (i) if this
Letter of Transmittal is signed by the registered holder(s) (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the
owner of Shares) of Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on the facing page hereto or (ii) if
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders
either if certificates for Shares are to be forwarded herewith or if a tender
of Shares is to be made pursuant to the procedures for delivery by book-entry
transfer set forth in Section 2 of the Offer to Purchase. For Shares to be
validly tendered pursuant to the Offer, (i) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of the Depositary's addresses set forth herein and either certificates or
a timely Book-Entry Confirmation for tendered Shares must be received by the
Depositary at one of such addresses, in each case prior to the Expiration Date
(as defined in the Offer to Purchase), or (ii) the tendering stockholder must
comply with the guaranteed delivery procedure set forth below.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. Pursuant
to such procedures, (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery provided by the Purchaser (or facsimile thereof) must be received by
the Depositary prior to the Expiration Date and (iii) the certificates for all
physically tendered Shares, or a Book-Entry Confirmation with respect to all
tendered Shares, together with this properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees, and any other documents required by this Letter of Transmittal,
must be received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 2
of the Offer to Purchase. A "trading day" is any day on which the New York
Stock Exchange is open for business.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-
ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER AND 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 thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares 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 the old
<PAGE>
certificate(s) will be sent to the registered holder, unless otherwise
provided in the appropriate box on this Letter of Transmittal, as soon as
practicable after the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares
not tendered or accepted for payment are to be issued to a person other than
the registered owner(s). Signatures on such certificates or stock powers must
be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the shares tendered hereby, the certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of the registered
owner(s) appear(s) on the certificates for such Shares. Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
6. STOCK TRANSFER TAXES. Except as 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 of Shares to it or its assignee pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any persons other than the registered holder(s), or
if tendered certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder or such person)
payable on the account of the transfer to such person will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes
or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or certificates for Shares not accepted for payment are to be
returned to a person other than the signer of this Letter of Transmittal or if
a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other
than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed. Any stockholder tendering Shares by book-entry transfer
will have any Shares not accepted for payment returned by crediting the
account maintained by such stockholder at the Book-Entry Transfer Facility
from which such transfer was made.
8. WAIVER OF CONDITIONS. Except as otherwise provided in the Offer to
Purchase, the Purchaser expressly reserves the absolute right in its sole
discretion to waive any of the specified conditions of the Offer or any defect
or irregularity in tender with regard to any Shares tendered.
9. SUBSTITUTE FORM W-9. The tendering stockholder (or other payee) is
required to provide the Depositary with a correct Taxpayer Identification
Number ("TIN"), generally the stockholder's social security or federal
employer identification
<PAGE>
number, and with certain other information, on Substitute Form W-9, which is
provided under "Important Tax Information" below, and to certify that the
stockholder (or other payee) is not subject to backup withholding. If a
tendering stockholder is subject to backup withholding, he or she must cross
out item (2) of the Certification Box on Substitute Form W-9 before signing
such Form. Failure to provide the information on the Substitute Form W-9 may
subject the tendering stockholder (or other payee) to a $50 penalty imposed by
the Internal Revenue Service and to 31% federal income tax withholding on the
payment of the purchase price. 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, he or she should write "Applied For" in the space provided
for the TIN in Part I, sign and date the Substitute Form W-9 and sign and date
the Certificate of Awaiting Taxpayer Identification Number. If "Applied For"
is written in Part I and the Depositary is not provided with a TIN by the time
of payment, the Depositary will withhold 31% of all such payments for
surrendered Shares thereafter until a TIN is provided to the Depositary.
10. LOST OR DESTROYED CERTIFICATES. If any certificate(s) representing
Shares has been lost or destroyed, the stockholder should check the
appropriate box on the front of the Letter of Transmittal. The Company's stock
transfer agent will then instruct such stockholder as to the procedure to be
followed in order to replace the certificate(s). The stockholder will have to
post a surety bond of approximately 2% of the current market value of the
stock. This Letter of Transmittal and related documents cannot be processed
until procedures for replacing lost or destroyed certificates have been
followed.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at their respective
locations set forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF) TOGETHER
WITH CERTIFICATES OR A BOOK-ENTRY CONFIRMATION FOR SHARES AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF
GUARANTEED DELIVERY (OR A FACSIMILE COPY THEREOF) MUST BE RECEIVED BY THE
DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder surrendering Shares must provide
the Depositary with his correct TIN on Substitute Form W-9 on this Letter of
Transmittal. If the stockholder is an individual, his TIN is his social
security number. If the correct TIN is not provided, the stockholder may be
subject to a $50 penalty imposed by the Internal Revenue Service and payments
made in exchange for the surrendered Shares may be subject to backup
withholding of 31%.
Certain persons (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding and
reporting requirements. In order for an exempt foreign stockholder to avoid
backup withholding, that person should complete, sign and submit a Form W-8,
Certificate of Foreign Status, signed under penalties of perjury, attesting to
his exempt status. A Form W-8 can be obtained from the Depositary. Exempt
stockholders, other than foreign stockholders, should furnish their TIN, write
"Exempt" on the face of the Substitute Form W-9 and sign, date and return the
Substitute Form W-9 to the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payment made to payee. Backup withholding is not an
additional tax. Rather, the federal income tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld. If backup
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent Federal income tax 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 his or her correct TIN (or
the TIN of any other payee) by completing the Substitute Form W-9 included in
this Letter of Transmittal certifying (1) that the TIN provided on the
Substitute Form W-9 is correct (or that such payee is awaiting a TIN) and that
(2) the stockholder is not
<PAGE>
subject to backup withholding because (i) the stockholder has not been
notified by the Internal Revenue Service that the stockholder is subject to
federal income tax backup withholding as a result of a failure to report all
interest and dividends or (ii) the Internal Revenue Service has notified the
stockholder that the stockholder is no longer subject to federal income tax
backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN, generally the
social security number or employer identification number of the record owner
of the Shares. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, he or she should write "Applied For" in the space provided for the TIN
in Part I, sign and date the Substitute Form W-9 and sign and date the
Certificate of Awaiting Taxpayer Identification Number, which appears in a
separate box below the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price until a TIN
is provided to the Depositary.
<PAGE>
SUBSTITUTE PART I--PLEASE PROVIDE ________________________
FORM W-9 YOUR CORRECT TIN IN THE Social Security Number
BOX AT RIGHT AND CERTIFY
BY SIGNING AND DATING
BELOW:
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE OR ______________________
Employer Identification
No.
Payor's Request for
Taxpayer (If Awaiting TIN write
Identification Number (TIN) "Applied for")
-------------------------------------------------------
PART II--For Payees NOT subject to backup
withholding, see the enclosed Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9 and complete as instructed
therein.
- -------------------------------------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because either (a) I am exempt
from backup withholding, (b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed guidelines.) THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR
CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATES
REQUIRED TO AVOID BACKUP WITHHOLDING.
- -------------------------------------------------------------------------------
SIGNATURE _______________________________________________ DATE ______________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) 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 (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number within sixty (60) days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
------------------------------------ ------------------------------------
SIGNATURE DATE
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager as set forth below:
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 308-6708
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
BY
GREAT UNIVERSAL ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE GREAT UNIVERSAL STORES P.L.C.
AT
$31.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, APRIL 10, 1998, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Banks, Trust March 16, 1998
Companies and Other Nominees:
We have been engaged by Great Universal Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is an indirect wholly owned subsidiary of
The Great Universal Stores P.L.C., a corporation organized under the laws of
the England ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Common Stock"), including the associated preferred
share purchase rights (the "Rights," and together with the Common Stock, the
"Shares"), of Metromail Corporation, a Delaware corporation (the "Company"),
at $31.50 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated March 16, 1998 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"). Please furnish copies of the
enclosed materials to those of your clients for whom you hold Shares
registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated March 16, 1998;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
4. Notice of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
The Offer is conditioned upon, among other things, there having been validly
tendered and not withdrawn prior to the Expiration Date (as defined in the
Offer to Purchase) that number of Shares that, when added to any Shares
acquired pursuant to the Stock Purchase Agreements (as defined in the Offer to
Purchase) simultaneously with the acceptance of Shares for payment pursuant to
the Offer, represent at least a majority of all outstanding Shares on a fully
diluted basis on the date of purchase.
<PAGE>
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay promptly
after the Expiration Date (as defined in the Offer to Purchase) for all shares
validly tendered prior to the Expiration Date and not properly withdrawn as,
if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares. Payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect thereto), (ii)
a Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message (as defined in the Offer to Purchase), and
(iii) any other documents required by the Letter of Transmittal.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to deliver their certificates on or prior to the Expiration Date or
to comply with the book-entry transfer procedures on a timely basis, a tender
may be effected by following the guaranteed delivery procedures specified in
Section 2 of the Offer to Purchase.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, APRIL 10, 1998, UNLESS
EXTENDED.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and
Information Agent as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and necessary costs and expenses incurred by
them in forwarding materials to their customers. The Purchaser will pay all
stock transfer taxes applicable to its purchase of Shares pursuant to the
Offer, subject to Instruction 6 of the Letter of Transmittal.
Additional copies of the enclosed materials may be obtained by contacting
the Dealer Manager or the Information Agent at their respective addresses and
telephone numbers set forth on the back cover of the enclosed Offer to
Purchase.
Very truly yours,
BEAR, STEARNS & CO. INC.
as Dealer Manager
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 308-6708
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY,
THE INFORMATION AGENT OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER
PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY
OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE
OR THE LETTER OF TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
BY
GREAT UNIVERSAL ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE GREAT UNIVERSAL STORES P.L.C.
AT
$31.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEWYORK
CITY TIME, ON FRIDAY, APRIL 10, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated March 16, 1998
(the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to the Offer by Great Universal Acquisition Corp., a
Delaware corporation (the "Purchaser"), which is an indirect wholly owned
subsidiary of The Great Universal Stores P.L.C., a corporation organized under
the laws of England ("Parent"), to purchase for cash all outstanding shares of
Common Stock, par value $.01 per share (the "Common Stock"), including the
associated preferred share purchase rights (the "Rights", and together with
the Common Stock, the "Shares"), of Metromail Corporation, a Delaware
corporation (the "Company"). We are the holder of record of Shares held by us
for your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES
HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request your instructions as to whether you wish to tender
any of or all of the Shares held by us for your account upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $31.50 per Share, net to the seller in cash, without
interest thereon.
2. The Offer is being made for all outstanding Shares.
3. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER AND DETERMINED THAT 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 STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES.
4. The Offer and withdrawal rights expire at 12:00 midnight, New York City
time, on Friday, April 10, 1998, unless extended.
<PAGE>
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares that, when added to any
Shares acquired pursuant to the Stock Purchase Agreements (as defined in
the Offer to Purchase) simultaneously with the acceptance of Shares for
payment pursuant to the Offer, represent at least a majority of the
Shares outstanding on a fully-diluted basis on the date of purchase.
6. Any stock transfer taxes applicable to a sale of Shares to the Purchaser
pursuant to the Offer will be borne by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer. If you wish to
have us tender any of or all of the Shares held by us for your account, please
so instruct us by completing, executing and returning to us the instruction
form set forth on the reverse side of this letter. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the reverse
side of this letter. Your instructions should be forwarded to us in ample time
to permit us to submit a tender on your behalf prior to the expiration of the
Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to, nor will tenders be accepted
from, or on behalf of, holders of Shares in any jurisdiction in which the
making or acceptance of the Offer would not be in compliance with the laws of
such jurisdiction. If the securities laws of any jurisdiction require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to
be made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers licensed under the law of such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer to
Purchase dated March 16, 1998 and the related Letter of Transmittal, in
connection with the offer by Great Universal Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of The Great Universal
Stores P.L.C., a corporation organized under the laws of England, to purchase
all outstanding shares of common stock, par value $.01 per share (the "Common
Stock"), including the associated preferred share purchase rights (the
"Rights", and together with the Common Stock, the "Shares"), of Metromail
Corporation, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in such Offer to Purchase and related Letter of
Transmittal.
Dated: , 1998
NUMBER OF SHARES TO BE TENDERED*
SHARES
I (we) understand that if I (we) sign this instruction form without
indicating a lesser number of Shares in the space above, all Shares held by
you for my (our) account will be tendered.
----------------------------------------------
Signature(s)
----------------------------------------------
----------------------------------------------
Print Name(s)
----------------------------------------------
----------------------------------------------
Print Address(es)
----------------------------------------------
Area Code and Telephone Number
----------------------------------------------
Tax ID or Social Security Number
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by your
firm for my (our) account are to be tendered.
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
METROMAIL CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if certificates for shares of Common Stock, par value $.01
per share (the "Common Stock"), including the associated preferred share
purchase rights (the "Rights," and together with the Common Stock, the
"Shares"), of Metromail Corporation, a Delaware corporation (the "Company"),
are not immediately available, or if the procedure for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary at the address set forth below prior to the
Expiration Date (as defined in the Offer to Purchase). This form may be
delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined in the Offer to Purchase). See Section 2 of
the Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Reorganization Reorganization Reorganization
Department Department Department
P.O. Box 3301 120 Broadway, 13th Floor 85 Challenger Road--Mail
South Hackensack, NJ New York, NY 10271 Drop-Reorg
07606
By Facsimile Transmission: Ridgefield, NJ 07660
(201) 329-8936
Confirm Receipt of Facsimile by Telephone:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Great Universal Acquisition Corp., a
Delaware corporation (the "Purchaser"), which is an indirect wholly owned
subsidiary of The Great Universal Stores P.L.C., a corporation organized under
the laws of England, upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase dated March 16, 1998 (the "Offer to
Purchase"), and the related Letter of Transmittal, receipt of which is hereby
acknowledged, the number of Shares (as such term is defined in the Offer to
Purchase) set forth below, all pursuant to the guaranteed delivery procedures
set forth in Section 2 of the Offer to Purchase.
Number of Shares: _________________
Certificate Nos. (if available):
-----------------------------------
-----------------------------------
(Check one box if Shares will be
tendered by book-entry transfer)
[_] The Depository Trust Company
[_] Philadelphia Depository Trust
Company
Account Number: ___________________
Dated: ______________________ ,1998
Name(s) of Record Holder(s):
-----------------------------------
-----------------------------------
Please Print
Address(es): ______________________
---------------------------
Zip Code
Area Code and Tel. No.:
-----------------------------------
-----------------------------------
Signature(s)
Dated: ______________________ ,1998
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation with respect to such
Shares, in any such case together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message, and any other required documents within
three trading days (as defined in the Offer to Purchase) after the date
hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible
Institution. All capitalized terms used herein have the meanings set forth in
the Offer to Purchase.
Name of Firm: ______________________ ____________________________________
Authorized Signature
Address: ___________________________ Name: ______________________________
Please Print
------------------------------
Zip Code
Area Code and Tel. No.: ____________ Title: _____________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Dated: ______________________ , 1998
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- --------------------------------------- ---------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under state
law
8. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
--------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
- ---------------------------------------
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your Social Security number or your Employer Identification
number.
(5) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS") and apply
for a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. 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 or
information reporting. 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 Secretaries,
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 of
the Code.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).
. Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
. Payments on tax-free covenant bonds under Section 1451 of the Code.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE
THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A and
6050N of the Code and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identifica-
tion purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certi-
fications 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>
EXHIBIT (A)(7)
FOR IMMEDIATE RELEASE
GREAT UNIVERSAL STORES TO ACQUIRE
METROMAIL FOR $31.50 PER SHARE IN CASH
London, England and Lombard, IL March 13, 1998 -- The Great Universal
Stores P.L.C. (GUS) and Metromail Corporation (NYSE: ML) today jointly announced
that the two companies have signed a definitive merger agreement pursuant to
which GUS will acquire all of the outstanding common stock of Metromail at a
price of $31.50 per share in cash in a transaction valued at approximately $800
million, including assumption of debt. The transaction has been approved
unanimously by the Boards of Directors of both companies.
Under the terms of the merger agreement, a subsidiary of GUS will promptly
commence a tender offer for all outstanding shares of Metromail stock at a net
price of $31.50 per share in cash. In connection with the execution of the
merger agreement, GUS entered into stock purchase agreements with certain
stockholders of Metromail (R.R. Donnelley & Sons Company and certain members of
Metromail management) who collectively own approximately 40% of the outstanding
Metromail shares, pursuant to which such stockholders agreed, among other
things, to sell their shares to GUS at the offer price. GUS also entered into
an agreement to purchase from Metromail previously unissued shares at the offer
price in an amount that, together with the shares owned by GUS and its
affiliates immediately after the tender offer and the shares to be purchased by
GUS pursuant to the stockholder agreements, represents at least a majority of
the outstanding shares of Metromail on a fully-diluted basis. These agreements
are subject to certain conditions which generally expire on March 30, 1998,
including limited conditions relating to the ability of the Metromail Board of
Directors to have discussions with potential bidders. Any shares not purchased
pursuant to the tender offer or such stock purchase agreements will be acquired
in a subsequent merger at a price of $31.50 per share in cash as soon as
practicable after completion of the tender offer.
Completion of the tender offer is subject to customary conditions,
including the acquisition by GUS of a majority of Metromail's common shares on a
fully-diluted basis (giving effect to the stock purchase agreements described
above), receipt of necessary governmental approvals and the expiration of
applicable waiting periods under the Hart-Scott-Rodino Act. The merger
agreement is not subject to a financing contingency. The merger agreement
provides for the payment to GUS of a fee of $15 million and reimbursement of
expenses if the merger agreement is terminated in certain circumstances.
Bear, Stearns & Co. Inc. advised GUS and will act as dealer manager in
connection with the tender offer. Lehman Brothers Inc. acted as Metromail's
financial adviser in connection with the transaction. Lehman Brothers has
delivered to the Metromail Board of Directors a written opinion to the effect
that, as of the date of such opinion and based upon and subject to certain
matters stated therein, the $31.50 per share cash consideration to be received
in the tender offer and the merger by holders of Metromail common stock was
fair, from a financial point of view, to such holders.
Lord Wolfson, Chairman of GUS, said, "Metromail is an important further
step in our strategy to develop a comprehensive information services business,
which began in 1996 with the acquisition of Experian. Together, these
businesses will be much better placed to meet the
<PAGE>
growing demand from organizations for comprehensive information about existing
and prospective customers."
Barton L. Faber, Chairman, President and Chief Executive Officer of
Metromail said, "Metromail's board and management have fulfilled their
commitment to pursue strategic alternatives in order to maximize value for its
shareholders. The combination of Metromail with Experian, GUS's global
information services business, will provide great opportunities for Metromail's
customers and prospects. Our industry is consolidating and Metromail employees
will benefit from being part of a larger, stronger company with exciting new
growth opportunities."
GUS is a United Kingdom-based holding company of a group of companies
involved in home shopping, Burberry's products and retailing, overseas
retailing, information services, finance and property investment. Metromail is
based in Lombard, Illinois and provides database marketing, direct marketing and
reference products and services in the United States and the United Kingdom.
<PAGE>
EXHIBIT (A)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer is made solely by the Offer to
Purchase dated March 16, 1998 and the related Letter of Transmittal and is being
made to all holders of Shares. The Offer is not being made to (nor will tenders
be accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction or any administrative or judicial action
pursuant thereto. In any jurisdiction where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Great Universal Acquisition Corp. by Bear,
Stearns & Co. Inc. or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
Metromail Corporation
at
$31.50 Net Per Share
by
Great Universal Acquisition Corp.
an indirect wholly-owned subsidiary of
The Great Universal Stores P.L.C.
Great Universal Acquisition Corp., a Delaware corporation (the
"Purchaser"), which is an indirect wholly owned subsidiary of The Great
Universal Stores P.L.C., a corporation organized under the laws of England
("Parent"), is offering to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Common Stock"), including the associated preferred
share purchase rights (the "Rights" and, together with the Common Stock, the
"Shares"), of Metromail Corporation, a Delaware corporation (the "Company"), at
a price of $31.50 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated March 16, 1998 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, APRIL 10, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there having been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of Shares which, when added to any Shares acquired pursuant to the Stock
Purchase Agreements (as defined in the Offer to Purchase) simultaneously with
the acceptance of Shares for payment pursuant to the Offer, represents a
majority of all outstanding Shares on a fully-diluted basis and (ii) the
expiration or termination of any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). The Offer
is also subject to other terms and conditions.
<PAGE>
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 12, 1998 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company. The Merger Agreement provided that, following the
consummation of the Offer, the Purchaser will be merged with and into the
Company (the "Merger") and each outstanding Share (other than Shares held by the
Company, Parent, the Purchaser or any other wholly-owned subsidiary of Parent,
and Shares held by stockholders who perfect dissenters' rights under Delaware
law) will be converted into the right to receive $31.50 in cash, without
interest thereon, or any higher price paid in the Offer (the "Offer Price"). The
Company has amended the Rights Agreement dated as of February 24, 1997, between
the Company and American Stock Transfer & Trust Company, as Rights Agent, make
the Rights Agreement inapplicable to Parent, Purchaser, and their respective
affiliates and associates in connection with the transactions contemplated by
the Merger Agreement and the Stock Purchase Agreements.
