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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WALLACE COMPUTER SERVICES, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
GUY P. WYSER-PRATTE
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.................................................................
2) Aggregate number of securities to which transaction
applies:
.................................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
$500
.................................................................
2) Form, Schedule or Registration Statement No.:
14A
.................................................................
3) Filing Party:
GUY P. WYSER-PRATTE
.................................................................
4) Date Filed:
AUGUST 19, 1996
.................................................................
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SOLICITATION OF PROXIES
IN CONNECTION WITH THE
1996 ANNUAL MEETING OF STOCKHOLDERS
OF
WALLACE COMPUTER SERVICES, INC.
--------------------
PROXY STATEMENT
OF
MR. GUY P. WYSER-PRATTE
Wyser-Pratte & Co., Inc.
63 Wall Street
New York, New York 10005
(212) 495-5350
--------------------
This Proxy Statement and the accompanying GOLD Annual Meeting
proxy card are furnished in connection with the solicitation of proxies by Guy
P. Wyser-Pratte, ("Wyser-Pratte") of Wyser-Pratte & Co., Inc. ("WPC") to be used
at the annual meeting of stockholders of Wallace Computer Systems, Inc., a
Delaware corporation ("Wallace" or the "Company"), to be held at [ ], Wednesday,
November 6, 1996, at 10:00 A.M., and any adjournments or postponements thereof
(the "Annual Meeting"). This Proxy Statement and the enclosed proxy card are
first being sent to shareholders on or about September __, 1996. The
solicitation is being made by Wyser-Pratte on behalf of Wyser-Pratte and WPC.
REASONS FOR THE PROXY CONTEST
As a result of opposition from the Company's management and
Board of Directors (the "Board"), Moore Corporation Limited ("Moore") has
terminated its tender offer for the Company's stock and abandoned its efforts to
acquire the Company. The Board resisted the Moore offer despite the support of
the offer by a large majority of the company's stockholders.
To remedy this failure of the Company's corporate governance
system, Wyser-Pratte now solicits your proxies to elect the Wyser-Pratte
Nominees which would create a Board majority committed to the goal of maximizing
shareholder value. Wyser-Pratte also solicits your proxies to vote for a series
of resolutions (the "Wyser-Pratte Resolutions") that would curb the ability of
the Board to block advantageous offers for the Company's stock in the future.
PLEASE SUPPORT OUR EFFORTS TO REFORM THE COMPANY'S CORPORATE
GOVERNANCE SYSTEM AND TO MAXIMIZE SHAREHOLDER VALUE. YOU ARE URGED TO VOTE IN
FAVOR OF EACH OF THE PROPOSALS BY PROMPTLY SIGNING, DATING AND MAILING THE GOLD
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
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ONLY YOUR LATEST-DATED PROXY WILL COUNT AT THE ANNUAL MEETING,
THEREFORE, DO NOT SIGN ANY PROXY THAT MANAGEMENT MAY DELIVER TO YOU.
If you have any questions concerning this Proxy Statement or
need assistance in voting your Wallace Common Stock (the "Common Stock"), feel
free to call our proxy solicitor, Mackenzie Partners, Inc. toll-free at (800)
322-2885 or Eric Longmire, Senior Managing Director of WPC, at (212) 495-5357.
BACKGROUND AND RECENT EVENTS
A little over one year ago, on July 30, 1995, Moore made a
tender offer to purchase all of the outstanding shares of Wallace common stock,
together with the associated preferred stock purchase rights, (the "Shares"), at
a price of $56 per share.
Two weeks later, on August 15, 1995 the board of directors of
the Company (the "Board") concluded that the Moore offer was inadequate, not in
the best interests of the Company and the stockholders and that, in the light of
the Company's future prospects, the interests of shareholders would be best
served by the Company remaining independent.
Then, on October 12, 1995 the Moore tender offer was amended
to increase the price to $60 per share in cash (the initial and amended Moore
tender offers are collectively referred to as the "Offer").
On October 17, 1995 the Board reached the same conclusions
regarding the Offer at $60 per share and the policy of independence that they
had reached in considering the Offer at $56 per share.
Notwithstanding the Board's conclusions, 73.5% of the Shares
were tendered to Moore. Furthermore, five days later at the Annual Meeting of
shareholders held on December 8, 1995 the shareholders elected to the Board
three individuals who had been nominated by Moore and, according to Moore's
proxy statement, were committed to taking such steps as were necessary to permit
the Offer and a subsequent merger with Moore to proceed. Shortly thereafter,
Moore determined that as a result of continued opposition from the Company's
management and Board, the conditions to the Offer could not be satisfied and on
December 20, Moore terminated the Offer, but stated that it remained interested
in acquiring the Company.
Finally, on August 6, 1996 Moore announced that it would not
pursue an acquisition of the Company. On August 7, 1996, Wyser-Pratte notified
the Company of his intention to nominate Guy P. Wyser-Pratte, William M. Frazier
and W. Michael Frazier (the "Wyser-Pratte Nominees") for election as directors
at the Company's Annual Meeting.
HELP US TO CREATE AN INDEPENDENT BOARD.
ELECT THREE MORE INDEPENDENT DIRECTORS COMMITTED TO MAXIMIZING
SHAREHOLDER VALUE
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The closing price of the Shares on the New York Stock Exchange
on September -, 1996, before giving effect to the Company's July 29 , 1996
two-for-one stock split (the "Stock Split") was $------. During the --- months
since the original Expiration Date of the Offer at $60 per share, the Standard &
Poor's 500 Index (with dividends reinvested) had increased by---%.
PURPOSE OF THE WYSER-PRATTE PROPOSALS
As discussed, the Board has failed to maximize value and act
in the best interests of all shareholders. Last year, Moore nominated a slate of
directors who also stated they were committed to maximizing shareholder value;
and those nominees (the "Moore Directors"), were elected to the Board. None of
the Moore Directors is an employee, officer or director of Moore. The
Wyser-Pratte Nominees, if elected, together with the Moore Directors, will
comprise a majority of the Board. The Wyser-Pratte Nominees intend to seek to
put the Company up for sale and to cooperate with the Moore Directors to
maximize shareholder value.
In addition, Wyser-Pratte believes that by adopting
Wyser-Pratte Resolutions the shareholders can reduce the ability of the Board to
block offers to acquire the Company or, in the case of the non-binding, advisory
resolutions, can encourage the Board to seek to sell the Company or otherwise
maximize shareholder value.
PROPOSALS TO BE CONSIDERED AT THE ANNUAL MEETING
1. ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
Wyser-Pratte believes that the response of management and the
Board to the Moore acquisition proposal and the Offer represented a failure of
the Company's corporate governance system.
In tendering 73.5% of the Shares to Moore and electing the
Moore Directors, the shareholders showed that a large majority of the
shareholders were opposed to the Board's policy of independence and did not
consider the Offer coercive or hostile to the interests of shareholders.
Despite this demonstration of Shareholder sentiment, the Board
continued to oppose the Offer and ultimately succeeded in defeating it, thereby
acting toward the shareholders in a manner that Wyser-Pratte considers hostile
and coercive. The Board refused Moore's invitation to enter into acquisition
negotiations, resisted the Offer, conducted litigation in opposition to the
Offer and refused to satisfy the conditions to the Offer.
The Board took these hostile actions--at great expense to the
Company--despite the fact that the original offering price of $56 a share
(subsequently increased to $60) represented an 84% premium over the Company's
share price on February 24, 1995 when Moore first contacted Wallace about an
acquisition, and 42% over the 30-day average closing
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price, immediately prior to the tender offer, according to a letter from Moore
to the Company. The Company conducted a classic "just say no" defense, a policy
which the shareholders sharply repudiated by tendering 73.5% of the Shares to
Moore and electing the Moore Directors. Wyser-Pratte believes it was wrong for
the Board not to seek other more advantageous alternatives to the Offer. He also
believes that the actions of management and the Board with respect to the Offer
represent an egregious example of management entrenchment and demonstrate an
unwillingness to take actions to enhance shareholder value for all shareholders
when such actions conflict with management's interest in remaining in power.
The election of the Wyser-Pratte Nominees would create a Board
majority committed to maximizing shareholder value. The Board currently consists
of nine directors, three of whose terms will expire at the Annual Meeting. If
the Wyser-Pratte Nominees are elected to the Board, they, together with the
three Moore Directors, Albert W. Isenman, III, Curtis A. Hessler and Robert P.
Rittereiser, will comprise a majority of the Board.
The Wyser-Pratte Nominees will seek to cooperate with the
Moore Directors to maximize shareholder value. The Wyser-Pratte Nominees would
seek to have the new board explore opportunities for an acquisition of the
Company on terms advantageous to shareholders, as well as alternative means of
maximizing shareholder value such as a structured share repurchase program
larger than the Company's existing share repurchase program.
In addition, the Wyser-Pratte Nominees, if elected, will also
seek to have the Board review and report to shareholders on the costs that the
Company has incurred or will incur as a result of "golden parachutes" and other
contracts with management, as well as the fees that the Company has paid to its
advisors in connection with its resistance to the Offer.
ACCORDINGLY, WYSER-PRATTE PROPOSES THE ELECTION OF THE
FOLLOWING NOMINEES TO THE BOARD:
THE WYSER-PRATTE NOMINEES
<TABLE>
<S> <C>
Name, Business Present Principal Occupation and
Address and Age Principal Occupations During
Last Five Years; Directorships(i)
Guy P. Wyser-Pratte (56) Mr. Wyser-Pratte is the President and
Wyser-Pratte & Co., Inc. Chief Executive Officer of Wyser-
63 Wall Street Pratte Management Company and
New York, New York 10005 WPC, companies which are
principally engaged in money
management and event arbitrage.
William M. Frazier (67) Mr. William M. Frazier is a senior
Frazier & Oxley, L.C. member of Frazier & Oxley, Legal
The St. James Mezzanine Corporation and President and Chief
</TABLE>
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<TABLE>
<S> <C>
401 Tenth Street Executive Officer of the Old National
Huntington, West Virginia 25727 Bank of Huntington, Huntington,
West Virginia. In 1992, served as a
director of the Van Dorn Company, a
publicly owned corporation which
was sold to Crown Cork & Seal Co.,
Inc. in December 1992.
W. Michael Frazier (36)ii Mr. Michael Frazier is a partner of
Frazier & Oxley, L.C. Frazier & Oxley, Legal Corporation.
The St. James Mezzanine
401 Tenth Street
Huntington, West Virginia 25727
</TABLE>
(i) Unless otherwise indicated, nominees' principal occupations have been their
principal occupations for the preceding five years. No corporation or
organization named in this table is a parent, subsidiary or other affiliate
of the Company
(ii) William M. Frazier is the father of W. Michael Frazier.
Based on currently available public information, the election
of the Wyser-Pratte Nominees as directors of Wallace requires a plurality of the
votes cast by the holders of the Shares represented in person or by proxy at the
Annual Meeting and entitled to vote in the election of directors, assuming a
quorum is present at the Annual Meeting. Thus, assuming a quorum is present, the
three persons receiving the greatest number of votes will be elected to serve as
directors until the 1999 Annual Meeting. Non-voted shares with the respect to
the election of directors will not affect the outcome of the election of
directors.
There are no arrangements or understandings between the
Wyser-Pratte Nominees and any other person pursuant to which the Wyser-Pratte
Nominees were selected as nominees. The Wyser-Pratte Nominees will receive
directors' fees upon their election as directors of the Company in accordance
with the Company's current practice. Although Wyser-Pratte has no reason to
believe that any of the Wyser-Pratte Nominees will be unable to serve as
directors, if any one or more of the Wyser-Pratte Nominees is not available for
election, the persons named on the GOLD Annual Meeting proxy card will vote for
such other nominees as may be proposed by Wyser-Pratte.
In order to give shareholders a greater voice in the
governance of the Company and to achieve a board of directors committed to the
goal of maximizing shareholder value, Wyser-Pratte recommends that you vote FOR
the proposal to elect the Wyser-Pratte Nominees.
SHAREHOLDER PROPOSALS
The Company presently is subject to agreements and statutory
and charter provisions which the Board utilized to block the Offer and which the
Board may utilize in the future to block other advantageous acquisition
opportunities, unless these provisions are eliminated. These provisions include
(a) the Rights Agreement dated March 14, 1990 dated as
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of March 14, 1990 between the Company and the Harris Trust and Savings Bank, as
Rights Agent (the "Poison Pill"), (b) Section 203 of the Delaware General
Corporation Law (the "Business Combination Statute"), and (c) Article Ninth of
the Company's Certificate of Incorporation ("Article Ninth"). The Poison Pill,
Business Combination Statute and Article Ninth are collectively referred to as
the "Acquisition Impediments." The Offer was conditioned on the Board taking
actions within its power so that the Acquisition Impediments would not apply to
the Offer or a subsequent business combination between Moore and the Company
(the "Poison Pill Conditions"). The Board refused to satisfy the Poison Pill
Conditions, and Moore withdrew the Offer.
