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SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
COMMERCIAL INTERTECH CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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PRELIMINARY MATERIALS DATED JULY ___, 1996
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The information included herein is as it is expected to be when the definitive
revocation solicitation statement is mailed to shareholders of Commercial
Intertech Corp. This revocation solicitation statement will be revised to
reflect actual facts at the time of filing of the definitive proxy statement.
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REVOCATION SOLICITATION STATEMENT BY BOARD OF DIRECTORS IN
OPPOSITION TO THE SOLICITATION MADE BY
OPUS ACQUISITION CORPORATION AND UNITED DOMINION INDUSTRIES LIMITED
TO CALL A SPECIAL MEETING OF SHAREHOLDERS
This revocation solicitation statement (this "Revocation Statement") by the
Board of Directors (the "Board of Directors") of Commercial Intertech Corp., an
Ohio corporation (the "Company") opposes the solicitation by United Dominion
Industries Limited, a Canadian corporation ("United Dominion"), and Opus
Acquisition Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of United Dominion ("OAC"), of Appointments of Designated Agents
("Agent Designations") to call a special meeting of the shareholders of the
Company (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 (as defined below) at the Special Meeting, permitted to be taken by
Company shareholders under the ORC (as defined below) in order to call and
convene the Special Meeting.
According to a solicitation statement filed with the Securities and
Exchange Commission (the "SEC") by United Dominion and OAC on July 24, 1996 (the
"Solicitation Statement"), the purpose of the Special Meeting would be to
consider and vote on the following proposals made by United Dominion and OAC
(each of which is opposed by the Board of Directors and management of the
Company): (i) a proposal to call on the Company's incumbent directors to redeem
the preferred share purchase rights (the "Rights") associated with the Company's
common shares, $1.00 par value (the "Common Shares"), pursuant to the
Shareholder'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) a proposal to remove all incumbent directors of the
Company, (iii) a proposal to amend the Company's Code of Regulations (the
"Regulations") to reduce the size of the Board of Directors from twelve 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) a
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proposal to elect three new directors nominated by United Dominion and OAC to
fill the vacancies resulting from such removal and reduction of the size of the
Board of Directors, (v) a proposal to amend the Company's Amended Articles of
Incorporation (the "Articles") to repeal Article SIXTH thereof and (vi) a
proposal to amend the Regulations to provide that the Ohio Control Share
Acquisition Law (as defined below) shall not apply to "control share
acquisitions" of Shares (as defined below), if the acquisition of Common Shares
constituting a majority of the voting power of the outstanding Shares (as
defined below) by the Company has not yet been authorized by the Company's
shareholders pursuant to Section 1701.831 (the "Ohio Control Share Acquisition
Law") of the Ohio Revised Code ("ORC") or OAC 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 Revised Offer
(described below). Under the ORC and the Regulations, shareholders holding 40%
or more of the outstanding Common Shares (the "Requisite Holders") are entitled
to call a special meeting of the Company's shareholders.
This Revocation Statement and the enclosed GREEN REVOCATION CARD are first
being mailed to shareholders on or about July 25, 1996. THE BOARD OF DIRECTORS
UNANIMOUSLY OPPOSES THE SOLICITATION BY UNITED DOMINION AND OAC. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU NOT SIGN ANY WHITE CONSENT CARD SENT
TO YOU BY UNITED DOMINION AND OAC. WHETHER OR NOT YOU HAVE PREVIOUSLY EXECUTED
A WHITE AGENT DESIGNATION, THE BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND
DELIVER THE ENCLOSED GREEN REVOCATION CARD AS PROMPTLY AS POSSIBLE, BY FAX OR BY
MAIL (USING THE ENCLOSED ENVELOPE), TO MORROW & CO., INC., 909 THIRD AVENUE,
20TH FLOOR, NEW YORK, NEW YORK, 10022, FAX: (212) 754-8362.
The Board of Directors has fixed the close of business on September 3, 1996
as the record date (the "Record Date") for the solicitation of Agent
Designations. According to the Solicitation Statement, United Dominion and OAC
believe that the setting of a record date with respect to United Dominion's and
OAC's solicitation of Agent Designations is unlawful. The Company believes,
however, that United Dominion's and OAC's position is without merit and that the
setting of the Record Date is expressly permitted under (S) 1701.45 of the ORC.
According to the Solicitation Statement, notwithstanding the setting of the
Record Date, United Dominion and OAC are purporting to commence on July 25, 1996
the solicitation of Agent Designations and intend to seek to call the Special
Meeting as soon as possible after the date on which United Dominion and OAC 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 United
Dominion and OAC deliver a written request to the Company to call the Special
Meeting). Without prejudice to the Company's position that the setting of the
Record Date complies with applicable law, the Company will solicit revocations
of any Agent Designations which United Dominion and OAC may purport to solicit
prior to the Record Date. As of the date of this Revocation Statement, there
are [ ] Common Shares and [ ] shares of the
Series B ESOP Preferred Shares, $1.00 par value (the "Preferred Shares" and,
together with the Common Shares, the "Shares") outstanding. If, notwithstanding
the Company's position, United Dominion and OAC are permitted under applicable
law to request the calling of a Special
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Meeting prior to the Record Date, United Dominion and OAC would require Agent
Designations from the holders of at least ________ Shares (excluding the 1,000
Common Shares owned by United Dominion and OAC) in order to call the Special
Meeting.
Subject to the provisions for cumulative voting in the election of
directors, as described below, each Share is entitled to one vote on all matters
brought before the Company's shareholders for a vote.
Certain Shares are held of record by Mellon Bank N.A., as trustee (the
"ESOP Trustee") for the Commercial Intertech Employee Stock Ownership Plan and
Commercial Intertech Retirement Stock Ownership and Savings Plan (the "ESOPs").
The trusts for these plans (the "ESOP Trusts") contain pass-through voting
provisions for the participants of the ESOPs, with Shares that are allocated to
a participant's account to be voted by the ESOP Trustee as instructed by the
participant and 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 proportionately as
the allocated Shares for which instructions were received are voted.
PARTICIPANTS IN THE ESOPS CAN ONLY EXECUTE THE GREEN REVOCATION CARD WITH
RESPECT TO SHARES HELD IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE TRUSTEE
ON THE FORM THAT WILL BE PROVIDED TO PARTICIPANTS FOR THAT PURPOSE. According
to their Solicitation Statement, United Dominion and OAC believe that,
notwithstanding the express terms of the trust document, the ESOP Trustee has a
fiduciary duty under the Employee Retirement Income Security Act of 1974
("ERISA") to exercise its discretion with respect to voting Shares held in the
ESOPs which are allocated to any participant's account but for which no
instructions are received by it and for all Shares held in ESOPs which are not
allocated to any participant's account. United Dominion and OAC also believe,
according to their Solicitation Statement, that the indemnification provisions
in favor of the ESOP Trustee contained in the 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. According to their Solicitation Statement, United Dominion
and OAC believe that the Department of Labor has successfully advanced similar
positions in a federal district court case, Reich v. NationsBank of Georgia,
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N.A., and Martin v. NationsBank of Georgia, N.A., an earlier opinion in the same
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proceeding.
In addition, 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 VOTE COMMON SHARES HELD IN THE PLANS ON THEIR
BEHALF BY INSTRUCTING THE PLAN TRUSTEE ON THE TRUSTEE INSTRUCTION CARD THAT WILL
BE PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
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Proxies representing Common Shares held of record will include Common
Shares allocated to participants under the Automatic Dividend Reinvestment Plan
(the "Dividend Reinvestment Plan") for shareholders of the Company. The form of
Proxy accompanying this Proxy Statement can be used to vote such Common Shares
held under the Dividend Reinvestment Plan.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE, WE
URGE YOU TO CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT HIM OR
HER TO EXECUTE A GREEN REVOCATION CARD ON YOUR BEHALF, VOTING AS RECOMMENDED BY
THE COMPANY'S BOARD OF DIRECTORS.
If you have any questions concerning Company's solicitation of Revocation
Cards, or United Dominion's and OAC's solicitation of Agent Designations, please
contact Morrow & Co., Inc. at 1-800-566-9061 (Toll-Free).
BACKGROUND AND PURPOSE OF THIS SOLICITATION
On May 10, 1996, at the request of William R. Holland, the Chief Executive
Officer of United Dominion, Mr. Holland met with Paul J. Powers, the Chairman
and Chief Executive Officer of the Company, in Youngstown, Ohio. During this
meeting, Mr. Holland expressed the view that a combination of the Company with
United Dominion would be attractive and suggested a price of $27.00 per share.
Mr. Powers indicated that the Company has a policy of independence, and that he
believed the Company's prospects on a stand-alone basis were strong.
On June 27, 1996, Mr. Holland faxed to Mr. Powers a letter, which was
released to the news media on the same day, containing an unsolicited proposal
to acquire the Company pursuant to a transaction in which the Company's
shareholders would receive $27.00 in cash for their Common Shares.
On July 11, 1996, United Dominion and OAC announced an unsolicited tender
offer to purchase all of the Company's outstanding Common Shares and the
associated Rights for a purchase price of $27.00 per Share, net to the seller in
cash, without interest thereon (the "Original Offer"). On the same date, the
Board of Directors unanimously determined that the Original Offer was
inadequate, and not in the best interests of the Company, its shareholders,
employees, customers, suppliers, labor organizations, the communities in which
the Company does business and its other constituencies, and did not adequately
reflect the long-term value or prospects of the Company. At that meeting, the
Board of Directors unanimously determined not to proceed with a planned public
offering of up to 20% of the stock of the Company's Cuno Incorporated fluid
filtration and purification subsidiary ("Cuno"), but instead to proceed with a
previously considered plan to spin off 100% of the stock of Cuno to the
Company's shareholders (the "Spin-Off"), subject to customary conditions,
including the receipt of an opinion of counsel with respect to the tax-free
nature of the Spin-Off. The Board of Directors had previously been considering,
together with its financial advisor, Goldman Sachs & Co. ("Goldman Sachs"),
either a 100% spin-off or a public offering of up to 20% of Cuno as a first step
toward a subsequent spin-off. At the July 11, 1996 meeting, the Board of
Directors decided to accelerate this process
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and proceed with a 100% spin-off to provide more direct and immediate value to
shareholders. The Board of Directors also unanimously approved a program to
repurchase up to 2,500,000 Common Shares in open market and privately negotiated
transactions (the "Repurchase Program"). On July 12, 1996, United Dominion and
OAC filed with the Company an Acquiring Person Statement under the Ohio Control
Share Acquisition Law in order to cause the Company to call a special meeting of
Company shareholders under the Ohio Share Acquisition Law (the "831 Special
Meeting").
