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November 25, 1997
To Our Shareholders:
On behalf of the Board of Directors of Xxxxxxx Xxxxxx Inc. (the "Company"),
we wish to inform you that the Company has entered into an Agreement and Plan of
Merger dated as of November 19, 1997 (the "Merger Agreement"), with HFS
Incorporated and HJ Acquisition Corp., its wholly owned subsidiary
("Purchaser"), pursuant to which Purchaser has today commenced a cash tender
offer (the "Offer") to purchase all of the outstanding shares of Common Stock of
the Company (the "Shares") at a price of $68.00 per Share. Under the Merger
Agreement, the Offer will be followed by a merger (the "Merger") in which any
remaining Shares will be converted into the right to receive $68.00 per Share.
Consummation of the Offer and the Merger is subject to certain conditions, as
more fully described in the enclosed materials.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS,
AND HAS APPROVED THE OFFER AND THE MERGER. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to the factors described in the enclosed Schedule 14D-9 that is
being filed today with the Securities and Exchange Commission, including, among
other things, the opinion of Xxxxxx Xxxxxxxxxx Xxxxx Inc., the Company's
financial advisor, that the consideration to be received by the holders of
Shares in the Offer and the Merger is fair to such holders from a financial
point of view. The Schedule 14D-9 contains other important information relating
to the Offer, and you are encouraged to read the Schedule 14D-9 carefully.
In addition to the enclosed Schedule 14D-9, also enclosed is the Purchaser's
Offer to Purchase dated November 25, 1997, together with related materials,
including a Letter of Transmittal, to be used for tendering your Shares in the
Offer. These documents state the terms and conditions of the Offer and provide
instructions as to how to tender your Shares. We urge you to read these
documents carefully in making your decision with respect to tendering your
Shares pursuant to the Offer.
On behalf of the Board of Directors,
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Xxxxx X. Xxxxxx
Chairman, President and Chief Executive
Officer