Wyser-Pratte is proposing the resolutions included in
Proposals 2, 3 and 4 to eliminate, or recommend that the Board eliminate, the
Acquisition Impediments.
As additional means of seeking to maximize shareholder value,
Wyser-Pratte is proposing the resolutions included in Proposal 5, to amend the
Company's By-laws to require the Board to seek and abide by the results of a
shareholder vote on certain defensive actions, and the resolution included in
Proposal 6, to recommend that the Board form a committee of independent
directors to review ways to maximize shareholder value.
Based on publicly available information, (i) adoption of the
Resolutions included in Proposals 2, 3, 5, and 6 requires an affirmative vote of
a majority of the Shares represented in person or by proxy and entitled to vote
at the Annual Meeting, assuming a quorum is present at the Annual Meeting and
(ii) adoption of the Resolution included in Proposal 4 requires approval by a
majority of the outstanding Shares, as provided in the Business Combination
Statute. With respect to abstentions and broker non-votes, the shares will be
considered present at the Annual Meeting, but since they are not affirmative
votes for the Resolutions, they will have the same effect as votes against the
Resolutions.
2. PROPOSAL TO URGE THE BOARD OF DIRECTORS TO ELIMINATE THE
COMPANY'S POISON PILL
(Item 2 on Proxy Card)
Shareholders are asked to consider and vote upon a proposal to
adopt the following non-binding, advisory resolution recommending that the Board
amend the Company's poison pill as follows:
"RESOLVED, it is recommended that the Board of Directors amend
the Company's "poison pill" so that all the outstanding Rights under Section
23 of the Rights Agreement dated as of March 14, 1990 between the Company and
Harris Trust and Savings Bank, as Rights Agent, expire ninety days after an
offer (not subject to a financing condition) has been made to acquire all of the
Company's outstanding shares."
The Poison Pill provides that upon the occurrence of certain
events, including the acquisition by a person or group of associated or
affiliated persons of 20% of the
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Company's shares (which threshold may be reduced to not less than 10% by the
Board), the Company will distribute various rights to its shareholders. These
rights, under certain circumstances, would entitle shareholders of the Company
other than such person or group to purchase shares of the Company's stock having
a market value equal to twice the purchase price or, if the Company were
acquired in a business combination, to purchase shares of the acquiror's stock
having a market value equal to twice the purchase price. Wyser-Pratte believes
that because of these provisions, it would not be economically feasible for a
potential acquiror of the Company to purchase more than the threshold amount of
the Company's shares unless the Board facilitates such acquisition by redeeming
the Poison Pill. The Board may redeem the Poison Pill prior to the tenth
business day following an announcement that such a person or group has exceeded
such threshold level of share ownership. The amendment proposed by this
Resolution would cause all outstanding Rights under the Poison Pill to expire
ninety days after an offer (not subject to a financing contingency) had been
made to acquire all the Shares; so that if such an offer were made, the Board
would have had an opportunity to seek an alternative transaction at a higher
price.
The Rights would expire, however, ninety days after an offer
was made that met the requirements of the proposal, whether or not the board
of directors believed that the offer was in the shareholders best interests.
Wyser-Pratte believes that this feature is consistent with the goal of
maximizing shareholder value, because Wyser-Pratte believes that the
shareholders rather than the Board should be the ultimate judge of whether an
offer is in the shareholders' best interests. He also believes that the
shareholders' acceptance of an offer is an indication that the shareholders
believe the offer is in their best interests, as long as there is a meaningful
time period (such as the ninety days provided for in this Resolution) in which
the Board can communicate its views to shareholders and competitive offers can
appear. The expiration caused by the proposed amendment would not apply to
offers subject to financing conditions because of the risk that the offeror
would not be able to close such an offer.
THE FOREGOING IS A SUMMARY OF THE POISON PILL AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE THERETO. THE SUMMARY OF RIGHTS THAT IS INCLUDED AS AN EXHIBIT TO
THE STOCKHOLDERS RIGHTS PLAN IS ATTACHED HERETO AS EXHIBIT A.
Wyser-Pratte believes that the Board could use the Poison Pill
to block future offers to acquire the Company, as they used it to block the
Offer; and, therefore, proposes this Resolution to enable the shareholders to
express to the Board the belief that the Poison Pill should be amended because
it is a major obstacle to the acquisition of the Company and is generally
inconsistent with the goal of maximizing shareholder value.
Wyser-Pratte urges you to vote FOR the Resolution to recommend
that the Board amend the Poison Pill.
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3. PROPOSAL TO URGE THE BOARD OF DIRECTORS TO SUBMIT TO
SHAREHOLDER VOTE AN AMENDMENT REPEALING ARTICLE NINTH
(Item 3 on Proxy Card)
Shareholders are asked to consider and vote upon the following
non-binding, advisory resolution recommending that the Board approve, and submit
to a Shareholder vote, an amendment repealing Article Ninth of the Company's
Restated Certificate of Incorporation.
"RESOLVED, it is recommended that the Board approve, and
submit to a Shareholder vote, an amendment repealing Article Ninth of the
Company's Restated Certificate of Incorporation."
Article Ninth requires, in effect, that the holders of at
least 80% of the Company's shares approve mergers and certain other transactions
involving an Interested Shareholder (as defined below) unless either (a) the
transaction is approved by a majority of the members of the Board that are not
affiliated with the Interested Shareholder and its affiliates and that were
directors prior to the time the Interested Shareholder became an Interested
Shareholder (the "Disinterested Directors"), or (b) certain specified price
criteria and procedural requirements are met.
For purposes of Article Ninth, an "Interested Shareholder" is
defined, in effect, as any person (other than the Company, or any subsidiary, or
any profit-sharing, employee stock ownership or other employee benefit plan of
the Company or any subsidiary) who is (a) the beneficial owner of more than 20%
of the Company's shares, or (b) is an affiliate of the Company and at any time
within the prior two-year period was the beneficial owner of more than 20% of
the Company's shares, or (c) is an assignee of or has succeeded, in a
transaction not involving a public offering, to any of the Company's shares
which were at any time within the prior two-year period beneficially owned by an
Interested Shareholder. Article Ninth may be repealed by an amendment to the
Certificate of Incorporation approved by a vote of 80% of the outstanding
shares.
THE FOREGOING IS A SUMMARY OF ARTICLE NINTH AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE THERETO. THE TEXT OF ARTICLE NINTH IS ATTACHED HERETO AS EXHIBIT B.
Wyser-Pratte believes Article Ninth is inconsistent with the goal of
maximizing shareholder value because the provision discourages offers to acquire
the Company's shares by creating obstacles to second-stage mergers in which
successful offerors acquire the remainder of the Company's shares. Article Ninth
has this effect because its minimum price provisions may require the acquiror to
pay more than fair value for the balance of the Company's shares if, for
example, the value of the shares decreases between the initial offer and the
second-stage merger. Wyser-Pratte's believes that shareholders do not require
the protection of Article Ninth because under Delaware law the terms of any
second-stage merger with a controlling shareholder must pass the entire fairness
test that, among other things, prohibits an acquiror from purchasing the balance
of the shares in a second-stage merger for less than fair value.
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Wyser-Pratte believes that the Board could use Article Ninth,
along with the other Acquisition Impediments, to block future offers to acquire
the Company, as they used the Acquisition Impediments to block the Offer; and,
therefore, proposes this Resolution to enable the shareholders to express to the
Board the belief that Article Ninth should be repealed because it may be an
obstacle to the acquisition of the Company and is, as discussed above, generally
inconsistent with the goal of maximizing shareholder value.
Wyser-Pratte urges you to vote FOR the Resolution to ask the
Board to submit the repeal of Article Ninth to a shareholder vote.
4. PROPOSAL TO AMEND THE BY-LAWS TO ELECT NOT TO BE
GOVERNED BY THE BUSINESS COMBINATION STATUTE
(Item 4 on Proxy Card)
Shareholders are asked to consider and vote upon the following
resolution, amending the Company's By-laws to elect not to be governed by the
Business Combination Statute:
"RESOLVED, that pursuant to Section 203 (b) (3) of the
Delaware General Corporation Law, the Shareholders hereby amend the Company's
By-laws by adding a new section 7.7 which shall read as follows:
`The corporation shall not be governed by Section 203
of the Delaware General Corporation Law.' "
The Business Combination Statute provides, in effect, that if
any person acquires beneficial ownership of 15% or more of the Company's
outstanding shares (thereby becoming an "Interested Stockholder"), the
Interested Stockholder may not engage in a business combination with the Company
for three years thereafter, subject to certain exceptions. Among the exceptions
are the Board's prior approval of such acquisition; the acquisition of at least
85% of the Company's shares (subject to certain exclusions) in the transaction
in which such person becomes an Interested Stockholder; and the approval of such
business combination by 66 2/3% of the outstanding stock not owned by the
Interested, adopt an amendment to the Bylaws or Certificate of Incorporation
electing not to be governed by the Business Combination Statute. Such amendment
would become effective twelve months after adoption and would not be subject to
amendment by the Board would not apply to a business combination with a person
who became an Interested Stockholder prior to the adoption of such amendment.
THE FOREGOING IS A SUMMARY OF THE BUSINESS COMBINATION STATUTE AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE THERETO. THE TEXT OF THE BUSINESS COMBINATION
STATUTE IS ATTACHED HERETO AS EXHIBIT C.
Wyser-Pratte believes the Business Combination Statute is
inconsistent with the goal of maximizing shareholder value because the provision
discourages offers to acquire
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the Company's shares by creating obstacles to second-stage mergers in which
successful offerors acquire the remainder of the Company's shares. The Business
Combination Statute has this effect because it requires the acquiror to win the
votes of a two-thirds super-majority of the minority shareholders to approve a
second-stage merger. Therefore, the acquiror may not be able to accomplish a
second-stage merger even if its terms are fair and it is supported by a simple
majority of the minority shareholders. If the Company opted out of the Business
Combination Statute, there would be no specific vote of the minority
shareholders required to effect a second-stage merger. In such event, if Moore
or one of its affiliates became an Interested Stockholder and proposed to
acquire the remainder of the Company's shares in a second-stage merger which was
not subject to the Business Combination Statute, it might be able to accomplish
this transaction without the favorable vote of a majority of the minority
shareholders. However, Wyser-Pratte believes that the Company's remaining
shareholders would not require the protection of the Business Combination
Statute, because a second-stage merger with a controlling shareholder would have
to satisfy the entire fairness test (including procedural fairness) and it is
common practice for acquirors to satisfy this requirement by conditioning a
second-stage merger on approval by a majority of the minority shareholders.
Wyser-Pratte believes that the Board could use the Business
Combination Statute to block future offers to acquire the Company, as it used
the Business Combination Statute and the other Acquisition Impediments to block
the Offer; and, therefore, proposes this Resolution to enable the shareholders
to eliminate a major obstacle to the acquisition of the Company, which, as
discussed above, is generally inconsistent with the goal of maximizing
shareholder value.
Wyser-Pratte urges you to vote FOR the Resolution to eliminate
a major obstacle to the acquisition of the Company by electing not to be
governed by the Business Combination Statute.
5. PROPOSAL TO AMEND THE BY-LAWS TO REQUIRE A SHAREHOLDER
VOTE ON CERTAIN DEFENSIVE ACTIONS
(Item 5 on Proxy Card)
Shareholders are asked to consider and vote upon a proposal to
adopt the following amendment to the Company's By-laws, which would add a new
Section requiring the Board to seek and abide by a shareholder vote on certain
defensive actions:
"RESOLVED, that the Shareholders hereby amend the Company's
By-laws by adding a new Section 7.8, which shall read as follows:
`If a cash tender offer (not subject to a financing condition)
is made to acquire all the Company's outstanding shares of Common Stock at a
price at least 25% greater than the average closing price of such shares during
the 30 days prior to the date on which such offer is made, and the Board of
Directors opposes such offer (including without limitation declining to redeem
the outstanding Rights pursuant to Section 23 of the Rights Agreement dated as
of March 14, 1990 between the Company and Harris Trust and Savings Bank, as
Rights Agent
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(the "Rights Agreement"), or approving such offer pursuant to Section 203(a)(1)
of the Delaware General Corporation Law), the Board of Directors shall call and
hold within sixty days after the date of such offer a meeting of stockholders at
which stockholders are asked to vote upon a proposal to support the Board of
Directors' policy of opposition to such offer; and if such resolution is not
approved by a vote of a majority of the Shares present and entitled to vote at a
meeting of stockholders at which a quorum is present held within such sixty day
period, the Board of Directors shall terminate its opposition to such offer no
later than thirty days after the earlier of (a) such stockholders meeting, and
(b) the end of such sixty-day period. Prior to the end of such thirty day
period, the Board of Directors shall take such reasonable actions (including
without limitation delaying the Distribution Date under the Rights Agreement) as
are necessary to preserve stockholders' ability to accept such offer. This
Section 7.8 may only be amended or repealed by a stockholder vote pursuant to
Section 7.1 of the By-laws.' "
Wyser-Pratte believes that the Board's opposition to the Offer
was a failure of the Company's corporate governance system, because the Board
resisted and ultimately defeated an offer that a large majority of the
shareholders supported. The proposed resolution would assure that such
Shareholder abuse does not happen again. If the Board decided to oppose a cash
tender offer (not subject to a financing contingency) at a premium of at least
25% above the market price of the Shares during the preceding month, the Board
would be obligated to call a shareholders meeting to vote on the Board's
opposition to such offer; and the Board would be required to abandon its
opposition unless this policy was approved by shareholders within sixty days
after the offer was made. The Board would not be required to submit offers
subject to financing conditions to a shareholder vote because of the risk that
the offeror would not be able to close such an offer. The By-law only applies to
offers of at least a 25% premium because Wyser-Pratte believes that a premium of
this size is large enough to be worthy of consideration by shareholders although
the average acquisition premium in Wallace's industry is higher than 25%. While
there can be no assurance that the Company will ultimately get a price higher
than the initial offer, most acquisition bids attract competition that often
leads to subsequent offers at a price higher than the initial offer or the
initial bidder often raises its price.
