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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COMMERCIAL INTERTECH CORP.
(Name of Registrant as Specified in its Charter)
UNITED DOMINION INDUSTRIES LIMITED
and
OPUS ACQUISITION CORPORATION
(Name of Person(s) Filing Proxy Statement)
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Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/X/ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed per Exchange Act Rules 14a-6(i)(4) and 0-11.
/ / 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.
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LOGO
SOLICITATION STATEMENT
OF
UNITED DOMINION INDUSTRIES LIMITED
AND
OPUS ACQUISITION CORPORATION
TO CALL A
SPECIAL MEETING OF SHAREHOLDERS
OF
COMMERCIAL INTERTECH CORP.
INTRODUCTION
This Solicitation Statement and the accompanying WHITE Appointment of
Designated Agents ("Agent Designations") are being furnished to holders of
outstanding common shares, par value $1.00 per share ("Common Shares"), and ESOP
Convertible Preferred Shares Series B, without par value ("Preferred Shares"
and, together with the Common Shares, the "Shares"), of Commercial Intertech
Corp., an Ohio corporation (the "Company"), in connection with the solicitation
of Agent Designations from holders of the Shares. As used herein, unless the
context otherwise requires, the term "Common Shares" shall include the
associated Rights (as defined below). The Agent Designations are being solicited
by United Dominion Industries Limited, a Canadian corporation ("Parent"), and
Opus Acquisition Corporation (the "Purchaser"), a Delaware corporation and
indirect wholly owned subsidiary of Parent, to provide for the calling of a
special meeting of shareholders of the Company (the "Special Meeting") for the
purpose of considering and voting on the proposals described below under the
heading "SPECIAL MEETING PROPOSALS" (the "Special Meeting Proposals"). Under the
Ohio Revised Code (the "ORC") and the Code of Regulations of the Company (the
"Company Regulations"), a special meeting of the Company shareholders may be
called at any time by the holders of at least 40% of the outstanding Shares (the
"Requisite Holders"). The principal executive offices of the Company are located
at 1775 Logan Avenue, Youngstown, Ohio 44510.
This Solicitation Statement and accompanying WHITE Agent Designation are
first being furnished to Company shareholders on or about July 25, 1996. WHITE
Agent Designations should be delivered as promptly as possible, by fax or by
mail (using the enclosed envelope), to Parent's information agent, MacKenzie
Partners, Inc. ("MacKenzie Partners"), 156 Fifth Avenue, New York, New York
10010, Fax: (212) 929-0308.
On July 18, 1996, the Company announced that the Company's Board of
Directors (the "Company's Board") had purported to fix September 3, 1996 as the
record date for determining shareholders entitled to execute Agent Designations
for the purpose of calling a Special Meeting. Parent and the Purchaser believe
that the purported setting of a record date by the Company's Board is a blatant
and unlawful attempt by the Company to take away rights to which you, the
shareholders of the Company, are entitled, so as to prevent Parent's and the
Purchaser's acquisition of the Company and to deny you the right to receive the
price to be paid in the tender offer described below in cash for your Common
Shares. Neither the ORC nor the Company Regulations provide for or make any
reference to the setting of a record date in connection with any action by
shareholders to call a special meeting in the manner specified in the Company
Regulations. Instead, the Company Regulations, in accordance with the ORC,
provide that a special meeting of the Company's shareholders may be called "AT
ANY TIME" by, among others, holders of 40% of the Shares. Accordingly, the
Designated Agents (as defined below) will call the Special Meeting by delivering
a written request in accordance with the Company Regulations AS SOON AS POSSIBLE
after the date upon which the Designated Agents have received Agent Designations
from holders of 40% of the Shares (excluding Agent Designations from holders of
Shares who are not holders on the date the Designated Agents deliver the Written
Request).
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THE AGENT DESIGNATIONS WILL NOT CONFER ANY RIGHTS TO VOTE ON MATTERS
BROUGHT BEFORE THE SPECIAL MEETING AND NO PROXIES FOR SUCH VOTES ARE BEING
SOLICITED WITH THIS SOLICITATION STATEMENT. PARENT AND THE PURCHASER WILL SEND
COMPANY SHAREHOLDERS ADDITIONAL PROXY MATERIALS SOLICITING PROXIES TO VOTE ON
THE SPECIAL MEETING PROPOSALS.
According to the Company's amended Annual Report on Form 10-K/A for the
fiscal year ended October 31, 1995 (the "Company 1995 10-K/A"), as of July 15,
1996 there were 14,665,404 Common Shares outstanding and, according to the
Company's Quarterly Report on Form 10-Q for the quarter ended April 30, 1996
(the "Company Form 10-Q"), as of April 30, 1996 there were 1,039,657 Preferred
Shares outstanding. According to amendments filed by the Company through July
23, 1996 to the Solicitation/Recommendation Statement on Schedule 14D-9
originally filed by the Company on July 12, 1996 (as amended from time to time,
the "Schedule 14D-9" 5,903,065), the Company repurchased 1,792,500 Common Shares
pursuant to its Repurchase Program (as defined below) first announced by the
Company on July 12, 1996, 944,900 of which were repurchased after July 15, 1996.
See "BACKGROUND OF THE PROPOSED ACQUISITION" below. Thus, assuming that since
the respective dates for which information is given no additional Shares have
been issued or repurchased (and assuming that no additional Shares are issued or
repurchased prior to the time that Agent Designations from the Requisite Holders
are delivered to the Company), Agent Designations from the holders of at least
5,903,065 Shares (excluding the 1,000 shares owned by Parent and the Purchaser)
must be received by Parent and the Purchaser in order to call the Special
Meeting.
The Preferred Shares are held of record by Mellon Bank N.A., as trustee
(the "ESOP Trustee") for the Company's Employee Stock Ownership Plan and
Retirement Stock Ownership and Savings Plan (the "ESOPs"). According to the
Company's Proxy Statement for its 1996 Annual Meeting of Shareholders (the
"Annual Meeting Proxy Statement"), the trusts for these plans (the "ESOP
Trusts") contain pass-through voting provisions for the participants of the
ESOPs, with Preferred Shares that are allocated to a participant's account voted
by the ESOP Trustee as instructed by the participant and Preferred Shares that
either are not allocated to any participant's account or are allocated but for
which no instruction from the participant has been received by the ESOP Trustee
voted by the ESOP Trustee in the same proportions as the allocated shares for
which instructions were received are voted. See "VOTING AT THE SPECIAL MEETING"
and "CERTAIN LEGAL MATTERS" below. PARTICIPANTS IN THE ESOPS CAN ONLY EXECUTE
AGENT DESIGNATIONS WITH RESPECT TO SHARES HELD IN THE ESOPS ON THEIR BEHALF BY
INSTRUCTING THE ESOP TRUSTEE ON THE FORM THAT SHOULD BE PROVIDED BY THE ESOP
TRUSTEE TO PARTICIPANTS FOR THAT PURPOSE. ESOP PARTICIPANTS CANNOT EXECUTE AGENT
DESIGNATIONS WITH RESPECT TO SHARES ALLOCATED TO THEIR ESOP ACCOUNT BY EXECUTING
THE ACCOMPANYING WHITE AGENT DESIGNATION.
Similarly, certain Common Shares are held of record by National City Bank,
N.E., as trustee (the "Plan Trustee") for the Company's Non-Qualified Stock
Purchase Plan and the Employee Savings and Stock Purchase Plan (the "Plans").
The trusts for these Plans (the "Plan Trusts") contain pass-through voting
provisions for the participants of the Plans, with Common Shares that are
allocated to a participant's account voted by the Plan Trustee as instructed by
the participant and Common Shares that either are not allocated to any
participant's account or are allocated but for which no instruction from the
participant has been received by the Plan Trustee voted by the Plan Trustee, in
its sole discretion. PARTICIPANTS IN THE PLANS CAN ONLY EXECUTE AGENT
DESIGNATIONS WITH RESPECT TO COMMON SHARES HELD IN THE PLANS ON THEIR BEHALF BY
INSTRUCTING THE PLAN TRUSTEE ON THE FORM THAT SHOULD BE PROVIDED TO PARTICIPANTS
BY THE PLAN TRUSTEE FOR THAT PURPOSE. PLAN PARTICIPANTS CANNOT EXECUTE AGENT
DESIGNATIONS WITH RESPECT TO COMMON SHARES ALLOCATED TO THEIR PLAN ACCOUNT BY
EXECUTING THE ACCOMPANYING WHITE AGENT DESIGNATION.
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PURPOSE OF THIS SOLICITATION
The Purchaser has commenced a tender offer to purchase all outstanding
Common Shares (and associated Rights) at a price of $30 per Common Share (and
associated Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in a Revised Offer to Purchase
dated July 16, 1996 (the "Offer to Purchase") and related Revised Letter of
Transmittal (the "Letter of Transmittal") (which, as either may be amended from
time to time, together constitute the "Offer"). The Offer, which was announced
on July 15, 1996, amended the terms of the Purchaser's original offer (the
"Original Offer"), which the Purchaser commenced on July 12, 1996 at a price of
$27 per Common Share (and associated Right).
The purpose of the Offer and the Proposed Merger (as defined below) is to
enable the Purchaser to acquire control of, and the entire equity interest in,
the Company. The Offer, as the first step in the acquisition of the Company, is
intended to facilitate the acquisition of all outstanding Shares. Parent
intends, following the completion of the Offer, to seek to have the Company
effect a merger or similar business combination with the Purchaser at the same
price per Common Share as the price per Common Share to be paid in the Offer
(the "Proposed Merger"), subject to the terms and conditions described in the
Offer to Purchase. The Purchaser's ability and willingness to accept Common
Shares tendered to it in the Offer, and to consummate the Proposed Merger, are
subject to certain terms and conditions (described below under "TERMS AND
CONDITIONS OF THE OFFER" and in the Offer to Purchase), certain of which terms
and conditions can only be satisfied in connection with a duly called special or
annual meeting of the Company shareholders.
Pursuant to this Solicitation Statement, Parent and the Purchaser are
soliciting Agent Designations from holders of outstanding Shares to call the
Special Meeting. By executing an Agent Designation, a shareholder will designate
specified persons as his or her agents (each a "Designated Agent") with
authority to take all actions, other than voting the Shares at the Special
Meeting, permitted to be taken by Company shareholders under the ORC in order to
call and convene the Special Meeting. The Special Meeting would be called to
consider and vote upon the Special Meeting Proposals, which will include
resolutions (i) calling upon the Company's incumbent directors to redeem, prior
to their removal as directors, the preferred share purchase rights (the
"Rights") associated with the Common Shares pursuant to the Company's Rights
Agreement, dated as of November 29, 1989, between the Company and The Mahoning
National Bank of Youngstown, as rights agent (the "Rights Agreement"), (ii) to
remove all incumbent directors of the Company, (iii) to amend the Company
Regulations to reduce the size of the Company's Board from 12 members to three
members and to provide that the directors shall serve as a single class having
the same term of office and shall not be divided into three classes having
staggered terms, (iv) to elect three new directors nominated by Parent and the
Purchaser (the "Parent Nominees") to fill the vacancies resulting from such
removal and reduction of the size of the Company's Board, (v) to amend the
Company Articles to repeal Article SIXTH thereof ("Article SIXTH") and (vi) if
the acquisition of Common Shares constituting a majority of the voting power of
the outstanding Shares by the Purchaser has not yet been authorized by the
Company's shareholders pursuant to Section 1701.831 of the ORC (the "Ohio
Control Shares Acquisition Law") as described herein or the Purchaser is not
otherwise satisfied, in its sole discretion, that the Ohio Control Share
Acquisition Law is invalid or inapplicable to the acquisition of Common Shares
pursuant to the Offer, to amend the Company Regulations to provide that the Ohio
Control Share Acquisition Law shall not apply to "control share acquisitions" of
Shares.
IF YOU BELIEVE THAT YOU SHOULD HAVE THE OPPORTUNITY TO DECIDE THE FUTURE OF
YOUR COMPANY AND THAT YOU SHOULD HAVE THE CHANCE TO RECEIVE $30 NET PER COMMON
SHARE IN CASH FOR ALL OF YOUR COMMON SHARES, PARENT AND THE PURCHASER URGE YOU
TO COMPLETE, SIGN AND RETURN YOUR WHITE AGENT DESIGNATION PROMPTLY.
Neither the call of the Special Meeting nor shareholder approval of the
Special Meeting Proposals will require you to tender your Common Shares to the
Purchaser, but the Purchaser may require that the Special Meeting Proposals be
approved at the Special Meeting before it will accept for payment Common Shares
tendered pursuant to the Offer. Tendering Common Shares pursuant to the Offer
will not constitute a vote in
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favor of the Special Meeting Proposals and will not, by itself, increase the
likelihood of the Offer being consummated. Instead, in order to support the
Offer, you must authorize the call of the Special Meeting by using the enclosed
WHITE Agent Designation and you must also vote in favor of the Purchaser's
acquisition of Common Shares in the Offer at the Ohio Control Share Acquisition
Meeting (as defined herein) and in favor of the Special Meeting Proposals voted
upon at the Special Meeting.
