-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gn/85w2Ch3+YRB2Vsz1ltBDvCBdbPWVcG2YfiDf1cPBMdlpqW6wxCMk5ja5E/czh c1yXimkgk8nTDOC33/GJ3g== 0001047469-99-018618.txt : 19990510 0001047469-99-018618.hdr.sgml : 19990510 ACCESSION NUMBER: 0001047469-99-018618 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19990507 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ABR INFORMATION SERVICES INC CENTRAL INDEX KEY: 0000920985 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 593228107 STATE OF INCORPORATION: FL FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-44917 FILM NUMBER: 99613124 BUSINESS ADDRESS: STREET 1: 34125 US HGHWY 19 N CITY: PALM HARBOR STATE: FL ZIP: 34684 BUSINESS PHONE: 7277852819 MAIL ADDRESS: STREET 1: 34125 US HGHWY 19 N CITY: PALM HARBOR STATE: FL ZIP: 34684 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP CENTRAL INDEX KEY: 0000109758 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 520278528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 8100 34TH AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55425 BUSINESS PHONE: 6128538100 FORMER COMPANY: FORMER CONFORMED NAME: CONTROL DATA CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL CREDIT CO DATE OF NAME CHANGE: 19680910 SC 14D1 1 SC 14D1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES 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 --------------------- ABR INFORMATION SERVICES, INC. (Name of Subject Company) SPRING ACQUISITION CORP. CERIDIAN CORPORATION (Bidders) VOTING COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 00077R 10 8 (CUSIP Number of Class of Securities) GARY M. NELSON CERIDIAN CORPORATION 8100 34TH AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55425 (612) 853-4291 (Name, Address and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of Bidders) Copies to: TIMOTHY J. SCALLEN THOMAS C. THOMAS OPPENHEIMER WOLFF & DONNELLY LLP PLAZA VII BUILDING 45 SOUTH SEVENTH STREET MINNEAPOLIS, MINNESOTA 55402 (612) 607-7000 --------------------------------------------- CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TRANSACTION VALUATION (1) AMOUNT OF FILING FEE (2) - -------------------------------------------------------------------------------- $768,039,549 $153,608 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Determined in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This Transaction Valuation assumes, solely for purposes of calculating the filing fee for this Schedule 14D-1, the purchase of 30,119,198 shares of voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc. at $25.50 per Share, net to seller in cash. Such number of shares represents the sum of all of the Shares outstanding as of April 30, 1999 and all of the Shares issuable upon exercise of options outstanding as of April 30, 1999 with an exercise price greater than $25.50. (2) Calculated in accordance with Rule 0-11(d) of the Exchange Act and equals 1/50 of 1% of the Transaction Valuation. / / 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: None. Filing Party: Not applicable. Form or Registration No.: Not applicable. Date Filed: Not applicable. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXPLANATORY NOTE This Tender Offer Statement on Schedule 14D-1 relates to an offer by Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), to purchase all of the outstanding shares of the voting common stock, par value $0.01 per share (collectively, the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net to seller in cash without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively (collectively, the "Offer"). The Offer is made pursuant to the Agreement and Plan of Merger dated as of April 30, 1999 among Parent, the Purchaser and the Company (the "Merger Agreement"), a copy of which is attached hereto as Exhibit (c)(1). ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is ABR Information Services, Inc., a Florida corporation, and the address of its principal executive office is 34125 U.S. Highway 19 North, Palm Harbor, Florida 34684-2141. (b) The information set forth in the Introduction of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Market Prices of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) and (g) The information set forth in the Introduction, Section 9 ("Certain Information Concerning the Purchaser and Parent") and Schedule A of the Offer to Purchase is incorporated herein by reference. (e)-(f) The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a)-(b) The information set forth in the Introduction, Section 9 ("Certain Information Concerning the Purchaser and Parent"), Section 10 ("Background of the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans for the Company; the Merger Agreement") and Section 13 ("Certain Conditions of the Offer and the Merger") 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 12 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. 2 ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(e) The information set forth in the Introduction, Section 10 ("Background of the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans for the Company; the Merger Agreement") and Section 13 ("Certain Conditions of the Offer and the Merger") of the Offer to Purchase is incorporated herein by reference. (f)-(g) The information set forth in Section 7 ("Certain Effects of the Offer") 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 8 ("Certain Information Concerning the Company"), Section 9 ("Certain Information Concerning the Purchaser and Parent"), Section 10 ("Background of the Offer") and Section 11 ("Purpose of the Offer and Merger; Plans for the Company; the Merger Agreement") of the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the Introduction, Section 9 ("Certain Information Concerning the Purchaser and Parent"), Section 10 ("Background of the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans for the Company; the Merger Agreement") and Section 13 ("Certain Conditions of the Offer and the Merger") 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 Section 17 ("Certain Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) None. (b)-(c) The information set forth in Section 2 ("Acceptance of and Payment for Shares") and Section 15 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 7 ("Certain Effects of the Offer") of the Offer to Purchase is incorporated herein by reference. (e) None. 3 (f) The information set forth in the Offer to Purchase and the related Letter of Transmittal and the Merger Agreement, copies of which are attached hereto as Exhibits (a)(1), (a)(2), and (c)(1), respectively, is incorporated herein in its entirety. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase dated May 7, 1999. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(6) Text of Joint Press Release issued by Parent and the Company on May 3, 1999. (a)(7) Form of Summary Advertisement dated May 7, 1999. (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (b)(1) Amended and Restated Credit Agreement dated as of December 12, 1995, as amended and restated as of July 31, 1997, among Parent, Bank of America National Trust and Savings Association, as Agent, and the Financial Institutions Parties Thereto. (b)(2) Waiver and First Amendment to Credit Agreement, dated as of December 2, 1997, among Parent, Bank of America National Trust and Savings Association as Agent, and the Financial Institutions Parties Thereto. (b)(3) Commitment Letter dated May 4, 1999, from Bank of America National Trust and Savings Association and Nationsbanc Montgomery Securities LLC to Parent. (c)(1) Agreement and Plan of Merger dated as of April 30, 1999 among Parent, the Purchaser and the Company. (c)(2) Confidentiality Agreement dated as of February 4, 1999 between Parent and Goldman, Sachs & Co., on behalf of the Company. (d)-(f) Not applicable. 4 SIGNATURES After due inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: May 7, 1999 CERIDIAN CORPORATION By: /s/ Gary M. Nelson -------------------------------------- Gary M. Nelson VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY SPRING ACQUISITION CORP. By: /s/ Gary M. Nelson ------------------------------------- Gary M. Nelson PRESIDENT AND CHIEF EXECUTIVE OFFICER 5 SCHEDULE 14D-1 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION METHOD OF FILING ------ ------------------------------------------------------------------- ---------------- (a)(1) Offer to Purchase dated May 7, 1999. Filed herewith electronically. (a)(2) Letter of Transmittal Filed herewith electronically. (a)(3) Notice of Guaranteed Delivery. Filed herewith electronically. (a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Filed herewith Nominees. electronically. (a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Filed herewith Trust Companies and Nominees. electronically. (a)(6) Text of Joint Press Release issued by Parent and the Company on Filed herewith May 3, 1999. electronically. (a)(7) Form of Summary Advertisement dated May 7, 1999. Filed herewith electronically. (a)(8) Guidelines for Certification of Taxpayer Identification Number on Filed herewith Substitute Form W-9. electronically. (b)(1) Amended and Restated Credit Agreement dated as of December 12, Incorporated by 1995, as amended and restated as of July 31, 1997, among Parent, reference to Exhibit Bank of America National Trust and Savings Association, as Agent, 10.1 to Parent's and the Financial Institutions Parties Thereto. Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File No. 1-1969) 6 (b)(2) Waiver and First Amendment to Credit Agreement, dated as of Incorporated by December 2, 1997, among Parent, Bank of America National Trust reference to Exhibit and Savings Association as Agent, and the Financial Institutions 10.25 to Parent's Parties Thereto. Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-1969) (b)(3) Commitment Letter dated May 4, 1999, from Bank of America Filed herewith National Trust and Savings Association and Nationsbanc electronically. Montgomery Securities LLC to Parent. (c)(1) Agreement and Plan of Merger dated as of April 30, 1999 among Filed herewith Parent, the Purchaser and the Company. electronically. (c)(2) Confidentiality Agreement dated as of February 4, 1999 between Filed herewith Parent and Goldman, Sachs & Co., on behalf of the Company. electronically.
7 EX-99.(A)(1) 2 EXHIBIT 99(A)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. AT $25.50 NET PER SHARE BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. THE BOARD OF DIRECTORS OF ABR INFORMATION SERVICES, INC. HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF ABR INFORMATION SERVICES, INC. AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS HEREINAFTER DEFINED) PURSUANT TO THE OFFER. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE A NUMBER OF SHARES OF ABR INFORMATION SERVICES, INC. WHICH, TOGETHER WITH ANY SHARES OWNED BY CERIDIAN CORPORATION, SPRING ACQUISITION CORP. AND/OR OTHER SUBSIDIARIES OF CERIDIAN CORPORATION, REPRESENTS MORE THAN 50% OF THE TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS. THE PURCHASER ESTIMATES THAT APPROXIMATELY 15,399,404 SHARES WILL NEED TO BE VALIDLY TENDERED (AND NOT WITHDRAWN) TO SATISFY THIS MINIMUM CONDITION (AS HEREINAFTER DEFINED). THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 1, 13 AND 16. ------------------------ IMPORTANT ANY STOCKHOLDER DESIRING TO TENDER ALL OR A PORTION OF SUCH STOCKHOLDER'S SHARES (AS HEREINAFTER DEFINED) SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF TRANSMITTAL AND MAIL OR DELIVER THE LETTER OF TRANSMITTAL TOGETHER WITH THE CERTIFICATE(S) EVIDENCING SUCH SHARES, AND ANY OTHER REQUIRED DOCUMENTS, TO THE DEPOSITARY (AS HEREINAFTER DEFINED) AT ONE OF THE ADDRESSES SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE OR TENDER SUCH SHARES PURSUANT TO THE PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 4, OR (2) REQUEST HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR SUCH STOCKHOLDER. A 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 SUCH STOCKHOLDER DESIRES TO TENDER SUCH SHARES. A 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 PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN SECTION 4. QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION AGENT OR TO THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND OTHER RELATED MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT OR THE DEALER MANAGER. ------------------------ The Dealer Manager for the Offer is: [LOGO OF BEAR, STEARNS & CO. INC.] May 7, 1999 TABLE OF CONTENTS
SECTION PAGE - ----------------------------------------------------------------------------------------------------------- ----- INTRODUCTION............................................................................................... 1 THE TENDER OFFER........................................................................................... 3 1. Terms of the Offer; Expiration Date..................................................................... 3 2. Acceptance of and Payment for Shares.................................................................... 3 3. Withdrawal Rights....................................................................................... 4 4. Procedures for Accepting the Offer and Tendering Shares................................................. 5 5. Certain Income Tax Consequences......................................................................... 7 6. Market Prices of Shares; Dividends...................................................................... 7 7. Certain Effects of the Offer............................................................................ 8 8. Certain Information Concerning the Company.............................................................. 9 9. Certain Information Concerning the Purchaser and Parent................................................. 12 10. Background of the Offer................................................................................ 15 11. Purpose of the Offer and the Merger; Plans for the Company; the Merger Agreement....................... 18 12. Source and Amount of Funds............................................................................. 23 13. Certain Conditions of the Offer........................................................................ 26 14. Dividends and Distributions............................................................................ 27 15. Certain Legal Matters.................................................................................. 28 16. Extension of Tender Period, Termination and Amendments................................................. 31 17. Certain Fees and Expenses.............................................................................. 33 18. Miscellaneous.......................................................................................... 33 Schedule A--Directors and Executive Officers of Parent and the Purchaser................................... A-1
i TO THE HOLDERS OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC.: INTRODUCTION Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), hereby offers to purchase all outstanding shares of the voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together 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, stock transfer taxes with respect to the purchase of Shares pursuant to the Offer. The Purchaser will pay all relevant charges and expenses incurred in connection with the Offer by Bear, Stearns & Co. Inc. ("Bear Stearns"), which is acting as the Dealer Manager for the Offer (in such capacity, the "Dealer Manager"), The Bank of New York, which is acting as the Depositary (the "Depositary"), and Georgeson & Company Inc., which is acting as the Information Agent (the "Information Agent"). See Section 17. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES WHICH TOGETHER WITH ANY SHARES OWNED BY PARENT, PURCHASER OR ANY OF THE PARENT COMPANIES (AS DEFINED IN THE MERGER AGREEMENT) REPRESENTS MORE THAN 50% OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS AT THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"). SEE SECTION 13. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of April 30, 1999, by and among the Company, Parent and the Purchaser (the "Merger Agreement"). The Merger Agreement provides that, subject to the terms and conditions of the Merger Agreement at the effective time (the "Effective Time") of the Merger (as hereinafter defined), the Purchaser will be merged with and into the Company (the "Merger"), and the Company will survive and become a wholly owned subsidiary of Parent (the "Surviving Corporation"). At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than Shares owned by Parent, the Purchaser or any other direct or indirect subsidiary of Parent or Shares that are owned by the Company or any of its direct or indirect subsidiaries and in each case not held on behalf of third parties, or Shares ("Dissenting Shares") held by stockholders who properly exercise and perfect dissenters' rights, if any, under the Florida Business Corporation Act (the "FBCA")) will be canceled, extinguished and converted into the right to receive, without interest, an amount in cash equal to $25.50 per Share or such higher price per Share as shall have been paid in the Offer (the "Merger Consideration"). The Merger Agreement is more fully described in Section 11. Stockholders of the Company do not have dissenters' rights as a result of the Offer. In addition, stockholders of the Company will not have dissenters' rights in connection with the Merger if on the record date fixed to determine the stockholders entitled to vote on or consent to the Merger, the Shares are listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. ("NASD") or are held of record by 2,000 or more stockholders. If, however, the Shares are not so listed or designated and are not held of record by at least 2,000 stockholders, then holders of Shares who do not vote or consent in favor of the Merger will have dissenters' rights. See Section 15. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT, HAS 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 RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. The consummation of the Merger is subject to the satisfaction or waiver of a number of conditions, including, if required by applicable law, the approval of the Merger Agreement by the stockholders of the Company. If the Minimum Condition is satisfied, the Purchaser will have sufficient voting power to 1 approve the Merger without the vote of any other stockholder of the Company. Under the Merger Agreement, Parent and the Purchaser have agreed to vote all Shares acquired in the Offer in favor of the Merger. If at least 80% of the outstanding Shares are purchased in the Offer, the Purchaser will be able to effect a "short-form merger" under the FBCA without the approval of any stockholder of the Company. See Section 11. Based on information provided by the Company, as of April 29, 1999, there were 28,762,983 Shares issued and outstanding and 2,035,823 Shares subject to issuance upon the exercise of outstanding options to purchase Shares of voting common stock (the "Options") granted under the Company's 1987 Amended and Restated Stock Option Plan, 1993 Amended and Restated Stock Option Plan, 1995 Non-Employee Director Stock Option Plan, 1996 Non-Employee Director Stock Option Plan and 1997 Stock Option Plan (together, the "Option Plans"). Based on the foregoing, and assuming the number of Shares on a fully diluted basis at expiration of the Offer would be 30,798,806, the Purchaser would need to purchase 15,399,404 Shares for the Minimum Condition to be satisfied. Subject to the consent of the Company and the rules and regulations of the Securities and Exchange Commission (the "Commission"), the Purchaser reserves the right (but is not obligated) to waive or amend the Minimum Condition and to purchase pursuant to the Offer fewer than the number of Shares necessary to satisfy the Minimum Condition. See Section 1. The Merger Agreement is more fully described in Section 11 of this Offer to Purchase. Stockholders are encouraged to read that Section carefully, together with all other terms and conditions of the Offer, before deciding whether to tender their Shares. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 2 THE TENDER OFFER 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the conditions set forth in the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and will pay for all Shares validly tendered on or prior to the Expiration Date and not withdrawn in accordance with Section 3 of this Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New York City time, on Friday, June 4, 1999, unless the Purchaser 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. Pursuant to the terms of the Merger Agreement, the Purchaser may extend the Offer as described in Section 16. The Offer is subject to certain conditions set forth in Section 13, including satisfaction of the Minimum Condition and the expiration or termination of the waiting period applicable to the Purchaser's acquisition of Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Subject to the terms of the Merger Agreement, if any condition to the Purchaser's obligation to purchase Shares is not satisfied prior to the acceptance for payment for any such Shares, the Purchaser may (i) at a scheduled expiration date of the Offer terminate the Offer, (ii) extend the Offer and, subject to withdrawal rights as set forth in Section 3, retain all such Shares until the expiration of the Offer as so extended, (iii) waive such condition (other than the Minimum Condition) and, subject to any requirement to extend the period of time during which the Offer is open, purchase all Shares validly tendered by the Expiration Date and not withdrawn, or (iv) delay acceptance for payment of Shares until satisfaction or waiver of the conditions of the Offer. Subject to the consent of the Company and the rules and regulations of the Commission, the Purchaser reserves the right (but is not obligated) to waive or amend the Minimum Condition and to purchase pursuant to the Offer fewer than the number of Shares necessary to satisfy the Minimum Condition. The Merger Agreement provides that, unless previously approved in writing by the Company, and subject to certain rights of the Purchaser to extend the Offer, the Purchaser will not decrease the price per Share offered in the Offer, change the form of consideration offered or payable in the Offer, decrease the number of Shares sought in the Offer, change the conditions to the Offer, impose additional conditions to the Offer, amend any term of the Offer in a manner adverse to the holders of Shares, or waive the Minimum Condition. For a description of the Purchaser's right and obligation to extend the period of time during which the Offer is open, and to amend, delay or terminate the Offer, see Section 16. The Company has provided the Purchaser with the Company's stockholder list for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares and will be furnished to brokers, dealers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 2. ACCEPTANCE OF AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will purchase, by accepting for payment, and will pay for, any and all Shares validly tendered and not withdrawn following the later of (i) the expiration or termination of all waiting periods under the HSR Act that are applicable to the purchase of Shares pursuant to the Offer, and (ii) the Expiration Date. See Section 15. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares or timely confirmation of book-entry transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 4, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by the Letter of Transmittal. 3 For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment (and thereby purchased) tendered Shares as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. Payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payments to tendering stockholders. The Purchaser will not, under any circumstances, pay any interest on the purchase price, regardless of any delay in making such payment. If any tendered Shares are not purchased pursuant to the Offer, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of book-entry transfer within the Book-Entry Transfer Facility, such Shares will be credited to an account maintained within the Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Offer. The Purchaser will pay all stock transfer taxes, if any, payable with respect to the transfer to it of Shares purchased pursuant to the Offer. If, prior to the Expiration Date, the Purchaser shall decide, in its sole discretion and subject to the terms of the Merger Agreement, to increase the consideration offered to stockholders pursuant to the Offer, such increased consideration shall be paid to all holders of Shares accepted for payment and paid for pursuant to the Offer. 3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be irrevocable, except that Shares tendered may be withdrawn at any time prior to the Expiration Date and, unless previously paid for, may also be withdrawn after July 5, 1999. If the Purchaser is delayed in its acceptance or purchase of or payment for Shares or is unable to purchase or pay for Shares for any reason, then, without prejudice to the Purchaser's rights under Sections 1, 13 and 16, tendered Shares may be retained by the Depositary on behalf of the Purchaser and may not be withdrawn except as permitted by this Section 3 and subject to Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). See Section 16. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses specified on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and, if certificates representing such Shares have been delivered or otherwise identified to the Depositary, the name(s) in which such certificate(s) is (are) registered, if different from the name of the person tendering such Shares. If certificates have been delivered or otherwise identified to the Depositary, then prior to the physical release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing such Shares and the signature on the notice of withdrawal must be guaranteed by a member firm of a registered national securities exchange, a member of the NASD, a commercial bank or trust company having an office, branch or agency in the United States or any other institution that is a member of the Medallion Signature Guaranty Program (each being referred to herein as an "Eligible Institution"). If Shares have been tendered pursuant to the procedure for book-entry tender as set forth in Section 4, the notice of withdrawal must specify the name and account number(s) of the account(s) at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. None of Parent, the Purchaser, the Dealer Manager, the Depositary or the Information Agent will be obligated to give notice of any defects or irregularities in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such notice. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. Withdrawals of Shares tendered may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Withdrawn Shares, however, may be 4 retendered by following one of the procedures described in Section 4 at any time prior to the Expiration Date. 4. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. VALID TENDER. In order for a holder of Shares to validly tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), together with any required signature guarantees and any other documents required by the Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, on or prior to the Expiration Date. Either (i) the certificates for such Shares must be delivered to the Depositary or (ii) such Shares must be tendered pursuant to the procedure for book-entry transfer set forth below and a Book-Entry Confirmation must be received by the Depositary (including an Agent's Message (as defined below), if the tendering stockholder has not delivered a Letter of Transmittal), in each case on or prior to the Expiration Date. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. Alternatively, the tendering stockholder may comply with the guaranteed delivery procedure set forth below. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to and received by the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from a participant in the system established by the Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such Letter of Transmittal against such participant. BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry transfer of the Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. Even if delivery of Shares is to be effected through book-entry transfer at the Book-Entry Transfer Facility, the Letter of Transmittal (or a manually signed facsimile thereof) along with any required signature guarantees and any other required documents, or an Agent's Message, must be transmitted to and received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase on or prior to the Expiration Date, or the stockholder must comply with the guaranteed delivery procedure set forth below. SIGNATURE GUARANTEES. If the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith and payment is to be made directly to such registered holder, or if Shares are tendered for the account of an Eligible Institution, no signature guarantee is required. In all other cases, signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. If certificates 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 accepted for payment or not tendered are to be returned to a person other than the registered holder, then certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or the names of the registered owner or owners appear on certificates, with the signature(s) on the certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5 of the Letter of Transmittal. GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and such holder's certificates are not immediately available, or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all of the following conditions are met: (i) such tenders are made by or through an Eligible Institution; 5 (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 on or prior to the Expiration Date; and (iii) the certificates for all tendered Shares in proper form for transfer (or a Book-Entry Confirmation), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantee and any other documents required by the Letter of Transmittal, or an Agent's Message, are received by the Depositary within three Nasdaq Stock Market ("Nasdaq") trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand, or may be transmitted by facsimile transmission, or by mail, to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. In all cases, payment for Shares tendered and purchased pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely Book-Entry Confirmation), a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), or an Agent's Message, and any other documents required by the Letter of Transmittal. OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder's proxies, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and purchased by the Purchaser (and any and all other Shares and other securities issued or issuable in respect thereof on or after May 7, 1999) prior to the time of any stockholder vote or other action. All such proxies shall be irrevocable and coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment. Upon such appointment, all prior proxies given by such stockholder with respect to such purchased Shares or other securities will be revoked and no subsequent proxies may be given. The designees of the Purchaser will, with respect to such Shares and other securities, be empowered to exercise all voting and other rights of such stockholder as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of the Company's stockholders, by written consent or otherwise. The Purchaser reserves the right to require that, in order for Shares to be validly tendered, immediately upon the acceptance for payment of such Shares, the Purchaser be able to exercise full voting and other rights of a record and beneficial holder, including rights in respect of acting by written consent, with respect to such Shares (and any and all other securities as set forth above). THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS TO BE BY MAIL, INSURED REGISTERED MAIL, RETURN RECEIPT REQUESTED IS RECOMMENDED. AMPLE TIME SHOULD BE ALLOWED FOR SUCH DOCUMENTS TO REACH THE DEPOSITARY. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 4, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the federal income tax laws, the Depositary will be required to withhold 31% of the amount of any payments made to certain stockholders pursuant to the Offer. To prevent such backup federal income tax withholding, each such stockholder must provide the Depositary with his or her correct taxpayer identification number and certify that such stockholder is not subject to such backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser and Parent, in their sole discretion, whose determination will be final and binding. The Purchaser and Parent reserve the absolute right to reject any or all tenders determined by them not to be in proper form or the acceptance of or payment for which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser and 6 Parent also reserve the absolute right to waive any of the conditions of the Offer or any defect in any tender with respect to any particular Shares or any particular stockholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, the Purchaser, the Dealer Manager, the Depositary or the Information Agent will be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notice. The Purchaser's and Parent's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and instructions thereto) will be final and binding. 5. CERTAIN INCOME TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the Offer or for Shares pursuant to the Merger will be taxable for federal income tax purposes and may be taxable under applicable state, local, foreign and other tax laws. The tax consequences of such receipt may vary depending upon, among other things, the particular circumstances of the stockholder. In general, a stockholder will recognize gain or loss equal to the difference between the amount of cash received and his or her tax basis in his or her Shares. Such gain or loss will generally be capital gain or loss provided that such stockholder held his or her Shares as a capital asset, and will be long-term capital gain or loss if, on the date of sale, such Shares were held for more than one year. Long-term capital gain of a non-corporate stockholder is generally taxed at a maximum rate of 20%. The foregoing may not be applicable to stockholders who acquired their Shares pursuant to the exercise of employee stock options or otherwise as compensation, who are not citizens or residents of the United States or who are otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code") (such as life insurance companies, tax exempt entities and regulated investment companies). THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISORS TO DETERMINE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO SUCH STOCKHOLDER, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS. 6. MARKET PRICES OF SHARES; DIVIDENDS. The Shares are traded in the over-the-counter market and are quoted on the Nasdaq National Market System under the symbol "ABRX". The following table sets forth, for the periods indicated, the range of high and low sales prices per Share as reported on the Nasdaq National Market System for such periods, in each case as reported by published financial sources and restated for the two-for-one stock split completed on February 19, 1997. The Company has not declared or paid any cash dividends on the Shares for the periods presented below.
HIGH LOW --------- --------- FISCAL YEAR ENDED JULY 31, 1997 First Fiscal Quarter................................................... $37 3/4 $25 1/2 Second Fiscal Quarter.................................................. $33 1/2 $19 11/16 Third Fiscal Quarter................................................... $24 3/8 $16 11/16 Fourth Fiscal Quarter.................................................. $32 3/4 $20 5/8 FISCAL YEAR ENDED JULY 31, 1998 First Fiscal Quarter................................................... $29 5/8 $22 Second Fiscal Quarter.................................................. $26 5/16 $21 11/32 Third Fiscal Quarter................................................... $31 5/8 $24 1/4 Fourth Fiscal Quarter.................................................. $27 3/4 $17 1/2 FISCAL YEAR ENDED JULY 31, 1999.......................................... First Fiscal Quarter................................................... $20 5/8 $ 8 1/2 Second Fiscal Quarter.................................................. $23 5/8 $13 3/4 Third Fiscal Quarter................................................... $24 1/2 $13 Fourth Fiscal Quarter (through May 6, 1999)............................ $25 15/32 $24 13/16
7 On April 30, 1999, the last full day of trading prior to the public announcement of the Merger Agreement, the last reported sale price for the Shares, as reported by the Nasdaq National Market System, was $17.50 per Share, according to published sources. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET PRICES FOR THE SHARES. 7. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and may also be expected to reduce the number of holders of Shares. Such reductions could adversely affect the liquidity and market value of the remaining Shares held by the public, if any. STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the standards for continued inclusion in the Nasdaq National Market System. According to Nasdaq's published guidelines, the Shares would not be eligible to be included for continued listing if, among other things (i) the number of publicly held Shares falls below 750,000, (ii) the number of holders of at least 100 Shares ("round lot holders") falls below 400, (iii) the aggregate market value of publicly held Shares falls below $5.0 million, or (iv) there are not at least two registered and active market makers. If the foregoing standards are not met, the Shares might continue to be listed on The Nasdaq SmallCap Market, Inc., but if (i) the number of round lot holders falls below 300, (ii) the number of publicly held Shares falls below 500,000, (iii) the aggregate market value of such publicly held Shares falls below $1.0 million, or (iv) there are not at least two registered and active market makers, Nasdaq rules provide that the Shares would no longer qualify for inclusion in Nasdaq, and Nasdaq would cease to provide any quotations. Shares held directly or indirectly by an officer or director of the Company or by a beneficial owner of more than 10% of the Shares will ordinarily not be considered as being publicly held for purposes of these standards. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of Nasdaq for continued inclusion and the Shares are no longer eligible for Nasdaq quotation, the market for the Shares could be adversely affected. If the Shares are no longer eligible for Nasdaq quotation, quotations might still be available from 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 interests in maintaining a market in the 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. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the Commission if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of Shares. 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 the Commission, and would make certain provisions of the Exchange Act (such as the short-swing profit recovery provisions of Section 16(b) and the requirement of furnishing a proxy or information statement in connection with stockholders' meetings pursuant to Section 14(a) or (c) and the related requirement of an annual report) 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, with respect to certain persons, eliminated. If, as a result of purchases pursuant to the Offer or otherwise, the Company is no longer required to maintain registration of the Shares under the Exchange Act, the Purchaser intends to cause the Company to apply for termination of such registration. MARGIN REGULATIONS. The Shares are presently "margin securities" under the rules of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such securities for the purpose of buying, carrying or trading in securities ("Purpose Loans"). In the event that the Shares were no longer quoted on Nasdaq (which depends on factors such as the number of holders of the Shares and the number 8 and market value of publicly held Shares (see "Stock Quotation" above)), it is possible the Shares may no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin regulations and, therefore, could no longer be used as collateral for Purpose Loans made by brokers. In addition, if the Shares were deregistered under the Exchange Act, the Shares would no longer constitute "margin securities." RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain "going private" transactions and which may under certain circumstances be applicable to the Merger or other transactions following the purchase of Shares pursuant to the Offer in which the Purchaser seeks to acquire the remaining Shares not held by it. However, Rule 13e-3 would be inapplicable if (i) the Shares are deregistered under the Exchange Act prior to the Merger or other transactions or (ii) the Merger or another business combination is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share for each class of Shares in the Merger or other business combination is at least equal to the amount paid per Share for such class of Shares in the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the Commission and disclosed to stockholders prior to the consummation of the transaction. 8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Florida corporation with its principal executive offices located at 34125 U.S. Highway 19 North, Palm Harbor, Florida 34684-2141, telephone (727) 785-2819. According to information filed by the Company with the Commission, the Company is primarily engaged in comprehensive benefits administration, payroll and human resource services to employers seeking to outsource these functions. 9 Set forth below is a summary of certain selected financial information with respect to the Company and its subsidiaries for the fiscal years ended July 31, 1998, 1997 and 1996 and for the six-month periods ended January 31, 1999 and 1998, which has been excerpted or derived from the audited consolidated financial statements contained in the Company's Annual Reports on Form 10-K for the fiscal years ended July 31, 1998, 1997 and 1996, and from unaudited consolidated financial statements contained in the Company's Quarterly Report on Form 10-Q for the quarterly period ended January 31, 1999. More comprehensive financial information is included in such reports and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to such documents and all of the financial statements and related notes contained therein. ABR INFORMATION SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
SIX MONTHS ENDED JANUARY 31, FISCAL YEAR ENDED JULY 31, -------------------- ------------------------------- 1999 1998 1998 1997 1996 --------- --------- --------- --------- --------- (UNAUDITED) INCOME STATEMENT DATA: Revenue.................................................. $ 54,148 $ 31,946 $ 74,592 $ 50,079 $ 31,162 Cost of services......................................... 29,855 18,177 42,387 28,179 17,864 Operating income(1)(2)................................... 64 7,780 7,346 12,135 6,362 Lease revenue, net....................................... 187 1,140 2,817 -- -- Income before provision for income taxes................. 2,581 11,724 15,527 19,216 9,234 Income tax provision..................................... 980 4,072 8,800 6,987 3,560 Net income............................................... 1,601 7,652 6,727 12,229 5,674 Per share data (diluted): Net income per share................................... .06 .28 .24 .44 .25 Adjusted weighted average shares outstanding (diluted)............................................ 29,096 27,880 28,194 27,892 23,031
AS OF JANUARY 31, AS OF JULY 31, --------------------- ---------------------------------- 1999 1998 1998 1997 1996 --------- ---------- ---------- ---------- ---------- (UNAUDITED) BALANCE SHEET DATA: Working capital..................................... $ 84,026 $ 125,823 $ 122,170 $ 127,839 $ 145,825 Total assets........................................ 271,939 237,506 273,191 222,017 202,574 Total long-term debt................................ -- -- -- -- -- Total shareholders' equity.......................... 232,375 201,838 230,615 194,096 181,150
- ------------------------ (1) Includes approximately $11 million of acquired research and development that was expensed in the third quarter of fiscal 1998. See Note N to the Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1998. (2) During fiscal 1999, the Company recorded a non-cash pre-tax software write-off of approximately $13.8 million. See Note C to Notes to Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the quarterly period ended January 31, 1999. The information concerning the Company contained in this Offer to Purchase or incorporated herein by reference has been taken from or based upon publicly-available documents and records on file with the Commission and other public sources or was provided by the Company. Although the Purchaser has no knowledge that would indicate that any statements contained herein based on such documents and records are untrue, neither Parent nor the Purchaser can take responsibility for the accuracy or completeness of 10 the information contained in such documents and records, or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information which are unknown to Parent or the Purchaser. In the course of discussions giving rise to the Merger Agreement, representatives of the Company furnished representatives of Parent with certain business and financial information that was not publicly available, including certain financial projections for its fiscal years ending July 31, 1999, 2000 and 2001 set forth below (the "Company Projections"). The Company Projections were prepared solely for the Company's internal purposes and were not prepared 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 such information is being included in this Offer to Purchase solely because it was furnished to Parent in connection with the discussions giving rise to the Merger Agreement. The Company Projections set forth below reflect numerous assumptions with respect to general business and economic conditions and other matters, many of which are inherently uncertain or beyond the Company's or Parent's control. There can be no assurance that the actual results will not be materially higher or lower than those contained in the Company Projections. The inclusion of the Company Projections should not be regarded as an indication that the Company, Parent or anyone else who received this information considered it an accurate predictor of future events, and the Company Projections should not be relied on as such. None of Parent, the Purchaser, the Company or any of their respective representatives assumes any responsibility for the accuracy of the Company Projections, and the Company has made no representation to Parent or the Purchaser regarding such information.