The By-law follows an approach to tender offer regulation that
is followed in the United Kingdom and other European Countries. If a substantial
is made to acquire a company's shares, the shareholders, not the board of
directors, should have the ultimate decision on whether to accept the offer. The
provision for a shareholder vote assures that this provision can not be used to
facilitate coercive offers, and the total period of up to ninety days in which
the Board can continue defensive actions regardless of the shareholder vote
allows management the opportunity to seek superior alternatives to such offer or
to persuade shareholders that the Company should preserve its independence.
The Delaware Courts have not considered the validity of a by-law similar to the
one proposed by this Resolution. The Delaware General Corporation Law authorizes
shareholders to adopt by-laws which "may contain any provision, not inconsistent
with law or with the certificate of incorporation, relating to the business of
the corporation, the conduct of its affairs, and its rights or powers or the
rights or powers of its stockholders, directors, officers or employees." While
Wyser-Pratte believes that the By-law is valid he recognizes that the courts
have not resolved the extent to which such stockholder-adopted by-laws may
limit the authority of the board of directors to oppose, or to adopt or employ
defensive measures against, takeover bids has not been resolved by the courts.
Accordingly, it is uncertain whether the By-law would survive a court challenge.
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Wyser-Pratte urges you to vote FOR the By-law amendment
requiring a shareholder vote on certain defensive actions.
6. PROPOSAL TO RECOMMEND ESTABLISHMENT OF A SPECIAL
COMMITTEE OF THE BOARD FOR MAXIMIZATION OF SHAREHOLDER
VALUE
(Item 6 on Proxy Card)
Shareholders are asked to consider and vote upon a proposal to
adopt the following non-binding, advisory resolution recommending that the Board
form a committee of independent directors to review ways to maximize shareholder
value and to make recommendations to the Board with respect to such proposal:
"RESOLVED, it is recommended that the Board of Directors of
Wallace Computer Services, Inc. (the "Company") establish a committee (the
"Committee") to actively seek to maximize shareholder value by (a) exploring
opportunities, and considering proposals, for an acquisition of the Company on
terms that are in the best interests of the Company's shareholders or (b)
recommending an alternative transaction such as a structured share repurchase
program significantly larger than the Company's existing share repurchase
program. The Committee shall consist of four independent directors (at least one
of which was elected in each of 1995 and 1996, as long as the Board includes
directors who were elected in such years) selected by a majority vote of the
entire board of directors. An independent director means one who has not within
five years either (i) been an officer or an employee of the Company or any of
its affiliates or (ii) personally or as an officer, employee or member of an
entity, provided goods or services to the Company as a supplier, attorney,
investment or commercial banker, or otherwise (except for services rendered as a
director) for which the Company paid consideration in excess of $10,000 in any
year. The Committee shall, at the Company's expense, retain independent legal
and financial advisors, excluding Goldman Sachs & Co. and the Company's other
existing attorneys and investment bankers. The Independent Committee will also
evaluate the accuracy of the Goldman Sachs' evaluation report entitled "Project
Greenbar," dated October 17, 1995. The Committee shall maintain reasonable
records of its activities and such records shall be open to inspection by
shareholders."
As discussed under "Election of Directors," Wyser-Pratte
believes that the actions of management and the Board with respect to the Offer
represent a failure of the Company's corporate governance system and demonstrate
an unwillingness to take actions to enhance shareholder value for all
shareholders when such actions conflict with management's interest in remaining
in power.
This Resolution is proposed to allow shareholders to express
the belief that the Board should be committed to the goal of maximizing
shareholder value. It is also a means for shareholders to express the view that
those persons on the Board who are also employed by the Company as executive
officers and who potentially have the most to lose in the event of an
acquisition of the Company should not play the key role in exploring the
Company's acquisition opportunities or in reviewing and negotiating any
acquisition proposal for the Company.
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Recognizing that an acquisition may not be the best means of maximizing
shareholder value at a particular point in time, the Resolution also authorizes
the committee to recommend an alternative transaction such as a structured share
repurchase program significantly larger than the Company's existing share
repurchase program.
The Company stated in a press release dated June 6, 1996 that
the Board had "authorized the repurchase of up to $100 million of the company's
stock. Shares would be repurchased from time to time at the discretion of the
Company at prices prevailing at the time of repurchase." Wyser-Pratte believes
that if the Company is not sold, it should repurchase at least $200 million of
its stock in a structured repurchase program, such as a tender offer or "Dutch
Auction," that would be designed to enable the Company to purchase this amount
of stock in a relatively short period of time. While the Company would have to
borrow a substantial portion of the funds for the repurchase program,
Wyser-Pratte believes that the Company could prudently incur $200 million or
more in additional debt. If the Committee determines that no action is in the
best interests of the Shareholders, it could choose to do nothing.
Project Greenbar was an attempt to estimate the value of the
Company by applying multiples to estimates of the Company's earnings per share
or earnings before interest and taxes using different measures of value. The
Committee would evaluate the report in order to determine its usefulness to the
Committee in estimating the Company's value. On January 30, 1996, Wyser-Pratte
sent a letter to Mr. Theodore Dimitriou, Chairman of the Board of the Company,
in which he stated that the Company's investment bankers, Goldman Sachs & Co.,
had made "substantial errors" in its October 17, 1995 report on the value of the
Company and that these errors "call into question the value of Goldman's report,
whether Wallace's board did in fact fulfill its duty of care and meet its
responsibilities to the Wallace shareholders, and whether Wallace filed a
misleading 14-D9 and proxy statement in connection with Moore Corp.'s hostile
takeover attempt and proxy fight." Wyser-Pratte believes that Goldman Sachs &
Co. erred in valuing the Company by applying incorrect multiples to estimates of
the Company's earnings per share or earnings before interest and taxes. He also
believes that in relying on the erroneous Goldman Sachs report to reach the
conclusion that the Offer was inadequate and that the Company should remain
independent, the Board may have violated its duty of care to shareholders and
may have made misleading statements in its 14D and proxy statement with respect
to the Offer and the Moore proxy.
Although this Resolution would not take away from the Board
the ultimate responsibility with respect to recommending a proposal to the
shareholders, or taking other steps to maximize shareholder value, Wyser-Pratte
believes that a vote FOR the Resolution and the creation of such a committee
will help assure that the Board pursues the goal of maximizing shareholder
value.
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THE MOORE OFFER AND
THE 1995 PROXY CONTEST
By letter on February 24, 1995, Moore sought to initiate
discussions of a business combination between Moore and the Company and was
advised that the Company was not interested in pursuing such discussions at that
time. On July 30, 1995, Moore announced its intention to commence a tender offer
for the Shares at a price of $56 per share. In a letter to Wallace, Moore stated
that the offer represented a 42% premium over Wallace's most recent 30-day
average closing price and an 84% premium over the Wallace share price on
February 24 when Moore first approached Wallace. The Offer was conditioned upon
the Poison Pill Conditions. See "The Acquisition Impediments."
On August 15, 1995, the Board concluded that the Offer was
inadequate and not in the best interests of the Company and the stockholders and
that, in the light of the Company's future prospects, the interests of
shareholders would be best served by the Company remaining independent.
Also on August 15, 1995, Wallace commenced litigation opposing the Offer.
On July 31, 1995, Moore Corporation Limited ("Moore") and
FRDK, Inc. ("FRDK") commenced an action in the United States District Court for
the District of Delaware by filing a complaint (the "Moore Action") against the
Company and each of the directors of the Company, entitled Moore Corporation
Limited and FRDK, Inc. v. Wallace Computer Services, Inc., et al. The Moore
Action, as amended by the Amended and Supplemental Complaint filed on October
17, 1995, asserted, among other things, that the use of certain anti-takeover
devices and other defensive measures by the Company was not proportionate nor
within the range of reasonable responses to the tender offer made by FRDK, a
wholly owned subsidiary of Moore, to purchase all outstanding shares of common
stock of the Company, together with associated preferred stock purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of March 14,
1990 (the "Rights Agreement"), at a price of $60 net to the seller in cash (the
"Offer"), and was in breach of the directors' fiduciary duties to the Company's
stockholders. The Moore Action also asserted that the Offer and merger with FRDK
or another wholly-owned subsidiary of Moore (the "Proposed Merger") and proxy
solicitation complied or would comply with all applicable laws and other
obligations and sought a declaratory judgment that the Offer and the Proposed
Merger and proxy solicitation complied with all applicable laws and other
obligations.
The Moore Action sought: (i) preliminary and permanent
injunctive relief that would have prohibited the Company, its directors,
officers and certain other related parties from taking steps to impede the
ability of the Company's stockholders to consider and make their own
determination as to whether to accept the terms of the Offer or give or withhold
consent to the terms of the proxy solicitation, or taking any other action to
thwart or interfere with the Offer, the Proposed Merger or the proxy
solicitation; (ii) (a) to compel the Company's directors to redeem the Rights or
amend the Rights Agreement to make the Rights inapplicable to the Offer and the
Proposed Merger, and (b) preliminary and permanent injunctive relief that would
have enjoined the Company, its directors, officers and certain other related
parties from taking any action to implement and distribute the Rights and from
taking actions pursuant to
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the Rights Agreement; (iii) (a) to compel the Company's directors to approve the
Offer and the Proposed Merger for the purposes of Section 203 of the Delaware
General Corporation Law ("Section 203"), and (b) preliminary and injunctive
relief that would have enjoined the Company, its directors, officers and certain
other related parties from taking any actions to enforce or apply Section 203
that would have interfered with the Offer; and (iv) (a) to compel the Company's
directors to approve the Offer and the Proposed Merger for purposes of Article
Ninth of the Restated Certificate of Incorporation of the Company ("Article
Ninth"), and (b) preliminary and permanent injunctive relief that would have
enjoined the Company, its directors, officers and certain other related parties
from taking any actions to enforce or apply Article Ninth that would have
interfered with the Offer.
On August 15, 1995, the Company and each of the directors of
the Company filed a Motion to Dismiss the Moore Action. On September 19, 1995,
the United States District Court for the District of Delaware denied the Motion
to Dismiss. On September 24, 1995, the Company and its directors filed an Answer
and Counterclaim in the United States District Court for the District of
Delaware in connection with the Moore Action. The counterclaim was brought
against Moore, Bidder and Reto Braun, Chairman of the Board and Chief Executive
Officer of Moore, and asserted (i) that the effect of the transactions
contemplated by the Offer to Purchase may have been substantially to lessen
competition in a relevant market and therefore violate Section 7 of the Clayton
Act, 15 U.S.C. Section 18; and (ii) that Moore, the Bidder, and Mr. Braun have
made false and misleading statements of fact in connection with the Offer and
their proxy solicitation materials. The counterclaim sought declaratory and
injunctive relief that would have enjoined (i) Moore and the Bidder from
acquiring any voting securities of the Company, and (ii) Moore, the Bidder and
Mr. Braun from acquiring any shares of Common Stock of the Company until 60 days
after they have fully complied with the Securities Exchange Act of 1934, as
amended.
On December 4, 1995, the United States District Court for the
District of Delaware issued an Order and an Opinion. Pursuant to the Order and
Opinion, the Court denied Moore and the Bidder's motion for a preliminary
injunction with respect to the breach of fiduciary claim. In addition, the Court
denied Moore and the Bidder's motion to dismiss the Company's antitrust
counterclaim. On January 23, 1996, the Court entered a final judgment dismissing
all claims in the action with prejudice. On January 29, 1996, the Company filed
a notice of appeal with the District Court in order to appeal the Court's
dismissal of the Company's antitrust counterclaim described above. On August 20,
1996, the United States Court of Appeals for the Third Circuit, in light of
Moore's stated decision not to proceed with the acquisition of the Company,
issued an order dismissing the appeal as moot and remanding the action to the
District Court for the dismissal of Wallace's antitrust claim. On August 22,
1996, the District Court implemented the Third Circuit's order, dismissing the
Company's antitrust claim as moot.
