Exhibit 99.1
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Quizno's(R)Shareholder Vote Set
Denver, Colo. - December 13, 2001 - The Quizno's Corporation (Nasdaq: QUIZ) (the
"Company") today announced that it is mailing the attached letter to its shareholders. The
attachments to the letter will be included in the mailing and are available on our website
(www.quiznos.com) and in our filings with the Securities Exchange Commission
(www.sec.gov).
The shareholders' meeting to vote on the merger of Firenze Corp. with and into the
Company that has been adjourned to December 14, 2001 at 10:00 am will again be adjourned to
and will reconvene at 10:00 am Friday, December 21, 2001, at the Oxford Hotel, 1600 17th
Street, Denver, Colorado 80202.
The Shareholder letter is as follows:
The Quizno's Corporation
1415 Larimer Street
Denver, Colorado
December 13, 2001
To our Shareholders:
On November 5, 2001, we sent our shareholders a notice of special meeting and proxy
statement describing a proposal to approve and adopt a merger agreement between us and
Firenze Corp., pursuant to which Firenze will be merged into us. If the merger is
approved, our public shareholders who do not exercise dissenters' rights will receive $8.50
per share for each share of our common stock that they own. The special meeting of
shareholders' was originally scheduled for November 30, 2001. It has been adjourned and is
currently set to reconvene Friday December 14, 2001 at 10:00 am, at which time it will be
adjourned again and will reconvene at 10:00 am December 21, 2001, at the Oxford Hotel in
Denver, Colorado.
Richard E. Schaden is the president and chief executive officer and chairman of our
board of directors and Richard F. Schaden is our vice president and corporate secretary and
a member of our board of directors. The Schadens are also the sole shareholders, officers
and directors of Firenze. The Schadens, therefore, have a direct conflict of interest with
respect to the proposed transaction. The Schadens own approximately 67% of our outstanding
common stock. In light of this conflict of interest, our board of directors formed the
special committee. The special committee is composed of three of our directors who are not
affiliated with Firenze. The special committee negotiated the terms of the merger
agreement on behalf of the board and us. In connection with the execution of the merger
agreement, both the board and the special committee determined that the merger and the
merger agreement are fair to and in the best interests of our public shareholders.
Our proxy statement described various letters and proposals received from a
shareholder in September and October 2001, and correspondence from the committee responding
to those proposals. The shareholder, Fagan Capital, Inc., generally outlined its
willingness to purchase shares from our minority shareholders, but only if certain
conditions were met, including the requirement that we grant Fagan a put option, which in
turn required approval by one of our lenders, Levine Leichtman Capital Partners II, L.P.
under the terms of the existing loan which was entered into in connection with our tender
offer in December 2000. The other proposed conditions included board representation for
the minority shareholders, or alternatively that the Schadens grant Fagan an option to
acquire all of our shares (including those owned by the Schadens) for $15 per share. None
of the proposals was in the form of a definitive offer that could be accepted to create a
binding transaction between Fagan and us. Fagan asserted that it was prepared to discuss
proposals that could result in our shareholders receiving in excess of $10 per share. As
noted in the proxy statement, the special committee considered and evaluated the Fagan
proposals, and determined it could not agree to the proposals, particularly the requirement
of a put option. Levine Leichtman had informed the special committee it would not consent
to the put option. The committee notified Fagan, however, that the committee would
facilitate a discussion between Levine Leichtman and Fagan, would review any agreement
reached between Fagan and Levine Leichtman, and would enter into negotiations with Fagan
under appropriate circumstances. The committee requested that any subsequent offer from
Fagan be made in the form of a binding offer with definitive documents.
On October 26, 2001 Fagan's counsel, Schulte, Roth & Zabel, LLP, responded to the
special committee noting the benefits of the Fagan proposal, asked the special committee to
announce its withdrawal of support for the Schaden proposal and commence negotiations with
Fagan. The letter also noted the necessity of a third party consent to the put option
included in the Fagan proposal, but declined the invitation to negotiate directly with
Levine Leichtman.
By letter dated October 29, 2001, Brobeck, Phleger & Harrison, LLP responded to the
Schulte letter on behalf of the special committee. The committee had asked Levine
Leichtman if it would consent to the put option condition, and Levine Leichtman declined.