In connection with the Merger Agreement, Parent entered into Stock Purchase
Agreements with certain stockholders of the Company (R.R. Donnelley & Sons
Company and certain members of the Company's management) who collectively own
approximately 40.4% of the outstanding Shares, pursuant to which such
stockholders agreed, among other things, to sell their shares to Parent at the
Offer Price. Parent also entered into an agreement to purchase from the Company
previously unissued Shares at the Offer Price in an amount that, together with
Shares owned by Parent and its affiliates immediately after the Offer and the
acquisition of Shares pursuant to such stockholder agreements, represents 51% of
the outstanding Shares on a fully-diluted basis. These agreements are subject to
certain conditions and termination rights which generally expire on March 30,
1998 if the applicable waiting period under the HSR Act expires on or before
March 30, 1998.
The Board of Directors of the Company 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 stockholders of the Company accept the Offer and
tender their Shares.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
ChaseMellon Shareholder Services, L.L.C. (the "Depositary"), of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
stockholders. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for (or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal. 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 making such payment.
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 Date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
Thursday, May 14, 1998. For a withdrawal to be effective, a written, telegraphic
or facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses as set forth in 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 the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates
<PAGE>
for Shares have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown on
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution (as defined in Section 2 of the
Offer to Purchase), the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedure for book-entry transfer as set forth in Section 2 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the appropriate Book-Entry Transfer Facility (as defined in the Offer
to Purchase) 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 any purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 2 of the Offer to Purchase at any time prior to the Expiration Date. All
questions as to the form and validity (including time of receipt of notices of
withdrawal will be determined by the Purchaser in its sole discretion, which
determination will be final and binding.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has supplied to the Purchaser the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares, and will be
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 Offer to Purchase and the Letter of Transmittal contain important
information that should be read before any decision is made with respect to the
Offer.
<PAGE>
Questions and requests for assistance or for copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer documents may be
directed to the Information Agent or the Dealer Manager, as set forth below, and
copies will be furnished at the Purchaser's expense. No fees or commissions will
be paid by Parent or the Purchaser to brokers, dealers or other persons other
than the Dealer Manager and the Information Agent for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
[Georgeson & Company Inc. Logo]
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect (212) 440-9800
All others call toll free: (800) 223-2064
The Dealer Manager for the Offer is:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 308-6708
March 16, 1998
<PAGE>
EXHIBIT (c)(1)
AGREEMENT AND PLAN
OF
MERGER
___________________________________
By and Among
METROMAIL CORPORATION,
GREAT UNIVERSAL ACQUISITION CORP.
and
THE GREAT UNIVERSAL STORES P. L. C.
___________________________________
March 12, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I THE OFFER................................................... 1
SECTION 1.01 The Offer........................................... 1
SECTION 1.02 Company Action...................................... 3
SECTION 1.03 Directors........................................... 4
ARTICLE II THE MERGER................................................. 5
SECTION 2.01 The Merger.......................................... 5
SECTION 2.02 Effective Time; Closing............................. 5
SECTION 2.03 Effects of the Merger; Subsequent Actions........... 6
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation............................... 6
SECTION 2.05 Directors........................................... 6
SECTION 2.06 Officers............................................ 6
SECTION 2.07 Conversion of Shares................................ 6
SECTION 2.08 Conversion of Purchaser Common Stock................ 7
SECTION 2.09 Company Option Plans................................ 7
SECTION 2.10 Stockholders' Meeting............................... 7
SECTION 2.11 Merger Without Meeting of Stockholders.............. 8
ARTICLE III DISSENTING SHARES; PAYMENT FOR SHARES................... 8
SECTION 3.01 Dissenting Shares................................... 8
SECTION 3.02 Exchange of Certificates............................ 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 10
SECTION 4.01 Organization and Qualification; Subsidiaries........ 10
SECTION 4.02 Charter and By-laws................................. 11
SECTION 4.03 Capitalization...................................... 11
SECTION 4.04 Authority Relative to this Agreement and the
Company Stock Purchase Agreement.......................... 12
SECTION 4.05 No Conflict; Required Filings and Consents.......... 12
SECTION 4.06 SEC Reports and Financial Statements................ 13
SECTION 4.07 Information......................................... 14
SECTION 4.08 Changes............................................. 14
SECTION 4.09 Opinion of Financial Advisor........................ 15
SECTION 4.10 Rights Agreement.................................... 15
SECTION 4.11 Takeover Statutes................................... 15
SECTION 4.12 Litigation.......................................... 15
SECTION 4.13 Employee Plans and Arrangements..................... 15
SECTION 4.14 Assets.............................................. 17
SECTION 4.15 Intellectual Property............................... 17
SECTION 4.16 Taxes............................................... 18
SECTION 4.17 Environmental Laws and Regulations.................. 19
SECTION 4.18 Brokers............................................. 21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER........................................................ 21
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C> <C>
SECTION 5.01 Organization and Qualification........................... 21
SECTION 5.02 Authority Relative to this Agreement and the Stock
Purchase Agreements............................................. 21
SECTION 5.03 No Conflict; Required Filings and Consents............... 22
SECTION 5.04 Information.............................................. 22
SECTION 5.05 Financing................................................ 23
SECTION 5.06 Brokers.................................................. 23
ARTICLE VI COVENANTS........................................................ 23
SECTION 6.01 Conduct of Business of the Company....................... 23
SECTION 6.02 Access to Information.................................... 25
SECTION 6.03 Reasonable Best Efforts.................................. 25
SECTION 6.04 Consents................................................. 26
SECTION 6.05 Public Announcements..................................... 27
SECTION 6.06 Indemnification; Insurance............................... 27
SECTION 6.07 Notification of Certain Matters.......................... 28
SECTION 6.08 No Solicitation.......................................... 29
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................ 30
SECTION 7.01 Conditions to Each Party's Obligation to Consummate
the Merger...................................................... 30
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER................................ 31
SECTION 8.01 Termination.............................................. 31
SECTION 8.02 Effect of Termination.................................... 32
SECTION 8.03 Fees and Expenses........................................ 32
SECTION 8.04 Amendment................................................ 33
SECTION 8.05 Extension; Waiver........................................ 33
ARTICLE IX MISCELLANEOUS.................................................... 34
SECTION 9.01 Non-Survival of Representations and Warranties........... 34
SECTION 9.02 Entire Agreement; Assignment............................. 34
SECTION 9.03 Validity................................................. 34
SECTION 9.04 Notices.................................................. 34
SECTION 9.05 Governing Law............................................ 35
SECTION 9.06 Consent to Jurisdiction; Waiver of Immunities............ 35
SECTION 9.07 Descriptive Headings..................................... 36
SECTION 9.08 Counterparts............................................. 36
SECTION 9.09 Parties in Interest...................................... 36
SECTION 9.10 Certain Definitions...................................... 36
SECTION 9.11 Specific Performance..................................... 37
</TABLE>
-ii-
<PAGE>
LIST OF SCHEDULES
-----------------
<TABLE>
<CAPTION>
<S> <C> <C>
Schedule 4.03 -- Capitalization
Schedule 4.05(a) -- Conflicts
Schedule 4.08 -- Changes
Schedule 4.12 -- Insurance
Schedule 4.13 -- Employee Plans and Arrangements
Schedule 4.17 -- Environmental Laws and Regulations
Schedule 6.01(e) -- Employee Benefit Arrangements
</TABLE>
-iii-
<PAGE>
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
----
<S> <C>
accumulated funding deficiency.................................... 16
Acquisition Proposal.............................................. 29
affiliate.........................................................15, 36
Agreement......................................................... 1
Antitrust Laws.................................................... 26
Benefit Plans..................................................... 16
Board............................................................. 1
Certificates...................................................... 9
Closing........................................................... 5
Closing Date...................................................... 6
Code.............................................................. 15
Commonly Controlled Entity........................................ 15
Company........................................................... 1
Company Process Agent............................................. 35
Company Representatives........................................... 25
Company Stock Purchase Agreement.................................. 1
Confidentiality Agreement......................................... 34
Consent........................................................... 13
control........................................................... 36
Dissenting Shares................................................. 8
Donnelley Stock Purchase Agreement................................ 1
Effective Time.................................................... 5
Employee Benefit Arrangement...................................... 24
employee pension benefit plan..................................... 15
employee welfare benefit plan..................................... 15
ERISA............................................................. 15
Exchange Act...................................................... 13
Executive Stock Purchase Agreement................................ 1
fully diluted basis............................................... 2
GAAP.............................................................. 13
GCL............................................................... 5
Governmental Entity............................................... 13
HSR Act........................................................... 13
Indemnified Parties............................................... 27
Indemnified Party................................................. 27
Independent Directors............................................. 5
Intellectual Property............................................. 18
Lehman Brothers................................................... 15
Lien.............................................................. 11
Material Adverse Effect on Purchaser.............................. 21
Material Adverse Effect on the Company............................ 10
</TABLE>
-iv-
<PAGE>
<TABLE>
<S> <C>
Merger............................................................. 5
Newco.............................................................. 1
Offer.............................................................. 1
Offer Documents.................................................... 2
Offer to Purchase.................................................. 2
Option............................................................. 1
Option Plans....................................................... 7
Other Filings...................................................... 14
Parent............................................................. 1
Parent Process Agent............................................... 35
Parent Representatives............................................. 25
Paying Agent....................................................... 9
PBGC............................................................... 17
Pension Plan....................................................... 15
Person............................................................. 36
Preferred Stock.................................................... 11
Process Agent...................................................... 35
prohibited transaction............................................. 16
Proxy Statement.................................................... 8
Purchaser.......................................................... 1
Purchaser Representatives.......................................... 25
reportable event................................................... 17
Rights............................................................. 11
Rights Agreement................................................... 11
Schedule 14D-1..................................................... 2
Schedule 14D-9..................................................... 3
SEC................................................................ 2
SEC Reports........................................................ 13
Shares............................................................. 1
Significant Subsidiaries........................................... 10
Stock Purchase Agreements.......................................... 1
Stockholders' Meeting.............................................. 7
subsidiaries....................................................... 36
Subsidiary......................................................... 36
Surviving Corporation.............................................. 5
Tax................................................................ 18
Taxes.............................................................. 18
Termination Fee.................................................... 33
Violation.......................................................... 12
Voting Debt........................................................ 11
Welfare Plan....................................................... 15
</TABLE>
-v-
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 12,
1998, by and among The Great Universal Stores P.L.C., a company incorporated
under the laws of England ("Parent"), Great Universal Acquisition Corp., a
Delaware corporation and an indirect subsidiary of Parent ("Purchaser"), and
Metromail Corporation (the "Company"), a Delaware corporation.
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company deem it advisable and in the best interests of the stockholders of
such corporations to effect the merger of Purchaser and the Company pursuant to
this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have approved the acquisition of the Company by Parent and, in
furtherance of such acquisition, Parent proposes to make or to cause Purchaser
to make a cash tender offer (the "Offer") for all of the outstanding shares of
common stock of the Company, par value $0.01 per share (including the associated
Rights (as defined in Section 4.03 of this Agreement)) (collectively, the
"Shares"), at a price of $31.50 net to the seller per Share (the "Purchase
Price") on the terms set forth in the Offer Documents (as such term is defined
below), and the Board of Directors of the Company (the "Board") has unanimously
approved the Offer and resolved to recommend that it be accepted by the
stockholders of the Company; and
WHEREAS, the Company and Parent are entering into a Stock Purchase
Agreement, dated as of the date hereof (the "Company Stock Purchase Agreement"),
R. R. Donnelley & Sons Company ("Donnelley") and Parent are entering into a
Stock Purchase Agreement, dated as of the date hereof (the "Donnelley Stock
Purchase Agreement"), and certain executives of the Company and Parent are each
entering into a Stock Purchase Agreement, dated as of the date hereof (each, an
"Executive Stock Purchase Agreement", and collectively with the Company Stock
Purchase Agreement and the Donnelley Stock Purchase Agreement, the "Stock
Purchase Agreements"), pursuant to which the Company, Donnelley and such
executives will, among other things, agree to sell Shares to Parent under
certain circumstances.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) Provided that nothing shall have occurred
that would result in the failure of any of the conditions set forth in Annex I
hereto, Parent and Purchaser shall, as promptly as practicable following the
date hereof and in any event not later
<PAGE>
than March 20, 1998, commence their Offer to purchase the Shares at a price
equal to the Purchase Price. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase" and, together with a letter of transmittal
relating thereto, the "Offer Documents") which shall be subject solely to the
condition that there be validly tendered and not withdrawn prior to the
expiration of the Offer that number of Shares which, when added to any Shares
acquired pursuant to the Stock Purchase Agreements simultaneously with the
acceptance of Shares pursuant to the Offer, represents at least a majority of
the Shares outstanding on a fully diluted basis (the "Minimum Condition") and to
the other conditions set forth in Annex I hereto (including the expiration of
applicable waiting periods under the HSR Act (as hereinafter defined)). For
purposes of this Agreement, "fully diluted basis" means issued and outstanding
Shares and Shares subject to issuance under outstanding Options (as defined
below). As soon as practicable, Parent and Purchaser shall file with the
Securities and Exchange Commission (the "SEC") a Schedule 14D-1 (which schedule,
together with all amendments and supplements thereto, is hereinafter referred to
as the "Schedule 14D-1") with respect to the Offer. The Company and its counsel
shall be given the opportunity to review the Schedule 14D-1 (as defined below)
before it is filed with the SEC. In addition, Parent and Purchaser agree to
provide the Company and its counsel with any comments, whether written or oral,
that Parent and/or its counsel may receive from time to time from the SEC or its
staff with respect to the Schedule 14D-1 promptly after the receipt of such
comments or other communications. Without the prior written consent of the
Company, neither Parent nor Purchaser shall decrease the price per Share or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased in the Offer, change the conditions set forth in
Annex I, impose additional conditions to the Offer or amend any other term of
the Offer in any manner materially adverse to the holders of the Shares. Subject
to the terms of the Offer and this Agreement and the satisfaction or waiver of
all the conditions of the Offer set forth in Annex I hereto as of any expiration
date of the Offer, Parent and/or Purchaser will accept for payment and pay for
all Shares validly tendered and not properly withdrawn pursuant to the Offer as
soon as practicable after such expiration date of the Offer. Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, (i) extend the
Offer on one or more occasions for up to ten business days for each such
extension beyond the then scheduled expiration date (the initial scheduled
expiration date being 20 business days following commencement of the Offer), if
at the then scheduled expiration date of the Offer any of the conditions to
Purchaser's obligation to accept for payment and pay for the Shares shall not be
satisfied or waived, until such time as such conditions are satisfied or waived,
(ii) increase the Purchase Price and extend the Offer for any period required by
any rule, regulation, interpretation or provision of the SEC or the staff
thereof applicable to the Offer and (iii) extend the Offer for an aggregate
period of not more than 10 business days beyond the latest expiration date that
would otherwise be permitted under clause (i) or (ii) of this sentence if there
shall not have been tendered and not withdrawn pursuant to the Offer at least
90% of the outstanding Shares.
(b) The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, shall not 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 made therein, in light of the circumstances under
-2-
<PAGE>
which they were made, not misleading, except that no representation is made by
Parent or Purchaser with respect to information supplied by the Company in
writing for inclusion in the Offer Documents. Each of Parent and Purchaser, on
the one hand, and the Company, on the other hand, agrees to correct promptly any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect and Parent
and Purchaser further agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws.
SECTION 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that, at a meeting duly called and held, its Board of Directors has
(i) unanimously determined that this Agreement, the Stock Purchase Agreements
and the transactions contemplated hereby and thereby, including, without
limitation, the Offer and the Merger, are fair to and in the best interest of
the Company's stockholders, (ii) unanimously approved this Agreement, the
Company Stock Purchase Agreement and the transactions contemplated hereby and
thereby, including, without limitation, the Offer and the Merger and (iii)
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares thereunder to Purchaser and approve and adopt this
Agreement, the Company Stock Purchase Agreement and the Merger; provided, that
such recommendation may be withdrawn, modified or amended if, in the good faith
opinion of the Directors, only after receipt of advice from outside legal
counsel, the failure to withdraw, modify or amend such recommendation would
result in the Board violating its fiduciary duties to the Company's stockholders
under applicable law. The Company consents to the inclusion of such
recommendation and approval in the Offer Documents.
(b) Contemporaneously with the commencement of the Offer as provided
for in Section 1.01, the Company will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (which schedule,
together with all amendments and supplements thereto, is hereafter referred to
as the "Schedule 14D-9") which shall reflect the recommendations and actions of
the Company's Board of Directors referred to above. The Company further agrees
to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. Each of the Company, on
the one hand, and Parent and Purchaser, on the other hand, agrees to promptly
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material respect
and the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent and its counsel with any
comments, whether written or oral, that the Company and/or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments or other communications.
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(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Parent and Purchaser mailing labels, security position
listings and any available listing, or computer file containing the names and
addresses of all recordholders of the Shares as of a recent date, and shall
furnish Parent and Purchaser with such additional information (including, but
not limited to, updated lists of holders of the Shares and their addresses,
mailing labels and lists of security positions) and assistance as Parent,
Purchaser or their respective agents may reasonably request in communicating the
Offer to the record and beneficial holders of the Shares. Except for such steps
as are necessary to disseminate the Offer Documents, Parent and Purchaser shall
hold in confidence the information contained in any of such labels and lists and
the additional information referred to in the preceding sentence, will use such
information in connection with the Offer, and, if this Agreement is terminated,
will upon request of the Company deliver or cause to be delivered to the Company
all copies of such information then in its possession or the possession of its
agents or representatives.
SECTION 1.3 Directors.
(a) Promptly upon the purchase of Shares by Parent or Purchaser or any
of its Subsidiaries pursuant to the Offer and/or pursuant to any of the Stock
Purchase Agreements which represents at least a majority of the outstanding
Shares, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
is equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Purchaser pursuant to this sentence)
multiplied by the percentage that the number of Shares so accepted for payment
bears to the total number of Shares then outstanding. In furtherance thereof,
the Company shall, upon request of the Purchaser, use its reasonable best
efforts promptly either to increase the size of its Board of Directors or secure
the resignations of such number of its incumbent directors, or both, as is
necessary to enable Purchaser's designees to be so elected to the Company's
Board of Directors, and shall take all actions available to the Company to cause
Purchaser's designees to be so elected. At such time, the Company shall, if
requested by Purchaser, also cause persons designated by Purchaser to constitute
at least the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 1.03(a), including mailing to
stockholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Purchaser's designees to be elected to the Company's Board
of Directors. Purchaser or Parent will supply the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.03 are in addition to and shall
not limit any rights which Purchaser, Parent or any of their affiliates may have
as a holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
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(c) In the event Purchaser's designees are elected to the Company's
Board of Directors, until the Effective Time (as defined below), the Company's
Board shall have at least two directors who are directors on the date hereof
("Independent Directors"), provided that, in such event, if the number of
Independent Directors shall be reduced below two for any reason whatsoever, any
remaining Independent Directors (or Independent Director, if there be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Director then remains, the other directors shall designate two
persons to fill such vacancies who shall not be stockholders, affiliates or
associates of Purchaser or Parent and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Notwithstanding anything
in this Agreement to the contrary, in the event that Purchaser's designees are
elected to the Company's Board, after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights, benefits or remedies hereunder or (iii) take any other action
by the Company's Board under or in connection with this Agreement.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the satisfaction
or waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the General Corporation Law of the State of
Delaware (the "GCL"), at the Effective Time Purchaser shall be merged (the
"Merger") with and into the Company. Following the Merger, the separate
corporate existence of Purchaser shall cease and the Company shall continue as
the surviving corporation (the "Surviving Corporation"). At the option of Parent
and provided that such amendment does not delay the Effective Time, the Merger
may be structured so that, and this Agreement shall thereupon be amended to
provide that, the Company shall be merged with and into Purchaser or another
direct or indirect wholly-owned subsidiary of Parent with Purchaser or such
other subsidiary of Parent continuing as the Surviving Corporation; provided,
however, that the Company shall be deemed not to have breached any of its
representations and warranties herein if and to the extent such breach would
have been attributable to such election.
SECTION 2.2 Effective Time; Closing. As soon as practicable after the
satisfaction or waiver (to the extent permitted hereunder) of the conditions set
forth in Article VII, the Company shall execute in the manner required by the
GCL and deliver to the Secretary of State of the State of Delaware a duly
executed and verified certificate of merger, or, if permitted, a certificate of
ownership and merger, and the parties shall take such other and further actions
as may be required by law to make the Merger effective. The time the Merger
becomes effective in accordance with applicable law is referred to as the
"Effective Time." Prior to such filing, a closing (the "Closing") shall be held
at the offices of Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois
60601, or such other place as the parties hereto shall
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agree, for the purpose of confirming the satisfaction or waiver of the
conditions set forth in Article VII. The date on which the Closing occurs is
referred to herein as the "Closing Date."
SECTION 2.3 Effects of the Merger; Subsequent Actions. The Merger shall
have the effects set forth in Section 259 of the GCL. Without limiting the
generality of the foregoing, and subject thereto and any other applicable laws,
at the Effective Time, all properties, rights, privileges, powers and franchises
of the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, restrictions, disabilities and duties of the Company and
Purchaser shall become debts, liabilities, restrictions, disabilities and duties
of the Surviving Corporation.
SECTION 2.4 Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) The By-Laws of Purchaser in effect at the Effective Time shall be
the By-Laws of the Surviving Corporation, until thereafter amended in accordance
with the provisions thereof and hereof and applicable law.
