Exhibit 2.1
Second Amendment to Agreement and Plan of Merger
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment")
is dated as of June 14, 1998 and entered into by and between Station Casinos,
Inc., a Nevada corporation (the "Company") and Crescent Real Estate Equities
Company, a Texas real estate investment trust ("Crescent"), with reference to
that certain Agreement and Plan of Merger, dated as of January 16, 1998, as
amended, by and between the Company and Crescent (the "Merger Agreement").
Capitalized terms used in this Amendment without definition shall have the
meanings set forth in the Merger Agreement.
AMENDMENTS TO MERGER AGREEMENT
1.1 AMENDMENT TO SECTION 1.1. Section 1.1 of the Merger Agreement is
hereby amended by replacing the words "(the "Surviving Corporation")" in the
second line of the second sentence thereof with the words "(the "Surviving
Entity")".
1.2 AMENDMENT TO SECTION 1.5(d). Section 1.5(d) is hereby amended by
deleting the last sentence thereof in its entirety and substituting for such
sentence the following:
Subject to the provisions of Sections 1.8 and 1.10 hereof, each share
of Company Common Stock that is held by any wholly owned Subsidiary
(as defined in Section 2.1) of the Company or Crescent (together, in
each case, with the associated Right (as defined in Section 3.2))
shall be converted into the number of validly issued, fully paid and
nonassessable Common Shares equal to the Exchange Ratio.
1.3 AMENDMENT TO SECTION 2.1. Section 2.1 of the Merger Agreement is
hereby amended by replacing the word "Company" in the fourth sentence thereof
with the word "Crescent".
1.4 AMENDMENT TO SECTION 2.17(a). Section 2.17(a) of the Merger
Agreement is hereby amended by inserting in the second line thereof, after
the word "Crescent," the words "neither Crescent" and by replacing the term
"Company Multiemployer Plan" in the third line thereof with the term
"Crescent Multiemployer Plan".
1.5 AMENDMENT TO SECTION 3.6. Section 3.6 of the Merger Agreement is
hereby amended by adding at the end of the last sentence thereof, after the
words "as required by law", the words ", disseminated to the stockholders of
the Company".
1.6 AMENDMENT TO SECTION 5.8(a). 5.8(a) of the Merger Agreement is
hereby amended by replacing the words "Company Stock Option" in the first
sentence thereof with the words "option to purchase Company Common Stock
(each a "Company Stock Option")", by replacing the words "and represent a
fully exercisable" in the
fifth line of the first sentence thereof with the word "an", by replacing the
word "percent" in the ninth line of the first sentence thereof with the word
"cent" and by adding at the end of the first sentence thereof, after the
words "Effective Time", the words "divided by the Exchange Ratio".
1.7 AMENDMENT TO SECTION 5.17. Section 5.17 of the Merger Agreement is
hereby amended by replacing the reference to "Article II" in the fourth line
of the fourth sentence thereof with a reference to "Article III" and by
inserting in the sixth line of the fourth sentence thereof, immediately
following romanette (iii), the word "unless".
1.8 AMENDMENT TO AND OBLIGATIONS UNDER SECTION 5.22. Section 5.22 of
the Merger Agreement is hereby amended by adding at the end of such section,
before the period, the phrase ", except that such agreements shall be revised
(i) to add to the definition of 'Shares' set forth in Section 1 of such
agreements, as a new subsection (vi), the words 'and (vi) any rights
described in Exhibits A or B to the Merger Agreement and any securities
underlying such rights, provided that neither such rights nor any shares
issued upon exercise of such rights shall be subject to the Lock-Up Agreement
provided in Section 2 of this Agreement, and provided further, that the
proviso in the definition of Registrable Shares which limits the number of
Shares that may be registered shall not be deemed to apply to such rights or
any such securities underlying such rights, and provided further, that
Crescent's covenants to register shares contained in such agreements shall
extend to such rights and to any securities underlying such rights, whether
issued by Crescent or by a subsidiary of Crescent', (ii) to provide that the
Lock-Up Period provided in Section 2(a) of such agreements shall expire
eighteen months after January 16, 1998 and the Lock-Up Period provided in
Section 2(b) of such agreements shall expire twelve months after January 16,
1998, and (iii) to replace the words 'Station Common Stock' in clause (i) of
the definition of 'Shares' with the words 'Common Shares' and to insert,
after the word 'date' in the third line of said definition, the words 'one
day after the date'." Each member of the Ownership Group hereby confirms his
obligations under and agrees to be bound by Section 5.22 of the Merger
Agreement.
1.9 AMENDMENT TO SECTION 6.3(a). Section 6.3(a) of the Merger
Agreement is hereby amended by inserting in the third line thereof, after the
words "Effective Time," the words "each member of the Ownership Group and
each of William W. Warner, Scott M Nielson and Glenn C. Christenson shall
have performed each of his agreements contained in this Agreement required to
be performed at or prior to the Effective Time".
1.10 AMENDMENT TO SECTION 7.1(d). Section 7.1(d) of the Merger
Agreement is hereby amended by adding, after the phrase "January 31, 1999,"
the phrase "(except that either party, in its discretion, shall have the
right to extend the date of
consummation of the Merger from January 31, 1999, to a date not later than
March 31, 1999)".