FISCAL YEAR ENDING JULY 31, ------------------------------- 1999 2000 2001 --------- --------- --------- (IN MILLIONS) Revenue.............................................................................. $ 120.1 $ 168.2 $ 220.4 Earnings Before Interest and Taxes................................................... 30.7 43.9 55.6 Net Income(1)........................................................................ 22.1 29.2 36.5
- ------------------------ (1) Excludes a 1999 pre-tax software write-off of approximately $13.8 million. The Company is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's business, principal physical properties, capital structure, material pending legal proceedings, operating results, financial condition, the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities, any material interests of such persons in transactions with the Company and other matters, is required to be disclosed in proxy statements and annual reports distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information may be inspected at the Commission's public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549, and should also be available for inspection at the following regional offices of the Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies may be obtained, by mail, for prescribed rates from the principal office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains an Internet site on the World Wide Web at http://www.sec.gov that contains reports, proxy statements and other information. Such information should also be available for inspection at the offices of the Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006. 11 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser is a newly incorporated Florida corporation and a wholly owned subsidiary of Parent. To date, the Purchaser has engaged in no activities other than those in connection with the Offer. The principal executive offices of the Purchaser are located at 8100 34th Avenue South, Minneapolis, Minnesota 55425, telephone (612) 853-4291. The principal executive offices of Parent are located at 8100 34th Avenue South, Minneapolis, Minnesota 55425, telephone (612) 853-8100. The name, business address, citizenship, present principal employment or occupation and employment history for the past five years of each of the directors and executive officers of the Purchaser and Parent are set forth in Schedule A to this Offer to Purchase. Parent, a Delaware corporation, was founded in 1957. Parent's information services businesses, which consist of its Human Resource Services businesses, its Comdata subsidiary and its Arbitron division, provide products and services to customers in the human resources, transportation and media information markets. Except as set forth in this paragraph or elsewhere in this Offer to Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge, any of the persons listed in Schedule A hereto nor any associate or majority owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any equity securities of the Company, and neither the Purchaser nor Parent nor, to the best of their knowledge, any of the persons or entities referred to above, nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in such equity securities during the past 60 days. Lawrence Perlman, Chairman and Chief Executive Officer of Parent, and John R. Eickhoff, Executive Vice President and Chief Financial Officer of Parent, own 2,000 and 500 Shares of the Company, respectively (together constituting less than one percent of the Shares). Except as set forth in this Offer to Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, has any contract, arrangement, understanding or relationship (whether or not legally enforceable) 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 of such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions which have occurred since August 1, 1995, between Parent, the Purchaser, or any of Parent's other subsidiaries or, to the best of the knowledge of Parent and the Purchaser, any of the persons listed in Schedule A hereto, on the one hand, and the Company or its affiliates, on the other hand, concerning: a merger, consolidation or acquisition; a tender offer or other acquisition of securities; an election of directors; or a sale or other transfer of a material amount of assets. Except as described in this Offer to Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, has since August 1, 1995, had any transaction with the Company or any of its executive officers, directors or affiliates which would require disclosure under the rules and regulations of the Commission applicable to the Offer. Except as set forth in this Offer to Purchase, during the last five years, neither the Purchaser nor Parent nor, to their best knowledge, have any of the persons listed on Schedule A (i) been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding been or become 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. Until immediately prior to the time the Purchaser purchases the Shares pursuant to the Offer, it is not anticipated that the Purchaser will have any significant assets or liabilities or engage in activities other than those incident to its formation and capitalization and the transactions contemplated by the Offer. Because 12 the Purchaser is a newly formed corporation and has minimal assets and capitalization, no meaningful financial information regarding the Purchaser is available. Parent is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning Parent's business, principal physical properties, capital structure, material pending legal proceedings, operating results, financial condition, directors and executive officers, their remuneration, stock options and restricted stock granted to them, the principal holders of Parent's securities and any material interest of such persons in transactions with Parent and other matters is required to be disclosed in proxy statements and annual reports distributed to Parent's stockholders and filed with the Commission. Such reports, proxy statements and other information may be examined, and copies may be obtained from the Commission in the same manner set forth in Section 8 with respect to information concerning the Company. Certain reports and other information concerning Parent may also be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. 13 Set forth below is a summary of certain selected financial information of Parent and its subsidiaries for the fiscal years ended December 31, 1998, 1997 and 1996 and for the three-month periods ended March 31, 1999 and 1998, which has been excerpted or derived from the audited consolidated financial statements contained in Parent's Annual Reports on Form 10-K for the fiscal years ended December 31, 1998, 1997 and 1996. Amounts as of, and for the period ended, March 31, 1999 will be reflected in Parent's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999, which is expected to be filed no later than May 17, 1999. More comprehensive financial information is included in such reports and other documents filed by Parent with the Commission, and the following summary is qualified in its entirety by reference to such documents and all of the financial statements and related notes contained therein. CERIDIAN CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, FISCAL YEAR ENDED DECEMBER 31, -------------------- ------------------------------- 1999 1998 1998 1997 1996 --------- --------- --------- --------- --------- (UNAUDITED) INCOME STATEMENT DATA: Revenue................................................. $ 321.4 $ 282.3 $ 1,162.1 $ 1,078.8 $ 942.6 Earnings from continuing operations(1).................. 164.4 35.4 135.5 59.2 64.6 Gain and earnings from discontinued operations(2)....... 25.4 437.0 46.4 38.3 33.1 Net earnings............................................ 41.8 35.8 189.8 472.4 181.9 Basic earnings per common share: Continuing operations................................. 0.29 0.25 1.14 0.23 0.90 Net earnings.......................................... 0.29 0.25 1.32 3.01 1.24 Diluted earnings per common share: Continuing operations................................. 0.28 0.24 1.11 0.22 0.84 Net earnings.......................................... 0.28 0.24 1.29 2.96 1.12 Shares used in calculations (in thousands) Basic................................................. 144,086 144,110 144,070 156,835 135,841 Diluted............................................... 149,111 147,195 147,597 159,481 161,938
AS OF MARCH 31, AS OF DECEMBER 31, -------------------- ------------------------------- 1999 1998 1998 1997 1996 --------- --------- --------- --------- --------- (UNAUDITED) BALANCE SHEET DATA: Total assets.......................................... $ 1,314.6 $ 1,289.7 $ 1,289.7 $ 1,243.3 $ 1,016.6 Debt obligations...................................... 51.9 54.5 54.5 3.0 138.2 Stockholders' equity.................................. 1,314.6 1,289.7 650.6 588.3 346.3
- ------------------------ (1) Includes 1998 unusual gains of $24.3 million, 1997 FAS 109 income tax benefit of $175.0 million and 1997 unusual losses of $307.6 million. See Notes B and D to Notes to Consolidated Financial Statements in Parent's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. (2) Includes gain from the December 1997 sale of Computing Devices International and earnings from its operations prior to the sale. See Note B to Notes to Consolidated Financial Statements in Parent's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. 14 10. BACKGROUND OF THE OFFER. During the fourth quarter of 1998, members of senior management of Parent and the Company had several discussions concerning a possible business relationship. On October 8, 1998, Ronald L. Turner, President and Chief Operating Officer of Parent, and Carl Keil, Vice President of Parent and President of Ceridian Employer Services, met with James MacDougald, Chairman, Chief Executive Officer and President of the Company, to discuss possible business relationships between the two companies, including possible alliances or joint ventures. On October 22, 1998, Mr. Turner discussed with Parent's Board of Directors at a regularly scheduled board meeting his meeting with Mr. MacDougald on October 8, 1998 and the possibility of a business relationship between the two parties. On November 19, 1998, Lawrence Perlman, Chairman and Chief Executive Officer of Parent, and Mr. Turner met with Mr. MacDougald to further explore possible business relationships. At such time, Messrs. Perlman and Turner asked whether the Company had any interest in being acquired by Parent, and were advised that the Company was not interested in entering into a transaction with Parent at that time. Messrs. Turner and MacDougald had several follow-up telephone conversations in December 1998, during which they discussed mutual cross selling opportunities, including the possibility that Parent provide payroll services to some of the Company's larger customers. No business relationship was explored at that time. In early February 1999, Mr. Perlman was telephoned by representatives of Goldman, Sachs & Co. ("Goldman Sachs") and advised that Goldman Sachs was representing the Company in connection with a possible transaction involving the Company. Mr. Perlman was asked if Parent would be interested in reviewing due diligence materials relating to the Company and possibly submitting an initial indication of interest relating to a potential acquisition of the Company. Mr. Perlman advised Goldman Sachs that Parent would be interested in reviewing the due diligence materials relating to the Company. On February 3, 1999, Mr. Turner telephoned Mr. MacDougald and confirmed Parent's interest in exploring a possible transaction. On February 3, 1999, at a regularly scheduled meeting, Parent's Board of Directors was advised by Parent's senior management of the opportunity to engage in a transaction with the Company. Management of Parent and Parent's Board of Directors had a detailed discussion of the Company and the strategic rationale for a transaction with the Company at this meeting. On February 4, 1999, Parent and Goldman Sachs, on behalf of the Company, executed a confidentiality agreement. Parent contacted Bear Stearns to advise Parent in connection with a possible transaction with the Company. On February 5, 1999, Parent received a confidential memorandum from Goldman Sachs with respect to the Company and began reviewing the information contained therein. On February 19, 1999, Parent received a letter from Goldman Sachs requesting a written, preliminary and non-binding indication of interest for a transaction with the Company. Goldman Sachs requested that the indication of interest be submitted no later than February 26, 1999. On February 26, 1999, Parent provided Goldman Sachs and the Company with a preliminary indication of interest, based on the confidential memorandum previously provided, to acquire the Company in a potential stock for stock transaction at a price of $26.00 to $30.00 per Share, assuming pooling of interests accounting treatment. Goldman Sachs thereafter advised Parent that, based on its preliminary indication of interest, Parent would be permitted to conduct additional due diligence concerning the Company. On the evening of March 16, 1999, Messrs. Turner, Keil and John R. Eickhoff, Executive Vice President and Chief Financial Officer of Parent, met various members of the Company's management and a representative of Goldman Sachs for dinner and discussed various due diligence items. 15 On March 17, 1999, various representatives of Parent and Bear Stearns participated in management presentations given by members of the Company's management. Representatives of Parent also conducted a review of various due diligence documents and materials relating to the Company on March 17 and 18, 1999, and visited the Company's operations in Palm Harbor and St. Petersburg, Florida. From this time, through and including April 30, 1999, Parent and Bear Stearns had conversations with the Company's management and Goldman Sachs, relating to a potential transaction with the Company. On March 26, 1999, Messrs. Perlman and Turner met, at Mr. Turner's request, with Mr. MacDougald in Palm Harbor, Florida to discuss the results of Parent's due diligence investigation and Parent's continued interest in acquiring the Company. During these discussions, the parties discussed the potential pricing uncertainty of a bid by Parent for the Company in a stock for stock transaction, as a pooling of interests, due to Parent's repurchase of its own securities during the previous two years and the need for Parent to sell a large quantity of its common stock to become eligible for pooling of interests accounting treatment. Mr. Perlman suggested to Mr. MacDougald that the parties might consider a business alliance in lieu of an acquisition. In a letter dated March 31, 1999, Parent received a request from Goldman Sachs for a definitive proposal by April 16, 1999 in connection with a transaction with the Company. Enclosed with the letter was a draft agreement for Parent's consideration. On April 5, 1999, Messrs. Perlman and Turner met with Mr. MacDougald to discuss Parent's continued interest in acquiring the Company. Messrs. Perlman and Turner again raised the possibility of a business alliance between the Company and Parent. On April 15, 1999, at its regularly scheduled board meeting, Parent's Board of Directors discussed the Company and the acquisition opportunity. Management of Parent advised the Board of Directors of Parent that at that time it did not recommend a stock for stock acquisition of the Company, but instead recommended the submission of an alternative proposal that would contemplate a business alliance and joint venture relationship in lieu of an acquisition. Parent's Board of Directors agreed to this recommendation. On April 16, 1999, Parent advised the Company and Goldman Sachs that it would not be submitting an acquisition bid, but instead proposed a business alliance and a joint venture relationship as a means for the two companies to conduct joint marketing and development efforts. On April 20, 1999, Goldman Sachs advised Parent that Parent's proposed business alliance and joint venture relationship proposal had not been accepted by the Company, and that the Company's Board of Directors intended to continue to engage in the process in which Parent had been invited to participate. Goldman Sachs advised Parent that if it wished to submit an acquisition proposal, it needed to do so by the close of business on April 23, 1999. On April 23, 1999, Parent submitted a proposal to Goldman Sachs to acquire all Shares of the Company at a price of $24.00 per Share in cash, subject to the approval of Parent's Board of Directors and additional due diligence by Parent as to certain technology matters, and requested a response by the close of business on April 27, 1999. Following receipt of the proposal, representatives of Goldman Sachs requested that Parent provide by April 26th any proposed modifications to the draft acquisition agreement Goldman Sachs had previously provided to Parent. On April 26, 1999, Parent submitted proposed modifications to the draft acquisition agreement previously provided. 16 On the evening of April 27, 1999, representatives of Goldman Sachs advised Bear Stearns that the Company's Board of Directors had met and requested that Parent withdraw several of its requested modifications to the draft merger agreement and also consider increasing its bid price. After discussions between Bear Stearns and Messrs. Perlman and Turner, Parent agreed to withdraw several of its requested modifications to the draft merger agreement and to increase its bid price to $25.00 per Share in cash, subject to approval of Parent's Board of Directors. On April 28, 1999, Mr. Turner and other representatives of Parent flew to Palm Harbor to conduct additional due diligence on various technology matters. In the early afternoon of April 29, 1999, and prior to the meeting of the Board of Directors of Parent on that day, Mr. MacDougald advised Mr. Turner by telephone that he did not believe that Parent's proposal would receive the support of the Board of Directors of the Company unless Parent increased its offer. On the afternoon of April 29, 1999, the Board of Directors of Parent met in a special telephonic meeting to consider whether to approve the offer to acquire all outstanding Shares of the Company. At this meeting, Bear Stearns made a presentation to the Board of Directors of Parent and delivered its oral opinion (which was subsequently confirmed in writing) that, subject to the matters set forth in its opinion, a bid price of $25.50 per Share would be fair from a financial point of view to Parent. After discussion of the strategic rationale for the acquisition of the Company by Parent, consideration of the financial analysis of the acquisition, the receipt of the oral opinion of Bear Stearns described above and the likely terms of the debt that Parent would need to secure to finance the acquisition and the costs and expenses relating thereto, the members of Parent's Board of Directors in attendance unanimously approved the offer and authorized Parent's senior management to proceed in its discretion. Following Parent's Board of Directors meeting on April 29, 1999, Parent's management advised Goldman Sachs that it would be submitting further modifications to the proposed merger agreement and a bid that would be open until 1:00 a.m., New York City time, on April 30, 1999. Parent thereafter submitted to the Company its modifications to the proposed merger agreement. Later that evening, representatives of Parent also reiterated that they would not increase the per Share price to an amount greater than $25.00 per Share. Prior to the expiration of Parent's deadline, Mr. MacDougald advised Mr. Turner that Parent's bid had not been accepted and would not be unless Parent increased its price per Share. It was suggested, however, that several members of the Company's senior management would agree to not have their Options accelerated upon a change of control if Parent increased its Offer. Mr. Turner advised Mr. MacDougald that Parent would not increase its bid price at that time. Mr. Turner and Mr. MacDougald, however, agreed to discuss the matter the next morning and each advised their respective legal counsel to continue to negotiate the terms of the Merger Agreement which they did through the early morning hours of April 30, 1999. On the morning of April 30, 1999, Mr. Turner and Mr. MacDougald discussed the matter again. Following this discussion, Parent authorized representatives of Bear Stearns to advise Goldman Sachs that Parent was increasing its offer to $25.50 per Share in cash. Mr. Turner also advised Mr. MacDougald of the increased bid price. Mr. MacDougald advised Mr. Turner that the increased bid price would be submitted to the Company's Board of Directors. Counsel for Parent and the Company continued to discuss issues relating to the Merger Agreement. In the afternoon of April 30, 1999, Mr. MacDougald advised Messrs. Perlman and Turner that the Company's Board of Directors had approved the Merger Agreement, subject to the Company's senior management, upon the advice of counsel, being able to resolve all remaining issues relating to the Merger Agreement. Thereafter, in the early evening of April 30, 1999, the Merger Agreement was finalized and executed. 17 11. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER AGREEMENT. The purpose of the Offer and the Merger is for Parent to acquire control of, and ownership of the entire equity interest in, the Company. The Offer is intended to permit Parent to acquire control of the Company at the earliest practicable date. The purpose of the Merger is to acquire all outstanding Shares not purchased pursuant to the Offer. Except as indicated in this Offer to Purchase, neither Parent nor the Purchaser has any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, relocation of operations, or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any material changes in the Company's capitalization, dividend policy, corporate structure or business or the composition of its management or personnel. THE MERGER AGREEMENT. The Merger Agreement provides for the commencement of the Offer as soon as reasonably practicable, and in any event within five business days, after the first public announcement of the Merger Agreement. The obligations of the Purchaser to consummate the Offer and accept for payment or pay for any Shares tendered pursuant to the Offer is subject only to the satisfaction of certain conditions, including the satisfaction of the Minimum Condition, which are described in Section 13. The Merger Agreement provides that, subject to the terms and conditions of the Merger Agreement at the Effective Time, the Purchaser will be merged with and into the Company, and the Company will survive and become a wholly owned subsidiary of Parent. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than Shares owned by Parent, the Purchaser or any other direct or indirect subsidiary of Parent or Shares that are owned by the Company or any of its subsidiaries and in each case not held on behalf of third parties or Dissenting Shares) will be canceled, extinguished and converted into the right to receive, without interest, an amount in cash equal to $25.50 per Share or such higher price per Share as shall have been paid in the Offer. The Merger Agreement requires the Company to take all necessary actions to cause prior to the Effective Time each Option that had not vested immediately prior to such time to become vested and fully exercisable. Certain executive officers of the Company, however, have waived all vesting rights that they may have pursuant to the terms of the Merger Agreement with respect to all Options beneficially owned by them and issued pursuant to the Option Plans. In addition, the Company is obligated to use its reasonable best efforts to cause each then outstanding Option, whether vested or unvested, to be canceled, with the holder thereof being entitled to receive, following the Effective Time, an amount equal to the difference, if any, between $25.50 (or such higher price per Share as shall have been paid in the Offer) and the exercise price of each such Option. Any Options that are not exercised in full or surrendered for cancellation ("Remaining Options") will, at the Effective Time, in accordance with the terms of the Option Plan pursuant to which such Option was issued, be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Remaining Option immediately prior to the Effective Time, (A) a number of shares of Parent's common stock, par value $.01 per share ("Parent Common Stock"), equal to the product (rounded up to the nearest whole number) obtained by multiplying (x) the number of Shares the holder of such Remaining Option would have been entitled to receive immediately prior to the Effective Time had such holder exercised such Remaining Option in full immediately prior to the Effective Time and (y) the quotient obtained by dividing $25.50 (or such higher price as shall have been paid in the Offer) by the average of the closing prices per share of Parent Common Stock on the New York Stock Exchange Composite Transactions tape for the five trading days immediately preceding the date of the Effective Time, as reported in the Wall Street Journal, New York City edition, and (B) at a price per share of Parent Common Stock (rounded down to the nearest whole cent) equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Remaining Option (assuming for such purposes that such Remaining Option was fully exercisable at such time) divided by (y) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Remaining Option in accordance with clause (A) above. Parent has agreed that at the Effective Time it will file a registration statement on Form S-8, or, if unavailable, a registration statement on Form S-3 (or any successor forms), or another 18 appropriate form with respect to the Parent Common Stock subject to Remaining Options, and has agreed to use its best efforts to cause such registration statement to become and remain effective, as well as comply with any applicable state securities or "blue sky" laws, for so long as any Remaining Options remain outstanding. In addition, prior to the Effective Time, the Board of Directors of Parent agreed to use reasonable efforts to take all actions necessary to ensure that the options to purchase Parent Common Stock (resulting from Remaining Options) held by the officers and directors of the Company shall be exempt for purposes of Rule 16b-3 under the Exchange Act. The Merger Agreement contains representations and warranties by the Company regarding, among other things, its organization, its capitalization, its authority relative to the Merger Agreement, consents and approvals necessary for the Offer and the Merger, the Company's filings and reports with and to the Commission, the absence of certain changes in its business, the absence of litigation, certain employee matters, compliance with laws, inapplicability of takeover statutes, environmental matters, taxes, labor matters, intellectual property, brokers and finders, and year 2000, and by each of Parent and the Purchaser regarding, among other things, its organization, its authority relative to the Merger Agreement and the Offer, and consents and approvals necessary for the Offer and the Merger. The obligations of the parties to effect the Merger are subject to the satisfaction or waiver of the following conditions: (i) the Merger Agreement and the plan of merger having been approved by the requisite vote of the holders of the Shares; (ii) any waiting period applicable to the consummation of the Merger under the HSR Act having expired or been earlier terminated; (iii) no court or governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any statute, law, ordinance, rule, regulation, judgment, decree, injunction or other order ("Order") that is in effect and permanently enjoins or otherwise prohibits consummation of the Merger; and (iv) the Purchaser shall have purchased Shares in the Offer. The Company has agreed that, prior to the Effective Time, the Company and its subsidiaries will each conduct its operations in the ordinary and usual course, and to the extent consistent therewith, will each use their respective best reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates. The Company further agreed that with respect to itself and its subsidiaries prior to the Effective Time: (i) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its subsidiaries; (B) amend its articles of incorporation or bylaws or the comparable governing instruments of any of its subsidiaries; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned subsidiaries to it or a wholly owned subsidiary; or (E) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, except, in connection with its Option Plans, or permit any of its subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock; (ii) neither it nor any of its subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any voting debt or any other property or assets (other than Shares issuable pursuant to options (whether or not vested) currently outstanding under the Company's Option Plans); (B) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its subsidiaries) or incur or modify any material indebtedness for borrowed money or guarantee any such indebtedness; or (C) by any means, make any significant acquisition of, or investment in, assets or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity); (iii) neither it nor any of its subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any compensation and benefit plans, or increase the salary, wage, bonus or other compensation of any employees except for 19 grants or awards or increases under existing compensation and benefit plans occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases), annual reestablishment of compensation and benefit plans and the provision of individual compensation or benefit plans and agreements for newly hired or appointed officers and employees of the Company and its subsidiaries or except for actions necessary to satisfy existing contractual obligations under existing compensation and benefit plans or agreements; and (iv) neither it nor any of its subsidiaries will authorize or enter into an agreement to do anything prohibited by the foregoing. The Company has also agreed that neither it nor any of its subsidiaries nor any of its or its subsidiaries' officers and directors shall, and that it shall direct and cause its and its subsidiaries' employees, agents and other representatives (including any investment banker, attorney or accountant retained by it or any of its subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate any inquiries or the making of any proposal or offer with respect to a merger, tender offer, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the assets or any equity securities of, it or any of its subsidiaries (any such proposal or offer being referred to as an "Acquisition Proposal"). The Company has further agreed that, except as otherwise provided in the Merger Agreement, neither it nor any of its subsidiaries nor any of its or its subsidiaries' officers and directors shall, and that it shall direct and cause its and its subsidiaries' employees, agents and representatives not to, directly or indirectly, engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal. Notwithstanding any of the foregoing, the Company, its representatives and its Board of Directors have the right to (i) comply with Rule 14e-2 under the Exchange Act with regard to an Acquisition Proposal or otherwise comply with the Exchange Act; (ii) provide information in response to a request therefor by a person who has made an unsolicited Acquisition Proposal; (iii) engage in any negotiations or discussions with any person who has made an unsolicited Acquisition Proposal or otherwise facilitate any effort or attempt to implement an Acquisition Proposal; and (iv) approve and recommend to its stockholders an Acquisition Proposal. The Board of Directors may take the action specified in (ii), (iii) and (iv) above only if and to the extent that it determines either (i) upon advice of outside legal counsel that the failure to take such action would constitute a breach of the directors' fiduciary duties under applicable law or (ii) that such Acquisition Proposal contains terms such that if an agreement relating to such Acquisition Proposal were entered into, it would be, in the aggregate, more favorable to the Company than the transactions contemplated by the Merger Agreement (any such more favorable Acquisition Proposal being referred to as a "Superior Proposal"), taking into account, at the sole discretion of the Board of Directors of the Company, any of the matters described in Section 4.5 of the articles of incorporation of the Company. The Company also has agreed to notify Parent within 48 hours of receipt of an Acquisition Proposal that would be reasonably likely to result in a Superior Proposal (including the terms thereof and the identity of the offeror) and to keep Parent reasonably informed of the status of any such proposal. Parent has agreed that all rights to indemnification now existing in favor of the directors, officers, employees and agents of the Company as provided in the Company's articles of incorporation or bylaws or otherwise in effect on the date of the Merger Agreement shall survive the Merger and continue in full force and effect for a period of six years after the Effective Time. Parent has also agreed to maintain in effect for a period of six years after the Effective Time the current policies of directors' and officers' liability insurance maintained by the Company (provided that Parent may substitute policies on materially similar terms) so long as the annual premium for such insurance is not in excess of 250% of the most recent annual premium paid (the "Current Premium"). If, however, the current policies of directors' and officers' liability insurance is terminated or canceled during such six-year period, Parent has agreed to use its best efforts to obtain as much insurance as can be obtained for the remainder of such period for a premium not in excess (on an annualized basis) of 250% of the Current Premium and indemnify the directors and officers for any costs not covered by such insurance. 20 The Merger Agreement provides that, if required by applicable law, the Company will promptly call a meeting of its stockholders for the purpose of voting upon the Merger Agreement. In connection therewith, except as otherwise expressly permitted by the Merger Agreement, the Company will, through its Board of Directors, recommend to its stockholders approval of such matters and take all lawful action to solicit such approval, including, without limitation, preparing and filing a proxy statement or information statement under the Exchange Act. The parties have also agreed to use their best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable on its part under the Merger Agreement and applicable laws and regulations to consummate the Offer and make effective the Merger and the other transactions contemplated by the Merger Agreement as soon as practicable. Pursuant to the Merger Agreement, Parent has agreed to maintain for a period of one year after the Effective Time for the benefit of the employees of the Company benefits under employee benefit plans that are no less favorable in the aggregate than those provided under the Company's current benefit plans; provided, however, that Parent will not be required to maintain any "change of control" or similar plans with respect to any change of control occurring after the Effective Time and excluding benefits provided pursuant to any plan covering one or a select group of current or former employees. Each employee of the Company as of the Effective Time will, for purposes of determining eligibility and vesting under any benefit plan of Parent, be given credit for all service with the Company prior to the Effective Time. In addition, Parent will cause to be waived any pre-existing condition limitations under the benefit plans of Parent and its subsidiaries in which the Company's and its subsidiaries' employees participate and cause to be credited to any deductible or out-of-pocket expense of Parent's benefit plans any deductibles or out-of-pocket expenses incurred by such employees and their beneficiaries and dependents during the portion of the calendar year prior to participation in the benefit plans provided by Parent. Parent has also agreed to cause the Company to honor all of the Company's existing employee benefit obligations to current and former employees under the compensation and benefit plans and all employee severance plans (or policies) and all employment or severance agreements previously disclosed to Parent. The Merger Agreement provides that, if requested by Parent, the Company will to the extent permissible, promptly following the purchase by the Purchaser of Shares pursuant to the Offer in accordance with the terms of the Merger Agreement, take all actions necessary (including calling a special meeting of the Board of Directors of the Company or the stockholders of the Company for this purpose) to cause natural persons designated by Parent to become directors of the Company (including mailing to the Company's stockholders the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder) so that the total number of such natural persons equals that number of directors, rounded up to the next whole number, which represents the product of the total number of directors on the Board of Directors multiplied by the percentage that such number of Shares so accepted for payment plus any Shares beneficially owned by Parent or its affiliates on the date of the Merger Agreement bears to the total number of Shares outstanding at the time of such acceptance for payment. At such time, the Company shall also cause persons designated by Parent to constitute 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. To implement the foregoing, the Company has agreed to increase the size of the Board of Directors or use its reasonable efforts to secure the resignation of directors, or both, as is necessary to permit Parent's designees to be elected to the Board of Directors of the Company; provided, however, that prior to the Effective Time there shall be at least three members of the Board of Directors of the Company who are neither officers of Parent nor designees, stockholders or affiliates of Parent ("Parent Insiders"). In the event that Parent's designees are elected to the Board of Directors of the Company after the acceptance for payment of Shares pursuant to the Offer and prior to the Effective Time, the affirmative vote of at least a majority of the directors of the Company who are not Parent Insiders will be required to (a) amend or terminate the Merger Agreement by the Company, (b) exercise or waive any of the Company's rights, benefits or remedies under the Merger 21 Agreement, (c) extend the time for performance of Parent's and the Purchaser's respective obligations under the Merger Agreement, or (d) take any other action by the Company's Board of Directors under or in connection with the Merger Agreement which would adversely affect the ability of the Company's stockholders to receive the Merger Consideration. The Surviving Corporation will use its best efforts to cause the Shares to be removed from quotation on the Nasdaq National Market System and deregistered under the Exchange Act as soon as practicable following the Effective Time. Unless required by the rules of the NASD, subsequent to the Purchaser's payment for Shares and prior to the Effective Time, the Company has agreed not to take any action to cause the Shares to be removed from quotation on the Nasdaq National Market System and deregistered under the Exchange Act. TERMINATION. The Merger Agreement may be terminated at any time prior to the Effective Time, whether prior to or after approval by the stockholders of the Company of the Merger Agreement: (a) by mutual written consent of the Boards of Directors of Parent, the Purchaser and the Company; (b) by either the Company or Parent if any Order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall have become final and non-appealable after the parties have used their respective best efforts to have such order removed, repealed or overturned; or (c) by the Company if (i) the Company's Board of Directors withdraws or adversely modifies its adoption of the Merger Agreement, its recommendation of the Offer or its recommendation that the Company's stockholders approve the Merger Agreement (including, without limitation, taking no position in response to a tender offer by a person other than Parent), (ii) there has been a material breach by Parent or the Purchaser of any material covenant or agreement contained in the Merger Agreement that is not curable or, if curable, is not cured prior to the earlier of (x) 30 days after written notice of such breach is given by the Company to the party committing such breach or (y) two business days prior to any date on which the Offer is scheduled to expire (so long as at such time specified in clause (y) neither the Company nor Parent has indicated that it intends to request (and has the right under the Merger Agreement to have such request honored) that the Offer be extended in accordance with the terms of the Merger Agreement), provided that Parent shall have been given notice of such breach at least two business days prior to termination, or (iii) the Purchaser (or any of the Parent Companies) shall have (x) terminated the Offer, or (y) failed to pay for Shares pursuant to the Offer on a timely basis following the expiration of the Offer, if the Offer has not been extended in accordance with the terms of the Merger Agreement. The Merger Agreement may be terminated by Parent (a) at any time prior to the Effective Time, by action of the Board of Directors of Parent if due to an occurrence or circumstance which resulted in a failure to satisfy any of the Offer Conditions (as hereinafter defined), and the Purchaser shall have terminated the Offer in accordance with the terms of the Merger Agreement (including, without limitation, taking no position in response to a tender offer by a person other than Parent, the Purchaser or any of their affiliates), (b) prior to the purchase of Shares by the Purchaser pursuant to the Offer if (i) the Company's Board of Directors withdraws or adversely modifies its adoption of the Merger Agreement, its recommendation of the Offer or its recommendation that the Company's stockholders approve the Merger Agreement (including, without limitation, taking no position in response to a tender offer by a person other than Parent, the Purchaser or any of their affiliates), (ii) there has been a material breach by the Company of any material covenant or agreement contained in the Merger Agreement that is not curable or, if curable, is not cured prior to the earlier of (x) 30 days after written notice of such breach is given by Parent to the party committing such breach or (y) two business days prior to any date on which the Offer is scheduled to expire; provided, however, that at such time specified in this clause (y) neither the Company nor Parent has indicated that it intends to request (and has the right under the Merger Agreement to have such request honored) that the Offer be extended in accordance with the terms of the Merger Agreement (provided that the Company shall have been given notice of such breach at least two business days prior to termination), or (iii) the Minimum Condition shall not have been satisfied by the expiration of the Offer (as it may have been extended from time to time), and at or prior to such time any person (other than Parent or the Purchaser) 22 shall have made a public announcement with respect to a bona fide Acquisition Proposal that contemplates a per Share consideration in excess of the Merger Consideration (a "Third Party Offer"). TERMINATION FEES. In the event the Merger Agreement is terminated in accordance with the terms of the Merger Agreement by Parent as a result of a material breach by the Company of any material covenant or agreement contained in the Merger Agreement, then the Company shall promptly, but in no event later than two days after the date of such termination, pay Parent a termination fee of $29.4 million (the "Termination Fee"). In the event that (i) (a) an Acquisition Proposal shall have been made to the Company or any person (other than Parent, the Purchaser or any of their affiliates) shall have publicly announced an intention to make an Acquisition Proposal with respect to the Company and thereafter the Merger Agreement is terminated (x) by the Company as a result of the termination of the Offer by the Purchaser or (y) by Parent due to an occurrence or circumstance which resulted in a failure to satisfy any of the Offer Conditions under circumstances that would have permitted Parent to terminate the Merger Agreement as a result of a material breach by the Company or (b) the Merger Agreement is terminated (x) by the Company or Parent as a result of the Company's Board of Directors withdrawing or adversely modifying its adoption of the Merger Agreement, its recommendation of the Offer or its recommendation that the stockholders of the Company approve the Merger Agreement or (y) by Parent as a result of the Minimum Condition not having been satisfied by the Expiration Date and at or prior to such time the public announcement of a Third Party Offer and (ii) (a) the person making the Third Party Offer (the "Acquiring Party") has acquired, by purchase, merger, consolidation, sale, assignment, lease, transfer or otherwise, in one transaction or any related series of transactions within 12 months after a termination of the Merger Agreement, a majority of the voting power of the outstanding securities of the Company or all or substantially all of the assets of the Company or (b) there has been consummated a merger, consolidation or similar business combination between the Company or one of its subsidiaries and the Acquiring Party within 12 months after the relevant termination of the Merger Agreement, then the Company shall pay Parent the Termination Fee. The preceding description of the terms and provisions of the Merger Agreement is qualified in its entirety by reference to the text of the Merger Agreement, which is an exhibit to the Tender Offer Statement on Schedule 14D-1 filed by the Purchaser and Parent with the Commission and is available for inspection and copying at the principal office of the Commission or may be viewed and printed from the Commission web site at http://www.sec.gov in the manner set forth in Section 9. 