SECTION 2.5 Directors. Subject to applicable law, the directors of
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.6 Officers. The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.7 Conversion of Shares. Subject to Section 3.01 below, at the
Effective Time, by virtue of the Merger and without any action on the part of
Parent, Purchaser, the Company or the holders of the following securities, each
Share issued and outstanding immediately prior to the Effective Time (other than
any Shares held by Parent, Purchaser, any wholly-owned subsidiary of Parent or
Purchaser, in the treasury of the Company or by any wholly-owned Subsidiary of
the Company, which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, shall be cancelled and retired and shall cease to
exist with no payment being made with respect thereto, and other than Dissenting
Shares) shall be converted into the right to receive the Purchase Price, without
interest thereon, upon surrender of the certificate formerly representing such
Share.
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SECTION 2.8 Conversion of Purchaser Common Stock. At the Effective
Time, each share of common stock, par value $.01 per share, of Purchaser issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.9 Company Option Plans.
(a) The Company shall (i) terminate its Amended and Restated 1996
Stock Incentive Plan and its 1996 Broad-Based Employee Stock Plan (collectively,
the "Option Plans"), immediately prior to the Effective Time without prejudice
to the rights of the holders of Options awarded pursuant thereto and (ii) grant
no additional Options, restricted stock, stock units, performance units,
performance shares, fixed awards or similar rights or awards under the Option
Plans or otherwise on or after the date hereof. As used hereafter in this
Section 2.09, "Options" shall include each stock option or other right to
acquire Shares (whether or not then exercisable, and regardless of the exercise
price thereof) granted by the Company, whether pursuant to the Option Plans or
otherwise, to an employee, agent, consultant, advisor or director of the
Company.
(b) The Company shall (i) use its reasonable best efforts to obtain
from each holder of any Option that it does not have the right to cancel the
consent of such holder to the cancellation of each such Option, and (ii) shall
cancel each Option that the Company has the right to cancel or as to which the
Company has obtained the consent of the holder thereof to such cancellation,
each such cancellation (whether or not a consent is required therefor) to take
effect immediately after the Effective Time. In consideration of each
cancellation of an Option, the Company shall pay to the holder of such Option,
promptly after such cancellation, in respect of such Option, an amount equal to
the excess, if any, of the Purchase Price over the per Share exercise price of
such Option, multiplied by the number of Shares subject to such Option.
(c) The Company shall suspend its 1997 Employee Stock Purchase Plan
(the "Purchase Plan") so as to provide that no purchase period shall begin after
March 31, 1998, and the Company shall terminate the Purchase Plan prior to the
Effective Time.
SECTION 2.10 Stockholders' Meeting.
(a) If required by the GCL in order to consummate the Merger, the
Company, acting through the Board, shall, in accordance with the GCL:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Stockholders' Meeting") as soon as practicable
following the acceptance for payment of and payment for the Shares by
Parent and/or Purchaser pursuant to the Offer for the purpose of
considering and taking action upon this Agreement;
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(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use its
reasonable best efforts (x) to obtain and furnish the information required
to be included by the SEC in the Proxy Statement (as hereinafter defined)
and, after consultation with Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (including
any amendment or supplement thereto, the "Proxy Statement") to be mailed to
its stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with Parent and
its counsel and (y) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law, include in the Proxy Statement the recommendation of the
Board that stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
(b) At such meeting, each of Parent and Purchaser will vote (and will
cause each of their respective affiliates to vote), all of the Shares (if any)
then owned by them (or their respective affiliates) in favor of the approval of
the Merger and the adoption of this Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders. Notwithstanding
Section 2.10, in the event that Parent, Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the Shares pursuant to the Offer and the
Stock Tender Agreement, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment of and payment for Shares by Parent
and/or Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in accordance
with Section 262 of the GCL, if such Section 262 provides for appraisal rights
for such Shares in the Merger ("Dissenting Shares"), shall not be converted into
the right to receive the Purchase Price as provided in Section 2.07, unless and
until such holder fails to perfect or withdraws or otherwise loses his right to
appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the Purchase Price, if any, to
which such holder is entitled, without interest or dividends thereon. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Shares
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and, prior to the Effective Time, Parent shall have the right to participate in
all negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands.
SECTION 3.2 Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate a bank or
trust company reasonably acceptable to the Company to act as paying agent (the
"Paying Agent") in effecting the exchange for the Purchase Price of certificates
(the "Certificates") that, prior to the Effective Time, represented Shares.
Upon the surrender of each such Certificate formerly representing Shares,
together with a properly completed letter of transmittal, the Paying Agent shall
pay the holder of such Certificate the Purchase Price multiplied by the number
of Shares formerly represented by each such Certificate, in exchange therefor,
and each such Certificate shall forthwith be cancelled. Until so surrendered
and exchanged, each such Certificate (other than Certificates representing
Dissenting Shares or Shares held by Parent, Purchaser or the Company, or any
direct or indirect subsidiary thereof, or in the treasury of the Company) shall
represent solely the right to receive the Purchase Price. No interest shall be
paid or accrue on the Purchase Price. If the Purchase Price (or any portion
thereof) is to be delivered to any person other than the person in whose name
the Certificate formerly representing Shares surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such exchange shall pay to the Paying
Agent any transfer or other Taxes required by reason of the payment of the
Purchase Price to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the Paying Agent that
such Tax has been paid or is not applicable.
(b) Prior to the Effective Time, Parent or Purchaser shall deposit, or
cause to be deposited, in trust with the Paying Agent the Purchase Price to
which holders of Shares shall be entitled at the Effective Time pursuant to
Section 2.07 hereof; provided, however, that no such deposit shall relieve
Parent or Purchaser of its obligation to pay the Purchase Price pursuant to
Section 2.07.
(c) The Purchase Price shall be invested by the Paying Agent as
directed by Parent, provided that such investments shall be limited to direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest quality
by Moody's Investors Services, Inc. or Standard & Poor's Corporation, or
certificates of deposit issued by a commercial bank having at least
$1,000,000,000 in assets; provided further that no loss on investment made
pursuant to this Section 3.02(c) shall relieve Parent or Purchaser of its
obligation to pay the Purchase Price pursuant to Section 2.07.
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(d) Promptly after the Effective Time, the Paying Agent shall mail to
each record holder of Certificates that immediately prior to the Effective Time
represented Shares a form of letter of transmittal and instructions for use in
surrendering such Certificates and receiving the Purchase Price in exchange
therefor.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares. If, after the
Effective Time, Certificates formerly representing Shares are presented to the
Surviving Corporation or the Paying Agent, they shall be cancelled and exchanged
for the Purchase Price as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
(f) Promptly following the date which is six months after the
Effective Time, the Paying Agent shall deliver to Parent all cash and documents
in its possession relating to the transactions described in this Agreement, and
the Paying Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing a Share may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Purchase Price, without any
interest thereon.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser that:
SECTION 4.1 Organization and Qualification; Subsidiaries. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of the Company's significant subsidiaries
(within the meaning of Regulation S-X under the Exchange Act (the "Significant
Subsidiaries")) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
Company and its Subsidiaries has the requisite corporate power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not have a Material Adverse Effect on the Company. The term "Material
Adverse Effect on the Company," as used in this Agreement, means any adverse
change, circumstance or effect that, individually or in the aggregate with all
other adverse changes, circumstances and effects, has had or will have a
material adverse effect on the business, financial condition, properties or
results of operations of the Company and its Subsidiaries taken as a whole.
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SECTION 4.02 Charter and By-laws. The Company has heretofore made
available to Parent a complete and correct copy of the charter and the By-laws
or comparable organizational documents, each as amended as of the date hereof,
of the Company and each of the Significant Subsidiaries.
SECTION 4.03 Capitalization. (a) The authorized capital stock of the
Company consists of 75,000,000 Shares and 20,000,000 shares of preferred stock,
par value $0.01 per share ("Preferred Stock"). As of the close of business on
March 6, 1998, 22,516,996 Shares were issued and outstanding, excluding 619,435
Shares in treasury. As of the close of business on March 6, 1998 there were no
shares of Preferred Stock issued and outstanding. The Company has no shares
reserved for issuance, except that, as of March 6, 1998, there were 2,087,119
Shares reserved for issuance pursuant to outstanding Options or other awards
under the Option Plans and there were 75,000 shares of Junior Participating
Preferred Stock, Series A, reserved for issuance upon exercise of the Preferred
Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of February 24, 1997 between the Company and American Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agreement"). The Company has no
options to purchase Shares outstanding other than as set forth on Schedule 4.03.
Since March 6, 1998, the Company has not issued any shares of capital stock
except pursuant to the exercise of Options outstanding as of such date. All of
the outstanding Shares are, and all Shares which may be issued pursuant to the
exercise of outstanding Options will be, when issued in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and
nonassessable. There are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company or any of its Subsidiaries issued and
outstanding. Except as set forth above or for the Rights or as set forth on
Schedule 4.03 and except for the transactions contemplated by this Agreement,
there are no existing options, warrants, calls, subscriptions or other rights,
convertible securities, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company or
any of its Subsidiaries, obligating the Company or any of its Subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Company or any
of its Subsidiaries or securities convertible into or exchangeable for such
shares or equity interests, and neither the Company nor any of its Subsidiaries
is obligated to grant, extend or enter into any such option, warrant, call,
subscription or other right, convertible security, agreement, arrangement or
commitment. Except as set forth in Section 2.09 and as set forth on Schedule
4.03, there are no outstanding contractual obligations of the Company or any of
its Subsidiaries to (i) repurchase, redeem or otherwise acquire any Shares or
the capital stock of the Company or any of its Subsidiaries or (ii) provide
funds to or make any investment in (in the form of a loan, capital contribution
or otherwise) any entity other than a wholly-owned Subsidiary.
(b) Each of the outstanding shares of capital stock of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and such shares of the Company's Subsidiaries as are owned by the
Company or by a Subsidiary of the Company are owned in each case free and clear
of any lien, claim, option, charge, security interest, limitation, encumbrance
and restriction of any kind (any of the foregoing being a "Lien").
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Except for directors' qualifying shares or as described on Schedule 4.03, all
outstanding shares of capital stock of each of the Company's Subsidiaries is
owned by the Company or another Subsidiary of the Company.
(c) Except as set forth on Schedule 4.03, there are no voting trusts
or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting of the capital stock of the
Company or any of its Subsidiaries.
SECTION 4.04 Authority Relative to this Agreement and the Company Stock
Purchase Agreement. The Company has all necessary corporate power and authority
to execute and deliver this Agreement, the Company Stock Purchase Agreement and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Company Stock Purchase Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly and validly authorized and approved by the
Board and no other corporate proceedings on the part of the Company are
necessary to authorize or approve this Agreement, the Company Stock Purchase
Agreement or to consummate the transactions contemplated hereby or thereby
(other than, with respect to the Merger, and subject to Section 2.11, the
approval and adoption of the Merger and this Agreement by the affirmative vote
of the holders of a majority of the Shares then outstanding). This Agreement and
the Company Stock Purchase Agreement have been duly and validly executed and
delivered by the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement and the Company Stock Purchase
Agreement by Parent and Purchaser, each constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) Except as set forth on Schedule 4.05(a) hereto, none of the
execution, delivery or performance of this Agreement or the Company Stock
Purchase Agreement by the Company, the consummation by the Company of the
transactions contemplated hereby or thereby or the compliance by the Company
with any of the provisions hereof or thereof will (i) conflict with or violate
the Certificate of Incorporation or By-Laws of the Company or the comparable
organizational documents of any of its Subsidiaries, (ii) conflict with or
violate any statute, ordinance, rule, regulation, order, judgment or decree
applicable to the Company or its Subsidiaries, or by which any of them or any of
their respective properties or assets may be bound or affected, or (iii) result
in a violation or breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in any loss of any material benefit, or the creation of any Lien on any of the
property or assets of the Company or any of its Subsidiaries (any of the
foregoing referred to in clause (ii) or this clause (iii) being a "Violation")
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiariesor any of their
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respective properties may be bound or affected, except in the case of the
foregoing clauses (ii) or (iii) for any such Violations which would not in the
aggregate have a Material Adverse Effect on the Company or materially adversely
affect the ability of the Company to consummate the transactions contemplated
hereby or thereby.
(b) None of the execution, delivery or performance of this Agreement
or the Company Stock Purchase Agreement by the Company, the consummation by the
Company of the transactions contemplated hereby or thereby or the compliance by
the Company with any of the provisions hereof or thereof will require any
consent, waiver, approval, authorization or permit of, or registration or filing
with or notification to (any of the foregoing being a "Consent"), any government
or subdivision thereof, domestic, foreign or supranational or any
administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational (a "Governmental Entity"),
except for (i) compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the filing of a
certificate of merger, or, if permitted, a certificate of ownership and merger,
pursuant to the GCL, (iii) notifications required by certain state Blue Sky,
takeover and environmental statutes, (iv) compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any
requirements of any foreign or supranational Antitrust Laws, and (v) Consents
the failure of which to obtain or make would not in the aggregate have a
Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated hereby or
thereby.
SECTION 4.06 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements required to be filed by
the Company with the SEC since January 1, 1997 (the "SEC Reports"). As of their
respective dates, the SEC Reports (including, without limitation, any financial
statements or schedules included therein) complied in all material respects with
the requirements of the Exchange Act or the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder applicable, as
the case may be, to such SEC Reports, and none of the SEC Reports contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included in the SEC
Reports and the audited financial statements as of and for the year ended
December 31, 1997, which the Company has provided to Parent, present fairly in
all material respects the consolidated financial position and the consolidated
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of the dates or for the periods presented therein in conformity
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved except as otherwise noted
therein, including the related notes.
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SECTION 4.07 Information. None of the information provided or that may be
provided by the Company for use in the Offer Documents, the Schedule 14D-1 or
any other document to be filed with the SEC or any other Governmental Entity in
connection with the transactions contemplated by this Agreement (the "Other
Filings"), and neither the Proxy Statement nor the Schedule 14D-9, shall, at the
time filed with the SEC or such other Governmental Entity, and, in the case of
the Proxy Statement, at the time mailed to the Company's stockholders, at the
time of the Stockholders' Meeting or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information provided or that may be provided by Parent or Purchaser specifically
for use in such documents. The Schedule 14D-9 and the Proxy Statement will
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.8 Changes. Since December 31, 1997, except as set forth in the
SEC Reports filed prior to the date hereof or as otherwise disclosed in Schedule
4.08 hereto:
(a) there has been no event, effect or change (including the
incurrence of any liabilities or obligations of any nature whether or not
accrued, contingent or otherwise) having a Material Adverse Effect on the
Company;
(b) the Company has not adopted any amendment to its Certificate of
Incorporation or By-laws;
(c) other than grants under the Options Plans and issuances upon
exercise of options granted under Option Plans and pursuant to the Purchase
Plan, the Company has not issued, reissued, pledged or sold, or authorized the
issuance, reissuance, pledge or sale of (i) additional shares of capital stock
of any class, or securities convertible into, exchangeable for or evidencing the
right to substitute for, capital stock of any class, or any rights, warrants,
options, calls, commitments or any other agreements of any character, to
purchase or acquire any capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, capital stock,
or (ii) any other securities in respect of, in lieu of, or in substitution for,
Shares;
(d) neither the Company nor any of its Subsidiaries declared, set
aside or paid any dividend or other distribution (whether in cash, securities or
property or any combination thereof) in respect of any class or series of its
capital stock other than between the Company and any of its wholly-owned
Subsidiaries; and
(e) neither the Company nor any of its Subsidiaries has split,
combined, subdivided, reclassified or redeemed, purchased or otherwise acquired
or proposed to redeem or purchased or otherwise acquired any shares of its
capital stock or any of its other securities.
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SECTION 4.9 Opinion of Financial Advisor. The Company has received the
opinion of Lehman Brothers Inc. ("Lehman Brothers"), dated the date hereof, to
the effect that, as of such date, the Purchase Price is fair to the holders of
Shares, a copy of which opinion has been delivered to Parent. The Company has
been authorized by Lehman Brothers to permit inclusion of such opinion (and
reference thereto) in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement.
SECTION 4.10 Rights Agreement. The Company has taken all action which may
be necessary under the Rights Agreement, so that (x) the execution of this
Agreement and any amendments thereto by the parties hereto and the execution of
the Stock Purchase Agreements and the consummation of the transactions
contemplated hereby and thereby shall not cause (i) Purchaser and/or Parent or
their respective Affiliates or Associates to become an Acquiring Person (as such
terms are defined in the Rights Agreement) unless this Agreement or the Stock
Purchase Agreements have been terminated in accordance with their respective
terms or (ii) a Distribution Date, a Stock Acquisition Date or a Triggering
Event (as such terms are defined in the Rights Agreement) to occur, irrespective
of the number of Shares acquired pursuant to the Offer, the Merger or the other
transactions contemplated by the Merger Agreement or the Stock Purchase
Agreements.
SECTION 4.11 Takeover Statutes. The Company has elected, pursuant to its
Certificate of Incorporation, not to be subject to Section 203 of the GCL.
Accordingly, such section is not applicable to the transactions contemplated
hereby or by the Stock Purchase Agreements.
SECTION 4.12 Litigation. Except as set forth in the SEC Reports, as of the
date hereof, there are no suits, claims, actions, proceedings, including,
without limitation, arbitration proceedings or alternative dispute resolution
proceedings, or investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries before any
Governmental Entity that would be reasonably likely to have a Material Adverse
Effect on the Company. The insurance endorsement described in Schedule 4.12 is
valid and binding on the Company and, to the knowledge of the Company, valid and
binding on the insurance company named therein.
SECTION 4.13 Employee Plans and Arrangements. (a) Schedule 4.13 lists each
"employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (hereinafter a
"Pension Plan") and "employee welfare benefit plan" (as defined in Section 3(1)
of ERISA, hereinafter a "Welfare Plan"), in each case maintained or contributed
to, or required to be maintained or contributed to, by the Company, any of its
Subsidiaries or any other person that, together with the Company, is treated as
a single employer under Section 4.14(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code") (each a "Commonly Controlled Entity") for
the benefit of any present or former employees of the Company or any of its
Subsidiaries. The Company has never maintained, or incurred any liability
whatsoever, with respect to a multiemployer plan (as defined in Section
4001(a)(3) of ERISA). The Company has made available to Purchaser true, complete
and correct copies of (i) each Pension Plan and Welfare Plan (collectively, the
"Benefit
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Plans"), (ii) the most recent annual report on Form 5500 as filed with the
Internal Revenue Service with respect to each applicable Benefit Plan, (iii) the
most recent summary plan description (or similar document) with respect to each
applicable Benefit Plan (iv) the most recent actuarial report or valuation with
respect to each plan that is a "defined benefit pension plan" (as defined in
Section 3(35) of ERISA), and (v) each trust agreement relating to any Benefit
Plan.
(b) Except where a failure would not have a Material Adverse Effect
on the Company, each Benefit Plan has been administered in accordance with its
terms. Except where a failure would not have a Material Adverse Effect on the
Company, the Company, its Subsidiaries and all the Benefit Plans are in
compliance with the applicable provisions of ERISA, the Code, and all other
laws, ordinances or regulations of any Governmental Entities. Except where a
failure would not have a Material Adverse Effect on the Company, there are no
investigations by any Governmental Entities, termination proceedings or other
claims (except claims for benefits payable in the normal operations of the
Benefit Plans), suits or proceedings against or involving any Benefit Plan or
asserting any rights to or claims for benefits under any Benefit Plan.
(c) Except where a failure would not have a Material Adverse Effect
on the Company, (i) all contributions to the Benefit Plans required to be made
by the Company or any of its Subsidiaries in accordance with the terms of the
Benefit Plans, any applicable collective bargaining agreement and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have been timely
made, (ii) there has been no application for or waiver of the minimum funding
standards imposed by Section 412 of the Code with respect to any Benefit Plan
that is a Pension Plan and (iii) no Pension Plan had an "accumulated funding
deficiency" within the meaning of Section 412(a) of the Code as of the end of
the most recently completed plan year.
(d) Except as set forth in Schedule 4.13, (i) each Pension Plan that
is intended to be a tax-qualified plan has been the subject of a determination
letter from the Internal Revenue Service to the effect that such Company Pension
Plan and each related trust is qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code, (ii) no such
determination letter has been revoked, and revocation has not been threatened,
(iii) no event has occurred and no circumstances exist that would adversely
affect the tax-qualification of such Pension Plan except for any events or
circumstances that would not have a Material Adverse Effect on the Company and
(iv) such Pension Plan has not been amended since the effective date of its most
recent determination letter in any respect that might adversely affect its
qualification, increase its cost or require security under Section 307 of ERISA.
The Company has made available to Purchaser a copy of the most recent
determination letter received with respect to each Pension Plan for which such a
letter has been issued, as well as a copy of any pending application for a
determination letter.
(e) Except where a failure would not have a Material Adverse Effect
on the Company: (i) no non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code or Section 406 of ERISA) has occurred that involves the
assets of any Benefit Plan; (ii) no Pension Plan has been terminated or has been
the subject of a "reportable event" (as defined in
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Section 4043 of ERISA and the regulations thereunder) for which the 30-day
notice requirement has not been waived by the Pension Benefit Guaranty
Corporation ("PBGC"); and (iii) none of the Company, any of its Subsidiaries or
any trustee, administrator or other fiduciary of any Benefit Plan has engaged in
any transaction or acted in a manner that could, or has failed to act so as to,
subject the Company, any such Subsidiary or any trustee, administrator or other
fiduciary to any liability for breach of fiduciary duty under ERISA or any other
applicable law.
