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EXHIBIT 99.1
March 1, 2000
Dear Stockholder:
I am pleased to inform you that on February 16, 2000, the Board of
Directors of Wall Street Deli, Inc. (the "Company") adopted a Rights Agreement
comprising a stockholder rights plan (the "Plan"). We believe that this Plan
will help protect the value of your investment in Wall Street Deli, Inc. With
this letter, we are sending you a summary describing the Plan. The adoption of
this Plan requires no action on your part.
The purpose of the Plan is to assure that all stockholders are treated
fairly by anyone who might seek to obtain control of the Company. The business
environment has changed in many ways over the years, and the corporate takeover
environment provides hostile bidders with a variety of coercive takeover
tactics. Your Board believes that a stockholder rights plan continues to be an
important tool to enable the Board to effectively represent the interests of all
stockholders in the event of an unsolicited takeover attempt. The Plan is not
unique; over 3,000 corporations throughout the country have adopted stockholder
rights plans.
The Plan was not adopted because of any current effort by another party
to acquire the Company. We are not aware of any present effort to acquire
control of the Company, but the existence of the Plan should help protect you
against unfair takeover techniques such as open-market accumulations of large
blocks of stock, partial or two-tiered offers that do not treat stockholders
equally and other similar tactics which do not provide all the stockholders the
full value of their investment.
Unless the Rights established by the Plan are redeemed by the Company,
the occurrence of certain takeover-related events will cause the Rights to
convert into the right to acquire securities of the Company (or of the acquirer)
at a significant discount. These takeover-related events include the acquisition
by any person or group (other than certain existing stockholders) of 15% or more
of the Company's common stock. The merger of the Company with and into any other
person and the sale or transfer of assets or earning power aggregating more than
50% of the Company's assets or earning power. The effect is to dilute the
acquiring person's interest in the Company and to raise the price of acquiring
the Company. Since the Rights are subject to redemption prior to the occurrence
of certain events, a potential acquirer can avoid triggering the Rights by
negotiating with the Company's Board of Directors to establish a full and fair
offering price.
This Plan does not in any way alter the financial strength of the
Company or interfere with its business strategy or operations. The adoption of
the Plan is not dilutive, does not affect reported earnings per share, is not
taxable to you or the Company, and will not affect your trading of common stock.
The Board and management continue to be committed to serving the best
interests of Company stockholders, employees and the communities in which we
operate. We believe Wall Street Deli, Inc. has a bright future. The distribution
to you of the Rights under the Plan reflects our determination that you, our
stockholders, be given every opportunity to participate fully in that future.
Very truly yours,
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
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