12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the Purchaser to purchase all of the outstanding Shares pursuant to the Offer and to pay fees and expenses related to the Offer and the Merger is expected to be approximately $763 million. The Offer and Merger are not conditioned on the ability of the Purchaser or Parent to obtain financing. The Purchaser plans to obtain all funds needed for the Offer and the Merger through a capital contribution which will be made by Parent. Parent plans to obtain the funds for such capital contribution from a combination of cash on hand, funds available to Parent under its existing Amended and Restated Credit Agreement dated as of December 12, 1995, as amended and restated as of July 31, 1997, among Parent and the various lenders specified therein (the "Credit Agreement") and pursuant to a financing commitment letter (the "Commitment"), dated May 4, 1999, from Bank of America National Trust and Savings Association ("BA"), and NationsBanc Montgomery Securities LLC ("NM Securities") (collectively, the "Commitment Lenders"). As of March 31, 1999, Parent had approximately $110.3 of cash and cash equivalents available to it without borrowings. The lenders under the Credit Agreement are committed to loan Parent up to $250 million minus (a) the aggregate principal amount of all outstanding committed loans under the Credit Agreement, (b) the aggregate undrawn face amount under all outstanding letters available under the Credit Agreement, plus (c) the amount of all unreimbursed drawings under all outstanding letters of credit available under the Credit Agreement (the "Credit Agreement Facility"). As of March 31, 1999, because no loans were outstanding under the Credit Agreement, and letters of credit in the aggregate undrawn face of amount of approximately $4.9 million were outstanding, Parent had the ability to borrow up to $245.1 million under the Credit Agreement Facility. 23 Pursuant to the Commitment, BA has agreed to provide a $450 million unsecured term loan to use solely for the purpose of capitalizing the Purchaser to enable it to make any payment required to acquire the Shares in accordance with the Merger Agreement, to pay transaction fees and expenses required in connection with the Offer and to invest in cash equivalents until payment for the foregoing purposes is made. NM Securities has agreed to act as lead arranger and book manager for the facility available under the Commitment (the "Commitment Facility"), and if necessary to form a syndicate of financial institutions for the Commitment Facility. THE CREDIT AGREEMENT. The parties to the Credit Agreement include Parent (as borrower), BA as Agent (in such capacity, the "Agent"), BancAmerica Securities, Inc., as Arranger (the "Arranger"), the Bank of New York and First Bank National Association, as Co-Agents (the "Co-Agents"), and various other financial institutions as parties thereto (the "Banks"). The following is a summary of certain portions of the Credit Agreement, which is qualified in its entirety by reference to the text of the Credit Agreement, which is an exhibit to the Tender Offer Statement on Schedule 14D-1 filed by the Purchaser and Parent with the Commission and is available for inspection and copying at the principal office of the Commission or may be viewed and printed from the Commission's web site at http://www.sec.gov in the manner set forth in Section 9. The Credit Agreement provides that the borrowings thereunder are subject to certain conditions precedent, including, among other things: (i) there not having been a material adverse change in the business or financial condition of Parent and its subsidiaries taken as a whole, since December 31, 1996; (ii) the representations and warranties made by Parent in the Credit Agreement being true and correct on and as of the date any loan thereunder is made as if made on such date (unless expressly referring to an earlier date, in which case they shall be true and correct as of such earlier date); and (iii) there not being a Default or Event of Default (as each term is defined in the Credit Agreement) in existence or which shall exist from making any loan under the Credit Agreement. The Credit Agreement provides for customary representations and warranties, including representations and warranties as to: (i) the due incorporation and organization of Parent and its subsidiaries and their power to own assets and carry on their businesses as they are currently being conducted; (ii) Parent's power to enter into and perform its obligations under the Credit Agreement; (iii) the enforceability of the Credit Agreement; (iv) the absence of conflicts related to the execution of and performance by Parent of the Credit Agreement; (v) the absence of defaults under the Credit Agreement or other material agreements to which Parent is a party; (vi) any required regulatory approvals and third party consents; (vii) the audited consolidated financial statements of Parent; (viii) pending litigation; (ix) obligations under ERISA; (x) compliance with certain laws of the United States, including those relating to tax and environmental matters; (xi) the title of Parent and its subsidiaries to their assets; (xii) whether Parent or any of its affiliates engage in any highly regulated business activities; (xiii) insurance; (xiv) whether Parent or any of its subsidiaries are subject to any burdensome contractual or organizational activities; (xv) labor matters; and (xvi) intellectual property matters. The Credit Agreement imposes various covenants on Parent, including covenants as to: (i) reporting of financial information and other notices and events; (ii) preserving the corporate existence of Parent and its subsidiaries; (iii) maintaining the properties of Parent and its subsidiaries; (iv) insurance; (v) payment of the obligations of Parent and its subsidiaries; (vi) compliance with various laws including those relating to environmental matters; (vii) inspection rights of the Banks; (viii) liens on assets of Parent or its subsidiaries; (ix) mergers, consolidations, dispositions and investments; (x) indebtedness, contingent and lease obligations; and (xi) financial covenants relating to cash flow and leverage of Parent. The Credit Agreement provides for various usual and customary events of default. The interest rate applicable to borrowings under the Credit Agreement Facility is determined at Parent's option, at the rate in the offshore interbank market for U.S. dollars for specified maturities, plus a 24 margin tied to Parent's credit ratings, or a rate equal to the higher of BA's prime rate, or the applicable federal funds rate plus .50% (the "Base Rate"). Borrowings may be made by written notice from Parent to the Agent not later than 9:30 a.m. (Chicago time) two (2) business days prior to the date of borrowing in the case of offshore rate borrowings, or before 10:30 a.m. (Chicago time) on the business day of the borrowing in the case of Base Rate borrowings. The loans under the Credit Agreement Facility are due on July 31, 2002, or earlier upon exercise of the Banks' default remedies, or if Parent determines to prepay the loans and terminate the commitment under the Credit Agreement Facility. THE COMMITMENT. The following is a summary of certain provisions of the Commitment, which is qualified in its entirety by reference to the text of the Commitment, which is an exhibit to the Tender Offer Statement on Schedule 14D-1 filed by the Purchaser and Parent with the Commission and is available for inspection and copying at the principal office of the Commission or may be viewed and printed from the Commission's web site at http://www.sec.gov in the manner set forth in Section 9. The Commitment is subject to usual and customary conditions for transactions of this type including: (i) the completion of due diligence with respect to the Company and Parent satisfactory to the Commitment Lenders; (ii) the negotiation, execution and delivery of definitive credit documentation satisfactory to the Commitment Lenders; (iii) the satisfactory review by the Commitment Lenders of the Merger Agreement and their approval of any changes thereto; (iv) satisfaction of the Commitment Lenders with Parent's proposed capital and ownership structure after giving effect to the Merger; (v) receipt and approval by the Commitment Lenders of the Company's financial statements; (vi) the absence of any material adverse change in the business, assets, operation, condition (financial or otherwise) or prospects since December 31, 1998 in the case of Parent and its subsidiaries, or since January 31, 1999 in the case of the Company; (vii) satisfactory opinions from Parent's counsel; (viii) receipt of all governmental and third party consents necessary to consummate the Merger and the Commitment Facility; (ix) no adverse litigation during the Offer; (x) Parent and its subsidiaries (including the Company) shall be in compliance with all existing financial obligations (after giving effect to the Merger); (xi) the Commitment Lenders determine that Parent shall have sufficient cash and financing to meet the ongoing financing needs of Parent and its subsidiaries after giving effect to the Merger; (xii) there not having occurred and be continuing a material adverse change in financial, banking or capital markets since May 4, 1999 that in the reasonable judgment of the Commitment Lenders would have a material adverse effect on the syndication of the Commitment Facility; and (xiii) the satisfaction of the Commitment Lenders that prior to and during the syndication of the Commitment Facility, Parent and its subsidiaries shall not have offered, placed or arranged to be in the process of offering, placing or arranging any competing issues of debt securities or bank financing (other than amounts available under the Credit Agreement or the term financing described below). Interest rates under the facility will be at Borrower's option: (a) the London interbank offered rate for specified maturities, plus a margin of 1.00%; or (b) the Base Rate plus a margin of 0.75% through the 90th day after the closing of the Commitment Facility, 0.875% through the 120th day after the closing of the Commitment Facility and 1.00% thereafter. The definitive agreement entered into pursuant to the Commitment Facility will contain customary representations and warranties and events of default and will incorporate by reference the covenants contained in the Credit Agreement. The definitive agreement will also contain covenants relating to year 2000 compliance and a requirement that the Purchaser merge with the Company by October 29, 1999. Parent has agreed to pay BA customary commitment and underwriting fees as well as certain of the fees and expenses of the Commitment Lenders and their affiliates arising in connection with the Commitment, the financing thereunder and any syndication thereof. In addition, Parent has agreed to indemnify each of BA and NM Securities and certain related persons against certain damages and 25 expenses arising out of investigations or litigation relating to the Commitment Facility and the use of the proceeds of the Commitment Facility. Parent may borrow funds under the Commitment Facility in not more than three borrowings within a period after the Commitment Facility is closed to be specified coincident with the consummation of the transaction. The Commitment Facility terminates, and all amounts owing thereunder will be due and payable not later than six months after closing of the Commitment Facility. Parent is required to prepay the Commitment Facility with 100% of the net proceeds of the contemplated three to ten year term financing described below, any equity issuance (other than pursuant to employee stock option exercises), or of certain to be specified asset dispositions. Optional prepayments of the Commitment Facility will be permitted. TERM FINANCING. Parent expects to raise additional funds through the issuance of long-term debt securities in one or more transactions. Parent has entered into an engagement letter with NM Securities relating to the issuance of approximately $450 million of the Company's debt securities with a contemplated term of three to ten years to be privately placed pursuant to Rule 144A or pursuant to a registered public offering under the Securities Act of 1933, as amended. ALTERNATIVE ARRANGEMENTS. If the above debt securities term financing is not obtained, Parent believes it will be able to obtain necessary financing from other sources on terms satisfactory to it. 13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, but subject to the terms of the Merger Agreement, the Purchaser will not be required to accept for payment or, subject to any applicable rules or regulations of the Commission, pay for any Shares, and may terminate the Offer (i) if by the expiration of the Offer (or, if extended, by the expiration of the Offer, as so extended) the Minimum Condition shall not have been satisfied, (ii) if all applicable waiting periods under the HSR Act shall not have expired or been terminated, or (iii) if on or after April 30, 1999, and at any time prior to acceptance for payment for any such Shares, any of the following events (together with the foregoing events, the "Offer Conditions") shall occur; provided, that in each such case, the Purchaser shall not be permitted to terminate the Offer (except pursuant to the condition specified in paragraph (g) below) if prior to the then scheduled expiration of the Offer, the Offer shall have been extended: (a) there shall have occurred (i) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (ii) a formal declaration of war or national or international calamity directly or indirectly involving the United States (other than any declaration of war resulting from the current conflict in Yugoslavia), (iii) any limitation (whether or not mandatory) by any United States governmental authority on the extension of credit by banks or other financial institutions that materially affects the extension of credit by banks or other lending institutions, (iv) any general suspension of, or limitation on prices for, trading in securities on the Nasdaq National Market or the over the counter market, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (b) the Company shall have breached or failed to perform any of its material obligations, covenants or agreements under the Merger Agreement in a manner permitting Parent to terminate the Merger Agreement or any representation or warranty of the Company set forth in the Merger Agreement shall not be true and correct, provided that such representations and warranties shall be deemed to be true and correct unless the failure of such representations and warranties to be so true and correct would have a Material Adverse Effect (as defined in the Merger Agreement) or would prevent the Company from consummating the transactions contemplated by the Merger Agreement in each case as if such representations and warranties were made at the time of such termination; 26 (c) there shall be instituted or pending any action, litigation, proceeding, investigation or other application (hereinafter, an "Action") before any court or other governmental entity: (i) challenging the acquisition by the Purchaser of Shares, or seeking to restrain or prohibit the consummation of the transactions contemplated by the Merger Agreement; (ii) seeking to prohibit, or impose any limitations on, Parent's or the Purchaser's ownership or operation of all or any portion of their or the Company's business or assets (including the business or assets of their respective affiliates and subsidiaries); (iii) seeking to make the acceptance for payment, purchase of, or payment for, some or all of the Shares illegal; (iv) seeking to impose limitations on the ability of Parent or the Purchaser effectively to acquire or hold or to exercise full rights of ownership of the Shares including, without limitation, the right to vote the Shares purchased by them on an equal basis with all other Shares on all matters properly presented to the stockholders; or (v) that, in any event, would have a Material Adverse Effect on the Company; (d) any statute, rule, regulation, order or injunction shall be enacted, promulgated, entered, enforced or become applicable to the Offer or the Merger, or any other action shall have been taken by any court or other governmental entity other than the application to the Offer or the Merger of the waiting period under the HSR Act, that would result in any of the effects of, or have any of the consequences sought to be obtained or achieved in any Action referred to in clauses (i) through (v) of paragraph (c) above; (e) any person (as such term is defined in Section 13(d)(3) of the Exchange Act (other than Parent or any of its affiliates)) commences a tender or exchange offer for a majority or more of the outstanding Shares at a price per Share greater than the Merger Consideration, or any such person shall have become the beneficial owner of more than 20% of the outstanding Shares (other than for bona fide arbitrage purposes), or any such person shall have entered into a definitive agreement to acquire all or substantially all of the Shares or to effect a merger, consolidation or other business combination with or involving the Company; (f) there shall have occurred an event which has caused a Material Adverse Effect; (g) the Board of Directors of the Company shall have amended, modified or withdrawn its recommendation of the Offer or the Merger in a manner adverse to Parent, or shall have endorsed, approved or recommended any other Acquisition Proposal, or shall have resolved to do any of the foregoing; or (h) the Merger Agreement shall have been terminated by the Company or Parent in accordance with its terms; which, in the reasonable judgment of Parent, in any such case, and regardless of the circumstances giving rise to any such conditions, makes it reasonably inadvisable to proceed with the Offer and/or with such acceptance for payment of or payment for Shares. The foregoing conditions, other than the Minimum Condition, are for the sole benefit of Parent and may be asserted by Parent or the Purchaser regardless of the circumstances giving rise to such condition or may be waived by Parent, other than the Minimum Condition, by express and specific action to that effect, in whole or in part at any time and from time to time in its sole discretion. Should the Offer be terminated pursuant to the foregoing provisions, all tendered Shares not theretofore accepted for payment shall forthwith be returned by the Depositary to the tendering stockholders. 14. DIVIDENDS AND DISTRIBUTIONS. Under the Merger Agreement, the Company has agreed not to (i) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned subsidiaries to it or a wholly owned subsidiary; (ii) split, combine or reclassify its outstanding shares of capital stock; (iii) issue, sell, pledge, 27 dispose of or encumber any capital stock owned by it in any of its subsidiaries; or (iv) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, except, in connection with the Option Plans, or permit any of its subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock. In the event that the Company changes the number of Shares or securities convertible or exchangeable into or exercisable for Shares issued and outstanding prior to the Effective Time as a result of a reclassification, stock split (including a reverse split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Merger Consideration will be equitably adjusted. If, on or after May 7, 1999, the Company should declare or pay any cash or stock dividend or other distribution or issue any rights with respect to the Shares, payable or distributable to stockholders of record on a date prior to the transfer to the name of the Purchaser or its nominee or transferee on the Company's stock transfer records of the Shares accepted for payment pursuant to the Offer, then, without prejudice to the Purchaser's rights under Sections 1 and 13 and without limiting the rights of the Purchaser described in the preceding paragraph of this Section 14, any such dividend, distribution or right to be received by the tendering stockholders will be received and held by the tendering stockholder for the account of the Purchaser and will be required to be promptly remitted and transferred by each tendering stockholder to the Depositary for the account of the Purchaser, accompanied by appropriate documentation and transfer. Pending such remittance, the Purchaser will be entitled to all rights and privileges as owner of any such dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser in its sole discretion. 15. CERTAIN LEGAL MATTERS. Except as set forth in this Section 15, based on a review of publicly available filings by the Company with the Commission and other information concerning the Company provided to Parent, the Purchaser is not aware of any license or other regulatory permit which appears to be material to the business of the Company that might be adversely affected by the Purchaser's acquisition of Shares pursuant to the Offer (and the indirect acquisition of the stock of the Company's subsidiaries), or of any approval or other action by any domestic or foreign governmental or administrative agency that would be required prior to the acquisition of Shares by the Purchaser pursuant to the Offer. Should any such approval or other action be required, it is the Purchaser's present intention that such additional approval or action would be sought. While the Purchaser does not presently intend to delay the purchase of Shares tendered pursuant to the Offer pending receipt of any such additional approval or the taking of any such action, there can be no assurance that any such additional approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Company's or Parent's business, or that certain parts of the Company's or Parent's business might not be required to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval or action or in the event that such approvals were not obtained or such actions were not taken. The Purchaser's obligation to purchase and pay for Shares is subject to certain conditions relating to the legal matters discussed in this Section 15. See Section 13. 28 ANTITRUST. Under the HSR Act, 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 ("FTC") and certain waiting period requirements have been satisfied. The acquisition of Shares pursuant to the Offer and the Merger Agreement is subject to such requirements. On or about May 7, 1999, Parent expects to file with the Antitrust Division and the FTC a Notification and Report Form with respect to the Offer and the Merger. Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares pursuant to the Offer may not be consummated prior to the expiration of a 15-calendar day waiting period following the filing by Parent, unless earlier terminated. Accordingly, Parent expects the waiting period applicable to the Offer will expire at 11:59 p.m., New York City time, on or about May 22, 1999, unless Parent receives a request from either the FTC or the Antitrust Division for additional information or documentary material, or the Antitrust Division and the FTC terminate the waiting period prior thereto. If, within such 15-day waiting period either the Antitrust Division or the FTC requests additional information or material from Parent concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the 10th calendar day after the date of substantial compliance by Parent with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the rules promulgated under the HSR Act. Thereafter, the waiting period could be extended only by court order or with the consent of the Purchaser. The additional 10-calendar-day waiting period may be terminated sooner by the FTC or the Antitrust Division. 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. Although the Company is required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer and the Merger, neither the Company's failure to make such filings nor a request made to the Company from the Antitrust Division or the FTC for additional information or documentary material will extend the Offer period with respect to the purchase of Shares pursuant to the Offer and the Merger Agreement. 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 13. If the acquisition of Shares is delayed pursuant to a request by the FTC or the Antitrust Division for additional information or documentary material pursuant to the HSR Act, the Offer may, at the discretion of the Purchaser, be extended (for a period not to exceed 10 business days for any particular extension) and, in any event, the purchase of and payment for Shares will be deferred until 10 days after the request is substantially complied with by Parent, unless the 10-day extended period expires on or before the date when the initial waiting period would otherwise have expired or unless the waiting period is sooner terminated by the FTC and the Antitrust Division. See Section 2. Unless the Offer is extended, any extension of the waiting period will not give rise to any additional withdrawal rights. See Section 3. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the acquisition of Shares by the Purchaser pursuant to the Offer and the Merger. At any time before or after the Purchaser's purchase of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer and the Merger or seeking divestiture of Shares purchased thereunder or the divestiture of assets of the Company, the Purchaser, Parent or any of their respective subsidiaries or affiliates. Private parties as well as state attorneys general may also bring legal actions under the antitrust laws under certain circumstances. If any such action by the FTC, the Antitrust Division or any other person should be instituted, the Purchaser could decline to accept for payment any Shares tendered. See Section 11 and 13 for certain conditions to the Offer. Based upon an examination of information relating to the businesses in which Parent and the Company are engaged, 29 Parent believes that the consummation of the Offer would not violate any antitrust laws. However, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. The Merger would not require an additional filing under the HSR Act if the Purchaser owns 50% or more of the outstanding Shares at the time of the Merger or if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated. STATE TAKEOVER LAWS. The Company is incorporated under the laws of the State of Florida. The FBCA contains provisions that are intended to defer hostile takeovers of Florida-based corporations and are informally known as the "Affiliated Transactions Statute" and the "Control-Share Acquisition Statute." In general, the Affiliated Transactions Statute requires that any "affiliated transaction" between a corporation with more than 300 shareholders and any person who is the beneficial owner of more than 10% of the corporation's outstanding voting shares (an "interested shareholder"), or any affiliate or associate of an interested person, must be approved by the holders of two-thirds of the voting shares of the corporation other than the shares beneficially owned by the interested shareholder. Absent approval by disinterested shareholders or an exception, the statute requires that a "fair price" be paid to shareholders in the transaction. An "affiliated transaction" includes a merger, a sale, exchange or other transfer of assets or shares of the corporation, and the benefit of loans, advances, pledges, guarantees, or other financial assistance or tax credits or advances provided by or through the corporation. The Affiliated Transaction Statute does not apply to an affiliated transaction if the transaction is approved in advance by a majority of the corporation's directors who are not affiliated or associated with the interested shareholder. Under the Control-Share Acquisition Statute, "control shares" of certain corporations that are acquired in a "control-share acquisition" will retain their voting rights only to the extent granted by a resolution that is approved by a majority of each class of voting securities of the corporation. A "control- share acquisition" is a direct or indirect acquisition by a person of the ownership or power to direct the exercise of the voting rights of "control shares," which is defined as shares that entitle a person to exercise more than specified proportions of the voting power of a corporation that is subject to the Control-Share Acquisition Statute (commencing with the acquisition of 20% or more of the voting shares of such corporation). An acquisition of shares does not constitute a "control-share acquisition" if the acquisition has been approved by the board of directors of the issuing corporation or if the acquisition occurs pursuant to a merger effected in compliance with the FBCA and the issuing corporation is a party to the agreement of merger or certain other statutory conditions have been met. At a meeting held on April 30, 1999, the Company's Board of Directors, none of whom are affiliated or associated with the Purchaser or Parent, unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and determined that each of the Offer and Merger are fair to and in the best interests of the holders of the Company's Shares. Accordingly, the Affiliated Transaction Statute and Control-Share Acquisition Statute will not apply to Parent and the Purchaser in connection with the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger. A number of states have adopted takeover laws which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, security holders, principal executive offices or principal places of business therein. To the extent that certain provisions of certain of these state takeover statutes purport to apply to the Offer or the Merger, the Purchaser believes that such laws conflict with federal law and constitute an unconstitutional burden on interstate commerce. In 1982, the Supreme Court of the United States, in EDGAR V. MITE CORP., held that the Illinois Business Takeovers Statute, which as a matter of state securities law made takeovers of corporations meeting certain requirements more difficult, imposed a substantial burden on interstate commerce and therefore was unconstitutional. In 1987, however, in CTS CORP. V. DYNAMICS CORP. OF 30 AMERICA, the Supreme Court of the United States held that the State of Indiana could, as a matter of corporate law and, in particular, those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders, provided that such laws were applicable only under certain conditions. 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 therein. Subsequently, a number of federal courts ruled that various state takeover statutes were unconstitutional insofar as they apply to corporations incorporated outside the state of enactment. Except as described herein, the Purchaser does not know whether the Offer is subject to any state takeover statutes and neither Parent nor the Purchaser has attempted to comply with any state takeover statutes in connection with the Offer other than as indicated above. Should any person seek to apply any such statute to the Offer, Parent and the Purchaser reserve the right to challenge the validity or applicability of any state law allegedly applicable to the Offer and nothing in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of that right. In the event that any additional state takeover statute is found applicable to the Offer and an appropriate court does not determine that such laws are inapplicable or invalid as applied to the Offer, the Purchaser may be required to file certain information with, or receive approvals from, the relevant state authorities, or the Purchaser might be unable to purchase and accept for payment or pay for Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In the circumstances described above, the Purchaser may not be obligated to accept for purchase and payment or pay for any Shares tendered. DISSENTERS' RIGHTS. Stockholders of the Company do not have dissenters' rights as a result of the Offer. In addition, stockholders of the Company will not have dissenters' rights in connection with the Merger if, on the record date fixed to determine the stockholders entitled to vote on or consent to the Merger, the Shares are listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the NASD or are held of record by 2,000 or more stockholders. If, however, the Shares are not so listed or designated and are not held of record by at least 2,000 stockholders, then holders of Shares who do not vote in favor of the Merger will have certain rights pursuant to the provisions of Sections 607.1301, 607.1302 and 607.1320 of the FBCA to dissent and demand determination and payment of the fair value of their Shares. If the statutory procedures are complied with, such rights could lead to a judicial determination of the fair value required to be paid to such dissenting holders for their Shares. The fair value of Shares determined for the purpose of dissenters' rights could be more or less than the Merger Consideration. Section 607.1301(2) of the FBCA defines "fair value" to exclude any appreciation or depreciation in anticipation of the transaction giving rise to dissenters' rights, unless such exclusion would be inequitable. The Shares of any stockholder who asserts dissenters' rights under the FBCA, but fails to perfect, or effectively withdraws or loses, his or her dissenters' rights, as provided in the FBCA, will be converted into the right to receive the Merger Consideration in accordance with the Merger Agreement. A stockholder may withdraw his or her notice of election to dissent by delivery to the Company of a written withdrawal of his or her notice of election to dissent. THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. FAILURE TO FOLLOW THE STEPS REQUIRED BY THE FBCA FOR PERFECTING DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF THOSE RIGHTS. 16. EXTENSION OF TENDER PERIOD, TERMINATION AND AMENDMENTS. The Merger Agreement provides that (i) if any of the Offer Conditions exists at the time of the scheduled Expiration Date of the Offer, the Purchaser may extend and reextend the Offer on one or more occasions for periods of time (not to exceed 10 business days for any particular extension) so that the expiration date of the Offer (as so extended) is as 31 soon as reasonably practicable or advisable after the date on which the particular Offer Condition no longer exists, and (ii) the Purchaser may extend or reextend the Offer on one or more occasions for periods of time (not to exceed 10 business days for any particular extension) for an aggregate period not to exceed 20 business days if on such expiration date there shall not have been validly tendered and not withdrawn at least the number of Shares necessary to permit the Merger to be effected without a meeting of the Company's stockholders, and, provided, further, that all extensions of the Offer made by the Purchaser (other than at the request of the Company) shall not extend the Offer beyond September 5, 1999. Parent and the Purchaser have agreed that until September 5, 1999 the Purchaser shall from time to time extend the Offer at such times as the Company may request for five business days for each extension, but shall in no event extend the Offer beyond September 5, 1999. The Purchaser may not, without the prior written consent of the Company, decrease the price per Share offered in the Offer, change the form of consideration offered or payable in the Offer, decrease the number of Shares sought in the Offer, change the conditions to the Offer, impose additional conditions to the Offer, amend any term of the Offer in any manner adverse to the holders of Shares or waive the Minimum Condition. If the Purchaser shall decide, in its sole discretion, to increase the consideration offered in the Offer to holders of Shares or make any other material change in the terms of the Offer to the extent permitted by the Merger Agreement or the information concerning the Offer to the extent permitted by the Merger Agreement, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c) and 14d-6(d) 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, including the relative materiality of the terms or information. With respect to a change in price or a change in percentage of securities sought, a minimum 10-business day period from the date of announcement thereof is required under the Exchange Act. If, prior to the Expiration Date, the Purchaser should decide to increase the price per Share being offered in the Offer, such increase will be applicable to all stockholders whose Shares are accepted for payment pursuant to the Offer. As used in this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1 under the Exchange Act. The Purchaser also expressly reserves the right (i) to the extent permitted by the Merger Agreement to delay payment for any Shares, regardless of whether such Shares were theretofore accepted for payment, or to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted or paid for, upon the occurrence of any of the conditions specified in Section 13 by giving oral notice thereof to the Depositary; and (ii) subject to the restrictions set forth in the Merger Agreement, at any time or from time to time, to amend the Offer in any respect. See Section 13. Any extension, delay, termination, waiver or amendment of the Offer will be followed, as soon as practicable, by public announcement thereof; and such announcement in the case of an extension will be made in accordance with Rule 14e-1(d) no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to either the Dow Jones or Reuters News Services and making any appropriate filings with the Commission. 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-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of the Offer. 32 17. CERTAIN FEES AND EXPENSES. Bear Stearns is acting as Dealer Manager for the Offer and as financial advisor to Parent in connection with the transactions described in this Offer to Purchase. Pursuant to an engagement letter dated April 29, 1999 and a Dealer Manager Agreement dated as of May 7, 1999, Parent has agreed to pay Bear Stearns an aggregate amount of $5.0 million upon consummation of the Offer and the satisfaction of the Minimum Condition. Bear Stearns became entitled to a cash fee of $1.5 million upon the rendering to the Board of Directors of Parent of its opinion as to the fairness from a financial point of view to Parent of the Offer price which fee will be credited against the $5.0 million fee referred to in the prior sentence. Parent has further agreed to reimburse Bear Stearns for its reasonable out-of-pocket expenses, including fees and disbursements of Bear Stearns' legal counsel, whether or not an acquisition of the Company is consummated, and has agreed to indemnify Bear Stearns against certain liabilities and expenses in connection with its engagement, including certain liabilities under the federal securities laws. The Purchaser has retained Georgeson & Company Inc. to act as Information Agent and The Bank of New York to act as Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the Offer to beneficial owners. The Information Agent and the Depositary will each receive reasonable and customary compensation for services relating to the Offer in addition to reimbursement of reasonable out-of-pocket expenses. The Purchaser has agreed to indemnify each of the Information Agent and the Depositary against certain liabilities and expenses in connection with the Offer including certain liabilities under the federal securities laws. Neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person (other than the above-described fees to Bear Stearns) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Purchaser for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. 18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which the making of the Offer is not in compliance with applicable law. 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 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, holders of Shares residing in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer Manager or by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Parent and the Purchaser have filed with the Commission a Tender Offer Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer, and may file amendments thereto. Such Tender Offer Statement and any amendments thereto, including exhibits, may be obtained in the manner described in Section 8 with respect to information concerning the Company, except that such information will not be available at the regional offices of the Commission. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. SPRING ACQUISITION CORP. 33 SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER 1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The names, ages, present principal occupation or employment and five-year employment history of each director and executive officer of Parent are set forth below. Unless otherwise indicated, all persons have held their current occupation or employment for at least the last five years. The business address of each such person is 8100 34th Avenue South, Minneapolis, Minnesota 55425. All persons listed below are citizens of the United States of America.