THE FAILURE TO EXECUTE AND RETURN THE WHITE AGENT DESIGNATION WILL HAVE THE
SAME EFFECT AS OPPOSING THE CALL OF THE SPECIAL MEETING AND MAY RESULT IN
WITHDRAWAL OF THE OFFER.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company. If such negotiations result in a
definitive merger agreement between the Company and Parent, certain material
terms of the Offer may change and Parent may elect not to proceed with any
solicitation with regard to the Special Meeting. Accordingly, such negotiations
could result in, among other things, termination or amendment of the Offer
and/or submission of a different acquisition proposal to the Company
shareholders for their approval.
A copy of the Tender Offer Statement on Schedule 14D-1, which was filed by
the Purchaser with the Securities and Exchange Commission (the "Commission") on
July 12, 1996 (the "Schedule 14D-1"), and all amendments thereto, including
Amendment No. 2 thereto filed on July 16, 1996, which includes the Offer to
Purchase and Letter of Transmittal, may be obtained from the Commission, upon
payment of the Commission's customary charges, by writing to its principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C.
20549. Such material is also available for inspection and copying at the
principal office of the Commission at the address set forth immediately above,
at the Commission's regional offices at Seven World Trade Center, 13th Floor,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at the offices of the New York Stock Exchange
(the "NYSE"), 20 Broad Street, New York, New York 10005. Such material should
also be available on-line through the Commission's EDGAR system.
On July 12, 1996, Parent and the Purchaser delivered to the Company an
"acquiring person statement" pursuant to the Ohio Control Share Acquisition Law
in connection with the Purchaser's proposed acquisition of Common Shares (the
"Proposed Control Share Acquisition") in the Offer. Within ten days of the
receipt of such acquiring person statement, the Ohio Control Share Acquisition
Law requires that the Company's Board call a special meeting of shareholders of
the Company for the purpose of voting on the Proposed Acquisition (the "Ohio
Control Share Acquisition Meeting"). On July 18, 1996, the Company issued a
press release announcing that the Company's Board had called the Ohio Control
Share Acquisition Meeting to be held on August 30, 1996. The solicitation of
Agent Designations pursuant to this Solicitation Statement does not relate to
the Ohio Control Share Acquisition Meeting. Parent and the Purchaser are
soliciting proxies under a separate proxy statement to authorize the Proposed
Control Share Acquisition pursuant to the Ohio Control Share Acquisition Law
(the "Ohio Control Share Acquisition Approval").
EFFECT OF EXECUTION AND DELIVERY OF AGENT DESIGNATIONS
Under the ORC and the Company Regulations, a special meeting of the Company
shareholders may be called at any time by the holders of at least 40% of the
Shares at such time and such place as such Requisite Holders set forth in a
written request delivered to the Chairman, President or Secretary of the Company
(the "Written Request"). The Company Regulations provide that, upon receipt of
the Written Request by an appropriate officer of the Company, it shall be the
duty of such officer to cause notice of the Special Meeting to be given to the
Company shareholders entitled thereto within five business days of receipt of
the Written Request; provided that, if such officer fails to cause such notice
to be given within such time period, then the Requisite Holders may give notice
of the Special Meeting to the Company shareholders. Accordingly, following
receipt of Agent Designations from the Requisite Holders, the Designated Agents
will call the Special Meeting and thereupon make appropriate delivery to the
President or the Secretary of the Company of the Written Request duly requesting
such officer forthwith to cause appropriate notice of the Special Meeting to be
given to the Company shareholders entitled thereto. If notice of the Special
Meeting is not so given
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within five business days of delivery of the Written Request, the Designated
Agents will cause notice thereof to be given to the Company shareholders as
provided in the Company Regulations. It is the current intention of Parent and
the Purchaser to designate that the Special Meeting will be held as soon as
practicable following receipt of Agent Designations from the Requisite Holders,
subject to the requirements of the ORC and the Company Regulations.
In the Written Request, the Designated Agents will also request that the
Company's Board take action, within such time as is specified in the Written
Request, to fix a record date for the determination of the Company shareholders
who are entitled to receive notice of or to vote at the Special Meeting (the
"Special Meeting Record Date"). If the Company's Board fails or refuses, within
such specified time, to fix the Special Meeting Record Date, then the Designated
Agents will fix the Special Meeting Record Date in compliance with, and as
permitted by, the ORC.
Under the ORC and subject to its provisions, Requisite Holders are entitled
to deliver the Written Request and to take all other actions described herein
and in the ORC in connection with calling the Special Meeting, any adjournment
thereof, fixing the time thereof, causing notice thereof to be given to the
Company shareholders, and causing the Special Meeting Record Date to be fixed.
The Agent Designations grant to the Designated Agents the full rights and
authority of Requisite Holders to take these actions in connection with the
Special Meeting. HOWEVER, THE AGENT DESIGNATIONS WILL NOT GIVE THE DESIGNATED
AGENTS THE RIGHT TO VOTE ANY SHARES AT THE SPECIAL MEETING.
You may revoke your Agent Designation at any time by executing and
delivering a written revocation to Commercial Intertech Corp., 1775 Logan
Avenue, Youngstown, Ohio 44510. Parent and the Purchaser request that you send a
copy of any revocation sent to the Company to United Dominion Industries
Limited, 2300 One First Union Center, Charlotte, North Carolina 28202-6039, c/o
B. Bernard Burns, Jr., Senior Vice President, General Counsel and Secretary. A
revocation may be in any written form, provided that it clearly states that your
Agent Designation is no longer effective. An Agent Designation may also be
revoked by notice given to the Company in an open meeting of the Company
shareholders. Any revocation of an Agent Designation will not affect any action
taken by the Designated Agents pursuant to the Agent Designation prior to such
revocation. In accordance with the ORC, no Agent Designation is valid after the
expiration of 11 months after it is made.
BY AUTHORIZING THE CALL OF THE SPECIAL MEETING, YOU WILL ALLOW THE COMPANY
SHAREHOLDERS TO PROTECT THEIR INTERESTS IN THE COMPANY BY EXPRESSING THEIR VIEWS
ON THE OFFER AND THE PROPOSED MERGER DIRECTLY TO THE COMPANY'S BOARD OF
DIRECTORS.
BY EXECUTING AND RETURNING THE WHITE AGENT DESIGNATION TO PARENT, YOU ARE
NOT COMMITTING TO CAST ANY VOTE IN FAVOR OF OR AGAINST, NOR ARE YOU GRANTING ANY
PROXY TO VOTE ON, ANY MATTER TO BE BROUGHT BEFORE THE SPECIAL MEETING. EXECUTION
AND DELIVERY OF AN AGENT DESIGNATION WILL NOT OBLIGATE YOU IN ANY WAY TO SELL
YOUR COMMON SHARES PURSUANT TO THE OFFER.
A VALIDLY EXECUTED AND UNREVOKED AGENT DESIGNATION AUTHORIZES THE
DESIGNATED AGENTS (1) TO CALL THE SPECIAL MEETING, (2) TO CAUSE THE DATE THEREOF
TO BE FIXED AND NOTICE THEREOF, OR OF ANY ADJOURNMENT THEREOF, TO BE GIVEN, (3)
TO CAUSE THE SPECIAL MEETING RECORD DATE, OR A RECORD DATE FOR ANY ADJOURNMENT
OF THE SPECIAL MEETING, TO BE FIXED, AND (4) TO EXECUTE ALL RIGHTS OF REQUISITE
HOLDERS INCIDENTAL TO CALLING AND CONVENING THE SPECIAL MEETING. TO VOTE ON THE
MATTERS TO BE BROUGHT BEFORE THE SPECIAL MEETING YOU MUST VOTE BY PROXY OR IN
PERSON AT THE SPECIAL MEETING. TO ACCEPT THE OFFER, YOU MUST FOLLOW THE
PROCEDURES SET FORTH IN THE OFFER TO PURCHASE.
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The tender of Common Shares pursuant to the Offer does not constitute the
grant to Parent or the Purchaser of any rights to execute Agent Designations
with respect to the tendered Common Shares until such time as such Common Shares
are accepted for payment by the Purchaser. ACCORDINGLY, IT IS IMPORTANT THAT YOU
EXECUTE AN AGENT DESIGNATION EVEN IF YOU TENDER YOUR COMMON SHARES PURSUANT TO
THE OFFER.
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can execute an Agent Designation for such
Shares and will do so only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and instruct
that person to execute the WHITE Agent Designation.
ESOP PARTICIPANTS CAN ONLY EXECUTE AGENT DESIGNATIONS WITH RESPECT TO
SHARES HELD IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE ESOP TRUSTEE ON THE
FORM THAT SHOULD BE PROVIDED BY THE ESOP TRUSTEE TO PARTICIPANTS FOR THAT
PURPOSE. SIMILARLY, PARTICIPANTS IN THE PLANS CAN ONLY EXECUTE AGENT
DESIGNATIONS WITH RESPECT TO SHARES HELD IN THE PLANS ON THEIR BEHALF BY
INSTRUCTING THE PLAN TRUSTEE ON THE FORM THAT SHOULD BE PROVIDED BY THE PLAN
TRUSTEE FOR THAT PURPOSE. PARTICIPANTS IN THE ESOPS AND THE PLANS CANNOT EXECUTE
AGENT DESIGNATIONS WITH RESPECT TO SHARES ALLOCATED TO THEIR ACCOUNTS BY
EXECUTING THE ACCOMPANYING WHITE AGENT DESIGNATION.
If the Purchaser should terminate, or materially amend the terms of, the
Offer prior to the delivery of the Written Request to the appropriate officer of
the Company, Parent or the Purchaser will disseminate such information regarding
such changes to the Company's shareholders and, in appropriate circumstances,
will provide the Company shareholders with a reasonable opportunity to revoke
their Agent Designations prior to the date when the Written Request is delivered
to the Company's officer.
SPECIAL MEETING PROPOSALS
RESOLUTION CALLING FOR REDEMPTION OF RIGHTS
At the Special Meeting, Parent intends to propose a resolution calling on
the Company's incumbent directors to redeem the Rights prior to the time such
directors are removed from office. This resolution, if adopted by the
shareholders of the Company, will not be binding on the Company's Board. Under
the Company Regulations, the affirmative vote of the holders of a majority of
the voting Shares represented at the Special Meeting is required to adopt this
resolution. In the event the Company's Board fails to redeem the Rights or to
take other action under the Rights Agreement to render the Rights inapplicable
to the Offer and the Proposed Merger, as explained below, the Purchaser may be
unable or unwilling to purchase Common Shares in the Offer and/or to consummate
the Proposed Merger, or the purchase of Common Shares in the Offer and the
consummation of the Proposed Merger may, due to the 180-day Restrictions
described below, be delayed by 180 days from the time nominees of Parent are
elected as directors of the Company.
According to the Company 1995 Form 10-K/A and the Company's Registration
Statement on Form 8-A dated November 30, 1989 (the "Form 8-A"), in November 1989
the Company adopted the Rights Agreement and declared a dividend of one Right
for each outstanding Common Share. The Company 1995 10-K/A states that each
Right entitles the registered holder thereof to purchase one one-hundredth of a
Series A Participating Preferred Share at a purchase price of $75, subject to
adjustment, and that the Rights will become operative in the event that certain
events occur. A more detailed description of the Rights is contained in the
Offer to Purchase.
According to the Form 8-A, the Rights Agreement provides that, until the
close of business on the Distribution Date (as defined below), the Rights will
be evidenced by the certificates for Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Shares will also constitute the surrender for
transfer of the Rights associated with the Common Shares represented by such
certificates. The Rights Agreement further provides that, as soon as practicable
following the Distribution Date, separate certificates representing the Rights
are to be mailed by the Company or the rights agent to holders of record of
Common Shares as of the close of business on the Distribution Date. The Rights
will separate from the Common Shares and a "Distribution Date" for the
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Rights will occur upon the earlier to occur of (i) a public announcement that,
without the prior approval of the Company, a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of securities having 20% or more of the voting power of all
outstanding voting securities of the Company (an "Acquiring Person") or (ii) ten
business days (unless such date is extended by the Company's Board) following
the commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any person or group of related
persons becoming an Acquiring Person.
Based on publicly available information, Parent and the Purchaser believe
that, as of the date hereof, the Rights are not exercisable, certificates for
Rights have not been issued and the Rights are evidenced by the certificates for
Common Shares. In its press release of July 18, 1996, the Company announced that
on July 17, 1996, the Company's Board had acted to delay the Distribution Date
until either (i) the close of business on August 7, 1996, or (ii) such earlier
date prior to the expiration date of the Offer as the Company's Board, or any
duly authorized committee thereof, shall designate. Accordingly, Parent and the
Purchaser believe that the Distribution Date will occur no later than August 7,
1996, unless prior to such date the Company's Board defers the Distribution
Date, redeems the Rights or amends the Rights Agreement to make the Rights
inapplicable to the Offer and the Proposed Merger. Based on the Form 8-A, Parent
and the Purchaser expect that each of them would become Acquiring Persons in the
event the Purchaser were to purchase Common Shares representing 20% or more of
the voting power of the Company's outstanding voting securities in the Offer.