On July 15, 1996, the purchase price of the Original Offer was increased to
$30.00 per Share, 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 "Revised Offer"). The stated purpose of the Revised
Offer is to acquire control of, and the entire equity interest in, the Company.
According to a Revised Offer to Purchase, dated July 16, 1996 (the "Revised
Offer to Purchase"), United Dominion intends, following completion of the
Revised Offer, to seek to have the Company consummate a merger or similar
business combination with OAC or another subsidiary of United Dominion at the
same price per Common Share to be paid in the Revised Offer (the "Proposed
Merger"), subject to the terms and conditions described in the Revised Offer to
Purchase. According to the Revised Offer to Purchase, the Revised Offer is
conditioned upon, among other things, the following significant matters:
(1) The Minimum Condition. There must be validly tendered and not properly
withdrawn prior to expiration of the Revised Offer a number of Common Shares
which, when added to the Common Shares beneficially owned by OAC and its
affiliates, constitutes at least two-thirds of the total voting power of all
Common Shares outstanding on a fully diluted basis on the date of purchase.
(2) The Control Share Condition. The approval of the Control Share
Acquisition shall have been obtained from the Company's shareholders or OAC
shall be 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 Revised Offer.
(3) The Business Combination Condition. OAC must be satisfied, in its sole
discretion, that the restrictions contained in Chapter 1704 (the "Ohio Business
Combination Law") of the ORC will not apply to the acquisition of Common Shares
pursuant to the Revised Offer or to the Proposed Merger.
The Ohio Business Combination Law prohibits certain combinations and other
transactions (each, a "Chapter 1704 Transaction"), such as the Proposed Merger,
between an issuing public corporation (such as the Company) and any "Interested
Shareholder" (defined generally as any person that, directly or indirectly, is
entitled to exercise or direct the exercise of 10% or more of the outstanding
voting power of a corporation in the election of directors) for a period of
three years after the date the person becomes an Interested Shareholder. After
such three year period, a Chapter 1704 Transaction between an issuing public
corporation and such Interested Shareholder is prohibited unless either certain
"fair price" provisions are complied with or the Chapter 1704 Transaction is
approved by certain supermajority shareholder votes.
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The Ohio Business Combination Law restrictions do not apply to a Chapter 1704
Transaction with an Interested Shareholder if either the acquisition of the
corporation's shares that would cause the Interested Shareholder to become an
Interested Shareholder, or the Chapter 1704 Transaction, is approved by a
resolution of the board of directors of the corporation adopted prior to the
date on which the Interested Shareholder became an Interested Shareholder.
(4) The Rights Condition. The Rights shall have been redeemed by the
Company or OAC shall be satisfied, in its sole discretion, that the Rights have
been invalidated or are otherwise inapplicable to the Revised Offer and the
Proposed Merger.
(5) The Articles Amendment Condition. Article SIXTH of the Articles (which
requires a 95% vote to approve a business combination which does not meet
certain "fair price" and procedural criteria) shall have been repealed or
otherwise amended with the effect that, or OAC shall be otherwise satisfied, in
its sole discretion, that, the provisions of such Article will not apply to the
Proposed Merger.
On July 17, 1996, the Board of Directors unanimously concluded that the
Revised Offer is inadequate, and not in the best interests of the Company, its
shareholders, employees, customers, suppliers, labor organizations, the
communities in which the Company does business and its other constituencies, and
does not adequately reflect the long-term value or prospects of the Company. At
that meeting, the Board of Directors unanimously reaffirmed the Company's prior
determination to proceed with the Spin-Off. The Board of Directors also
unanimously reaffirmed the Repurchase Program. In addition, the Board of
Directors fixed September 3, 1996 as the Record Date and fixed August 7, 1996
and August 30, 1996 as the record date and meeting date, respectively, for the
831 Special Meeting.
On July 25, 1996, United Dominion and OAC commenced their purported
solicitation of Agent Designations. In connection with such purported
solicitation, United Dominion and OAC are providing the Company's shareholders
with a Solicitation Statement and an Agent Designation. A shareholder's
execution of an Agent Designation designates specific persons as agents for the
shareholder with authority to take all actions necessary to convene the Special
Meeting. SIGNING AND RETURNING AN AGENT DESIGNATION FURTHERS THE INTERESTS OF
UNITED DOMINION AND OAC IN PURSUING THE REVISED OFFER, WHICH YOUR BOARD OF
DIRECTORS HAS DETERMINED IS INADEQUATE AND NOT IN THE BEST INTERESTS OF THE
COMPANY, ITS SHAREHOLDERS AND OTHER CONSTITUENCIES. UNITED DOMINION'S AND OAC'S
NOMINEES, IF ELECTED, ARE COMMITTED TO ENSURING THAT A FUTURE BOARD OF DIRECTORS
OF THE COMPANY APPROVES THEIR OFFER, WHICH YOUR BOARD OF DIRECTORS HAS
DETERMINED TO BE INADEQUATE. UNLIKE THE COMPANY'S CURRENT BOARD OF DIRECTORS,
FOLLOWING THE SPECIAL MEETING THE BOARD OF DIRECTORS WOULD BE COMPRISED OF
UNITED DOMINION'S AND OAC'S HAND-PICKED REPRESENTATIVES. NEITHER UNITED
DOMINION NOR OAC HAS ANY FIDUCIARY OBLIGATION TO PROTECT YOUR INTERESTS; THEIR
SOLE OBLIGATIONS ARE TO THEIR OWN SHAREHOLDERS.
If a shareholder signs and returns an Agent Designation to United Dominion
and OAC, such shareholder purportedly authorizes United Dominion and OAC to call
the Special Meeting. The Agent Designations also provide that the agenda for
the Special Meeting will include: (i) a
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proposal to call on the Company's incumbent directors to redeem the Rights, (ii)
a proposal to remove all incumbent directors of the Company, (iii) a proposal to
amend the Regulations to reduce the size of the Board of Directors from twelve
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) a proposal to elect three new directors
nominated by United Dominion and OAC to fill the vacancies resulting from such
removal and reduction of the size of the Board of Directors, (v) a proposal to
amend the Articles to repeal Article SIXTH thereof and (vi) a proposal to amend
the Regulations to provide that the Ohio Control Share Acquisition Law shall not
apply to "control share acquisitions" of Shares, if the acquisition of Common
Shares constituting a majority of the voting power of the outstanding Shares by
OAC has not yet been authorized by the Company's shareholders pursuant to the
Ohio Control Share Acquisition Law or OAC 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 Revised Offer.
The purpose of the above listed proposals is to facilitate the consummation
of the Revised Offer which the current Board of Directors and management of the
Company has determined to be inadequate and not in the best interest of the
Company, its shareholders, employees, customers, suppliers, labor organizations,
the communities in which the Company does business and its other constituencies,
and does not adequately reflect the long-term value or prospects of the Company,
by eliminating provisions which are designed to protect the Company against
inadequate offers and to give your Board of Directors flexibility to act in what
it is convinced are the best interests of the Company, its shareholders and
other constituencies.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS NOT RETURN THE AGENT
DESIGNATION REQUESTED BY UNITED DOMINION AND OAC. TO STOP UNITED DOMINION AND
OAC FROM USING YOUR COMMON SHARES TO FURTHER THEIR INADEQUATE OFFER, THE BOARD
OF DIRECTORS RECOMMENDS THAT YOU (1) DISCARD ANY WHITE AGENT DESIGNATION AND (2)
IF YOU HAVE ALREADY RETURNED A WHITE AGENT DESIGNATION, SIGN, DATE AND RETURN
THE ENCLOSED GREEN REVOCATION CARD AS SOON AS POSSIBLE.
RECOMMENDATION BY THE COMPANY'S BOARD OF DIRECTORS
At a meeting of the Board of Directors held on July 11, 1996, the Board of
Directors met with its financial and legal advisers and reviewed the Original
Offer of $27.00 per Share. At that meeting, the Board of Directors unanimously
concluded that the Original Offer was inadequate and not in the best interests
of the Company, its shareholders, employees, customers, suppliers, labor
organizations, the communities in which the Company does business and its other
constituencies, and did not adequately reflect the long-term value or prospects
of the Company. At that meeting, the Board of Directors unanimously determined
to proceed with the Spin-Off, subject to customary conditions, including the
receipt of an opinion of counsel with respect to the tax-free nature of the
Spin-Off. The Board of Directors had previously been considering, together with
Goldman Sachs, either a 100% spin-off or a public offering of up to 20% of Cuno
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as a first step toward a subsequent spin-off. At the July 11, 1996 meeting, the
Board decided to accelerate this process and proceed with a 100% spin-off to
provide more direct and immediate value to shareholders. The Board also
unanimously approved the Repurchase Program.
On July 15, 1996, United Dominion and OAC issued a press release announcing
the Revised Offer.
On July 17, 1996, the Board of Directors of the Company met to review the
Revised Offer with its financial and legal advisors. The Board of Directors
unanimously concluded that the Revised Offer is inadequate and not in the best
interests of the Company, its shareholders, employees, customers, suppliers,
labor organizations, the communities in which the Company does business and its
other constituencies, and does not adequately reflect the long-term value or
prospects of the Company. At that meeting, the Board of Directors unanimously
reaffirmed the Company's prior determination to proceed with the Spin-Off. The
Board of Directors also unanimously reaffirmed the Repurchase Program.