In addition to the Moore Action, the Company and its directors
have been named as defendants in three purported class actions filed between
July 31, 1995 and August 3, 1995 on behalf of the public stockholders of the
Company in the Court of Chancery of the State of Delaware in and for New Castle
County. These actions are entitled Koff v. Dimitriou, et al.; Laperriere v.
Wallace Computer Services, Inc., et al.; and Pittman v. Dimitriou, et al.
(collectively, the "Stockholder Actions"). The complaints in the Stockholder
Actions contain substantially similar allegations, and allege breach of
fiduciary duty claims arising out of the
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proposal by FRDK to acquire the Company. The complaints in the Stockholder
Actions also seek substantially similar relief, including declaratory and
injunctive relief barring defendants from breaching their fiduciary duties to
plaintiffs and the putative class members and from taking steps to impede any
offer to acquire the Company, as well as damages in an unspecified amount.
On September 22, 1995, the plaintiffs in the Koff and
Laperriere actions filed an Amended Class Action Complaint which, among other
things, consolidates the actions that those plaintiffs filed in the Court of
Chancery of the State of Delaware. The Amended Class Action Complaint, among
other things, seeks injunctive relief with respect to enforcement of certain
amendments to the Company's Profit Sharing Plan and Profit Sharing Trust. On
November 21, 1995, the plaintiffs in the Koff and Dimitriou actions filed a
Second Amended Class Action Complaint in the Court of Chancery of the State of
Delaware. The plaintiffs' counsel in the Stockholder Actions has extended the
time in which the Company must answer or otherwise respond to the complaint
until ten days from the date plaintiffs' counsel requests such a response.
On October 12, 1995, Moore amended the Offer to increase the
cash price for the Shares to $60 net per share. On October 17, 1995 the Board
reached the same conclusions regarding the Offer and the policy of independence
at $60 per share that they had reached in considering the Offer at $56 per
share. As of November 3, 1995, a total of 16,698,706 shares, representing
approximately 73.5% of the Shares before giving effect to the Stock Split, had
been validly tendered and not withdrawn pursuant to the Offer, but the Offer was
not consummated because the Poison Pill Conditions had not been satisfied or
waived. On November 6, 1995, Moore extended the Offer until 12:00 Midnight, New
York City time, on Monday December 11, 1995.
On November 10, 1995, Moore distributed a proxy statement to
Wallace shareholders soliciting proxies in connection with certain Moore
proposals to be voted on at the 1995 annual meeting of Wallace shareholders
scheduled for December 8, 1995. Moore solicited proxies for the following
proposals:
1. to elect the Moore Directors to the Board;
2. to remove all of the members of the Board other than the
Moore Directors;
3. to amend the Wallace By-laws to fix the number of
directors at five, rather than a number to be agreed upon
by the Board from time to time; and
4. to repeal each provision of the Wallace By-laws or
amendments thereto adopted without shareholder approval
after February 15, 1995 and before the annual meeting,
including the By-law amendment creating a 60-day notice
requirement applicable to shareholders desiring to bring
business for consideration at a Wallace annual meeting.
The Moore Directors were elected at the 1995 annual meeting.
If, in addition, the Moore stockholder resolutions had been approved, the Moore
Directors would have constituted a majority of a five member Wallace Board, and
the Moore Directors, subject to the
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fulfillment of their fiduciary duties as directors of Wallace, would have been
able to take action to satisfy the Poison Pill Conditions to enable the Offer to
be consummated. However, while the Moore stockholder resolution relating to
By-law amendments adopted without shareholder approval was approved by a vote of
a majority of the Shares represented at the meeting, the other resolutions,
which required the affirmative vote of 80% of the outstanding Shares, were not
adopted. As a result, the Poison Pill Conditions were not satisfied, and on
December 20, Moore terminated the Offer, but stated that it remained interested
in acquiring the Company.
On August 6, 1996, Moore announced that it would not pursue
the acquisition of the Company.
CHANGE IN CONTROL
Based on a review of documents filed with the Securities and
Exchange Commission and other publicly available information, Wyser-Pratte
believes that the election of the Wyser-Pratte Nominees may result in a
"Material Change" within the meaning of various of the Company's employee
benefit plans and employment contracts, thereby entitling the participants in
such plans and the individual parties to such contracts to receive various
payments and benefits.
According to Amendment No. 3 to Schedule 14D-9, the Board
approved and adopted amendments on September 6, 1995 to the Wallace Computer
Services, Inc. Employee Severance Pay Plan (the "Employee Plan"), the Wallace
Computer Services, Inc. Executive Severance Pay Plan (the "Executive Pay Plan"),
the Wallace Computer Services, Inc. Executive Incentive Plan (the "Executive
Incentive Plan") and the Wallace Computer Services, Inc. Deferred
Compensation/Capital Accumulation Plans for 1990, 1991, 1993, 1994 and 1995 (the
"Deferred Compensation Plans") (the Employee Plan, the Executive Pay Plan, the
Executive Incentive Plan and the Deferred Compensation Plans are referred to
collectively as the "Benefit Plans") to increase the number of incumbent
directors that must cease to be directors before a "Material Change" shall occur
under the Benefit Plans. The amendments provide that a "Material Change" shall
be deemed to have occurred when, among other things, individuals who, as of
September 6, 1995, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board; provided, however, that
any individual who becomes a member of the Board subsequent to such date whose
election, or nomination for election by the stockholders of Wallace was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be deemed to be a member of the Incumbent Board; and provided
further, that no individual whose election or initial assumption of office as a
director of Wallace occurs as a result of an actual or threatened election
contest (as such terms are used in Rule14a-11 of Regulation 14A promulgated
under the Exchange Act) with respect to the election or removal of directors, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be a member of the
Incumbent Board. The Board also approved and adopted an amendment to the
Employee Plan to provide that the amount of the severance benefit payable upon
certain terminations of employment as provided in the Employee Plan after the
occurrence of a Material Change to certain participants, as designated by the
Compensation Committee of the Board from time to time, shall be not less than
one year of
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Annual Compensation (as defined in the Employee Plan). On September 6, 1995, the
Compensation Committee designed 37 participants for this purpose. The Board also
approved the reclassification of four employees that were not executive officers
of Wallace from Level I Participants to Level II Participants under the
Executive Pay Plan.
On September 6, 1995, the Board approved and adopted Amendment
No. 36 to the Wallace Computer Services, Inc. Profit Sharing and Retirement Plan
(the "Profit Sharing Plan") and Amendment No. 6 to the Wallace Computer
Services, Inc. Profit Sharing and Retirement Trust Agreement (the "Profit
Sharing Trust") (collectively, the "Amendments") which provide, among other
things, that (i) each plan participant is allowed to give voting instructions,
in the manner proscribed by the trustee, with respect to the number of Shares
represented by such plan participant's proportionate interest in the trust under
the Profit Sharing Plan and (ii) each plan participant is allowed to instruct
the trustee regarding how to respond to a tender offer with respect to the
numbers of Shares represented by such plan participant's interest in the trust
under the Profit Sharing Plan. On September 6, 1995, the Board also authorized
certain officers of Wallace to appoint on behalf of Wallace and independent
institutional trustee to replace the current individual trustees under the
Profit Sharing Trust with respect to the Shares held thereunder.
On September 6, 1995, the Board approved and adopted Amendment
No. 1 ("Amendment No.1") to the Wallace Computer Services, Inc. Long-Term
Performance Plan (the "LTP Plan"), which Amendment No. 1 added a provision
relating to the treatment of awards in the event of a "Material Change." The
definition of "Material Change" as provided in the Amendment No. 1 is
substantially similar to the definition of Material Change contained in the
Employee Plan, the Executive Pay Plan and the Executive Incentive Pay Plan.
Amendment No. 1 provides, among other things, that (i) a plan participant's
accrued bonus balance under the LTP Plan would not be reduced below the amount
of the plan participant's accrued bonus balance as calculated after inclusion of
the plan participant's award, if any, for the Plan Year (as defined in the LTP
Plan) immediately preceding the Plan Year during which the Material Change
occurs and (ii) an individual who is a plan participant immediately prior to the
occurrence of a Material Change (a "Protected Participant") will be entitled to
receive payment of such participant's accrued bonus balance if, at any time
during the two-year period beginning on the date that the Material Change
occurs, the Protected Participant's employment with Wallace terminates, whether
voluntarily or involuntarily, for any reason other than for Cause (as defined in
Amendment No. 1) or on account of the Protected Participant's death or permanent
disability (in which event the Protected Participant or his or her
beneficiaries, as the case may be, are entitled to the benefits otherwise
provided by the LTP Plan).
According to Amendment No. 7 to the Schedule 14D-9, the Board
approved and adopted on September 27, 1995, Amendment No. 37 ("Amendment
No. 37") to the Wallace Computer Services, Inc. Profit Sharing and Retirement
Fund, which Amendment No. 37 modified the definition of "Material Change" to be
substantially similar to the definition of Material Change contained in the
Employee plan, the Executive Pay Plan, the Executive Incentive Plan and the
LTP Plan.
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The Cronin Employment Agreement provides that Mr. Cronin be
paid various payments and receive additional benefits upon the occurrence of
certain events following a "Material Change" (as defined therein).
CERTAIN INFORMATION CONCERNING
WYSER-PRATTE
AND OTHER PARTICIPANTS
IN THE SOLICITATION
Wyser-Pratte is President and Chief Executive Officer of
Wyser-Pratte Management Company and WPC, which are principally engaged in money
management and event arbitrage. The principal executive offices of WPC are
located at 63 Wall Street, New York, New York 10005. Wyser-Pratte owns
beneficially 1,057,000 shares of the Common Stock, representing approximately
2.3% of the 45,757,794 shares of Common Stock outstanding as of May 31, 1996, as
reported in the Company's Quarterly Report on Form 10-Q for the quarter ended
April 30, 1996, after giving effect to the Stock Split. This includes (i) 8,000
shares owned directly by Wyser-Pratte and (ii) 1,049,000 shares owned by
investment partnerships and other managed accounts for which affiliates of WPC
are the general partner or investment manager. In non-discretionary accounts
maintained with WPC, 44,000 shares of the Common Stock, representing less than
1% of the outstanding shares of Common Stock, are held by clients of WPC.
Neither WPC nor Wyser-Pratte has any voting or investment power or authority
with respect to shares of Common Stock held in such accounts. Both Wyser-Pratte
and WPC disclaim beneficial ownership of such shares. Certain information about
the directors and executive officers of WPC is set forth in Schedule I attached
hereto. Other than Wyser-Pratte, no other officer of WPC owns any shares of
Common Stock check. If the Wyser-Pratte Nominees are elected, Wyser-Pratte will
ask the Board to have the Company reimburse him for costs and expenses incurred
in connection with this proxy solicitation. Wyser-Pratte does not intend to
request that his reimbursement request be submitted to a vote of shareholders.
Except as set forth in this Proxy Statement or in the
Appendices hereto, to the best knowledge of Wyser-Pratte, none of Wyser-Pratte,
any of the persons participating in this solicitation on behalf of Wyser-Pratte,
the Wyser-Pratte Nominees, and any associate of any of the foregoing persons (i)
owns beneficially, directly or indirectly, or has the right to acquire, any
securities of the Company or any parent or subsidiary of the Company, (ii) owns
any securities of the Company of record but not beneficially, (iii) has
purchased or sold any securities of the Company within the past two years, (iv)
has incurred indebtedness for the purpose of acquiring or holding securities of
the Company, (v) is or has been a party to any contract, arrangement or
understanding with respect to any securities of the Company within the past
year, (vi) has been indebted to the Company or any of its subsidiaries since the
beginning of the Company's last fiscal year or (vii) has any arrangement or
understanding with respect to future employment by the Company or with respect
to any future transactions to which the Company or any of its affiliates will or
may be a party. In addition, except as set forth in this Proxy Statement or in
the Appendices hereto, to the best knowledge of Wyser-Pratte, none of
Wyser-Pratte, any of the persons participating in this solicitation on behalf of
Wyser-Pratte, the Wyser-Pratte Nominees, and any associate or immediate family
member of
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any of the foregoing persons has had or is to have a direct or indirect material
interest in any transaction with the Company since the beginning of the
Company's last fiscal year, or any proposed transaction, to which the Company or
any of its affiliates was or is a party.
None of the corporations or organizations in which the
Wyser-Pratte Nominees have conducted their principal occupation or employment
was a parent, subsidiary or other affiliate of the Company and the Wyser-Pratte
Nominees do not hold any position or office with the Company or have any family
relationship with any executive officer or director of the Company or have been
involved in any legal proceedings of the type required to be disclosed by the
rules governing this solicitation.
VOTING RIGHTS
According the Company's Quarterly Report on Form 10Q for the
quarter ended April 30, 1996, at May 31, 1996, 45,757,788 shares of Common Stock
were outstanding and entitled to vote, after giving effect to the Stock Split.