The committee again noted that the terms of Fagan's current proposal would cause an event
of default under the Levine Leichtman facility. The committee also offered to facilitate
discussions between Fagan and Levine Leichtman to allow Fagan to make a feasible proposal
which the committee would help negotiate. The committee informed Fagan that it remained
willing to negotiate an offer with Fagan whenever Fagan presented to the special committee
an offer which would be acceptable to the independent third parties whose consent would be
required. Such consent would have been required from Levine Leichtman, and may have been
required from AMRESCO, with whom we had a loan agreement dating back to 1999, depending on
the form of the offer made by Fagan. The special committee also noted that although it
could not force the Schadens to negotiate with Fagan, the committee remained willing to
facilitate a meeting with the Schadens if it would result in a higher price for the
minority shareholders. Finally, the special committee noted that it remained willing to
consider any definitive proposals Fagan actually made.
Schulte responded by letter dated November 1, 2001, reiterating some prior arguments
and noting the potential higher price and non-coercive features of the Fagan proposal. It
alleged the committee breached its obligations to the minority shareholders because it
failed to negotiate Fagan's purportedly 25 percent higher proposal on the grounds that
Levine Leichtman's approval was required for the put option. Schulte also challenged our
disclosure of the Fagan proposal as focusing only on Fagan's put option condition. It also
noted that William Fagan had scheduled a meeting with Richard E. Schaden and expressed hope
that progress could be made at the meeting. No proposals were made by Schulte to obtain
the third party consent necessary to implement the Fagan proposal. Schulte expressed the
view that no prudent businessman would make a minority investment without a necessary
liquidity provision, such as the put option proposed by Fagan.
On November 5, 2001, Richard E. Schaden met with William Fagan in Denver, Colorado.
Mr. Fagan proposed a number of possible transactions between Fagan and Firenze, which
seemed to suggest that the minority shareholders be allowed to remain shareholders in a
private company or alternatively, that minority shareholders be permitted to voluntarily
sell their shares to us for $8.50 per share. As a third alternative, a voting trust for
minority shareholders would be created, where Fagan would act as trustee, and where we
would grant a right for the voting trust to put its shares to us for fair market value at a
future date. Mr. Fagan also proposed that he would buy additional shares of stock of the
company for a premium so that the company could use the money to pay the minority
shareholders a higher price. He suggested that he would purchase shares at $10.63 per
share if he could have a right to put the newly issued shares back to us at fair market
value in the future.
Mr. Schaden indicated he was not interested in pursuing a transaction with Mr.
Fagan. Mr. Schaden believed it was not in our best interest to continue as a public
company, or as a private company with a potentially large number of minority shareholders.
Mr. Schaden agreed with the committee's analysis and conclusion that the public market has
not responded to our positive growth. Hence, he believed we had not realized the
principal benefits of public ownership. In reaching that conclusion, Mr. Schaden relied on
the factors relied upon by the committee and discussed below. Mr. Schaden also understood
that our common stock has remained very thinly traded, providing little liquidity for our
shareholders. He believed that minority shareholders in a private company would have
virtually no liquidity. For that reason, Mr. Schaden did not want to pursue Mr. Fagan's
first alternative. Mr. Fagan's second alternative also held out the prospect of remaining
minority or public shareholders, which Mr. Schaden did not believe was in our interest.
The third alternative, the voting trust, required a put option, which was unacceptable
because it would have required approval from Levine Leichtman, which as discussed was not
available. There were no agreements or understandings reached.
On November 13, 2001, a lawsuit titled Sebesta v. Schaden, et al., was commenced by
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Edward C. Sebesta against us, Richard E. Schaden, Richard F. Schaden, and four other
present or former directors, in the District Court for the City and County of Denver. The
complaint alleges that the defendants breached their fiduciary duties by wrongfully
supporting the proposed merger with Firenze and by failing to adequately disclose
information concerning proposals made by Fagan, the special committee's responses and
alleged conflicts of interest. Plaintiff sought a temporary restraining order or TRO to
preclude us from holding our November 30, 2001 shareholders' meeting until corrective
disclosures were made and disseminated. On November 28, 2001, the court heard and denied
plaintiff's motion, finding that the plaintiff had not satisfied any of the requirements
for obtaining injunctive relief. The Court specifically held "...the plaintiff has come
into this Court with unclean hands seeking relief when, in fact, the plaintiff, and its
agents, have been less than candid, less than accurate in its representations, in terms of
its own offer in terms of it being conditional, and any request for relief would not serve
the public's interest". We filed an answer denying any wrongdoing.