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- EXECUTIVE OFFICERS: Lawrence Perlman (61).......... 1980 Chairman and Chief Executive Officer of Parent. Ronald L. Turner (52).......... 1993 President and Chief Operating Officer of Parent. Mr. Turner has been President and Chief Operating Officer of Parent since April 1998. He was Executive Vice President of Operations of Parent from March 1997 to April 1998; an Executive Vice President of Parent and President and Chief Executive Officer of Parent's Computing Devices International division from January 1996 to March 1997; and Vice President of Parent and President of Computing Devices International from January 1993 to January 1996. John R. Eickhoff (59).......... 1989 Executive Vice President and Chief Financial Officer of Parent. Mr. Eickhoff has been Executive Vice President and Chief Financial Officer of Parent since May 1995, and was Vice President and Chief Financial Officer of Parent from June 1993 to May 1995. Mr. Eickhoff was Vice President and Corporate Controller of Parent from July 1989 to June 1993. Loren D. Gross (53)............ 1993 Vice President and Corporate Controller of Parent Tony G. Holcombe (43).......... 1997 Vice President, and President of Comdata, a subsidiary of Parent. Mr. Holcombe has been Vice President of Parent and President of Comdata since May 1997. Mr. Holcombe was President and Chief Executive Officer of National Processing, Inc., which provides transaction processing services and customized processing solutions, from October 1994 to March 1997, and was Executive Vice President, Corporate Services for National Processing from 1991 through 1994.
A-1
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- Shirley J. Hughes (53)......... 1998 Senior Vice President of Human Resources of Parent. Ms. Hughes has been Senior Vice President of Human Resources of Parent since June 1998. Ms. Hughes was Vice President of Human Resources of Mercy Health Services from October 1994 to June 1998. From 1992 to 1994, she served as Vice President of Human Resources and Administrative Services of Parent, and from 1991 to 1992, she served as Vice President of Human Resources for the Information Services Group of Parent. Carl O. Keil (57).............. 1997 Vice President, and President of Ceridian Employer Services, a division of Parent. Mr. Keil has been Vice President of Parent and President of Ceridian Employer Services since April 1997. Mr. Keil was President and Chief Executive Officer of EduServ Technologies, Inc., which originates, services and securitizes student loans, from March 1992 to January 1997 Stephen B. Morris (55)......... 1992 Executive Vice President, and President of Arbitron, a division of Parent. Mr. Morris has been Executive Vice President of Parent and President of Arbitron since January 1996. Mr. Morris was Vice President of Parent and President of Arbitron from December 1992 to January 1996. Gary M. Nelson (47)............ 1997 Vice President, General Counsel and Secretary of Parent. Mr. Nelson has been Vice President and General Counsel of Parent since July 1997 and Secretary of Parent since October 1998. From 1983 to July 1997, Mr. Nelson was a partner in the Oppenheimer Wolff & Donnelly LLP law firm. Linda Hall Whitman (50)........ 1998 Vice President, and President of Ceridian Performance Partners, a division of Parent. Ms. Whitman has been Vice President of Parent since October 1998 and President of Ceridian Performance Partners since April 1996. From October 1995 to March 1996, she was Vice President of Business Integration of Parent. Prior to joining Parent, Ms. Whitman spent 15 years at Honeywell, Inc., serving most recently as Vice President of the Home and Building Control consumer business group from 1993 to September 1995.
A-2
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- DIRECTORS: Bruce R. Bond (52)............. 1998 President and Chief Executive Officer of PictureTel Corporation, a company that develops, manufactures and markets video and audio conferencing solutions, since February 1998. Prior to joining PictureTel, Mr. Bond served as Chief Executive Officer of ANS Communications, the networking subsidiary of America Online, Inc., from July 1996 to February 1998. Prior to ANS, Mr. Bond spent seven years with British Telecom PLC, where he was Managing Director of British Telecom's national business communications division. Nicholas D. Chabraja (56)...... 1998 Chairman and Chief Executive Officer of General Dynamics Corporation. Mr. Chabraja was elected Chairman and Chief Executive Officer in June 1997. Mr. Chabraja served as Vice Chairman of General Dynamics from December 1996 to June 1997, Executive Vice President from 1994 to December 1996, and Senior Vice President and General Counsel from 1993 to 1994. Ruth M. Davis (70)............. 1984 President and Chief Executive Officer of the Pymatuning Group, Inc. Robert H. Ewald (51)........... 1998 President and Chief Executive Officer of E-Stamp Corporation. Mr. Ewald was elected President and Chief Executive Officer in March 1999. From October 1997 to July 1998, Mr. Ewald served as Executive Vice President and Chief Operating Officer of Silicon Graphics, Inc., a provider of high performance workstations, servers and super computers. He was Executive Vice President, Computer Systems for Silicon Graphics from April 1997 to October 1997. Prior to the merger of Cray Research, Inc. with Silicon Graphics, Mr. Ewald served as President and Chief Operating Officer of Cray from December 1994 to March 1997; Chief Operating Officer, Super Computer Operations from January 1994 to December 1994; and as Executive Vice President and General Manager of Super Computer Operations from January 1993 to January 1994. Richard G. Lareau (70)......... 1971 Partner in the law firm of Oppenheimer Wolff & Donnelly LLP.
A-3
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- Ronald T. LeMay (53)........... 1997 President and Chief Operating Officer of Sprint Corporation, a global communications company. Mr. LeMay returned to this position in October 1997 after having served as Chairman, President and Chief Executive Officer of Waste Management, Inc., a provider of waste management services, from July 1997 to October 1997. Mr. LeMay was President and Chief Operating Officer of Sprint from February 1996 to July 1997; Vice Chairman of Sprint from April 1995 to April 1996; President of Sprint's Long Distance Division from 1989 to March 1995. George R. Lewis (58)........... 1994 President and Chief Executive Officer of Philip Morris Capital Corporation, a subsidiary of Philip Morris Companies, Inc., a consumer packaged goods company. Prior to assuming his current position in May 1997, Mr. Lewis served as Vice President and Treasurer of Philip Morris Companies Inc. since 1984. Charles Marshall (70).......... 1989 Former Vice Chairman of American Telephone and Telegraph Company, a telecommunications company. Mr. Marshall served as Vice Chairman from 1985 until his retirement in April 1989. Ronald A. Matricaria (56)...... 1998 Chairman of St. Jude Medical, Inc., a provider of medical devices for the cardiovascular market. Mr. Matricaria has served as Chairman since January 1995 and served as Chief Executive Officer from April 1993 to May 5, 1999. Prior to joining St. Jude, Mr. Matricaria was employed by Eli Lilly and Company, Inc., a pharmaceutical company, for 23 years, with his last position having been Executive Vice President of Lilly's Pharmaceutical Division and President of its North American operations. Lawrence Perlman (61).......... 1985 Chairman and Chief Executive Officer of Parent. Ronald L. Turner (52).......... 1998 President and Chief Operating Officer of Parent. Mr. Turner has been President and Chief Operating Officer of Parent since April 1998. He was Executive Vice President of Operations of Parent from March 1997 to April 1998; an Executive Vice President of Parent and President and Chief Executive Officer of Parent's Computing Devices International division from January 1996 to March 1997; and Vice President of Parent and President of Computing Devices International from January 1993 to January 1996.
A-4
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER OR DIRECTOR, AS PRESENT PRINCIPAL OCCUPATION OR NAME (AGE) APPLICABLE EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- Carole J. Uhrich (55).......... 1994 Former Executive Vice President and Assistant Chief Operating Officer of Polaroid Corporation. Ms. Uhrich was employed by Polaroid from 1966 to 1999, and was Executive Vice President and Assistant Chief Operating Officer from September 1998 to April 1999. She was Executive Vice President of Commercial Imaging from March 1997 to September 1998; Executive Vice President, Global Products Supply from February 1996 to March 1997; Vice President, Manufacturing and Product Development from 1992 to February 1996, and prior to that time, served in a series of manufacturing, corporate quality and market research positions at Polaroid. Richard W. Vieser (71)......... 1988 Former Chairman, President and Chief Executive Officer of Lear Siegler, Inc. Mr. Vieser served as Chairman, President and Chief Executive Officer from March 1987 until his retirement in 1989. Paul S. Walsh (43)............. 1991 Chief Executive Officer of The Pillsbury Company.
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The names, ages, present principal occupation or employment and five-year employment history of each director and executive officer of the Purchaser are set forth below. Unless otherwise indicated, all persons have held their current occupation or employment for at least the last five years. The business address of each such person is 8100 34th Avenue South, Minneapolis, Minnesota 55425. All persons listed below are citizens of the United States of America.
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER PRESENT PRINCIPAL OCCUPATION OR NAME AND AGE OR DIRECTOR EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- Gary M. Nelson (47)............ 1999 President, Chief Executive Officer and a Director of the Purchaser and Vice President, General Counsel and Secretary of Parent. Mr. Nelson has been President, Secretary and a Director of the Purchaser since April 1999 and Vice President and General Counsel of Parent since July 1997 and Secretary of Parent since October 1998. From 1983 to July 1997, Mr. Nelson was a partner in the Oppenheimer Wolff & Donnelly LLP law firm.
A-5
YEAR FIRST ELECTED OR APPOINTED AS AN EXECUTIVE OFFICER PRESENT PRINCIPAL OCCUPATION OR NAME AND AGE OR DIRECTOR EMPLOYMENT; FIVE-YEAR EMPLOYMENT HISTORY - ------------------------------- ----------------- ------------------------------------------------------------- A. Reid Shaw (42).............. 1999 Vice President and Secretary of the Purchaser and Vice President, Associate General Counsel and Assistant Secretary of Parent. Mr. Shaw has been Vice President and Assistant Secretary of the Purchaser since April 1999 and Vice President of Parent since 1994, Assistant Secretary since 1993 and Associate General Counsel since 1991. John H. Grierson (52).......... 1999 Vice President and Treasurer of the Purchaser and Vice President and Treasurer of Parent. Mr. Grierson has been Vice President and Treasurer of the Purchaser since April 1999 and Vice President and Treasurer of Parent since 1994. James R. Burkle (55)........... 1999 Vice President of the Purchaser and Vice President of Parent. Mr. Burkle has been Vice President of the Purchaser since April 1999 and Vice President of Parent since 1991.
A-6 Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of the Company or his broker, dealer, commercial bank or other nominee to the Depositary at one of its addresses set forth below. THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK ------------------ BY FACSIMILE TRANSMISSION: (FOR ELIGIBLE INSTITUTIONS BY MAIL: ONLY) BY HAND OR OVERNIGHT COURIER: Tender & Exchange (212) 815-6213 Tender & Exchange Department Department P.O. Box 11248 CONFIRM FACSIMILE BY 101 Barclay Street Church Street Station TELEPHONE: Receive and Deliver Window New York, NY 10286-1248 (800) 507-9357 New York, NY 10286
------------------------ Any questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. You may also contact your broker, dealer, commercial bank or trust company or nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: [LOGO OF GEORGESON & COMPANY INC.] Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 or ALL OTHERS CALL TOLL FREE: (800) 223-2064 THE DEALER MANAGER FOR THE OFFER IS: [LOGO OF BEAR, STEARNS & CO. INC.] 245 Park Avenue New York, New York 10167 Call Toll Free: (888) 225-1793 EX-99.(A)(2) 3 EXHIBIT 99(A)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MAY 7, 1999 BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION - ----------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER: Tender & Exchange Department (FOR ELIGIBLE INSTITUTIONS Tender & Exchange Department P.O. Box 11248 ONLY) 101 Barclay Street Church Street Station (212) 815-6213 Receive and Deliver Window New York, NY 10286-1248 CONFIRM FACSIMILE BY New York, NY 10286 TELEPHONE: (800) 507-9357
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders of ABR Information Services, Inc. (the "Company") if certificates for Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in Section 4 of the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to the accounts maintained by The Bank of New York, as Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 4 of the Offer to Purchase. Holders of Shares whose certificates for Shares are not immediately available, or who are unable to deliver their Shares or confirmation of the book-entry tender of their Shares into the Depositary's account at the Book-Entry Transfer Facility ("Book Entry Confirmation") and all other documents required by this Letter of Transmittal to the Depositary on or 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 4 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution ______________________________________________ Account Number _____________________________________________________________ Transaction Code Number ____________________________________________________ / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. 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_______________________________ Account Number______________________________________________________________ Transaction Code Number_____________________________________________________
- ------------------------------------------------------------------------------------------------------------- DESCRIPTION OF TENDERED SHARES - ------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED APPEAR(S) ON STOCK CERTIFICATE(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) - ------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES REPRESENTED NUMBER CERTIFICATE BY OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- TOTAL SHARES: - ------------------------------------------------------------------------------------------------------------- * Need not be completed by stockholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being Tendered. See Instruction 4. - -------------------------------------------------------------------------------------------------------------
The name(s) and address(es) of the registered holder(s) should be printed, if not already printed above, exactly as they appear on the certificate(s) representing the Shares tendered hereby. The certificates and number of Shares that the undersigned wishes to tender should be indicated in the appropriate box. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), the above-described shares of voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), pursuant to the Purchaser's offer to purchase all outstanding Shares at a price of $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and in this Letter of Transmittal (which together constitute the "Offer"), receipt of which are hereby acknowledged. The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or in part from time to time, to Parent or one or more of its other direct or indirect wholly owned subsidiaries, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares and other securities and property issued or issuable or distributed or distributable in respect thereof on or after May 7, 1999 and prior to the transfer to the name of the Purchaser or nominee or transferee of the Purchaser on the Company's stock transfer records of the Shares tendered herewith (collectively, a "Distribution")), and irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any Distribution) with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to: (i) deliver certificates for such Shares (and any Distribution), or transfer ownership of such Shares (and any Distribution) on the account books maintained by the Book-Entry Transfer Facility, together in any such case, with all accompanying evidences of transfer and authenticity, to, or upon the order of, the Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the purchase price (adjusted, if appropriate, as provided in the Offer to Purchase); (ii) present such Shares (and any Distribution) for transfer on the books of the Company; and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any Distribution), all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby irrevocably appoints the Purchaser, its officers and its designees, and each of them and any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to exercise all voting and other rights of the undersigned in such manner as each such attorney-in-fact and proxy or the substitute for any such attorney-in-fact and proxy shall in the sole discretion of each such attorney-in-fact and proxy or his or her substitutes deem proper, and otherwise act (including pursuant to written consent) with respect to all of the Shares tendered hereby (and any Distribution) which have been accepted for payment by the Purchaser prior to the time of such vote or other action and which the undersigned is entitled to vote at any meeting of stockholders (whether annual or special and whether or not an adjourned meeting), or consent in lieu of any such meeting, or otherwise. This Proxy will be irrevocable and coupled with an interest and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall revoke, without further action, any other power of attorney and/or proxy given by the undersigned at any time with respect to such Shares (and any distribution) and no subsequent power of attorney or proxy may be given (and if given will not be effective) with respect thereto by the undersigned. The undersigned understands that the Purchaser expressly reserves the right to require that, in order for Shares to be validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares (and any Distribution), the Purchaser is able to exercise full voting rights and other rights of a record and beneficial holder thereof, including rights in respect of acting by written consent with respect to such Shares (and any Distribution) or voting at any meeting of stockholders. The undersigned hereby represents and warrants that: (i) the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any Distribution) and (ii) when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto (and any Distribution), free and clear of all liens, restrictions, charges, claims and encumbrances, except as created hereby, and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver any additional documents reasonably deemed by the Depositary, the Purchaser or Parent to be reasonably necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any Distribution). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser the whole of any Distribution issued to the undersigned on or after May 7, 1999, in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer. Pending such remittance, the Purchaser shall be entitled to all rights and privileges as owner of any such Distribution and may, subject to the terms of the Merger Agreement, withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser in its sole discretion. All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in Section 4 of the Offer to Purchase and in the instructions hereto will constitute the tendering stockholder's acceptance of the terms and conditions of the Offer, as well as the tendering stockholder's representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered (and any Distribution), as specified in this Letter of Transmittal. The Purchaser's acceptance for payment of Shares pursuant to the Offer will constitute a binding agreement between the tendering stockholder 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 and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature. In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of, and deliver said check and/or return such certificates to, the person or persons so indicated. Unless otherwise indicated in the box entitled "Special Payment Instructions", please credit any Shares tendered hereby and delivered by book-entry transfer which are not purchased by crediting the account at the Book-Entry Transfer Facility. The undersigned recognizes that the Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered. / / Check here if any of the certificates representing Shares that you own have been lost, destroyed or stolen and see Instruction 11. - -------------------------------------------------------------------------------- - ----------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned and/or Shares tendered hereby and delivered by book-entry transfer that are not accepted for payment are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than the account indicated above. Issue / / check / / certificates to: Name _______________________________________________________________________ (PLEASE PRINT) Address ____________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) __________________________________________________________________________ (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9) Credit Shares delivered by book-entry transfer and not purchased to the Book-Entry Transfer Facility Account ____________________________________________________________________________ (ACCOUNT NUMBER) ____________________________________________________________________________ ____________________________________________________________________________ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above. Mail / / check / / certificates to: Name _______________________________________________________________________ (PLEASE PRINT) Address ____________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) __________________________________________________________________________ (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9) __________________________________________________________________________ __________________________________________________________________________ IMPORTANT SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9) __________________________________________________________________________ __________________________________________________________________________ SIGNATURE(S) OF OWNER(S) Dated: _______, 1999 (Must be signed by registered owner(s) exactly as name(s) appear(s) on certificate(s) for Shares or on a security position listing or by person(s) authorized to become registered owner(s) by certificates and documents transmitted herewith. If signature is (are) by trustees, executors, administrators, guardians, attorneys-in-fact, agents, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s) ____________________________________________________________________ Name of Firm _______________________________________________________________ (PLEASE PRINT) Capacity (full title) ______________________________________________________ Address ____________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Numbers ( )_______________________________________ Taxpayer Identification or Social Security No. _____________________________ (SEE SUBSTITUTE FORM W-9) ____________________________________________________________________________ ____________________________________________________________________________ GUARANTEE OF SIGNATURE(S) (IF REQUIRED; SEE INSTRUCTIONS 1 AND 5) Name(s) ____________________________________________________________________ (Please Print) Authorized Signature _______________________________________________________ Name of Firm _______________________________________________________________ Address ____________________________________________________________________ ____________________________________________________________________________ (INCLUDING ZIP CODE) Area Code and Telephone Number _____________________________________________ Dated: ________________________________, 1999 - -------------------------------------------------------------------------------- TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 9) - ------------------------------------------------------------------------------------------------------------ SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE ------------------------ FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security DATING BELOW. OR ------------------------ Employer Identification Number ------------------------------------------------------------------------- Department of the Treasury, Part 2 - Certification - Under Penalties Part 3 -- Internal Revenue Service of Perjury, I certify that: Payer's Request for Taxpayer (1) The number shown on this form is my Awaiting Identification Number (TIN) correct Taxpayer Identification Number TIN / / (or I am waiting for a number to be issued to me and have checked the box in Part 3) and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. - ------------------------------------------------------------------------------------------------------------ CERTIFICATION INSTRUCTIONS - You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you 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 such item (2). SIGNATURE: ---------------------------- DATE ------------------- - ------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. - --------------------------------------------- ----------------------------------------, 1999 SIGNATURE DATE
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. - --------------------------------------------- ----------------------------------------, 1999 SIGNATURE DATE I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I
INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) of Shares tendered herewith, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" above, or (b) if such Shares are tendered for the account of a member firm of a registered national securities exchange, a member of the NASD, a commercial bank or trust company having an office, branch or agency in the United States or other institution that is a member of the Medallion Signature Guaranty Program (an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter of Transmittal. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by stockholders either if Share certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 4 of the Offer to Purchase. Certificates for tendered Shares, or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal prior to the Expiration Date. Stockholders whose certificates are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer prior to the Expiration Date may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the certificates (or a Book-Entry Confirmation) representing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the Nasdaq National Market operated by the National Association of Securities Dealers is open for business. If certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. The method of delivery of certificates for Shares and all other required documents, including delivery through any Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder. 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 (unless you are tendering all of the Shares you own). All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate number(s) and/or the number of Shares and any other required information should be listed on a separate signed schedule attached hereto. 4. PARTIAL TENDERS. (Not Applicable to stockholders who tender by book-entry transfer.) If fewer than all of the Shares evidenced by any certificate delivered to the Depositary 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 a case, new stock certificate(s) for the Shares that were evidenced by your old Share certificate(s), but were not tendered by you, will be sent to you (unless otherwise provided in the appropriate box on this Letter of Transmittal) as soon as practicable after the Expiration Date 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 alteration, enlargement or 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 of the tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any 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. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to or certificates for Shares not tendered or not purchased are to be issued in the name of a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificate(s) 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 otherwise provided 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 order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificate(s) for Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered holder(s), if a transfer tax is imposed for any reason other than the sale or transfer of Shares to Purchaser pursuant to the Offer, or if tendered certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or an exemption therefrom is submitted. Except as otherwise provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificate(s) listed in this Letter of Transmittal. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued, or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal, or if the check and/or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account at the Book-Entry Transfer Facility as such stockholder may designate under "Special Payment Instructions." If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer. 8. WAIVER OF CONDITIONS; IRREGULARITIES. Except as otherwise provided in the Offer to Purchase, the Purchaser also reserves the absolute right to waive any defect or irregularity in any tender of Shares. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, which determination shall be final and binding. The Purchaser reserves the absolute right to reject any or all tenders of Shares determined by it not to be in proper form or the acceptance for payment of or payment for tenders of Shares which may, in the opinion of the Purchaser's counsel, be unlawful. No tender of Shares will be deemed to have been properly made until all defects and irregularities relating thereto have been cured or waived. The Purchaser's interpretation of the terms and conditions of the Offer in this regard will be final and binding. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notification. 9. SUBSTITUTE FORM W-9. Under U.S. federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN"), generally the stockholder's social security or federal employer identification number, with certain other information, on the above Substitute Form W-9. Failure to provide the information on the form may subject the tendering stockholder or other payee to a $50 penalty. In addition, payments that are made to such stockholder or other payee with respect to Shares purchased pursuant to the Offer may be subject to 31% federal income tax withholding on the payment of the purchase price. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit the appropriate version of Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. The appropriate version of Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld, provided that the requested information is given to the Internal Revenue Service. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the Substitute Form W-9 certifying (i) that the TIN provided on the Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and (ii) that (a) such stockholder has not been notified by the Internal Revenue Service that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends or (b) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, if the stockholder or other payee does not provide a properly certified TIN to the Depositary within 60 days, the Depositary will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such stockholder if a TIN is provided to the Depositary within 60 days. The stockholder is required to give the Depositary the TIN (e.g. social security number or employer identification number) of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Share certificates. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for assistance may be directed to the Information Agent or the Dealer Manager at its address and telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained from the Information Agent or the Dealer Manager or from brokers, dealers, commercial banks or trust companies. 11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate evidencing Shares has been lost, destroyed or stolen, the tendering stockholder should promptly notify the Company's transfer agent. The tendering stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW: THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER: (FOR ELIGIBLE INSTITUTIONS ONLY) Tender & Exchange Department (212) 815-6213 Tender & Exchange Department P.O. Box 11248 CONFIRM FACSIMILE BY TELEPHONE: 101 Barclay Street Church Street Station (800) 507-9357 Receive and Deliver Window New York, NY 10286-1248 New York, NY 10286
Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers listed below. Additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials may be obtained from the Information Agent or the Dealer Manager as set forth below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: [LOGO] Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 or All Others Call Toll Free: (800) 223-2064 THE DEALER MANAGER FOR THE OFFER IS: [LOGO] 245 Park Avenue New York, New York 10167 Call Toll Free: (888) 225-1793 EX-99.(A)(3) 4 EXHIBIT 99(A)(3) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. TO SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION This Notice of Guaranteed Delivery or one substantially in the form hereof must be used to accept the Offer (as defined below) if certificates representing shares of voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), are not immediately available or all required documents cannot be delivered to The Bank of New York (the "Depositary"), on or prior to the Expiration Date (as defined in the Offer to Purchase (as defined below)), or the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or facsimile transmission (for Eligible Institutions only) or mail to the Depositary and must include a guarantee by an Eligible Institution (as defined in the Offer to Purchase). See Section 4 of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT BY MAIL: (FOR ELIGIBLE INSTITUTIONS COURIER: ONLY) Tender & Exchange (212) 815-6213 Tender & Exchange Department Department P.O. Box 11248 CONFIRM FACSIMILE BY 101 Barclay Street Church Street Station TELEPHONE: Receive and Deliver Window New York, NY 10286-1248 (800) 507-9357 New York, NY 10286
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery 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. Ladies and Gentlemen: The undersigned hereby tenders to Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 7, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase. Number of Shares .......................... Name(s) of Record Holder(s) ............... Certificate No(s). (if available): ........ Address(es): .............................. ........................................... ............................................ Area Code and Telephone Number(s): ............................................ If Share(s) will be tendered by book entry transfer, check box below / / The Depository Trust Company Account Number ............................ Signature(s): ............................. Date ......................................
THE GUARANTEE BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member firm of a registered national securities exchange, a member of the NASD, a commercial bank or trust company having an office, branch or agency in the United States or other institution that is a member of the Medallion Signature Guaranty Program (an "Eligible Institution"), hereby (a) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended and (b) guarantees to deliver to the Depositary, at one of its addresses set forth above, either the certificates representing all tendered shares, in proper form for transfer, a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or, in the case of book-entry delivery of Shares, an Agent's Message (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal within three National Association of Securities Dealers, Inc. Automated Quotation System trading days after the date of execution of this Notice of Guaranteed Delivery. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal (unless an Agent's Message is utilized) 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. Name of Firm: ............................. ............................................ (Authorized Signature) Address: .................................. Name: ..................................... (Please Type or Print) ........................................... Title: .................................... (Zip Code) Area Code and Telephone Number(s): .................. Date: .....................................