(f) No Commonly Controlled Entity has incurred any liability to a
Pension Plan (other than for contributions not yet due) or to the PBGC (other
than for the payment of premiums not yet due other than liabilities that would
have a Material Adverse Effect on the Company).
(g) Except where the failure would not have a Material Adverse Effect
on the Company, no Commonly Controlled Entity has (i) engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to a liability
at any time after the date hereof or (ii) acted in a manner that could, or
failed to act so as to, result in fines, penalties, taxes or related charges
under (x) Section 502(c), (i) or (1) of ERISA, (y) Section 4071 of ERISA or (z)
Chapter 43 of the Code.
(h) The Company and its Subsidiaries comply with the applicable
requirements of parts 6 and 7 of subtitle B of Title I of ERISA ((S)(S) 601 et
seq.) with respect to each Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code.
(i) Schedule 4.13 lists (i) all employment agreements between the
Company or any of its Subsidiaries and any of their respective directors or
officers and between the Company or any of its Subsidiaries and any of its or
their employees which is not terminable by the Company or its Subsidiaries on
less than 90 days' notice, (ii) all agreements and plans pursuant to which any
director, officer or employee of the Company or any of its subsidiaries is
entitled to benefits upon termination of their employment or a change in control
of the Company and (iii) all Option Plans.
SECTION 4.14 Assets. The Company or one of its Subsidiaries has (a) good
and marketable title to or a valid leasehold interest under a capitalized lease
in all assets recorded on the Company's balance sheet as of December 31, 1997
included in the financial statements referred to in Section 4.06(b), except for
assets disposed of in the ordinary course of business since such date, and (b) a
valid leasehold or other interest in all other assets used by it in its
business, except in each case for exceptions to the foregoing that would not
have a Material Adverse Effect on the Company.
SECTION 4.15 Intellectual Property. (a) Except for any exceptions to the
foregoing that would not have a Material Adverse Effect on the Company, the
Company and its Subsidiaries own or have the right to use all Intellectual
Property reasonably necessary for the Company and its Subsidiaries to conduct
their business as it is currently conducted and consistent with past practice.
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(b) Except for any exceptions to the foregoing that would not have a
Material Adverse Effect on the Company: (i) all of the registered Intellectual
Property owned by the Company and its Subsidiaries is subsisting and unexpired,
free of all Liens, has not been abandoned and, to the knowledge of the Company,
does not infringe the Intellectual Property rights of any third party; (ii) none
of the Intellectual Property owned by the Company and its Subsidiaries is the
subject of any license, security interest or other agreement granting rights
therein to any third party (except for contracts relating to data, databases or
software licensed to third parties in the ordinary course of Company's or its
Subsidiaries' businesses); (iii) to the knowledge of the Company, no judgment,
decree, injunction, rule or order has been rendered by any Governmental Entity
which would limit, cancel or question the validity of, or the Company's or its
Subsidiaries' rights in and to, any Intellectual Property owned by the Company;
(iv) the Company has not received notice of any pending or threatened suit,
action or proceeding that seeks to limit, cancel or question the validity of, or
the Company's or its Subsidiaries' rights in and to, any Intellectual Property;
and (v) the Company and its Subsidiaries take reasonable steps to protect,
maintain and safeguard the Intellectual Property owned by the Company, including
any Intellectual Property for which improper or unauthorized disclosure would
impair its value or validity, and have caused their employees to execute
agreements in connection with the foregoing.
(c) For purposes of this Agreement "Intellectual Property" shall mean
all rights, privileges and priorities provided under U.S., state and foreign law
relating to intellectual property, including without limitation all (i)(A)
inventions, discoveries, processes, formulae, designs, methods, techniques,
procedures, concepts, developments, technology, new and useful improvements
thereof and know-how relating thereto, whether or not patented or eligible for
patent protections; (B) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items; (C) trademarks,
service marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; and (D) trade
secrets and other confidential information; and (ii) all registrations,
applications, recordings, and licenses or other similar agreements related to
the foregoing.
SECTION 4.16 Taxes. The Company and each of its Subsidiaries have (i)
filed all Tax Returns which they are required to file under applicable laws and
regulations, (ii) paid all Taxes which have become due and payable, and (iii)
accrued as a liability on the balance sheet included in the Company's 1997
financial statements described in Section 4.06 all Taxes which were accrued but
not yet due and payable as of the date thereof, except for failures to take any
of such actions which, individually or in the aggregate, would not have a
Material Adverse Effect on the Company. For purposes of this Agreement, "Tax" or
"Taxes" shall mean any federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax of any
kind, including any interest or penalties in respect of the foregoing, and "Tax
Returns" means returns, declarations, reports, information returns, or other
documents filed or required to be filed in connection with the
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determination, assessment or collection of Taxes of any person or the
administration of any laws, regulations or administrative requirements relating
to any Taxes.
SECTION 4.17 Environmental Laws and Regulations. Except as disclosed in
Schedule 4.17:
(i) The Company and its Subsidiaries hold and are in
compliance with all Environmental Permits (as defined below), and the
Company and its Subsidiaries are otherwise in compliance with all
Environmental Laws (as defined below) and there are no conditions that
might prevent or interfere with such compliance in the future, except where
the failure to hold or to be in such compliance would not reasonably be
expected to have a Material Adverse Effect on the Company;
(ii) As of the date hereof, neither the Company nor any of its
Subsidiaries has received any Environmental Claim (as defined below) and
there is no threatened Environmental Claim that would reasonably be
expected to have a Material Adverse Effect on the Company;
(iii) Neither the Company nor any of its Subsidiaries has
entered into any consent decree, order or agreement under any Environmental
Law;
(iv) There are no (A) underground storage tanks, (B)
polychlorinated biphenyls, (C) friable asbestos or asbestos-containing
materials, (D) sumps, (E) surface impoundments, (F) landfills, or (G)
sewers or septic systems present at any facility currently owned, leased,
operated or otherwise used by the Company or any of its Subsidiaries the
presence of which would reasonably be expected to have a Material Adverse
Effect on the Company;
(v) There are no past (including, without limitation, with
respect to assets or businesses formerly owned, leased or operated by the
Company or any of its Subsidiaries) or present actions, activities, events,
conditions or circumstances, including without limitation the release,
threatened release, emission, discharge, generation, treatment, storage or
disposal of Hazardous Materials the occurrence of which would reasonably be
expected to have a Material Adverse Effect on the Company;
(vi) No modification, revocation, reissuance, alteration,
transfer, or amendment of the Environmental Permits, or any review by, or
approval of, any third party of the Environmental Permits is required in
connection with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby or the continuation of
the business of the Company or its Subsidiaries following such consummation
that would reasonably be expected to have a Material Adverse Effect on the
Company;
(vii) Hazardous Materials have not been generated, transported,
treated, stored, disposed of, released or threatened to be released at, on,
from or under any of
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the properties or facilities currently owned, leased or otherwise used by
the Company or any of its Subsidiaries, in violation of, or so as could
result in liability under, any Environmental Laws that would reasonably be
expected to have a Material Adverse Effect on the Company;
(viii) None of the Company or its Subsidiaries has contractually
assumed any liabilities or obligations under any Environmental Laws that
would reasonably be expected to have a Material Adverse Effect on the
Company;
(ix) To the extent required by GAAP, the Company and its
Subsidiaries have accrued or otherwise provided for all damages,
liabilities, penalties or costs that they may incur in connection with any
claim pending or threatened against them, or any requirement that is or may
be applicable to them, under any Environmental Laws, and such accrual or
other provision is reflected in the Company's most recent consolidated
financial statements included in the SEC Reports filed prior to the date
hereof, except where the failure to make such accrual or provision would
not reasonably be expected to have a Material Adverse Effect on the
Company; and
(x) For purposes of this Agreement, the following terms shall
have the following meanings: (A) "Environmental Claim" means any written or
oral notice, claim, demand, action, suit, complaint, proceeding or other
communication by any person alleging liability or potential liability
(including without limitation liability or potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damage, personal injury, fines or penalties)
arising out of, relating to, based on or resulting from (1) the presence,
discharge, emission, release or threatened release of any Hazardous
Materials at any location, whether or not owned, leased or operated by the
Company or any of its Subsidiaries or (2) circumstances forming the basis
of any violation or alleged violation of any Environmental Law or
Environmental Permit or (3) otherwise relating to obligations or
liabilities under any Environmental Laws; (B) "Environmental Permits" means
all permits, licenses, registrations and other governmental authorizations
required under Environmental Laws for the Company and its Subsidiaries to
conduct their operations and businesses on the date hereof and consistent
with past practices; (C) "Environmental Laws" means all applicable federal,
state and local statutes, rules, regulations, ordinances, orders, decrees
and common law relating in any manner to contamination, pollution or
protection of the environment, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act, the
Solid Waste Disposal Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Occupational Safety and Health Act, the
Emergency Planning and Community-Right-to-Know Act, the Safe Drinking Water
Act, all as amended, and similar state laws; and (D) "Hazardous Materials"
means all hazardous or toxic substances, wastes, materials or chemicals,
petroleum (including crude oil or any fraction thereof) and petroleum
products, friable asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials, and substances regulated pursuant to,
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or that could reasonably be expected to provide the basis of liability
under, any Environmental Law.
SECTION 4.18 Brokers. Except for the engagement of Lehman Brothers, whose
fees will be paid by the Company and a copy of whose engagement letter has been
provided to Parent, none of the Company, any of its Subsidiaries, or any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company that:
SECTION 5.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of England and
each material subsidiary of Parent is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Parent and its
material subsidiaries (including Purchaser) has the requisite corporate power
and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent," as used in this Agreement, means any
adverse change, circumstance or effect that, individually or in the aggregate
with all other adverse changes, circumstances and effects, has had or will have
a materially adverse effect on the business, financial condition, properties or
results of operations of Parent and its Subsidiaries taken as a whole.
SECTION 5.2 Authority Relative to this Agreement and the Stock Purchase
Agreements. Each of Parent and Purchaser has all necessary corporate power and
authority to execute and deliver this Agreement, the Stock Purchase Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Purchase Agreements by
Parent and Purchaser and the consummation by Parent and Purchaser of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by the Boards of Directors of Parent and Purchaser and
by Parent as stockholder of Purchaser, and no other corporate proceedings on the
part of Parent or Purchaser are necessary to authorize or approve this
Agreement, the Stock Purchase Agreements or to consummate the transactions
contemplated hereby or thereby. This Agreement has been duly
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executed and delivered by each of Parent and Purchaser and, assuming the due and
valid authorization, execution and delivery by the Company, constitutes a valid
and binding obligation of each of Parent and Purchaser enforceable against each
of them in accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
SECTION 5.3 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement or the Stock
Purchase Agreements by Parent or Purchaser, the consummation by Parent or
Purchaser of the transactions contemplated hereby or thereby or compliance by
Parent or Purchaser with any of the provisions hereof or thereof will (i)
conflict with or violate the organizational documents of Parent or Purchaser,
(ii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to Parent or Purchaser, or any of their
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a Violation pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Purchaser, or any
of their subsidiaries, is a party or by which any of their respective properties
or assets may be bound or affected, except in the case of the foregoing clauses
(ii) and (iii) for any such Violations which would not have a Material Adverse
Effect on Parent or materially adversely affect the ability of Parent or
Purchaser to consummate the transactions contemplated hereby.
(b) None of the execution and delivery of this Agreement or the Stock
Purchase Agreements by Parent and Purchaser, the consummation by Parent and
Purchaser of the transactions contemplated hereby or thereby or compliance by
Parent and Purchaser with any of the provisions hereof or thereof will require
any Consent of any Governmental Entity, except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a certificate of
merger, or, if permitted, a certificate of ownership and merger, pursuant to the
GCL, (iii) notifications required by certain state Blue Sky, takeover and
environmental statutes, (iv) compliance with the HSR Act and any requirements of
any foreign or supranational Antitrust Laws and (v) Consents the failure of
which to obtain or make would not have a Material Adverse Effect on Parent or
materially adversely affect the ability of Parent or Purchaser to consummate the
transactions contemplated hereby.
SECTION 5.4 Information. None of the information provided or that may be
provided by Parent or Purchaser for use in the Proxy Statement, the Schedule
14D-9 or the Other Filings, and neither the Offer Documents nor the Schedule
14D-1, shall, at the time filed with the SEC or any other Governmental Entity,
and, in the case of the Proxy Statement, at the time mailed to the Company's
stockholders, at the time of the Stockholders' Meeting or at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, neither Parent nor Purchaser makes
any representation or warranty with respect to any information provided or that
may be provided by the Company specifically for use in such
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documents. The Schedule 14D-1 and the Offer Documents will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 5.5 Financing. Parent or Purchaser will have available to it at
the time required the funds necessary to consummate the Merger and the
transactions contemplated hereby.
SECTION 5.6 Brokers. Except for Bear, Stearns & Co. Inc., whose fees will
be paid by Parent, none of Parent, Purchaser, any of their Subsidiaries, or any
of their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.1 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement or with the prior written consent of Parent,
during the period from the date of this Agreement to the Effective Time, the
Company will, and will cause each of its Subsidiaries to, conduct its operations
only in the ordinary and usual course of business consistent with past practice
and will use its best reasonable efforts, and will cause each of its
Subsidiaries to use its reasonable best efforts, to preserve intact the business
organization of the Company and each of its Subsidiaries, to keep available the
services of its and their present officers and key employees, and to preserve
the good will of those having business relationships with it. Without limiting
the generality of the foregoing, and except as otherwise expressly contemplated
by this Agreement, the Company will not, and will not permit any of its
Subsidiaries to, prior to the Effective Time, without the prior written consent
of Parent:
(a) adopt any amendment to its Certificate of Incorporation or By-laws
or comparable organizational documents;
(b) except for issuances of capital stock of the Company's
Subsidiaries to the Company or a wholly-owned Subsidiary of the Company, issue,
reissue, pledge or sell, or authorize the issuance, reissuance, pledge or sale
of (i) additional shares of capital stock of any class, or securities
convertible into, exchangeable for or evidencing the right to substitute for,
capital stock of any class, or any rights, warrants, options, calls, commitments
or any other agreements of any character, to purchase or acquire any capital
stock or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for, capital stock, other than the issuance of
Shares, pursuant to the exercise of Options outstanding on the date hereof, or
(ii) any other securities in respect of, in lieu of, or in substitution for,
Shares outstanding on the date hereof;
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(c) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in respect
of any class or series of its capital stock other than between the Company and
any of its wholly-owned Subsidiaries;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(e) except for (i) increases in salary and wages granted to officers
and employees of the Company or its Subsidiaries in conjunction with promotions
or other changes in job status or normal compensation reviews (within the
amounts projected in the Company's 1998 operating plan previously provided to
Parent) in the ordinary course of business consistent with past practice, or
(ii) increases in salary, wages and benefits to employees of the Company
pursuant to collective bargaining agreements in effect on the date hereof,
increase the compensation or fringe benefits pay able or to become payable to
its directors, officers or employees (whether from the Company or any of its
Subsidiaries), or pay or award any benefit not required by any existing plan or
arrangement (including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Option Plans or otherwise) or grant any additional severance or termination
pay to (other than as required by existing agreements or policies listed on
Schedule 6.01(e) hereto), or enter into any employment or severance agreement
with, any director, officer or other employee of the Company or any of its
Subsidiaries or, except pursuant to arrangements disclosed in Schedule 6.01(e)
or as required by Section 2.09, establish, adopt, enter into, amend, accelerate
any rights or benefits or waive any performance or vesting criteria under any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance or other employee benefit plan,
agreement, trust, fund, policy or arrangement for the benefit or welfare of any
directors, officers or current or former employees (any of the foregoing being
an "Employee Benefit Arrangement"), except in each case to the extent required
by applicable law or regulation; provided, however, that nothing herein will be
deemed to prohibit the payment of benefits as they become payable;
(f) acquire, sell, lease or dispose of any assets or securities which
are material to the Company and its Subsidiaries, or enter into any commitment
to do any of the foregoing or enter into any material commitment or transaction,
in each case outside the ordinary course of business consistent with past
practice other than transactions between a wholly owned Subsidiary of the
Company and the Company or another wholly owned Subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term debt or incur or assume
any short-term debt, except that the Company and its Subsidiaries may incur or
pre-pay debt in the ordinary course of business in amounts and for purposes
consistent with past practice under existing lines of credit, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except in the
ordinary course of business consistent with past practice, or (iii) make any
loans, advances
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or capital contributions to, or investments in, any other person except in the
ordinary course of business consistent with past practice and except for loans,
advances, capital contributions or investments between any wholly owned
Subsidiary of the Company and the Company or another wholly owned Subsidiary of
the Company;
(h) settle or compromise any material suit or claim or material
threatened suit or claim;
(i) other than in the ordinary course of business consistent with past
practice, (i) modify, amend or terminate any contract, (ii) waive, release,
relinquish or assign any contract (or any of the Company's rights thereunder),
right or claim, or (iii) cancel or forgive any indebtedness owed to the Company
or any of its Subsidiaries;
(j) make any tax election not required by law or settle or compromise
any tax liability, in either case that is material to the Company and its
Subsidiaries;
(k) make any material change, other than in the ordinary course of
business and consistent with past practice or as required by applicable law,
regulation or change in generally accepted accounting principles, applied by the
Company (including tax accounting principles);
(l) release any person or entity from, or waive any provision of, any
standstill agreement to which it is a party or any confidentiality agreement
between it and another person or entity; or
(m) agree in writing or otherwise to take any of the foregoing actions
prohibited under Section 6.01 or any action which would cause any representation
or warranty in this Agreement to be or become untrue or incorrect in any
material respect.
SECTION 6.2 Access to Information. From the date of this Agreement until
the Effective Time, the Company will, and will cause its Subsidiaries, and each
of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives"), to give Parent
and Purchaser and their respective officers, employees, counsel, advisors and
representatives (collectively, the "Parent Representatives") reasonable access,
during normal business hours, to the offices and other facilities and to the
books and records of the Company and its Subsidiaries and will cause the Company
Representatives and the Company's Subsidiaries to furnish Parent, Purchaser and
Parent Representatives to the extent available with such financial and operating
data and such other information with respect to the business and operations of
the Company and its Subsidiaries as Parent and Purchaser may from time to time
reasonably request. Parent will comply with the terms of the Confidentiality
Agreement (as hereinafter defined).
SECTION 6.3 Reasonable Best Efforts. Subject to the terms and conditions
herein provided and to applicable legal requirements, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done,
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and to assist and cooperate with the other parties hereto in doing, as promptly
as practicable, all things necessary, proper or advisable under applicable laws
and regulations to ensure that the conditions set forth in Annex I and Article
VIII are satisfied, to remove any injunctions or other impediments or delays,
legal or otherwise and to consummate and make effective the transactions
contemplated by this Agreement.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent and/or Purchaser or any of
their respective subsidiaries, should be discovered by the Company or Parent, as
the case may be, which should be set forth in the Offer Documents, the Proxy
Statement, the Other Filings, Schedule 14D-1 or Schedule 14D-9, the discovering
party will promptly inform the other parties of such event or circumstance. If
at any time after the Effective Time any reasonable further action is necessary
or desirable to carry out the purposes of this Agreement, including the
execution of additional instruments, the proper officers and directors of each
party to this Agreement shall take all such necessary reasonable action.
SECTION 6.4 Consents.
(a) Each of the parties will, and will cause its Subsidiaries to, use
its reasonable best efforts to obtain as promptly as practicable all Consents of
any Governmental Entity or any other public or private person required in
connection with, and waivers of any Violations that may be caused by, the
consummation of the transactions contemplated by this Agreement.
(b) Each of the Company and Parent shall use its reasonable best
efforts to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters. Each
of the Company and Parent shall further take all reasonable actions necessary to
file any other forms or notifications which may be required by any foreign
Governmental Entity and to obtain any approvals which may be required in
connection therewith.
(c) In furtherance and not in limitation of the foregoing, each of
Parent and the Company shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any domestic or foreign government or
Governmental Entity or any multinational authority ("Antitrust Laws"); provided,
however, that nothing in this Agreement shall require, or be construed to
require, Purchaser or any of its affiliates to proffer to, or agree to, sell or
hold separate and agree to sell, before or after the Effective Time, any
material assets, businesses, or interest in any assets or businesses of
Purchaser, the Company or any of their respective affiliates (or to consent to
any sale, or agreement to sell, by the Company of any of its material assets or
businesses) or to agree to any material changes or restrictions in the
operations of any such assets or businesses.
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(d) Any party hereto shall promptly inform the others of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or governmental or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request. Parent will advise the
Company promptly in respect of any understandings, undertakings or agreements
(oral or written) which Parent proposes to make or enter into with the Federal
Trade Commission, the Department of Justice or any other domestic or foreign
government or governmental or multinational authority in connection with the
transactions contemplated by this Agreement.
SECTION 6.5 Public Announcements. The mutual press release with respect to
the execution of this Agreement shall be a joint press release acceptable to
Parent and the Company. Thereafter, so long as this Agreement is in effect,
neither Parent and Purchaser, on the one hand, nor the Company, on the other,
shall issue any press release or otherwise make any public statement with
respect to the transactions contemplated by this Agreement without prior
consultation with the other party, except as may be required by law or as
contemplated by the first clause of Section 6.08(a)(ii) (it being understood and
agreed that the Company intends to file a Current Report on Form 8-K with
respect to the transaction contemplated hereby promptly after the date hereof).
SECTION 6.6 Indemnification; Insurance.