In reaching its conclusions referred to above, the Board of Directors
considered numerous factors, including but not limited to:
(i) the Board of Directors' familiarity with the business, financial
condition, prospects and current business strategy of the Company, the
nature of the businesses in which the Company operates and the Board of
Directors' belief that the Revised Offer does not reflect the long-term
values inherent in the Company;
(ii) the Company's financial performance in recent years, including
its record results for its 1995 fiscal year and three consecutive years of
improving operating results, including strong improvements in operating
performance and profitability by Cuno;
(iii) the Company's long-term strategic plan to build value for its
shareholders by growing its core businesses;
(iv) the Company's plan to proceed with the Spin-Off, in light of the
belief of the Board of Directors and management that:
-- the Spin-Off should enhance the abilities of the managements of
both the Company and Cuno to focus more closely on the objectives of their
respective businesses, enhance the two companies' ability to create
incentives that align the interests of their management and employees with
the performance of their respective companies, and permit Cuno to use its
publicly traded stock as a currency for expansion through acquisitions; and
-- the Spin-Off should enable shareholders of the Company to benefit
in the near term from the value of a high-growth, high-multiple business,
which has not previously received appropriate market recognition because of
the Company's mix of industrial businesses, which typically trade at lower
multiples. The Board of Directors took into consideration that there is
some risk that the tax-free nature of the Spin-Off could be
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impacted, with attendant adverse tax consequences to the Company and
certain of its shareholders, in the event of an acquisition of the Company
by certain third parties (including United Dominion) following a spin-off;
(v) the Board of Directors' belief that the Repurchase Program will
provide investors who desire to obtain liquidity for their investment in
the Company with an opportunity to sell all or a portion of their
investment in the Company; these shareholders may be more likely to support
actions that would make it more difficult for the Company to resist an
inadequate bid, which in the view of the Board of Directors would not be in
the best interests of the Company, its shareholders and its other
constituencies; accordingly, the Repurchase Program may stabilize the
Company's base of long-term shareholders and may give long-term
shareholders who desire to participate in the benefits of the Spin-Off and
the future growth of the Company and Cuno a greater opportunity to do so;
the Board of Directors also considered the fact that the Repurchase Program
is expected to be accretive to the Company's earnings per Share;
(vi) the Board of Directors' belief, in light of the Company's
strategic plan and its plan to proceed with the Spin-Off, that this is not
the appropriate time to sell the Company;
(vii) the Board of Directors' belief that the interests of the
Company, its shareholders and other constituencies would best be served by
the Company continuing as an independent entity, proceeding with its plans
to effect the Spin-Off, and effecting the Repurchase Program;
(viii) the opinion of Goldman Sachs, the Company's financial advisor,
after reviewing with the Board of Directors many of the factors referred to
above and other financial criteria used in assessing an offer, that the
Revised Offer is inadequate; and
(ix) the disruptive effect consummation of the Revised Offer would
have on the Company's employees, suppliers, customers and the communities
where the Company operates.
IN LIGHT OF THE BOARD OF DIRECTORS' CONCLUSIONS THAT THE OFFER IS
INADEQUATE, IS NOT IN THE BEST INTERESTS OF THE COMPANY, ITS SHAREHOLDERS AND
OTHER CONSTITUENCIES, AND DOES NOT ADEQUATELY REFLECT THE LONG-TERM VALUE OR
PROSPECTS OF THE COMPANY, THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
NOT RETURN THE AGENT DESIGNATION REQUESTED BY UNITED DOMINION AND OAC. TO STOP
UNITED DOMINION AND OAC FROM USING YOUR COMMON SHARES TO FURTHER THEIR
INADEQUATE OFFER, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU (1) DISCARD ANY
WHITE AGENT DESIGNATION AND (2) IF YOU HAVE ALREADY RETURNED A WHITE AGENT
DESIGNATION, SIGN, DATE AND RETURN THE ENCLOSED GREEN REVOCATION CARD AS SOON AS
POSSIBLE.
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THE RETURN OF A SIGNED REVOCATION CARD OR AGENT DESIGNATION BY A
SHAREHOLDER IS INDEPENDENT OF ANY DECISION BY SUCH SHAREHOLDER WHETHER OR NOT TO
TENDER SHARES PURSUANT TO UNITED DOMINION'S INADEQUATE OFFER. THE RETURN OF A
SIGNED REVOCATION CARD OR AGENT DESIGNATION BY A SHAREHOLDER IS ALSO INDEPENDENT
OF ANY PROXY PREVIOUSLY EXECUTED BY SUCH SHAREHOLDER IN CONNECTION WITH THE 831
SPECIAL MEETING TO BE HELD PURSUANT TO THE OHIO CONTROL SHARE ACQUISITION LAW.
EFFECT OF EXECUTION AND DELIVERY OF AGENT DESIGNATIONS
Under the ORC and the Regulations, a special meeting of the Company's
shareholders may be called by the Requisite Holders 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
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's 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's shareholders. According to the Solicitation Statement, following
receipt of Agent Designations from Requisite Holders, the Designated Agents
intend to call the Special Meeting and thereupon make delivery, to the President
or the Secretary of the Company, of the Written Request requesting such officer
forthwith to cause appropriate notice of the Special Meeting to be given to the
Company's shareholders entitled thereto. According to the Solicitation
Statement, if notice of the Special Meeting is not so given within five business
days of delivery of the Written Request, the Designated Agents intend to cause
notice thereof to be given to the Company's shareholders as provided in the
Regulations. According to the Solicitation Statement, it is the current
intention of United Dominion and OAC to designate that the Special Meeting be
held as soon as practicable following receipt of Agent Designations from the
Requisite Holders, subject to the requirements of the ORC and the Regulations.
According to the Solicitation Statement, in the Written Request, the
Designated Agents will also request that the Board of Directors take action,
within such time as is specified in the Written Request, to fix a record date
for the determination of the shareholders who are entitled to receive notice of
or to vote at the Special Meeting (the "Special Meeting Record Date").
According to the Solicitation Statement, if the Board of Directors fails or
refuses, within such specified time, to fix the Special Meeting Record Date,
then the Designated Agents intend to fix the Special Meeting Record Date.
The Board of Directors has fixed the close of business on September 3, 1996
as the Record Date for the solicitation of Agent Designations. According to the
Solicitation Statement, United Dominion and OAC believe that the setting of a
record date with respect to United Dominion's and OAC's solicitation of Agent
Designations is unlawful. The Company believes, however, that United Dominion's
and OAC's position is without merit and that the setting of the
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Record Date is expressly permitted under (S) 1701.45 of the ORC. According to
the Solicitation Statement, notwithstanding the setting of the Record Date,
United Dominion and OAC are purporting to commence on July 25, 1996 the
solicitation of Agent Designations and intend to seek to call the Special
Meeting as soon as possible after the date on which United Dominion and OAC 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 United
Dominion and OAC deliver a written request to the Company to call the Special
Meeting). Without prejudice to the Company's position that the setting of the
Record Date complies with applicable law, the Company will solicit revocations
of any Agent Designations which United Dominion and OAC may purport to solicit
prior to the Record Date. As of the date of this Revocation Statement, there are
[ ] Common Shares and [ ] Preferred Shares outstanding. If,
notwithstanding the Company's position, United Dominion and OAC are permitted
under applicable law to request the calling of a Special Meeting prior to the
Record Date, United Dominion and OAC would require Agent Designations from the
holders of at least ________ Shares (excluding the 1,000 Common Shares owned by
United Dominion and OAC) in order to call the Special Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE SOLICITATION BY UNITED
DOMINION AND OAC. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU NOT
SIGN ANY WHITE CONSENT CARD SENT TO YOU BY UNITED DOMINION AND OAC. WHETHER OR
NOT YOU HAVE PREVIOUSLY EXECUTED A WHITE AGENT DESIGNATION, THE BOARD OF
DIRECTORS URGES YOU TO SIGN, DATE AND DELIVER THE ENCLOSED GREEN REVOCATION CARD
AS PROMPTLY AS POSSIBLE, BY FAX OR BY MAIL (USING THE ENCLOSED ENVELOPE), TO
MORROW & CO., INC., 909 THIRD AVENUE, 20TH FLOOR, NEW YORK, NEW YORK, 10022,
FAX: (212) 754-8362.
Certain Shares are held of record by Mellon Bank N.A., as ESOP Trustee for
Commercial Intertech's ESOPs. The ESOP Trusts contain pass-through voting
provisions for the participants of the ESOPs, with Shares that are allocated to
a participant's account to be voted by the ESOP Trustee as instructed by the
participant and 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 proportionately as
the allocated Shares for which instructions were received are voted.
PARTICIPANTS IN THE ESOPS CAN ONLY EXECUTE THE GREEN REVOCATION CARD WITH
RESPECT TO SHARES HELD IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE TRUSTEE
ON THE FORM THAT WILL BE PROVIDED TO PARTICIPANTS FOR THAT PURPOSE. According
to their Solicitation Statement, United Dominion and OAC believe that,
notwithstanding the express 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 ESOPs which are allocated to any participant's account but
for which no instructions are received by it and for all Shares held in ESOPs
which are not allocated to any participant's account. United Dominion and OAC
also believe, according to their Solicitation Statement, that the
indemnification provisions in favor of the ESOP Trustee contained in the trust
documents, which provide full indemnification for the ESOP Trustee only for
actions taken upon the written direction of the
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participants and in accordance with the terms of the ESOP, violate ERISA.
According to their Solicitation Statement, United Dominion and OAC believe that
the Department of Labor has successfully advanced similar positions in a
federal district court case, Reich v. NationsBank of Georgia, N.A., and Martin
------------------------------------- ------
v. NationsBank of Georgia, N.A., an earlier opinion in the same proceeding.
- -------------------------------
In addition, 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 VOTE COMMON SHARES HELD IN THE PLANS ON THEIR
BEHALF BY INSTRUCTING THE PLAN TRUSTEE ON THE TRUSTEE INSTRUCTION CARD THAT WILL
BE PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
Proxies representing Common Shares held of record will include Common
Shares allocated to participants under the Automatic Dividend Reinvestment Plan
(the "Dividend Reinvestment Plan") for shareholders of the Company. The form of
Proxy accompanying this Proxy Statement can be used to vote such Common Shares
held under the Dividend Reinvestment Plan.
REVOCATION
Either a WHITE Agent Designation or a GREEN Revocation Card may be revoked
by written notice of revocation to the Company by fax or by mail (using the
enclosed envelope), to Morrow & Co., Inc., 909 Third Avenue, 20th Floor, New
York, New York, 10022, Fax: (212) 754-8362. Such revocation may be in any
form, but must be signed and dated and must clearly express your intention to
revoke your previously executed Agent Designation or Revocation Card. THERE
WILL BE NO MEETING AT WHICH YOU CAN REVOKE AN AGENT DESIGNATION OR A REVOCATION
CARD. Your latest dated card will supersede any earlier-dated card, except that
a GREEN Revocation Card that would otherwise act as a revocation will be
inoperative and of no effect if delivered after the date, if any, as of which it
is determined that United Dominion and OAC have effectively called the Special
Meeting. A shareholder's revocation of a previously executed WHITE Agent
Designation will have the effect of opposing United Dominion's and OAC's call
for the Special Meeting. 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.
If you have any questions concerning the Company's solicitation of
Revocation Cards, or United Dominion's and OAC's solicitation of Agent
Designations, please contact Morrow & Co., Inc., at 1-800-566-9061 (Toll-Free).