1.11 AMENDMENT TO SECTION 8.5. Section 8.5 of the Merger Agreement is
hereby amended by adding at the end of the first sentence thereof, after the
words "Convertible Preferred Stock", the words " or Redeemable Preferred
Stock".
1.12 AMENDMENT TO SCHEDULE 3.4 OF THE COMPANY'S DISCLOSURE LETTER.
Schedule 3.4 to the Company's disclosure letter is hereby amended by
replacing the words "Merger Agreement" in the last sentence of the third item
under "Loans, Credit Agreements, Etc." with the words "Participation
Agreement".
1.13 AMENDMENT TO SCHEDULE 3.13 OF THE COMPANY'S DISCLOSURE LETTER.
Schedule 3.13 to the Company's disclosure letter is hereby amended by
deleting the bracketed language in Item 1 under "Compliance with
Environmental Laws."
1.14 AMENDMENT TO SECTION 6.2 AND ADDITION OF SECTION 5.25. Section 6.2
of the Merger Agreement is hereby amended by deleting subsection (i).
Article V of the Merger Agreement is hereby amended by adding a new Section
5.25, as follows:
"Section 5.25 AGREEMENT TO NAME DIRECTORS. Upon written request by
Frank J. Fertitta III and Lorenzo J. Fertitta, delivered within three
months after the Effective Time, such persons shall become members of
the Board of Trust Managers of Crescent and the Board of Directors of
the JV Parent."
1.15 AMENDMENT TO SECTION 5.20. Section 5.20 of the Merger Agreement is
hereby amended to replace the reference to "Section 6.2(i)" with a reference
to "Section 5.25".
MISCELLANEOUS
2.1 EFFECT ON MERGER AGREEMENT. On and after the date of this
Amendment, each reference in the Merger Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import referring to the
Merger Agreement shall mean and be a reference to the Merger Agreement as
amended by this Amendment. Except as specifically amended by this Amendment,
the Merger Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
2.2 APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to contracts
made and to be performed entirely within such State.
2.3 CONSENT TO PRESS RELEASE. Station hereby consents to the public
issuance of the press release attached hereto as Exhibit A and to the
declaration of the distribution of common stock purchase rights on the terms
attached hereto as Exhibit B, and confirms that such press release and
declaration may be given or
made without the need for any further amendment of, or consent pursuant to
the Merger Agreement, so long as neither such press release nor the terms of
such declaration are modified, supplemented or amended in a manner materially
adverse to the holders of Company Common Stock or Convertible Preferred
Stock. The parties hereto agree that the record dates for the distributions
of the rights described in Exhibits A and B shall be set so as to permit the
Conversion Price of the Convertible Preferred Stock to be adjusted pursuant
to Section 7(d) of the Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.50 Convertible Preferred Stock of Station
Casinos, Inc. to account for such distributions.
2.4 ADJUSTMENT OF STOCK OPTIONS. If, based on the issuance of the
subscription rights described in Exhibit B, any change or adjustment is made
to the options or the terms of any of the options granted under the Crescent
Stock Plans, or if any executive officer or director of Crescent shall be
granted any new options in lieu on an adjustment to such options, in each
case to the extent such change, adjustment or grant is based on the issuance
of the subscription rights described in Exhibits A or B, then an equivalent
and proportional change, adjustment or grant shall be made to the terms of
each Substitute Option. No other change or adjustment shall be made to the
terms of any Substitute Option based on the issuance of such subscription
rights. Each member of the Ownership Group and William W. Warner, Scott M
Nielson and Glenn C. Christenson agrees, for himself, to execute the waiver
attached hereto as SCHEDULE 2.4.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
STATION CASINOS, INC.
By:/s/ Frank J. Fertitta III
----------------------------
Name: Frank J. Fertitta III
Title: Chairman of the Board and Chief Executive Officer
By: /s/ Lorenzo J. Fertitta
----------------------------
Name: Lorenzo J. Fertitta
Title: Director
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ David M. Dean
----------------------------
Name: David M. Dean
Title: Senior Vice President, Law and Secretary
SOLELY FOR PURPOSES OF SECTIONS 1.8 (SECTION 5.22 OF THE MERGER AGREEMENT) AND
THE LAST SENTENCE OF SECTION 2.4 OF THIS AMENDMENT:
/s/ Frank J. Fertitta III
-------------------------
Frank J. Fertitta III
/s/ Lorenzo J. Fertitta
-------------------------
Lorenzo J. Fertitta
/s/ Blake L. Sartini
-------------------------
Blake L. Sartini
SOLELY FOR PURPOSES OF THE LAST SENTENCE OF SECTION 2.4 OF THIS AMENDMENT:
/s/ William W. Warner
-------------------------
William W. Warner
/s/ Scott M Nielson
-------------------------
Scott M Nielson
/s/ Glenn C. Christenson
-------------------------
Glenn C. Christenson
Exhibit A
PRESS RELEASE CRESCENT REAL ESTATE
EQUITIES COMPANY
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FOR IMMEDIATE RELEASE
FORT WORTH, TEXAS
June 15, 1998
CRESCENT REAL ESTATE EQUITIES
ANNOUNCES THAT 66% DIVIDEND INCREASE
WILL FOLLOW CLOSING OF STATION MERGER
Crescent Real Estate Equities Company (NYSE:CEI), one of the country's
largest real estate investment trusts, today announced that the board of
trust managers has approved, upon completion of its pending merger with
Station Casinos, Inc. (NYSE:STN), an increase in the company's quarterly
dividend to $.63 per share from $.38 per share, representing an increase of
approximately 66%. Crescent anticipates completion of the merger in the
fourth quarter of 1998, subject to approval by Station's shareholders, gaming
regulators in Nevada and Missouri and satisfaction of other closing
conditions.