According to the Form 8-A, the Rights Agreement provides that, at any time
prior to the close of business on the earlier of (i) the date that an Acquiring
Person becomes such and (ii) November 29, 1999, the Company's Board may redeem
(except as provided in the Rights Agreement) the Rights in whole, but not in
part, at a price of $.01 per Right.
According to the Form 8-A, the Rights Agreement further provides that, in
the event that a majority of the Board of Directors of the Company is comprised
of (i) persons elected at a meeting of stockholders or by stockholder action by
written consent who were not nominated by the Board of Directors in office
immediately prior to such meeting or action by written consent and/or (ii)
successors of such persons elected to the Company's Board for the purpose of
either facilitating a transaction with an Interested Person (as defined therein)
or circumventing directly or indirectly the provisions of the Rights Agreement,
then, for a period of 180 days following the effectiveness of such action, (a)
the Rights may not be redeemed if such redemption is reasonably likely to have
the purpose of facilitating a transaction with an Interested Person or if,
during such 180-day period, the Company enters into any agreement reasonably
likely to facilitate a transaction with an Interested Person and the redemption
is reasonably likely to facilitate such a transaction, (b) the Rights Agreement
may not be amended or supplemented in any manner reasonably likely to have the
purpose or effect of facilitating certain business combination transactions with
an Interested Person or (c) the Company may not exclude from the definition of
an Acquiring Person any Interested Person who acquires 20% or more of the
outstanding Common Stock or deem any offer by an Interested Person to be a
Permitted Offer (as defined in the Rights Agreement) (the "180-Day
Restrictions"). Accordingly, the Purchaser may be unable or unwilling to
purchase Common Shares in the Offer, and Parent and the Purchaser may be unable
or unwilling to consummate the Proposed Merger for a period of 180 days
following the election of the Parent Nominees to the Company's Board unless the
persons constituting the current Board of Directors of the Company redeem the
Rights (or amend the Rights Agreement or take other action under the Rights
Agreement to make the Rights and/or the 180-Day Restrictions inapplicable to the
Offer and the Proposed Merger). This 180-day waiting period would take effect
even if the persons constituting the current Board of Directors of the Company
were removed, and the new board of directors consisting of the Parent Nominees
(the "New Board") were elected, at the Special Meeting and the New Board
thereafter voted to redeem the Rights.
Parent and the Purchaser believe that under the circumstances of the Offer,
and under applicable law, the Company's Board of Directors has a fiduciary
obligation to redeem the Rights (or to amend the Rights Agreement or take other
action under the Rights Agreement to make the Rights and the 180-Day
Restrictions
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inapplicable to the Offer and the Proposed Merger), and Parent and the Purchaser
have requested that the Company's Board do so.
Parent and the Purchaser commenced an action (the "Ohio Action") against
the Company and its directors on July 11, 1996 in The United States District
Court for the Southern District of Ohio, Eastern Division (the "Ohio Federal
District Court"), seeking, among other things, an order requiring the Company's
Board to redeem the Rights. See "CERTAIN LEGAL MATTERS" below.
REMOVAL OF CURRENT DIRECTORS AND ELECTION OF NEW DIRECTORS
At the Special Meeting, the Purchaser intends to propose that all incumbent
directors of the Company be removed from office and that the size of the
Company's Board be reduced from 12 to three members. The persons appointed by
the proxies to be solicited by Parent and the Purchaser for the Special Meeting
would vote the Shares represented by such proxies in favor of the proposals to
remove all of the incumbent directors of the Company and, as described below, to
amend the Company Regulations to reduce the size of the Company's Board from 12
to three members (and, in connection with such reduction in size, to provide
that the directors shall serve as a single class with the same term of office).
Removal of all incumbent directors requires the affirmative vote of a majority
of the total voting power of the outstanding Shares. See "VOTING AT THE SPECIAL
MEETING" below.
The Purchaser also intends to propose that the Parent Nominees be elected
as directors of the Company to fill all of the vacancies created by the removal
of the incumbent directors and the reduction of the size of the Board, each to
hold office until a successor has been elected and qualified or until death,
resignation or removal. Company shareholders will be provided with the
identities of and other information concerning the Parent Nominees in the proxy
statement relating to the Special Meeting which will be forwarded to Company
shareholders prior to the Special Meeting.
The laws of the State of Ohio, under which the Company is organized,
provide for cumulative voting for the election of directors if any shareholder
gives notice in writing to the President, a Vice President or the Secretary of
the Company, not less than 48 hours (unless notice of the meeting has not been
given at least ten days before the date fixed for the meeting, in which case 24
hours) before the time fixed for holding the meeting that such shareholder
desires that the voting for the election of directors shall be cumulative,
provided that announcement of the giving of such notice is made upon the
convening of the meeting by the Chairman or the Secretary of the Company or by
or on behalf of such shareholder. Each shareholder shall then have the right to
vote his or her Shares cumulatively at the election; that is, each shareholder
shall be entitled to cast a number of votes as shall equal the number of votes
represented by such shareholder's Shares on the Special Meeting Record Date
multiplied by the number of directors to be elected. A shareholder may cast all
such cumulative votes for a single nominee or may allocate them among as many
nominees as that shareholder sees fit. In the event the election of directors at
the Special Meeting is to be by cumulative voting, the Purchaser and Parent
intend to seek to have as many of the Parent Nominees elected as possible. The
order of Parent Nominees to be elected in such event will be set forth in the
Proxy Statement relating to the Special Meeting.
THE PARENT NOMINEES, IF ELECTED AT THE SPECIAL MEETING, WILL SEEK, SUBJECT
TO THEIR FIDUCIARY DUTIES, TO GIVE ALL SHAREHOLDERS THE OPPORTUNITY TO ACCEPT
THE OFFER. ACCORDINGLY, THE EXECUTION OF AN AGENT DESIGNATION WILL FACILITATE
THE OPPORTUNITY FOR SHAREHOLDERS TO CONSIDER AND VOTE FOR THE PARENT NOMINEES
AND WILL ENHANCE YOUR CHANCES OF BEING ABLE TO TAKE ADVANTAGE OF THE OFFER.
AMENDMENTS OF THE COMPANY REGULATIONS
The Purchaser intends to propose at the Special Meeting a resolution to
amend Article II of the Company Regulations to eliminate the requirement that
the Company's Board be divided into three classes and to reduce the size of the
Company's Board from 12 to three members, who will serve as a single class.
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In addition, the Purchaser intends, if the Ohio Control Share Acquisition
Approval has not been obtained or the Purchaser has not otherwise been
satisfied, in its sole discretion, that the Ohio Control Share Acquisition Law
is invalid or inapplicable to the acquisition of Common Shares pursuant to the
Offer by the date of the Special Meeting, to propose at the Special Meeting a
resolution to amend the Company Regulations by adding the following Article XI
to the Company Regulations:
"ARTICLE XI
"CONTROL SHARE ACQUISITION STATUTE NOT APPLICABLE
"Section 1701.831 of the Ohio Revised Code does not apply to 'control
share acquisitions' (as such term is defined in division (Z)(1) of Section
1701.01 of the Ohio Revised Code) of shares of the corporation."
The Company Regulations require the affirmative vote of a majority of the
total voting power of the outstanding Shares to approve these amendments to the
Company Regulations. See "VOTING AT THE SPECIAL MEETING" below.
AMENDMENT OF THE COMPANY ARTICLES
Article SIXTH of the Company Articles provides that the affirmative vote of
holders of 95% of all shares of stock of the Company entitled to vote in the
election of directors shall be required to authorize a business combination (as
defined in the Company Articles) with any entity that, directly or indirectly,
beneficially owns 30% or more of the Shares as of the record date for the
meeting of shareholders at which such authorization is sought unless the
consideration to be offered to holders of the outstanding Shares complies with
certain "fair price" requirement provisions (the "Article SIXTH Requirements").
Consequently, to ensure that all of the conditions to Parent's and the
Purchaser's ability and willingness to consummate the Offer and the Proposed
Merger have been or will be satisfied, Parent proposes that the Company Articles
be amended to repeal Article SIXTH in its entirety.
Article SIXTH may be amended or repealed only by the affirmative vote of
95% of all shares of stock of the Company entitled to vote in the election of
directors, or by the affirmative vote of at least two-thirds of the outstanding
Shares upon the unanimous recommendation of the Board of Directors provided that
all of the directors qualify as "continuing directors" at the time such
recommendation is made. "Continuing director" is defined to include directors
holding office prior to the time that any entity proposing a business
combination has acquired 10% or more of the outstanding stock of the Company.
Because the Special Meeting will occur prior to the time the Purchaser purchases
Common Shares in the Offer, the Parent Nominees, if elected at the Special
Meeting, will qualify as "continuing directors" for purposes of Article SIXTH.
Parent and the Purchaser have requested that the Company's Board
unanimously recommend to the Company shareholders that Article SIXTH be repealed
or otherwise amended such that its provisions are inapplicable to the Proposed
Merger. There can be no assurance that the Company's Board will do so. In the
event that the Company's Board fails to do so prior to the intended date of the
consummation of the Offer, the Purchaser expects the Parent Nominees, if all of
such persons are elected at the Special Meeting, and subject to their fiduciary
duties, to take such appropriate action as shall result in a unanimous
recommendation by the Company's Board to the Company shareholders that Article
SIXTH be repealed. In the event such recommendation is made, pursuant to Article
SIXTH and the ORC, the affirmative vote of holders of two-thirds of the voting
power of the total number of outstanding Shares shall be sufficient to approve
the proposal to repeal Article SIXTH.
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
Parent and the Purchaser also anticipate requesting, in the proxy
solicitation relating to the Special Meeting, authority to initiate and vote for
proposals to recess or adjourn the Special Meeting for any reason, including to
allow inspectors of the election to certify the outcome of the election of
directors, or to allow the solicitation of additional votes, if necessary, to
approve the Special Meeting Proposals. Neither Parent nor the
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<PAGE> 11
Purchaser currently anticipates additional Special Meeting Proposals on any
substantive matters. However, Parent and the Purchaser may elect to cause
additional Special Meeting Proposals to be identified in the notice of, and in
the proxy materials for, the Special Meeting.
IF PARENT AND THE PURCHASER DO NOT OBTAIN SUFFICIENT AGENT DESIGNATIONS TO
CALL THE SPECIAL MEETING AND IF THE SPECIAL MEETING PROPOSALS ARE NOT APPROVED
BY THE COMPANY SHAREHOLDERS, IT IS UNLIKELY THAT CERTAIN CONDITIONS TO THE OFFER
WILL BE SATISFIED AND THAT COMMON SHARES WILL BE ACCEPTED FOR PAYMENT PURSUANT
TO THE OFFER. IN SUCH EVENT, PARENT AND THE PURCHASER MAY EITHER (1) TERMINATE
THE OFFER OR (2) CONTINUE TO PURSUE THE OFFER AND THE SATISFACTION OF THE
CONDITIONS TO THE OFFER THROUGH NEGOTIATION, LITIGATION AND OTHER MEANS. SEE
"TERMS AND CONDITIONS OF THE OFFER" AND "CERTAIN LEGAL MATTERS" BELOW.
VOTING AT THE SPECIAL MEETING
Subject to the provisions for cumulative voting in the election of
directors, as described above, each Share is entitled to one vote on all matters
brought before the Company's shareholders for a vote. According to the Annual
Meeting Proxy Statement and other documents publicly filed by the Company under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Common
Shares and the Preferred Shares vote together as a single class, with each
Common Share entitled to one vote and each Preferred Share entitled to one and
one-half votes. However, in the Ohio Action, the Company admitted that the
Preferred Shares are entitled to only one vote per share. Accordingly, Parent
and the Purchaser believe that, in any shareholder vote in which the Common
Shares and Preferred Shares vote together as a single class, the Preferred
Shares are entitled to one vote per Preferred Share notwithstanding the fact
that since September 1994 all votes of the Company's shareholders have
erroneously been tabulated on the basis of one and one-half votes per Preferred
Share. See "CERTAIN LEGAL MATTERS" below.