On November 27, 2001, three days before the scheduled shareholders' meeting and on
the eve of the TRO hearing, Fagan delivered a letter to the special committee which
outlined in general terms apparently three different proposals. It became a major focus of
the hearing for the TRO described in the paragraph above. The first appeared to propose to
amend the current merger to provide $9.50 per share to minority shareholders, allowing them
an option to continue as shareholders after the merger, with Fagan buying shares in the
surviving entity and no put option required. Fagan also expressed its continued interest
in purchasing the minority shares for $10.63 per share, but only if we agreed to the put
option, and alternatively indicated its willingness to explore purchasing all of the shares
(including the shares held by the Schadens and their affiliates) for $15 per share. Fagan
stated that its proposal would expire on December 10, 2001. The committee noted that all
three of the apparent proposals required third party consents as follows:
o the $9.50 proposal would require the Schadens to agree to amend the Firenze merger
agreement
o the $10.63 proposal would require consent from Levine Leichtman which had previously
been refused
o the $15 proposal would require the separate consents of AMRESCO and Levine Leichtman
under the terms of their respective existing loan agreements and a willingness
of the Schadens to sell their shares
There was no indication by Fagan that the third parties had approved or been
approached. The committee further noted that since the proposals were general in nature
and did not specify a particular form or structure, it could not determine what other
consents or approvals might be required.
The committee responded to Fagan on November 28, 2001. It stated that it had engaged
in a lengthy, detailed process attempting to determine whether Fagan would ever be prepared
to make a bona fide offer in a form that could be accepted for the benefit of our minority
shareholders, and noted that Fagan had failed to make such an offer. The committee
expressed its concern that the timing of Fagan's November 27 letter was designed more to
disrupt the shareholders' meeting, and that it was not a sincere expression of interest in
acquiring the minority shares. The committee noted that the letter did not contain
sufficient information to constitute a binding offer that the committee could recommend.
Nevertheless, the committee told Fagan it was willing to immediately pursue a transaction
with Fagan that would ensure the minority shareholders would receive $9.50 per share, with
no put option which would require third party consent. It noted that time was of the
essence since there was a binding agreement providing the minority shareholders $8.50 in
cash scheduled to close on November 30, 2001. The committee once again asked Fagan for a
binding offer with definitive documents and stated it was prepared to negotiate such an
offer through the close of business on November 29, 2001.
The committee did not receive an offer in the requested form of a binding offer with
definitive documents that could be accepted by us. The committee considered this a
necessary and typical requirement for a company to accept a superior offer and meet the
requirements of the Firenze merger agreement commonly referred to as a "fiduciary out".
Instead, on November 29, the special committee received a three-page letter from
Fagan covering a number of topics. Among other things, the letter asserted that Fagan had
made an "UNCONDITIONAL $9.50 OFFER" and referred to the $10.63 and $15 or higher
proposals. It asked that the committee propose a transaction structure and provide a form
of definitive agreement. Fagan also requested written confirmation that our board of
directors (including the Schadens) support the transaction. While asserting the $9.50
proposal was unconditional, the November 29 letter did not remove the conditions in the
November 27 proposal, including that:
o the current merger be amended
o the holders be allowed to continue as shareholders following the merger
o Fagan not purchase the shares from the holders directly, but instead purchase shares
of the surviving company's common stock
o "the foregoing proposal is subject to reaching a mutually satisfactory definitive
agreement providing for standard terms"
The committee met by telephone on November 29th to consider the various proposals
from Mr. Fagan. The committee noted that the Fagan November 29 letter did not cure the
deficiencies noted in the committee's November 28 letter and described in more detail in
the prior three paragraphs. It also noted that the committee had been requesting such a
binding offer from Fagan for almost three months, since at least September 7, 2001.
Nonetheless, it decided to continue discussions with Mr. Fagan in an attempt to see if a
feasible binding agreement could be reached that would be of greater benefit to the company
and its shareholders than the current agreement at $8.50 per share. The committee
responded in writing that same day. It noted that Fagan failed to provide the requested
definitive legal documentation for execution and again asked Fagan for a definitive offer.
Given the last minute nature of the proposal, it requested funds in escrow or a personal
guaranty to provide certainty. Fagan responded by letter the next morning, November 30,
2001. Fagan repeated the requests of its November 29, 2001, letter but did not provide the
documentation asked for by the committee.
We determined to delay the shareholders' meeting to provide additional disclosure to
our shareholders on the recent developments. We adjourned the shareholders' meeting until
10:00 am the following Tuesday, December 4, 2001.
