[LOGO]
December 15, 1999
Dear Stockholder:
On behalf of the Board of Directors of Xxxxxxx Corporation (the "Company"),
I am pleased to inform you that the Company has entered into an Agreement and
Plan of Merger, dated as of December 8, 1999 (the "Merger Agreement"), with
Torque Acquisition Co., L.L.C. ("Acquisition Company"), a wholly-owned
subsidiary of Vestar Capital Partners IV, L.P., and Torque Merger Sub, Inc.
("Merger Sub"), a wholly-owned subsidiary of Acquisition Company. Pursuant to
the Merger Agreement, the Company and Acquisition Company have today commenced a
joint tender offer (the "Offer") to purchase all outstanding shares of common
stock of the Company (the "Shares") at a price of $23.00 per Share, net to the
seller in cash, without interest.
Following the successful completion of the Offer, upon the terms and subject
to the conditions contained in the Merger Agreement, Merger Sub will be merged
with and into the Company (the "Merger"), with the Company as the surviving
corporation (the "Surviving Corporation"). At the effective time of the Merger,
each remaining issued and outstanding Share (other than certain Shares owned by
the investor group) will be converted into the right to receive $23.00 in cash,
subject to dissenters' rights. In accordance with the terms of the Merger
Agreement and other related documents, 100% of the equity interests in the
Surviving Corporation will be owned by an investor group consisting of
Acquisition Company, which is an affiliate of Vestar Capital Partners, and
certain members of senior management of the Company, including myself and
members and trusts for the benefit of my family, together with the Xxxxxxx
Foundation, currently the Company's largest stockholder.
YOUR BOARD OF DIRECTORS, AFTER RECEIVING THE UNANIMOUS RECOMMENDATION OF A
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS COMPRISED OF THREE INDEPENDENT
DIRECTORS, HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, HAS UNANIMOUSLY
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO AND
IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS (OTHER THAN THE INVESTOR
GROUP), AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
In arriving at its recommendation, the Special Committee and Board of
Directors gave careful consideration to the factors described in the enclosed
Offer to Purchase, dated December 15, 1999, and incorporated by reference in the
enclosed Solicitation/Recommendation Statement on Schedule 14D-9, each of which
is being filed today with the Securities and Exchange Commission, including,
among other factors, the written opinion of Bear, Xxxxxxx & Co. Inc., the
Special Committee's financial advisor, dated December 8, 1999, that, subject to
the assumptions, factors and limitations set forth in the opinion, the $23.00
per Share in cash being offered in the Offer and to be received in the Merger is
fair, from a financial point of view, to the Company's stockholders (other than
the investor group). The full text of the written opinion of Bear, Xxxxxxx &
Co. Inc. is attached to the Offer to Purchase as Exhibit I and you are urged to
read such opinion in its entirety.
Additional information with respect to the transaction, including important
information with respect to the Special Committee's and the Board of Directors'
recommendations and the background of the
transaction, is contained in the enclosed Offer to Purchase, and we urge you to
consider this information carefully.
If the tender offer is completed, the vote on the second-step merger will be
assured. In addition, the merger is not likely to occur until a few months after
the tender offer is completed. Accordingly, if you want to receive the $23 in
cash for your Shares at the earliest possible time, we urge you to tender your
Shares in the Offer.
In addition to the Offer to Purchase and the Schedule 14D-9, enclosed are
various related materials including a Letter of Transmittal to be used for
tendering Shares in the Offer if you are the record holder of the Shares. The
Offer to Purchase and the related materials set forth the terms and conditions
for the Offer and provide instructions on how to tender your Shares. If you need
assistance with the tendering of your Shares, please contact the information
agent, Xxxxxxxxx Xxxxxxxxxxx Communications Inc., at its address or telephone
number appearing on the back cover of the Offer to Purchase. We urge you to read
and consider the enclosed materials carefully before making your decision with
respect to tendering your Shares pursuant to the Offer.
Very truly yours,
[LOGO]
Xxxxx X. Xxxxxxx,
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