As described above in the "INTRODUCTION," the ESOP Trusts contain certain
pass-through voting provisions. Parent and the Purchaser believe that,
notwithstanding the express terms of the trust documents, the ESOP Trustee has a
fiduciary duty under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to exercise its discretion with respect to voting Shares held
in the ESOP which are allocated to a participant's account but for which no
instructions are received by it and for all Shares held in the ESOP which are
not allocated to a participant's account. Parent and the Purchaser also believe
that the indemnification provisions in favor of the ESOP Trustee contained in
the ESOP trust documents, which provide full indemnification for the ESOP
Trustee only for actions taken upon the written direction of the participants
and in accordance with the terms of the ESOP, violate ERISA. The United States
Department of Labor (the "DOL") has successfully advanced similar positions in a
federal district court case, which is currently on appeal, arising out of a
tender offer in which the target company's employee stock ownership plan
provided that tendering decisions were to be passed-through to participants with
respect both to allocated and unallocated shares, and that a failure to direct
by a participant should be interpreted by the trustee as an instruction not to
tender. The court in Reich v. NationsBank of Georgia, N.A. concluded that it is
not appropriate for participants in an employee stock ownership plan to make
tendering decisions with respect to unallocated shares (due to "an inherent
conflict of interest"). The court also stated that "when a trustee receives no
affirmative direction regarding allocated shares, the trustee must take
exclusive responsibility for decisions regarding these shares." (Moreover, the
DOL has taken the position that, under the fiduciary requirements of ERISA, a
trustee of an employee stock ownership plan must override participant
instructions if following them would be imprudent.) In Martin v. NationsBank of
Georgia, N.A., an earlier opinion in the same federal district court proceeding,
the court granted partial summary judgment to the DOL on its claim that
indemnification rights in favor of a trustee of an employee stock ownership plan
that differed depending on whether or not the trustee followed participant
voting and tendering instructions violated ERISA. The court stated that the
indemnification agreement, which created "a financial incentive for the trustee
to breach its fiduciary obligations under ERISA," compromised the trustee's
independent judgment and thus violated ERISA.
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As also described above in the "INTRODUCTION," the Plan Trusts contain
pass-through voting provisions for the participants of the Plans, with Common
Shares that are allocated to a participant's account voted by the Plan Trustee
as instructed by the participant and Common Shares that either are not allocated
to any participant's account or are allocated but for which no instruction from
the participant has been received by the Plan Trustee voted by the Plan Trustee,
in its sole discretion.
BACKGROUND OF THE PROPOSED ACQUISITION
Parent continuously seeks to strengthen its business segments by adding new
products, including through acquisitions, particularly of manufacturing
businesses producing proprietary engineered products. The Company's planning and
development department has for several years included the Company among a number
of companies that it follows as potential combination prospects. Also, beginning
in late 1995, Parent, based on public information and with the assistance of
Schroder Wertheim & Co. Incorporated, Parent's financial advisor ("Schroder
Wertheim"), began analyzing the potential attractiveness of a possible
acquisition of the Company. Based on this analysis, senior management of Parent
determined to contact the Company to assess its receptiveness to a potential
combination of the Company and Parent.
On May 10, 1996, Mr. William R. Holland, Chairman and Chief Executive
Officer of Parent, met with Mr. Paul J. Powers, Chairman, President and Chief
Executive Officer of the Company, at Mr. Holland's request. At that meeting, Mr.
Holland discussed the benefits of a combination of Parent and the Company and
proposed a transaction in which Parent would acquire all of the Shares at a
price of $24.00 per Common Share. Mr. Powers responded that he was not
interested in considering a transaction between the Company and Parent.
Thereafter, on or about June 17, 1996, a representative of Schroder
Wertheim received a telephone call from a representative of the Company stating
that the Company was considering an initial public offering of 20% of the common
stock of Cuno Incorporated, a wholly owned subsidiary of the Company ("Cuno").
The Company representative asked if Schroder Wertheim was interested in learning
further about Cuno and potentially participating as a co-manager in such an
offering. The representative of Schroder Wertheim replied that Schroder Wertheim
had no such interest.
On June 27, Mr. Holland sent the following letter to Mr. Powers:
Mr. Paul J. Powers
Chairman, President and
Chief Executive Officer
Commercial Intertech Corporation
1775 Logan Avenue
Youngstown, OH 44505
Dear Paul:
I enjoyed our meeting on May 10 and appreciated your time and
hospitality. I have been pondering the situation since then and would
certainly like to see our discussions proceed further. I was disappointed
that you did not share my desire to move forward. I am convinced that the
combination of our two companies would make an extremely strong industrial
enterprise.
Accordingly, United Dominion Industries is offering to acquire
Commercial Intertech pursuant to a negotiated merger transaction in which
your shareholders would receive $27.00 per share in cash for all common
shares of Commercial Intertech, or approximately $500 million in total
consideration, including assumption of debt. This price represents
approximately a 40% premium to Commercial Intertech's current share price.
Given United Dominion's strong financial condition, the proposed
transaction would not be subject to a financing condition and we do not
anticipate any anti-trust problems.
We believe that this is a full and fair price that presents an
attractive opportunity for the shareholders of Commercial Intertech. We
obviously would honor outstanding commitments to your employees and would
be pleased to discuss in depth how our companies could best be combined.
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As you know, United Dominion does about $2 billion in sales--all in
manufacturing--and earned $77.3 million in 1995. We have a balance sheet
that is about 25% leveraged and have significant financial resources
available to us. We have enjoyed an excellent record of growth the last
five years and have returned, over that time, about a 24% compounded annual
return to our shareholders.
Some of the features of the combined company would be:
- Astron and Varco-Pruden would create one of the largest and strongest
metal building companies in the world, with sales of approximately $450
million, capturing the benefits of geographical reach and substantial
synergies;
- Cuno and Flair would, in our judgment, likewise create significant
synergies. This combination would create an operation doing approximately
$450 million in sales, making it one of the largest filtration businesses
in the world; and
- Our compaction operations (Bomag and Hypac) use approximately $50 million
a year in hydraulics. I would expect that these units would become a
significant customer of your hydraulics operation.
In short, Paul, we believe that the combination of United Dominion and
Commercial Intertech (with sales exceeding $2.5 billion) would produce a
strong company with a bright future.
As our preference is to consummate a negotiated transaction, we would
be pleased to advance our discussions at the earliest practicable time
after you have had an opportunity to discuss this offer with your
directors.
We are experienced in acquiring manufacturing companies and, with our
advisors, we can bring the transaction to a speedy conclusion.
Sincerely,
W.R. Holland
WRH/es
cc: Board of Directors
Commercial Intertech
Also on June 27, 1996, Parent issued a press release announcing its
delivery of the above letter and setting forth the full text thereof. Shortly
before the issuance of Parent's announcement on June 27, 1996, Mr. Holland
telephoned Mr. Powers to apprise him of the announcement. However, Mr. Powers
was unavailable and did not return the telephone call.
On June 30, 1996, the Company issued the following press release:
FOR IMMEDIATE RELEASE
COMMERCIAL INTERTECH RESPONDS TO
UNITED DOMINION UNSOLICITED TAKEOVER BID
Youngstown, Ohio: June 30, 1996--Commercial Intertech Corp. (NYSE:
TEC) said today that the proposal received on June 27, 1996 from
Canadian-based United Dominion Industries, Ltd. to acquire the Company was
unsolicited, that it represents a unilateral effort by United Dominion and,
contrary to the suggestion in United Dominion's letter, did not arise out
of any negotiations between the companies.
The Board of Directors of Commercial Intertech, at an initial meeting
on June 29, 1996, reaffirmed the Company's long-standing objective of
creating shareholder value as an independent public company and noted that
the Company achieved record financial performance in fiscal 1995. The Board
also indicated that it will review the United Dominion proposal in
consultation with its legal and investment advisers.
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As part of its ongoing strategic plans to enhance shareholder value,
the Company is preparing a public offering of up to 20% of the stock of
Cuno Incorporated, its wholly-owned filtration subsidiary. In that
connection, Mr. Paul J. Powers, Chairman of Commercial Intertech Corp.,
noted that Schroder Wertheim, United Dominion's financial adviser, had been
aware of the confidentially-proposed Cuno stock offering, having been
offered the opportunity of participating as co-manager within the last two
weeks.
Also, as part of its strategic plan, on June 28, Commercial Intertech
acquired Component Engineering Company, a manufacturer of cartridge-type
hydraulic valves based in Chanhassen, Minnesota.
Commercial Intertech is a multi-national manufacturer of Hydraulic
Systems, Building Systems and Metal Products, and Fluid Purification.
Employing more than 4,000 men and women around the world, the Company has
35 manufacturing facilities in 10 countries.
On July 3, 1996, Parent acquired 1,000 Common Shares at a price of $27.00
per share in cash on the open market on the NYSE (500 of which were later
contributed to the Purchaser).
On July 10, 1996, as a result of a meeting between the respective financial
advisors of Parent and the Company, Mr. Holland placed a call to Mr. Powers,
which call Mr. Powers returned later that day. During the call, Mr. Holland
indicated to Mr. Powers that he hoped the call could be productive and that the
two could get together once again to discuss a possible transaction. Mr. Powers
replied that the Company would have no response to Parent's proposal until the
Company's Board met and, therefore, there was no reason to have a meeting. He
did not indicate when the meeting of the Company's Board would be held.
On July 11, 1996, the Board of Directors of Parent approved the
commencement of the transactions contemplated herein and Parent announced that
it would be commencing the Original Offer. In addition, Parent also said that it
intends to acquire in the Proposed Merger any Common Shares not purchased in
such offer. Also on July 11, 1996, Parent and the Purchaser commenced the Ohio
Action in the Ohio Federal District Court against the Company and its directors,
among others. See "CERTAIN LEGAL MATTERS" below.
On July 12, 1996, the Purchaser commenced the Original Offer. Also on that
date, Parent and the Purchaser (i) delivered an "acquiring person statement" to
the Company under the ORC, (ii) initiated the process to commence a solicitation
of Agent Designations to call the Special Meeting, (iii) commenced litigation
against the Company and its directors, among others (see "CERTAIN LEGAL MATTERS"
below), and (iv) requested the Company's shareholder list and security position
listings and other information pursuant to the federal securities laws and the
ORC.
On July 12, 1996, after the announcement by Parent and the Purchaser of the
commencement of the Original Offer, the Company issued a press release in which
it stated, among other things, that the Company's Board had determined to
recommend that shareholders reject as inadequate the Original Offer, and had
"reaffirmed the Company's strategic plan which now includes an accelerated
initiative to spin off to shareholders 100% of its wholly owned Cuno
Incorporated filtration subsidiary" (the "Spin-Off"). In addition, the press
release stated that implementation of the Spin-Off was subject to customary
conditions, including receipt of a legal opinion regarding the tax-free nature
of the Spin-Off, and also stated that the Company's Board had approved a program
to repurchase up to 2.5 million of its 15.5 million Common Shares currently
outstanding (the "Repurchase Program").
Thereafter, on July 12, 1996, Parent issued the following press release:
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<PAGE> 15
FOR IMMEDIATE RELEASE
UNITED DOMINION RESPONDS TO COMMERCIAL
INTERTECH'S REJECTION OF ITS TENDER OFFER,
REMAINS COMMITTED TO COMBINATION OF THE COMPANIES
CHARLOTTE, NC (July 12, 1996) -- United Dominion Industries (NYSE,
TSE: UDI), said it is disappointed that directors of Commercial Intertech,
Corp. (NYSE: TEC) have rejected its $27 per share tender offer for all
outstanding common shares of Commercial Intertech and that it will evaluate
all alternatives that would enable it to complete the acquisition.
United Dominion said that it continues to believe that a negotiated
transaction provides substantially more value and less risk for all
Commercial Intertech shareholders than the actions announced today by TEC
directors. United Dominion also reaffirmed its commitment to pursuing the
combination of the two companies.
Following the close of trading on the NYSE on July 12, 1996, the Company
filed the Schedule 14D-9 in which it set forth the recommendation of the
Company's Board in respect of the Original Offer. The Schedule 14D-9 also
disclosed open market purchases by the Company of 847,600 Common Shares during
that day (at an average purchase price of $28.62 per Common Share) and disclosed
for the first time "some risk" that certain future events could cause the
Spin-Off not to be tax-free.
On July 15, 1996, Parent and the Purchaser announced the amendment of the
Original Offer to increase the price to be paid pursuant to the Offer from $27
to $30 per Common Share (and associated Right) as set forth in the following
press release:
FOR IMMEDIATE RELEASE
UNITED DOMINION INCREASES OFFER FOR
COMMERCIAL INTERTECH COMMON STOCK
TO $30 PER SHARE
CHARLOTTE, NC (July 15, 1996) -- United Dominion Industries (NYSE,
TSE: UDI), today announced that it has increased the price to be paid
pursuant to its cash tender offer for all outstanding common shares,
including associated preferred share purchase rights, of Commercial
Intertech Corp. (NYSE: TEC) from $27 to $30 per share, or approximately 57
percent more than TEC's share closing price on June 27 when United Dominion
first publicly announced its acquisition proposal. Including the assumption
of TEC debt, the aggregate transaction value of the revised offer is now
approximately $550 million.
United Dominion also responded to the plan announced Friday by
Commercial Intertech's board of directors to thwart United Dominion's offer
by repurchasing up to 2.5 million common shares and spinning off 100
percent of the company's Cuno Division.
William R. Holland, United Dominion's chairman and chief executive
officer, described the share buy-back effort as "egregious and clearly
unfair to TEC shareholders because it discriminates against certain
shareholders without providing full and adequate disclosure."
"In our judgment, buying back its shares in the open market Friday
from primarily large institutional investors and arbitrageurs is strong
evidence of TEC management's and board of directors' clear intentions to
entrench themselves further rather than to afford all shareholders an
opportunity to decide the future direction of the company," he said.