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SPECIAL MEETING PROPOSALS BY UNITED DOMINION AND OAC
According to the Solicitation Statement, if they obtain sufficient Agent
Designations to call a Special Meeting, United Dominion and OAC intend to raise
the following six proposals ("Special Meeting Proposals") at such meeting: (i)
a proposal to call on the Company's incumbent directors to redeem the Rights
associated with the Common Shares pursuant to the Rights Agreement, (ii) a
proposal to remove all incumbent directors of the Company, (iii) a proposal to
amend the Regulations to reduce the size of the Board of Directors from twelve
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) a proposal to elect three new directors
nominated by United Dominion and OAC to fill the vacancies resulting from such
removal and reduction of the size of the Board of Directors, (v) a proposal to
amend the Company Articles to repeal Article SIXTH thereof and (vi) a proposal
to amend the Company Regulations to provide that the Ohio Control Share
Acquisition Law shall not apply to "control share acquisitions" of Shares, if
the acquisition of Common Shares constituting a majority of the voting power of
the outstanding Shares by Company has not yet been authorized by the Company's
shareholders pursuant to the Ohio Control Share Acquisition Law or OAC 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 Revised Offer.
The purpose of seeking the adoption of the Special Meeting Proposals is to
facilitate the consummation of the Revised Offer which the current Board of
Directors and management of the Company has determined to be inadequate and not
in the best interest of the Company, its shareholders, employees, customers,
suppliers, labor organizations, the communities in which the Company does
business and its other constituencies, and does not adequately reflect the long-
term value or prospects of the Company by eliminating provisions which are
designed to protect the Company against inadequate offers and to give your Board
of Directors flexibility to act in what it is convinced are the best interests
of the Company, its Shareholders and other constituencies. Accordingly, in the
event of a Special Meeting, the Board of Directors intend to oppose each of the
Special Meeting Proposals which are described in greater detail in the
subsections below.
RESOLUTION CALLING FOR REDEMPTION OF RIGHTS
According to the Solicitation Statement, United Dominion and OAC intend to
propose at the Special Meeting 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 Board of Directors. In the event the Board of Directors
fails to redeem the Rights or to take other action under the Rights Agreement to
render the Rights inapplicable to the Revised Offer and the Proposed Merger, as
explained below, United Dominion and OAC may be unable or unwilling to purchase
Common Shares in the Revised Offer and/or to consummate the Proposed Merger, or
the purchase of Common Shares in the Revised Offer and the consummation of the
Proposed Merger may, due to the
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restrictions on certain actions by a Board of Directors which is comprised of an
Interested Majority (as defined below) described below (the "180-Day
Provisions"), be delayed by 180 days from the time nominees of United Dominion
are elected as directors of the Company.
On November 29, 1989, the Board of Directors declared a dividend
distribution of one Right for each outstanding Common Share to shareholders of
record (the "Rights Record Date") on December 13, 1989. As a result of a 3 for
2 stock split effective as of September 1, 1994, two-thirds of one Right is
attached to each outstanding Common Share. When exercisable, each full Right
entitles the holder thereof to purchase one one-hundredth of a share of Series A
Participating Preferred Shares, no par value, at $75 per share, subject to
adjustment. The description and terms of the Rights are set forth in the Rights
Agreement.
The Rights are currently attached to all Common Share certificates
representing Shares outstanding and no separate Rights certificates have been
distributed. On the earlier of (i) a public announcement that, without the
prior approval of the Company, a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired or obtained the right to acquire
the beneficial ownership of securities having 20% or more of the voting power of
all outstanding voting securities of the Company or (ii) 10 days (unless such
date is extended by the Board of Directors) 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 (the earlier of such dates, the "Distribution Date"), the
Rights become exercisable. At its July 17, 1996 meeting, the Board of Directors
of the Company resolved to delay a "Distribution Date" under the Rights
Agreement pursuant to clause (ii) of the preceding sentence until either (i) the
close of business on August 7, 1996 or (ii) such earlier date prior to the
expiration date of the Revised Offer as the Board of Directors, or any duly
authorized committee thereof, but subsequent resolution duly approved, shall
designate.
Once exercisable, the Rights will be evidenced, with respect to any of the
Common Shares certificates outstanding as of the Rights Record Date, by such
Common Share certificate together with the Summary of Rights attached as Exhibit
C to the Rights Agreement. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with Common
Share certificates. From as soon as practicable after the Rights Record Date
and until the Distribution Date (or earlier redemption or expiration of the
Rights), new certificates for Common Shares issued after the Rights Record Date
upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Shares outstanding as of the Rights Record Date
(with or without the Summary of Rights attached) will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
If an Acquiring Person becomes such, holders of Rights (other than the
Acquiring Person its affiliates and associates) have, for a period of 60 days,
the right to receive upon exercise that
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<PAGE>
number of Common Shares having a market value of two times the exercise price of
the Right, to the extent available, and then a Common Share equivalent having a
market value of two times the exercise price of the Right (such Rights
collectively, the "Subscription Rights"). If the Revised Offer is consummated,
unless the Rights have previously been redeemed or otherwise rendered
inapplicable to the purchase of Common Shares pursuant to the Revised Offer, the
Subscription Rights would be triggered, which could result in substantial
dilution of the interests of United Dominion and OAC. Accordingly, the Company
believes that, unless and until the Rights are redeemed or otherwise rendered
inapplicable to the Revised Offer, the Revised Offer will not be consummated.
Moreover, pursuant to the 180-Day Provisions, if nominees of United Dominion and
OAC were to constitute a majority of the Board of Directors, they would be
prohibited from redeeming the Rights for 180 days following their election.
After the public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such (the date of such announcement, the "Shares
Acquisition Date"), if (i) a merger or other business combination occurs in
which the Common Shares are exchanged or changed (other than a merger with a
person or group who acquired Common Shares pursuant to a Permitted Offer (as
defined below) and is offering in the merger not less than the price paid
pursuant to the Permitted Offer and the same form of consideration paid) or (ii)
50% or more of the Company's assets or earning power are sold in one transaction
or a series of transactions, each holder of a Right (other than such Acquiring
Person) has the right to receive upon exercise that number of Common Shares of
the acquiring company having a market value of two times the exercise price of
the Right.
A "Permitted Offer" means a tender offer or exchange offer for all
outstanding shares of Common Shares at a price and on terms determined, prior to
the purchase of such shares under such tender offer or exchange offer, by at
least a majority of the members of the Board of Directors who are not officers
of the Company, to be both adequate and otherwise in the best interests of the
Company, its shareholders (other than the person on whose behalf the offer is
being made) and other relevant constituencies that the Board of Directors may
consider under Ohio law, including, without limitation, the constituencies
described in Section 1701.59(E) of the ORC. However, in the event that a
majority of the Board of Directors is comprised of (i) persons elected at a
meeting of shareholders or by shareholder action by written consent who were not
nominated by the directors in office immediately prior to such meeting or action
by written consent and/or (ii) successors of such persons elected to the Board
of Directors for the purpose of either facilitating a transaction with an
Interested Person (as defined below) or circumventing directly or indirectly the
provisions of the Rights Agreement (such majority, an "Interested Majority"),
then for a period of 180 days following the effectiveness of such action no
offer by an Interested Person may be deemed a Permitted Offer. "Interested
Person" with respect to a transaction means (x) any person who (i) is or will
become an Acquiring Person if the transaction were to be consummated without
regard to any required approval of the Company and (ii) directly or indirectly
proposed or nominated a director of the Company which director (or a successor
of such person elected to the Board of Directors for the purpose of either
facilitating a transaction with such Interested Person or circumventing directly
or indirectly the provisions of the Rights Agreement) is in office at the time
of consideration of the transaction in question, or (y) an affiliate or
associate of such person. In the event that a majority of the Board of
Directors
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is comprised of an Interested Majority, then for 180 days following the
effectiveness of such action, the Company may not exclude from the definition of
an Acquiring Person any Interested Person who acquires 20% or more of the
Company's outstanding Common Shares.
At any time prior to the earlier of (i) a person becoming an Acquiring
Person or (ii) the expiration of the Rights, the Company may, upon action by the
Board of Directors in their sole discretion, redeem the Rights, in whole but not
in part, at a price of $.01 in cash per Right (the "Redemption Price"), which
redemption shall be effective upon action of the Board of Directors in the
exercise of their sole discretion. In addition, following the Shares
Acquisition Date, the Company may redeem the then outstanding Rights in whole,
but not in part, at the Redemption Price provided that such redemption is (i) in
connection with a merger or other business combination transaction or series of
transactions involving the Company in which all holders of Common Shares are
treated alike, but not involving an Acquiring Person or any person who was an
Acquiring Person or (ii) following an event giving rise to, and the expiration
of the exercise period for, the Subscription Rights, if and for as long as no
person beneficially owns securities representing 20% or more of the voting power
of the Company's voting securities. However, if a majority of the Board of
Directors is an Interested Majority, then (x) the Rights may not be redeemed for
180 days after such election if such redemption is reasonably likely to have the
purpose of facilitating a transaction with an Interested Person and (y) the
Rights may not be redeemed if during the 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.
The Rights expire on the earlier of (i) November 29, 1999, (ii)
consummation of a merger transaction with a person or group who acquired Common
Shares pursuant to a Permitted Offer, and is offering in the merger the same
form of consideration and not less than the price per share paid pursuant to the
Permitted Offer or (iii) redemption by the Company.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or receive dividends.
Any of the provisions of the Rights Agreement may be amended or
supplemented by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended or supplemented by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person). However, if the majority of the Board of Directors is an
Interested Majority, then for a period of 180 days following the effectiveness
of such action 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.
In the event that United Dominion or any affiliates or associates of United
Dominion, acting as group, acquire beneficial ownership of 20% or more of the
Common Shares pursuant to the Revised Offer or otherwise, such persons will be
an Acquiring Person as defined in the Rights Agreement and a Shares Acquisition
Date will have occurred.
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<PAGE>
United Dominion and OAC commenced litigation 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 Board of Directors of the Company to
redeem the Rights. See "CERTAIN LEGAL MATTERS" below.
REMOVAL OF CURRENT DIRECTORS AND ELECTION OF NEW DIRECTORS
According to the Solicitation Statement, at the Special Meeting, United
Dominion and OAC intend to propose that all incumbent directors of the Company
be removed from office and that the size of the Board of Directors be reduced
from twelve to three members. The persons appointed by the proxies to be
solicited by United Dominion and OAC for the Special Meeting would vote the
Shares represented by such proxies in favor of United Dominion's and OAC's
proposals to remove all of the incumbent directors of the Company and, as
described below, to amend the Regulations to reduce the size of the Board of
Directors from twelve 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.