(a) From and after the date hereof, Parent and Purchaser shall
indemnify and hold harmless each person who is, or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, an officer, director
or employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties" and individually, the "Indemnified Party") against all
losses, liabilities, expenses, claims or damages in connection with any claim,
suit, action, proceeding or investigation based in whole or in part on the fact
that such Indemnified Party is or was a director, officer or employee of the
Company or any of its Subsidiaries and arising out of acts or omissions
occurring prior to and including the Effective Time (including but not limited
to the transactions contemplated by this Agreement) to the fullest extent
permitted by the GCL, for a period of not less than six years following the
Effective Time; provided, however, 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 final disposition of
any and all such claims.
(b) Parent shall cause the Certificate of Incorporation and By-Laws
of the Surviving Corporation and its Subsidiaries to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under
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applicable law and shall not permit the amendment of such provisions in any
manner adverse to the Indemnified Parties, as the case may be, without the prior
written consent of such persons, for a period of six years from and after the
date hereof.
(c) Without limitation of the foregoing, in the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter, including, without
limitation, the transactions contemplated by this Agreement, occurring prior to,
and including, the Effective Time, Parent will pay as incurred such Indemnified
Party's 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 such payments in the event of a
final determination by a court of competent jurisdiction that such Indemnified
Party is not entitled thereto. Parent shall pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.06 or any action
involving an Indemnified Party resulting from the transactions contemplated by
this Agreement.
(d) For six years after the Effective Time, the Surviving Corporation
shall cause to be maintained policies of directors and officers' liability
insurance comparable to those currently maintained by the Company for the
benefit of directors and officers of the Company (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions which are substantially equivalent) with respect
to matters occurring prior to the Effective Time. Notwithstanding the foregoing,
in no case shall the Surviving Corporation be required to pay an annual premium
for such insurance greater than 300% of the last annual premium paid prior to
the date hereof. The Company represents to Parent that the last annual premium
paid for such insurance prior to the date hereof was $256,000.
(e) Any determination to be made as to whether any Indemnified Party
has met any standard of conduct imposed by law shall be made by legal counsel
reasonably acceptable to such Indemnified Party, Parent and the Surviving
Corporation, retained at Parent's and the Surviving Corporation's expense.
(f) This Section 6.06 is intended to benefit the Indemnified Parties
and their respective heirs, executors and personal representatives and shall be
binding on the successors and assigns of Parent, Purchaser and the Surviving
Corporation.
SECTION 6.7 Notification of Certain Matters. Parent and the Company shall
promptly notify each other of (a) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (i) to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (ii) to cause
any material covenant, condition or agreement under this Agreement not to be
complied with or satisfied in all material respects and (b) any failure of the
Company or Parent, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder in any
material respect; provided,
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however, that no such notification shall affect the representations or
warranties of any party or the conditions to the obligations of any party
hereunder.
SECTION 6.8 No Solicitation. (a) The Company and its Subsidiaries shall
not, and the Company and its Subsidiaries shall use their reasonable best
efforts to ensure that their respective officers, directors, employees,
representatives and agents (including, but not limited to, investment bankers,
attorneys and accountants) do not, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Purchaser, any of its affiliates or representatives) concerning any
proposal or offer to acquire all or a substantial part of the business or
properties of the Company or any of its Subsidiaries or any capital stock of the
Company or any of its Subsidiaries, whether by merger, tender offer, exchange
offer, sale of assets or similar transaction involving the Company or any
Subsidiary, division or operating or principal business unit of the Company (an
"Acquisition Proposal"), except that nothing contained in this Section 6.08 or
any other provision hereof shall prohibit the Company or the Company's Board
from (i) 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 promulgated under the Exchange Act, or (ii) making such disclosure to
the Company's stockholders as, in the good faith judgment of the Board, after
receiving advice from outside counsel, is required under applicable law;
provided that the Company may not, except as permitted by Section 6.08(b),
withdraw or modify its position with respect to the Offer or the Merger or
approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition Proposal.
Except as permitted by Section 6.08(b), the Company shall, and shall cause each
of its Subsidiaries to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations by the Company, any of its
Subsidiaries or any officer, director, employee or affiliate of, or investment
banker, attorney, accountant or other advisor or representative of, the Company
or any of its Subsidiaries with parties conducted heretofore with respect to any
of the foregoing.
(b) Notwithstanding the foregoing, prior to the later of (i) 11:59 P.M.
Chicago time March 30, 1998 and (ii) the expiration of the applicable waiting
periods under the HSR Act, the Company may furnish information concerning the
Company and its Subsidiaries to any corporation, partnership, person or other
entity or group pursuant to appropriate confidentiality agreements with terms
substantially similar to those contained in the Confidentiality Agreement, and
may negotiate and participate in discussions and negotiations with such entity
or group concerning an Acquisition Proposal if (i) such entity or group, which
has not been solicited by or on behalf of the Company after the date hereof, has
submitted a bona fide written proposal to the Company relating to any such
transaction which the Board concludes in good faith, after consulting with a
nationally recognized investment banking firm, (A) is more favorable to the
Company's stockholders (in their capacities as stockholders), from a financial
point of view, than the Offer and the Merger and (B) is reasonably capable of
being completed, and (ii) in the good faith opinion of the Board of Directors of
the Company, only after receipt of advice from outside legal counsel to the
Company, the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Board of Directors to violate its
fiduciary duties to the Company's stockholders under applicable law (an
Acquisition Proposal which satisfies
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clauses (i) and (ii) being referred to herein as a "Superior Proposal"). The
Company shall provide reasonable notice to Purchaser to the effect that it has
received an Acquisition Proposal, including its terms and conditions (but
excluding the identity of the party or parties making such Acquisition Proposal,
unless the terms and conditions of such Acquisition Proposal contains a purchase
price that includes stock of such party or parties). At any time after 48 hours
following notification to Purchaser of the Company's intent to do so (which
notification shall include the identity of the bidder and the material terms and
conditions of the proposal) and if the Company has otherwise complied with the
terms of this Section 6.08(b), the Board of Directors may withdraw or modify its
approval or recommendation of the Offer and may cause the Company to enter into
an agreement with respect to a Superior Proposal, provided it shall concurrently
with entering into such agreement pay or cause to be paid to Purchaser the
Termination Fee (as defined below) plus any amount payable at the time for
reimbursement of expenses pursuant to Section 8.03(b). If the Company shall have
notified Purchaser of its intent to enter into an agreement with respect to a
Superior Proposal in compliance with the preceding sentence and has otherwise
complied with such sentence, the Company may enter into an agreement with
respect to such Superior Proposal (with the bidder and on terms no less
favorable than those specified in such notification to Purchaser) after the
expiration of such 48 hour period.
SECTION 6.9 Agreement regarding Certain Real Estate. The Company represents
and warrants that it has the unconditional right to obtain legal title to the
properties occupied by it or its Subsidiaries in Mt. Pleasant, Iowa, Lincoln,
Nebraska, and Rutland, Vermont which were subject to industrial revenue bond
financings that have now been paid in full (the "IRB Properties") and agrees to
use its reasonable best efforts to cause the deeds to each of the IRB Properties
to be transferred to and in the name of the Company prior to the consummation of
the Offer.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions to Each Party's Obligation to Consummate the
Merger. The respective obligations of Parent, Purchaser and the Company to
consummate the Merger and the transactions contemplated hereby are subject to
the satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. If required by the GCL, the stockholders of
the Company shall have duly approved the transactions contemplated by this
Agreement.
(b) Injunctions, Illegality. The consummation of the Merger shall not
be restrained, enjoined or prohibited by any order, judgment, decree, injunction
or ruling of a court of competent jurisdiction or any Governmental Entity and
there shall not have been any statute, rule or regulation enacted, promulgated
or deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger.
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(c) Purchase of Shares. Parent and/or Purchaser shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Parent or Purchaser if Parent and/or Purchaser fails to purchase Shares tendered
pursuant to the Offer in violation of the terms of this Agreement or the Offer.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of the Company (with any
termination by Parent also being an effective termination by Purchaser):
(a) by mutual consent of Parent and the Company;
(b) by Parent or the Company:
(i) if any court or Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable best
efforts to lift) restraining, enjoining or otherwise prohibiting the Merger
and such order, decree, ruling or other action shall have become final and
nonappealable; or
(ii) if (x) the Offer shall have expired without any Shares being
purchased therein or (y) Purchaser shall not have accepted for payment all
Shares tendered pursuant to the Offer by September 30, 1998; provided,
however, that the right to terminate this Agreement under this Section
8.01(b)(ii) 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 Purchaser, to purchase the Shares pursuant to the Offer on
or prior to such date;
(c) by the Company:
(i) if Parent and/or Purchaser fails to commence the Offer as
provided in Section 1.01 hereof; provided, that the Company may not
terminate this Agreement pursuant to this Section 8.01(c)(i) if the Company
is at such time in breach of its obligations under this Agreement such as
to cause a Material Adverse Effect on the Company;
(ii) in connection with entering into a definitive agreement in
accordance with Section 6.08(b), provided it has complied with all
provisions of such
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section, including the notice provisions therein, and that it makes
simultaneous payment of the Termination Fee plus any amounts then due as a
reimbursement of expenses; or
(iii) if Parent or Purchaser shall have made a material
misrepresentation or have breached in any material respect any of their
respective representations, covenants or other agreements contained in this
Agreement, which breach cannot be or has not been cured, in all material
respects, within 30 days after the giving of written notice to Parent or
Purchaser, as applicable; provided, however, that the right to terminate
this Agreement under this Section 8.01(c)(iii) shall not be available
(other than as a result of any breach of covenants or other agreements
contained in this Agreement) after 11:59 P.M. Chicago time March 30, 1998
unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time.
(d) by Parent:
(i) if, due to an occurrence, not involving a breach by Parent or
Purchaser of their obligations hereunder, which makes it impossible to
satisfy any of the conditions set forth in Annex I hereto, Parent or
Purchaser shall have failed to commence the Offer on or prior to five
business days following the date of the initial public announcement of the
Offer;
(ii) if prior to the purchase of Shares pursuant to the Offer, the
Company shall have breached any representation, warranty, covenant or other
agreement contained in this Agreement which (A) would give rise to the
failure of a condition set forth in paragraph (f) or (g) of Annex I hereto
and (B) cannot be or has not been cured, in all material respects, within
30 days after the giving of written notice to the Company; provided,
however, that the right to terminate this Agreement under this Section
8.01(d)(ii) shall not be available (other than as a result of any breach of
covenants or other agreements contained in this Agreement) after 11:59 P.M.
Chicago time March 30, 1998 unless the expiration of applicable waiting
periods under the HSR Act shall not have occurred at or prior to such time;
(iii) if any event set forth in paragraph (e) of Annex I hereto shall
have occurred; or
(iv) if the condition set forth paragraph (j) of Annex I hereto fails
to be fulfilled by March 20, 1998.
SECTION 8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.01, this Agreement shall forthwith become void
and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the provisions of this Section
8.02, Section 8.03 and the last sentence of Section 6.02, which shall survive
any such termination. Nothing contained in this Section 8.02 shall relieve any
party from liability for any breach of this Agreement or the Confidentiality
Agreement.
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SECTION 8.3 Fees and Expenses.
(a) Except as contemplated by this Agreement, each party hereto shall
bear its own expenses and costs in connection with this Agreement and the
transactions contemplated hereby.
(b) If
(w) the Company shall terminate this Agreement pursuant to Section
8.01(c)(ii) hereof,
(x) Parent shall terminate this Agreement pursuant to Section
8.01(d)(iii) hereof,
(y) either the Company or Parent terminates this Agreement pursuant to
Section 8.01(b)(ii) and (a) prior thereto there shall have been
publicly announced another Acquisition Proposal (provided, however,
that solely for purposes of this clause (a), the term Acquisition
Proposal shall not include (1) the purchase of less than 5% of any
class or series of capital stock of the Company if such purchase does
not involve an offer to acquire additional shares of capital stock of
the Company that could cause any person, entity or "group" (as defined
in Section 13(d)(3) of the Exchange Act), other than Purchaser or its
affiliates or any group of which any of them is a member, to
beneficially own 5% or more of any such class or series or (2) any
purchase of 5% or more of any class or series of capital stock of the
Company which can properly be reported on a Schedule 13G) or an event
set forth in paragraph (h) of Annex I shall have occurred and (b) an
Acquisition Proposal pursuant to which any Person acquires all or a
substantial part of the business or properties of the Company or any
of its Subsidiaries, any of the capital stock (or securities
exercisable for or convertible into such capital stock) of any of the
Subsidiaries of the Company or any capital stock (or securities
exercisable for or convertible into such capital stock) of the Company
which represents 20% or more of the equity interest or voting power of
the Company shall be consummated on or prior to December 31, 1998, or
(z) Parent shall terminate this Agreement pursuant to Section
8.01(d)(iv) hereof and an Acquisition Proposal pursuant to which any
Person acquires all or a substantial part of the business or
properties of the Company or any of its Subsidiaries, any of the
capital stock (or securities exercisable for or convertible into such
capital stock) of any of the Subsidiaries of the Company or any
capital stock (or securities exercisable for or convertible into such
capital stock) of the Company which represents 20% or more of the
equity interest or voting power of the Company shall be consummated on
or prior to December 31, 1998,
then, the Company shall pay to Purchaser an amount equal to $15,000,000 (the
"Termination Fee"), plus an amount equal to Purchaser's actual documented
reasonable out-of-pocket fees and
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expenses (including, without limitation, reasonable legal, investment banking,
financing commitment fees and commercial banking fees and expenses) incurred by
Purchaser and Parent in connection with the due diligence investigation, the
Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby (the "Reimbursable Expenses"), which shall be payable by
wire transfer of same day funds to an account designated by Purchaser. The
Company shall also be obligated to pay to Purchaser the Reimbursable Expenses in
such manner if Parent shall terminate this Agreement pursuant to Section
8.01(d)(iv) hereof (regardless of whether an Acquisition Proposal is consummated
thereafter). The Termination Fee and Purchaser's good faith estimate of its
Reimbursable Expenses shall be paid concurrently with any such termination,
together with delivery of a written acknowledgment by the Company of its
obligation to reimburse Purchaser for its actual expenses in excess of such
estimated expenses payment, except that the Termination Fee and such expenses
shall be payable in connection with a termination described in clauses (y) or
(z) above upon the consummation of an Acquisition Proposal referenced in such
clauses.
SECTION 8.4 Amendment. This Agreement may be amended by Parent and the
Company at any time before or after any approval of this Agreement by the
stockholders of the Company but, after any such approval, no amendment shall be
made which decreases the Purchase Price or changes the form thereof without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
SECTION 8.5 Extension; Waiver. At any time prior to the Effective Time,
any party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein by any other party or in
any document, certificate or writing delivered pursuant hereto by any other
party or (iii) waive compliance with any of the agreements of any other party or
with any conditions to its own obligations. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. The covenants and other agreements contained herein shall
survive in accordance with their respective terms.
SECTION 9.2 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments
referred to herein) and the letter agreement between Lehman Brothers, on behalf
of the Company, and
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Experian Corporation, on its own behalf and for Parent and its other affiliates,
dated February 6, 1998 (the "Confidentiality Agreement"), constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and
thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party (except that Parent may assign its rights and Purchaser may assign its
rights, interest and obligations to any affiliate or direct or indirect
subsidiary of Parent without the consent of the Company). Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 9.3 Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
SECTION 9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Parent or Purchaser:
The Great Universal Stores P. L. C.
c/o Experian Corporation
505 City Parkway West
Orange, California 92668
Attention: Tom Gasparini, Senior Vice President
with a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Donald G. Lubin
If to the Company:
Metromail Corporation
360 East 22nd Street
Lombard, Illinois 60148
Attention: General Counsel
with copies to:
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<PAGE>
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Carter W. Emerson, P.C.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.6 Consent to Jurisdiction; Waiver of Immunities. The Company,
Parent and Purchaser irrevocably submit to the jurisdiction of any Delaware
state or federal court thereof in any action or proceeding arising out of or
relating to this Agreement, and the Company, Parent and Purchaser hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Delaware court or in such federal court. Parent and
Purchaser hereby irrevocably appoint The Corporation Trust Company (the "Parent
Process Agent"), with an office on the date hereof at Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware, as its agent to receive on behalf of
Parent or Purchaser service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to Parent or Purchaser
in care of Parent Process Agent at Parent Process Agent's above address, and
Parent and/or Purchaser hereby irrevocably authorize and direct Parent Process
Agent to accept such service on their behalf. The Company hereby irrevocably
appoints The Corporation Trust Company (the "Company Process Agent"), with an
office on the date hereof at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware, as its agent to receive on behalf of the Company service
of copies of the summons and complaint and any other process which may be served
in any such action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Company in care of the Company Process
Agent at the Company Process Agent's above address, and the Company hereby
irrevocably authorizes and directs the Company Process Agent to accept such
service on its behalf. As an alternative method of service, the Company, Parent
and Purchaser also irrevocably consent to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to the
respective party at its address specified in Section 9.04. The Company, Parent
and Purchaser agree that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
SECTION 9.7 Descriptive Headings. The descriptive headings and captions
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
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<PAGE>
SECTION 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 9.9 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and, except with respect
to Sections 2.09 and 6.06, nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.10 Certain Definitions. As used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean any
other person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "Subsidiary", "Subsidiaries" or "subsidiaries" means,
with respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.11 Specific Performance. 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 in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
* * * * *
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IN WITNESS WHEREOF, each of the parties has caused this Agreement and Plan
of Merger to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
THE GREAT UNIVERSAL STORES P. L. C.
By: /s/ Thomas Gasparini
-------------------------------
Name: Thomas Gasparini
-----------------------------
Title:
----------------------------
GREAT UNIVERSAL ACQUISITION CORP.
By: /s/ Thomas R. Newkirk
-------------------------------
Name: Thomas R. Newkirk
-----------------------------
Title:
----------------------------
METROMAIL CORPORATION
By: /s/ Barton L. Faber
-------------------------------
Name: Barton L. Faber
-----------------------------
Title:
----------------------------
<PAGE>
Annex I
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to 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 or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against Purchaser, Parent, the Company or
any Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Purchaser's or Parent's ownership or operation (or that of any of
their respective Subsidiaries or affiliates) of all or a material portion of
their or the Company's businesses or assets (or that of any of its
Subsidiaries), or to compel Purchaser or Parent or their respective Subsidiaries
and affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and their respective Subsidiaries,
in each case taken as a whole, (ii) challenging the acquisition by Purchaser or
Parent of any Shares under the Offer, seeking to restrain or prohibit the making
or consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Agreement or the Stock Purchase
Agreements, or seeking to obtain from the Company, Purchaser or Parent any
damages that are material in relation to the Company and its Subsidiaries taken
as a whole, (iii) seeking to impose material limitations on the ability of
Purchaser, or render Purchaser unable, to accept for payment, pay for or
purchase some or all of the Shares pursuant to the Offer and the Merger or (iv)
seeking to impose material limitations on the ability of Purchaser or Parent
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders or there shall be pending any
suit, action or proceeding by any Governmental Entity against Purchaser, Parent,
the Company or any Subsidiary of the Company which is reasonably likely to have
a Material Adverse Effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
<PAGE>
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange for a
period in excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not mandatory),
(iii) a commencement of a war or other international or national calamity
directly or indirectly involving the United States, (iv) any limitation (whether
or not mandatory) by any United States governmental authority on the extension
of credit generally by banks or other financial institutions, or (v) a change in
general financial, bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United States to
extend credit or syndicate loans or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof; provided, however, the right to terminate the Agreement
pursuant to this provision shall not be available after 11:59 P.M. Chicago time
March 30, 1998 unless the expiration of applicable waiting periods under the HSR
Act shall not have occurred at or prior to such time;
(d) there shall have occurred any events after the date of the
Agreement which have or will have a Material Adverse Effect on the Company;
provided, however, the right to terminate the Agreement pursuant to this
provision shall not be available after 11:59 P.M. Chicago time March 30, 1998
unless the expiration of applicable waiting periods under the HSR Act shall not
have occurred at or prior to such time;
(e) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Purchaser its approval or recommendation of the Offer, the Merger or the
Agreement, or approved or recommended any Acquisition Proposal or (ii) the
Company shall have entered into any agreement with respect to any Superior
Proposal in accordance with Section 6.08(b) of the Agreement; provided, however,
the right to terminate the Agreement pursuant to this provision shall not be
available after 11:59 P.M. Chicago time March 30, 1998 unless the expiration of
applicable waiting periods under the HSR Act shall not have occurred at or prior
to such time;
(f) the representations and warranties of the Company set forth in
the Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Agreement and as of the scheduled expiration of the Offer (or if
applicable waiting periods under the HSR Act shall have expired on or before
March 30, 1998, as of March 30, 1998), unless the inaccuracies without giving
effect to any materiality or material adverse effect qualifications or
materiality exceptions contained therein under such representations and
warranties, taking all the inaccuracies under all such representations and
warranties together in their entirety, do not result in Material Adverse Effect
on the Company; provided, however, the right to terminate the Agreement pursuant
to this provision shall not be available after 11:59 P.M. Chicago time March 30,
1998 unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time;
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<PAGE>
(g) the Company shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it (i)
under Section 6.01 or 6.08 of the Agreement or (ii) under any other agreement or
covenant to be performed or complied with by it under the Agreement, unless the
failure to so perform or comply would not have a Material Adverse Effect on the
Company;
(h) it shall have been publicly disclosed or Purchaser or Parent
shall have otherwise learned that any person, entity or "group" (as defined in
Section 13(d)(3) of the Exchange Act), other than Purchaser or its affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange Act)
of more than 20% of the outstanding shares of any class or series of capital
stock of the Company (including the Shares), through the acquisition of stock,
the formation of a group or otherwise, or shall have been granted an option,
right or warrant, conditional or otherwise, to acquire beneficial ownership of
more than 20% of any class or series of capital stock of the Company (including
the Shares); provided, however, the right to terminate the Agreement pursuant to
this provision shall not be available after 11:59 P.M. Chicago time March 30,
1998 unless the expiration of applicable waiting periods under the HSR Act shall
not have occurred at or prior to such time;
(i) the Agreement shall have been terminated in accordance with its
terms; or
(j) the Company shall have failed to obtain the irrevocable letter of
credit that is a condition precedent to the obligations of the insurer under the
insurance endorsement described in Schedule 4.12 to the Agreement by March 20,
1998 in accordance with the terms of such endorsement.