Mr. Holland also cited the proposed 100 percent spin-off of Cuno as
additional evidence of the extreme and reactive nature of TEC's unilateral
response, taken without first giving its shareholders an opportunity to
consider United Dominion's offer. In a filing with the Securities and
Exchange Commission on Friday, Commercial Intertech indicated that its
board had previously considered and rejected the 100 percent spin-off of
Cuno. Now, in the face of United Dominion's offer, the board has
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<PAGE> 16
proposed the spin-off despite the admitted tax risk to shareholders and
without even obtaining an Internal Revenue Service ruling or approval by
the Company's owners.
Mr. Holland indicated that United Dominion will continue to seek a
special meeting of TEC shareholders to enable them to make an informed
decision regarding United Dominion's offer after carefully comparing its
value against TEC's reactive alternative plan.
"United Dominion's revised offer of $30 per share incorporates the
synergistic opportunities possible only through the combination of United
Dominion and Commercial Intertech and are not available to TEC, or its Cuno
Division, on a stand-alone basis," Mr. Holland said.
"We are confident that Commercial Intertech shareholders will conclude
that United Dominion's cash proposal offers significantly more value and
considerably less risk than the leveraged alternative proposed by
Commercial Intertech's management and board of directors," he said.
Later on July 15, 1996, the Company issued a press release in which it
stated that the Company's Board would promptly review the revised Offer and in
which it "urged shareholders not to make any determination whether to accept or
reject" the Offer until the Company's Board published a recommendation with
respect to the Offer.
On July 15, 1996, Parent and the Purchaser filed their First Amended
Complaint (the "First Amended Complaint") in connection with the Ohio Action.
Also on July 15, the Ohio Federal District Court scheduled a hearing for July
29, 1996 with respect to claims made by Parent and Purchaser in the Ohio Action
with respect to the Ohio Control Share Acquisition Law. See "CERTAIN LEGAL
MATTERS" below.
On July 18, 1996, the Company issued a press release in which it stated,
among other things, that the Company's Board had (i) determined to recommend
that shareholders reject as inadequate the Offer; (ii) fixed August 30, 1996, in
Youngstown, Ohio, as the date and location of the Ohio Control Share Acquisition
Meeting and the close of business on August 7, 1996, as the record date for the
Ohio Control Share Acquisition Meeting; (iii) purported to fix the close of
business on September 3, 1996 as a record date for the solicitation of Agent
Designations; and (iv) acted to delay the Distribution Date under the Rights
Agreement until either (a) the close of business on August 7, 1996, or (b) such
earlier date prior to the expiration date of the Offer as the Company's Board
shall designate. Also on July 18, 1996, the Company filed its Answer and
Counterclaims to the First Amended Complaint (the "Company Answer") in
connection with the Ohio Action in which it admitted that the Preferred Shares
are entitled to only one vote per share (notwithstanding that the Company's
public filings under the Exchange Act prior to such time have expressly stated
that the Preferred Shares are entitled to one and one-half votes per share). In
the Company Answer, the Company also asserted counterclaims against Parent and
the Purchaser including alleged disclosure violations under state and Federal
law. The Company Answer also asserts that if Parent and the Purchaser obtain
proxies representing more than 10% of the voting power of the Common Shares to
remove the Company's Board, Parent and the Purchaser would be "interested
shareholders" under the Ohio Business Combination Law. See "CERTAIN LEGAL
MATTERS" below.
On July 19, 1996, Parent and the Purchaser moved to file in the Ohio Action
their Second Amended Complaint seeking to enjoin the Company and the Company's
Board from taking any steps to effectuate the proposed Spin-Off until the
Company's shareholders have the opportunity to vote at the Ohio Control Share
Acquisition Meeting and the Special Meeting. See "CERTAIN LEGAL MATTERS" below.
TERMS AND CONDITIONS OF THE OFFER
As described above, on July 12, 1996, the Purchaser commenced the Original
Offer and on July 15, 1996, the Purchaser announced that it was increasing the
price to be paid pursuant to the Offer from $27 to $30 per Common Share, net to
the seller in cash. As stated in the Offer to Purchase, the purpose of the Offer
and the Proposed Merger is to enable the Purchaser to acquire control of, and
the entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding Shares. Parent intends to continue to seek to negotiate with the
Company with
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respect to the acquisition of the Company by Parent. Parent currently intends,
as soon as practicable following consummation of the Offer, to seek to have the
Company consummate the Proposed Merger.
The Offer is conditioned, among other things, upon the following:
(1) The Minimum Condition. There must be validly tendered a number of
Common Shares which, when added to the Common Shares beneficially owned by the
Parent and its affiliates, constitutes at least two-thirds of the total voting
power of all Shares outstanding on a fully diluted basis on the date of
purchase. As of the date hereof, Parent and the Purchaser each own 500 Common
Shares and no Preferred Shares.
According to the Company 1995 10-K/A, as of July 15, 1996, there were
14,665,404 Common Shares outstanding and, according to the Company Form 10-Q, as
of April 30, 1996 there were 1,039,657 Preferred Shares outstanding. According
to the Company 1995 10-K/A, there were 1,818,600 Common Shares reserved for
issuance under the Company stock plans (with options to purchase 617,051 Common
Shares outstanding as of October 31, 1995) and 1,301,082 Common Shares reserved
for issuance upon conversion of Preferred Shares. According to amendments filed
by the Company through July 23, 1996 to the Schedule 14D-9, the Company
repurchased 944,900 Common Shares after July 15, 1996 pursuant to the Repurchase
Program. The Company 1995 10-K/A states that each Preferred Share is convertible
into 1.235 Common Shares (for a total of 1,283,976 Common Shares issuable upon
conversion of all Preferred Shares).
Based on the foregoing, assuming the exercise of all options and the
conversion of all Preferred Shares, and assuming that no additional Shares or
options were issued, granted or repurchased since the respective dates for which
information has been provided, there would be 15,621,531 Common Shares
outstanding on a fully diluted basis. Parent owns 1,000 Common Shares
beneficially, 500 of which are held of record by Parent and 500 of which are
held of record by the Purchaser. Thus, based on the foregoing assumptions, the
valid tender of 10,413,354 Common Shares would satisfy the Minimum Condition.
However, the actual number of Common Shares required will depend upon the facts
as they exist on the date of purchase.
(2) The Control Share Condition. The Ohio Control Share Acquisition
Approval shall have been obtained from the Company shareholders or the Purchaser
shall be satisfied, in its sole discretion, that the Ohio Control Share
Acquisition Law is invalid or inapplicable to the Proposed Control Share
Acquisition.
(3) The Business Combination Condition. The Purchaser must be satisfied,
in its sole discretion, that the restrictions contained in Chapter 1704 of the
ORC (the "Ohio Business Combination Law") will not apply to the acquisition of
Common Shares pursuant to the Offer or to the Proposed Merger.
The Ohio Business Combination Law provides that if a purchaser becomes
entitled to exercise or direct the exercise of 10% or more of the total voting
power of the Company in the election of directors (thereby becoming an
"interested shareholder"), the Company may not engage in a "business
combination" (defined to include a variety of transactions, including mergers
such as the Proposed Merger) with the purchaser or any affiliate of the
purchaser for three years after the purchaser becomes an interested shareholder,
and the Ohio Business Combination Law imposes significant restrictions on such
transactions thereafter. The three-year prohibition would not apply to the
Proposed Merger if, among other things, the Company's Board of Directors adopts
a resolution approving the Proposed Merger, provided that such resolution is
adopted prior to the date that the Purchaser becomes an interested shareholder
(as defined in the Ohio Business Combination Law).
Parent and the Purchaser have requested that the Company's Board take
appropriate action so that the Ohio Business Combination Law is not applicable
to the acquisition of Common Shares pursuant to the Offer or the Proposed
Merger. In the event that the Company's Board fails to do so prior to the
intended date of the consummation of the Offer, the Purchaser expects that the
Parent Nominees, if elected at the Special Meeting, and subject to their
fiduciary duties, shall have the power to and shall take such appropriate action
as shall result in the satisfaction of the Business Combination Condition.
However, in the Company Answer filed on July 18, 1996, the Company requests,
among other things, that if Parent and the Purchaser obtain proxies representing
more than 10% of the voting power of the Common Shares to remove the current
board of directors, Parent and the Purchaser be declared "interested
shareholders" under the Ohio Business Combination Law. Parent believes that the
Company's position is without merit.
16
<PAGE> 18
(4) The Rights Condition. The Rights shall have been redeemed by the
Company or the Purchaser shall be satisfied, in its sole discretion, that the
Rights have been invalidated or are otherwise inapplicable to the Offer and the
Proposed Merger.
(5) The Articles Amendment Condition. Article SIXTH shall have been
repealed or otherwise amended with the effect that, or the Purchaser shall be
otherwise satisfied, in its sole discretion, that, the provisions of such
Article SIXTH are inapplicable to the Proposed Merger.
The Offer is also subject to other terms and conditions which are described
in the Offer to Purchase and the Letter of Transmittal, copies of which are
available from MacKenzie Parnters, the Information Agent for the Offer, at 156
Fifth Avenue, New York, New York 10010. If you have not already received a copy
of the Offer to Purchase, the Letter of Transmittal and other Offer documents,
Parent and the Purchaser urge you to obtain such documents by contacting
MacKenzie Partners.
With respect to the Control Share Condition, Parent and the Purchaser have
delivered to the Company (without prejudice to their right to challenge the
validity of the Ohio Control Share Acquisition Law) an acquiring person
statement pursuant to the Ohio Control Share Acquisition Law and have commenced
the solicitation of proxies under a separate proxy statement to obtain the Ohio
Control Share Acquisition Approval. In addition, on July 11, 1996, Parent and
the Purchaser commenced the Ohio Action relating, in part, to the Ohio Control
Share Acquisition Law. On July 15, 1996, the Ohio Federal District Court
scheduled a hearing for July 29, 1996 with respect to claims made by Parent and
the Purchaser in the Ohio Action with respect to the Ohio Control Share
Acquisition Law. See "CERTAIN LEGAL MATTERS" below.
With respect to the Business Combination Condition, Parent and the
Purchaser requested in the Offer to Purchase that the Company's Board satisfy
the Business Combination Condition by taking appropriate action so that the Ohio
Business Combination Law is inapplicable to the acquisition of Common Shares
pursuant to the Offer and the Proposed Merger. To the knowledge of Parent and
the Purchaser, the Company's Board has to date refused to take such action.
Parent and the Purchaser expect that the Parent Nominees will, if elected at the
Special Meeting, and subject to their fiduciary duties, take such appropriate
action as shall result in the satisfaction of the Business Combination
Condition.
With respect to the Rights Condition, Parent and the Purchaser requested in
the Offer to Purchase that the Company's Board satisfy the Rights Condition by
taking appropriate action to redeem the Rights pursuant to the terms of the
Rights Agreement or to amend the Rights Agreement or take other action under the
Rights Agreement to make the Rights inapplicable to the Offer and the Proposed
Merger. To the knowledge of Parent and the Purchaser, the Company's Board has to
date refused to take such action. Parent and the Purchaser believe that the
Company's Board has a fiduciary obligation to redeem the Rights or to take other
action under the Rights Agreement so as to enable the Company shareholders to
accept the Offer and receive $30 per Common Share therein or in the Proposed
Merger. As described above, if the incumbent directors are removed at the
Special Meeting and prior to such time the Company's Board shall have failed to
redeem the Rights, the newly elected directors may be unable to redeem the
Rights, and the Purchaser may be unable or unwilling to purchase Common Shares
in the Offer, for a period of 180 days after the date on which the Parent
Nominees are elected and constitute a majority of the directors.
Parent and the Purchaser have commenced the Ohio Action relating, in part,
to the Rights. See "CERTAIN LEGAL MATTERS" below.
Parent and the Purchaser have requested that the Company's Board take
appropriate action to unanimously recommend to the Company's shareholders the
repeal of Article SIXTH. There can be no assurance that the Company's Board will
do so. In the event that the Company's Board fails to do so prior to the
intended date of the consummation of the Offer, the Purchaser expects the Parent
Nominees, if all such nominees are elected at the Special Meeting, and subject
to their fiduciary duties, to take such appropriate action as shall result in
the satisfaction of the Articles Amendment Condition.