On December 3, 2001, Fagan sent to the special committee a signed form of investment
agreement and personal guaranty of Fagan's obligations signed by William and Laura Fagan.
Among other things, the investment agreement provided that:
o Parties were Fagan, us and Firenze
o Firenze and we would amend the Firenze merger agreement in a number of respects and
in a form acceptable to Fagan
o Fagan would fund Firenze to have it buy shares from minority shareholders who wished
to sell their shares for $9.50 per share
o Fagan would receive an equivalent number of shares in the surviving company
o Minority shareholders who did not wish to sell their shares would be allowed to
remain shareholders
o We must agree not go private or delist from trading without the affirmative vote of
the majority of the minority shareholders
o The proposal would expire 5:00 pm (CST) on December 5, 2001
The investment agreement, guaranty letter and cover letter are exhibits to a Form SC 13D/A
filed with the Securities Exchange Commission by Fagan and various other shareholders on
December 6, 2001.
The committee met on December 3, 2001 and consulted with its financial advisor and
Brobeck on the merits of the Fagan proposal. It noted that the proposal would require the
approval of Firenze since it would amend the existing merger agreement between Firenze and
us. The committee instructed Brobeck to explore with Schulte and counsel for Firenze
whether changes to the proposed agreement could be made to make it mutually acceptable.
Brobeck asked Schulte whether the covenant against going private or delisting could be
shortened or deleted. Schulte indicated a willingness to discuss with Fagan shortening the
covenant against going private or delisting but no definitive timeframe was set. Brobeck
also noted that the proposed investment agreement would require approval from the Schadens
and Schulte indicated that Fagan was willing to be flexible with regard to various
structures, although no information was provided which indicated that any change to the
proposed form would eliminate the necessity of the Schadens' approval. Brobeck asked
Schadens' counsel if Firenze would raise its $8.50 offer and whether the Schadens would
support a $9.50 offer in the form proposed by Fagan. The Schadens' counsel responded that
Firenze would not raise its price and would not respond to a hypothetical proposal from
Fagan. No material progress was made with either Fagan or Firenze.
The committee reconvened that evening and heard presentations from us, Richard E.
Schaden and Schadens' counsel. Mr. Schaden indicated that the uncertainty associated with
the various delays to their proposed transaction was likely impeding the company's ability
to carry on its business. We likewise noted that the many allegations in the press were
negatively affecting our ability to sell franchises. Mr. Schaden also noted that the
Firenze merger was a more certain deal in that it was not subject to third party consents
or other conditions that were unlikely to be satisfied. The committee asked several
questions of Mr. Schaden. In response to a request, Mr. Schaden declined to increase the
merger consideration above $8.50. Mr. Schaden renewed his position that the Schadens'
shares were not for sale. Mr. Schaden declined to indicate whether he would support the
Fagan $9.50 proposal until he knew the definitive terms, structure and conditions. Mr.
Schaden, Schadens' counsel and we then left the meeting.
The committee then reviewed and discussed the current state of the proposals as
alternatives to the current binding merger agreement with Firenze, and concluded as follows:
o the $9.50 proposal appeared to be a possibility if a modification could be reached on
the limitations requested by Fagan on us going private or delisting from trading
o Fagan was free to launch an unconditional $9.50 per share tender offer, without the
consent or approval of the special committee or us
o the Schadens refused to increase the price of the current merger
o the $10.63 proposal was not possible without the consent of Levine Leichtman, which
had been refused
o the $15.00 proposal was not possible since the Schadens did not wish to sell
The committee noted it was hampered by the lack of definitive terms and conditions of
the Fagan $9.50 proposal. It determined the best opportunity for compromise was to propose
to Fagan and the Schadens a shortening of the time period of the requested limitations on
the company going private, and ask if either had ideas to bridge the differences. The
committee decided that Mr. Bromberg should call Mr. Fagan to negotiate and Brobeck should
call Schulte and Schadens' counsel again to see if an agreement could be reached. No
significant changes were made by any of the parties.