According to the Solicitation Statement, United Dominion and OAC also
intend to propose that nominees of United Dominion 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 of Directors, each to hold
office until a successor has been elected and qualified or until death,
resignation or removal. According to the Solicitation Statement, Company
shareholders will be provided with information concerning United Dominion's
nominees in a 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 10 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. According to the Solicitation Statement,
in the event the election of directors at the Special Meeting is to be by
cumulative voting, United Dominion and OAC intend to seek to have as many of
their nominees elected as possible.
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<PAGE>
AMENDMENTS OF THE REGULATIONS
According to the Solicitation Statement, United Dominion and OAC intend to
propose at the Special Meeting a resolution to amend Article II of the
Regulations by replacing Sections 1 and 2 in their entirety with the following
language:
"SECTION 1. NUMBER. Until changed in accordance with the provisions
of Section 2 hereof, the Board of Directors of the corporation shall
consist of three (3) directors."
"SECTION 2. ELECTION AND TERM. Each director shall hold office until
the next annual meeting of shareholders and until his or her successor is
elected, or until his or her earlier resignation, removal from office, or
death. The election of directors shall, if the number of persons nominated
shall be greater than the number of directorships to be filled, be by
ballot."
"The number of directors may be increased or decreased (subject to the
condition that in no event shall the number of directors be less than three
(3)), by resolution adopted by shareholders entitled to exercise a majority
of the voting power on such proposal present in person or by proxy at any
annual meeting or at any special meeting called for that purpose, provided
that no decrease in the number of directors shall of itself have the effect
of shortening the term of any incumbent director."
"The Board of Directors may adopt such further regulations governing
the elections of directors, not inconsistent with the foregoing, as shall
to the Board of Directors seem proper and expedient."
In addition, as stated in the Solicitation Statement, United Dominion and
OAC intend, if the approval of the Control Share Acquisition has not been
obtained or OAC 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 Revised Offer by the date of the
Special Meeting, to propose at the Special Meeting a resolution to amend the
Regulations by adding the following Article XI to the 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 Regulations require the affirmative vote of a majority of the total
voting power of the outstanding Shares to approve these amendments to the
Regulations.
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AMENDMENT OF THE ARTICLES
Article SIXTH of the Articles ("Article SIXTH") 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 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" requirements (the "Article SIXTH Requirements"). According
to the Solicitation Statement, United Dominion and OAC intend to propose that
the 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 OAC purchases Common
Shares in the Revised Offer, United Dominion's nominees, if elected at the
Special Meeting, will qualify as "continuing directors" for purposes of Article
SIXTH.
United Dominion and OAC have requested that the Company's Board of
Directors unanimously recommend to the Company shareholders that Article SIXTH
be repealed or otherwise amended such that its provisions are inapplicable to
the Proposed Merger. Because the Board of Directors believes that the Revised
Offer is inadequate, the Board of Directors opposes any action by United
Dominion and OAC to repeal or amend Article SIXTH such that its provisions are
inapplicable to the Proposed Merger. According to the Solicitation Statement,
if the Special Meeting were to be called, OAC expects United Dominion's
nominees, if all such persons are elected at the Special Meeting, to take such
action as shall result in a unanimous recommendation by the Board of Directors
to the Company's 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 would be sufficient to approve the proposal to repeal Article
SIXTH.
RECOMMENDATION OF THE BOARD OF DIRECTORS WITH RESPECT TO SPECIAL MEETING
PROPOSALS
The above listed proposals are designed to facilitate the consummation of
the Revised Offer, which your Board of Directors and management have determined
to be inadequate and not in the best interest of the Company, its shareholders,
employees, customers, suppliers, labor organizations, the communities in which
the Company does business and its other constituencies, and not to adequately
reflect the long-term value or prospects of the Company.
THE BOARD OF DIRECTORS WILL RECOMMEND THAT SHAREHOLDERS VOTE AGAINST EACH
OF UNITED DOMINION'S AND OAC'S PROPOSALS DESCRIBED ABOVE AND ANY OTHER PROPOSALS
BROUGHT BEFORE THE
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SPECIAL MEETING WHICH ARE DESIGNED TO, OR HAVE THE EFFECT OF, FACILITATING
UNITED DOMINION'S INADEQUATE OFFER.
RECESS OR ADJOURNMENT OF MEETING
In the event of the Special Meeting, the Board of Directors intends to
request, 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.
CERTAIN LEGAL MATTERS
On July 11, 1996, United Dominion and OAC commenced litigation (the
"District Court Litigation") in the Federal District Court for the Southern
District of Ohio, Eastern Division (the "Court"), against the Company, the Board
of Directors, the acting Commissioner of Securities of the Ohio Division of
Securities, the Ohio Director of Commerce and the State of Ohio. Plaintiffs
sought declarations that, among other things, (i) Section 1701.01(CC)(2) of
Ohio's Control Share Acquisition Law is unconstitutional because it is claimed
to conflict with the United States Constitution, and (ii) the Rights Agreement
and the Rights are invalid, unlawful, null and void. Plaintiffs also sought,
among other things, to enjoin (i) the enforcement of Sections 1701.01(CC)(2) and
1701.831(E) of Ohio's Control Share Acquisition Law, (ii) the Company's
directors from taking any action to enforce or amend the Rights Agreement (other
than to redeem the Rights or to amend certain provisions that limit the ability
of the Company to redeem the Rights), and (iii) the Company from commencing or
prosecuting in any court other than the court in which the action was filed, any
action or proceeding relating to the plaintiff's tender offer. Further, the
plaintiffs sought an order to compel the Company to redeem the Rights and to
amend certain provisions of the Rights Agreement that limit the ability of the
Company to redeem the Rights. On July 15, 1996, the Court scheduled a hearing
for July 29, 1996 with respect to United Dominion and OAC's motion to enjoin
preliminarily the enforcement of Sections 1701.01(CC)(2) and 1701.831(E) of the
Ohio Control Share Acquisition Law and the parties are commencing discovery with
respect thereto.
On July 15, 1996, United Dominion and OAC filed an amended complaint
asserting as additional claims that the directors of the Company had violated
their fiduciary duties to the Company's shareholders by determining to undertake
the Repurchase Program, undertaking to effect the Spin-Off and refusing to
negotiate with United Dominion and OAC; that the Company's Schedule 14D-9
contained false and misleading statements in violation of the Securities and
Exchange Act of 1934 (the "Exchange Act"); and that the Company's repurchase of
shares in the Repurchase Program violated the Exchange Act. The plaintiffs
sought to enjoin preliminarily and permanently: (1) the Board of Directors from
refusing to negotiate with United Dominion and OAC; (2) the Repurchase Program;
and (3) the Company from refusing to amend its Schedule 14D-9 with respect to
the Repurchase Program and the Spin-Off.
On July 18, 1996, the Company filed its answer to the amended complaint of
United Dominion and OAC denying all substantive allegations and raising, as
counterclaims, that there were disclosure violations in the state and federal
filing by United Dominion and OAC associated with the Revised Offer. The
Company also sought a declaratory judgment that, if
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<PAGE>
United Dominion and OAC obtain proxies representing more than 10% of the voting
power of the Company's Common Shares in the election of directors, United
Dominion and OAC would be "interested shareholders" within the meaning of the
Ohio Business Combination Law and thus be prohibited from engaging in certain
transactions with the Company, including completing their Proposed Merger, for a
minimum of three years and thereafter, unless they comply with the Ohio Business
Combination Law.
On July 19, 1996, United Dominion filed a motion in its litigation
against the Company seeking leave of the Court to file a Second Amended
Complaint. On July 22, 1996, the Company filed a brief opposing United
Dominion's motion and challenging its standing to bring additional claims
contained in the proposed Second Amended Complaint. Also, on July 23, 1996, the
Company filed a motion seeking an order enjoining the Revised Offer and United
Dominion's and OAC's associated proxy and Agent Designation solicitations
because of certain false and misleading disclosures in materials filed with the
SEC. The Company seeks an order requiring United Dominion to make curative
disclosures to correct the false and misleading disclosures and enjoining United
Dominion's tender offer and associated proxy and agent designation solicitations
for a period of time following the curative disclosures.
SOLICITATION OF REVOCATIONS
The costs of the revocation solicitation will be borne by the Company. In
addition to solicitation by mail, directors, officers and regular employees of
the Company may solicit proxies in person, by telephone, by personal interview,
e-mail, or by telecopier, none of whom will receive additional compensation for
such solicitations. The Company will request banks, brokerage houses and other
custodians, nominees and fiduciaries to forward its solicitation materials to
the beneficial owners of the Common Shares they hold of record and obtain
authorization for, and appropriate certification in connection with, the
execution of Revocation Cards. The Company will reimburse these record holders
for customary mailing expenses incurred by them in forwarding these materials.
The Company also has retained Morrow & Co., Inc. to assist the Company in
connection with communications with shareholders and to provide other services
in connection with the revocation solicitation and the Revised Offer. The
Company will pay Morrow & Co., Inc. reasonable and customary fees for its
services, including reimbursement for reasonable expenses, and provide customary
indemnities.
Except as described above, neither the Company nor, to the best of the
Company's knowledge, any person acting on its behalf has retained any other
person to make solicitations or recommendations to security holders on its
behalf in connection with the transactions contemplated by the Revised Offer.