Gerald W. Haddock, Crescent's president and chief executive officer
commented, "In determining the new dividend amount, management and the board
of trust managers considered such factors as the Company's substantial cash
flow growth in the prior twelve months and near-term and long-term internal
and external growth prospects, including the accretion resulting from the
Station transaction. After initiating this dividend increase upon completion
of the Station merger, the Company will continue to maintain a conservative
payout ratio based on both funds from operations and funds available for
distribution."
Crescent also announced that, upon completion of the merger with Station, it
will commence a rights offering, pursuant to which Crescent's shareholders
(including the former shareholders of Station) will receive one right for
each share of common stock held. Every five rights will entitle the holder
thereof to purchase one share of Crescent common stock at an exercise price
of $31 1/8 per share, which was the closing price of the common stock on June
12, 1998, as reported by the NYSE. Unitholders in Crescent's operating
partnership will receive corresponding rights. All of the rights will be
exercisable until 60 days after the record date for the distribution. The
record date for distribution of the rights will follow the closing of the
merger with Station. Proceeds of the rights offering will be used to fund
acquisitions or to prepay outstanding borrowings. The rights offering will
be made pursuant to a registration statement filed today with the Securities
and Exchange Commission, following its effectiveness.
Crescent also announced that it intends to contribute substantially all of
the real estate assets acquired from Station to a new partnership (the
"Casino Partnership") that will invest principally in casinos, other gaming
properties and other real estate properties in Las Vegas, Nevada. Crescent
initially would own all of the Casino Partnership, but expects to offer
Crescent's shareholders and unitholders rights to acquire common or preferred
equity interests in the Casino Partnership, or in a real estate investment
trust which would hold interests in the Casino Partnership. The record date
for any such offering will follow the closing of the merger with Station.
Any proceeds raised
through such an offering would be used to prepay indebtedness assumed in
connection with the Station merger or to fund new acquisitions or
developments. No decisions have been made as to the terms of any such
offering, or as to what securities might be offered. The structuring of the
Casino Partnership has not been finalized, and its formation is contingent
upon the closing of the merger transaction with Station.
"A rights offering currently represents the optimal manner in which to raise
new equity as it provides our shareholders the ability to maintain their pro
rata ownership interests in Crescent," stated Mr. Haddock. "Furthermore,
because of the opportunity we have to expand the Station gaming franchise, a
separately capitalized and focused gaming entity in which Crescent retains
control and the majority of the ownership is the ideal structure to execute
our game plan."
Crescent will be conducting a conference call to discuss these announcements
on Monday, June 15, 1998 at 4:00 P.M. EST. To access the conference call,
please dial 800/779-1743 (Code:Crescent).
Crescent is a fully integrated real estate company which, upon completion of
certain pending transactions, will own through its subsidiaries a portfolio
of real estate assets, consisting of 88 office properties and 7 retail
properties totaling 32 million square feet, a 38% interest in 94 refrigerated
warehouse facilities, 89 behavioral healthcare facilities, 6 hotel/casino
properties, 7 full-service hotels totaling 2,276 rooms, 2 destination health
and fitness resorts, and economic interests in 5 residential development
corporations. The office and retail properties are located primarily in 21
metropolitan submarkets in Texas and Colorado.
For further information, please contact Dallas E. Lucas, Chief Financial
Officer, Crescent Real Estate Equities Company at (817) 321-1426. Crescent
is also online at www.cei-crescent.com.
Exhibit B
Terms of Declaration of stock purchase rights
1. Crescent will declare a distribution, to its holders of record following
the Effective Time of the Merger, of one common stock purchase right with
respect to each share of Crescent Common Stock, and one unit purchase right
with respect to each unit of Crescent Real Estate Limited Partnership then
outstanding.
2. The rights shall have a term of 60 days commencing on the record date.
3. A fixed number of common stock purchase rights, which shall be not less
than 4.75 and not more than 5, will entitle a holder to purchase one share
of Crescent common stock for $31 1/8. The same number of unit purchase
rights will entitle a holder to purchase one unit of Crescent Real Estate
Equities Limited Partnership for $66 1/4.
4. The rights will be freely transferable and will be listed for trading on
the New York Stock Exchange.
5. The record date for the distribution of rights shall be established by the
board of directors of Crescent, in its discretion, so long as the record
date follows the Effective Time of the Merger.