The committee reconvened on December 4, 2001 to further consider the fairness of the
existing merger agreement and whether any changes could be made to any of the Fagan
proposals to deliver additional value to the minority shareholders. Among other things,
the committee reanalyzed its conclusion that it was not in the interests of us and our
shareholders to remain public, for the reasons expressed in the proxy statement and saw no
reason to change its conclusion. Those reasons included:
o our small public float and limited institutional following in our stock or coverage
by analysts;
o our low trading volume
o the Schadens' indication that they were unwilling to sell their shares of our common
stock to a third party
o the board's conclusion that there is little likelihood that the liquidity of our
common stock will improve in the future
o the poor performance of our stock price since our initial public offering
Based on its review of the historical stock performance and the analysis of its
financial advisor, the special committee believes that:
o absent special transactions such as the self tender offer in late 2000 and the
current merger agreement, the stock price is likely to trade below $8.50 per share
o the low volume means that any attempt by our shareholders to sell shares in any
volume would likely depress the price
As a result, the committee determined it would be difficult for the shareholders to
obtain $8.50 for a significant number of shares.
Upon the announcement of the Firenze merger, the stock price moved up to the range of
$8.50. The committee believes that the publicity generated by the various Fagan proposals
moved the price closer to the $9.00 range. When Fagan announced it was unlikely a
transaction would be completed, the price tended back to the $8.50 level. The committee
believes that absent a transaction involving the stock, it is likely the stock price would
decrease and return to lower volume. This analysis supports the conclusion that $8.50 per
share in cash is fair to the minority shareholders.
The Schadens, we and Firenze expressly adopted and agreed with the committee's
analysis and its conclusion.
It reviewed its conclusions of the prior meeting that there was no available
alternative to the current merger which could be implemented, and decided this had not
changed. However, the committee decided to continue its efforts to develop a transaction
with Fagan which would result in our shareholders receiving $9.50 a share. On the same
date, two members of the special committee called Mr. Fagan and informed him that his
proposal would not be accepted, principally because of the proposed restriction on going
private and the prohibition on delisting from securities trading.
We adjourned the December 4, 2001 shareholders' meeting.
On December 5, 2001, Fagan delivered a letter to the committee noting its proposal
had expired and indicating it could not enter into an agreement that would allow us to go
private or effect a transaction which would cause it to cease to be a shareholder. Fagan
said it would not initiate further contacts with the committee, but that it was still
interested in pursuing a transaction with us.
On December 6, 2001, the special committee met to explore alternatives to structure a
transaction that could actually get done, meet our objectives and get additional cash
consideration to the minority shareholders. It also determined to establish a process to
reach a final result in our best interests and in the best interests of our shareholders.
These results are detailed in the next two paragraphs.
On December 7, 2001, Brobeck contacted Schulte to indicate that the committee was
still interested in a transaction with Fagan, and that a definitive proposal would be
made. Later that day, the committee sent Fagan a form of definitive agreement, which if
signed by Fagan, would result in our minority shareholders receiving $9.50 per share from
Fagan for each of their shares. The agreement was intended to firmly obligate Fagan to pay
our shareholders $9.50 a share and contains various provisions designed to assure that the
transaction actually occurs, including a requirement that Fagan escrow the merger price.
The agreement would not limit our ability to go private or effect a transaction that would
cause Fagan to cease to be a shareholder. The material terms of the proposed merger
agreement provided that:
o Fagan would create a new company into which we would be merged
o we would be the surviving company
o if approved by our shareholders, each shareholder other than the Schadens, certain of
their affiliates, the Fagans and Levine Leichtman, would receive $9.50 per
share in cash for each share of their stock
o Fagan would pay the $9.50 for each share of stock repurchased, and would escrow the
amount estimated to be needed to buy the minority shares
o Fagan would receive one share for every share repurchased from the minority
shareholders, so that at the end of the transaction, Fagan would own
approximately 30% of us
In the committee's opinion, the principal differences from Fagan's last proposal were:
o Fagan would be required to purchase all the minority shares for $9.50 per share
o Fagan would be required to pay the purchase price
o the agreement would not limit our ability to go private or effect a transaction that
would cause Fagan to cease to be a shareholder
Although in a prior letter to Fagan, the committee had offered to substitute a
personal guaranty from William and Laura Fagan for escrowed funds, this accommodation was
due to Mr. Fagan's claim that he could not escrow the funds within the time period
requested by the committee. The committee believed, however, that escrowed funds would
help ensure that a Fagan transaction would close, if the current $8.50 merger were to be
terminated. Given the new time frame for Fagan to respond to the December 7 merger offer,
the committee felt Fagan had ample time to comply with an escrow requirement and therefore
did not offer Fagan a guaranty option.