The foregoing conditions are for the benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or Purchaser in
whole or in part at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
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EXHIBIT (c)(2)
--------------
STOCK PURCHASE AGREEMENT
------------------------
Stock Purchase Agreement (this "Agreement"), dated as of March 12, 1998,
between The Great Universal Stores P.L.C., a corporation incorporated under the
laws of England ("Parent"), and R.R. Donnelley & Sons Company ("Stockholder").
WHEREAS, Stockholder owns (both beneficially and of record) 8,600,000
shares (the "Shares") of common stock, par value $.01 per share ("Common
Stock"), of Metromail Corporation, a Delaware corporation (the "Company");
WHEREAS, concurrently herewith, Parent and an indirect wholly owned
subsidiary of Parent ("Purchaser") are entering into an agreement and plan of
merger with the Company, dated as of March 12, 1998 (the "Merger Agreement"),
pursuant to which Purchaser has agreed to make a cash tender offer (the "Offer")
for, among other things, all outstanding shares of Common Stock at $31.50 per
share (or any higher price paid in the Offer, the "Offer Price"), net to the
seller in cash, to be followed by a merger of Purchaser with and into the
Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has required that Stockholder agree, and in order to
induce Parent to enter into the Merger Agreement, Stockholder has agreed, among
other things, (i) to sell the Shares (as defined herein) to Parent, (ii) to
appoint Parent as Stockholder's proxy to vote the Shares, and (iii) with respect
to certain questions put to stockholders of the Company for a vote, to vote the
Shares, in each case, in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1. Purchase of Shares. On the terms and subject to the conditions
set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Parent will purchase from the
Stockholder, and the Stockholder will sell and transfer to the Parent, all
of the Shares at a purchase price per share equal to the Offer Price, free
and clear of all mortgages, pledges, security interests, encumbrances,
liens, options, debts, charges, claims and restrictions of any kind.
1.2. Conditions to Closing. The obligations of the parties to
consummate the transactions contemplated by Section 1.1 hereof are subject
to the following conditions: (a) any waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
applicable to the delivery of the Shares shall have expired or been
terminated; and (b) there shall be no preliminary or permanent injunction
or other order by any court of competent
<PAGE>
jurisdiction restricting, preventing or prohibiting the delivery of the
Shares. Parent and the Stockholder shall each promptly after the date
hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3. Closing. Subject to the conditions contained in this Agreement,
the closing of the transactions contemplated by Section 1.1 hereof (the
"Closing") shall occur at a site designated by Parent in Chicago, Illinois
simultaneously with the acceptance by Purchaser of the shares of Common
Stock validly tendered and not withdrawn pursuant to the terms of the Offer
in accordance with the terms and conditions of the Offer and the Merger
Agreement (the "Closing Date"). Subject to the conditions contained in
this Agreement, Parent may direct Stockholder to deliver to Purchaser at
the Closing a certificate or certificates evidencing the Shares, each such
certificate being duly endorsed in blank and accompanied by such stock
powers and such other documents as may reasonably be necessary in
Purchaser's judgment to transfer record ownership of the Shares into
Purchaser's name on the stock transfer books of the Company, and Parent
will purchase the Shares at a purchase price equal to the Offer Price. All
payments made by Parent to Stockholder pursuant to this Section 1.3 shall
be made by wire transfer of immediately available funds to an account
designated by Stockholder, in an amount equal to the sum of the product of
(i) the Offer Price and (ii) the total number of Shares delivered at the
Closing.
1.4. Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Common Stock by
reason of any stock dividend, subdivision, merger, recapitalization,
combination, conversion or exchange of shares, or any other change in the
corporate or capital structure of the Company (including, without
limitation, the declaration or payment of an extraordinary dividend of cash
or securities) which would have the effect of diluting or otherwise
adversely affecting Parent's rights and privileges under this Agreement,
the number and kind of the Shares and the consideration payable in respect
of the Shares shall be appropriately and equitably adjusted to restore to
Parent its rights and privileges under this Agreement.
2. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows:
2.1. Title to the Shares. Stockholder is the owner (both
beneficially and of record) of the Shares. Except for the Shares,
Stockholder is not the record or beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of, and does not
have any other rights of any nature to acquire any additional shares of,
any shares of capital stock of the Company. Stockholder owns all of the
Shares free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on Stockholder's
voting rights, charges and other encumbrances of any nature whatsoever,
and, except as provided in
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<PAGE>
this Agreement, Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the Shares.
The Stockholder has sole power of disposition with respect to all of the
Shares and sole voting power with respect to the matters set forth in
Section 5 hereof. Upon the delivery to Parent by Stockholder of a
certificate or certificates evidencing the Shares, Parent will receive
valid and marketable title to the Shares, free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Parent's voting rights, charges and other
encumbrances of any nature whatsoever.
2.2. Authority Relative to This Agreement. Stockholder has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Stockholder and, assuming the due authorization, execution and
delivery by Parent, constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
2.3. No Conflict. The execution and delivery of this Agreement by
Stockholder does not, and the performance of this Agreement by Stockholder
will not, (a) except for any filings required under the HSR Act and for
requirements of U.S. federal and state securities laws, require any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority of the United
States or any political subdivision thereof, (b) conflict with or violate
the certificate of incorporation or bylaws of the Stockholder, or (c)
conflict with, violate or result in any breach of or constitute a default
under (or an event which with notice or lapse of time or both would become
a default under) any agreement, judgment, injunction, order, law, rule,
regulation, decree or arrangement to which Stockholder is a party or is
bound, other than, in the case of clause (c), any such conflicts,
violations, breaches or defaults that, individually or in the aggregate,
would not materially impair the ability of Stockholder to perform its
obligations hereunder.
2.4. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of Stockholder.
3. Representations and Warranties of Parent. Parent hereby represents
and warrants to Stockholder as follows:
3.1. Authority Relative to This Agreement. Parent has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution
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<PAGE>
and delivery of this Agreement by Parent and the consummation by Parent of
the transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of Parent. This Agreement
has been duly and validly executed and delivered by Parent and, assuming
the due authorization, execution and delivery by Stockholder, constitutes a
legal, valid and binding obligation of Parent, enforceable against Parent
in accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and
(ii) is subject to general principles of equity.
3.2. No Conflict. The execution and delivery of this Agreement by
Parent does not, and the performance of this Agreement by Parent will not,
(a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, (b) conflict
with or violate the certificate of incorporation or bylaws of Parent, (c)
conflict with, violate or result in any breach of or constitute a default
under (or an event which with notice or lapse of time or both would become
a default under) any agreement, judgment, injunction, order, law, rule,
regulation, decree or arrangement applicable to Parent or by which any
property or asset of Parent is bound or affected, other than, in the case
of clause (c), any such conflicts, violations, breaches or defaults that,
individually or in the aggregate, would not materially impair the ability
of Parent to perform its obligations hereunder.
3.3. Brokers. Except for Bear Stearns & Co. Inc., whose fees will be
paid by Parent, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of Parent.
3.4. Investment Intent. Parent hereby represents that any securities
it purchases pursuant to this Agreement are being purchased for its own
account for purposes of investment and not with a view to, or for sale in
connection with, any public distribution thereof. In addition, Purchaser
acknowledges that the Shares being purchased pursuant to this Agreement
have not been and will not be registered under the Securities Act of 1933,
as amended, and may not be resold without registration under such Act or
unless an exception therefrom is available.
3.5. Financing. Parent or Purchaser will have available to it at the
time required the funds necessary to consummate the purchase of the Shares
pursuant to the terms hereof.
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<PAGE>
4. Covenants of Stockholder.
4.1. No Disposition or Encumbrance of Shares. Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and
except pursuant to the Offer, Stockholder shall not, and shall not offer or
agree to, sell, transfer, tender, assign, hypothecate or otherwise dispose
of, or create or permit to exist any security interest, lien, claim,
pledge, option, right of first refusal, agreement, limitation on
Stockholder's voting rights, charge or other encumbrance of any nature
whatsoever with respect to the Shares now owned or that may hereafter be
acquired by Stockholder.
4.2. No Solicitation of Transactions. Stockholder (and its
subsidiaries and affiliates) shall not, and Stockholder (and its
subsidiaries and affiliates) shall use their reasonable best efforts to
ensure that their respective officers, directors, employees,
representatives and agents (including, but not limited to, investment
bankers, attorneys and accountants) do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations
with, or provide any information to, any corporation, partnership, person
or other entity or group (other than Parent, any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries or any capital stock of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of
assets or similar transaction involving the Company or any subsidiary,
division or operating or principal business unit of the Company (an
"Acquisition Proposal"), unless the Company is permitted to do so in
accordance with the terms of the Merger Agreement; provided, that the
foregoing shall not apply to any directors of the Company in their capacity
as such who are also directors, officers, employees, representatives or
agents of Stockholder (the "Donnelley Directors"), it being acknowledged
and agreed that the Donnelley Directors are subject to the terms and
conditions set forth in the Merger Agreement in their capacity as such.
Notwithstanding the foregoing, prior to the later of (i) 11:59 p.m.,
Chicago time, on March 30, 1998 and (ii) the expiration of the applicable
waiting periods under the HSR Act (as defined in the Merger Agreement),
Stockholder may furnish information concerning the Company and its
subsidiaries to any corporation, partnership, person or other entity or
group pursuant to appropriate confidential agreements with terms
substantially similar to those contained in the Confidentiality Agreement
(as defined in the Merger Agreement), and may negotiate and participate in
discussions and negotiations with such entity or group concerning an
Acquisition Proposal that constitutes a Superior Proposal (as defined in
the Merger Agreement). Stockholder shall, and shall cause each of its
affiliates to, immediately cease and cause to be terminated any existing
activities, discussions or negotiations by Stockholder, any of its
affiliates or any officer, director, employee or affiliate of, or
investment banker, attorney, accountant or other advisor or representative
of, Stockholder or any of its affiliates with parties conducted heretofore
with respect to
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<PAGE>
any of the foregoing. The parties acknowledge and agree that the Company
shall not be deemed an affiliate of Stockholder for purposes of this
Section 4.2
4.3. Compliance of Stockholder with This Agreement. Stockholder
shall take all actions and forbear from all actions, in each case,
necessary in order that (a) all of Stockholder's representations and
warranties hereunder are true and correct and (b) Stockholder fulfills all
of its obligations hereunder.
5. Voting Agreement; Proxy of Stockholder.
5.1. Voting Agreement. Stockholder hereby agrees that, during the
time this Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the
stockholders of the Company, Stockholder shall, to the extent applicable,
(a) vote (or execute a consent in respect of) all of the Shares and any
shares of Common Stock or other securities acquired of record or
beneficially by the Stockholder after the date hereof (the "Stockholder
Shares") in favor of the Merger, the Merger Agreement (as amended from time
to time) and any of the transactions contemplated by the Merger Agreement;
and (b) vote (or execute a consent in respect of) the Shares and the
Stockholder Shares against any action or agreement that would reasonably be
expected to impede, interfere with, delay or attempt to discourage the
Offer or the Merger, including, but not limited to: (i) any extraordinary
corporate transaction (other than the Merger), such as a merger,
reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any
proposal made in opposition to or in competition with the Merger; (ii) a
sale or transfer of a material amount of assets of the Company or any of
its Subsidiaries; (iii) any change in the management or board of directors
of the Company, except as otherwise agreed to in writing by Parent; (iv)
any material change in the present capitalization or dividend policy of the
Company; or (v) any other material change in the corporate structure or
business of the Company or any of its Subsidiaries.
5.2. Irrevocable Proxy. Stockholder agrees that, in the event
Stockholder shall fail to comply with the provisions of Section 5.1 hereof
as determined by Parent in its sole discretion, such failure shall result,
without any further action by Stockholder, in the irrevocable appointment
of Parent as the attorney and proxy of Stockholder, with full power of
substitution, to vote, and otherwise act (by written consent or otherwise)
with respect to all shares of Common Stock and other securities, including
the Shares and the Stockholder Shares, that Stockholder is entitled to vote
at any meeting of stockholders of the Company (whether annual or special
and whether or not an adjourned or postponed meeting) or consent in lieu of
any such meeting or otherwise, on the matters and in the manner specified
in Section 5.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND
COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED
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TO BE IRREVOCABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF
THE DELAWARE GENERAL CORPORATION LAW ("DGCL"). Stockholder hereby revokes,
effective upon the execution and delivery of the Merger Agreement by the
parties thereto, all other proxies and powers of attorney with respect to
the Shares and the Stockholder Shares that Stockholder may have heretofore
appointed or granted, and no subsequent proxy or power of attorney (except
in furtherance of Stockholder's obligations under Section 5.1 hereof) shall
be given or written consent executed (and if given or executed, shall not
be effective) by Stockholder with respect thereto so long as this Agreement
remains in effect.
6. Termination. This Agreement (including any power of attorney and
proxy granted pursuant to Section 5.2 hereof or otherwise) shall terminate
automatically on the earlier of (i) the termination of the Merger Agreement in
accordance with the terms and conditions thereof and (ii) September 30, 1998.
7. Miscellaneous.
7.1. Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
7.2. Further Assurances. Stockholder and Parent shall execute and
deliver all such further documents and instruments and take all such
further action as may be reasonably necessary in order to consummate the
transactions contemplated hereby.
7.3. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
7.4. Entire Agreement. This Agreement constitutes the entire
agreement between Parent and Stockholder with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written
and oral, between Parent and Stockholder with respect to the subject matter
hereof.
7.5. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that Parent may assign all or any of its rights
and obligations hereunder to any affiliate of Parent, provided that no such
assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
7.6. Parties in Interest. This Agreement shall be binding upon,
inure solely to the benefit of, and be enforceable by, the parties hereto
and their successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to or
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<PAGE>
shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
7.7. Amendment; Waiver. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto. Any party hereto
may (a) extend the time for the performance of any obligation or other act
of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any agreement or condition contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
7.8. 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 this Agreement is not affected in any manner materially
adverse to any party.
7.9. Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 7.9):
if to Parent:
The Great Universal Stores P.L.C.
c/o Experian Corporation
505 City Parkway West
Orange, California 92868
Attention: Thomas Gasparini
Senior Vice President,
Secretary and General Counsel
Facsimile: (714) 938-2513
Telephone: (714) 385-8296
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<PAGE>
with a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Donald G. Lubin, Esq.
Facsimile: (312) 876-7934
Telephone: (312) 876-8000
if to Stockholder:
R.R. Donnelley & Sons Company
77 West Wacker Drive
Chicago, Illinois 60601
Attention: Monica Fohrman, Secretary
Facsimile: (312) 326-7156
Telephone: (312) 326-8000
7.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in Delaware without regard to
any principles of choice of law or conflicts of law of such State. All
actions and proceedings arising out of or relating to this Agreement shall
be heard and determined in any state or federal court sitting in Delaware.
Each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (iii) agrees that
such party will not bring any action relating to this Agreement or the
transactions contemplated hereby in any court other than a Federal court
sitting in the state of Delaware or a Delaware state court and (iv) waives
any right to trial by jury with respect to any claim or proceeding related
to or arising out of this Agreement or any of the transactions contemplated
hereby.
7.11. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
7.12. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered
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shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first written above.
THE GREAT UNIVERSAL STORES P.L.C.
/s/ Thomas Gasparini
By: ___________________________________
Name: Thomas Gasparini
Title: Authorized Signatory
R.R. DONNELLEY & SONS COMPANY
/s/ Cheryl A. Francis
By: ___________________________________
Name: Cheryl A. Francis
Title: Executive Vice President and
Chief Financial Officer
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<PAGE>
EXHIBIT (c)(3)
STOCK PURCHASE AGREEMENT
------------------------
Stock Purchase Agreement (this "Agreement"), dated as of March 12, 1998,
between The Great Universal Stores P.L.C., a corporation incorporated under the
laws of England ("Parent"), and ____________________ ("Executive").
WHEREAS, Executive owns (both beneficially and of record) __________ shares
(together with any shares to be issued to Executive on or about March 31, 1998
pursuant to the Company's Stock Purchase Plan) (the "Shares") of common stock,
par value $.01 per share ("Common Stock"), of Metromail Corporation, a Delaware
corporation (the "Company"), and options (the "Options") to acquire ___________
shares of Common Stock (the shares issuable upon exercise of the Options are
referred to herein as the "Option Shares"); and
WHEREAS, concurrently herewith, Parent and an indirect wholly owned
subsidiary of Parent ("Purchaser") are entering into an agreement and plan of
merger with the Company, dated as of March 12, 1998 (the "Merger Agreement"),
pursuant to which Purchaser has agreed to make a cash tender offer (the "Offer")
for, among other things, all outstanding shares of Common Stock at $31.50 per
share (or any higher price paid in the Offer, the "Offer Price"), net to the
seller in cash, to be followed by a merger of Purchaser with and into the
Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has required that Executive agree, and in order to
induce Parent to enter into the Merger Agreement, Executive has agreed, among
other things, (i) to exercise the Options and sell the Shares and the Option
Shares to Parent, (ii) to appoint Parent as Executive's proxy to vote the Shares
and the Option Shares, and (iii) with respect to certain questions put to
stockholders of the Company for a vote, to vote the Shares and the Option
Shares, in each case, in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1. Purchase of Shares. On the terms and subject to the conditions
set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Parent will purchase from the Executive,
and the Executive will sell and transfer to the Parent, all of the Shares
and the Option Shares at a purchase price per share equal to the Offer
Price, free and clear of all mortgages, pledges, security interests,
encumbrances, liens, options, debts, charges, claims and restrictions of
any kind.
<PAGE>
1.2. Conditions to Closing. The obligations of the parties to
consummate the transactions contemplated by Section 1.1 hereof are subject
to the following conditions: (a) any waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
applicable to the delivery of the Shares and the Option Shares shall have
expired or been terminated; and (b) there shall be no preliminary or
permanent injunction or other order by any court of competent jurisdiction
restricting, preventing or prohibiting the delivery of the Shares or the
Option Shares. Parent and the Executive shall each promptly after the date
hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares and the Option
Shares.
1.3. Closing. Subject to the conditions contained in this Agreement,
the closing of the transactions contemplated by Section 1.1 hereof (the
"Closing") shall occur at a site designated by Parent simultaneously with
the acceptance by Purchaser of the shares of Common Stock validly tendered
and not withdrawn pursuant to the terms of the Offer in accordance with the
terms and conditions of the Offer and the Merger Agreement (the "Closing
Date"). Prior to the Closing, Executive shall exercise all of the Options,
pay the Company the aggregate exercise price thereof in cash and obtain a
certificate evidencing all of the Option Shares duly executed by the
Company and registered in the name of Executive. Notwithstanding anything
in the agreements evidencing the Options to the contrary, the Executive
shall not pay the Company the exercise price of the Options in any
consideration other than cash (whether by cashless exercise or otherwise).
At the Closing and subject to the conditions contained in this Agreement,
Parent hereby directs Executive to deliver to Purchaser a certificate or
certificates evidencing the Shares and the Option Shares, each such
certificate being duly endorsed in blank and accompanied by such stock
powers and such other documents as may be necessary in Purchaser's judgment
to transfer record ownership of the Shares and the Option Shares into
Purchaser's name on the stock transfer books of the Company, and Parent
will purchase the Shares and the Option Shares at a purchase price equal to
the Offer Price. All payments made by Parent to Executive pursuant to this
Section 1.3 shall be made by wire transfer of immediately available funds
to an account designated by Executive or by certified bank check payable to
Executive, in an amount equal to the sum of the product of (i) the Offer
Price and (ii) the total number of Shares and Option Shares delivered at
the Closing.
1.4. Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Common Stock by
reason of any stock dividend, subdivision, merger, recapitalization,
combination, conversion or exchange of shares, or any other change in the
corporate or capital structure of the Company (including, without
limitation, the declaration or payment of an extraordinary dividend of cash
or securities) which would have the effect of diluting or otherwise
adversely affecting Parent's rights and privileges under this Agreement,
the number and kind of the Shares and the Option Shares and the
consideration
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<PAGE>
payable in respect of the Shares and the Option Shares shall be
appropriately and equitably adjusted to restore to Parent its rights and
privileges under this Agreement.