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(4) 5 EXHIBIT 99(A)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. AT $25.50 NET PER SHARE BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. May 7, 1999 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), to act as Dealer Manager in connection with the Purchaser's offer to purchase all outstanding shares of voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"), copies of which are enclosed herewith. 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 May 7, 1999. 2. Letter of Transmittal, to be used by stockholders of the Company in accepting the Offer. 3. Notice of Guaranteed Delivery for Shares to be used to accept the Offer if certificates for Shares and all other required documents are not immediately available or cannot be delivered to The Bank of New York, (the "Depositary") by the Expiration Date (as defined in the Offer to Purchase) or if the procedures for book-entry transfer cannot be completed by the Expiration Date. 4. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 5. Guidelines of the Internal Revenue Service for certification of Taxpayer Identification Number on Substitute Form W-9. 6. Return envelope addressed to the Depositary. 7. The letter to stockholders of the Company from the Chairman of the Board of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company and mailed to the shareholders of the Company. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn by the Expiration Date a number of Shares of the Company which, together with any Shares owned by Parent, the Purchaser and/or other subsidiaries of Parent, represents more than 50% of the total number of Shares then outstanding on a fully diluted basis, and (ii) the expiration of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder. The Offer is also subject to other terms and conditions contained in the Offer to Purchase. See the Introduction and Sections 1, 3 and 16. In order to accept the Offer, a duly executed and properly completed Letter of Transmittal and any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer of Shares, and any other required documents should be sent to the Depositary, and either certificates representing tendered Shares should be delivered to the Depositary, or Shares should be tendered by book-entry transfer into the Depositary's account maintained at The Depository Trust Company (the "Book-Entry Transfer Facility"), all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. If holders of shares wish to tender, but it is impracticable for them to forward their Share Certificates or other required documents on or prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified in Section 3 of the Offer to Purchase. The Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manager, as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for reasonable expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of the Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at their respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase. The offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. Very truly yours, BEAR, STEARNS & CO. INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, ANY AFFILIATE OF THE FOREGOING, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. EX-99.(A)(5) 6 EXHIBIT 99(A)(5) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. AT $25.50 NET PER SHARE BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. May 7, 1999 To Our Clients: Enclosed for your consideration are the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer") and other materials relating to the offer by Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), to purchase all outstanding shares of voting common stock, par value $0.01 per Share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is the letter to stockholders from the Company accompanied by the Solicitation/Recommendation on Schedule 14D-9 of the Company. Holders of Shares whose certificates for such Shares are not immediately available, or who cannot deliver their certificates and all other required documents to The Bank of New York (the "Depositary"), on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedures for book-entry transfer on a timely basis, must, if they want to tender in the Offer, tender their Shares according to the guaranteed delivery procedures set forth in Section 4 of the Offer to Purchase. WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all such Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: 1. The offered price is $25.50 per Share, net to you in cash, without any interest thereon, upon the terms and subject to the conditions set forth in the Offer. 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 AGREEMENT (AS DEFINED IN THE OFFER TO PURCHASE), HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. 4. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Friday, June 4, 1999, unless the Offer is extended. 5. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. 6. The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn by the Expiration Date a number of Shares of the Company which, together with any Shares owned by Parent, the Purchaser and/or other subsidiaries of Parent, represents more than 50% of the total number of Shares then outstanding on a fully diluted basis, and (ii) the expiration of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder. The Offer is also subject to other terms and conditions contained in the Offer to Purchase. See the Introduction and Sections 1, 3 and 16. 7. Payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (a) certificates for tendered Shares or timely confirmation of the book-entry transfer of such Shares into the account maintained by the Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 4 of the Offer to Purchase, (b) the Letter of Transmittal or a facsimile thereof, properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase), in connection with a book-entry delivery, and (c) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when certificates for or confirmations of book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility are actually received by the Depositary. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares 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 is being made on behalf of the Purchaser by Bear, Stearns & Co. Inc., the Dealer Manager for the Offer, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. If you wish to have us tender any or all of your Shares held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth below. An envelope to return your instructions to us is enclosed. PLEASE FORWARD YOUR INSTRUCTIONS TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE. The enclosed Letter of Transmittal is furnished to you as an example and should not be used to tender Shares. IF YOU AUTHORIZE THE TENDER OF YOUR SHARES, ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED ON THE INSTRUCTION FORM SET FORTH BELOW. INSTRUCTIONS WITH RESPECT TO: OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. AT $25.50 NET PER SHARE BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer") in connection with the offer by Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation to purchase all outstanding shares of voting common stock, par value $0.01 per Share (the "Shares"), of ABR Information Services, Inc, a Florida corporation (the "Company"), at a purchase price of $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase. This will instruct you to tender to the Purchaser the number of Shares indicated below (or if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to Be Tendered: ___________________ Shares* SIGN HERE Signature(s): __________________________________________________________________ Signature(s): __________________________________________________________________ (Print Name(s)): _______________________________________________________________ (Print Address(es)): ___________________________________________________________ (Area Code and Telephone Number(s)): ___________________________________________ (Taxpayer Identification or Social Security Number(s)): ________________________ Dated:____________________, 1999 ________________________ * Unless otherwise indicated, it will be assumed that you instruct us to tender all Shares held by us for your account. EX-99.(A)(6) 7 EXHIBIT 99(A)(6) NEWS RELEASE TRISH SCORPIO CERIDIAN CORPORATION 612/853-4717 JAMES P. O'DROBINAK ABR INFORMATION SERVICES 727/785-2819, X7207 CERIDIAN TO ACQUIRE ABR INFORMATION SERVICES IN $750 MILLION CASH TRANSACTION ACQUISITION POSITIONS CERIDIAN AS THE LEADING SINGLE SOURCE PROVIDER OF A FULL COMPLEMENT OF HUMAN RESOURCE SERVICES CERIDIAN TO LAUNCH CASH TENDER OFFER FOR ABR MINNEAPOLIS/PALM HARBOR, FL, May 3, 1999 - Ceridian Corporation (NYSE: CEN) and ABR Information Services, Inc. (NASDAQ: ABRX) jointly announced today that they have entered into a definitive agreement providing for Ceridian's acquisition of ABR at a price of $25.50 in cash per share in a transaction valued at approximately $750 million. ABR is a provider of comprehensive benefits administration, payroll, and human resource services to employers of all sizes. The cash for the transaction is expected to come from existing Ceridian cash and borrowings. While the transaction is expected to be slightly dilutive before synergies to Ceridian's projected earnings per share in 1999 and 2000, it will be immediately accretive to cash flow and is expected to significantly increase the growth rate of Ceridian's Human Resource business. Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Ceridian will commence an all-cash tender offer for all outstanding shares of ABR at a price of $25.50 per share. The offer is conditioned upon, among other things, there having been validly tendered, and not withdrawn prior to the expiration of the tender offer, a number of ABR shares which equals a majority of the shares outstanding on a fully diluted basis and the receipt of all necessary regulatory approvals. The transaction is expected to be completed in the second quarter. ABR (www.abr.com) is the nation's largest COBRA (Consolidated Omnibus Budget Reconciliation Act) compliance administrator and is a leading third party provider of open enrollment services, flexible spending account administration, and 401(k) and pension plan administration. The company also provides payroll and human resource information services to small businesses. ABR, which has achieved revenue growth in excess of 30 percent for 20 consecutive quarters, is expected to generate approximately $120 million of revenue for its 1999 fiscal year. The company serves more than 50,000 customers, a number of them Fortune 500 companies, and it employs approximately 1,500 people. Based in the Tampa/St. Petersburg area, ABR operates marketing/service centers in Florida, New Jersey, Pennsylvania, Virginia, Maryland, Wisconsin, Colorado, Arizona and California. Ceridian, which had total revenue of $1.2 billion in 1998, provides information services to customers in a number of markets, including human resources (HR). Its HR business generated $700 million of revenue in 1998; the business includes Ceridian Employer Services, a leading provider of HR information systems (HRIS) and outsourced payroll and tax filing services. "The addition of ABR builds on the solid base we have been creating since 1992 by expanding further into the fastest growing segments of the HR services market, including business process outsourcing, employee advisory services and retirement services," said Lawrence Perlman, chairman and chief executive officer of Ceridian. "The combined forces of Ceridian and ABR will create a powerful, agile and capable team to achieve the leadership position in HR outsourcing," said Ronald L. Turner, president and chief operating officer of Ceridian. "We will immediately be able to offer customers a combined payroll, tax filing, HRIS and benefits outsourcing solution, creating significant advantages for them, as well as for both enterprises. Both companies' business strategies, products sets, distribution channels, customer mixes and infrastructures are highly complementary. "Upon completion of the transaction, we will leverage the distribution channels of the two organizations to provide ABR's offerings into Ceridian's prospect and customer base, and vice versa," Turner said. "The combination of the two companies should create a logical, beneficial cross-selling opportunity. "Ceridian's new, feature-rich Source 500 HR information system and ABR's powerful new Maximilian benefits outsourcing system will combine to provide the strongest and most technically advanced product offering available today," Turner added. "ABR has grown rapidly due to the extraordinary efforts of a wonderful group of employees," said James E. MacDougald, ABR's founder, chairman and chief executive officer, who will continue to lead the business. "Given Ceridian's strong resources and product set, this new partnership will allow ABR to grow even faster in the future, and I look forward to being part of Ceridian. The transaction will be beneficial to ABR's customers and employees, and provide a significant premium to its shareholders." Bear, Stearns & Co. is financial advisor to Ceridian and dealer manager for the tender offer. The tender offer will be made only pursuant to definitive offering documents to be filed with the Securities and Exchange Commission. Goldman, Sachs & Co. is financial advisor to ABR. Ceridian Corporation (www.ceridian.com) is a leading information services company that serves the human resources, transportation and media information markets. Ceridian's human resources businesses, in addition to Ceridian Employer Services, include Ceridian Performance Partners, a provider of fully integrated workplace effectiveness solutions; Centrefile, a provider of payroll and human resources management solutions in the United Kingdom; and Usertech, a provider of computer user training and performance support programs. Ceridian's other businesses include Comdata, a provider of transaction processing and information services to the transportation industry, and Arbitron, a research company serving the media industry. ABR Information Services, Inc. provides comprehensive benefits administration, payroll and human resource services to employers seeking to outsource functions such as COBRA, HIPAA, payroll and tax deposit filings, flexible spending accounts, qualified plans and other services. ABR provides services to employers ranging in size from 20 to over 200,000 employees. ABR provides portability (primarily COBRA and HIPAA) services through the trade name CobraServ-Registered Trademark- and payroll and tax deposit filing services through the trade name PayAmerica-Registered Trademark-. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE STATEMENTS REGARDING CERIDIAN CORPORATION CONTAINED IN THIS RELEASE THAT ARE NOT HISTORICAL IN NATURE, PARTICULARLY THOSE THAT UTILIZE TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES," OR "PLANS," OR COMPARABLE TERMINOLOGY, ARE FORWARD-LOOKING STATEMENTS BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS, AND ENTAIL VARIOUS RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE SUCH MATERIAL DIFFERENCES INCLUDE CHANGES IN INTEREST RATES; THE ABILITY TO INCREASE REVENUE FROM CROSS-SELLING EFFORTS AND NEW PRODUCTS; SUCCESSFUL INTEGRATION OF THE PRODUCTS, TECHNOLOGIES AND OPERATIONS OF ABR; ACHIEVEMENT OF SATISFACTORY CUSTOMER RETENTION RATES; THE ABILITY TO EXPAND THE LOCAL FUELING MARKET BUSINESS; THE ABILITY TO IMPROVE OPERATING MARGINS IN THE HUMAN RESOURCE SERVICES BUSINESS; SUCCESSFUL IMPLEMENTATION OF SYSTEM UPGRADES AND CONVERSIONS; AND OTHER FACTORS THAT ARE DESCRIBED ON PAGE 15 OF CERIDIAN'S 1998 ANNUAL REPORT. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON INFORMATION AVAILABLE TO CERIDIAN ON THE DATE HEREOF, AND IT ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS ABOUT ABR THAT INVOLVE RISKS AND UNCERTAINTIES INCLUDING, BUT NOT LIMITED TO, RISKS SUCH AS: (i) POTENTIAL FOR UNFAVORABLE INTERPRETATION OF GOVERNMENT REGULATIONS OR NEW GOVERNMENT LEGISLATION; (ii) THE ABILITY TO ATTRACT AND RETAIN QUALIFIED SALES, INFORMATION SERVICES AND MANAGEMENT PERSONNEL; (iii) POTENTIAL INCREASES IN ABR'S COSTS; (iv) POTENTIAL LOSS OF ANY MATERIAL CUSTOMER; (v) THE FINANCIAL CONDITION OF ITS CLIENTS; (vi) THE IMPACT OF COMPETITION FROM EXISTING AND NEW ORGANIZATIONS; (vii) THE FAILURE TO MANAGE GROWTH AND SUCCESSFULLY INTEGRATE WITH CERIDIAN; AND (viii) OTHER FACTORS WHICH ARE DESCRIBED IN FURTHER DETAIL IN ABR'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON INFORMATION AVAILABLE TO ABR ON THE DATE HEREOF, AND IT ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. EX-99.(A)(7) 8 EXHIBIT 99(A)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated May 7, 1999, and the related Letter of Transmittal and is being made to all holders of Shares. The Purchaser (as defined below) is not aware of any jurisdiction where the making of the Offer is prohibited by the laws of such jurisdiction. If the Purchaser becomes aware of any jurisdiction the laws of which prohibit the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such laws. If after such good faith effort, the Purchaser cannot comply with such laws, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares 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 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 VOTING COMMON STOCK OF ABR INFORMATION SERVICES, INC. AT $25.50 NET PER SHARE BY SPRING ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CERIDIAN CORPORATION Spring Acquisition Corp., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of Ceridian Corporation, a Delaware corporation ("Parent"), is offering to purchase all outstanding shares of the voting common stock, par value $0.01 per share (the "Shares"), of ABR Information Services, Inc., a Florida corporation (the "Company"), at $25.50 per Share, net to the seller in cash, without any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 7, 1999 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"). Following the Offer, the Purchaser intends to effect the Merger (as described below). - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 4, 1999, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE (AS DEFINED BELOW) A NUMBER OF SHARES OF THE COMPANY WHICH, TOGETHER WITH ANY SHARES BENEFICIALLY OWNED BY PARENT, THE PURCHASER AND/OR OTHER SUBSIDIARIES OF PARENT, REPRESENTS MORE THAN 50% OF THE TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE PURCHASER ESTIMATES THAT APPROXIMATELY 15,399,404 SHARES WILL NEED TO BE VALIDLY TENDERED (AND NOT WITHDRAWN) TO SATISFY THE MINIMUM CONDITION. SEE SECTION 13 OF THE OFFER TO PURCHASE. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of April 30, 1999, by and among the Company, Parent and the Purchaser (the "Merger Agreement"). The Merger Agreement provides that, subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the "Effective Time"), the Purchaser will be merged with and into the Company, and the Company will survive and become a wholly owned subsidiary of Parent. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than Shares owned by Parent, the Purchaser or any other direct or indirect subsidiary of Parent or Shares that are owned by the Company or any of its direct or indirect subsidiaries and in each case not held on behalf of third parties, or Shares held by stockholders who properly exercise and perfect dissenters' rights, if any, under the Florida Business Corporation Act will be canceled, extinguished and converted into the right to receive, without interest, an amount in cash equal to $25.50 per Share or such higher price per Share as shall have been paid in the Offer. Stockholders of the Company do not have dissenters' rights as a result of the Offer. In addition, stockholders of the Company will not have dissenters' rights in connection with the Merger if on the record date fixed to determine the stockholders entitled to vote on or consent to the Merger, the Shares are listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. ("NASD") or are held of record by 2,000 or more of such stockholders. If, however, the Shares are not so listed or designated and are not held of record by at least 2,000 stockholders, then holders of Shares who do not vote or consent in favor of the Merger will have dissenters' rights. See Section 15 of the Offer to Purchase. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT, HAS 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 RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. Subject to the terms of the Merger Agreement, if any condition to the Purchaser's obligation to purchase Shares is not satisfied prior to the acceptance for payment for any such Shares, the Purchaser may (i) at a scheduled expiration date, terminate the Offer and return all tendered Shares to the tendering stockholders, (ii) extend the Offer and, subject to withdrawal rights as set forth in Section 3 of the Offer to Purchase, retain all such Shares until the expiration of the Offer as so extended, (iii) waive such condition (other than the Minimum Condition) and, subject to any requirement to extend the period of time during which the Offer is open, purchase all Shares validly tendered by the Expiration Date and not withdrawn; or (iv) delay acceptance for payment of Shares until satisfaction or waiver of the conditions of the Offer. For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment (and thereby purchased) tendered Shares as, if and when the Purchaser gives oral or written notice to the The Bank of New York (the "Depositary") of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. Payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payments to tendering stockholders. The Purchaser will not, under any circumstances, pay interest on the purchase price, regardless of any delay in making such payment. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing the Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and (iii) any other documents required by the Letter of Transmittal. Tenders of Shares made pursuant to the Offer will be irrevocable, except that Shares tendered may be withdrawn at any time prior to the Expiration Date and, unless previously accepted for payment, may also be withdrawn after July 5, 1999. The term "Expiration Date" means 12:00 midnight, New York City time, on Friday, June 4, 1999, unless the Purchaser 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. If the Purchaser is delayed in its acceptance or purchase of or payment for Shares or is unable to purchase or pay for Shares for any reason, then, without prejudice to the Purchaser's rights, tendered Shares may be retained by the Depositary on behalf of the Purchaser and may not be withdrawn except as described in the Offer to Purchase and subject to Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses specified on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and, if certificates representing such Shares have been delivered or otherwise identified to the Depositary, the name(s) in which such certificate(s) is (are) registered, if different from the name of the person tendering such Shares. If certificates have been delivered or otherwise identified to the Depositary, then prior to the physical release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing such Shares and the signature on the notice of withdrawal must be guaranteed by a member firm of a registered national securities exchange, a member of the NASD, a commercial bank or trust company having an office, branch or agency in the United States or any other institution that is a member of the Medallion Signature Guaranty Program (an "Eligible Institution"), unless such Shares have been tendered by an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry tender as set forth in Section 4 of the Offer of Purchase, the notice of withdrawal must specify the name and account number(s) of the account(s) at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. None of Parent, the Purchaser, the Dealer Manager, the Depositary or the Information Agent will be obligated to give notice of any defects or irregularities in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such notice. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. The Purchaser reserves the right, from time to time, to extend the period of time during which the Offer is open (but subject to the terms and conditions of the Merger Agreement) by giving oral or written notice of such extension to the Depositary. Any such extension will be followed, as soon as practicable, by public announcement thereof, no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company's stockholder list for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares and will be furnished to brokers, dealers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance or for additional copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations as set forth below, and copies will be furnished promptly at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer. THE INFORMATION AGENT FOR THE OFFER IS: [INSERT LOGO OF GEORGESON & COMPANY INC. HERE] Wall Street Plaza New York, New York 100005 Banks and Brokers Call Collect: (212) 440-9800 or All Others Call Toll Free: (800) 223-2064 THE DEALER MANAGER FOR THE OFFER IS: [INSERT LOGO OF BEAR, STEARNS & CO. INC. HERE] 245 Park Avenue New York, New York 10167 Call Toll Free: (888) 225-1793 May 7, 1999 EX-99.(A)(8) 9 EXHIBIT 99(A)(8) 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.
- ------------------------------------------------------------- GIVE THE NAME AND FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of the (joint account) account or, if combined funds, the first individual on the account(1)(6) 3. Husband and wife (joint The actual owner of the account) account or, if joint funds, the first individual on the account(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if the account) minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee incompetent person(3) for a designated ward, minor, or incompetent person 7. a. The usual revocable The grantor-trustee(1) savings trust account (grantor is also trustee) b. So-called trust The actual owner(1) account that is not a legal or valid trust under State law 8. Sole proprietorship The owner(4) account - -------------------------------------------------------------
- ------------------------------------------------------------- GIVE THE NAME AND FOR THIS TYPE OF ACCOUNT: EMPLOYER INDENTIFICATION NUMBER OF-- - ------------------------------------------------------------- 9. A valid trust, estate, The legal entity (do not or pension trust furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(5) 10. Corporate account The corporation 11. Religious, charitable, The organization or educational organization account 12. Partnership account The partnership 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 - -------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the individual name of the owner, but you may also enter your business or "doing business as" name. You may use either your social security number or employee identification number (if you have one). (5) List first and circle the name of the legal trust, estate or pension trust. (6) If joint foreign payees, every foreign payee must provide an applicable version of Form W-8, certifying their foreign status, or a joint payee who has not established foreign status must provide a taxpayer identification number on Form W-9, which number must be used for purposes of backup withholding and information reporting. Note: If no name is circled when there is more than one name listed, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON 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 Social Security Number Card or Form SS-4, Application for Employer Identification Number at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. Certain resident aliens may request an individual taxpayer identification number on Form W-7. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - An organization exempt from tax under Section 501(a) or an individual retirement plan. - The United States or any agency or instrumentality thereof. - A state, the District of Columbia, a possession of the United States or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency or instrumentality thereof. Other payees that may be exempt from backup withholding depending on the type of payment include the following: - A corporation. - A financial institution. - A dealer in securities or commodities required to register in the U.S. or a possession of the U.S. - A real estate investment trust. - A futures commission merchant registered with the Commodity Futures Trading Commission. - A common trust fund operated by a bank under Section 584(a). - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. - A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under Section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner. - Payments of patronage dividends not paid in money. - Payments made by certain foreign organizations. - Section 404(k) distributions made by an ESOP. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Mortgage interest paid to you. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE FORM W-9 WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE EXEMPT ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, BROKER PAYMENTS OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments, other than interest, dividends and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see Code sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N, and their regulations. PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(B)(3) 10 EXHIBIT 99(B)(3) May 4, 1999 Mr. Jack Eickhoff Chief Financial Officer Ceridian Corporation 8100 34th Avenue South Minneapolis, MN 55425-1640 Re: $450,000,000 SENIOR CREDIT FACILITY Dear Jack: Bank of America National Trust and Savings Association ("Bank of America") is pleased to offer its commitment to lend $450,000,000 (the "Facility"), upon and subject to the terms and conditions of this letter and the Summary of Terms and Conditions attached hereto (the "Summary of Terms"). NationsBanc Montgomery Securities LLC ("NMS") is pleased to advise you of its willingness to act as sole and exclusive Lead Arranger and Book Manager for the Facility and if required to form a syndicate of financial institutions (the "Lenders") reasonably acceptable to you for the Facility. If the Facility is syndicated, Bank of America will act as sole and exclusive Administrative Agent for the Facility and NMS will act as sole and exclusive Lead Arranger and Book Manager for the Facility. No additional agents, co-agents or arrangers will be appointed and no other titles will be awarded without our prior written approval. At Bank of America's option, NMS may commence syndication efforts, and you agree to actively assist NMS in achieving a syndication of the Facility that is satisfactory to it. Such assistance shall include (a) your providing and causing your advisors to provide us and the other Lenders upon request with all information reasonably deemed necessary by us to complete syndication; (b) assistance in the preparation of an Offering Memorandum to be used in connection with the syndication; (c) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from your existing lending relationships; and (d) otherwise assisting us in our syndication efforts, including by making senior management and advisors of the Borrower and its subsidiaries available from time to time to attend and make presentations regarding the business and prospects of the Borrower and its subsidiaries, as appropriate, at one or more meetings of prospective Lenders. It is understood and agreed that Bank of America and NMS, after consultation with you, will manage and control all aspects of the syndication, including decisions as to the selection of proposed Lenders and any titles offered to proposed Lenders, when commitments will be accepted and the final allocations of the commitments among the Lenders. It is understood that no Lender participating in the Facility will receive compensation from you in order to obtain its commitment, except on the terms contained herein and in the Summary of Terms. It is also understood and agreed that the amount and distribution of the fees among the Lenders will be at our sole discretion and that any syndication prior to execution of the definitive documentation for the Facility will reduce the commitment of Bank of America. Ceridian Corporation May 4, 1999 Page 2 The commitment of Bank of America hereunder and the agreement of NMS to provide the services described herein are subject to the agreement in the preceding paragraph and the satisfaction of each of the following conditions precedent in a manner acceptable to us in our reasonable judgment: (a) each of the terms and conditions set forth herein and in the Summary of Terms; (b) the completion of all due diligence with respect to the Borrower and its subsidiaries and any entity proposed to be acquired with the proceeds of the Facility ("Target Company") in scope and determination satisfactory to us in our reasonable judgment; (c) our satisfaction that prior to and during the syndication of the Facility there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of the Borrower other than the amount available under the existing Amended and Restated Credit Agreement and the amount obtained under the proposed $450,000,000 debt offering; (d) the negotiation, execution and delivery of definitive documentation for the Facility consistent with the Summary of Terms and otherwise satisfactory to us; (e) no change, occurrence or development that could, in our reasonable opinion, have a material adverse effect on the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries taken as a whole, or Target Company and its subsidiaries taken as a whole, shall have occurred or become known to us; and (f) our not becoming aware after the date hereof of any information or other matter which in our reasonable judgment is inconsistent in a material and adverse manner with any information or other matter relating to the Borrower, the Target Company or the contemplated transaction with the Target Company disclosed to us prior to the date hereof (in which case we may, in our reasonable judgment, suggest alternative financing amounts or structures that ensure adequate protection for us, or for the Lenders, or terminate this letter and any commitment or undertaking hereunder). You hereby represent, warrant and covenant that (a) all information, other than Projections (defined below), which has been or is hereafter made available to us or the Lenders by you or any of your representatives in connection with the transactions contemplated hereby (the "Information") is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and (b) all financial projections concerning the Borrower and its subsidiaries, or Target Company and its subsidiaries, that have been or are hereafter made available to us or the Lenders by you or any of your representatives (the "Projections") have been or will be prepared in good faith based upon assumptions you believe to be reasonable. You agree to furnish us with such Information and Projections as we may reasonably request and to supplement the Information and the Projections from time to time until the closing date for the Facility so that the representation, warranty and covenant in the preceding sentence is correct on such closing date. You understand that in arranging and syndicating the Facility, Bank of America and NMS will be using and relying on the Information and the Projections without independent verification thereof. By acceptance of this offer, the Borrower agrees to pay all reasonable out-of-pocket fees and expenses (including reasonable attorneys' fees and expenses, the allocated cost of internal counsel and due diligence expenses) incurred before or after the date hereof by us in connection with the Facility and any syndication thereof. You agree to indemnify and hold harmless Bank of America, NMS, each Lender and each of their affiliates and their directors, officers, employees, advisors and agents (each, an "Indemnified Party") from and against (and will reimburse each Indemnified Party as the same are incurred) any and all losses, claims, damages, liabilities, and expenses (including, without limitation, the reasonable fees and expenses of counsel and the allocated cost of internal counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) any matters contemplated by this letter, any related transaction, the Facility or any use made or proposed to be made with the proceeds thereof unless and only to the extent that, as to any Indemnified Party, it shall be determined in a final, nonappealable judgment by a court of competent jurisdiction that such losses, claims, damages, liabilities or expenses resulted primarily from the gross negligence or willful misconduct of such Ceridian Corporation May 4, 1999 Page 3 Indemnified Party. No Indemnified Party shall be liable for any damages arising from the use by others of Information or other materials obtained through internet, Intralinks or other similar information transmission systems in connection with the Facility. You agree that no Indemnified Party shall have any liability for any indirect or consequential damages in connection with its activities related to the Facility. The terms of this letter, the Summary of Terms and the fee letter between Bank of America and you (the "Fee Letter") are confidential and, except for disclosure on a confidential basis to your accountants, attorneys and other professional advisors retained by you in connection with the Facility or as may be required by law, may not be disclosed in whole or in part to any other person or entity without our prior written consent. We hereby specifically consent to the disclosure of this letter and the Summary of Terms (but NOT the Fee Letter) to Target Company and its stockholders and their respective attorneys, financial advisors, and accountants in connection with the tender offer with respect to Target Company (the "Transaction"), in any filing with the Securities and Exchange Commission or any other federal or state regulatory body in connection with the Transaction to the extent required by law, in a press release and other disclosure to the extent necessary to comply with applicable securities laws, at any time following (i) your signed acceptance hereof and (ii) the payment of the fees set forth in the Fee Letter to be paid upon your acceptance of this letter. Without limiting the foregoing, in the event that you disclose the contents of this letter or the Summary of Terms in contravention of the preceding sentence, you shall be deemed to have accepted the terms of this letter. Notwithstanding any such disclosure to any other person or entity, this letter sets forth the understanding among the parties hereto and may not be relied upon by any other person or entity (other than the Indemnified Parties). The provisions of the immediately preceding three paragraphs shall remain in full force and effect regardless of whether any definitive documentation for the Facility shall be executed and notwithstanding the termination of this letter or any commitment or undertaking hereunder. This letter and the Fee Letter shall be governed by laws of the State of California. This letter, together with the Summary of Terms and the Fee Letter, are the only agreements that have been entered into among us with respect to the Facility and set forth the entire understanding of the parties with respect thereto. This letter may be modified or amended only by the written agreement of all of us. This letter is not assignable by the Borrower without our prior written consent and is intended to be solely for the benefit of the parties hereto and the Indemnified Parties. This offer will expire at 5:00 p.m. Pacific standard time on May 6, 1999 unless you execute this letter and the Fee Letter and return them to us prior to that time (which may be by facsimile transmission), whereupon this letter and the Fee Letter (each of which may be signed in one or more counterparts) shall become binding agreements. Thereafter, this undertaking and commitment will expire on June 15, 1999 unless definitive documentation for the Facility is executed and delivered prior to such date. THIS WRITTEN AGREEMENT (WHICH INCLUDES THE SUMMARY OF TERMS AND CONDITIONS) AND THE FEE LETTER REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Ceridian Corporation May 4, 1999 Page 4 We are pleased to have the opportunity to work with you in connection with this important financing. Very truly yours, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: /s/ Name Illegible --------------------------------- Title: Vice President NATIONSBANC MONTGOMERY SECURITIES LLC By: /s/ Name Illegible --------------------------------- Title: Vice President Accepted and Agreed to as of May 6, 1999: CERIDIAN CORPORATION By: /s/ John H. Grierson --------------------------------- Title: Vice President and Treasurer Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- SUMMARY OF TERMS AND CONDITIONS CERIDIAN CORPORATION $450,000,000 SENIOR CREDIT FACILITY BORROWER: A wholly-owned subsidiary (the "Purchaser") of Ceridian Corporation (the "Borrower") will acquire by tender offer all (or in any event not less than the minimum amount necessary to permit a Purchaser to prevail in a vote for a merger between Purchaser and Acquired Company) of the outstanding shares ("Shares") of ABR Information Services (the "Acquired Company") at a per share price not to exceed $25.50 per share (the "Transaction"). LENDER: Bank of America National Trust and Savings Association ("Bank of America" or the "Bank"). INTERIM TERM LOAN: An unsecured, non-revolving term loan facility in the principal amount of $450,000,000 ("Facility") will be available upon the terms and conditions hereinafter set forth. PURPOSE: The proceeds of the Facility shall be used solely to capitalize the Purchaser in order to enable it to make any required payment for Shares in accordance with the Purchase Agreement (as defined below), to enable Borrower and the Purchaser to pay transaction