Only holders of record as of the close of business on __________________ will be
entitled to vote at the Annual Meeting. Wyser-Pratte intends to vote all shares
of Common Stock beneficially owned by him in favor of each proposal set forth
herein.
GENERAL INFORMATION
This Proxy Statement and the accompanying GOLD Proxy Card are
first being made available to shareholders on or about September ____, 1996.
Executed Proxies will be solicited by mail advertisement, telephone, telecopier
and in person. Solicitation will be made by Wyser-Pratte and Eric Longmire,
Senior Managing Director of WPC neither of whom will receive additional
compensation for such solicitation. Proxies will be solicited from individuals,
brokers, banks, bank nominees and other institutional holders. Wyser-Pratte has
requested banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all solicitation materials to the beneficial owners of the shares
they hold of record. Wyser-Pratte will reimburse these record holders for their
reasonable out-of-pocket expenses.
In addition, Wyser-Pratte has retained Mackenzie Partners,
Inc. ("Mackenzie") to solicit proxies in connection with the Annual Meeting for
which Mackenzie will be paid a fee of approximately $______ and will be
reimbursed for its reasonable expenses. Mackenzie will employ approximately [ ]
people in its efforts. Costs incidental to this solicitation include
expenditures for printing, postage, legal and related expenses and are expected
to be approximately ______. The total costs incurred to date in connection with
this solicitation are not in excess of $______.
OTHER MATTERS TO BE CONSIDERED
AT THE ANNUAL MEETING
Except as set forth in the Proxy Statement, Wyser-Pratte is
not aware of other matters to be considered at the Annual Meeting. However, if
any other matters properly come
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before the Annual Meeting, Wyser-Pratte will vote his Common Stock and all
proxies held by him in accordance with his best judgment with respect to such
maters. Your attention is directed to the Company's 1996 Proxy Statement
regarding the procedures for submitting proposals for consideration at the
Company's 1997 Annual Meeting.
CERTAIN OTHER INFORMATION REGARDING THE COMPANY
Shareholders are referred to the Company's 1996 Proxy
Statement with respect to the compensation and remuneration paid and payable and
other information related to the Company's officers and directors, beneficial
ownership of the Company's securities.
VOTING OF PROXY CARDS
Shares of Common Stock represented by properly executed GOLD
PROXY CARDS will be voted at the Annual Meeting as marked, and in the discretion
of the persons named as proxies on all other matters as may properly come before
the Annual Meeting, including all motions for an adjournment or postponement of
Annual Meeting, unless otherwise indicated in the Proxy Statement.
IF YOU WISH TO VOTE FOR THE PROPOSALS AND IN THE DISCRETION OF
THE PERSONS NAMED AS PROXIES ON ALL MATTERS AS MAY PROPERLY COME BEFORE THE
ANNUAL MEETING, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN
THE PROVIDED POSTAGE-PAID ENVELOPE.
REVOCABILITY OF SIGNED PROXIES
A proxy executed by a holder of the Company's Common Stock may
be revoked at any time before its exercise by sending a written revocation of
such proxy, by submitting another proxy with a later date marked on it or by
appearing in person at the Annual Meeting and voting. A written revocation must
clearly state that the proxy to which it relates is no longer effective and must
be executed and delivered prior to the time that the action authorized by the
executed proxy is taken. The written revocation may be delivered either to
Wyser-Pratte or the Secretary of the Company. Although a written revocation or
later dated proxy delivered only to Wallace will be effective, Wyser-Pratte
requests that if a written revocation or subsequent proxy also be delivered to
Wyser-Pratte so that he will be aware of such written revocation.
THE RETURN OF A SIGNED AND DATED GOLD PROXY CARD WILL FULLY
REVOKE ANY PREVIOUSLY DATED PROXY YOU MAY HAVE RETURNED. THE LATEST DATED PROXY
IS THE ONE THAT COUNTS.
YOUR VOTE IS IMPORTANT. IT WILL HELP DECIDE WHETHER THE
SHAREHOLDERS WILL HAVE AN ADEQUATE VOICE IN THE AFFAIRS OF THE COMPANY. PLEASE
MARK, SIGN AND DATE THE ENCLOSED GOLD PROXY
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CARD AND RETURN IT PROMPTLY IN THE PROVIDED POSTAGE-PAID ENVELOPE.
GUY P. WYSER-PRATTE
IF YOUR SHARES OF WALLACE COMMON STOCK ARE HELD IN THE NAME OF
A BROKERAGE FIRM, BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN SIGN A PROXY
WITH RESPECT TO YOUR COMMON STOCK. ACCORDINGLY, PLEASE CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR A PROXY CARD TO BE SIGNED
REPRESENTING YOUR SHARES OF COMMON STOCK
- --------
If you have any questions about giving your proxy or required assistance, please
contact our proxy solicitor, Mackenzie partners, Inc. toll-free at (800)
322-2885, or Eric Longmire, Senior Managing Director of WPC at (212) 495-5357.
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EXHIBIT A
WALLACE COMPUTER SERVICES, INC.
STOCKHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS
On March 14, 1990 (the "Rights Dividend Declaration Date"),
the Board of Directors of Wallace Computer Services, Inc. (the "Corporation")
adopted a Stockholder Rights Plan and declared that a dividend of one Right be
distributed on each outstanding share of Common Stock, par value $1.00 per share
("Common Stock"), to stockholders or record as of the close of business on March
28, 1990 (the "Record Date"). Each Right entitles the registered holder to
purchase from the Corporation one two-hundredth of a share (a "Unit") of Series
A Preferred Stock, par value $50.00 per share ("Series A Preferred Stock"), or,
in certain circumstances, shares of Common Stock, other securities, and/or cash
or other property, at an Exercise Price of $115.00 per Unit, subject to
adjustment.
The complete terms and conditions of the Rights are set forth
in a Rights Agreement dated as of March 14, 1990 (the "Rights Agreement")
between the Corporation and Harris Trust and Savings Bank, as Rights Agent. This
Summary of Rights does not purport to be complete and is qualified in its
entirety by the provisions of the Rights Agreement. A copy of the Rights
Agreement has been filed with the Securities and Exchange Commission as an
Exhibit to the Corporation's Registration Statement on Form 8-A dated March 14,
1990. A copy of the Rights Agreement is also available free of charge from the
Corporation.
Initially, the Rights will attach to the outstanding shares of
Common Stock, and no separate Rights Certificates will be distributed. The
Rights will detach from the outstanding shares of Common Stock and separate
Rights Certificates will be issued when there is a Distribution Date. A
"Distribution Date" will occur at (i) the close of business on the tenth day
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has become the Beneficial Owner of
20% or more (or such lower Beneficial Ownership threshold not less than 10% as
may be established through an amendment of the Rights Agreement) of the
outstanding shares of Common Stock (the date of such public announcement being
the "Stock Acquisition Date"), or (ii) if earlier, the close of business on the
tenth business day following the commencement of tender or exchange offer that
would result in a person or group becoming the Beneficial Owner of 20% or more
(or such lower Beneficial Ownership threshold not less than 10% as may be
established through an amendment of the Rights Agreement) of the outstanding
shares of Common Stock. Until a Distribution Date occurs, the Rights will be
evidenced by the certificates for the shares of Common Stock to which the Rights
are attached, the Rights will transfer with (and only with) the shares of Common
Stock to which such Rights are attached, and the transfer of any certificate for
Common Stock will also constitute the transfer of the Rights attached to the
shares of Common Stock represented by such certificate.
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All shares of Common Stock outstanding on the Record Date will
receive Rights. In addition, all shares of Common Stock issued prior to the
Distribution Date will be issued with Rights. All certificates for Common Stock
issued after the Record Date and prior to the Distribution Date will contain a
legend incorporating the Rights Agreement by reference.
Shares of Common Stock issued after the Distribution Date and
prior to the earlier to occur of the Final Expiration Date and the time at which
the Rights are redeemed will be issued with Rights if (i) such shares are issued
pursuant to the exercise of options, warrants or stock purchase rights issued by
the Corporation or any of its Subsidiaries prior to the Distribution Date, (ii)
such shares are issued under any employee benefit or compensation plan or
arrangement established by the Corporation or any of its Subsidiaries prior to
the Distribution Date, or (iii) such shares are issued upon the exercise,
conversion or exchange of convertible securities issued by the Corporation or
any of its Subsidiaries prior to the Distribution Date. Except as otherwise
determined by a majority of the independent members of the Board of Directors,
no other shares of Common Stock issued after the Distribution Date will be
issued with Rights.
The Rights are not exercisable until the distribution Date and
will expire at the close of business on March 31, 2000 (the "Final Expiration
Date"), unless earlier redeemed or exchanged by the Corporation.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to the holders of record of Common Stock as of the
Distribution Date, and, thereafter, the Rights Certificates alone will represent
the Rights.
In the event that, (i) at any time following the Rights
Dividend Declaration Date, a Person becomes the Beneficial Owner of 20% or more
(or such lower Beneficial Ownership threshold not less than 10% as may be
established through an amendment of the Rights Agreement) of the then
outstanding shares of Common Stock, or (ii) at any time following the Stock
Acquisition Date, (A) the Corporation is the surviving corporation in a merger
or other business combination with an Acquiring Person, (B) an Acquiring Person
engages in one or more "self-dealing" transactions involving the Corporation or
any of its Subsidiaries as set forth in the Rights Agreement, or (C) a
reclassification of stock, a merger or consolidation, or any other transaction
occurs that results in an increase of 1% or more in the percentage of any class
of equity securities of the Corporation or any of its Subsidiaries that is
beneficially owned by an Acquiring Person, each holder of a Right will
thereafter have the right to receive, if such holder so elects, upon exercise of
such Right, in lieu of shares of Series A Preferred Stock, shares of Common
Stock ("Flip-In Shares"), or, in certain circumstances, cash, property and/or
other securities, then having a current market value equal to two times the then
current Exercise Price for each Unit then purchasable upon exercise of such
Right; provided, however, that, upon the occurrence of any event referred to in
clause (i) or (ii) of this paragraph, all Rights that are or, under certain
circumstances specified in the Rights Agreement, were beneficially owned by any
Acquiring Person shall be null and void. No Rights shall be exercisable
following the occurrence of any event referred to in clause (i)
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or (ii) of this paragraph until such time as the Rights are no longer redeemable
by the Corporation at the option and election of the Board of Directors.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination,
or (ii) 50% or more of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) is sold or otherwise transferred, each holder of
a Right (except a Right that is or was held by an Acquiring Person that has
become null and void as a result of the occurrence of an event referred to in
clause (i) or (ii) of the preceding paragraph) shall thereafter have the right
to receive, if such holder so elects, upon exercise of such Right, in lieu of
shares of Series A Preferred Stock or Flip-In Shares, shares of common stock of
the acquiror then having a current market value equal to two times the then
current Exercise Price for each Unit then purchasable upon exercise of such
Right. The events referred to in clauses (i) and (ii) of the preceding paragraph
and in clauses (i) and (ii) of this paragraph are hereinafter referred to as
"Triggering Events."
The Exercise Price payable upon exercise of the Rights and the
number of Units of Series A Preferred Stock (and the amount of other securities
and/or property, if any) issuable upon exercise of the Rights are subject to
adjustment in the event that (i) there is a stock dividend on, or a subdivision,
combination or reclassification of, Series A Preferred Stock, or (ii) the
holders of Series A Preferred Stock are granted certain options, warrants or
rights to subscribe for or purchase Series A Preferred Stock (or equivalent
Preferred Stock) or securities convertible into Series A Preferred Stock (or
securities convertible into equivalent Preferred Stock) at a price less than the
current market price of Series A Preferred Stock, or (iii) any evidence of
indebtedness, cash and/or other property (other than regular quarterly cash
dividends) or any options, warrants or purchase rights (in addition to rights,
options or warrants of the type referred to in clause (ii) of this paragraph)
are distributed to the holders of Series A Preferred Stock.
Subject to certain exceptions as set forth in the Rights
Agreement, no adjustment in the Exercise Price will be required until the
cumulative adjustments amount to at least 1/10 of 1% of the Exercise Price. No
fractional Units will be issued upon exercise of the Rights, but, in lieu
thereof, a cash adjustment will be paid to the holder of the exercised Rights
based on the market price of the Series A Preferred Stock on the last trading
date prior to the date of exercise.
At any time prior to and until ten Business Days following the
Stock Acquisition Date, the Corporation may, at the option and election of the
Board of Directors, redeem the Rights in whole, but not in part, at a price of
$.01 per Right, payable in cash; provided, however, that any election to redeem
that is made after the Stock Acquisition Date must be concurred in by a majority
of the independent members of the Board of Directors. After the redemption
period has expired, the Corporation's right to redeem the Rights at the option
and election of the Board of Directors may be reinstated if each Acquiring
Person reduces his beneficial ownership to 5% or less of the outstanding shares
of Common Stock in a transaction or series of transactions that does
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no involved the Corporation or any of its Subsidiaries and does not result in
a Triggering Event.