17
<PAGE> 19
CERTAIN LEGAL MATTERS
On July 11, 1996, Parent and the Purchaser commenced the Ohio Action
against the Company in the Ohio Federal District Court, the directors of the
Company, the Acting Commissioner of Securities of the Ohio Division of
Securities, the Director of Commerce of the Ohio Department of Commerce and the
State of Ohio seeking, among other things, that the Court declare
unconstitutional and enjoin application of Sections 1707.041, 1707.042, 1707.23
and 1707.26 of the ORC (collectively, the "Ohio Take-Over Act") and certain
provisions of the Ohio Control Share Acquisition Law that impair the voting
rights of certain "Interested Shares" (as defined in the Ohio Control Share
Acquisition Law; the Interested Shares are sometimes referred to herein as
"Disqualified Shares"). In March, 1995, in Luxottica Group S.p.A. v. The United
States Shoe Corporation, the Ohio Federal District Court issued an order
declaring invalid the provisions of the Ohio Control Share Acquisition Law that
impair the voting rights of the Disqualified Shares. Without prejudice to its
position that the Ohio Take-Over Act is unconstitutional, on July 12, 1996,
Parent and the Purchaser submitted Form 041 under the Ohio Take-Over Act,
including a copy of the Schedule 14D-1 relating to the Offer, to the Ohio
Division. If injunctive relief is not obtained against the enforcement of the
Ohio Take-Over Act, then the Purchaser may not be obligated to accept for
payment or pay for Common Shares tendered pursuant to the Offer or may, among
other things, terminate the Offer or amend the terms and conditions of the
Offer.
The complaint also alleges that the 180-Day Restrictions are in violation
of the ORC and invalid, and, further, that refusal by the directors of the
Company to redeem the Rights constitutes a breach of the directors' fiduciary
duties. The complaint seeks, among other things, that the Court enjoin the
Company and its directors from taking any steps to enforce or amend the Rights,
and require that the Rights be redeemed and that the 180-Day Restrictions be
deleted.
The complaint further alleged that the Preferred Shares held of record by
the trustee for the Company's ESOPs are not entitled to one and one-half votes
per share under Ohio law and the Company Articles and the Company Regulations,
but rather that each Preferred Share is entitled to one vote. The complaint
sought, among other things, a declaratory judgment that the Preferred Shares are
entitled to only one vote per share and an injunction against the recognition of
any altered or increased voting rights for the Preferred Shares. In the Company
Answer, and subsequently in the Company 1995 10-K/A, the Company admitted that
the Preferred Shares are entitled to only one vote per share notwithstanding
that since September 1994 the Company's Board has recognized one and one half
votes per Preferred Share.
On July 15, 1995, the Ohio Federal District Court scheduled a hearing for
July 29, 1996 with respect to claims made by Parent and the Purchaser in the
Ohio Action seeking that such court declare unconstitutional and enjoin certain
provisions of the Ohio Control Share Acquisition Law that impair the voting
rights of Disqualified Shares.
Also on July 15, 1996, Parent and the Purchaser filed the First Amended
Complaint alleging that the proposed Spin-Off and the Repurchase Program
constitute violations of the directors' duties under Ohio law, that the Schedule
14D-9 is false and misleading and that the Repurchase Program violates federal
securities laws.
On July 18, 1996, the Company filed the Company Answer. Among other things,
the Company's counterclaims set forth in the Company Answer request that if
Parent and the Purchaser obtain proxies representing more than 10% of the voting
power of the Common Shares to elect the Parent Nominees at the Special Meeting,
Parent and the Purchaser be declared "interested shareholders" under the Ohio
Business Combination Law with the effect that Parent and the Purchaser would be
prohibited from consummating the Proposed Merger for a period of three years.
Parent and the Purchaser believe the Company's position is an incorrect reading
of the law and is without merit. In either case, the prohibitions of the Ohio
Business Combination Law will not apply as a result of solicitation of proxies
in connection with the Control Share Meeting, which will not involve the
election or removal of directors.
On July 19, 1996, Parent and the Purchaser moved to file their Second
Amended Complaint in the Ohio Action seeking to enjoin the Company and the
Company's Board from taking any steps to effectuate the Spin-Off until the
Company's shareholders have the opportunity to vote at the Ohio Control Share
Acquisition Meeting and the Special Meeting.
In addition, the ESOP Trusts contain certain pass-through voting
restrictions described under "VOTING AT THE SPECIAL MEETING" above. Parent and
the Purchaser believe that, notwithstanding the express
18
<PAGE> 20
terms of the trust document, the ESOP Trustee has a fiduciary duty under ERISA
to exercise its discretion with respect to voting Shares held in the ESOP which
are allocated to a participant's account but for which no instructions are
received by it and for all Shares held in the ESOP which are not allocated to a
participant's account. See "VOTING AT THE SPECIAL MEETING" above.
19
<PAGE> 21
SOLICITATION OF AGENT DESIGNATIONS
Agent Designations may be solicited by mail, telephone, telecopier or the
Internet, and in person. Solicitations may be made by directors, officers,
investor relations personnel and other employees of Parent or the Purchaser,
none of whom will receive additional compensation for such solicitations. Parent
has requested banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all of its solicitation materials to the beneficial
owners of the Shares they hold of record. Parent will reimburse these record
holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
Parent has retained MacKenzie Partners for solicitation and advisory
services in connection with (i) this solicitation, (ii) the solicitation of
proxies for the Special Meeting, and (iii) the solicitation of proxies for the
Ohio Control Share Acquisition Meeting. Parent has also retained MacKenzie
Partners to act as Information Agent in connection with the Offer. Parent will
pay MacKenzie Partners usual and customary compensation for all such services,
including up to $100,000 as compensation for this solicitation, and will
reimburse MacKenzie Partners for reasonable out-of-pocket expenses in connection
therewith. Parent has agreed to indemnify MacKenzie Partners against certain
liabilities and expenses in connection with the Offer, including, without
limitation, certain liabilities under the federal securities laws. MacKenzie
Partners will solicit proxies from individuals, brokers, bank nominees and other
institutional holders.
Schroder Wertheim is acting as Dealer Manager in connection with the Offer
and as Parent's financial advisor with respect to the Offer and the Proposed
Merger. As compensation for such services, Parent has agreed to pay or cause to
be paid to Schroder Wertheim a fee of $500,000 upon commencement of the Offer.
Parent has agreed to pay or cause to be paid to Schroder Wertheim an additional
fee of $3,500,000 contingent upon consummation of a Transaction. "Transaction"
has been defined as an acquisition by Parent of the Company by way of (i)
merger, (ii) purchase of all or a portion of the assets or stock of the Company,
(iii) obtaining 50% or more voting control of the common stock of the Company or
effective control of the Board of Directors of the Company through a proxy or
similar solicitation, or (iv) otherwise. Parent has also agreed that, in the
event a Transaction is not consummated, Parent will pay to Schroder Wertheim 10%
of any profits Parent receives upon its disposition of, or otherwise received in
respect of, securities of the Company acquired by it, or 10% of any break-up fee
Parent receives from the Company (in each case, less any fees paid to Schroder
Wertheim at the commencement of the Offer). In addition, Parent has agreed to
reimburse Schroder Wertheim for certain reasonable out-of-pocket expenses
incurred in connection with the Offer and the Proposed Merger or otherwise
arising out of Schroder Wertheim's engagement, and has also agreed to indemnify
Schroder Wertheim (and certain affiliated persons) against certain liabilities
and expenses, including, without limitation, certain liabilities under the
federal securities laws.
Schroder Wertheim may from time to time in the future render various
investment banking services to Parent and its affiliates, for which it is
expected it would be paid customary fees. In the ordinary course of business,
Schroder Wertheim and its affiliates may actively trade the securities of Parent
and the Company for their own account and for the account of customers and
accordingly may, at any time, hold long or short positions in such securities.
In connection with Schroder Wertheim's engagement as financial advisor,
Parent anticipates that certain employees of Schroder Wertheim may communicate
in person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are Company shareholders for the purpose of
assisting in the solicitation of Agent Designations to call the Special Meeting
and of proxies for the Special Meeting, as well as for the solicitation of
proxies for the Ohio Control Share Acquisition Meeting. Schroder Wertheim will
not receive any fee for or in connection with such solicitation activities apart
from the fees which it is otherwise entitled to receive as described above.
The entire expense of soliciting Agent Designations and proxies for the
Special Meeting is being borne by Parent or a subsidiary of Parent. Neither
Parent nor any such subsidiary will seek reimbursement for such expenses from
the Company. Costs incidental to these Agent Designations and proxies include
expenditures for printing, postage, legal and related expenses and are expected
to be approximately $350,000. Total costs incurred to date in furtherance of or
in connection with these Agent Designations are approximately $50,000.
20
<PAGE> 22
If the Purchaser should terminate, or materially amend the terms of, the
Offer prior to the delivery of the Written Request to the appropriate officer of
the Company, Parent or the Purchaser will disseminate such information regarding
such changes to the Company's shareholders and, in appropriate circumstances,
will provide the Company shareholders with a reasonable opportunity to revoke
their Agent Designations prior to the date when the Written Request is delivered
to the Company's officer.
SHAREHOLDER PROPOSALS
According to the Company's Annual Meeting Proxy Statement, the deadline for
receipt of shareholders' proposals for inclusion in the Company's 1997 proxy
material is October 1, 1996.
OTHER INFORMATION
Parent is a corporation organized under the Canada Business Corporation Act
and is headquartered in Charlotte, North Carolina. Parent's businesses
manufacture proprietary engineered products for industrial and building
customers worldwide. Parent's Industrial Products Segment serves selected
markets with engineered equipment for heating, air drying and purification,
fluid handling, heat exchange, compaction, food processing and aerospace
applications. Parent's Building Products Segment manufactures a variety of
complementary products, ranging from steel doors to loading dock equipment to
complete pre-engineered metal buildings systems, primarily for the
non-residential construction market.
The Purchaser is a newly incorporated Delaware corporation and an indirect
wholly owned subsidiary of Parent which to date has not conducted any business
other than in connection with the Offer and the Proposed Merger. The principal
executive offices of Parent and the Purchaser are located at 2300 One First
Union Center, 301 South College Street, Charlotte, North Carolina 28202. United
Dominion Industries, Inc., a Delaware corporation and a direct wholly owned
subsidiary of Parent, owns all the outstanding shares of the Purchaser. William
R. Holland, Chairman and Chief Executive Officer of Parent, owns 1,000 Common
Shares that he acquired in 1994.
Certain information about the directors and executive officers of Parent
and the Purchaser and certain employees and other representatives of Parent who
may also assist MacKenzie Partners in soliciting proxies is set forth in the
attached Schedule I. Schedule II sets forth certain information relating to
Common Shares owned by Parent, the Purchaser, and other representatives.
Schedule III sets forth certain information, as made available in public
documents, regarding Shares held by the Company's principal shareholders and its
management.
THIS SOLICITATION STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF COMMON
SHARES NOR AN OFFER WITH RESPECT THERETO. THE PURCHASER'S OFFER IS BEING MADE
ONLY BY MEANS OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL. FOR
ADDITIONAL COPIES OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL, CALL
THE INFORMATION AGENT FOR THE OFFER, MACKENZIE PARTNERS, AT 212-929-5500 (CALL
COLLECT) OR 800-322-2885 (TOLL FREE).
PLEASE INDICATE YOUR SUPPORT OF THE PURCHASER'S OFFER BY COMPLETING,
SIGNING AND DATING THE ENCLOSED WHITE AGENT DESIGNATION AND RETURNING IT
PROMPTLY TO MACKENZIE PARTNERS AT 156 FIFTH AVENUE, NEW YORK, NEW YORK 10010, IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE
UNITED STATES.
YOUR SUPPORT IS IMPORTANT! PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING
WHITE AGENT DESIGNATION PROMPTLY.
UNITED DOMINION INDUSTRIES LIMITED
OPUS ACQUISITION CORPORATION
July 25, 1996
21
<PAGE> 23
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
PARENT
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last five
years, and the name, principal business and address of any corporation or other
organization in which such employment is conducted or was conducted of each
director and executive officer of Parent. Except for Messrs. Crossgrove, Grant,
MacKay, McDonald, Scott, Stinson, Allan Taylor and George Taylor, who are
citizens of Canada, each of the Parent's directors and executive officers is a
citizen of the United States. The business address of each executive officer of
Parent is 2300 One First Union Center, Charlotte, North Carolina 28202. Each
occupation set forth opposite a person's name, unless otherwise indicated,
refers to employment with Parent. Directors are indicated by an asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
MATERIAL OCCUPATIONS FOR PAST
FIVE YEARS,
NAME, PRINCIPAL BUSINESS AND
BUSINESS (B) OR RESIDENCE (R) ADDRESS OF
NAME ADDRESS PRINCIPAL OFFICE OF EMPLOYER
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
James E. Courtney*............ (r)1779 Venus Dr. Chairman of the Board, First
Sanibel, Florida Independence Bank of Fort
33957-3427 Myers, Jan. 1, 1996.
President, The Mariner Group,
Inc., a real estate management
and development company, 12800
University Drive, Suite 350,
Fort Myers, Florida 33907,
from 1992 to 1995.
Peter A. Crossgrove*.......... (b)141 Adelaide Street West President and CEO, Southern
Suite 1703 Africa Minerals Corporation, a
Toronto, Ontario M5H 3L5 diamond exploration company,
Canada 141 Adelaide Street West,
Suite 1703, Toronto, Ontario
M5H 3L5, Canada, from 1994 to
present. Chairman and Chief
Executive Officer of Brush
Creek Corporation, an
investment holding company,
250 Yonge Street, Toronto,
Ontario M5B 1C8, Canada, from
1993 to present. Acting CEO,
Placer Dome Inc., an
international mining company,
Suite 3500, IBM Tower,
Toronto-Dominion Ctr.,
Toronto, Ontario M5K 1N3,
Canada, from 1992 to 1993.