The committee said it would be available to negotiate the agreement until 5:00 pm the
following Tuesday, December 11, 2001, and encouraged Fagan and its representatives to be
present at the committee's counsel's offices on December 11 to adequately respond to any
last minute changes. The committee indicated it would not extend the deadline. The
committee informed Fagan that the Schadens and Firenze had agreed not to oppose the
transaction as set forth in the documents sent to Fagan. They also informed Fagan that
Firenze waived the condition of its merger with us related to any material adverse change
and dissenters' rights and that the Schadens would take all corporate and shareholder
action as may be necessary for Firenze to approve the Firenze merger.
The committee set the 5:00 pm December 11, 2001 deadline because of the numerous
proposals Fagan made since the announcement of the Firenze merger -- none of which
developed into a transaction. The committee was concerned that Fagan's actions have
delayed the process, increased the overall transaction costs to us and caused deal risk to
the minority shareholders and that Fagan did not intend to enter into a transaction more
favorable to our minority shareholders. It continues to be concerned by the conditions
attached to Fagan's proposals and, especially in its most recent proposals, their timing
and proximity to our special shareholders' meeting.
In an interview that appeared in the Rocky Mountain News on December 11, 2001, Mr.
Fagan is quoted as saying "It's grossly deficient...If they stick to their 5 pm deadline,
I'd say there's 0 percent chance we'll have an agreement." He is also quoted as saying,
"If the company would grant me standard minority shareholder protection, we could get a
deal done. There is no such thing as making a minority investment in a private company
without that."
By letter dated December 10, 2001, Schulte explained that Fagan had been unable to
review the materials until the 10th. It alleges that the committee has no interest in
seriously considering an alternative proposal and reiterated previous arguments as to why
Fagan's prior proposed agreement was superior. The letter states six conditions before
Fagan would consider a detailed response:
(i) Fagan would like to further discuss alternatives to a coercive transaction,
including allowing the minority shareholders to retain their interests in the
surviving company or at least a meaningful vote with respect to the transaction;
furthermore, Fagan's counsel noted that Fagan was open to structuring the transaction
such that the company could become a private company;
(ii) Schulte indicated that before it could consider if the agreement sent by
the special committee on December 7, 2001 constituted a serious offer, it first
needed for the committee to be ready to disclose the current voting results of the
minority shareholders, as well as explain the rationale for any changes to the terms
of the existing Schaden proposal and an explanation as to why Fagan must become an
actual party to the merger agreement as opposed to merely funding the purchase price
as originally contemplated in the earlier Fagan proposal;
(iii) Schulte indicated that no third party would expend substantial time and
money to provide a superior transaction for minority holders unless it had some
protection against an immediate squeeze out; therefore, Schulte indicated that it
would like to discuss various alternatives and suggested that alternatives could
include precluding the Schadens from squeezing out Fagan for some reasonable period
of time and using an investment banker, as opposed to the courts, to run a fair
market determination process;
(iv) Schulte indicated that the 5:00 p.m. Tuesday deadline was unreasonably
short and shouldn't be adhered to by the special committee in light of the pending
Fagan proposals;
(v) Schulte indicated that in light of the large percentage of minority
shareholders that have expressed an intent to dissent from the Schaden transaction,
potential for a better transaction exists and that additional time should be allotted
to bring a more favorable transaction to the minority shareholders, and further
suggested that delaying action until after the company published its 2001 financial
results would facilitate this objective and allow the parties to reassess the
fairness of the current proposal; and
(vi) Schulte suggested that Fagan needed to better understand the Schadens'
willingness to support an alternative proposal before Fagan could expend more time
and money on such a proposal.
Two members of the special committee repeatedly called Mr. Fagan on the afternoon of
December 11th to determine what conditions Mr. Fagan would require on "squeezed-out"
protection to see if a deal could still be consummated and sent a fax and e-mail to that
effect. Mr. Fagan did not return any of the calls. Schulte did e-mail Brobeck near the
end of the business day reiterating the request for the committee to respond in writing,
but to the committee's disappointment, Fagan was unavailable to talk in person prior to the
proposal deadline to see if a superior deal could be reached.
Following these events, the special committee met during the day and evening on
December 11th with its financial advisor and legal counsel and it reviewed and discussed
its original recommendation, based on the factors discussed above. As a result, the
special committee determined not to change its recommendation that the Firenze merger is
fair and in the best interests of our public shareholders.
The Quizno's Corporation
The correspondence between the
special committee and Fagan from June 2001
through December 11, 2001 is attached as Exhibit A.
The merger agreement sent to Fagan by the
committee is attached as Exhibit B.
For more information contact:
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Patrick E. Meyers, Vice President & General Counsel
The Quizno's Corporation, 720-359-3300