Immediately upon any action of the Board of Directors ordering
a redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of the Rights will be to receive the redemption
price.
At any time after any person becomes an Acquiring Person, and
prior to the time any person (other than the Corporation, any of its
Subsidiaries, any employee stock ownership plan or other employee benefit plan
of the Corporation or any of its Subsidiaries, and any person organized,
appointed or established pursuant to the terms of any employee stock ownership
plan or other employee benefit plan of the Corporation or any of its
Subsidiaries ) becomes the Beneficial Owner of 50% or more of the outstanding
shares of Common Stock, the Corporation may, at the option and election of the
Board of Directors, exchange shares of Common Stock (or Common Stock
Equivalents) or shares of Series A Preferred Stock (or Equivalent Preferred
Stock) for all or any part of the then outstanding and unexercised Rights (other
than Rights that are or were beneficially owned by an Acquiring Person and have
become null and void) at an exchange rate of one share of Common Stock (or
Common Stock Equivalent) per Right or one two-hundredth of a share of Series A
Preferred Stock (or Equivalent Preferred Stock) per Right, as the case may be,
appropriately adjusted to reflect any stock dividend, stock split, reverse stock
split or other similar transaction occurring after the Rights Dividend
Declaration Date; provided, however, that any election to exchange shares of
Common Stock (or Common Stock Equivalents) or shares of Series A Preferred Stock
(or Equivalent Preferred Stock) for any Rights that is made after the Stock
Acquisition Date must be concurred in by a majority of the independent members
of the Board of Directors.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends.
Although the initial distribution of the Rights not be taxable
to the Corporation or its stockholders, a stockholder may, depending upon the
circumstances, be required to recognize taxable income when the Rights become
exercisable.
With the exception of certain provisions relating to the
principal terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended with
the approval of the independent members of the Board of Directors in order to
cure any ambiguity, defect or inconsistency, to make changes that do not
adversely affect the interests of holders of Rights (other than an Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment may be made to lengthen the time period
during which the Rights may be redeemed if the Rights are not then redeemable.
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At any time that there is no Person known to the Board of
Directors to be an "Acquiring Person," the Corporation may amend the Rights
Agreement with the approval of the Board of Directors to lower the Beneficial
Ownership threshold (initially 20% or more) in the definition of "Acquiring
Person," the Beneficial Ownership threshold (initially 20% or more) for the type
of tender or exchange offer for Common Stock that would give rise to a
Distribution Date, and/or the level of Beneficial Ownership (initially 20% or
more) that would trigger a Flip-In Event, to a percentage that is not less than
10% and is greater than the largest percentage of the shares of Common Stock
then outstanding then known by the Board of Directors to be beneficially owned
by any Person.
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EXHIBIT B
NINTH: Certain Business Combinations:
1. Vote Required for Certain Business Combinations:
A. In addition to any other vote or corporate action required
by law, by this Certificate of Incorporation, by the by-laws of the corporation,
or otherwise, and except as otherwise expressly provided in Section 2 of this
Article NINTH:
(i) any merger or consolidation of the corporation or any
Subsidiary (as hereinafter defined) with any Interested Shareholder (as
hereinafter defined) or any person which is, or after such transaction
would be, an Affiliate (as hereinafter defined) of any Interested
Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or in a series of transactions)
to or with any Interested Shareholder or any person which is, or after
such transaction would be, an Affiliate of any Interested Shareholder,
of any property or assets of the corporation or any Subsidiary having
an aggregate Fair Market Value (as hereinafter defined) of $1,000,000
or more; or
(iii) any issuance or transfer by the corporation or any
Subsidiary (in one transaction or in a series of transactions) to any
Interested Shareholder or any person which is, or after such
transaction would be, an Affiliate of any Interested Shareholder, of
any stock or other securities of the Corporation or any Subsidiary
having an aggregate Fair Market Value of $1,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation
or dissolution of the corporation proposed by or on behalf of any
Interested Shareholder or any person which is, or after such
transaction would be, an Affiliate of any Interested Shareholder; or
(v) any issuance, transfer or modification (by amendment to
this Certificate of Incorporation or otherwise) of stock or other
securities, or any reclassification of stock or other securities
(including any reverse stock split), or any recapitalization, or any
reorganization (including any merger or consolidation) or any other
transaction (whether or not with or into or otherwise involving an
Interested Shareholder or any person which is, or after such
transaction would be, an Affiliate of an Interested Shareholder) which
has the effect, directly or indirectly, of increasing the voting power
of any Interested Shareholder or any person which is, or after such
transaction would be, an Affiliate of any Interested Shareholder or
which has the effect, directly or indirectly, of increasing the
proportionate share beneficially owned by any Interested Shareholder or
any person which is, or after such transaction would be, an Affiliate
of any Interested Shareholder, of any class or series of equity
securities or of any class or series of
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securities convertible directly or indirectly into equity securities
of the corporation or any Subsidiary;
shall require the affirmative vote of the holders of at least 80% of the
combined voting power of the then outstanding shares of stock of the corporation
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may otherwise be required, or that a
lesser percentage may otherwise be specified, by law, in any agreement with any
national securities exchange, or otherwise.
B. The term "Business Combination" as used in this Article
NINTH shall mean any transaction which is referred to in any one or more of
subparagraphs (i) through (v) of paragraph A of this Section 1.
2. When Higher Vote is Not Required: The provisions of Section
1 of this Article NINTH shall not be applicable to a particular Business
Combination, and such Business Combination shall require only such affirmative
vote as may be required by law or under the other Articles of this Certificate
of Incorporation, if either (i) the condition specified in paragraph A of this
Section 2 is satisfied or (ii) all of the conditions specified in subparagraphs
(i) through (vi) of paragraph B of this Section 2 are satisfied.
A. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereafter defined).
or
B. All of the following conditions shall have been satisfied:
(i) The aggregate amount of the cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of the
Business Combination (the "Consummation Date") of consideration other
than cash to be received per share by holders of common stock in such
Business Combination shall be at least equal to the higher of the
following:
(a) (if applicable) the Highest Per Share Price (as
hereinafter defined) (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid for any
shares of common stock beneficially owned by the Interested
Shareholder and acquired either (X) within the two-year period
immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date")
or (Y) in the transaction or transactions in which it became
an Interested Shareholder; or
(b) the Fair Market Value per share of common stock on
the Announcement Date; or
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(c) the Fair Market Value per share of common stock on
the date on which the Interested Shareholder became an
Interested Shareholder (the "Determination Date").
(ii) The aggregate amount of the cash and the Fair Market
Value as of the Consummation Date of consideration other than cash to
be received per share by holders of shares of any class or series of
outstanding stock other than common stock shall be at least equal to
the highest of the following (it being intended that the requirements
of this subparagraph (ii) shall be required to be met with respect to
each and every such class and series of outstanding stock, whether or
not the Interested Shareholder has previously acquired any shares of
such class or series of stock):
(a) (if applicable) the Highest Per Share Price (as
hereinafter defined) (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid for any
shares of such class or series of stock beneficially owned by
the Interested Shareholder and acquired either (X) within the
two-year period immediately prior to the Announcement Date or
(Y) in the transaction or transactions in which it became an
Interested Shareholder;
(b) (if applicable) the highest amount per share to
which holders of shares of such class or series of stock may
be entitled in the event of any optional or mandatory
redemption of any shares of such class or series of stock;
(c) (if applicable) the highest preferential amount
per share to which the holders of shares of such class or
series of stock may be entitled in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
corporation;
(d) the Fair Market Value per share of such class or
series of stock on the Announcement Date; or
(e) the Fair Market Value per share of such class or
series of stock on the Determination Date.
(iii) The consideration to be received by holders of a
particular class or series of outstanding stock (including common
stock) shall be in cash or in the same form the Interested Shareholder
has previously used to acquire shares of such class or series of stock.
If the Interested Shareholder has paid for shares of any class or
series of stock with varying forms of consideration, the form of
consideration for such class or series of stock shall be either cash or
the form used to acquire the largest number of shares of such class or
series of stock previously acquired by it.
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(iv) After the Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination:
(a) there shall have been no such failure to declare and pay in full on
the regular payment date therefor any quarterly dividends (whether or
not cumulative) on the outstanding preferred stock, except as approved
by a majority of the Disinterested Directors; (b) there shall have been
(X) no reduction in the annual rate of dividends paid on the common
stock (except as necessary to reflect any subdivision of the common
stock), except as approved by a majority of the Disinterested
Directors, and (Y) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding shares of
the common stock, unless the failure to so increase such annual rate is
approved by a majority of the Disinterested Directors; and (c) such
Interested Shareholder shall have not become the beneficial owner of
any additional shares of stock of the corporation except as part of the
transaction or transactions which result in such Interested Shareholder
becoming an Interested Shareholder.
(v) After the Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder and its affiliates shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantages provided by the corporation or any Subsidiary whether in
anticipation of or in connection with a Business Combination or
otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to all stockholders of the corporation at
least 30 days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is otherwise
required to be furnished pursuant to such Act, rules or regulations or
such subsequent provisions).
3. Certain Definitions: For the purposes of this Article
NINTH:
A. A "person" includes any individual and any firm,
corporation or other entity.
B. The term "Interested Shareholder" means any person (other
than the corporation, or any Subsidiary, or any profit-sharing, employee stock
ownership or other employee benefit plan of the corporation or any Subsidiary)
which:
(i) is the beneficial owner, directly or indirectly, of Voting
Stock representing more than 20% of the combined voting power of the
outstanding Voting Stock; or
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(ii) is an Affiliate of the corporation and at any time within
the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of Voting Stock representing
20% or more of the combined voting power of the then outstanding Voting
Stock; or
(iii) is an assignee of, or has otherwise succeeded to, any
shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially owned by
any Interested Shareholder, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1993 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations).
An "Interested Shareholder" shall also include any person with
which such Interested Shareholder directly or indirectly has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
C. A person shall be a "beneficial owner" of any stock:
(i) which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding or upon the exercise of any
conversion rights, exchange rights, warrants, options, or otherwise, or
(b) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates directly or indirectly has any agreement, arrangement or
understanding for the purposes of acquiring, holding, voting or
disposing of any shares of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph B of this Section 3, the number of
shares of Voting Stock deemed to be outstanding shall include shares deemed
owned through application of paragraph C of this Section 3 but shall not include
any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of any conversion
rights, warrants, options, or otherwise.
E. The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934 as in effect of
September 1, 1985.
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F. The term "Subsidiary" means any corporation of which a
majority of any class of equity securities is owned, directly or indirectly, by
the corporation; provide, however, that for the purposes of the definition of
Interested Shareholder set forth in paragraph B of this Section 3, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity securities is owned, directly or indirectly, by the corporation.
G. The term "Disinterested Director" means with respect to any
Interested Shareholder: (i) any member of the Board of Directors who is
unaffiliated with such Interested Shareholder and its Affiliates and was a
member of the Board of Directors prior to the time that such Interested
Shareholder became an Interested Shareholder, and (ii) any successor of a
Disinterested Shareholder who is unaffiliated with such Interested Shareholder
and its Affiliates and is recommended to succeed another Disinterested Director
by a majority of the Disinterested Directors then on the Board of Directors.
H. The term "Fair Market Value" means: (i) in the case of
stock, the highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the Composite Tape
for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities exchange on
which such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of such
stock during the 30-day period preceding the date in question of the National
Association of Securities Dealers, Inc. Automated Quotations Systems or any
other quotation system then in use, or if no such quotations are available, the
fair market value on the date in question of a share of such stock as determined
in good faith by a majority of the Disinterested Directors (or, if there are no
Disinterested Directors, as determined in good faith by a majority of the entire
Board of Directors), in each case with respect to any class or series of stock,
appropriately adjusted for any dividend or distribution in shares of such stock
or any stock split or reclassification of outstanding shares of such stock into
a greater number of shares of stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of stock; (ii)
in the case of cash, the amount of such cash; and (iii) in the case of assets or
property other than stock or cash, the fair market value of such assets or
property on the date in question as determined in good faith by a majority of
the Disinterested Directors (or, if there are no Disinterested Directors, as
determined in good faith by a majority of the entire Board of Directors).
I. References to "Highest Per Share Price" shall in each case
with respect to any class or series of stock reflect an appropriate adjustment
for any dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.
J. In the event of any Business Combination in which the
corporation survives, the phrase "consideration other than cash to be received"
as used in
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subparagraphs (i) and (ii) of paragraph B of Section 2 of this Article NINTH
shall include the shares of common stock and/or the shares of any other class or
series of outstanding stock retained by the holders of such shares.