President and Chief Executive
Officer of Itco Properties
Ltd., a wholly owned
subsidiary of Starlaw Holdings
Limited, a company that
develops, purchases and holds
real estate in Canada and the
U.S., from 1982 to 1992.
</TABLE>
S-1
<PAGE> 24
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
MATERIAL OCCUPATIONS FOR PAST
FIVE YEARS,
NAME, PRINCIPAL BUSINESS AND
BUSINESS (B) OR RESIDENCE (R) ADDRESS OF
NAME ADDRESS PRINCIPAL OFFICE OF EMPLOYER
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
R. Stuart Dickson*............ (b)2000 Two First Union Center Chairman of the Executive
Charlotte, NC 28282 Committee, Ruddick
Corporation, an industrial
thread, regional supermarket
and venture capital company,
2000 Two First Union Center,
Charlotte, NC 28282, from 1994
to present. Chairman, Ruddick
Corporation, from 1968 to
1994.
James A. Grant*............... (b)Suite 3900 Partner of Stikeman, Elliott,
1155 Rene Levesque Blvd. W. a law firm, Commerce Court
Montreal, Quebec H3B 3V2 West, Suite 5300, Toronto,
Canada Ontario M5L IB9, Canada, from
1970 to present. Chairman of
Executive Committee of
Stikeman, Elliott since 1988.
William R. Holland*........... Chairman since 1987 and Chief
Executive Officer since 1986.
Russell C. King, Jr.*......... (r)2376E Dunwoody Crossing Retired since May 30, 1994.
Atlanta, GA 30338 President and Chief Operating
Officer, Sonoco Products
Company, an international
manufacturer of packaging
products, 1 North Second
Street, P.O. Box 160,
Hartsville, SC 29551, from
1990 to 1994.
H. John McDonald*............. (b)Suite 2800, 2 Bloor St. Chairman, Black & McDonald
East Limited, an international
Toronto, Ontario M4W 1A8 mechanical and electrical
Canada contracting company, Suite
2800, 2 Bloor St. East,
Toronto, Ontario M4W 1A8,
Canada, since 1984.
Dalton D. Ruffin*............. (r)2841 Galsworthy Dr. Retired since January 1, 1989.
Winston-Salem, NC 27106
I. Barry Scott*............... (r)96 Churchill Road Baie Retired since February 28,
d'Urfe, Quebec H9X 2Y3 1995. Chairman and Chief
Canada Executive Officer of CP Rail
System, a transportation
division of Canadian Pacific
Limited, 910 Peel Street, Room
215, P.O. Box 6042, Station
Centre-ville, Montreal, Quebec
H3C 3E4, Canada, from 1985 to
1995.
William W. Stinson*........... (b)Suite 800, Place du Canada Retired since May 1, 1996.
P.O. Box 6042, Chairman of Canadian Pacific
Station Centre-ville Limited, a transportation,
Montreal, Quebec H3C 3E4 energy, real estate and hotel
Canada company, Suite 800, Place du
Canada, P.O. Box 6042, Station
Centre-ville, Montreal, Quebec
H3C 3E4, Canada from 1989 to
1996. Chief Executive Officer
of Canadian Pacific Limited
from 1985 to 1996.
</TABLE>
S-2
<PAGE> 25
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
MATERIAL OCCUPATIONS FOR PAST
FIVE YEARS,
NAME, PRINCIPAL BUSINESS AND
BUSINESS (B) OR RESIDENCE (R) ADDRESS OF
NAME ADDRESS PRINCIPAL OFFICE OF EMPLOYER
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
Allan R. Taylor, O.C.*........ (r)The Chedington Manor Retired since January 31,
1 Chedington Place, Suite 2A 1995. Chairman, Royal Bank of
North York, Ontario M4N 3R4 Canada, a financial
Canada institution, Royal Bank Plaza,
Toronto, Ontario M5J 2J5,
Canada, from 1986 to 1995.
George S. Taylor*............. (b)120 Adelaide St. W Retired since December 31,
Suite 1850 1995. President and Chief
Toronto, Ontario M5J 2T3 Executive Officer, John Labatt
Canada Limited, a brewing company,
Labatt House BCE Place, P.O.
Box 811, Suite 200-181 Bay
St., Toronto, Ontario M5J 2T3,
Canada, from 1992 to 1995.
Executive Vice President, John
Labatt Limited, from 1985 to
1992.
Jan K. Ver Hagen*............. President and Chief Operating
Officer since 1994. Vice
Chairman, Emerson Electric
Co., a manufacturer of a broad
range of electrical and
electronic products, 8000 W.
Florissant Ave., St. Louis,
Missouri 63136, from 1988 to
1994.
Robert E. Drury............... Executive Vice President and
Chief Administrative Officer
since 1995. Chief Financial
Officer from 1992 to 1995, and
Senior Vice President from
1993 to 1995. Vice President
from 1987 to 1993.
Richard A. Bearse............. Senior Vice President since
1996. President and Chief
Executive Officer, Flair
Corporation, a manufacturer of
air filtration and dehydration
equipment, 4647 S.W. 40th
Avenue, Ocala, Florida 34474,
from 1992 to 1995. President
and Chief Executive Officer,
Pneumatic Products
Corporation, a subsidiary of
Flair, from 1991 to 1992.
B. Bernard Burns, Jr.......... General Counsel and Secretary
since 1992, and Senior Vice
President since 1993. Vice
President from 1989 to 1993.
Glenn A. Eisenberg............ Senior Vice President and
Chief Financial Officer since
1995. Vice President of
Planning and Development from
1992 to 1995. Director of
Corporate Finance and Investor
Relations since 1991. Manager
of Treasury Analysis and
Services from 1990 to 1991.
John G. MacKay................ Senior Vice President since
1995. Various positions with
Parent since 1990, including
President-- Industrial
Products segment.
</TABLE>
S-3
<PAGE> 26
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
MATERIAL OCCUPATIONS FOR PAST
FIVE YEARS,
NAME, PRINCIPAL BUSINESS AND
BUSINESS (b) OR RESIDENCE (r) ADDRESS OF
NAME ADDRESS PRINCIPAL OFFICE OF EMPLOYER
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
Irvin B. Prude................ Senior Vice President since
1995. Various positions since
1968, including
President--Building Products
segment.
J. Milton Childress II........ Vice President since 1996.
Assistant Vice President from
1995 to 1996. Director of
corporate development from
1992 to 1995. Ernst & Young
prior to 1992.
William Dries................. Vice President and Controller
since 1990.
June P. Hassett............... Vice President since 1996.
Assistant Vice President from
1995 to 1996. Director of
taxes from 1991 to 1995.
Richard L. Magee.............. Vice President since 1996.
Assistant Vice President from
1995 to 1996. Associate
General Counsel since 1993,
and Assistant General Counsel
from 1989 to 1993.
Robert L. Shaffer............. Vice President of Corporate
Communications since 1990.
Thomas J. Snyder.............. Vice President and Treasurer
since 1993, and Treasurer
since 1991. Various positions
with Parent since 1977.
Timothy J. Verhagen........... Vice President since 1993.
Vice President and Associate
General Counsel, The Marley
Company, a manufacturer of
engineered equipment for
heating, fluid handling and
heat exchange applications,
1900 Shawnee Mission Parkway,
Mission, Kansas 66205, from
1985 to 1993.
</TABLE>
THE PURCHASER
The name and position with the Purchaser of each director and executive
officer of the Purchaser are set forth below. The business address, present
principal occupation or employment, five-year employment history and citizenship
of each person is set forth below. Directors are indicated by an asterisk.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
---- ---------------------------
<S> <C>
B. Bernard Burns, Jr.*.................. Vice President and
Secretary
Robert E. Drury*........................ President
Glenn A. Eisenberg*..................... Vice President and
Treasurer
Richard L. Magee........................ Assistant Secretary
</TABLE>
S-4
<PAGE> 27
SOLICITATION OF AGENT DESIGNATIONS
The following individuals constitute representatives of the Dealer Manager
who may solicit Agent Designations:
<TABLE>
<S> <C>
Michael Grad............................ Managing Director
Schroder Wertheim & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Henry Aboodi............................ Vice President
Schroder Wertheim & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
</TABLE>
S-5
<PAGE> 28
SCHEDULE II
SHARES HELD BY PARENT AND THE PURCHASER
As of the date hereof, the Purchaser holds of record 500 Common Shares and
no Preferred Shares and Parent holds of record 500 Common Shares and no
Preferred Shares.
In the ordinary course of its business, Schroder Wertheim may trade the
securities of the Company for its own account and the accounts of its customers
and, accordingly, may at any time hold a long or short position in such
securities. As of the date hereof, Schroder Wertheim held no Shares.
The following table sets forth the dates within the past two on which
Schroder Wertheim purchased or sold Common Shares for its own account, and the
amount purchased or sold on each such date:
<TABLE>
<CAPTION>
DATE TRANSACTION AMOUNT
------------------------------------------------ ----------- --------------------
<S> <C> <C>
September 18, 1995 purchase 600 Common Shares
September 19, 1995 sale 600 Common Shares
February 4, 1996 purchase 2,000 Common Shares
February 15, 1996 sale 500 Common Shares
February 16, 1996 purchase 500 Common Shares
March 5, 1996 sale 2,000 Common Shares
</TABLE>
S-6
<PAGE> 29
SCHEDULE III
PRINCIPAL SHAREHOLDERS OF THE COMPANY
AND SHAREHOLDINGS OF THE COMPANY'S MANAGEMENT
Set forth below is information regarding Shares owned by (i) those persons
owning more than 5% of the outstanding Shares and (ii) directors and executive
officers of the Company as a group. Such information is obtained from the
Company's proxy statement for its 1996 Annual Meeting of Shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The name of any person or "group" (as that term is used in the Exchange
Act) disclosed by the Company in its proxy statement for its 1996 Annual Meeting
of Shareholders to be the beneficial owner of more than five percent (5%) of any
class of the Company's voting securities as of December 31, 1995 is set forth
below:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OF ALL VOTING
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP CLASS SHARES
- ------------------- ------------------------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C>
Common National City Bank, N.E. 1,219,766(1) 7.91% 7.40%
P.O. Box 450
Youngstown, OH 44501
Common Norwest Corporation 1,163,153(2) 7.55% 7.06%
6th and Marquette
Minneapolis, MN 55479
Series B Preferred Mellon Bank N.A. 1,053,508(3) 100.00% 6.39%
P.O. Box 444
Pittsburgh, PA 15230
</TABLE>
- ---------------
(1) This figure includes 175,250 Common Shares held in trust by National
City Bank, N.E. (trustee) for the benefit of participants in the Commercial
Intertech Corp. Employee Savings and Stock Purchase Plan.
This figure includes 3,109 Common Shares held in trust by National City
Bank (trustee) for the benefit of participants in the Non-Qualified Stock
Purchase Plan of Commercial Intertech Corp.
National City Bank has sole voting power over 873,878 Shares and shared
voting power over 172,029 Shares. National City Bank has sole investment power
over 328,589 Shares and shared investment power over 891,177 Shares.
(2) Norwest Corporation holds Common Shares in a fiduciary capacity for
various institutional and personal accounts.
Norwest Corporation has sole voting power over 950,703 Shares and shared
voting power over 600 Shares. Norwest Corporation has sole investment power over
1,163,003 Shares and shared investment power over 150 Shares.
(3) This figure represents all of the outstanding Preferred Shares held of
record by Mellon Bank N.A. (trustee) for the benefit of participants in the
Commercial Intertech Employee Stock Ownership Plan and the Commercial Intertech
Retirement Stock Ownership and Savings Plan. The trust for these plans contains
provisions for pass-through voting rights to the employee participants in the
plans.
Mellon Bank has shared voting power and shared investment power over all
Preferred Shares.
S-7
<PAGE> 30
SECURITY OWNERSHIP OF MANAGEMENT
The directors, nominees for the office of director, the Chief Executive
Officer, the four other highly compensated executive officers, a former
executive officer and all directors and executive officers as a group were the
beneficial owners of the Company's voting shares, as of December 31, 1995, as
disclosed in the Company's proxy statement for its 1996 Annual Meeting of
Shareholders, as set forth below:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF
OWNER BENEFICIAL OWNERSHIP VOTING SHARES
- --------------------- -------------------- -------------
<S> <C> <C>
William J. Bresnahan 300 *
Charles B. Cushwa III 206,770(1)(4)(5)(8)(12)(16) 1.3%
William W. Cushwa 226,250(1)(2)(3)(4)(6)(7)(8)(10)(13)(14)(16) 1.4%
John M. Galvin 3,000(8) *
John Gilchrist 33,227(8)(9)(10)(14) *
Richard J. Hill 9,535(8)(9) *
Neil D. Humphrey 5,829(8)(9) *
Hubert Jacobs van 13,410(17) *
Merlen
Mark G. Kachus 25,026 *
William E. Kassling 0 --
Gerald C. McDonough 3,750(8) *
C. Edward Midgley 10,000 *
John Nelson 14,573(1)(8) *
Paul J. Powers 322,424(2)(8)(10)(14) 1.9%
George M. Smart 2,000 *
Don E. Tucker 137,724(1)(2)(11)(14) *
Bruce C. Wheatley 30,301(8)(15) *
Philip N. Winkelstern 176,518(1)(2)(3)(8)(10)(14) 1.1%
All Directors and 1,329,534 7.9%
Executive Officers
as a Group (21
people)
</TABLE>
*less than 1%
- ---------------
(1) Does not include Common Shares owned by the members of the
above-mentioned directors' families who share their homes, as follows: of Mr.