fees and expenses required for the Transaction and to invest in cash equivalents until payment for the foregoing purposes is made. INTEREST RATES: As set forth in Addendum I. FEES/EXPENSES: As set forth in Addendum I and the Fee Letter. MATURITY: The Facility shall terminate and all amounts shall be due and payable 6 months from Closing. CLOSING: The date of execution of definitive loan documents. To occur on or before June 15, 1999. AVAILABILITY: Loans made under the Facility shall be available in not more than three borrowings within a period after Closing to be specified (coincident with the consummation of the Transaction), subject to conditions precedent as outlined below and the specified use of proceeds described above. MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS: This Facility shall be repaid and the commitment shall be reduced by 100% of the net proceeds of the planned $450,000,000 debt issuance, by the net proceeds of any equity issuance (other than pursuant to employee stock option exercise), or by the net proceeds of certain asset dispositions, in each case, by Borrower or Acquired Company. Optional prepayments will be permitted. - ------------------------------------------------------------------------------- Page 1 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- CONDITIONS PRECEDENT: Usual and customary for a transaction of this type, including but not limited to satisfactory results in all material respects from the following: (i) The completion of all due diligence, including receipt of combined projections, with respect to the Acquired Company in scope and determination satisfactory to Bank of America in its reasonable discretion. (ii) The negotiation, execution and delivery of definitive documentation for the Facility satisfactory to Bank of America, which shall include, without being limited to: (a) satisfactory opinions of counsel to the Borrower (which shall cover, among other things, authority, legality, validity, binding effect and enforceability of the documents for the Facility and non-contravention of laws and other contracts in relation to the facility and the Transaction) and of local counsel, (b) such corporate resolutions, certificates and other documents as Bank of America shall reasonably require, and (c) such other customary closing documents as Bank of America shall reasonably request. (iii) Bank of America's satisfactory review of the purchase agreement (including all schedules exhibits thereto) regarding the Acquired Company (the "Purchase Agreement"). The Purchase Agreement shall have been consummated in accordance with the terms thereof and in compliance with applicable law and regulatory approvals. The Purchase Agreement shall not be altered, amended or otherwise changed or supplemented or any condition therein waived, without the prior written consent of Bank of America. (iv) The proposed corporate capital and ownership structure (including articles of incorporation and by-laws), shareholders agreements and management of the Borrower and its subsidiaries (after giving effect to the Transaction), shall be satisfactory to Bank of America. (v) Bank of America shall have received and, in each case, approved the consolidated financial statements of the Acquired Company and its subsidiaries for a period to be determined, including balance sheets, income and cash flow statements audited by independent public accountants of recognized national standing and prepared in conformity with GAAP, a pro forma balance sheet of the Borrower and its subsidiaries as of the Closing Date giving effect to the Transaction and the transactions contemplated hereby and reflecting estimated purchase price accounting adjustments, reviewed by independent public accountants of recognized national standing, and such other information relating to the Transaction as Bank of America may require. - ------------------------------------------------------------------------------- Page 2 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- (vi) There shall not have occurred a material adverse change since December 31, 1998 for the Borrower, or since January 31, 1999 for the Acquired Company, in the business, assets, operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries or the Acquired Company or in the facts and information regarding such entities as represented to date. (vii) Receipt of all governmental, shareholder and third party consents (including Hart-Scott Rodino clearance) and approvals necessary or, in the opinion of Bank of America, desirable in connection with the consummation of the Transaction and the related financings and other transactions contemplated hereby and expiration of all applicable waiting periods without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on the Transaction or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the judgment of Bank of America could have such effect; compliance with margin regulations. (viii) No adverse litigation concerning the Transaction. (ix) The Borrower and its subsidiaries (including the Acquired Company) shall be in compliance with all existing financial obligations (after giving effect to the Transaction). (x) Receipt and review, with results satisfactory to the Administrative Agent and its counsel, of information regarding litigation, tax, accounting, labor, insurance, pension liabilities (actual or contingent), real estate leases, material contracts, debt agreements, property ownership, and contingent liabilities relative to the Acquired Company, the Borrower, and their respective subsidiaries. (xi) Bank of America shall have received all fees and expenses required to be paid on or before Closing. REPRESENTATIONS AND WARRANTIES: Usual and customary for financings of this type, including, but not limited to, the following: (i) corporate existence and status; (ii) corporate power and authority/enforceability; (iii) no violation of law or contracts or organizational documents; (iv) no material litigation (except as previously discussed in writing); (v) correctness of specified financial statements and other information and no material adverse change; (vi) no required governmental or third party approvals; (vii) use of proceeds/compliance with margin regulations; (viii) status under Investment Company Act; (ix) ERISA matters; (x) environmental matters; (xi) payment of taxes; (xii) accuracy of disclosure; (xiii) Year 2000 preparedness; and (xiv) consummation of the Transaction. - ------------------------------------------------------------------------------- Page 3 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- COVENANTS: The covenants from the Amended and Restated Credit Agreement dated December 12, 1995 ("Syndicated Facility") among Ceridian Corporation, Bank of America NT & SA as Agent, and The Financial Institutions a Party Thereto shall be restated, with such exceptions as Bank of America may agree. These covenants shall apply to the Facility even if the Amended and Restated Facility is terminated. The covenants may also include terms or conditions that are usual and customary for financings of this type generally and for this transaction in particular as determined by the Bank in its sole discretion, including, but not limited to, the following: (i) delivery of financial statements and other reports; (ii) delivery of compliance certificates; (iii) delivery of notices of default, material litigation and material governmental and environmental proceedings; (iv) compliance with laws (including environmental laws and ERISA matters) and material contractual obligations; (v) payment of taxes; (vi) maintenance of insurance; (vii) limitation on liens and negative pledges; (viii) limitation on mergers, consolidations and sales of assets; (ix) limitation on investments (including loans and advances) and acquisitions; (xi) limitation on transactions with affiliates; (xii) Year 2000 compliance; and (xiii) Purchaser shall merge with the Acquired Company by October 29, 1999. EVENTS OF DEFAULT: Usual and customary for financings of this type generally and for this transaction in particular, including, but not limited to, the following: (i) nonpayment of principal, interest, fees or other amounts, (ii) violation of covenants, (iii) inaccuracy of representations and warranties, (iv) cross-default to other material agreements and indebtedness, (v) bankruptcy and other insolvency events, (vi) material judgments, (vii) ERISA matters, (viii) actual or asserted invalidity of any loan documentation or security interests, or (ix) change of control. ASSIGNMENTS AND PARTICIPATIONS; SYNDICATION: The Bank will be permitted to make assignments in acceptable minimum amounts to other financial institutions approved by the Borrower, which approval shall not be unreasonably withheld (so long as no event of default under the Facility or incipient default has occurred and is continuing). The Bank will be permitted to sell participations with voting rights limited to significant, "money" matters. Such documentation shall contain representations and warranties, covenants and events of default that as the same those set forth in the initial, bilateral documentation. The cost of such additional documentation (including fees and expenses of counsel to Bank of America and to the Administrative Agent, NationsBanc Montgomery Securities LLC) shall be Borrower's responsibility. INDEMNIFICATION: The Borrower shall indemnify Bank of America and its affiliates from and against all losses, liabilities, claims, damages or expenses arising out of or relating to the Transaction, the Facility, the Borrower's use of loan proceeds or the commitments, including, but not limited to, reasonable attorneys' fees (including the allocated cost of internal counsel) and settlement costs. This indemnification shall survive and - ------------------------------------------------------------------------------- Page 4 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- continue for the benefit of the indemnitees at all times after the Borrower's acceptance of Bank of America's commitment for the Facility, notwithstanding any failure of the Facility to close. GOVERNING LAW: State of Illinois. - ------------------------------------------------------------------------------- Page 5 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- THIS SUMMARY OF TERMS AND CONDITIONS (THE "TERM SHEET") IS NOT MEANT TO BE, NOR SHALL IT BE CONSTRUED AS, AN ATTEMPT TO DESCRIBE ALL TERMS AND CONDITIONS THAT WOULD PERTAIN TO THE FACILITY, NOR DO ITS TERMS SUGGEST THE SPECIFIC PHRASING OF DOCUMENTATION CLAUSES. INSTEAD, IT IS INTENDED TO OUTLINE CERTAIN BASIC POINTS OF BUSINESS UNDERSTANDING AROUND WHICH THE FACILITY COULD BE STRUCTURED AND IS SUBJECT TO REVIEW OF LEGAL AND TAX ISSUES. - ------------------------------------------------------------------------------- Page 6 Confidential CERIDIAN CORPORATION - ------------------------------------------------------------------------------- ADDENDUM I FEES AND EXPENSES COMMITMENT FEE: The Borrower will pay a fee (the "Commitment Fee"), as set forth in the Fee Letter. INTEREST RATES: The Facility shall bear interest at a rate equal to LIBOR plus the Applicable Margin or the Alternate Base Rate (to be defined as the higher of (i) the Bank of America prime rate or (ii) the Federal Funds rate plus .50%). Such right of reimbursement shall be in addition to and not in limitation of customary cost and yield protections. The Applicable Margin shall be 75 basis points through day 90 (after Closing), 87.5 basis points through day 120 (after Closing) and 100 basis points thereafter, assuming maintenance at all times of investment grade senior unsecured debt ratings from Moody's and S&P; such margin may be subject to change under the loan agreement, based upon changes in such ratings. The Borrower may select interest periods of 1, 2, or 3 months (or such other periods acceptable to the Bank) for LIBOR loans, subject to availability. Interest shall be payable at the end of the selected interest period, but no less frequently than quarterly. A default rate shall apply on all loans in the event of default under the Facility at a rate per annum of 2% above the applicable interest rate. CALCULATION OF INTEREST AND FEES: Other than calculations in respect of interest at the Alternate Base Rate (which shall be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of interest and fees shall be made on the basis of actual number of days elapsed in a 360 day year. COST AND YIELD PROTECTION: Customary for transactions and Facility of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes. EXPENSES: The Borrower will pay all reasonable costs and expenses associated with the preparation, due diligence, administration, syndication and enforcement of all documentation executed in connection with the Facility, including, without limitation, the legal fees of counsel to Bank of America (including the allocated cost of internal counsel), regardless of whether or not the Facility is closed. The Borrower will also pay the expenses of Bank, the Administrative Agent, if any, and the Syndicate Banks in connection with the enforcement of any loan documentation for the Facility. - ------------------------------------------------------------------------------- Page 7 EX-99.(C)(1) 11 EXHIBIT 99(C)(1) Exhibit 99 (c)(1) AGREEMENT AND PLAN OF MERGER AMONG ABR INFORMATION SERVICES, INC. CERIDIAN CORPORATION AND SPRING ACQUISITION CORP. DATED AS OF APRIL 30, 1999 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"), dated as of April 30, 1999, among ABR Information Services, Inc., a Florida corporation (the "COMPANY"), Ceridian Corporation, a Delaware corporation ("PARENT"), and Spring Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of Parent ("MERGER SUB"). RECITALS WHEREAS, the respective boards of directors of each of Parent, Merger Sub and the Company have approved this Agreement and adopted the plan of merger set forth herein whereby Merger Sub will merge with and into the Company upon the terms and subject to the conditions set forth in this Agreement (the "MERGER"); WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE 1. THE TENDER OFFER 1.1. TENDER OFFER. (a) Provided that this Agreement shall not have been terminated in accordance with Article IX hereof and none of the events set forth in paragraphs (a) through (g) of Annex A hereto shall have occurred or be existing and the other conditions to the Offer specified in Annex A shall have been satisfied (together with such events, the "Offer Conditions"), as soon as reasonably practicable, and in any event within five Business Days after public announcement of this Agreement, Merger Sub will commence a tender offer (the "OFFER") for all of the outstanding Shares (as defined below) at a price of $25.50 per Share in cash, net to the seller, and, subject only to and in accordance with the terms and conditions of the Offer, accept for payment Shares that are validly tendered and not withdrawn immediately following (unless the Offer shall have been extended in accordance with the terms hereof) the later of (i) the date on which the waiting period under the HSR Act has expired or has been terminated and (ii) the twentieth Business Day after the commencement of the Offer; PROVIDED, HOWEVER, and notwithstanding anything to the contrary in the foregoing, it is understood and agreed that (A) if any of the Offer Conditions specified in paragraphs (a) through (h) of Annex A exists at the time of the scheduled expiration date of the Offer or if, the applicable waiting periods under the HSR Act have not expired or been earlier terminated, Merger Sub may extend and reextend the Offer on one or more occasions for periods of time (not to exceed ten Business Days for any particular extension) so that the expiration date of the Offer (as so extended) is as soon as reasonably practicable or advisable after the date on which the particular Offer Condition no longer exists, and (B) Merger Sub may extend and reextend the Offer on one or more occasions for periods of time (not to exceed ten Business Days for any particular extension) for an aggregate period not to exceed twenty Business Days if on such expiration date there shall not have been validly tendered and not withdrawn at least the number of Shares necessary to permit the Merger to be effected without a meeting of the Company's 1 stockholders, and; PROVIDED, FURTHER, that all extensions of the Offer made by Merger Sub (other than at the request of the Company) shall not extend the Offer beyond September 5, 1999. Parent and Merger Sub agree that until September 5, 1999 Merger Sub shall from time to time extend the Offer at such times as the Company may request for five Business Days for each extension, but shall in no event extend the Offer beyond September 5, 1999. Merger Sub shall not, without the prior written consent of the Company, decrease the price per Share offered in the Offer, change the form of consideration offered or payable in the Offer, decrease the numbers of Shares sought in the Offer, change the conditions to the Offer, impose additional conditions to the Offer, amend any term of the Offer in any manner adverse to the holders of Shares or waive the Minimum Conditions (as defined in Annex A). (b) As soon as reasonably practicable on the date the Offer is commenced, Merger Sub shall file a Tender Offer Statement on Schedule 14D-1 (the "SCHEDULE 14D-1") with the SEC with respect to the Offer. The Schedule 14D-1 shall contain an Offer to Purchase and forms of the related letter of transmittal and other documents relating to the Merger (which Schedule 14D-1, Offer to Purchase, letter of transmittal and other documents, together with any supplements or amendments thereto, are referred to herein collectively as the "OFFER DOCUMENTS"). Parent and Merger Sub agree that the Company and its counsel shall be given an opportunity to review the Schedule 14D-1 before it is filed with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents that shall have become false or misleading in any material respect, and Parent and Merger Sub further agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Parent and Merger Sub also agree that the Offer Documents shall comply with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations thereunder. (c) The Company's Board of Directors shall recommend acceptance of the Offer to its stockholders in a Solicitation/Recommendation Statement on Schedule 14D-9 (the "SCHEDULE 14D-9") to be filed with the Securities and Exchange Commission (the "SEC") substantially contemporaneously with the filing of the Schedule 14D-1; PROVIDED, HOWEVER, that if the Company's Board of Directors determines consistent with its fiduciary duties to amend or withdraw such recommendation, such amendment or withdrawal shall not constitute a breach of this Agreement. Merger Sub and its counsel shall be given an opportunity to review the Schedule 14D-9 before it is filed with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct any information provided by it for use in the Schedule 14D-9 that 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 disseminated to holders of shares, in each case as and to the extent required by the applicable federal securities laws. The Company also agrees that the Schedule 14D-9 shall comply with the requirements of the Exchange Act and the rules and regulations thereunder. (d) In connection with the Offer, if requested by Parent, the Company will promptly notify its Transfer Agent to furnish to Merger Sub a list, as of a recent date, of the names and addresses of the record holders of Shares and a copy of the names and addresses of participants identified in the most recent security position listing of any clearing agency which is within the access of the Company. If Merger Sub needs to disseminate amendments to the Offer Documents, the Company, if requested by Parent, shall furnish Merger Sub with updated names and addresses of record holders of Shares not previously furnished to Merger Sub which is within the access of the Company. For purposes of this Agreement, the term "Business Day" means any day other than Saturday, Sunday or a federal holiday. 2 ARTICLE 2. THE MERGER; CLOSING; EFFECTIVE TIME 2.1. THE MERGER. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING CORPORATION"), and the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger, except as set forth in Article III. The Merger shall have the effects specified in the Florida Business Corporation Act (the "FBCA"). 2.2. CLOSING. The closing of the Merger (the "CLOSING") shall take place (i) at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York at 10:00 A.M. on the business day on which the last to be satisfied or waived of the conditions set forth in Article VIII hereof shall be satisfied or waived in accordance with this Agreement or (ii) at such other place and time and/or on such other date as the Company and Parent may agree in writing (the "CLOSING DATE"). 2.3. EFFECTIVE TIME. As soon as practicable following the Closing, the Company and Parent will cause Articles of Merger reflecting the provisions set forth in this Agreement (the "ARTICLES OF MERGER") to be executed (by the Company and Merger Sub) and delivered for filing to the Department of State of the State of Florida (the "DEPARTMENT") as provided in Section 607.1105 of the FBCA. The Merger shall become effective at the time when the Articles of Merger have been duly filed with the Department or at such later time agreed by the parties in writing and provided in the Articles of Merger (the "EFFECTIVE TIME"). ARTICLE 3. ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION 3.1. THE ARTICLES OF INCORPORATION. The articles of incorporation of the Company as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation (the "ARTICLES"), until duly amended as provided therein or by applicable law, except that Article III of the articles of incorporation of the Company shall be amended in its entirety to read as follows: "The total number of shares of all classes of capital stock that the Corporation shall have authority to issue shall be 1,000 shares of Common Stock, par value $.01 per share." and Article IV of the articles of incorporation of the Company shall be amended in its entirety to read as follows: "The total number of directors of the Corporation shall be fixed from time to time pursuant to the by-laws of the Corporation." 3.2. THE BY-LAWS. The by-laws of the Company in effect at the Effective Time shall be the by-laws of the Surviving Corporation (the "BY-LAWS"), until thereafter amended as provided therein or by applicable law. 3 ARTICLE 4. OFFICERS AND DIRECTORS OF THE COMPANY AND THE SURVIVING CORPORATION 4.1. DIRECTORS. The directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Articles and the By-Laws as in effect from time to time. 4.2. OFFICERS. The officers of the Company at the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Articles and the By-Laws. 4.3. BOARD OF DIRECTORS. If requested by Parent, the Company shall to the extent permissible, promptly following the purchase by Merger Sub of Shares pursuant to the Offer in accordance with the terms hereunder, take all actions necessary (including calling a special meeting of the Board of Directors of the Company or the stockholders of the Company for this purpose) to cause natural Persons designated by Parent to become directors of the Company so that the total number of such natural Persons equals that number of directors, rounded up to the next whole number, which represents the product of (x) the total number of directors on the board of directors of the Company multiplied by (y) the percentage that the number of Shares so accepted for payment plus and shares beneficially owned by Parent or its affiliates on the date hereof bears to the number of Shares outstanding at the time of such acceptance for payment. At such time, the Company shall also cause persons designated by Parent to constitute 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. In furtherance thereof, the Company will increase the size of the board of directors of the Company, or use its reasonable efforts to secure the resignation of directors, or both, as is necessary to permit Parent's designees to be elected to the board of directors of the Company; PROVIDED, HOWEVER, that prior to the Effective Time, the board of directors of the Company shall always have at least three members who are neither officers of Parent nor designees, stockholders or affiliates of Parent ("Parent Insiders"). The Company's obligations to appoint designees to the board of directors of the Company now shall be subject to Section 14(f) of the Exchange Act and Rule 14(f)-l thereunder. The Company shall promptly take all actions required pursuant to such Section and Rule in order to fulfill its obligations under this Section 4.3 and shall include in the Schedule 14D-9 such information as is required under such Section and Schedule. Parent agrees to furnish to the Company all information concerning Parent's designees which may be necessary to comply with the foregoing and agrees that such information will comply with the Exchange Act and the rules and regulations thereunder and other applicable laws. Notwithstanding anything in this Agreement to the contrary, in the event that Parent's designees are elected to the Board of Directors of the Company after the acceptance for payment of Shares pursuant to the Offer and prior to the Effective Time, the affirmative vote of at least a majority of the directors of the Company who are not Parent Insiders shall be required to (a) amend or terminate this Agreement by the Company, (b) exercise or waive any of the Company's rights, benefits or remedies hereunder, (c) extend the time for performance of Parent's and Merger Sub's respective obligations hereunder, or (d) take any other action by the Company's Board of Directors under or in connection with this Agreement which would adversely affect the ability of the stockholders of the Company to receive the Merger Consideration. 4 ARTICLE 5. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES 5.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the Merger and without any action on the part of the holder of any capital stock of the Company: (a) MERGER CONSIDERATION. Each share of the voting Common Stock, par value $0.01 per share, of the Company (a "SHARE" and, collectively, the "SHARES") issued and outstanding immediately prior to the Effective Time (other than Shares owned by Parent, Merger Sub or any other direct or indirect Subsidiary of Parent (collectively, the "PARENT COMPANIES"), Shares that are owned by the Company or any direct or indirect Subsidiary of the Company and in each case not held on behalf of third parties or Shares that are owned by Dissenting Stockholders (collectively, "EXCLUDED SHARES")) shall be cancelled, extinguished and converted into the right to receive, without an interest, an amount in cash equal to $25.50 per Share (the "Merger Consideration") or such greater amount which may be paid pursuant to the Offer. At the Effective Time, all Shares shall no longer be outstanding and shall be cancelled and retired and shall cease to exist, and each certificate (a "CERTIFICATE") formerly representing any of such Shares (other than Excluded Shares) shall thereafter represent only the right to the Merger Consideration for each Share upon the surrender of such Certificate in accordance with Section 5.2 or the right, if any, to receive payment from the Surviving Corporation of the "fair value" of such Shares as determined in accordance with Section 607.1302 of the FBCA. (b) CANCELLATION OF SHARES. Each Excluded Share shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, shall be cancelled and retired without payment of any consideration therefor and shall cease to exist. (c) MERGER SUB. At the Effective Time, each share of Common Stock, par value $.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation. 5.2. SURRENDER OF CERTIFICATES. (a) PAYING AGENT. Immediately prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with a paying agent (the "PAYING AGENT"), selected by Parent (within 15 days after the date hereof) with the Company's prior approval for the benefit of the holders of Shares, an amount in cash sufficient in the aggregate to provide all funds necessary for the Paying Agent to make payments of the Merger Consideration to all holders of Shares, (such cash being hereinafter referred to as the "EXCHANGE FUND"). To the extent not required within five Business Days for payment with respect to surrendered Shares, proceeds in the Exchange Fund shall be invested by the Paying Agent, as directed by Parent (as long as such investments do not impair the rights of holders of Shares) in direct obligations of the United States of America, obligations for which the faith and credit of the United States of America is pledged to provide for the payment of principal and interest, or certificates of deposit issued by a commercial bank having at least $10 billion in assets, and any net earnings with respect thereto shall be paid to Parent as and when requested by the Parent; provided that at no time may the amount of the Exchange Fund be reduced below an amount necessary to make payments of the Merger Consideration to all Shares not theretofore submitted. (b) EXCHANGE PROCEDURES. At the Effective Time, the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Shares at the Effective Time (other than holders of Excluded Shares) (i) a letter of transmittal specifying that delivery of the Certificates shall be 5 effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates (or affidavits of loss in lieu thereof) to the Paying Agent, such letter of transmittal to be in such form and have such other provisions as Parent and the Company may reasonably agree, and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the amounts of cash payable hereunder to a Person other than the Person in whose name the surrendered Certificate is registered on the transfer books of the Company). Subject to Section 5.2(e), upon surrender of a Certificate for cancellation to the Paying Agent together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a check in an amount equal to (after giving effect to any required tax withholdings) the Merger Consideration multiplied by the number of Shares formerly represented by such Certificate and the Certificate so surrendered shall forthwith be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, a check in the amount payable hereunder, upon due surrender of the Certificate, may be paid to such a transferee if the Certificate formerly representing such Shares is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer. For the purposes of this Agreement, the term "PERSON" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature. (c) TRANSFERS. After the Effective Time, there shall be no transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates evidencing ownership of Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares except as otherwise provided for herein or by applicable law. (d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund that remains unclaimed by the stockholders of the Company for one year after the Effective Time shall be returned to Parent. Any stockholders of the Company who have not theretofore complied with this Article V shall thereafter look only to Parent for payment of the Merger Consideration upon due surrender of their Certificates (or affidavits of loss in lieu thereof), in each case, without any interest thereon. (e) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the amount of cash such Persons are entitled to hereunder upon due surrender of the Shares represented by such Certificate pursuant to this Agreement. 5.3. DISSENTERS' RIGHTS. Notwithstanding anything in this Agreement to the contrary, if available under the FBCA, Shares that are issued and outstanding immediately prior to the Effective Time and which are held by stockholders ("Dissenting Stockholders") who have not voted in favor of or consented to the Merger and in the manner provided in Section 607.1320 of the FBCA shall have delivered a written notice of intent to demand payment for such Shares if the Merger is effectuated in the time and manner provided in FBCA and shall not have failed to perfect or shall not have effectively withdrawn or lost their rights to appraisal and payment under the FBCA shall not be converted into the right to receive the Merger Consideration, but shall, in lieu thereof, be entitled to receive the consideration as shall be determined pursuant to Sections 607.1301 through 607.1320 of the FBCA; 6 PROVIDED, HOWEVER, that any such holder who shall have failed to perfect or shall have effectively withdrawn or lost his, her or its right to appraisal and payment under the FBCA, shall thereupon be deemed to have had such Person's Shares converted, at the Effective Time, into the right to receive the Merger Consideration set forth herein, without any interest thereon. 5.4. ADJUSTMENTS TO PREVENT DILUTION. In the event that the Company changes the number of Shares or securities convertible or exchangeable into or exercisable for Shares, issued and outstanding prior to the Effective Time as a result of a reclassification, stock split (including a reverse split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Merger Consideration shall be equitably adjusted. ARTICLE 6. REPRESENTATIONS AND WARRANTIES 6.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in the disclosure letter delivered to Parent by the Company on or prior to entering into this Agreement (the "COMPANY DISCLOSURE LETTER"), the Company hereby represents and warrants to Parent and Merger Sub that: (a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing or of active status, as applicable, under the laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership or operation of its properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not have a Company Material Adverse Effect. The Company has made available to Parent complete and correct copies of the Company's and its Subsidiaries' articles of incorporation and by-laws (or comparable governing instruments), as amended to the date hereof. The Company's and its Subsidiaries' articles of incorporation and by-laws (or comparable governing instruments) so delivered are in full force and effect. As used in this Agreement, the term "SUBSIDIARY" means, with respect to the Company, Parent or Merger Sub, as the case may be, any entity, whether incorporated or unincorporated, of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such party or by one or more of its respective Subsidiaries or by such party and any one or more of its respective Subsidiaries. As used in this Agreement, the term "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on the financial condition, properties, business or results of operations of the Company and its Subsidiaries taken as a whole; PROVIDED, HOWEVER, that any such effect resulting from any change (i) in law, rule, regulation or generally accepted accounting principles ("GAAP") or interpretations thereof, (ii) in economic or business conditions generally which does not have a disproportionate effect on the Company and its Subsidiaries taken as a whole or (iii) resulting from the execution and delivery of this Agreement and the contemplated consummation of the transactions contemplated hereby shall not be considered when determining if a Company Material Adverse Effect has occurred. 7 (b) CAPITAL STRUCTURE. The authorized capital stock of the Company consists of 100,000,000 Shares, of which 28,762,983 Shares were outstanding as of the close of business on April 29, 1999, 250,000 shares of nonvoting common stock par value $0.01 per share, of the Company, of which no shares were outstanding as of the date hereof and 2,000,000 shares of Preferred Stock, par value $0.01 per share (the "PREFERRED SHARES"), of the Company, of which no shares were outstanding as of the date hereof. All of the issued and outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares reserved for or subject to issuance, except that, as of April 29, 1999, there were 3,313,104 Shares reserved in the aggregate for issuance pursuant to the Company 1997 Stock Option Plan, the Company 1993 Amended and Restated Stock Option Plan, the Company 1987 Amended and Restated Stock Option Plan, the Company 1995 Non-Employee Director Stock Option Plan and the Company 1996 Non-Employee Director Stock Option Plan (collectively, the "STOCK PLANS"). Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by the Company or a direct or indirect wholly-owned Subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or to sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("VOTING DEBT"). (c) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS. (i) The Company has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement and to consummate, subject only to approval of this Agreement by the holders of a majority of the outstanding Shares, the Merger. This Agreement has been duly executed and delivered by the Company, and assuming due authorization, execution and delivery of this Agreement by Parent and Merger Sub, is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY EXCEPTION"). (ii) The Board of Directors of the Company (A) has approved this Agreement and the Offer and adopted the plan of merger set forth herein and (B) has received the opinion of its financial advisors, Goldman, Sachs & Co., to the effect that the Merger Consideration and the consideration to be paid pursuant to the Offer pursuant to this Agreement are fair from a financial point of view to the holders of Shares. (d) GOVERNMENTAL FILINGS; NO VIOLATIONS. (i) Other than the filings and/or notices (A) pursuant to the FBCA, (B) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), and (C) under the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), no notices, reports or other filings are required to be made by the Company with, nor are any consents, registrations, approvals, permits or 8 authorizations required to be obtained by the Company from, any governmental or regulatory authority, agency, commission, body or other governmental entity (each a "GOVERNMENTAL ENTITY"), in connection with the execution and delivery of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated hereby, except for those that the failure to make or obtain would not have a Company Material Adverse Effect or prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. (ii) The execution, delivery and performance of this Agreement by the Company do not, and the consummation by the Company of the Merger and the other transactions contemplated hereby will not, constitute or result in (A) a breach or violation of, or a default under, either the articles of incorporation of the Company or by-laws of the Company or the comparable governing instruments of any of its Subsidiaries, (B) a breach or violation of, or a default under, the acceleration of any obligations or the creation of a lien, pledge, security interest or other encumbrance on the assets of the Company or any of its Subsidiaries (with or without notice, lapse of time or both) pursuant to, any agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation ("CONTRACTS") or any Law or governmental or non-governmental permit or license to which the Company or any of its Subsidiaries is subject or (C) any change in the rights or obligations of any party under any of the Contracts, except, in the case of clause (B) or (C) above, for any breach, violation, default, acceleration, creation or change that would not have a Company Material Adverse Effect or prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. (e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has made available to Parent each registration statement, report, proxy statement or information statement filed by it since July 31, 1997 and prior to the date hereof, including (i) the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1998, and (ii) the Company's Quarterly Reports on Form 10-Q for the quarterly periods ended October 31, 1998, and January 31, 1999, each in the form (including exhibits, annexes and any amendments thereto) filed with the Securities and Exchange Commission (the "SEC") (collectively, including amendments of any such reports as amended, the "COMPANY REPORTS"). Each of the consolidated balance sheets included in or incorporated by reference into the Company Reports (including the related notes and schedules) fairly presents the consolidated financial position of the Company and its Subsidiaries as of its date and each of the consolidated statements of income and of consolidated statements of cash flow included in or incorporated by reference into the Company Reports (including any related notes and schedules) fairly presents the results of operations, retained earnings and changes in financial position, as the case may be, of the Company and its Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to the absence of notes and normal year-end audit adjustments), in each case in accordance with GAAP consistently applied during the periods involved, except as may be noted therein. None of the Company Reports (in the case of Company Reports filed pursuant to the Securities Act), as of their effective dates, contains any untrue statement of a material fact or omits 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 and none of the Company Reports (in the case of Company Reports filed pursuant to the Exchange Act), as of their respective dates contains any statement which, at the time and in the light of the circumstances under which it was made, was false or misleading with respect to any material fact, or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since January 1, 1996, no Subsidiary of the Company has been required to file any forms, reports or other documents with the SEC. 9 (f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company Reports or as permitted hereunder, since July 31, 1998 (the "Audit Date"), the Company and its Subsidiaries taken as a whole have conducted their business only in, and have not engaged in any material transaction other than according to, the ordinary and usual course of such business and there has not been (i) any change in the financial condition, properties, business or results of operations of the Company and its Subsidiaries that has had a Company Material Adverse Effect; (ii) any material damage, destruction or other casualty loss with respect to any material asset or material property owned, leased or otherwise used by the Company or any of its Subsidiaries, not covered by insurance; (iii) any declaration, setting aside or payment of any dividend or other distribution in respect of the capital stock of the Company; or (iv) any change by the Company in accounting principles, practices or methods which is not required or permitted by GAAP. Since the Audit Date and through the date hereof, except as provided for herein or as disclosed in the Company Reports, there has not been any material increase in the compensation payable or that could become payable by the Company or any of its Subsidiaries to officers or key employees or any material amendment of any of the Compensation and Benefit Plans other than increases or amendments in the ordinary course which increases or amendments have not had a Company Material Adverse Effect. (g) LITIGATION AND LIABILITIES. Except as disclosed in the Company Reports, there are no civil, criminal or administrative actions, suits, claims, hearings, investigations or proceedings pending or, to the knowledge of the executive officers of the Company, threatened against the Company or any of its Subsidiaries, except for those that would not have a Company Material Adverse Effect or prevent or materially burden or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature (whether absolute, accrued or contingent)which would have a Company Material Adverse Effect except (i) liabilities or obligations that are accrued for or reserved against in the Company's consolidated balance sheet as of January 31, 1999 and (ii) liabilities or obligations arising since January 31, 1999 in the ordinary course of business and consistent with past practice. (h) EMPLOYEE BENEFITS. (i) A copy of each bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock, stock option, employment, termination, severance, compensation, medical, health, life, disability, cafeteria, paid time off, perquisites, fringe benefits or other plan, agreement, policy or arrangement that covers employees or former employees of the Company and/or its Subsidiaries ("EMPLOYEES"), or directors or former directors of the Company and/or its Subsidiaries (the "COMPENSATION AND BENEFIT PLANS") and any trust agreement or insurance contract forming a part of such Compensation and Benefit Plans has been made available or provided to Parent prior to the date hereof. The Compensation and Benefit Plans are listed in Section 6.1(h) of the Company Disclosure Letter and any Compensation and Benefit Plans containing "change of control" or similar provisions therein are specifically identified in Section 6.1(h) of the Company Disclosure Letter. (ii) All Compensation and Benefit Plans covering Employees (the "PLANS") have been operated in all material respects in accordance with their terms and in substantial compliance with all applicable Laws. Each Plan that is an "employee pension benefit plan" within the meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (a "PENSION PLAN") and that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service (the "IRS") with respect to "TRA" (as defined in Section 1 of Rev. Proc. 93-39), and none of the executive officers of the Company has knowledge of any circumstances reasonably likely to result in revocation of any such favorable 10 determination letter. There is no material pending or, to the knowledge of the executive officers of the Company, threatened litigation relating to the Compensation and Benefit Plans. Neither the Company nor any of its Subsidiaries has engaged in a transaction with respect to any Plan that, assuming the taxable period of such transaction expired as of the date hereof, would subject the Company or any of its Subsidiaries to a material tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA. (iii) No liability under Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by the Company or any Subsidiary with respect to any ongoing, frozen or terminated "single-employer plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any of them, or the single-employer plan of any entity which is considered one employer with the Company under Section 4001 of ERISA or Section 414 of the Code (an "ERISA AFFILIATE"). The Company and its Subsidiaries have not incurred and do not expect to incur, directly or indirectly, any withdrawal liability with respect to a multiemployer plan under Subtitle E to Title IV of ERISA. No notice of a "reportable event", within the meaning of Section 4043 of ERISA for which the 30-day reporting requirement has not been waived, has been required to be filed for any Pension Plan or by any ERISA Affiliate within the 12-month period ending on the date hereof or will be required to be filed in connection with the transactions contemplated by this Agreement. (iv) All contributions and premiums required to be made under the terms of any Compensation and Benefit Plan as of the date hereof have been timely made or have been reflected on the most recent consolidated balance sheet filed or incorporated by reference in the Company Reports. Neither any Pension Plan nor any single-employer plan of an ERISA Affiliate has an "accumulated funding deficiency," within the meaning of Section 412 of the Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding funding waiver (whether or not waived) as of the last day of the most recent plan year ended prior to the date hereof. Neither the Company nor its Subsidiaries has provided, or is required to provide, security to any Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code. No insurance policy or Contract with respect to any Compensation and Benefit Plans requires or permits retroactive increases in premiums or payments due thereunder. (v) Under each Pension Plan which is a single employer plan, as of the last day of the most recent plan year ended prior to the date hereof, the actuarially determined present value of all "benefit liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the actuarial assumptions contained in the Pension Plan's most recent actuarial valuation), did not exceed the then current value of the assets of such Pension Plan, and there has been no material change in the financial condition of such Pension Plan since the last day of the most recent plan year. (vi) Neither the Company nor its Subsidiaries have any obligations for retiree health and life benefits under any Compensation and Benefit Plan. (vii) The consummation of the Merger and the other transactions contemplated by this Agreement will not (x) entitle any Employees to severance pay, (y) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any of the Compensation and Benefit Plans or (z) result in any breach or violation of, or a default under, any of the Compensation and Benefit Plans. The Company may amend or terminate any Compensation and Benefit Plan in accordance with its express terms or under applicable Law. 11 (viii) Notwithstanding anything to the contrary contained in this Section 6.1(h), the representations and warranties contained in this Section 6.1(h) shall be deemed to be true and correct unless such failures to be true and correct are reasonably likely to have a Company Material Adverse Effect. (i) COMPLIANCE WITH LAWS. The business of the Company and its Subsidiaries is not being conducted in violation of any federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental Entity (collectively, "LAWS"), except for violations that would not have a Company Material Adverse Effect or prevent or materially burden or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. No investigation or review by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or, to the knowledge of the executive officers of the Company, threatened, nor has any Governmental Entity indicated an intention to conduct the same, except for those the outcome of which would not have a Company Material Adverse Effect or prevent or materially burden or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. The Company and its Subsidiaries each has all permits, licenses, franchises, variances, exemptions, orders and other governmental authorizations, consents and approvals from Governmental Entities necessary to conduct its business as presently conducted, except for those the absence of which would not have a Company Material Adverse Effect or prevent or materially burden or materially impair the ability of the Company to consummate the Merger and the other transactions contemplated by this Agreement. (j) TAKEOVER STATUTES. No "fair price," "moratorium," "control share acquisition," "interested stockholder" or other similar anti-takeover statute or regulation (including, without limitation, Sections 607.0901 and 607.0902 of the FBCA) (each a "TAKEOVER STATUTE") or restrictive provision of any applicable anti-takeover provision in the articles of incorporation of the Company or by-laws of the Company is, applicable to the Company, the Shares, the Offer, the Merger or any of the other transactions contemplated by this Agreement. (k) ENVIRONMENTAL MATTERS. Except as disclosed in the Company Reports and except for such matters that would not have a Company Material Adverse Effect: the Company and its Subsidiaries (i) are in substantial compliance with all applicable Environmental Laws; (ii) have not received any notice from any Governmental Entity or any third party alleging any violation of, or liability under, any applicable Environmental Laws; (iii) are not subject to any court order, administrative order or decree arising under any Environmental Law; (iv) to the knowledge of the executive officers of the Company do not own or operate any property that has been contaminated with any Hazardous Substance and (v) are not subject to any claims, demands or notifications concerning liability for any Hazardous Substance disposal or contamination. Parent and Merger Sub acknowledge that the representations and warranties contained in this Section 6.1(k) are the only representations and warranties being made by the Company with respect to compliance with, or liability or claims under, Environmental Laws or with respect to permits issued or required under Environmental Laws, that no other representation by the Company contained in this Agreement shall apply to any such matters and that no other representation or warranty, express or implied, is being made with respect thereto. As used herein, the term "ENVIRONMENTAL LAW" means any federal, state, local or foreign statute, law, regulation, order, decree, permit, authorization, common law or agency requirement as in effect and as interpreted relating to: (A) the protection, investigation or restoration of the environment, 12 health, safety, or natural resources or (B) the handling, use, presence, disposal, release or threatened release of, or exposure to, any Hazardous Substance. As used herein, the term "HAZARDOUS SUBSTANCE" means any substance that is listed, classified or regulated pursuant to any Environmental Law including any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive material or radon. (l) TAXES. The Company and each of its Subsidiaries (i) have duly and timely filed (taking into account any extension of time within which to file) all Tax Returns (as defined below) required to be filed by any of them and all such filed Tax Returns are complete and accurate in all material respects; (ii) have paid all Taxes (as defined below) that are shown as due on such filed Tax Returns or that the Company or any of its Subsidiaries are obligated to withhold from amounts owing to any employee, creditor or third party, except with respect to matters contested in good faith and would not have a Company Material Adverse Effect; and (iii) have not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, except, in each case, for those failures to file or pay or those waivers that would not have a Company Material Adverse Effect. There are not pending or, to the knowledge of the executive officers of the Company, threatened in writing, any audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters. As used in this Agreement, (i) the term "TAX" (including, with correlative meaning, the terms "TAXES", and "TAXABLE") includes all federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severances, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions, and (ii) the term "TAX RETURN" includes all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes. (m) LABOR MATTERS. Neither the Company nor any of its Subsidiaries is the subject of any proceeding asserting that the Company or any of its Subsidiaries has committed an unfair labor practice nor is there pending or, to the knowledge of the executive officers of the Company, threatened, nor since January 1, 1996 has there been any labor strike, dispute, walk-out, work stoppage, slow-down or lockout involving the Company or any of its Subsidiaries, except in each case for those that would not have a Company Material Adverse Effect or prevent or materially burden or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement. (n) INTELLECTUAL PROPERTY. (i) The Company and/or one or more of its Subsidiaries owns, or is licensed or otherwise possesses valid rights to use, all patents, trademarks, trade names, service marks, copyrights, and any applications therefor, technology, know-how, computer software programs or applications, and tangible or intangible proprietary information or materials that are used in the business of the Company and its Subsidiaries, except for any such failures to own, be licensed or possess that would not have a Company Material Adverse Effect, and to the knowledge of the executive officers of the Company all patents, trademarks, trade names, service marks and copyrights owned by the Company 13 and/or its Subsidiaries are valid and subsisting, except for those that would not have a Company Material Adverse Effect. (ii) Except as disclosed in Company Reports or except as would not have a Company Material Adverse Effect: (A) the Company is not, nor will it be as a result of the execution and delivery of this Agreement or the performance of its obligations hereunder, in violation of any licenses, sublicenses and other agreements as to which the Company is a party as of the date hereof and pursuant to which the Company is authorized to use any third-party patents, trademarks, service marks, copyrights, trade secrets or computer software (collectively, "THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS"); (B) no claims with respect to (I) the patents, registered and material unregistered trademarks and service marks, registered copyrights, trade names, and any applications therefor, trade secrets or computer software owned by the Company or any of its Subsidiaries (collectively, the "COMPANY INTELLECTUAL PROPERTY RIGHTS"); or (II) Third-Party Intellectual Property Rights are currently pending or, to the knowledge of the executive officers of the Company, are threatened by any Person; (C) to the knowledge of the executive officers of the Company there are not any valid grounds for any bona fide claims (I) to the effect that the sale, licensing or use of any service as used, sold or licensed by the Company or any of its Subsidiaries, infringes on any copyright, patent, trademark, service mark or trade secret; (II) against the use by the Company or any of its Subsidiaries of any Company Intellectual Property Rights or the Third-Party Intellectual Property Rights used in the business of the Company or any of its Subsidiaries as currently conducted; (III) challenging the ownership, validity or enforceability of any of the Company Intellectual Property Rights; or (IV) challenging the license or legally enforceable right to use of the Third-Party Intellectual Rights by the Company or any of its Subsidiaries; and (D) to the knowledge of the executive officers of the Company, there is no unauthorized use, infringement or misappropriation of any of the material Intellectual Property Rights by any third party, including any employee or former employee of the Company or any of its Subsidiaries. (o) BROKERS AND FINDERS. Except for Goldman, Sachs & Co., neither the Company nor any of its officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders' fees in connection with the Merger or the other transactions contemplated by this Agreement. (p) YEAR 2000. The Company has developed a plan which it reasonably believes is designed to confirm that all computer software and systems (including hardware, firmware, operating system software, utilities, embedded processors and application's software) used in and material to the business of the Company are designed to operate during and after the calendar year 2000 to accurately process data (including but not limited to calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries, including leap year calculations and the Company is not aware of any flaws in any of the computer software and systems owned by it and used in and material to the business of the Company that would have a Company Material Adverse Effect. 14 (q) WAIVER OF VESTING. The individuals listed in Schedule 6.1(q) of the Company Disclosure Letter have waived all vesting rights that they may have pursuant to the terms of Section 7.8 hereof with respect to all options to purchase shares beneficially owned by them and issued pursuant to the Stock Plans. The Company has provided Parent with copies of each such waiver. (r) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations and warranties contained in this Section 6.1, neither the Company nor any other Person makes any other express or implied representation or warranty on behalf of the Company or any of its Affiliates. 6.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Except as set forth in the disclosure letter delivered to the Company by Parent on or prior to entering into this Agreement (the "PARENT DISCLOSURE LETTER"), Parent and Merger Sub each hereby represent and warrant to the Company that: (a) CAPITALIZATION OF MERGER SUB. The authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock, par value $.01 per share, of Merger Sub all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent, and there are (i) no other shares of capital stock or voting securities of Merger Sub authorized, (ii) no securities of Merger Sub convertible into or exchangeable for shares of capital stock or voting securities of Merger Sub and (iii) no options or other rights to acquire from Merger Sub, and no obligations of Merger Sub to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Merger Sub. Merger Sub has not conducted any business prior to the date hereof and has no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to or in connection with this Agreement, the Offer and the Merger and the other transactions contemplated by this Agreement. (b) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing (or active status) under the laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing (or active status) as a foreign corporation in each jurisdiction where the ownership or operation of its properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not have a Parent Material Adverse Effect. Parent has made available to the Company a complete and correct copy of Parent's and Merger Sub's certificates of incorporation and by-laws (or comparable governing instruments), as amended to the date hereof. Parent's and Merger Sub's certificates of incorporation and by-laws (or comparable governing instruments) so delivered are in full force and effect. As used in this Agreement, the term "PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on the financial condition, properties, business or results of operations of Parent and its Subsidiaries taken as a whole; PROVIDED, HOWEVER, that any such effect resulting from any change in law, rule, or regulation or GAAP or interpretations thereof shall not be considered when determining if a Parent Material Adverse Effect has occurred. (c) CAPITAL STRUCTURE. As of the most recently filed Quarterly Report on Form 10-Q of Parent, the authorized, issued and outstanding capital stock of Parent is as stated therein. Each of the outstanding shares of capital stock or other securities of each of Parent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by Parent or a direct or indirect 15 wholly-owned Subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth in the most recently filed Quarterly Report on Form 10-Q of Parent and in the ordinary course of business, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of Parent or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter ("PARENT VOTING DEBT"). (d) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS. (i) No vote of holders of capital stock of Parent is necessary to approve this Agreement, the Offer and the Merger and the other transactions contemplated hereby. Each of Parent and Merger Sub has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement, and to consummate the Merger and the transactions contemplated hereby. The consummation of the transactions contemplated hereby has been duly authorized by the respective Boards of Directors of Parent and Merger Sub and no other corporate proceeding on the part of Parent or Merger Sub is necessary to authorize the execution and delivery of this Agreement by Parent and Merger Sub and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming due authorization, execution and delivery of this Agreement by the Company, is a valid and legally binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy and Equity Exception. (ii) The Board of Directors of Parent has received the opinion of its financial advisors, Bear Stearns & Co. Inc., to the effect that the Merger Consideration and the Consideration to be paid in the Offer are fair, from a financial point of view, to Parent. (e) GOVERNMENTAL FILINGS; NO VIOLATIONS. (i) Other than the filings and/or notices (A) pursuant to the FBCA, (B) under the HSR Act, and (C) the Exchange Act, no notices, reports or other filings are required to be made by Parent or Merger Sub with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Parent or Merger Sub from, any Governmental Entity, in connection with the execution and delivery of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the Merger, the Offer and the other transactions contemplated hereby, except for those that the failure to make or obtain would not have a Parent Material Adverse Effect or prevent, materially delay or materially impair the ability of Parent or Merger Sub to consummate the transactions contemplated by this Agreement. (ii) The execution, delivery and performance of this Agreement by Parent and Merger Sub do not, and the consummation by Parent and Merger Sub of the Offer, the Merger or the other transactions contemplated hereby will not, constitute or result in (A) a breach or violation of, or a default under, either the certificate of incorporation or by-laws of Parent and Merger Sub or the comparable governing instruments of any of Parent's Subsidiaries, (B) a breach or violation of, or a 16 default under, the acceleration of any obligations or the creation of a lien, pledge, security interest or other encumbrance on the assets of Parent or any of its Subsidiaries (with or without notice, lapse of time or both) pursuant to, any Contracts or any Law or governmental or non-governmental permit or license to which Parent or any of its Subsidiaries is subject or (C) any change in the rights or obligations of any party under any of the Contracts, except, in the case of clause (B) or (C) above, for any breach, violation, default, acceleration, creation or change that would not have a Parent Material Adverse Effect or prevent, materially delay or materially impair the ability of Parent or Merger Sub to consummate the transactions contemplated by this Agreement. (f) LITIGATION AND LIABILITIES. There are no civil, criminal or administrative actions, suits, claims, hearings, investigations or proceedings pending or, to the knowledge of the executive officers of Parent, threatened against Parent or any of its Subsidiaries, which would prevent or materially burden or materially impair the ability of Parent or Merger Sub to consummate the Offer, the Merger or any of the other transactions contemplated by this Agreement. (g) COMPLIANCE WITH LAWS. The business of Parent and its Subsidiaries taken as a whole is not being conducted in violation of any Laws, except for violations that would not materially burden or materially impair the ability of Parent to consummate the transactions contemplated by this Agreement. As of the date hereof, no investigation or review by any Governmental Entity with respect to Parent or any of its Subsidiaries is pending or, to the knowledge of the executive officers of Parent, threatened, nor has any Governmental Entity indicated an intention to conduct the same, except for those the outcome of which would not prevent or materially burden or materially impair the ability of Parent to consummate the transactions contemplated by this Agreement. Parent and its Subsidiaries each has all permits, licenses, franchises, variances, exemptions, orders and other governmental authorizations, consents and approvals from Governmental Entities necessary to conduct its business as presently conducted, except for those the absence of which would not prevent or materially burden or materially impair the ability of Parent or Merger Sub to consummate the Merger and the other transactions contemplated by this Agreement. (h) TAKEOVER STATUTES. No Takeover Statute or restrictive provision of any applicable anti-takeover provision in the certificate of incorporation of Parent or by-laws of Parent is, applicable to Parent, Merger Sub, the Offer, the Merger or any of the other transactions contemplated by this Agreement. (i) BROKERS AND FINDERS. Except for Bear Stearns & Co. Inc., neither Parent nor any of its officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders' fees in connection with the Offer, the Merger or the other transactions contemplated by this Agreement. (j) FUNDS. Parent and Merger Sub will have the funds necessary to consummate the Offer and the Merger. (k) NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations and warranties contained in this Section 6.2, neither Parent nor any other Person makes any other express or implied representation or warranty on behalf of Parent or any of its Affiliates. 17 ARTICLE 7. COVENANTS 7.1. INTERIM OPERATIONS OF THE COMPANY. From the date hereof through the Effective Time, the Company covenants and agrees that its business and the business of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates. Without limiting the generality of the foregoing, except as otherwise set forth in Section 7.1(a) of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, from the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or by Law): (i) it shall not (x) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (y) amend its articles of incorporation or by-laws or the comparable governing instruments of any of its Subsidiaries; (z) split, combine or reclassify its outstanding shares of capital stock; (aa) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly- owned Subsidiaries to it or a wholly-owned Subsidiary or (bb) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, except, in connection with the Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock; (ii) neither it nor any of its Subsidiaries shall (x) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other property or assets (other than Shares issuable pursuant to options (whether or not vested) outstanding on the date hereof under the Stock Plans); (y) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness for borrowed money or guarantee any such indebtedness or (z) by any means, make any significant acquisition of, or investment in, assets or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity); (iii) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans, or increase the salary, wage, bonus or other compensation of any employees except for grants or awards or increases under existing Compensation and Benefit Plans occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases), annual reestablishment of Compensation and Benefit Plans and the provision of individual compensation or benefit plans and agreements for newly hired or appointed officers and employees of the Company and its Subsidiaries or except for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans or agreements existing as of the date hereof; and 18 (iv) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do anything prohibited by the foregoing. 7.2. ACQUISITION PROPOSALS. The Company agrees that neither it nor any of its Subsidiaries nor any of its or its Subsidiaries' officers and directors shall, and that it shall cause its and its Subsidiaries' employees, agents and other representatives (including any investment banker, attorney or accountant retained by it or any of its Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate any inquiries or the making of any proposal or offer with respect to a merger, tender offer, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the assets or any equity securities of, it or any of its Subsidiaries (any such proposal or offer being hereinafter referred to as an "ACQUISITION PROPOSAL"). The Company further agrees that neither it nor any of its Subsidiaries nor any of its or its Subsidiaries' officers and directors shall, and that it shall cause its and its Subsidiaries' employees, agents and representatives not to, directly or indirectly, engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any Person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that nothing contained in this Agreement shall prevent either the Company or any of its representatives or the Board of Directors of the Company from (A) complying with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal or otherwise complying with the Exchange Act; (B) providing information in response to a request therefor by a Person who has made an unsolicited Acquisition Proposal; (C) engaging in any negotiations or discussions with any Person who has made an unsolicited Acquisition Proposal or otherwise facilitating any effort or attempt to implement an Acquisition Proposal; or (D) recommending such an Acquisition Proposal to the stockholders of the Company, if, and only to the extent that, in each such case referred to in clause (B), (C) or (D) above, the Board of Directors of the Company determines either (x) upon advice of outside legal counsel that the failure to take such action would constitute a breach of the directors' fiduciary duties under applicable law or (y) that such Acquisition Proposal contains terms such that if an agreement relating to such Acquisition Proposal were entered into it would be, in the aggregate, more favorable to the Company, taking into account, at the sole discretion of the Board of Directors of the Company, any of the matters described in Section 4.5 of the articles of incorporation of the Company, than the transactions contemplated by this Agreement (any such more favorable Acquisition Proposal being referred to as a "SUPERIOR PROPOSAL"). The Company agrees that it will immediately cease and cause to be terminated any existing discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal; it being understood that any Acquisition Proposal made prior to the date hereof may, if made at any time after the date hereof, be deemed a Superior Proposal, if it would otherwise fulfill the requirements for being deemed a Superior Proposal hereunder. The Company agrees that it will take the necessary steps to promptly inform the individuals or entities referred to in the first sentence hereof of the obligations undertaken in this Section 7.2. The Company will, within forty-eight hours of receipt of an Acquisition Proposal that would be reasonably likely to result in a Superior Proposal, notify Parent of the receipt and terms of such proposal, including the identity of the offeror, and will keep Parent reasonably informed of the status of any such Proposal. The Company also agrees that as soon as reasonably practicable after the date hereof it will request the return of confidential information from any Person previously receiving such information in connection with such Person's consideration of a potential Acquisition Proposal. 7.3. MEETINGS OF THE COMPANY'S STOCKHOLDERS. If required following expiration of the Offer and the purchase of Shares thereunder, the Company will promptly take, consistent with the FBCA and its articles of incorporation and By-Laws, all action necessary to convene a meeting of holders of Shares as promptly as practicable to consider and vote upon the approval of the Merger and this Agreement. 19 Without limiting the generality of the foregoing, if required by applicable law, the Company and Parent shall immediately following the purchase of Shares pursuant to the Offer prepare an information or proxy statement (the "PROXY STATEMENT"), file it with the SEC under the Exchange Act as promptly as practicable after Merger Sub purchases Shares pursuant to the Offer, and use all reasonable efforts to have it cleared by the SEC. As promptly as practicable after the Proxy Statement has been cleared by the SEC, the Company shall mail the Proxy Statement to the stockholders of the Company as of the record date for the stockholders' meeting referred to above. If required under applicable law, the Company and Parent shall prepare the Schedule 13e-3, file it with the SEC under the Exchange Act as promptly as practicable after Merger Sub purchases shares pursuant to the Offer and supplement and amend it as shall be required. The Company will use its best efforts to obtain and furnish the information required to be included by it in the Proxy Statement and, after consultation with Parent, respond promptly to any comments of the SEC relating to the preliminary proxy or information statement relating to the transactions contemplated by this Agreement and to cause the definitive Proxy Statement relating to the transactions contemplated by this Agreement to be mailed to its stockholders, all at the earliest practical time. Whenever any event occurs which should be set forth in an amendment or supplement to the Proxy Statement or any other filing required to be made with the SEC, each party will promptly inform the other and cooperate in filing with the SEC and/or mailing to stockholders such amendment or supplement. The Proxy Statement and all amendments and supplements thereto shall comply with applicable law in all material respects and be in form and substance satisfactory to Parent. Subject to fiduciary requirements of applicable Law as advised by outside counsel, the Board of Directors of the Company shall recommend such approval referral to which shall be included in the Proxy Statement and the Company shall take all lawful action to solicit such approval. At any such meeting of the Company all of the Shares then owned by the Parent Companies will be voted in favor of this Agreement. The Proxy Statement with respect to such meeting of stockholders, at the date mailed to stockholders, shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that the foregoing shall not apply to the extent that any such untrue statement of a material fact or omission to state a material fact was made by the Company in reliance upon and in conformity with written information concerning the Parent Companies furnished to the Company by Parent for use in the Proxy Statement. Notwithstanding the foregoing, in the event that Parent or Merger Sub shall acquire at least 80% of the outstanding shares of each class of capital stock of the Company pursuant to the Offer, the parties hereto agree, at the request of Parent, to take all appropriate and necessary action to cause the Merger to become effective, as soon as practicable after the expiration or termination of the Offer and the transactions contemplated hereby, without a meeting of stockholders of the Company, in accordance with the FBCA. 7.4. FILINGS; OTHER ACTIONS; NOTIFICATION. (a) The Company and Parent shall cooperate with each other and use (and shall cause their respective Subsidiaries to use) their respective best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement and applicable Laws to consummate the Offer and make effective the Merger and the other transactions contemplated by this Agreement as soon as practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings and to obtain as soon as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate the Offer, the Merger or any of the other transactions contemplated by this Agreement. Subject to applicable Laws relating to the exchange of information, Parent and the Company shall have the right to review in advance, and to the extent practicable each will consult the other on, all the information relating to Parent or the Company, as the case may be, and any of their respective Subsidiaries, that appear in any filing made with, or written materials submitted to, any third party and/or 20 any Governmental Entity in connection with the Merger and the other transactions contemplated by this Agreement. In exercising the foregoing right, each of the Company and Parent shall act reasonably and as promptly as practicable. (b) The Company and Parent each shall, upon request by the other, furnish the other with all information concerning itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of Parent, the Company or any of their respective Subsidiaries to any third party and/or any Governmental Entity in connection with the Offer, the Merger and the transactions contemplated by this Agreement. (c) Subject to any confidentiality obligations and the preservation of any attorney-client privilege, the Company and Parent each shall keep the other apprised of the status of matters relating to completion of the transactions contemplated hereby, including promptly furnishing the other with copies of notices or other communications received by Parent or the Company, as the case may be, or any of its Subsidiaries, from any third party and/or any Governmental Entity with respect to the Offer, the Merger and the other transactions contemplated by this Agreement. (d) Without limiting the generality of the undertakings pursuant to this Section 7.4, each of the Company and Parent agrees to take or cause to be taken the following actions: (i) provide promptly to any and all federal, state, local or foreign courts or Government Entity with jurisdiction over enforcement of any applicable antitrust laws ("GOVERNMENT ANTITRUST ENTITY") information and documents requested by any Government Antitrust Entity or necessary, proper or advisable to permit consummation of the Merger and the transactions contemplated by this Agreement; and (ii) take promptly, in the event that any permanent or preliminary injunction or other order is entered or becomes reasonably foreseeable to be entered in any proceeding that would make consummation of the Merger in accordance with the terms of this Agreement unlawful or that would prevent or delay consummation of the Offer, the Merger or any of the other transactions contemplated by this Agreement, any and all steps (including the appeal thereof or the posting of a bond necessary to vacate, modify or suspend such injunction or order so as to permit such consummation on a schedule as close as possible to that contemplated by this Agreement. 7.5. ACCESS. Upon reasonable notice, and except as may otherwise be required by applicable Law, the Company shall (and shall cause its Subsidiaries to) afford the other's officers, employees, counsel, accountants and other authorized representatives ("REPRESENTATIVES") reasonable access, during normal business hours throughout the period prior to the Effective Time, to its properties, books, contracts and records and, during such period, each shall (and shall cause its Subsidiaries to) furnish promptly to Parent all information concerning its business, properties and personnel as may reasonably be requested; PROVIDED, that no investigation pursuant to this Section shall affect or be deemed to modify any representation or warranty made by the Company and; PROVIDED, FURTHER, that the foregoing shall not require the Company to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company would result in the disclosure of any trade secrets of third parties or violate any of its obligations with respect to confidentiality if the Company shall have used reasonable efforts to obtain the consent of such third party to such inspection or disclosure. All requests for information made pursuant to this Section shall be directed to an executive officer of the Company or such Person as may be designated by either of its executive officers, as the case may be. All such information shall be governed by the terms of the Confidentiality Agreement. 21 7.6. STOCK EXCHANGE DE-LISTING. The Surviving Corporation shall use its best efforts to cause the Shares to be removed from quotation on the NASDAQ National Market System and de-registered under the Exchange Act as soon as practicable following the Effective Time. Unless required by the rules of the National Association of Securities Dealers, subsequent to Merger Sub's payment for Shares and prior to the Effective Time, the Company shall not take any action to cause the Shares to be removed from quotation on the NASDAQ National Market System and de-registered under the Exchange Act. 7.7. PUBLICITY. The initial press release shall be a joint press release and thereafter the Company and Parent each shall consult with the other prior to issuing any press releases or otherwise making public announcements with respect to the Offer, the Merger and the other transactions contemplated by this Agreement and prior to making any filings with any third party and/or any Governmental Entity (including any national securities exchange or national market systems) with respect thereto, except as may be required by law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or national market system. 