4. Powers of the Board of Directors: The Board of Directors
shall have the power and duty to determine, on the basis of information known to
them after reasonable inquiry, (a) whether a person is an Interested Shareholder
and (b) if a person is an Interested Shareholder, who, if any of the members of
the Board of Directors, are Disinterested Directors with respect to such
Interested Shareholder; and the Disinterested Directors (or the sole
Disinterested Director) with respect to any Interested Shareholder shall have
the power and duty to determine, on the basis of information known to them (or
him) after reasonable inquiry, whether or not the provisions of this Article
NINTH are being or have been satisfied with respect to any Business Combination
with respect to such Interested Shareholder or any of its Affiliates. The good
faith determination of a majority of the entire Board of Directors or of a
majority of the Disinterested Directors (or the sole Disinterested Director), as
the case may be, shall be binding and conclusive for all purposes of this
Article NINTH.
5. No Effect on Fiduciary Obligations of Interested
Shareholder: Nothing contained in this Article NINTH shall be construed to
relieve any Interested Shareholder or any Affiliate or Associate of an
Interested Shareholder from any fiduciary obligation imposed by law.
6. Amendment or Repeal: Notwithstanding anything contained in
this Certificate of Incorporation or the by-laws of the corporation to the
contrary, the affirmative vote of the holders of at least 80% of the combined
voting power of the outstanding Voting Stock, voting together as a single class,
shall be required to alter, amend, adopt any provisions inconsistent with, or
repeal this Article NINTH.
34
<PAGE>
<PAGE>
EXHIBIT C
203 BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS. (a)
Notwithstanding any other provisions of this chapter, a corporation shall not
engage in any business combination with any interested stockholder for a period
of 3 years following the date that such stockholder became an interested
stockholder, unless:
(1) prior to such date the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder; or
(2) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (i) by persons who are directors and also
officers and (ii) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or
(3) on or subsequent to such date the business combination is approved
by the board of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least 66
2/3% of the outstanding voting stock which is not owned by the interested
stockholder.
(b) The restrictions contained in this section shall not apply if:
(1) the corporation's original certificate of incorporation contains a
provision expressly electing not to be governed by this section;
(2) the corporation, by action of its board of directors, adopts an
amendment to its bylaws within 90 days of the effective date of this section,
expressly electing not to be governed by this section, which amendment shall not
be further amended by the board of directors.
(3) the corporation, by action of its stockholders, adopts an amendment
to its certificate of incorporation or bylaws expressly electing not to be
governed by this section, provided that, in addition to any other vote required
by law, such amendment to the certificate of incorporation or bylaws must be
approved by the affirmative vote of a majority of the shares entitled to vote.
An amendment adopted pursuant to this paragraph shall not be effective until 12
months after the adoption of such amendment and shall not apply to any business
combination between such corporation and any person who became an interested
stockholder of such corporation on or prior to such adoption. A bylaw amendment
adopted pursuant to this paragraph shall not be further amended by the board of
directors;
35
<PAGE>
<PAGE>
(4) the corporation does not have a class of voting stock that is (i)
listed on a national securities exchange, (ii) authorized for quotation on an
inter-dealer quotation system of a registered national securities association or
(iii) held of record by more than 2,000 stockholders, unless any of the
foregoing results from action taken, directly indirectly, by an interested
stockholder or from a transaction in which a person becomes an interested
stockholder;
(5) a stockholder becomes an interested stockholder inadvertently and
(i) as soon as practicable divests sufficient shares so that the stockholder
ceases to be an interested stockholder and (ii) would not, at any time within
the 3 year period immediately prior to a business combination between the
corporation and such stockholder, have been a interested stockholder but for the
inadvertent acquisition; or
(6) the business combination is proposed prior to the consummation or
abandonment of and subsequent to the earlier of the public announcement or the
notice required hereunder of a proposed transaction which (i) constitutes one of
the transactions described in the second sentence of this paragraph; (ii) is
with or by a person who either was not an interested stockholder during the
previous 3 years or who became an interested stockholder with the approval of
the corporation's board of directors; and (iii) is approved or not opposed by a
majority of the members of the board of directors then in office (but not less
than 1) who were directors prior to any person becoming an interested
stockholder during the previous 3 years were recommended for election or elected
to succeed such directors by a majority of such directors. The proposed
transactions referred to in the preceding sentence are limited to (x) a merger
or consolidation of the corporation (except for a merger in respect of which,
pursuant to section 251(f) of the chapter, no vote of the stockholders of the
corporation is required); (y) a sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of transactions),
whether as part of a dissolution or otherwise, of assets of the corporation or
of any direct or indirect majority-owned subsidiary of the corporation (other
than to any direct or indirect wholly-owned subsidiary or to the corporation)
having an aggregate market value equal to 50% or more of either that aggregate
market value of all of the assets of the corporation determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
the corporation; or (z) a proposed tender or exchange offer for 50% or more of
the outstanding voting stock of the corporation. The corporation shall give not
less than 20 days' notice to all interested stockholders prior to the
consummation of any of the transactions described in clauses (x) or (y) of the
second sentence of this paragraph. Notwithstanding paragraphs (1), (2), (3) and
(4) of this subsection, a corporation may elect by a provision of its original
certificate of incorporation or any amendment thereto to be governed by this
section, provided that any such amendment to the certificate of incorporation
shall not apply to restrict a business combination between the corporation and
an interested stockholder of the corporation if the interested stockholder
became such prior to the effective date of the amendment.
(c) As used in this section only, the term:
36
<PAGE>
<PAGE>
(1) "affiliate" means a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, another person.
(2) "associate," when used to indicated a relationship with any person,
means (i) any corporation or organization of which such person is a director,
officer or partner or is, directly or indirectly, the owner of 20% or more of
any class of voting stock, (ii) any trust or other estate in which such person
has at least a 20% beneficial interest or as to which such person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such person, or any relative of such spouse, who has the same residence as such
person.
(3) "business combination," when used in reference to any corporation
and any interested stockholder of such corporation, means:
(i) any merger or consolidation of the corporation or any direct or
indirect majority-owned subsidiary of the corporation with (A) the interested
stockholder, or (B) with any other corporation if the merger or consolidation is
caused by the interested stockholder and as a result of such merger or
consolidation subsection (a) of this section is not applicable to the surviving
corporation;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), except
proportionately as a stockholder of such corporation, to or with the interested
stockholder, whether as part of a dissolution or otherwise, of assets of the
corporation or of any direct or indirect majority-owned subsidiary of the
corporation which assets have an aggregate market value equal to 10% or more of
either the aggregate market value of all the assets of the corporation
determined on a consolidated basis or the aggregate market value of all the
outstanding stock of the corporation;
(iii) any transaction which results in the issuance or transfer by the
corporation or by any direct or indirect majority-owned subsidiary of the
corporation of any stock of the corporation or of any stock of the corporation
or of such subsidiary to the interested stockholder, except (A) pursuant to the
exercise, exchange or conversion of securities exercisable for, exchangeable for
or convertible into stock of such corporation or any such subsidiary which
securities were outstanding prior to the time that the interested stockholder
became such, (B) pursuant to a dividend or distribution paid or made, or the
exercise, exchange or conversion of securities exercisable for, exchangeable for
or convertible into stock of such corporation or any such subsidiary which
security is distributed, pro rata to all holders of a class or series of stock
of such corporation subsequent to the time the interested stockholder became
such, (C) pursuant to an exchange offer by the corporation to purchase stock
made on the same terms to all holders of said stock, or (D) any issuance or
transfer of stock by the corporation; provided, however, that in no case under
(B)-(D) above shall there be an increase in the interested stockholder's
proportionate share of the stock of any class or series of the corporation or of
the voting stock of the corporation;
37
<PAGE>
<PAGE>
(iv) any transaction involving the corporation or any direct or
indirect majority-owned subsidiary of the corporation which has the effect,
directly or indirectly, of increasing the proportionate share of the stock of
any class or series, or securities convertible into the stock of any class or
series, of the corporation or of any such subsidiary which is owned by the
interested stockholder, except as a result of immaterial changes due to
fractional share adjustments or as a result of any purchase or redemption of any
shares of stock not caused, directly or indirectly, by the interested
stockholder; or
(v) any receipt by the interested stockholder of the benefit, directly
or indirectly (except proportionately as a stockholder of such corporation) of
any loans, advances, guarantees, pledges, or other financial benefits (other
than those expressly permitted in subparagraphs (i)-(iv) above) provided by or
through the corporation or any direct or indirect majority-owned subsidiary.
(4) "control," including the term "controlling," "controlled by" and
"under common control with," means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting stock, by contract, or
otherwise. A person who is the owner of 20% or more of a corporation's
outstanding voting stock shall be presumed to have control of such corporation,
in the absence of proof by a preponderance of the evidence to the contrary.
Notwithstanding the foregoing, a presumption of control shall not apply where
such person holds voting stock, in good faith and not for the purpose of
circumventing this section, as an agent, bank, broker, nominee, custodian or
trustee for one or more owners who do not individually or as a group have
control of such corporation.
(5) "interested stockholder" means any person (other than the
corporation and any direct or indirect majority-owned subsidiary of the
corporation) that (i) is the owner of 15% or more of the outstanding voting
stock of the corporation, or (ii) is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting stock of
the corporation at any time within the 3-year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
stockholder; and the affiliates and associates of such person; provided,
however, that the term "interested stockholder" shall not include (x) any person
who (A) owned shares in excess of the 15% limitation set forth herein as of, or
acquired such shares pursuant to a tender offer commenced prior to, December 23,
1987, or pursuant to an exchange offer announced prior to the aforesaid date and
commenced within 90 days thereafter and continued to own shares in excess of
such 15% limitation or would have but for action by the corporation or (B)
acquired said shares from a person described in (A) above by gift, inheritance
or in a transaction in which no consideration was exchanged; or (y) any person
whose ownership of shares in excess of the 15% limitation set forth herein in
the result of action taken solely by the corporation provided that such person
shall be an interested stockholder if thereafter he acquires additional shares
of voting stock of the corporation, except as a result of further corporate
action not caused, directly or indirectly, by such person. For the purpose of
determining whether a person is an interested stockholder, the voting stock of
the corporation deemed to be outstanding shall include stock deemed to be owned
by the person through application of paragraph (8) of this subsection but shall
not
38
<PAGE>
<PAGE>
include any other unissued stock of such corporation which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(6) "person" means any individual, corporation, partnership,
unincorporated association or other entity.
(7) "voting stock" means stock of any class or series entitled to vote
generally in the election of directors.
(8) "owner" including the terms "own" and "owned" when used with
respect to any stock means a person that individually or with or through any of
its affiliates or associates:
(i) beneficially owns such stock, directly or indirectly; or
(ii) has (A) the right to acquire such stock (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; provided, however,
that a person shall not be deemed the owner of stock tendered pursuant to a
tender or exchange offer made by such person or any of such person's affiliates
or associates until such tendered stock is accepted for purchase or exchange; or
(B) the right to vote such stock pursuant to any agreement, arrangement or
understanding; provided, however, that a person shall not be deemed the owner of
any stock because of such person's right to vote such stock if the agreement,
arrangement or understanding to vote such stock arises solely from a revocable
proxy or consent given in response to a proxy or consent solicitation made to 10
or more persons; or
(iii) has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent as described in item (B) of clause (ii) of this paragraph), or disposing
of such stock with any other person that beneficially owns, or whose affiliates
or associates beneficially own, directly or indirectly, such stock.
(d) No provision of a certificate of incorporation or bylaw shall
require, for any vote of stockholders required by this section a greater vote of
stockholders than that specified in this section.
(e) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all matters with respect to this section.
39
<PAGE>
<PAGE>
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF WPC
AND THEIR ADVISORS THAT MAY PARTICIPATE
IN THE SOLICITATION OF PROXIES
The name, business address, and present principal occupation
or employment of each of the directors and executive officers of WPC and its
advisors and certain other employees and representatives of WPC that may
participate in the solicitation of proxies are set forth below. Unless otherwise
indicated, the principal business address of each director or executive officer
of Wyser-Pratte &Co. is, 63 Wall Street, New York, NY 10005.
PARTICIPANT DIRECTORS AND EXECUTIVE OFFICERS OF WPC.
Present Office or Other
Name Principal Occupation or Employment
- ---- ----------------------------------
Guy P. Wyser-Pratte President
Eric Longmire Senior Managing Director
<PAGE>
<PAGE>
SCHEDULE II
The following sets forth the name, business address and the number of
shares of Common Stock of the Company owned beneficially by the participants in
this solicitation of proxies, or their associates. No shares are held of record
but not beneficially by the participants or their associates.
Number of Shares of Common Stock
<TABLE>
<CAPTION>
Name & Beneficially Owned
Business Address (September _, 1996) Percent of Common Stock
---------------- ------------------- -----------------------
<S> <C> <C>
William M. Frazier 1000(1) 2
Frazier & Oxley, L.C.
The St. James Mezzanine
401 Tenth Street
Huntington, West Virginia 25727
W. Michael Frazier 600 2
Frazier & Oxley, L.C.
The St. James Mezzanine
401 Tenth Street
Huntington, West Virginia 25727
Guy P. Wyser-Pratte 1,057,000(3) 2.3
Wyser-Pratte & Co., Inc.