Charles Cushwa -- 2,147 Shares; of Mr. William Cushwa -- 26,548 Shares; of Mr.
Nelson -- 28,675 Shares; of Mr. Tucker -- 1,146 Shares; of Mr.
Winkelstern -- 5,479 Shares. Beneficial ownership thereof is disclaimed by the
respective directors.
(2) Includes the beneficial interest in Common Shares (fractional shares
not shown) credited to the accounts of the above-mentioned beneficial owners by
the Trustee acting under the provisions of the Company's Employee Savings and
Stock Purchase Plan, as follows: Mr. William Cushwa -- 4,254 Shares; Mr.
Powers -- 1,595 Shares; Mr. Tucker -- 9,243 Shares; and Mr. Winkelstern -- 8,529
Shares.
(3) Includes Common Shares held by the directors as custodians for their
minor children as follows: minor children of Mr. William Cushwa -- 4,011 Shares;
and minor grandchildren as follows: minor grandchild of Mr. Winkelstern -- 750
Shares.
(4) Charles B. Cushwa III and William W. Cushwa are two of three
beneficiaries of a trust, of which they are not trustees, which consists of
294,000 Common Shares, the income from which will be paid to the beneficiaries
equally during their lives. These Shares are not included in the amounts shown
in the table.
(5) Includes 46,500 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National City
Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. Charles B. Cushwa III.
(6) Does not include 11,250 Common Shares held in trust, of which William
W. Cushwa is not a trustee, for the benefit of his child and of which beneficial
ownership is disclaimed by Mr. William W. Cushwa.
S-8
<PAGE> 31
(7) Includes 44,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City Bank,
N.E. and William W. Cushwa are co-trustees. Beneficial ownership thereof is
disclaimed by Mr. William W. Cushwa.
(8) Includes Common Shares acquirable within 60 days of December 31, 1995
upon exercise of options issued under the Company's Stock Option and Award Plans
as follows: Mr. Charles Cushwa -- 1,500 Shares; Mr. William Cushwa -- 10,125
Shares; Mr. Galvin -- 1,500 Shares; Mr. Gilchrist -- 12,612 Shares; Mr.
Hill -- 1,500 Shares; Mr. Humphrey -- 1,500 Shares; Mr. McDonough -- 10,500
Shares; Mr. Nelson -- 1,500 Shares; Mr. Powers -- 134,250 Shares; Mr.
Wheatley -- 7,500 Shares; and Mr. Winkelstern -- 60,000 Shares.
(9) Includes Common Shares (fractional shares not shown) credited to the
accounts of the above-mentioned beneficial owners by the administrator of the
Company's Automatic Dividend Reinvestment Plan, as follows: Mr.
Gilchrist -- 1,448 Shares; Mr. Hill -- 3,035 Shares; and Mr. Humphrey -- 12,429
Shares.
(10) Includes in each case 232 Preferred Shares (fractional shares not
shown) and the following number of Common Shares (fractional shares not shown)
credited to the accounts of the above-mentioned beneficial owners by the Trustee
acting under the provisions of the Company's 401(k) plan: Mr. William
Cushwa -- 762 Shares; Mr. Gilchrist -- 270 Shares; Mr. Powers -- 4,432 Shares;
and Mr. Winkelstern -- 270 Shares.
(11) Includes 190 Preferred Shares (fractional shares not shown) and 4,919
Common Shares (fractional shares not shown) credited by the Trustee acting under
the provisions of the Company's 401(k) plan.
(12) Includes 39,244 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National City
Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. Charles B. Cushwa III.
(13) Includes 61,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City Bank,
N.E. and William W. Cushwa are co-trustees. Beneficial ownership thereof is
disclaimed by Mr. William W. Cushwa.
(14) Includes in each case one Common Share (fractional shares not shown)
as a result of participation in the Commercial Intertech Employee Stock
Ownership Plan and the following number of Preferred Shares (fractional shares
not shown) as a result of participation in the Commercial Intertech Employee
Stock Ownership Plan: Mr. William Cushwa -- 266 Shares; Mr. Gilchrist -- 323
Shares; Mr. Powers -- 619 Shares; Mr. Tucker -- 464 Shares; and Mr.
Winkelstern -- 604 Shares.
(15) Includes 11 Preferred Shares (fractional shares not shown) and 1,364
Common Shares (fractional shares not shown) held under the provisions of the
Company's 401(k) plan. Includes 58 Preferred Shares (fractional shares not
shown) as a result of participation in the Commercial Intertech Employee Stock
Ownership Plan.
(16) Charles B. Cushwa III and William W. Cushwa are two of three
beneficiaries of a trust, of which they are not trustees, containing 482,625
Shares distribution of which is dependent upon the resolution of certain probate
estate matters. The shares are not included in the amounts shown in the table.
(17) Includes the beneficial interest in 123 Common Shares (fractional
shares not shown) credited by the Trustee acting under the provisions of the
Company's Non-Qualified Stock Purchase Plan.
S-9
<PAGE> 32
- --------------------------------------------------------------------------------
IMPORTANT
If your shares are registered in your own name, you may mail or fax your WHITE
Agent Designation (both sides) to MacKenzie Partners, Inc. at the address or fax
number listed below.
If your shares are held in "street name" -- held by your brokerage firm or bank
- -- immediately instruct your broker or bank representative to sign United
Dominion's WHITE Agent Designation on your behalf. If you have any questions on
voting your shares, please call.
PARTICIPANTS IN THE COMPANY'S EMPLOYEE STOCK OWNERSHIP PLAN AND RETIREMENT STOCK
OWNERSHIP AND SAVINGS PLAN (THE "ESOPs") AND THE COMPANY'S NON-QUALIFIED STOCK
PURCHASE PLAN AND EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN (THE "PLANS")
DESIRING TO APPOINT DESIGNATED AGENTS TO CALL A SPECIAL MEETING WITH RESPECT TO
SHARES HELD ON THEIR BEHALF SHOULD SO INSTRUCT THE ESOP TRUSTEE OR THE PLAN
TRUSTEE, AS APPLICABLE, BY COMPLETING THE FORM WHICH SHOULD BE PROVIDED BY THE
ESOP TRUSTEE OR THE PLAN TRUSTEE, AS APPLICABLE, TO PARTICIPANTS FOR THAT
PURPOSE.
[LOGO]
156 Fifth Avenue
New York, NY 10010
CALL TOLL-FREE (800) 322-2885
FAX: (212) 929-0308
- --------------------------------------------------------------------------------
<PAGE> 33
AGENT DESIGNATION
THIS AGENT DESIGNATION IS SOLICITED BY UNITED DOMINION INDUSTRIES LIMITED
AND OPUS ACQUISITION CORPORATION FOR THE APPOINTMENT OF DESIGNATED AGENTS TO
CALL A SPECIAL MEETING OF SHAREHOLDERS OF COMMERCIAL INTER-TECH CORP.
Each of the undersigned hereby constitutes and appoints Daniel H. Burch,
Stanley J. Kay, Jr., and Mark H. Harnett, and each of them, with full power of
substitution, the proxies and agents of each of the undersigned (said proxies
and agents, together with each substitute appointed by any of them, if any,
collectively, the "Designated Agents") in respect of all Common Shares, par
value $1.00 per share ("Common Shares"), of Commercial Intertech Corp. (the
"Company") owned by the undersigned to do any or all of the following, to which
each of the undersigned hereby consents:
1. To take all such action as shall be necessary or appropriate to call
(BUT NOT TO VOTE AT) a special meeting of the shareholders of the Company (the
"Special Meeting") for the purpose of considering and voting upon the following
proposals, in the following order:
A. A proposal that the shareholders adopt a resolution calling on the
incumbent Board of Directors of the Company to redeem, prior to their
removal from office, the preferred share purchase rights associated with
the Common Shares.
B. A proposal to remove all of the incumbent directors of the Company.
C. A proposal to amend the Code of Regulations of the Company (i) to
reduce the authorized size of the Board of Directors of the Company from 12
to three members, (ii) to provide that the members of the Board of
Directors of the Company shall not be divided into three classes but shall
serve as a single class with the same term of office, and (iii) to provide
that the Ohio Control Share Acquisition Law, Section 1701.831 of the Ohio
Revised Code (the "ORC"), does not apply to "control share acquisitions"
(as defined in the ORC) of Shares.
D. To elect three new directors to fill the vacancies resulting from
such removal and reduction of the size of the Board of Directors of the
Company.
E. A proposal to repeal Article SIXTH of the Company's Amended and
Restated Articles of Incorporation.
F. Proposals to consider and vote upon any other matter that properly
comes before the Special Meeting.
2. To request, in a writing delivered either in person or by registered
mail to the President or the Secretary of the Company, that such officer
forthwith cause to be given, to the Company shareholders entitled thereto,
notice of the Special Meeting to be held on a date and at a place to be
determined by the Designated Agents; and if such notice is not given within five
business days after presentation to such officer of such request, to fix the
time of the Special Meeting and to give appropriate notice thereof, or to cause
such notice to be given by any designated representative.
3. To request that the Board of Directors of the Company fix a record date
for the determination of the shareholders of the Company, who are entitled to
receive notice of and to vote at the Special Meeting, within such period as the
Designated Agents may request and, if the Board of Directors of the Company
fails or refuses to fix such record date within such time, to fix a record date
for such purpose, subject to the limitations set forth in division (A) of
Section 1701.45 of the ORC.
4. If the Designated Agents duly fix the record date for the Special
Meeting, then also, if such Designated Agents determine that it is necessary to
do so, to fix one or more additional record dates for any adjournments of the
Special Meeting, subject to the limitations set forth in division (A) of Section
1701.45 of the ORC, and to the extent and in the manner provided by the ORC, to
give notice thereof and of the date to which the Special Meeting shall have been
adjourned to the Company shareholders of record as of said new record date in
accordance with the same requirements as those applying to a meeting newly
called.
<PAGE> 34
5. To exercise any and all of the other rights of each of the undersigned
incidental to (i) calling the Special Meeting, (ii) causing notice of the
Special Meeting and any adjournment thereof to be given to the Company
shareholders, (iii) causing a record date to be fixed for the determination of
the Company shareholders entitled to notice of and to vote at the Special
Meeting and at any adjournment thereof, and (iv) causing the purposes of the
authority expressly granted hereinabove to the Designated Agents to be carried
into effect; provided, however, that NOTHING CONTAINED IN THIS INSTRUMENT SHALL
BE CONSTRUED TO GRANT TO THE DESIGNATED AGENTS THE RIGHT, POWER OR AUTHORITY TO
VOTE ANY SHARES OWNED BY THE UNDERSIGNED AT THE SPECIAL MEETING.
Dated: , 1996
--------------------------------------
(Signature)
--------------------------------------
(Signature, if jointly held)
Title:
--------------------------------------
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should
sign. When signing as an
attorney, executor,
administrator, trustee or
guardian, give full title as
such. If a corporation, sign in
full corporate name by
President or other authorized
officer. If a partnership, sign
in partnership name by
authorized person.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN
THE ENCLOSED ENVELOPE.
PLEASE PROMPTLY COMPLETE, SIGN, DATE AND FAX OR MAIL IN THE ENCLOSED
ENVELOPE TO MACKENZIE PARTNERS, INC., 156 FIFTH AVENUE, NEW YORK, NEW YORK
10010, FAX: (212) 929-0308.
PARTICIPANTS IN THE ESOPS AND THE PLANS CAN ONLY EXECUTE AGENT DESIGNATIONS
WITH RESPECT TO SHARES HELD IN THE ESOPS OR PLANS ON THEIR BEHALF BY INSTRUCTING
THE ESOP TRUSTEE OR THE PLAN TRUSTEE, AS APPLICABLE, ON THE FORM THAT SHOULD BE
PROVIDED BY THE ESOP TRUSTEE OR THE PLAN TRUSTEE, AS APPLICABLE, TO PARTICIPANTS
FOR THAT PURPOSE. ESOP PARTICIPANTS AND PLAN PARTICIPANTS CANNOT EXECUTE AGENT
DESIGNATIONS WITH RESPECT TO SHARES ALLOCATED TO THEIR ESOP ACCOUNT OR PLAN
ACCOUNT BY EXECUTING THE ACCOMPANYING WHITE AGENT DESIGNATION CARD.