OTHER FEES
Pursuant to a letter agreement dated June 28, 1996 (the "Letter
Agreement"), the Company has retained Goldman Sachs as financial advisor with
respect to the Revised Offer and certain other possible transactions and Goldman
Sachs will act as exclusive financial advisor
-22-
<PAGE>
with respect to any proxy or consent solicitation (including this revocation
solicitation) involving United Dominion and OAC. Pursuant to the Letter
Agreement, the Company has agreed to pay to Goldman Sachs:
(a) a fee of $250,000 payable on the date of the Letter Agreement;
(b) an additional fee of $250,000 in the event of the commencement by
United Dominion or any affiliate or other party of a tender offer, payable upon
the commencement of the tender offer;
(c) if 15% or more of the outstanding Shares of the Company are acquired by
United Dominion or any other person or group (including the Company), in one or
a series of transactions or if all or substantially all of the assets of the
Company are transferred, in one or a series of transactions, by way of a sale,
distribution or liquidation, an additional fee equal to 0.85% of the aggregate
value of all such transactions (in the event at least 50% of the outstanding
Shares of the Company are acquired by United Dominion or any other person or
group, including the Company, such aggregate value shall be determined as if
such acquisition were of 100% of the Shares of the Company);
(d) if the Company or any other entity formed or owned in substantial part
or controlled by the Company or one or more members of senior management of the
Company or any employee benefit plan of the Company or any of its subsidiaries
effects certain recapitalization transactions not covered by subparagraph (c), a
fee (to be negotiated) equal to between 0.85% and 1.0% of the aggregate value of
such transaction;
(e) in the event that the Company acquires the securities or assets of
another company or sells, distributes or liquidates all or a portion of the
assets of the Company, including any pension-related assets, or sells or
distributes securities of the Company, whether such distribution is made by
dividend or otherwise, and no fee has become payable to Goldman Sachs with
respect to such transaction pursuant to subparagraphs (c) and (d) above,
additional fees customary to such transactions based on the aggregate value of
the transaction; and
(f) subject to certain conditions, in the event no transaction of the type
described in subparagraphs (c) and (d) has been consummated by January 1, 1997,
a fee of $500,000 on each such date as of which no transaction has been
consummated: January 1, 1997, April 1, 1997, July 1, 1997, October 1, 1997,
January 1, 1998 and April 1, 1998 less any amounts paid under subparagraphs (a)
and (b) above.
Any fees paid pursuant to subparagraphs (a), (b) and (f) above shall be
credited against any fees payable pursuant to subparagraphs (d) and (e) above.
Pursuant to the Letter Agreement, if the Company becomes the subject of, or
is threatened with, a contested proxy or consent solicitation by United Dominion
or any other party, Goldman Sachs will act as the Company's exclusive financial
advisor with regard to such proxy or consent solicitation.
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<PAGE>
The Company has also agreed to reimburse Goldman Sachs periodically for its
reasonable out-of-pocket expenses, including the fees and disbursements of its
attorneys, plus any sales, use or similar taxes (including additions to such
taxes, if any) arising in connection with any matter referred to in the Letter
Agreement. In addition, the Company has agreed to indemnify Goldman Sachs
against certain liabilities, including liabilities under federal securities
laws.
INTERESTS OF CERTAIN PERSONS
THE STOCK OPTION AND AWARD PLANS; FORM OF OPTION AGREEMENT
The Company's Stock Option and Award Plans allow for the grant of a variety
of stock incentive instruments, including nonqualified (i.e., not tax-preferred)
and incentive stock options, stock appreciation rights, restricted stock and
performance shares. For many years, the Company has granted stock options to
its key executives to create a direct link between shareholder and executive
interests. In the past the Company has also periodically granted time-lapse
restricted stock to its key executives.
The performance share program, first initiated in fiscal 1993, is a longer-
term incentive program designed to motivate key executives whose efforts result
in the achievement of sustained financial results leading to increased
shareholder value. Designed to replace substantially the restricted stock
grants previously made to key executives, the Management Evaluation and
Compensation Committee of the Board of Directors (the "Committee") believes
performance shares better align executive and shareholder financial interests.
The Committee selected 63 executives throughout the Company for participation in
the performance share program.
Depending on responsibilities within the Company, performance shares are
earned based on average corporate and/or group Return On Equity ("ROE"),
divisional operating income and, for certain executives, individual specific
objectives over a three-year performance period. In future years, the Committee
may consider other measures of shareholder value and performance periods, as
appropriate, in light of the Company's strategic objectives. Threshold levels
of ROE and, in certain cases, operating income must be achieved before any
distributions are made.
Historically the Company has granted stock options on an annual basis while
performance shares are granted every other year. In determining stock option
awards, the Committee considers such factors as median competitive award levels,
the size of previous stock option awards and Company and individual performance.
The Company has modified its practice of awarding restricted stock to key
executives. Restricted stock is now used only in special circumstances, such as
to attract new key executives for employment with the Company and in other
similar non-recurring circumstances.
Pursuant to the terms of the Company's Stock Option and Award Plan of 1989,
the Stock Option and Award Plan of 1993 and the Stock Option and Award Plan of
1995 (collectively, the
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<PAGE>
"Stock Option and Award Plans"), the Committee may provide, upon a change of
control (as defined in the Stock Option and Award Plans and which would include
the consummation of the Revised Offer), that (i) any and all stock appreciation
rights outstanding on the date that such change of control is determined to have
occurred and any and all stock options awarded under the Stock Option and Award
Plans not previously exercisable and vested shall become fully exercisable and
vested and (ii) restrictions applicable to any and all restricted stock and
performance share awards shall lapse and such shares and awards shall be fully
vested.
Similarly, pursuant to the terms of the Company's form of Option Agreement,
the options granted thereunder and not yet exercisable shall become exercisable
and vested upon a change of control or a potential change of control (as both
terms are defined in the Option Agreement and which would include the
consummation of the Revised Offer).
EMPLOYMENT AGREEMENTS
On July 27, 1994, the Company entered into an Employment Agreement with
Paul J. Powers. Mr. Powers' Employment Agreement expires on February 28, 2000.
The Employment Agreement provides for the payment of a base salary which can be
increased at the discretion of the Company. Mr. Powers' annual base salary for
1995 was $481,667. Additionally, Mr. Powers shall be eligible to (1) receive
cash bonuses as part of the Company's Salaried Employee Incentive Plan ("SEIP");
and (2) participate in other incentive, stock option, profit sharing and similar
plans maintained by the Company for the benefit of its executives. In addition,
the employment agreement with Mr. Powers provides that in the event of his
termination without cause (as defined in his employment agreement), Mr. Powers
shall receive a lump sum payment equal to two and one-half times his most recent
annual cash compensation. Finally, Mr. Powers will be included in all other
employee benefit plans to the extent that he is eligible. Such plans include,
but are not limited to, group life insurance plans, hospitalization and medical
plans and long-term disability plans.
On May 18, 1992, the Company entered into an Employment Agreement with
Bruce C. Wheatley and on December 3, 1993, the Company entered into an
Employment Agreement with Mark G. Kachur. Mr. Wheatley's Employment Agreement
is for a term of three years and Mr. Kachur's Employment Agreement is for a term
of three years. The Employment Agreement with Mr. Wheatley provides for a base
salary of $200,000 and Mr. Kachur's Employment Agreement provides for a base
salary of $240,000. Both employment agreements provide for participation in the
Company's SEIP as well as other Company benefit programs, including group life
insurance, hospitalization and medical plans. The Employment Agreements also
provide for the grant of stock options under certain stock option plans, subject
to vesting requirements, and also provide for participation in a supplemental
deferred compensation arrangement. In the event of a change in control of the
Company, the Employment Agreements provide for a lump sum severance payment in
the amount of two years' cash compensation as well as continued participation in
Company benefit programs for two years following termination.
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<PAGE>
TERMINATION BENEFITS
On February 15, 1988, the Company entered into a Severance Compensation and
Consulting Agreement with Paul J. Powers. On September 28, 1989, the Company
entered into separate Severance Compensation Agreements with each of Gilbert M.
Manchester, William W. Cushwa, Steven J. Hewitt, Edward J. Barnard, Patrick C.
Reardon, Kenneth W. Marcum and Robert A. Calcagni. On June 25, 1992, the
Company entered into a Severance Compensation Agreement with John Gilchrist, on
July 20, 1992 with Bruce C. Wheatley, on March 25, 1995 with Mark G. Kachur and
on February 29, 1996 with Hubert Jacobs van Merlen. The Severance Compensation
and Consulting Agreement and the Severance Compensation Agreements are referred
to collectively as the "Agreements." The Agreements were the result of a
determination by the Board of Directors that it is appropriate and in the best
interest of the Company and its shareholders that, in the event of a possible
change in control of the Company, the stability and continuity of management
would be maintained, free of the distractions incident to any change in control.
For purposes of the Agreements, a "change in control" shall be deemed to
have occurred if (i) there shall be consummated (a) any consolidation or merger
of the Company in which the Company is not the continuing surviving corporation
or pursuant to which shares of the Company's Common Stock would be converted
into cash, securities or other property, other than a merger of the Company in
which the holders of the Company's Common Stock immediately prior to the merger
have substantially the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (b) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or (ii) the
shareholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person [as such term is
used in Section 13(d) and 14(d)(2) of the Exchange Act], other than the Company
or a subsidiary or any employee benefit plan sponsored by the Company or a
subsidiary, shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding securities
ordinarily (and apart from rights accruing in special circumstances) having the
right to vote in the election of directors, as a result of a tender or an
exchange offer, open market purchases, privately negotiated purchases or
otherwise, or (iv) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at least the
majority thereof, unless the election or the nomination for election by the
Company's shareholders of each new director during such two-year period is
approved by a vote of at least two-thirds of the directors then still in office
who were directors in the beginning of such two-year period.
Benefits are payable under the Agreements only if a change in control has
occurred and within two years after such change in control the officer's
employment is terminated involuntarily without cause or voluntarily by the
officer for reasons such as demotion, reduction in base salary, relocation, loss
of benefits or other changes. The principal benefits to be provided to Mr.
Powers under his Agreement are (i) a lump sum payment equal to two times his
annual cash compensation (base salary and incentive compensation), (ii)
continued participation in the
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<PAGE>
Company's employee benefit programs for three years following termination, and
(iii) a consulting fee equal to his annual cash compensation in consideration
for consulting services over a one-year period after termination. The principal
benefits to be provided to Messrs. Manchester, Cushwa, Hewitt, Barnard, Reardon,
Marcum, Jacobs van Merlen, Calcagni, Kachur, Wheatley, and Gilchrist under the
Agreements are (i) a lump sum payment equal to two times the officer's annual
cash compensation (base salary and incentive compensation) and (ii) continued
participation in the Company's employee benefit programs for two years following
termination. If the officer's termination occurs after age 62, separation
payments are reduced by a factor based upon the number of months remaining until
the officer reaches age 65. The Agreements are not employment agreements, and do
not impair the right of the Company to terminate the employment of the executive
with or without cause prior to a change in control, or the right of the
executive to voluntarily terminate his employment. Each Agreement generally
terminates on the earlier of the date on which the officer reaches age 65 or
five years from the date of the Agreement, provided that the term of the
Agreement will be automatically extended for additional one-year periods until
the officer reaches age 65 or the Company or the officer determines not to
extend the Agreement.