63 Wall Street
New York, New York 10005
</TABLE>
- --------
(1) Mr. Frazier holds an additional 200 shares as nominee and disclaims any
beneficial ownership of these shares.
(2) Less than 1%
(3) Includes (i) 8,000 shares owned directly by Mr. Wyser-Pratte; and (ii)
1,049,000 shares owned by investment partnerships and other managed accounts
for which affiliates of WPC are the general partner or investment manager.
Another 44,000 shares are held in non-discretionary accounts at WPC.
Wyser-Pratte disclaims beneficial ownership of these shares.
<PAGE>
<PAGE>
SCHEDULE III
The following tables set forth information with respect to all
purchases and sales of Common Stock of the Company by Wyser-Pratte and his
affiliates and the Wyser-Pratte Nominees during the past two years.* Except as
set forth below, no participant in this solicitation has purchased or sold
securities of the Company within the past two years.
Shares Purchased by WPC for Non-discretionary Accounts
<TABLE>
<CAPTION>
No. of Shares
Date Purchased Price
- ---- --------- -----
<S> <C> <C>
08-14-95 5,000 59.1175
08-14-95 5,000 59.1175
08-14-95 2,000 59.0575
08-14-95 5,000 59.1175
08-14-95 1,000 59.1175
08-14-95 1,000 59.1175
09-13-95 10,000 58.0000
09-13-95 10,000 58.0000
09-21-95 10,000 57.1600
10-31-95 2,000 56.6875
10-31-95 1,000 56.7375
10-31-95 2,000 56.4635
10-31-95 1,000 56.7375
10-31-95 2,000 56.6875
10-31-95 2,000 56.7375
12-21-95 2,000 54.3548
12-21-95 1,000 54.3548
12-21-95 5,000 54.3548
12-21-95 5,000 54.2648
12-21-95 5,000 54.3548
12-21-95 1,000 54.3548
12-21-95 1,000 54.3548
01-11-96 11,000 53.5500
01-17-96 11,000 53.3000
01-22-96 5,000 54.7025
06-28-96 5,000 60.0132
06-28-96 10,000 60.0132
07-02-96 3,000 59.5250
07-10-96 10,000 58.7537
07-19-96 2,000 58.3500
07-22-96 4,000 57.2700
</TABLE>
- --------
* Shares purchased or sold before July 29, 1996 do not reflect the Stock Split.
<PAGE>
<PAGE>
Shares Sold by WPC for Non discretionary Accounts
<TABLE>
<CAPTION>
Date No. of Shares Sold Price
---- ------------------ -----
<S> <C> <C>
02-21-96 5,000 54.9482
04-23-96 1,000 57.4231
05-07-96 5,000 59.0480
05-08-96 2,000 58.9690
05-08-96 1,000 58.9690
05-08-96 8,000 58.9690
05-08-96 1,000 58.9590
05-08-96 2,000 59.1840
05-08-96 1,000 59.1840
05-08-96 1,000 58.9590
05-09-96 2,000 59.0383
05-09-96 5,000 59.0383
05-09-96 5,000 59.0383
05-09-96 5,000 59.0383
05-09-96 5,000 59.0383
05-09-96 5,000 59.0383
05-09-96 1,000 59.0383
05-09-96 1,500 59.0383
05-09-96 1,000 59.0383
05-09-96 1,500 59.0383
05-17-96 1,000 60.7080
05-20-96 5,000 60.6980
05-20-96 5,000 60.6980
05-20-96 5,000 60.6980
05-20-96 5,000 60.6980
05-21-96 1,000 60.6980
05-21-96 500 60.6980
05-21-96 1,000 60.6980
05-21-96 500 60.6980
05-21-96 1,000 60.6980
</TABLE>
Shares Purchased by WPC for Managed Accounts
<TABLE>
<CAPTION>
No. of Shares
Date Purchased Price
---- --------- -----
<S> <C> <C>
08-01-95 5,000 58.5200
08-09-95 7,300 59.0550
08-09-95 2,700 59.0600
08-09-95 3,400 59.0500
08-09-95 1,600 59.0700
08-09-95 2,000 59.0650
08-10-95 28,500 58.7196
08-10-95 6,100 58.7196
08-10-95 7,700 58.7146
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
08-10-95 3,600 58.7246
08-10-95 4,500 58.7246
08-11-95 25,900 58.8223
08-11-95 5,600 58.8223
08-11-95 7,000 58.8173
08-11-95 3,400 58.8273
08-11-95 4,100 58.8273
08-14-95 16,800 59.0475
08-14-95 3,900 59.0525
08-14-95 4,800 59.0425
08-14-95 2,100 59.0575
08-14-95 2,800 59.0525
08-17-95 2,500 58.8100
08-17-95 2,500 58.8100
09-06-95 4,500 58.0600
09-06-95 2,500 58.0600
09-06-95 3,000 58.0600
09-08-95 3,000 58.0600
09-08-95 10,100 58.0500
09-08-95 3,000 58.0600
09-08-95 3,100 58.0600
09-14-95 1,700 57.0300
09-14-95 4,000 57.0500
09-14-95 1,200 57.0350
09-14-95 2,100 57.0300
09-15-95 15,000 56.9262
09-15-95 6,300 56.9263
09-15-95 8,400 56.9562
09-15-95 4,200 56.9262
09-15-95 4,900 56.9263
10-26-95 9,900 57.0550
11-03-95 4,800 57.7086
11-03-95 1,800 57.7186
11-03-95 2,200 57.7386
11-03-95 400 57.7686
11-03-95 1,400 57.7236
12-21-95 42,000 54.1248
12-21-95 11,100 54.1298
12-21-95 14,800 54,1548
12-21-95 3,200 54.1348
12-21-95 7,900 54,1298
12-21-95 8,600 54.1298
01-03-96 14,400 55.5200
01-11-96 9,900 53.6804
01-11-96 5,200 53.7104
01-11-96 1,200 53.6954
01-11-96 1,400 53.6954
01-12-96 2,900 53.4692
01-12-96 2,900 53.4692
01-12-96 1,700 53.4942
01-12-96 1,000 53.4842
01-12-96 1,500 53.4792
01-15-96 3,000 53.4000
01-15-96 2,000 53.4050
01-15-96 2,000 53.4250
01-15-96 1,000 53.4150
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
01-15-96 1,000 53.4150
01-17-96 5,300 53.2700
01-17-96 2,000 53.2800
01-17-96 2,000 53.2800
01-17-96 2,500 54.0250
01-18-96 2,500 54.0250
01-18-96 8,500 54.0500
01-18-96 1,200 54.0350
01-22-96 10,500 54.6725
01-22-96 8,400 54.6725
01-22-96 4,500 54.7025
01-22-96 1,100 54.6925
01-22-96 3,400 54.6775
01-22-96 1,300 54.6875
01-23-96 3,500 54.5250
01-25-96 800 54.8397
01-25-96 28,200 54.8447
01-26-96 3,100 54.9250
05-07-96 10,443 59.1200
06-28-96 1,600 59.7932
06-28-96 2,400 59.7882
07-11-96 8,157 59.8750
07-22-96 3,100 57.3000
07-23-96 2,000 57.8625
07-26-96 9,100 57.6283
07-26-96 5,900 57.6583
07-31-96 500 29.5650
07-31-96 500 29.5650
08-09-96 20,000 27.0500
</TABLE>
Shares Sold by WPC for Managed Accounts
<TABLE>
<CAPTION>
Date No. of Shares Sold Price
---- ------------------ ------
<S> <C> <C>
05-06-96 5,000 59.0930
05-06-96 2,700 59.0930
05-06-96 2,300 59.0930
05-06-96 3,800 58.9430
05-06-96 5,600 58.9430
05-06-96 600 58.9430
06-06-96 100 60.4979
06-26-96 2,000 59.9780
06-26-96 4,500 59.9780
06-26-96 400 59.9780
07-31-96 500 29.4340
</TABLE>
<PAGE>
<PAGE>
Shares Purchased by Guy P. Wyser-Pratte (1)
<TABLE>
<CAPTION>
Date No. of Shares Purchased Price
---- ----------------------- -----
<S> <C> <C>
08-14-95 2000 59.0575
10-31-95 2000 56.4635
07-22-96 4000 57.2700
</TABLE>
Shares Sold by Guy P. Wyser-Pratte
<TABLE>
<CAPTION>
Date No. of Shares Sold Price
---- ----------------------- -----
<S> <C> <C>
05-08-95 2000 59.1835
05-08-96 1000 56.1839
05-17-96 1000 57.7079
</TABLE>
Shares Purchased by W. Michael Frazier
<TABLE>
<CAPTION>
Date No. of Shares Purchased Price
---- ----------------------- -----
<S> <C> <C>
7-10-96 300 59.2566
</TABLE>
Shares Purchased by W. M. Frazier
<TABLE>
<CAPTION>
Date No. of Shares Purchased Price
---- ----------------------- -----
<S> <C> <C>
7-3-96 500 60.0835
</TABLE>
(1) Wyser-Pratte's securities are contained in a margin account in the regular
course of business of a broker in connection with the purchases listed in
the table. As of September, 1996, $_____ of this indebtedness was
outstanding.
<PAGE>
<PAGE>
APPENDIX 1
PROXY CARD
GOLD PROXY
WALLACE COMPUTER SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS - NOVEMBER 6, 1996
THIS PROXY IS SOLICITED B GUY P. WYSER-PRATTE
IN OPPOSITION TO THE WALLACE BOARD OF DIRECTORS
The undersigned stockholder of Wallace Computer Services, Inc.
("Wallace") hereby appoints _____, _____and _____, each of them with full power
of substitution, to vote all shares of Common Stock of Wallace that the
undersigned is entitled to vote if personally present at the 1995 Annual Meeting
of Stockholders of Wallace to be held on November 6, 1996, and at any
adjournments or postponements thereof as indicated below and in the discretion
of the proxies, to vote upon such other business as may properly come before the
meeting, and any adjournment or postponement thereof. The undersigned hereby
revokes any previous proxies with respect to matters covered by this Proxy.
Mr. Wyser-Pratte recommends a vote FOR Proposals 1, 2, 3, 4, 5, and 6.
1. Election of Directors: Election of Guy P. Wyser-Pratte, William W. Frazier,
W. Michael Frazier as directors whose terms expire at the Annual Meeting of
Shareholders in 1999
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY for all nominees
INSTRUCTION: To withhold authority to vote for the election of one or more of
the persons nominated by Wyser-Pratte, mark FOR above and write the name(s) of
the person(s) with respect to whom you wish to withhold authority to vote below:
----------------------------------------------------------------------
2. To advise the Board to eliminate the Company's poison pill.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To advise the Board to propose the repeal of Article Ninth (requiring an 80%
shareholder vote for certain business combinations).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To elect not to be governed by the Business Combination Statute (prohibiting
certain business combinations with Interested Stockholders)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To require the Board to seek and abide by a shareholder vote on certain
defensive actions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. To advise the Board to form a committee of independent directors to review
ways to maximize shareholder value.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This Proxy, when properly executed, will be voted in the manner marked herein by
the undersigned stockholder. If no marking is made, this proxy will be deemed to
be a direction to vote FOR Proposals 1, 2, 3, 4, 5, and 6 and in the discretion
of the proxies, to vote upon such other business as may properly come before the
meeting, and any adjournment or postponement thereof.
------------------------------------
(Date)
------------------------------------
(Signature)
-------------------------------------
(Title)
------------------------------------
(Signature, if held jointly)
When shares are held by joint tenants,
both should sign. When signing an
attorney, executor, administrator,
trustee, guardian, corporate officer
or partner, please give full title as
such. If a corporation, please sign in
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person. This Proxy votes
all shares held in all capacities.
Please mark, sign, date and mail promptly
<PAGE>
<PAGE>
IMPORTANT
Your proxy is important. No matter how many shares you own,
please give Wyser-Pratte your proxy FOR the election of the Wyser-Pratte
Nominees and FOR approval of the Wyser-Pratte Resolutions by:
MARKING the enclosed GOLD Annual Meeting proxy card,
SIGNING the enclosed GOLD Annual Meeting proxy card,
DATING the enclosed GOLD Annual Meeting proxy card and
MAILING the enclosed GOLD Annual Meeting proxy card TODAY in
the envelope provided (no postage is required if mailed in the
United States).
If you have already submitted a proxy to Wallace for the
Annual Meeting, you may change your vote to a vote FOR the election of the
Wyser-Pratte Nominees or FOR the Wyser-Pratte Resolutions by marking, signing,
dating and returning the enclosed GOLD proxy card for the Annual Meeting, which
must be dated after any proxy you may have submitted to Wallace. Only your
latest dated proxy for the Annual Meeting will count at such meeting.
If you have any question or require any addition information concerning this
Proxy Statement or the proposals by Wyser-Pratte, please contact Mackenzie
Partners, Inc. at the address and telephone number set forth below.
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT
OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE THE GOLD ANNUAL
MEETING PROXY CARD.
