[UNITED NATIONAL BANK LETTERHEAD]
NOTICE TO PARTICIPANTS
IN THE XXXX GROUP, INC. 1987
EMPLOYEE INCENTIVE STOCK OWNERSHIP PLAN
JULY 14, 1997
Dear Participant:
As you may already know, Xxxx Group, Inc., a Delaware corporation (the
"Company") is party to a merger agreement, dated July 1, 1997 (the "Merger
Agreement"), by and among the Company, Fremont Acquisition Company, LLC, a
Delaware limited liability company ("Fremont") and Xxxx Acquisition Corporation,
a Delaware corporation ("Purchaser"), providing for, among other things, the
tender offer described in this letter and the attached materials. Enclosed for
your information is a copy of the Purchaser's Offer to Purchase and the related
Letter of Transmittal relating to the offer.
Pursuant to the Merger Agreement, the Purchaser, a wholly owned subsidiary
of Fremont, has commenced a cash tender offer (the "Offer") to purchase all of
the issued and outstanding shares of common stock, par value $0.50 per share,
including the associated rights to purchase shares of preferred stock, issued
pursuant to the Rights Agreement, dated July 25, 1995, between the Company and
BankBoston, N.A. (formerly The First National Bank of Boston), as amended (the
"Rights", and together with the common stock, the "Shares"), at a price of $5.40
per Share in cash. The Offer covers Shares allocated to your account as a
participant in the Xxxx Group, Inc. 1987 Employee Incentive Stock Ownership Plan
("ESOP II").
If the Offer is successful, following the merger (the "Merger"), the Company
will be the surviving corporation and will become a wholly owned subsidiary of
Fremont. In addition, if the Offer is successful, (i.e., the Purchaser acquires
51% or more of the Shares sought in the Offer), then at the time of the
subsequent Merger, each Share not purchased in the Offer (other than Shares held
by dissenting stockholders who perfect appraisal rights under Delaware law) will
be canceled and converted into a right to receive the amount paid for such
Shares in the Offer, without interest.
The Board of Directors of the Company has unanimously approved the Offer and
the Merger as being fair to and in the best interests of the Company and its
stockholders and recommends that all stockholders accept the Offer.
Only the Trustee (United National Bank) of ESOP II can tender the Shares
held in your account. As Trustee of ESOP II, we have carefully considered the
Offer and have determined that it would be in the best interests of ESOP II
participants if we tendered ALL of the ESOP Shares. However, under the terms of
ESOP II, we need approval of our decision to sell these Shares to the Purchaser
by a vote of a majority of the Shares held by the participants in ESOP II.
In determining whether or not to approve our decision, you should review the
enclosed Offer materials. Shares with no voting instructions will be voted
proportionately to the Shares that have been voted. Enclosed you will find
voting instructions and a return envelope.
YOUR VOTING INSTRUCTIONS MUST BE RETURNED IN THE ENVELOPE PROVIDED BY WEDNESDAY,
JULY 30, 1997.
PLEASE DO NOT RETURN YOUR INSTRUCTION FORM TO THE COMPANY.
If you have any questions, please call MacKenzie Partners, Inc., the
Information Agent for the Offer, at the telephone number indicated in the
enclosed Offer materials which are being furnished to you for your information
only.
UNITED NATIONAL BANK
The Trustee of the 1987
Employee Incentive Stock Ownership
Plan
2