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<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of June 30, 1996 (unless a
different date is specified in the notes to the table) with respect to (a) each
current director of the Company, (b) each of the Named Executive Officers (as
defined in Item 402(a)(3) of Regulation S-K of the Exchange Act) and (c) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature Percent
of Beneficial of Voting
Name of Beneficial Owner Ownership Shares**
- ---------------------------------------- --------------------------------- ----------
<S> <C> <C>
William J. Bresnahan 300 *
Charles B. Cushwa III 220,380 (1)(4)(5) 1.48%
(8)(12)(16)
William W. Cushwa 238,925 (1)(2)(3)(4)(6)(7) 1.61%
(8)(13)(14)(16)(17)
John M. Galvin 5,750 (8) *
John Gilchrist 32,032 (8)(10)(14) *
Richard J. Hill 10,397 (8)(9) *
Neil D. Humphrey 6,635 (8)(9) *
Hubert Jacobs van Merlen 13,103 *
Mark G. Kachur 32,086 (8) *
William E. Kassling 5,000 *
Gerald C. McDonough 4,500 (8) *
C. Edward Midgley 10,000 *
Paul J. Powers 329,041 (2)(8)(10)(14) 2.22%
George M. Smart 2,750 (8) *
Don E. Tucker 136,855 (1)(2)(8)(11) *
Bruce E. Wheatley 34,714 (8)(15) *
All Directors and Executive Officers as 1,198,805 8.08%
a Group (19 people)
</TABLE>
*less than 1%
**Percent of All Voting Shares based on total outstanding Common Shares and
Preferred Shares as of July 19, 1996.
(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 - 947 shares; of Mr. William Cushwa - 26,308 shares; and of Mr.
Tucker - 1,146 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 - 4,347 shares;
Mr. Powers - 1,630 shares; and Mr. Tucker - 9,446 shares.
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(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.
(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 44,000 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.
(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 June 30, 1996 upon
exercise of options issued under the Company's Stock Option and Award Plans
as follows: Mr. Charles Cushwa - 2,250 shares; Mr. William Cushwa - 1,875
shares; Mr. Galvin - 2,250 shares; Mr. Gilchrist - 11,250 shares; Mr.
Hill - 2,250 shares; Mr. Humphrey - 1,500 shares; Mr. McDonough - 2,250
shares; Mr. Powers - 137,250 shares; Mr. Wheatley - 11,250 shares; Mr.
Kachur - 7,500 shares; Mr. Smart - 750 shares; and Mr. Tucker - 750 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. Hill -
3,147 shares; and Mr. Humphrey - 1,485 shares.
(10) Includes in each case 317 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.
Gilchrist - 441 shares; and Mr. Powers - 5,011 shares.
(11) Includes 206 Preferred Shares (fractional shares not shown) and 5,036
Common Shares (fractional shares not shown) credited by the Trustee acting
under the provisions of the Company's 401(k) plan.
(12) Includes 38,396 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.
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<PAGE>
(14) Includes in each case two 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 - 324 shares; Mr.
Gilchrist - 398 shares; and Mr. Powers - 719 shares.
(15) Includes 96 Preferred Shares (fractional shares not shown) and 1,890 Common
Shares (fractional shares not shown) held under the provisions of the
Company's 401(k) plan. Includes 110 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 75,000 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 300 Preferred Shares (fractional shares not shown) and 903 Common
Shares (fractional shares not shown) credited by the trustee acting under
the provisions of the Company's 401(K) Plan.
The information set forth above concerning the security holdings of the
beneficial owners is based on information received from the persons named. None
of such beneficial owners, directly or indirectly, owns beneficially any equity
securities of any subsidiary of the Company.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The name of any person or "group" (as that term is used in the Exchange
Act) known by the Company to be the beneficial owner of more than five percent
(5%) of any class of the Company's voting securities as of June 30, 1996 is set
forth below:
<TABLE>
<CAPTION>
Amount and
Title Name and Address Nature of Percent Percent of
of of Beneficial of All Voting
Class Beneficial Owner Ownership Class** Shares**
- ----------- ----------------------- ------------- -------- -----------
<S> <C> <C> <C> <C>
Common National City Bank N.E. 989,707 (1) 7.17% 6.67%
P.O. Box 450
Youngstown, OH 44501
Series B Mellon Bank N.A. 1,039,657 (2) 100.00% 7.00%
Preferred P.O. Box 444
Pittsburgh, PA 15230
</TABLE>
** Percentage of All Voting Shares and Percent of Class based on total
outstanding Common Shares and Preferred Shares as of July 19, 1996.
(1) This figure includes 172,409 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 1,597 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 644,032 shares and shared
voting power over 170,806 shares. National City Bank has sole investment
power over 277,613 shares and shared investment power over 712,094 shares.
(2) This figure represents all of the outstanding ESOP Convertible Preferred
Stock-Series B held of record by Mellon Bank N.A. (trustee) for the benefit
of participants in the ESOPs. 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.
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<PAGE>
SHAREHOLDER PROPOSALS
Proposals of security holders to be presented at the 1997 Annual Meeting of
shareholders of the Company must be in proper form and must be received by the
Company by October 1, 1996.
By Order of the Board of Directors,
Shirley M. Shields,
Secretary
Youngstown, Ohio
July __, 1996
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<PAGE>
INFORMATION AS TO DIRECTORS
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
William J. Bresnahan (45) President of Hynes Industries. 1995 1997
Mr. Bresnahan received his bachelor
of science degree in Business
Administration from Youngstown State
University and his master's degree in
Business Administration from the
University of Pittsburgh. He held
sales and marketing positions with
Proctor & Gamble and Pharmacia, Inc.
before joining Hynes Industries in
1980. He held sales and general
management positions at Hynes
Industries until he was named
President in 1989. Mr. Bresnahan is
a director of the Mahoning National
Bank, Youngstown, Ohio.
William W. Cushwa (58) Vice President Planning and Assistant 1975 1997
Treasurer of the Company. Mr. Cushwa
received his bachelor of arts degree
from the University of Notre Dame and
his master's degree in Business
Administration from Case Western
Reserve University. Mr. Cushwa joined
the Company in 1960, was elected
Assistant Treasurer in 1969, and
Director of Corporate Planning in 1977
and was elected to his current
position in 1983.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Neil D. Humphrey (67) President Emeritus of Youngstown 1985 1997
State University, having retired
as President in 1992 after eight
years in that position. Dr. Humphrey
received his bachelor of arts degree
from Idaho State University, his
master of science degree in Government
Management from the School of Business
Administration of the University of
Denver, and his doctorate degree in
Education from Brigham Young
University. His prior experience
includes 10 years as Chancellor of the
University of Nevada System. He also
served as Budget Director for the State
of Nevada.
C. Edward Midgley (58) Advisory Director, PaineWebber, 1995 1997
Incorporated. Mr. Midgley received
his bachelor of arts degree in
Economics from Princeton University and
his master's degree in Business
Administration from Harvard Business
School. Until 1994, he was Co-Head of
Investment Banking, Executive Managing
Director, Head of Mergers and
Acquisitions and Member of the Board of
Directors of Kidder, Peabody & Co.
Incorporated. He has served as Managing
Director, Partner and Head of
Corporate Finance/Client Coverage Group
at Bankers Trust Company; Vice Chairman,
Office of the Chief Executive at
Fieldcrest Cannon, Inc.; and Vice
Chairman at Amoskeag Company.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gerald C. McDonough (67) Retired in July 1988 as Chairman of 1992 1998
the Board of Directors and Chief
Executive Officer of Leaseway
Transportation Corporation.
Mr. McDonough received his bachelor's
degree in Business Administration from
Case Western Reserve University.
Mr. McDonough is a director of York
International, York, Pennsylvania,
Acme-Cleveland Corp., Cleveland, Ohio,
Brush-Wellman Corporation, Cleveland,
Ohio, and Associated Estates Realty
Corporation, Cleveland, Ohio, and a
Trustee of the Fidelity Funds, Boston,
Massachusetts.
Paul J. Powers (60) Chairman, President, Chief Executive 1984 1998
Officer and Chief Operating Officer of
the Company. Mr. Powers received his
bachelor's degree in Economics from
Merrimack College and his master's
degree in Business Administration from
George Washington University. Mr. Powers
joined the Company in 1982 as Group Vice
President of Hydraulics, was elected
President and Chief Operating Officer in
1984 and was elected Chairman and Chief
Executive Officer in 1987. Mr. Powers is
a director of Ohio Edison Company, Akron,
Ohio, Twin Disc, Inc., Racine, Wisconsin,
and Global Marine, Inc., Houston, Texas.
</TABLE>
-35-
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George M. Smart (50) President and Chairman of the Board 1995 1998
of Directors of Phoenix Packaging
Corporation. Mr. Smart received his
bachelor of science degree from The
Defiance College and his master's
degree in Business Administration from
Wharton School, University of
Pennsylvania. He was President and CEO
of Central States Can Co. from 1978 to
1993. He has been President and
Chairman of Phoenix Packaging
Corporation since 1993. Mr. Smart is a
director of Phoenix Packaging
Corporation, North Canton, Ohio,
Belden & Blake Corporation, North
Canton, Ohio, Ohio Edison Company,
Akron, Ohio, and The Defiance College,
Defiance, Ohio.
Don E. Tucker (67) Retired Senior Vice President and 1977 1998
Chief Administrative Officer of the
Company. Mr. Tucker received his
bachelor of arts degree from Aurora
College and his bachelor of law degree
from Yale University. Mr. Tucker joined
the Company in 1972 as General Counsel
and Assistant Secretary, was elected
Senior Vice President and Chief
Administrative Officer in 1984 and
retired in 1993. Mr. Tucker is a
director of Bank One Youngstown N.A.,
Youngstown, Ohio.
</TABLE>
-36-
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles B. Cushwa III, (61) Director of Cushwa Center for 1972 1999
Entrepreneurship, Youngstown State
University since 1988. Mr. Cushwa
received his bachelor of arts degree in
Sociology and his master of arts degree
in Economics from the University of
Notre Dame. Mr. Cushwa joined the
Company in 1961 and held various
management positions with the Company
until retiring in 1988 as the Secretary
of the Company. Mr. Cushwa is a director
of Home Savings and Loan Company of
Youngstown, Youngstown, Ohio.