7.8. BENEFITS. (a) STOCK OPTIONS. (i) The Company shall take all necessary actions to cause (including plan amendments) prior to the Effective Time each outstanding option to purchase Shares which had not vested immediately prior to such time to become vested and fully exercisable. (ii) Prior to the Effective Time, the Company shall use its reasonable best efforts to cause each then outstanding option granted under the Stock Plans to purchase Shares (a "Company Option"), whether vested or unvested, to be cancelled, with the holder thereof becoming entitled to receive an amount of cash equal to the product of (x) the amount, if any, by which the Merger Consideration exceeds the exercise price per Share subject to such Company Option (whether vested or unvested) and (y) the number of Shares issuable pursuant to the unexercised portion of such Option, less any required withholding of taxes (such amount being hereinafter referred to as the "OPTION CONSIDERATION"). The Option Consideration shall be paid as soon as practicable following the Effective Time, but in any event within five (5) days following the Effective Time. The cancellation of a Company Option in exchange for the Option Consideration shall be deemed a release of any and all rights the holder had or may have had in respect of such Company Option, and any required consents received from Company Option holders shall so provide. (iii) In the event that any Company Options are not cancelled in accordance with the provisions of Section 7.8(a)(ii), such Company Options (the "Remaining Options") shall be subject to the following provisions of this Section 7.8(a)(iii). Each Remaining Option, shall, at the Effective Time, in accordance with the terms of the Stock Plan pursuant to which such Company Option was issued, be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Remaining Option immediately prior to the Effective Time, (A) a number of shares of Parent Common Stock equal to the product (rounded up to the nearest whole number) obtained by multiplying (x) the number of Shares the holder of such Remaining Option would have been entitled to receive immediately prior to the Effective Time had such holder exercised such Remaining Option in full immediately prior to the Effective Time and (y) the quotient obtained by dividing the Merger Consideration by the average of the closing prices per share of Parent Common Stock on the NYSE Composite Transactions tape for the five trading days immediately preceding the date of the Effective Time as reported in the Wall Street Journal, New York City edition, (B) at a price per share of Parent Common Stock (rounded down to the nearest whole cent) equal to (A) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Remaining Option (assuming for such purposes that 22 such Remaining Option was fully exercisable at such time) divided by (B) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Remaining Option in accordance with the foregoing; PROVIDED, HOWEVER, that any Remaining Option which is intended to be an "incentive stock option" (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. (iv) At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans to permit the assumption of the Remaining Options by Parent. Effective at the Effective Time, Parent shall assume each Remaining Option in accordance with the terms of the Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Remaining Options. At the Effective Time, Parent shall file a registration statement on Form S-8, or, if unavailable, a registration statement on Form S-3 (or any successor forms), or another appropriate form with respect to the Parent Common Stock subject to Remaining Options, and shall use its best efforts to cause such registration statement to become and remain effective (and maintain the current status of the prospectus or prospectuses contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as any Remaining Options remain outstanding. (v) Prior to the Effective Time, the Board of Directors of Parent shall use reasonable efforts to take all actions necessary to ensure that the options to purchase Parent Common Stock (resulting from Remaining Options) held by the officers and directors of the Company in accordance with this Section 7.8(a) shall be exempt for purposes of Rule 16b-3 under the Exchange Act (including, with respect to each officer and director of the Company, having the full Board of Directors of Parent adopt, prior to the Effective Time, resolutions providing (i) the name of each such officer and director, (ii) the number of shares of Parent Common Stock to be subject to each Remaining Option held by each such officer or director, (iii) any other material terms of such options and (iv) the fact that such approval is for the purpose of obtaining an exemption under Rule 16b-3 under the Exchange Act). (b) EMPLOYEE BENEFITS. Parent agrees that, during the period commencing at the Effective Time and ending on the first anniversary thereof, the employees of the Company and its Subsidiaries will continue to be provided with benefits under employee benefit plans that are no less favorable in the aggregate than the Plans (excluding "change of control" or similar Plans with respect to any change of control occurring after the Effective Time and excluding benefits provided pursuant to any Plan covering one or a select group of current or former employees) currently provided by the Company and its Subsidiaries to such employees as disclosed in the Company Disclosure Letter. Following the Effective Time, Parent shall cause service by employees of the Company and its Subsidiaries (and any predecessor entities) to be taken into account for all purposes (including, without limitation, eligibility to participate, eligibility to commence benefits, vesting, benefit accrual and severance) under any benefit plans of Parent or its Subsidiaries (including the Surviving Corporation). From and after the Effective Time, Parent shall (i) cause to be waived any pre-existing condition limitations under benefit plans of Parent or its Subsidiaries in which employees of the Company or its Subsidiaries participate and (ii) cause to be credited to any deductible or out of pocket expense of Parent's plans any deductibles and out-of-pocket expenses incurred by such employees and their beneficiaries and dependents during the portion of the calendar year prior to participation in the benefit plans provided by Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to, honor all employee benefit obligations to current and former employees under the Compensation and Benefit Plans and all employee severance plans and all employment or severance agreements listed on Schedule 7.8(b) of the Company Disclosure Letter. 23 7.9. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The Articles of Incorporation and By-laws shall contain the provisions with respect to indemnification set forth in Section 6.1 of the articles of incorporation of the Company and Section 10.1 of the by-laws of the Company on the date of this Agreement and shall provide for indemnification to the fullest extent permitted by and in accordance with the FBCA, which provisions shall not be amended, repealed or otherwise modified for a period of six years after the Effective Time (or, in the case of matters known prior to the Effective Time which have not been resolved prior to the sixth anniversary of the Effective Time, until such matters are finally resolved) in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of the Company in respect of actions or omissions occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement). (b) Following the Effective Time, Parent shall indemnify and hold harmless, to the fullest extent permitted under applicable law (and Parent shall also advance expenses as incurred to the fullest extent permitted under applicable law), each present and former director, officer and employee of the Company and its Subsidiaries (collectively, the "INDEMNIFIED PARTIES") against any costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages or liabilities (collectively, "COSTS") incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, including the transactions contemplated by this Agreement. (c) Any Indemnified Party wishing to claim indemnification under paragraph (b) of this Section 7.9, upon receiving written notification of any such claim, action, suit, proceeding or investigation, shall promptly notify Parent thereof, but the failure to so notify shall not relieve Parent of any liability it may have to such Indemnified Party if such failure does not materially and irreversibly prejudice Parent. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) Parent shall have the right within ten days following the notification of Parent by the Indemnified Person of such claim, action, suit, proceeding or investigation to assume the defense thereof and Parent shall not be liable to such Indemnified Parties for any legal expenses of other counsel subsequently incurred by such Indemnified Parties in connection with the defense thereof, except that if Parent elects not to assume such defense, counsel for the Indemnified Parties advises that there are issues which raise conflicts of interest between Parent and the Indemnified Parties or the Indemnified Parties have defenses available to them that are not available to Parent, the Indemnified Parties may retain counsel satisfactory to them, and Parent shall pay all fees and expenses of such counsel for the Indemnified Parties. If such indemnity is not available with respect to any Indemnified Party, then Parent and the Indemnified Party shall contribute to the amount payable in such proportion as is appropriate to reflect the relative faults and benefits of the Surviving Corporation (in the case of Parent) and the Indemnified Parties. (d) The Surviving Corporation shall maintain the Company's existing officers' and directors' liability insurance ("D&O INSURANCE") or coverage on materially similar terms thereof for a period of six years after the Effective Time so long as the annual premium therefor is not in excess of 250% of the last annual premium paid prior to the date hereof (the "CURRENT PREMIUM"); PROVIDED, HOWEVER, that if the existing D&O Insurance is terminated or cancelled during such six-year period, the Surviving Corporation shall use its best efforts to obtain as much D&O Insurance as can be obtained for the remainder of such period for a premium not in excess (on an annualized basis) of 250% of the Current Premium and shall agree to indemnify the directors and officers for any Costs not covered by such D&O Insurance. 24 (e) If Parent or the Surviving Corporation or any of its successors or assigns (i) shall consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then, and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Corporation shall assume all of the obligations set forth in this Section 7.9. (f) The provisions of this Section are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties, their heirs and their representatives. 7.10. TAKEOVER STATUTE. If any Takeover Statute is or may become applicable to the Shares, the Offer, the Merger or the other transactions contemplated by this Agreement, each of Parent and the Company and their respective Board of Directors shall grant such approvals and take such actions as are necessary so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement or by the Merger and otherwise act to eliminate or minimize the effects of such statute or regulation on such transactions. 7.11. EXPENSES. Parent shall pay all charges and expenses, including those of the Paying Agent, in connection with the transactions contemplated in Article V. Except as otherwise provided in this Section 7.11, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement, the Offer and the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such expense. ARTICLE 8. CONDITIONS 8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver at or prior to the Effective Time of each of the following conditions: (a) STOCKHOLDER APPROVAL. If required by the FBCA, the Merger this Agreement and the plan of merger shall have been duly approved by holders of a majority of the outstanding Shares in accordance with applicable law and the articles of incorporation and by-laws of the Company. (b) HSR. The waiting period applicable to the consummation of the Merger under the HSR Act shall have expired or been earlier terminated. (c) LITIGATION. No court or Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, law, ordinance, rule, regulation, judgment, decree, injunction or other order that is in effect and permanently enjoins or otherwise prohibits consummation of the Merger (collectively, an "ORDER"). (d) TENDER OFFER. Merger Sub (or one of the Parent Companies) shall have purchased Shares in the Offer. 25 ARTICLE 9. TERMINATION 9.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the approval by stockholders of the Company referred to in Section 8.1(a), by mutual written consent of the Company, Merger Sub and Parent by action of their respective Boards of Directors. 9.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by action of the Board of Directors of either Parent or the Company if any Order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and non-appealable after the parties have used their respective best efforts to have such Order removed, repealed or overturned (whether before or after the approval by the stockholders of the Company). 9.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, by action of the Board of Directors of the Company (a) if the Board of Directors of the Company withdraws or adversely modifies its adoption of this Agreement, its recommendation of the Offer or its recommendation that the stockholders of the Company approve this Agreement (including, without limitation, taking no position in response to a tender offer by a Person other than Parent), (b) if there has been a material breach by Parent or Merger Sub of any material covenant or agreement contained in this Agreement that is not curable or, if curable, is not cured prior to the earlier of (i) 30 days after written notice of such breach is given by the Company to the party committing such breach or (ii) two Business Days prior to any date on which the Offer is scheduled to expire; PROVIDED, however that at such time specified in this clause (ii) neither the Company nor Parent has indicated that it intends to request (and has the right under this Agreement to have such request honored) that the Offer be extended in accordance with the terms hereof (provided that Parent shall have been given notice of such breach at least two Business Days prior to termination) or (c) Merger Sub (or any of the Parent Companies) shall have (i) terminated the Offer or (ii) failed to pay for Shares pursuant to the Offer on a timely basis following the expiration of the Offer, if the Offer has not been extended in accordance with the terms hereof. 9.4. TERMINATION BY PARENT. This Agreement may be terminated and the Merger may be abandoned at any time (a) prior to the Effective Time by action of the Board of Directors of Parent if due to an occurrence or circumstance which resulted in a failure to satisfy any of the Offer Conditions, and Merger Sub shall have terminated the Offer in accordance with the terms hereof (including, without limitation, taking no position in response to a tender offer by a Person other than any of the Parent Companies), (b) prior to the purchase of Shares by Merger Sub pursuant to the Offer if (i) the Board of Directors of the Company withdraws or adversely modifies its adoption of this Agreement, its recommendation of the Offer or its recommendation that the stockholders of the Company approve this Agreement (including, without limitation, taking no position in response to a tender offer by a Person other than any of the Parent Companies), (ii) there has been a material breach by the Company of any material covenant or agreement contained in this Agreement that is not curable or, if curable, is not cured prior to the earlier of (A) 30 days after written notice of such breach is given by Parent to the party committing such breach or (B) two Business Days prior to any date on which the Offer is scheduled to expire; PROVIDED, however, that and at such time specified in this clause (ii) neither the Company nor 26 Parent has indicated that it intends to request (and has the right under this Agreement to have such request honored) that the Offer be extended in accordance with the terms hereof (provided that the Company shall have been given notice of such breach at least two Business Days prior to termination) or (iii) the Minimum Condition shall not have been satisfied by the expiration of the Offer (as it may have been extended from time to time), and at or prior to such time any Person (other than Parent or Merger Sub) shall have made a public announcement with respect to a bona fide Acquisition Proposal that contemplates a per Share consideration in excess of the Merger Consideration. 9.5. EFFECT OF TERMINATION AND ABANDONMENT. (a) In the event of termination of this Agreement and the abandonment of the Merger pursuant to this Article IX, this Agreement (other than as set forth in Section 10.1) shall become void and of no effect with no liability on the part of any party hereto (or of any of its directors, officers, employees, agents, legal and financial advisors or other representatives); PROVIDED, HOWEVER, that except as otherwise provided herein, no such termination shall relieve any party hereto of any liability or damages resulting from any willful breach of this Agreement. (b) In the event that this Agreement is terminated by Parent pursuant to Section 9.4(b)(ii), then the Company shall promptly, but in no event later than two days after the date of such termination, pay Parent a termination fee (as liquidated damages) of $29,400,000 (the "TERMINATION FEE") by wire transfer of same day funds to an account previously designated in writing by Parent to the Company. In the event that (i)(A) an Acquisition Proposal (other than pursuant to this Agreement) shall have been made to the Company or any Person (other than Parent or any of its Affiliates) shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to the Company and thereafter this Agreement is terminated by the Company pursuant to Section 9.3(c)(i) or Parent pursuant to Section 9.4(a) under circumstances which would have permitted Parent to terminate pursuant to Section 9.4(b)(ii) or (B) this Agreement is terminated (x) by the Company pursuant to Section 9.3(a) or (y) by Parent pursuant to Section 9.4(b)(i) or (iii) and (ii)(A) the Person making the Acquisition Proposal which was outstanding at the time of the termination (the "ACQUIRING PARTY") has acquired, by purchase, merger, consolidation, sale, assignment, lease, transfer or otherwise, in one transaction or any related series of transactions within twelve months after a termination of this Agreement, a majority of the voting power of the outstanding securities of the Company or all or substantially all of the assets of the Company or (B) there has been consummated a merger, consolidation or similar business combination between the Company or one of its Subsidiaries and the Acquiring Party within twelve months after the relevant termination of this Agreement, then the Company shall promptly, but in no event later than two days after the consummation of the transaction or transactions with the Acquiring Party, pay Parent the Termination Fee in same day funds to an account previously designated by Parent to the Company in writing. The Company's payment of the Termination Fee shall be the sole and exclusive remedy of Parent and Merger Sub against the Company and any of its Subsidiaries and their respective directors, officers, employees, agents, advisors or other representatives in the event this Agreement is terminated and the Termination Fee is payable whether or not there has been a breach of this Agreement (whether or not such breach is willful). ARTICLE 10. MISCELLANEOUS AND GENERAL 10.1. SURVIVAL. This Article 10 and the agreements of the Company, Parent and Merger Sub contained in Sections 7.6 (De-listing), 7.8 (Benefits), 7.11 (Expenses) and 7.9 (Indemnification; Directors' and Officers' Insurance) shall survive the consummation of the Merger. This Article 10, the agreements of the Company, Parent and Merger Sub contained in Section 7.11 (Expenses), Section 9.5 27 (Effect of Termination and Abandonment) and the Confidentiality Agreement shall survive the termination of this Agreement. All other representations, warranties, covenants and agreements in this Agreement shall not survive the consummation of the Merger or the termination of this Agreement. 10.2. MODIFICATION OR AMENDMENT. Subject to the provisions of the applicable law, at any time prior to the Effective Time, the parties hereto may modify or amend this Agreement, by written agreement executed and delivered by duly authorized officers of the respective parties; PROVIDED that, in the case of the Company any such modification or amendment must be approved by a majority of the directors who are not Parent Insiders. 10.3. WAIVER OF CONDITIONS. The conditions to each of the parties' obligations to consummate the Merger are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law; PROVIDED, that, in the case of the Company any such waiver must be approved by a majority of the directors who are not Parent Insiders. 10.4. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. 10.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of Florida or, if unavailable to the parties, the courts of the State of Florida solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a State of Florida or Federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in such manner as may be permitted by law shall be valid and sufficient service thereof. 10.6. NOTICES. Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail or nationally recognized overnight courier service, postage prepaid, or by facsimile: IF TO PARENT OR MERGER SUB Ceridian Corporation 8100 34th Avenue South Minneapolis, MN 55425-1640 Attention: Ronald L. Turner Fax: (612) 853-7272 28 (with a copy to Ceridian Corporation 8100 34th Avenue South Minneapolis, MN 55425-1640 Attention: Reid Shaw Fax: (612) 853-3413) IF TO THE COMPANY ABR Information Services, Inc. 34125 U.S. Highway 19 North Palm Harbor, Florida 34684-2141 Attention: James P. O'Drobinak Fax: (727) 789-3854 (with a copy to Francis J. Aquila Sullivan & Cromwell 125 Broad Street New York, New York 10004 Fax: (212) 558-3588) or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above. 10.7. ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This Agreement (including any exhibits hereto), the Company Disclosure Letter, the Parent Disclosure Letter and the Confidentiality Agreement, dated February 4, 1999, between Parent and Goldman, Sachs & Co., on behalf of the Company (the "CONFIDENTIALITY AGREEMENT") constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. 10.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.9 (Indemnification; Directors' and Officers' Insurance), this Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 10.9. OBLIGATIONS OF PARENT AND OF THE COMPANY. Whenever this Agreement requires a Subsidiary of Parent to take any action, such requirement shall be deemed to include an undertaking on the part of Parent to cause such Subsidiary to take such action. Whenever this Agreement requires a 29 Subsidiary of the Company to take any action, such requirement shall be deemed to include an undertaking on the part of the Company to cause such Subsidiary to take such action and, after the Effective Time, on the part of the Surviving Corporation to cause such Subsidiary to take such action. 10.10. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability or the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 10.11. INTERPRETATION. The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Agreement is made to a Section or Exhibit, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." 10.12. ASSIGNMENT. This Agreement shall not be assignable by operation of law or otherwise. 30 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written above. ABR INFORMATION SERVICES, INC. By: /s/ James E. MacDougald ---------------------------------- Name: James E. MacDougald Title: Chairman, President and CEO CERIDIAN CORPORATION By: /s/ Ronald L. Turner ---------------------------------- Name: Ronald L. Turner Title: President and Chief Operating Officer SPRING ACQUISITION CORP. By: /s/ Gary M. Nelson ---------------------------------- Name: Gary M. Nelson Title: President 31 ANNEX A CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, but subject to the terms of the Merger Agreement, Merger Sub shall not be required to accept for payment or, subject to any applicable rules and regulation of the SEC, pay for any Shares, and may terminate the Offer (i) if by the expiration of the Offer (or, if extended, by the expiration of the Offer, as so extended) a number of Shares which together with any Shares owned by Parent, Merger Sub and the Parent Companies, constitutes more than 50% of the outstanding Shares (on a fully-diluted basis) at the expiration of Offer (the "Minimum Conditions") shall not have been validly tendered pursuant to the Offer and not properly withdrawn, (ii) if all applicable waiting periods under the HSR Act shall not have expired or been terminated or (iii) if on or after April 30, 1999, and at any time prior to acceptance for payment for any such Shares, any of the following events shall occur; provided that in each such case Merger Sub shall not be permitted to terminate the Offer (except pursuant to paragraph (g) below) if prior to the then scheduled expiration of the Offer the Offer shall have been extended: (a) there shall have occurred (i) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (ii) a formal declaration of war or national or international calamity directly or indirectly involving the United States (other than any declaration of war resulting from the current conflict in Yugoslavia), (iii) any limitation (whether or not mandatory) by any United States governmental authority on the extension of credit by banks or other financial institutions that materially affects the extension of credit by banks or other lending institutions, (iv) any general suspension of, or limitation on prices for, trading in securities on the Nasdaq National Market or the over the counter market, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (b) the Company shall have breached or failed to perform any of its material obligations, covenants or agreements under the Merger Agreement in a manner permitting Parent to terminate the Merger Agreement, or any representation or warranty of the Company set forth in the Merger Agreement shall not be true and correct, provided that such representations and warranties shall be deemed to be true and correct unless the failure of such representations and warranties to be so true and correct would have a Company Material Adverse Effect or would prevent the Company from consummating the transactions contemplated by the Merger Agreement, in each case as if such representations and warranties were made at the time of such termination. (c) there shall be instituted or pending any action, litigation, proceeding, investigation or other application (hereinafter, an "Action") before any court or other Governmental Entity: (i) challenging the acquisition by the Purchaser or Merger Sub of Shares, seeking to restrain or prohibit the consummation of the transactions contemplated by the Merger Agreement; (ii) seeking to prohibit, or impose any limitations on, Parent's or Merger Sub's ownership or operation of all or any portion of their or the Company's business or assets (including the business or assets of their respective affiliates and subsidiaries); (iii) seeking to make the acceptance for payment, purchase of, or payment for, some or all of the Shares illegal; (iv) seeking to impose limitations on the ability of Purchaser or Merger Sub effectively to acquire or hold or to exercise full rights of ownership of the Shares including, without limitation, the right to vote the Shares purchased by them on an equal basis with all other shares on all matters properly presented to the stockholders; or (v) that, in any event, would have a Company Material Adverse Effect; (d) any statute, rule, regulation, order or injunction shall be enacted, promulgated, entered, enforced or become applicable to the Offer or the Merger, or any other action shall have been taken by any court or other Governmental Entity other than the application to the Offer or the Merger of the waiting period under the HSR Act, that would result in any of the effects of, or have any of the consequences sought to be obtained or achieved in, any Action referred to in clauses (i) through (v) of paragraph (b) above; (e) any person (as such term is defined in Section 13(d)(3) of the Exchange Act (other than Parent or any of its affiliates)) commences a tender or exchange offer for a majority or more of the outstanding Shares at a price per Share greater than the Merger Consideration or any such person shall have become the beneficial owner of more than 20% of the outstanding Shares (other than for bona fide arbitrage purposes), or any such person shall have entered into a definitive agreement to acquire all or substantially all of the Shares or to effect a merger, consolidation or other business combination with or involving the Company; (f) there shall have occurred an event which has caused a Company Material Adverse Effect; (g) the Board of Directors of the Company shall have amended, modified or withdrawn its recommendation of the Offer or the Merger in a manner adverse to Parent, or shall have endorsed, approved or recommended any other Acquisition Proposal, or shall have resolved to do any of the foregoing; or (h) the Merger Agreement shall have been terminated by the Company or Parent in accordance with its terms; which, in the reasonable judgment of Parent, in any such case, and regardless of the circumstances giving rise to any such conditions, makes it reasonably inadvisable to proceed with the Offer and/or with such acceptance for payment of or payment for Shares. The foregoing conditions other than the Minimum Condition are for the sole benefit of Parent and may be asserted by Parent or Merger Sub regardless of the circumstances giving rise to such condition or may be waived by Parent other than the Minimum Condition, by express and specific action to that effect, in whole or in part at any time and from time to time in its sole discretion. EX-99.(C)(2) 12 EXHIBIT 99(C)(2) Exhibit 99 (c)(2) [Goldman, Sachs & Co. Letterhead] PERSONAL AND CONFIDENTIAL February 4, 1999 Ceridian Corporation 8100 34th Avenue South Minneapolis, MN 55425 Attention: Lawrence Perlman Chairman, President and CEO Gentlemen: In connection with your consideration of a possible negotiated transaction (a "Transaction") between you and ABR Information Services, Inc. (the "Company"), you have requested information concerning the Company. As a condition to your being furnished such information, you agree for a period of five years from the date hereof to treat any information concerning the Company (whether prepared by the Company, its advisors or otherwise) which is furnished to you by or on behalf of the Company, including any technical, trade secret or other proprietary information of the Company with which you or your Representatives (as hereinafter defined) may come into contact in the course of your investigation, whether before or after the date of this Agreement, together with any reports, analyses, compilations, records, notes and any other writings prepared by you or your Representatives which contain, reflect or are based upon such information (herein collectively referred to as the "Evaluation Material") in accordance with the provisions of this letter and to take or abstain from taking certain other actions herein set forth. The term "Evaluation Material" does not include information which (i) is already in your possession, provided that such information is not known by you to be subject to another confidentiality agreement with or other obligation of secrecy to the Company or another person, or (ii) becomes generally available to the public other than as a result of a disclosure by you or your Representatives, or (iii) becomes available to you on a non-confidential basis from a source other than the Company or its Representatives, provided that such source is not bound by a confidentiality agreement with or other obligation of secrecy to the Company or another person. You hereby agree that the Evaluation Material will be used solely for the purpose of evaluating a possible Transaction between the Company and you and not for any other purpose including but not limited to solicitation of the Company's customers, and that such information will be kept confidential by you and your Representatives; provided, however, that (i) any of such information may be disclosed to your directors, officers, employees, counsel, investment bankers and other representatives of you or your advisors, such persons being generally referred to herein as "Representatives", who need to know such information for the purpose of evaluating any possible Transaction between the Company and you (it being understood that such Representatives shall be informed by you of the confidential nature of such information and any Evaluation Material prepared by them, and shall be directed by you to treat such information confidentially and in accordance with the terms hereof), and (ii) any disclosure of such information may be made to which the Company consents in writing. You hereby acknowledge that you are aware, and that you will advise your Representatives who are informed as to the matters which are the subject of this letter, that the United States securities laws prohibit any person who has received from an issuer material, non-public information from purchasing or selling securities of such issuer. In addition, without the prior written consent of the Company, you will not, and will direct your Representatives, not to, disclose to any person either the fact that discussions or negotiations are taking place concerning a possible Transaction or any of the terms, conditions or other facts with respect to any such possible Transaction, including the status thereof (collectively, "Transaction Information"). If you or your Representatives are contacted within three years by any other person regarding a possible transaction involving the Company, you agree immediately to notify us of the details of any such contact. In the event that you or any of your Representatives are required to disclose any Evaluation Material or Transaction Information (i) in connection with any judicial or administrative proceedings (by oral questions, interrogatories, requests for information or documents, subpoena, Civil Investigation Demand or similar process) or (ii) in order, in the opinion of your outside counsel, to avoid violating the United States federal securities laws, you will in advance of such disclosure provide the Company with prompt notice of such requirement(s). You also agree to the extent legally permissible, to provide the Company, in advance of any such disclosure, with copies of any Evaluation Material and descriptions (written or oral) of the Transaction Information you intend to disclose (and, if applicable, the text of the disclosure language itself) and to cooperate with the Company to the extent it may seek to limit such disclosure. If, in the absence of a protective order or the receipt of a waiver from the Company after a request in writing therefor is made by you (such request to be made as soon as practicable to allow the Company a reasonable amount of time to respond thereto), you or your Representatives are legally required to disclose Evaluation Material or Transaction Information to any tribunal or in order to comply with the United States federal securities laws, you may disclose such information without liability hereunder, Further, without your prior written consent, we will not, and will direct our Representatives, not to, disclose to any person the fact that discussions or negotiations are taking place with you concerning a possible Transaction ("Bidder Information"). In the event that we or our Representatives are required to disclose any Bidder Information (i) in connection with any judicial or administrative proceedings (by oral questions, interrogatories, requests for information or documents, subpoena, Civil Investigation Demand or similar process) or (ii) in order, in the opinion of our outside counsel, to avoid violating the United States federal securities laws, we will in advance of such disclosure provide you with prompt notice of such requirement(s). You hereby acknowledge that the Evaluation Material is being furnished to you in consideration of your agreement that you will not and shall cause your Representatives not to propose to the Company or any other person any transaction between you and the Company and/or its security holders or involving any of its securities or security holders unless the Company shall have requested in writing that you make such a proposal, and that you will not (i) acquire, or assist, advise or encourage any other persons in acquiring, directly or indirectly, any of the Company's securities, businesses or assets (including rights or options to acquire such ownership) for a period of three years from the date of this letter unless the Company shall have consented in advance in writing to such acquisition, (ii) seek or propose to influence, advise, change or control the management, Board of Directors, governing instruments or policies or affairs of the Company during such three year period or (iii) make any public disclosure, or take any action which could require the Company to make any public disclosure (under any law, rule or regulation or rule or regulation of a national securities exchange), with respect to any of the matters set forth in this Agreement, or enter into any agreement related to any of the foregoing. Although the Company has endeavored to include in the Evaluation Material information known to it which it believes to be relevant for the purpose of your investigation, you understand that neither the Company nor any of its Representatives or advisors have made or make any representation or warranty as to the accuracy or completeness of the Evaluation Material. You agree that neither the Company nor its Representatives or advisors shall have any liability to you or any of your affiliates or Representatives resulting from the use of the Evaluation Material. At any time, upon written request by the Company, you shall promptly redeliver to the Company all written Evaluation Material and any other written material containing or reflecting any information in the Evaluation Material (whether prepared by the Company, its advisors or otherwise) and will not retain any copies, extracts or other reproductions in whole or in part of such written material. All documents, memoranda, notes and other writings whatsoever prepared by you or your advisors based on the information in the Evaluation Material prepared by you shall be destroyed, and such destruction shall be certified in writing to the Company by an authorized officer supervising such destruction. For a period of two years from the date hereof, you agree that you and your affiliates will not, directly or indirectly, hire or seek to hire any employees of the Company whose identity becomes known to you or your Representatives in connection with evaluating a possible Transaction, provided that nothing herein shall prevent you from hiring any person who responds to a general media advertisement or a non-directed search inquiry, or who makes an unsolicited contact for employment. It is 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 right, power or privilege. The Company, without prejudice to any rights to judicial relief it may otherwise have, shall be entitled to seek equitable relief, including injunction, in the event of any breach or potential breach of the provisions of this Agreement. You agree that you will not oppose the granting of such relief on the basis that the Company has an adequate remedy at law. You also agree that you will not seek and agree to waive any requirement for the securing or posting of a bond in connection with the Company's seeking or obtaining such relief. You agree that unless and until a definitive agreement between the Company and you with respect to any Transaction 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 or any written or oral expression with respect to such a Transaction by any of our respective Representatives thereof except for the matters specifically agreed to herein. The agreement set forth in this paragraph may be modified or waived only by a separate writing by the Company and you expressly so modifying or waiving such agreement It is understood and agreed that if any provision contained in this Agreement or the application thereof to you, the Company, or any other person or circumstance shall be invalid, illegal or unenforceable in any respect under any applicable law as determined by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions contained in this Agreement, or the application of such provisions to such persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. In the case of any such invalidity, illegality or unenforceability, the parties hereto shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties. This Agreement shall benefit and bind your successors and assigns and the successors and assigns of the Company. Any assignment of this Agreement by you without prior written consent of the Company shall be void. This letter shall be governed by, and construed in accordance with, the laws of the State of New York. Very truly yours, ABR INFORMATION SERVICES, INC. By /s/ Name Illegible ---------------------------------------------- Goldman, Sachs & Co. on behalf of ABR Information Services, Inc. Confirmed and Agreed to: CERIDIAN CORPORATION By: /s/ A. Reid Shaw, VP --------------------------------------------- Date: FEBRUARY 4, 1999 ------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----