1.5. Tender of Shares and Option Shares. Upon the request of Parent
after 11:59 p.m., Chicago time, on March 30, 1998, Executive agrees to
tender and sell to Purchaser pursuant to the Offer all of the Shares and
the Option Shares. If requested by Parent to so tender and sell the Shares
and the Option Shares, Executive shall exercise all of the Options, pay the
Company the aggregation exercise price thereof in cash and obtain a
certificate evidencing all of the Option Shares duly executed by the
Company and registered in the name of Executive. Notwithstanding anything
in the agreements evidencing the Options to the contrary, Executive shall
not pay the Company the exercise price of the Options in any consideration
other than cash (whether by cashless exercise or otherwise). If requested
by Parent to so tender and sell the Shares and the Option Shares, Executive
agrees that Executive shall deliver to the depository for the Offer for
receipt prior to the Expiration Date (as defined in the Offer) of the
Offer, either a letter of transmittal together with the certificates for
the Shares and the Option Shares, if available, or a "Notice of Guaranteed
Delivery", if the Shares or the Option Shares are not available.
Stockholder agrees not to withdraw any Shares or Option Shares tendered
into the Offer.
2. Representations and Warranties of Executive. Executive hereby
represents and warrants to Parent as follows:
2.1. Title. Executive is the owner (both beneficially and of record)
of the Shares and the Options. Except for the Shares and the Options,
Executive is not the record or beneficial owner (as defined in the Merger
Agreement) of, and does not have any other rights of any nature to acquire
any additional shares of, any shares of capital stock of the Company. All
of the Options are fully vested and exercisable, and any acceleration of
the vesting of the Options has been duly and validly authorized by all
necessary corporate action on the part of the Company. Executive owns all
of the Shares and, upon exercise of the Options and payment therefor, will
own all of the Option Shares, in each case free and clear of all security
interests, liens, claims, pledges, options, restrictions, rights of first
refusal, agreements, limitations on Executive's voting rights, charges and
other encumbrances of any nature whatsoever, and, except as provided in
this Agreement, Executive has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the Shares
or the Option Shares. The Executive has sole power of disposition with
respect to all of the Shares and the Option Shares and sole voting power
with respect to the matters set forth in Section 5 hereof. Upon the
delivery to Parent by Executive of a certificate or certificates evidencing
the Shares and the Option Shares, Parent will receive good, valid and
marketable title to the Shares and the Option Shares, in each case free and
clear of all security interests, liens, claims,
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<PAGE>
pledges, options, restrictions, rights of first refusal, agreements,
limitations on Parent's voting rights, charges and other encumbrances of
any nature whatsoever.
2.2. Authority Relative to This Agreement. Executive has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Executive and, assuming the due authorization, execution and
delivery by Parent, constitutes a legal, valid and binding obligation of
Executive, enforceable against Executive in accordance with its terms.
2.3. No Conflict. The execution and delivery of this Agreement by
Executive does not, and the performance of this Agreement by Executive will
not, (a) except for any filings required under the HSR Act and for
requirements of federal and state securities laws, require any consent,
approval, authorization or permit of, or filing with or notification to,
any governmental or regulatory authority, domestic or foreign, or (b)
conflict with, violate or result in any breach of or constitute a default
under (or an event which with notice or lapse of time or both would become
a default under) any agreement, judgment, injunction, order, law, rule,
regulation, decree or arrangement to which Executive is a party or is
bound.
2.4. Brokers. Except for Lehman Brothers Inc., whose fees will be
paid by the Company and a true and correct copy of whose engagement letter
has been provided by Purchaser, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Executive.
3. Representations and Warranties of Parent. Parent hereby represents
and warrants to Executive as follows:
3.1. Authority Relative to This Agreement. Parent has all necessary
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 Parent and the
consummation by Parent of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly and validly executed and delivered
by Parent and, assuming the due authorization, execution and delivery by
Executive, constitutes a legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms.
3.2. No Conflict. The execution and delivery of this Agreement by
Parent does not, and the performance of this Agreement by Parent will not,
(a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign,
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<PAGE>
(b) conflict with or violate the certificate of incorporation or bylaws of
Parent, (c) conflict with, violate or result in any breach of or constitute
a default under (or an event which with notice or lapse of time or both
would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement applicable to Parent or by
which any property or asset of Parent is bound or affected, other than, in
the case of clause (c), any such conflicts, violations, breaches or
defaults that, individually or in the aggregate, would not materially
impair the ability of Parent to perform its obligations hereunder.
3.3. Brokers. Except for Bear Stearns & Co. Inc., whose fees will be
paid by Parent, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission from Executive in connection
with the transactions contemplated hereby based upon arrangements made by
or on behalf of Parent.
3.4. Investment Intent. Parent hereby represents that any securities
it purchases pursuant to this Agreement are being purchased for its own
account for investment and not with a view to, or for sale in connection
with, any public distribution thereof
4. Covenants of Executive.
4.1. No Disposition or Encumbrance. Executive hereby covenants and
agrees that, except as contemplated by this Agreement and except pursuant
to the Offer, Executive shall not, and shall not offer or agree to, sell,
transfer, tender, assign, hypothecate or otherwise dispose of, or create or
permit to exist any security interest, lien, claim, pledge, option,
restriction, right of first refusal, agreement, limitation on Executive's
voting rights, charge or other encumbrance of any nature whatsoever with
respect to the Shares, the Options or the Option Shares now owned or that
may hereafter be acquired by Executive.
4.2. No Solicitation of Transactions. Executive and his affiliates
shall not, and Executive and his affiliates shall use their best efforts to
ensure that Executive's representatives and agents (including, but not
limited to, investment bankers, attorneys and accountants) and his
affiliates' officers, directors, employees, representatives and agents
(including, but not limited to, investment bankers, attorneys and
accountants) do not, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or
group (other than Parent, any of its affiliates or representatives)
concerning any proposal or offer to acquire all or a substantial part of
the business or properties of the Company or any of its subsidiaries or any
capital stock of the Company or any of its subsidiaries, whether by merger,
tender offer, exchange offer, sale of assets or similar transaction
involving the Company or any subsidiary, division or operating or principal
business unit of the
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Company (an "Acquisition Proposal"), unless the Company is permitted to do
so in accordance under the terms of the Merger Agreement. Executive shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations by Executive or his affiliates or any
investment banker, attorney, accountant or other advisor or representative
of, Executive or his affiliates with parties conducted heretofore with
respect to any of the foregoing.
4.3. Compliance of Executive with This Agreement. Executive shall
take all actions and forbear from all actions, in each case, necessary in
order that (a) all of Executive's representations and warranties hereunder
are true and correct and (b) Executive fulfills all of its obligations
hereunder.
5. Voting Agreement; Proxy of Executive.
5.1. Voting Agreement. Executive hereby agrees that, during the time
this Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the
stockholders of the Company, Executive shall, to the extent applicable, (a)
vote (or execute a consent in respect of) all of the Shares and the Option
Shares and any shares of Common Stock or other securities acquired of
record or beneficially by the Executive after the date hereof (the
"Executive Shares") in favor of the Merger, the Merger Agreement (as
amended from time to time) and any of the transactions contemplated by the
Merger Agreement; (b) vote (or execute a consent in respect of) the Shares,
the Option Shares and the Executive Shares against any action or agreement
that would result in a breach of any covenant, representation or warranty
or any other obligation of the Company under the Merger Agreement; and (c)
vote (or execute a consent in respect of) the Shares, the Option Shares and
the Executive Shares against any action or agreement that would reasonably
be expected to impede, interfere with, delay or attempt to discourage the
Offer or the Merger, including, but not limited to: (i) any extraordinary
corporate transaction (other than the Merger), such as a merger,
reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any
proposal made in opposition to or in competition with the Merger; (ii) a
sale or transfer of a material amount of assets of the Company or any of
its Subsidiaries; (iii) any change in the management or board of directors
of the Company, except as otherwise agreed to in writing by Parent; (iv)
any material change in the present capitalization or dividend policy of the
Company; or (v) any other material change in the corporate structure or
business of the Company or any of its Subsidiaries.
5.2. Irrevocable Proxy. Executive agrees that, in the event
Executive shall fail to comply with the provisions of Section 5.1 hereof as
determined by Parent in its sole discretion, such failure shall result,
without any further action by Executive, in the irrevocable appointment of
Parent as the attorney and proxy of Executive, with full power of
substitution, to vote, and otherwise act (by written consent or otherwise)
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with respect to all shares of Common Stock and other securities, including
the Shares, the Option Shares and the Executive Shares, that Executive is
entitled to vote at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned or postponed meeting) or
consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 5.1. THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE
IRREVOCABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE
DELAWARE GENERAL CORPORATION LAW ("DGCL"). Executive hereby revokes,
effective upon the execution and delivery of the Merger Agreement by the
parties thereto, all other proxies and powers of attorney with respect to
the Shares, the Option Shares and the Executive Shares that Executive may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Executive's obligations under Section
5.1 hereof) shall be given or written consent executed (and if given or
executed, shall not be effective) by Executive with respect thereto so long
as this Agreement remains in effect.
6. Termination. This Agreement shall terminate automatically in the
event that the Merger Agreement is terminated in accordance with the terms and
conditions thereof.
7. Miscellaneous.
7.1. Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
7.2. Further Assurances. Executive and Parent shall execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the transactions
contemplated hereby.
7.3. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
7.4. Entire Agreement. This Agreement constitutes the entire
agreement between Parent and Executive with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written
and oral, between Parent and Executive with respect to the subject matter
hereof.
7.5. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that Parent may assign all or any of its rights
and obligations hereunder to any affiliate of Parent, provided that no such
assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
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7.6. Parties in Interest. This Agreement shall be binding upon,
inure solely to the benefit of, and be enforceable by, the parties hereto
and their successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person
any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
7.7. Amendment; Waiver. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto. Any party hereto
may (a) extend the time for the performance of any obligation or other act
of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any agreement or condition contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
7.8. 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 this Agreement 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 in a
mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated to the fullest extent possible.
7.9. Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 7.9):
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if to Parent:
The Great Universal Stores P.L.C.
c/o Experian Corporation
505 City Parkway West
Orange, California 92868
Attention: Thomas Gasparini
Senior Vice President, Secretary
and General Counsel
Facsimile: (714) 938-2513
Telephone: (714) 385-8296
with a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Donald G. Lubin, Esq.
Facsimile: (312) 876-7934
Telephone: (312) 876-8000
if to Executive:
-------------------------
-------------------------
-------------------------
-------------------------
Facsimile: ______________
Telephone: ______________
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Carter W. Emerson, Esq.
Facsimile: (312) 861-2200
Telephone: (312) 861-2000
7.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in Delaware without regard to
any principles of choice of law
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<PAGE>
or conflicts of law of such State. All actions and proceedings arising out
of or relating to this Agreement shall be heard and determined in any state
or federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal
court located in the State of Delaware or any Delaware state court in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave
from any such court, (iii) agrees that such party will not bring any action
relating to this Agreement or the transactions contemplated hereby in any
court other than a Federal court sitting in the state of Delaware or a
Delaware state court and (iv) waives any right to trial by jury with
respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
7.11. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
7.12. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first written above.
By: ____________________________
THE GREAT UNIVERSAL STORES P.L.C.
By: _____________________________
Name:
Title:
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<PAGE>
EXHIBIT (c)(4)
STOCK PURCHASE AGREEMENT
------------------------
Stock Purchase Agreement (this "Agreement"), dated as of March 12, 1998,
between The Great Universal Stores P.L.C., a corporation incorporated under the
laws of England ("Parent"), and Metromail Corporation, a Delaware corporation
(the "Company").
WHEREAS, concurrently herewith, Parent and an indirect wholly owned
subsidiary of Parent ("Purchaser") are entering into an agreement and plan of
merger with the Company, dated as of March 12, 1998 (the "Merger Agreement"),
pursuant to which Purchaser has agreed to make a cash tender offer (the "Offer")
for, among other things, all outstanding shares of the Company's common stock,
par value $.01 per share ("Common Stock"), at $31.50 per share (or any higher
price paid in the Offer, the "Offer Price"), net to the seller in cash, to be
followed by a merger of Purchaser with and into the Company (the "Merger"); and
WHEREAS, concurrently herewith, Parent and R.R. Donnelley & Sons Company
(the "Stockholder") are entering into a Stock Purchase Agreement (the
"Stockholder Purchase Agreement"), pursuant to which Parent will purchase
8,600,000 shares of Common Stock (the "Stockholder Shares") from the Stockholder
in accordance with the terms and conditions set forth therein; and
WHEREAS, concurrently herewith, Parent and each of Barton L. Faber, Thomas
J. Quarles and Ronald G. Eidell (collectively, the "Management Group") are
entering into Stock Purchase Agreements (the "Management Purchase Agreements"),
pursuant to which Parent will purchase the Shares and the Option Shares (each as
defined in the Management Purchase Agreements) (collectively, the "Management
Shares") from each member of the Management Group in accordance with the terms
and conditions set forth therein; and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has required that the Company agree, and in order to
induce Parent to enter into the Merger Agreement, the Company has agreed, to
sell to Parent authorized but unissued Shares (as defined herein) in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1. Purchase of Shares. On the terms and subject to the conditions
set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Parent shall purchase from the Company,
and the Company shall issue and sell to Parent, that number of shares of
Common Stock, if any (the "Shares"), equal to the number of shares of
Common Stock that when added to the
<PAGE>
sum of (a) the number of shares of Common Stock accepted by Purchaser and
its affiliates for purchase pursuant to the terms of the Offer, (b) the
number of Stockholder Shares, if any, purchased by Parent from the
Stockholder pursuant to the Stockholder Purchase Agreement simultaneously
with the acceptance of shares of Common Stock by Parent and its affiliates
for payment pursuant to the Offer and (c) the number of Management Shares,
if any, purchased by Parent from the Management Group pursuant to the
Management Purchase Agreements simultaneously with the acceptance of shares
of Common Stock by Parent and its affiliates for payment pursuant to the
Offer, shall constitute 51% of the outstanding shares of Common Stock on a
fully diluted basis giving effect to the issuance of the Shares, at a per
share purchase price equal to the Offer Price (the "Purchase Price").
1.2. Conditions to Closing. The obligations of the parties to
consummate the transactions contemplated by Section 1.1 hereof are subject
to the following conditions: (a) any waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
applicable to the issuance and delivery of the Shares shall have expired or
been terminated; and (b) there shall be no preliminary or permanent
injunction or other order by any court of competent jurisdiction
restricting, preventing or prohibiting the issuance and delivery of the
Shares. Parent and the Company shall each promptly after the date hereof
make such filings and provide such information as may be required under the
HSR Act with respect to the sale of the Shares.
1.3. Closing. Subject to the conditions contained in this Agreement,
the closing of the transactions contemplated by Section 1.1 hereof (the
"Closing") shall occur at a site designated by Parent simultaneously with
the acceptance by Purchaser of the shares of Common Stock validly tendered
and not withdrawn pursuant to the terms of the Offer in accordance with the
terms and conditions of the Offer and the Merger Agreement (the "Closing
Date"). At the Closing and subject to the conditions contained in this
Agreement, Parent hereby directs the Company to deliver to Purchaser a
certificate or certificates evidencing the number of Shares to be
purchased, each such certificate being duly executed by the Company and
registered in the name of Purchaser, and Parent will purchase the delivered
Shares at a purchase price equal to the Offer Price. All payments made by
Parent to the Company pursuant to this Section 1.3 shall be made by wire
transfer of immediately available funds to an account designated by the
Company or by certified bank check payable to the Company, in an amount
equal to the sum of the product of (i) the Offer Price and (ii) the total
number of shares of Common Stock delivered at the Closing.
1.4. Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Common Stock by
reason of any stock dividend, subdivision, merger, recapitalization,
combination, conversion or exchange of shares, or any other change in the
corporate or capital structure of the Company (including, without
limitation, the declaration or payment of an
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<PAGE>
extraordinary dividend of cash or securities) which would have the effect
of diluting or otherwise adversely affecting Parent's rights and privileges
under this Agreement, the number and kind of the Shares and the
consideration payable in respect of the Shares shall be appropriately and
equitably adjusted to restore to Parent its rights and privileges under
this Agreement.
1.5. Vesting of Options. The Company hereby covenants and agrees to
accelerate the vesting of all of the Options (as defined in the Management
Purchase Agreements) and restricted Common Stock to be sold by the
Management Group to Parent pursuant to the terms of the Management Purchase
Agreements (the "Restricted Stock") prior to the earlier of (i) if so
requested by Purchaser pursuant to the Management Purchase Agreements, the
timely tender and sale by Executive of all of the Option Shares pursuant to
the Offer and (ii) the closing of the transactions contemplated by the
Management Purchase Agreements. The Company hereby represents and warrants
to Parent that any acceleration of the vesting of the Options (as defined
in the Management Purchase Agreements) and the Restricted Stock has been
duly and validly authorized by all necessary corporate action on the part
of the Company.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent as follows:
2.1. Shares. The Company has taken all necessary corporate action to
authorize and reserve the Shares for issuance and will take all necessary
corporate action to authorize and reserve for issuance all additional
shares of Common Stock or other securities which may be issued as a result
of Section 1.4 hereof. The Shares (or such other securities) to be issued,
when paid for as provided herein, will be duly authorized, validly issued,
fully paid and nonassessable and will be delivered free and clear of all
security interests, liens, claims, pledges, options, preemptive rights,
rights of first refusal, agreements, limitations on the Company's voting
rights, charges and other encumbrances of any nature whatsoever. Upon the
delivery to Parent by the Company of a certificate or certificates
evidencing the Shares, Parent will receive good, valid and marketable title
to the Shares.
2.2. Brokers. Except for Lehman Brothers Inc., whose fees will be
paid by the Company and a true and correct copy of whose engagement letter
has been provided to Parent, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Company.
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<PAGE>
3. Representations and Warranties of Parent. Parent hereby represents
and warrants to the Company as follows:
3.1. Authority Relative to This Agreement. Parent has all necessary
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 Parent and the
consummation by Parent of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly and validly executed and delivered
by Parent and, assuming the due authorization, execution and delivery by
the Company, constitutes a legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms.
3.2. No Conflict. The execution and delivery of this Agreement by
Parent does not, and the performance of this Agreement by Parent will not,
(a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, (b) conflict
with or violate the certificate of incorporation or bylaws of Parent, (c)
conflict with, violate or result in any breach of or constitute a default
under (or an event which with notice or lapse of time or both would become
a default under) any agreement, judgment, injunction, order, law, rule,
regulation, decree or arrangement applicable to Parent or by which any
property or asset of Parent is bound or affected, other than, in the case
of clause (c), any such conflicts, violations, breaches or defaults that,
individually or in the aggregate, would not materially impair the ability
of Parent to perform its obligations hereunder.
3.3. Brokers. Except for Bear Stearns & Co. Inc., whose fees will be
paid by Parent, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission from the Company in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Parent.
3.4. Investment Intent. Parent hereby represents that any securities
it purchases pursuant to this Agreement are being purchased for its own
account for investment and not with a view to, or for sale in connection
with, any public distribution thereof.
4. Termination. This Agreement shall terminate automatically in the event
that the Merger Agreement is terminated in accordance with the terms and
conditions thereof.
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<PAGE>
5. Miscellaneous.
5.1. Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
5.2. Further Assurances. The Company and Parent shall execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the transactions
contemplated hereby.
5.3. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
5.4. Entire Agreement. This Agreement constitutes the entire
agreement between Parent and the Company with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written
and oral, between Parent and the Company with respect to the subject matter
hereof.
5.5. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that Parent may assign all or any of its rights
and obligations hereunder to any affiliate of Parent, provided that no such
assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
5.6. Parties in Interest. This Agreement shall be binding upon,
inure solely to the benefit of, and be enforceable by, the parties hereto
and their successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person
any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
5.7. Amendment; Waiver. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto. Any party hereto
may (a) extend the time for the performance of any obligation or other act
of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any agreement or condition contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
5.8. 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 this Agreement is not
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<PAGE>
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 in a mutually acceptable manner in order
that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
5.9. Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 5.9):
if to Parent:
The Great Universal Stores P.L.C.
c/o Experian Corporation
505 City Parkway West
Orange, California 92868
Attention: Thomas Gasparini
Facsimile: (714) 938-2513
Telephone: (714) 385-8296
with a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Donald G. Lubin, Esq.
Facsimile: (312) 876-7934
Telephone: (312) 876-8000
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<PAGE>
if to the Company:
Metromail Corporation
360 East 22nd Street
Lombard, Illinois 60148
Attention: Thomas J. Quarles
Senior Vice President and
General Counsel
Facsimile: (630) 620-2997
Telephone: (630) 620-3300
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Carter W. Emerson, Esq.
Facsimile: (312) 861-2200
Telephone: (312) 861-2000
5.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in Delaware without regard to
any principles of choice of law or conflicts of law of such State. All
actions and proceedings arising out of or relating to this Agreement shall
be heard and determined in any state or federal court sitting in Delaware.
Each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (iii) agrees that
such party will not bring any action relating to this Agreement or the
transactions contemplated hereby in any court other than a Federal court
sitting in the state of Delaware or a Delaware state court and (iv) waives
any right to trial by jury with respect to any claim or proceeding related
to or arising out of this Agreement or any of the transactions contemplated
hereby.
5.11. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
5.12. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered
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<PAGE>
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first written above.
THE GREAT UNIVERSAL STORES P.L.C.