John M. Galvin (63) Private Investor and consultant following 1993 1999
retirement in 1992. He was Vice Chairman
and director of The Irvine Company from
1987 to 1992. He received his bachelor's
degree in Business administration from
Indiana University. He has served as
President of the Rust Group of Austin,
Texas; as Senior Vice President of Aetna
Life and Casualty; and as Chief Executive
Officer of Aetna's International and
Diversified Business Division. Mr. Galvin
is a Director of Global Marine, Inc. of
Houston, Texas and Oasis Residential Inc.
of Las Vegas, Nevada.
</TABLE>
-37-
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
PRINCIPAL OCCUPATION OR ELECTED A TERM
NAME (AGE) EMPLOYMENT DIRECTOR EXPIRES
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard J. Hill (65) Retired in 1990 as Certified Public 1993 1999
Accountant with Hill, Barth & King,
CPAs, a regional certified public
accounting firm operating in Ohio,
Pennsylvania and Florida. Mr. Hill
formerly was a general partner and
chairman of the Executive Committee
of Hill, Barth & King. He received his
bachelor's degree in Business
Administration from Youngstown State
University. Mr. Hill is a director of
Penelmatic, Inc., Youngstown, Ohio.
William E. Kassling (51) Chairman, Chief Executive Officer 1996 1999
and President of Westinghouse Air Brake
Company. Mr. Kassling received his
bachelor of science degree in Industrial
Management from Purdue University and
his master's degree in Business
Administration.
</TABLE>
-38-
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The principal Executive Officers of the Company and their recent business
experience are as follows:
<TABLE>
<CAPTION>
Name Office Held Age
- --------------------------- ---------------------------------------------- ---
<S> <C> <C>
Paul J. Powers Chairman of the Board of Directors, President 60
and Chief Executive Officer
Hubert Jacobs van Merlen Senior Vice President and Chief Financial 41
Officer
Bruce C. Wheatley Senior Vice President-Administration 54
Mark G. Kachur Senior Vice President-Fluid Purification 52
Robert A. Calcagni Group Vice President-Building Systems and 55
Metal Products
John Gilchrist Group Vice President-Hydraulic Systems 50
William G. Welker Group Vice President 65
William W. Cushwa Vice President - Planning, Assistant 58
Treasurer & Director
Gilbert M. Manchester Vice President and General Counsel 51
Steven J. Hewitt Controller 46
</TABLE>
None of the Executive Officers are related and they are elected from year
to year or until their successors are duly elected and qualified.
All of the Executive Officers have been continuously employed by the
Company for more than five years except Mr. Mark Kachur and Mr. Bruce Wheatley.
<PAGE>
COMMERCIAL INTERTECH CORP.
THIS REVOCATION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS IN
OPPOSITION TO THE SOLICITATION OF AGENT DESIGNATIONS BY UNITED DOMINION
INDUSTRIES LIMITED
AND OPUS ACQUISITION CORPORATION
The undersigned shareholder, acting with regard to all common shares, par value
$1.00 per share (the "Common Shares"), of Commercial Intertech Corp., an Ohio
corporation, owned by such shareholder, hereby REVOKES any previously executed
Agent Designation requesting the call of a special meeting of shareholders (the
"Special Meeting") described in the Solicitation Statement of United Dominion
Industries Limited and Opus Acquisition Corporation dated July 24, 1996. THE
BOARD OF DIRECTORS STRONGLY RECOMMENDS THAT YOU REVOKE ANY PREVIOUSLY EXECUTED
AGENT DESIGNATION REQUESTING THE CALL OF THE SPECIAL MEETING BY PROPERLY
SIGNING, DATING AND RETURNING THIS REVOCATION CARD.
PLEASE SIGN THIS REVOCATION CARD EXACTLY AS
YOUR NAME APPEARS HEREON. IF SIGNING AS
ATTORNEY, ADMINISTRATOR, EXECUTOR, GUARDIAN
OR TRUSTEE, PLEASE GIVE TITLE AS SUCH. IF A
CORPORATION, THIS SIGNATURE SHOULD BE THAT
OF AN AUTHORIZED OFFICER WHO SHOULD STATE
HIS OR HER TITLE. IF A PARTNERSHIP, SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
Date: ________________, 1996
-----------------------------------------------
Signature
-----------------------------------------------
Signature if held jointly
PARTICIPANTS IN THE ESOPS CAN ONLY EXECUTE REVOCATION CARDS WITH RESPECT TO
SHARES HELD IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE ESOP TRUSTEE ON THE
FORM THAT WILL BE PROVIDED TO PARTICIPANTS FOR THAT PURPOSE. ESOP PARTICIPANTS
CANNOT EXECUTE REVOCATION CARDS WITH RESPECT TO SHARES ALLOCATED TO THEIR ESOP
ACCOUNT BY EXECUTING THE ACCOMPANYING GREEN REVOCATION CARD.
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN PLANS -- EMPLOYEE SAVINGS
AND STOCK PURCHASE PLAN]
CONFIDENTIAL INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IN OPPOSITION TO THE SOLICITATION OF AGENT DESIGNATIONS BY UNITED DOMINION
INDUSTRIES LIMITED AND OPUS ACQUISITION CORPORATION
The undersigned hereby directs the Trustee to revoke any Agent Designation
requesting the call of a special meeting of shareholders (the "Special Meeting")
described in the Solicitation Statement of United Dominion Industries Limited
and Opus Acquisition Corporation dated July 24, 1996, previously executed by the
Trustee in accordance with instructions provided by the undersigned with respect
to Common Shares of Commercial Intertech Corp. allocated to the undersigned's
account under the plan.
THE BOARD OF DIRECTORS STRONGLY RECOMMENDS THAT YOU REVOKE ANY PREVIOUSLY
EXECUTED INSTRUCTION CARD DIRECTING THE TRUSTEE TO EXECUTE AN AGENT DESIGNATION
BY PROPERLY SIGNING, DATING AND RETURNING THIS INSTRUCTION CARD.
PLEASE SIGN, DATE AND RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. THIS INSTRUCTION CARD WILL BE SEEN ONLY BY AUTHORIZED
PERSONNEL APPOINTED BY THE TRUSTEE.
Dated:______________, 1996 _____________________________________________
Signature of Participant
_____________________________________________
Social Security Number
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN PLANS -- NON-QUALIFIED
STOCK PURCHASE PLAN]
CONFIDENTIAL INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
NON-QUALIFIED STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IN OPPOSITION TO THE SOLICITATION OF AGENT DESIGNATIONS BY UNITED DOMINION
INDUSTRIES LIMITED AND OPUS ACQUISITION CORPORATION
The undersigned hereby directs the Trustee to revoke any Agent Designation
requesting the call of a special meeting of shareholders (the "Special Meeting")
described in the Solicitation Statement of United Dominion Industries Limited
and Opus Acquisition Corporation dated July 24, 1996, previously executed by the
Trustee in accordance with instructions provided by the undersigned with respect
to Common Shares of Commercial Intertech Corp. allocated to the undersigned's
account under the plan.
THE BOARD OF DIRECTORS STRONGLY RECOMMENDS THAT YOU REVOKE ANY PREVIOUSLY
EXECUTED INSTRUCTION CARD DIRECTING THE TRUSTEE TO EXECUTE AN AGENT DESIGNATION
BY PROPERLY SIGNING, DATING AND RETURNING THIS INSTRUCTION CARD.
PLEASE SIGN, DATE AND RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. THIS INSTRUCTION CARD WILL BE SEEN ONLY BY AUTHORIZED
PERSONNEL APPOINTED BY THE TRUSTEE.
Dated: _____________, 1996 _____________________________________________
Signature of Participant
_____________________________________________
Social Security Number
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
EMPLOYEE STOCK OWNERSHIP PLAN]
CONFIDENTIAL INSTRUCTIONS TO: MELLON BANK N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
EMPLOYEE STOCK OWNERSHIP PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IN OPPOSITION TO THE SOLICITATION OF AGENT DESIGNATIONS BY UNITED DOMINION
INDUSTRIES LIMITED AND OPUS ACQUISITION CORPORATION
The undersigned hereby directs the Trustee to revoke any Agent Designation
requesting the call of a special meeting of shareholders (the "Special Meeting")
described in the Solicitation Statement of United Dominion Industries Limited
and Opus Acquisition Corporation dated July 24, 1996, previously executed by the
Trustee in accordance with instructions provided by the undersigned with respect
to Common Shares of Commercial Intertech Corp. allocated to the undersigned's
account under the plan.
THE BOARD OF DIRECTORS STRONGLY RECOMMENDS THAT YOU REVOKE ANY PREVIOUSLY
EXECUTED INSTRUCTION CARD DIRECTING THE TRUSTEE TO EXECUTE AN AGENT DESIGNATION
BY PROPERLY SIGNING, DATING AND RETURNING THIS INSTRUCTION CARD.
PLEASE SIGN, DATE AND RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. THIS INSTRUCTION CARD WILL BE SEEN ONLY BY AUTHORIZED
PERSONNEL APPOINTED BY THE TRUSTEE.
Dated: _____________, 1996 _____________________________________________
Signature of Participant
_____________________________________________
Social Security Number
NOTE: Please sign your name exactly as it appears in print. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such.
<PAGE>
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN]
CONFIDENTIAL INSTRUCTIONS TO: MELLON BANK N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IN OPPOSITION TO THE SOLICITATION OF AGENT DESIGNATIONS BY UNITED DOMINION
INDUSTRIES LIMITED AND OPUS ACQUISITION CORPORATION
The undersigned hereby directs the Trustee to revoke any Agent Designation
requesting the call of a special meeting of shareholders (the "Special Meeting")
described in the Solicitation Statement of United Dominion Industries Limited
and Opus Acquisition Corporation dated July 24, 1996, previously executed by the
Trustee in accordance with instructions provided by the undersigned with respect
to Common Shares of Commercial Intertech Corp. allocated to the undersigned's
account under the plan.
THE BOARD OF DIRECTORS STRONGLY RECOMMENDS THAT YOU REVOKE ANY PREVIOUSLY
EXECUTED INSTRUCTION CARD DIRECTING THE TRUSTEE TO EXECUTE AN AGENT DESIGNATION
BY PROPERLY SIGNING, DATING AND RETURNING THIS INSTRUCTION CARD.
PLEASE SIGN, DATE AND RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. THIS INSTRUCTION CARD WILL BE SEEN ONLY BY AUTHORIZED
PERSONNEL APPOINTED BY THE TRUSTEE.
Dated: _____________, 1996 _____________________________________________
Signature of Participant
_____________________________________________
Social Security Number
NOTE: Please sign your name exactly as it appears in print. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such.