/s/ Thomas Gasparini
By: ___________________________________
Name: Thomas Gasparini
Title: Authorized Signatory
METROMAIL CORPORATION
/s/ Barton L. Faber
By: ___________________________________
Name: Barton L. Faber
Title: Chairman, President and Chief Executive
Officer
-8-
<PAGE>
Exhibit (c)(5)
LEHMAN BROTHERS
February 6, 1998
Experian Corporation
505 City Parkway West
Orange, CA 92868
Attention: Mr. Van Skilling
Chairman & Chief Executive Officer
Dear Mr. Skilling:
In connection with your consideration of a possible transaction with
Metromail Corporation and/or its subsidiaries or affiliates (collectively, with
such subsidiaries or affiliates, the "Company"), the Company is prepared to make
available to you certain information concerning the business, financial
condition, operations, prospects, assets and liabilities of the Company. As a
condition to such information being furnished to you and your parent company's
directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers and financial advisors)
(collectively, "Representatives"), you agree to treat any information concerning
the Company (whether prepared by the Company, its advisors or otherwise and
irrespective of the form of communication) which has been or will be furnished
to you or to your Representatives by or on behalf of the Company (herein
collectively referred to as the "Evaluation Material") in accordance with the
provisions of this letter agreement, and to take or abstain from taking certain
other actions hereinafter set forth.
The term "Evaluation Material" shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents or materials
prepared by you or your Representatives which contain, reflect or are based
upon, in whole or in part, the information furnished to you or your
Representatives pursuant hereto. The term "Evaluation Material" does not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by you or your Representatives, (ii) was within your
possession prior to its being furnished to you by or on behalf of the Company
pursuant hereto, provided that the source of such information was not known by
you or any of your Representatives, after reasonable investigation, to be bound
by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to you on a non-confidential basis
from a source other than the Company or any of its Representatives, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.
LEHMAN BROTHERS INC.
190 SOUTH LASALLE STREET SUITE 2300 CHICAGO, ILLINOIS 60605
TELEPHONE 312/609-7200 FACSIMILE 312/609-8562
<PAGE>
You hereby agree that you and your Representatives shall use the Evaluation
Material solely for the purpose of evaluating a possible transaction between the
Company and you, that the Evaluation Material will be kept confidential by you
and your Representatives and that (except as may be required by law) you and
your Representatives will not disclose any of the Evaluation Material in any
manner whatsoever; provided, however, that (i) you may make any disclosure of
such information to which the Company gives its prior written consent and (ii)
any of such information may be disclosed to your Representatives who need to
know such information for the sole purpose of evaluating a possible transaction
with the Company, who agree to keep such information confidential in accordance
with this letter agreement and who are provided with a copy of this letter
agreement and agree to be bound by the terms hereof to the same extent as if
they were parties hereto. In any event, you shall be responsible for any breach
of this letter agreement by any of your Representatives and you agree, at your
sole expense, to take all reasonable measures to restrain your Representatives
from prohibited or unauthorized disclosure or use of the Evaluation Material.
In addition, you agree that, without the prior written consent of the
Company, you and your Representatives will not disclose to any other person the
fact that the Evaluation Material has been made available to you, that
discussions or negotiations are taking place concerning a possible transaction
involving the Company or any of the terms, conditions or other facts with
respect thereto (including the status thereof), unless in the written opinion of
your counsel such disclosure is required by law and then only with as much prior
written notice to the Company as is practical under the circumstances. Without
limiting the generality of the foregoing, you further agree that, without the
prior written consent of the Company, you will not, directly or indirectly,
enter into any agreement, arrangement or understanding, or any discussions which
might lead to such agreement, arrangement or understanding, with any other
person regarding a possible transaction involving the Company. The term "person"
as used in this letter agreement shall be broadly interpreted to include the
media and any corporation, partnership, group, individual or other entity. The
Company agrees that, without your prior written consent, neither the Company nor
its Representatives will disclose to any other person the fact that the
Evaluation Material has been made available to you or that discussions or
negotiations are taking place concerning a possible transaction involving the
Company and you, unless in the written opinion of its counsel such disclosure is
required by law and then only with as much prior written notice to you as is
practical under the circumstances.
You further agree that, without the prior consent of Lehman Brothers Inc.
as financial advisor to the Company ("Lehman Brothers"), all communications
regarding the proposed transaction, requests for additional information, and
discussions or questions regarding procedures, will be submitted or directed
only to Lehman Brothers and not to the Company or any of its affiliates or any
of their respective directors, officers or employees.
In the event that you or any of your Representatives are requested or
required (by deposition, interrogatories, requests for information or documents
in legal proceedings, subpoena, civil investigative demand or other similar
process) to disclose any of the Evaluation Material, you shall provide the
Company with prompt written notice of any such
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<PAGE>
request or requirement so that the Company may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this letter
agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Company, you or any of your Representatives are
nonetheless, in the written opinion of your counsel, legally compelled to
disclose Evaluation Material to any tribunal or else stand liable for contempt
or suffer other censure or penalty, you or your Representative may, without
liability hereunder, disclose to such tribunal only that portion of the
Evaluation Material which such counsel advises you is legally required to be
disclosed, provided that you exercise your reasonable efforts to preserve the
confidentiality of the Evaluation Material, including, without limitation, by
cooperating with the Company to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the Evaluation
Material by such tribunal.
If you decide that you do not wish to proceed with a transaction with the
Company, you will promptly inform Lehman Brothers of that decision. In that
case, or at any time upon the request of the Company or its agent for any reason
or for no reason, you will promptly deliver to the Company all Evaluation
Material (and all copies thereof) furnished to you or your Representatives by or
on behalf of the Company pursuant hereto except for one copy thereof to be kept
in a sealed box by your legal department for record purposes only. In the event
of such a decision or request, all other Evaluation Material prepared by you or
your Representatives shall be destroyed and no copy thereof shall be retained
and you agree to certify in writing that such destruction has occurred except
for one copy thereof to be kept in a sealed box by your legal department for
record purposes only. Notwithstanding the return or destruction of the
Evaluation Material, you and your Representatives will continue to be bound by
your obligations of confidentiality and other obligations hereunder.
You understand and acknowledge that neither the Company nor any of its
Representatives (including without limitation Lehman Brothers) makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material. You agree that neither the Company nor
any of its Representatives (including without limitation Lehman Brothers) shall
have any liability to you or to any of your Representatives relating to or
resulting from the use of the Evaluation Material. Only those representations or
warranties which are made in a final definitive agreement regarding the
transactions contemplated hereby, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.
In consideration of the Evaluation Material being furnished to you, you
hereby agree that, for a period of eighteen months from the date hereof, neither
you, your affiliates nor any person on behalf of you or your affiliates will
solicit to employ (whether as an employee, officer, director, agent, consultant
or independent contractor) any person who is employed by the Company, its
subsidiaries or its affiliates. The term "solicit to employ" includes any
communication (written, telephone or oral) from or initiated by you, your
affiliates or any person on behalf of you or your affiliates to any employee of
the Company, its subsidiaries or its affiliates but does not include advertising
to fill one or more positions in any newspaper of general circulation or
industry publication on a basis consistent with past practice.
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<PAGE>
In consideration of the Evaluation Material being furnished to you, you
hereby agree that, without the prior written consent of the Board of Directors
of the Company, for a period of one year from the date hereof, neither you nor
any of your affiliates (as such term is defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended), acting alone or as part of a group, will
acquire or offer or agree to acquire, directly or indirectly, by purchase or
otherwise, any voting securities (or direct or indirect rights or options to
acquire any voting securities) of the Company, or otherwise seek to influence or
control, in any manner whatsoever, the management or policies of the Company.
You agree that unless and until a final definitive agreement regarding a
transaction between the Company and you has been executed and delivered, neither
the Company nor you will be under any legal obligation of any kind whatsoever
with respect to such a transaction by virtue of this letter agreement except for
the rights and obligations specifically agreed to herein. You further
acknowledge and agree that the Company reserves the right, in its sole
discretion, to reject any and all proposals made by you or any of your
Representatives with regard to a transaction between the Company and you, and to
terminate discussions and negotiations with you at any time.
The Company reserves the right to assign all of its rights, powers and
privileges under this letter agreement (including, without limitation, the right
to enforce all of the terms of this letter agreement) to a successor in interest
to the Company.
It is understood and agreed that no failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
It is further understood and agreed that any breach of this letter
agreement by you or any of your Representatives may result in irreparable harm
to the Company, that money damages may not be a sufficient remedy for any such
breach of this letter agreement and that the Company shall be entitled to seek
equitable relief, including injunction and specific performance, as a remedy
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies for a breach by you of this letter agreement but shall be in addition
to all other remedies available at law or equity to the Company. In the event of
litigation relating to this letter agreement, the party that fails to prevail
in such action shall pay the reasonable legal fees incurred by the prevailing
party in connection with such litigation, including any appeal therefrom.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of Illinois and may not be amended or terminated except
pursuant to a written agreement duly executed by you and the Company. You and
the Company hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Illinois and of the United
States District Court located in the City of Chicago for any lawsuits, actions
or other proceedings arising out of or relating to this Agreement and agree not
to commence any such lawsuit, action or other proceeding except in such courts.
You further
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<PAGE>
agree that service of any process, summons, notice or document by registered
mail to your address set forth above shall be effective service of process for
any lawsuit, action or other proceeding brought against you in any such court.
You and the Company hereby irrevocably and unconditionally waive any objection
to the laying of venue of any lawsuit, action or other proceeding arising out of
or relating to this Agreement in the courts of the State of Illinois or the
United States District Court located in the City of Chicago, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
The obligations of each party under this agreement will cease three years
from the date hereof, provided that with respect to the copy of the Evaluation
Material kept for record purposes, your obligation to keep such Evaluation
Materials in a sealed box shall continue until such Evaluation Materials are
destroyed or returned to the Company.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between you and the Company.
Very truly yours,
/s/ Michael K. Stake
-------------------------------------
Lehman Brothers Inc.
as financial advisor to, and on behalf of,
Metromail Corporation
Accepted and agreed as of
the date first written above:
EXPERIAN CORPORATION
By: /s/ Thomas A. Gasparini
------------------------------
Name: THOMAS A. GASPARINI
Title: Vice President and
General Counsel
-5-
<PAGE>
EXHIBIT (c)(6)
AMENDMENT
---------
Amendment to a Sales Agreement dated as of June 19, 1996 (the "Sales Agreement")
by and between R. R. Donnelley & Sons Company, a Delaware corporation
("Donnelley") and Metromail Corporation, a Delaware corporation ("Metromail").
WITNESSETH
----------
WHEREAS, in conjunction with its initial public offering of shares, Donnelley
and Metromail entered into the Sales Agreement pursuant to which Donnelley
agreed to sell certain Services on behalf of Metromail and Metromail agreed to
pay certain amounts to Donnelley in exchange therefore;
WHEREAS, as a condition to a tender offer for the shares of Metromail, Great
Universal Stores P.L.C. ("GUS") has required an extension of the term of the
Sales Agreement; and
WHEREAS, Donnelley is agreeable to extending the term of the Sales Agreement,
provided certain other amendments to the Sales Agreement are made;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
Section 1. Definitions. All terms used herein shall have the meanings set forth
in the Sales Agreement.
Section 2. Effectiveness. This Amendment shall be effective upon the closing
by GUS of its offer to purchase the issued and outstanding shares
of Metromail (the "Amendment Effective Date"), but should such
closing not occur prior to May 31, 1998, this Amendment shall be
null and void and of no further force and effect.
Section 3. Charges. Upon the Amendment Effective Date, in lieu of the sales
commission described in Paragraphs 4(b) and (c) of the Sales
Agreement, the sales commission to be either withheld by Donnelley
(in the case of Paragraph 4(b)) or to be paid to Donnelley (in the
case of Paragraph 4(c)) shall be calculated on the same basis as set
forth on page 30 and according to the "Commissions" terms set forth
on page 45, both in a proposal from Metromail to Donnelley dated
February 5, 1998, except that the sales commission on sales of Mail
Production Services shall be calculated at a rate of 3%.
Furthermore, to the extent that the parties have entered into side
agreements prior to the Amendment Effective Date that alter the
terms of the Sales Agreement, then notwithstanding the provisions of
this Amendment, such side agreements shall continue to govern the
terms of the relationship to which they relate.
<PAGE>
Section 4. Term. Upon the Amendment Effective Date, the provisions of Paragraph
7 of the Sales Agreement shall be deemed amended to change the
reference therein to "December 31, 1998" to "December 31, 2000."
Section 5. Additional Terms. Upon the Amendment Effective Date, the following
additional paragraphs shall be deemed added to the Sales Agreement:
10. In consideration of the mutual agreements contained
herein, MM agrees that during the term of this Agreement, it
shall not provide any of the Services to any of the
following entities, their subsidiaries or affiliates (each
being a "Restricted Entity"):
(a) Quad Graphics
(b) Quebecor
(c) World Color
(d) Banta
(e) Big Flower;
provided that nothing herein shall prevent MM from providing
Services to the entities named above when such Services are
part of a contractual arrangement with RRD or a publisher.
MM further agrees that it shall not allow its affiliated
companies to either (i) enter into agreements to pay
commissions to any Restricted Entity for the sale of
Services; or (ii) allow any Restricted Entity to broker or
market the Services of such affiliated companies; but will
allow such affiliated companies to provide only spot or
overflow Services to any Restricted Entity as requested by
such Entity from time to time.
11. During the term of this Agreement, MM agrees to provide
support to RRD in its postal rate matters and other postal
affairs efforts at a level consistent with the support
provided in 1997.
12. MM currently has and supports DataLink connections at
two RRD facilities and absorbs tape and freight costs for
Services provided at other RRD facilities. MM agrees to
continue to support its DataLink connections as currently
installed at RRD facilities and to absorb tape and freight
costs for Services provided at other RRD facilities.
Further, MM agrees to determine the total tape and freight
costs for RRD facilities not utilizing a DataLink
connection, and to work with RRD to analyze opportunities to
improve service and costs through among other options,
DataLink installations at such facilities and the migration
of tape and freight costs to the ultimate customer.
<PAGE>
13. MM and RRD agree to explore together opportunities to
create co-branded and/or proprietary product and service
offerings for mutual marketing efforts.
14. MM agrees to continue to provide up to 200 hours of
consulting and analytical services to RRD for RRD's internal
use during any calendar year beginning 1998 upon the request
of RRD.
15. The parties acknowledge that MM has products and
services beyond the Services described in this Agreement,
including database products. MM and RRD agree to work
together in good faith to establish a cost-plus arrangement
covering the sale of database products by RRD to its
targeted customer accounts, but the terms and conditions of
any such arrangement shall be contained in a further
amendment or addendum to this Agreement.
16. MM agrees to continue to support financially joint
marketing efforts by MM and RRD at not less than historical
levels (1997=$110,000). Further, MM agrees to increase such
historical levels at a rate of not less than 1% for each
dollar of gross sales other than sales of Mail Production
Services above $20.7 million provided by RRD to MM, and RRD
shall match any such expenditures by MM.
17. RRD agrees that should RRD contract in its own name
with its ultimate customer for the Services of MM, it shall
name MM as its subcontractor in its contract for such
Services.
18. RRD and MM agree to work together to determine the
level of support required by RRD sales personnel in order
for the sales commissions described in paragraph 4 to
continue to be payable thereunder when the ultimate customer
is no longer a customer of RRD, and the terms of this
Agreement shall be amended to reflect the agreement of the
parties.
Section 7. Execution in Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same amendment, and shall
become binding when one or more counterparts have been signed by each of the
parties hereto and delivered to each of Donnelley and Metromail.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of March 12, 1998.
R.R. DONNELLEY & SONS COMPANY
By: /s/ Cheryl A. Francis
---------------------------------------
Cheryl A. Francis
Executive Vice President and
Chief Financial Officer
METROMAIL CORPORATION
By: /s/ Barton L. Faber
---------------------------------------
Barton L. Faber
Chairman, President & Chief Executive
Officer
<PAGE>
EXHIBIT (c)(7)
AMENDMENT
---------
Amendment to a Data Center Services Agreement dated as of June 19, 1996 (the
"DCSA") by and between R. R. Donnelley & Sons Company, a Delaware corporation
("Donnelley") and Metromail Corporation, a Delaware corporation ("Metromail").
WITNESSETH
----------
WHEREAS, in conjunction with its initial public offering of shares, Donnelley
entered into the DCSA pursuant to which Metromail agreed to provide certain
services to Donnelley for the period ending December 31, 1998; and
WHEREAS, as a condition to a tender offer for the shares of Metromail, Great
Universal Stores P.L.C. ("GUS") has required an extension of the term of the
DCSA; and
WHEREAS, Donnelley is agreeable to extending the term of the DCSA, provided
certain other amendments to the DCSA are made;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
Section 1. Definitions. All terms used herein shall have the meanings set
forth in the DCSA.
Section 2. Effectiveness. This Amendment shall be effective upon the closing
by GUS of its offer to purchase the issued and outstanding shares
of Metromail (the "Amendment Effective Date"), but should such
closing not occur prior to May 31, 1998, this Amendment shall be
null and void and of no further force and effect.
Section 3. Term. Upon the Amendment Effective Date, the provisions of
Paragraph 3 of the DCSA shall be deemed amended to change each
reference therein to "December 31, 1998" to "December 31, 1999."
Section 4. Annual Fee. Upon the Amendment Effective Date, the provisions of
Paragraph 9.2 of the DCSA shall be deemed amended to read as
follows:
From the beginning of the Term until December 31, 1996, the
Annual Fee shall be $4,300,000 ($358,333 per month, prorated
for any portion of a month). For each subsequent year of the
Term
<PAGE>
through December 31, 1999, the Annual Fee shall be adjusted
according to the terms set forth in Schedule D.
Section 5. Additional Provisions. Upon the Amendment Effective Date, the
following shall be added as Section 4.11 of the DCSA:
Operating Procedures. By December 31, 1998, MM, at no
additional cost to RRD, shall provide to RRD, documentation
of all operating procedures, including but not limited to,
production control, schedule and job control procedures,
according to standards established by RRD. In the event
that MM fails to provide such documentation by December 31,
1998, RRD shall engage contractor resources to perform this
work and charge MM all direct costs associated with the
documentation engagement. MM shall make available the staff
requested by RRD to assist the contractor in the
documentation work. All documentation prepared pursuant to
this Section 4.11 shall be and become the sole property of
RRD.
Section 6. Schedule B. Upon the Amendment Effective Date, the provisions
contained in Attachment B1, Service Level Memorandum, to Schedule B
shall be deemed amended as follows:
a. Paragraph I shall be amended to read as follows:
SYSTEM AVAILABILITY - The mainframe will be available 24
hours a day, 6 days a week; on Saturday, it will be
available 20 hours from midnight until 8 p.m. It will be
attended 24 hours per day, 7 days per week, other than on
Thanksgiving Day and Christmas Day. A service level goal of
99% of available time (excluding holidays and scheduled
downtime), each month is established.
b. Paragraph II shall be amended to read as follows:
VAX AVAILABILITY - The SOS System and the electronic mail
system will be available and attended during the same hours
as established in paragraph 1 above. Similarly, a service
level goal of 99% of available time is established.
c. Paragraph III shall be amended to substitute "one second or
less" for "one second."
<PAGE>
Section 7. Schedule C. Upon the Amendment Effective Date, the following
paragraph shall be added to Schedule C:
MM shall use all efforts to replace immediately all
personnel who terminate their employment with MM whether
through new hiring or redeployment of existing personnel. In
any event, MM shall allow RRD an opportunity to review the
qualifications of, or to participate in the interviewing of,
candidates for such replacements.
Section 8. Execution in Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same
amendment, and shall become binding when one or more counterparts
have been signed by each of the parties hereto and delivered to
each of Donnelley and Metromail.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of March 12, 1998.
R.R. DONNELLEY & SONS COMPANY
By: /s/ Cheryl A. Francis
-------------------------------------
Cheryl A. Francis
Executive Vice President and
Chief Financial Officer
METROMAIL CORPORATION
By: /s/ Barton L. Faber
-------------------------------------
Barton L. Faber
Chairman, President & Chief Executive
Officer
<PAGE>
EXHIBIT (c)(8)
March 12, 1998
R.R. Donnelley & Sons Company
77 West Wacker Drive
Chicago, Illinois 60601
Ladies and Gentlemen:
This letter will confirm our understanding that Metromail Corporation (the
"Company") and Great Universal Stores P.L.C. ("GUS"), and a wholly-owned
subsidiary of GUS ("Sub"), concurrently herewith are entering into an agreement
and plan of merger dated as of March 12, 1998 (the "Merger Agreement") by which
GUS and Sub will make a cash tender offer (the "Offer") for all outstanding
shares of common stock of the Company at a $31.50 price per share, and as a
condition to entering into the Merger Agreement GUS and Sub require that the
letter agreement dated February 24, 1997 (the "Letter Agreement") between the
Company and you be terminated effective as of the Closing (as defined in the
Stock Purchase Agreement dated March 12, 1998 between GUS and you). By your
execution below, you therefore agree with us that the Letter Agreement will be
terminated effective as of the Closing. Should the Closing not occur on or
before September 30, 1998 then the Letter Agreement shall remain in full force
and effect.
Very truly yours,
METROMAIL CORPORATION
By: /s/ Barton Faber
-------------------------
Name: Barton Faber
-----------------------
Title: Chairman, President and Chief Executive Officer
------------------------------------------------
Agreed to and accepted this 12th day of
March 1998:
R.R. DONNELLEY & SONS COMPANY
By: /s/ Cheryl A. Francis
---------------------------
Name: Cheryl A. Francis
Title: Executive Vice President & Chief
Financial Officer
