<PAGE> 1
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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
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
RESOURCE GENERAL
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
RESOURCE GENERAL
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / 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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<PAGE> 2
RESOURCE GENERAL CORPORATION
2365 Scioto Harper Drive
Columbus, Ohio 43204
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1996
AT 5:15 P.M.
To The Shareholders of
RESOURCE GENERAL CORPORATION
A special meeting of the shareholders of Resource General Corporation
will be held at 2365 Scioto Harper Drive, Columbus, Ohio 43204 on May 28, 1996
at 5:15 p.m. for the purpose of authorizing two proposed stock purchases which
will, if consummated, result in a change in control of Resource General
Corporation.
The Board of Directors has fixed the close of business on April 28,
1996, as the record date for the determination of shareholders entitled to
notice and to vote at the special meeting or any adjournment thereof.
By Order of the Board of Directors
of Resource General Corporation
Charles T. Sherman, Secretary
May 3, 1996
Columbus, Ohio
- -----------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE SPECIAL MEETING AND TO
VOID THE POSSIBLE EXPENSE OF ADDITIONAL PROXY SOLICITATION, YOU ARE ASKED TO
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE.
IF YOU ATTEND THE SPECIAL MEETING, THE PROXY WILL NOT BE USED, IF YOU SO
REQUEST.
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1
<PAGE> 3
RESOURCE GENERAL CORPORATION
2365 SCIOTO HARPER DRIVE
COLUMBUS, OHIO 43204
PROXY STATEMENT
FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 28, 1966
MAY 3, 1996
A Special Meeting of the Shareholders of Resource General Corporation (the
"Company") will be held on May 28, 1996 (the "Special Meeting") for the purpose
of authorizing two proposed stock purchases (the "Proposed Acquisitions"), the
consummation of which will result in a change in control of the Company. The
Company expects that this proxy statement and the accompanying form of proxy
will be mailed to each shareholder of record on or about May 3, 1996. This
proxy statement is furnished in connection with the solicitation by the
Company's Board of Directors (the "Board") of proxies to be used at the Special
Meeting and at any adjournment thereof.
Enclosed with this statement is another proxy statement (the "Annual Meeting
Proxy Statement") furnished by the Company in connection with its solicitation
of proxies to be used for the Annual Meeting of Shareholders of the Company to
be held on May 28, 1996, and at any adjournments thereof (the "Annual
Meeting"). The Annual Meeting will be held for the purpose of amending the
Articles of Incorporation, amending the Code of Regulations and electing
directors, Robert S. Ryan, Charles T. Sherman and Howard Daniel Smith for a
term of three years and for the transaction of such other business as may come
before the Annual Meeting.
A proxy for the Special Meeting is enclosed. Any proxy given may be revoked by
a shareholder at any time before it is exercised by filing with the Company a
notice in writing revoking it or by duly executing a proxy bearing a later
date. Proxies also may be revoked by any shareholder present at the Special
Meeting who expresses a desire to vote his or her shares in person. Subject to
such revocation and except as otherwise stated herein or in the form of proxy,
all proxies duly executed and received prior to, or at the time of, the Special
Meeting will be voted in accordance with the specifications of the proxies. If
no specification is made, proxies will be voted _____ the Proposed Acquisitions
(see "Proposed Change in Control Transactions").
OUTSTANDING SHARES AND VOTING RIGHTS
Outstanding Shares
There were 1,086,020 shares of the Company's Common Stock outstanding on April
28, 1996, which date has been set as the record date for the purpose of
determining shareholders entitled to notice of, and to vote at, the Special
Meeting.
Voting Rights
2
<PAGE> 4
On any matter submitted to a shareholder vote, each holder of Common Stock
will be entitled to one vote, in person or by proxy, for each share of Common
Stock registered in his or her name on the books of the Company as of the
record date. Under Ohio law and the Company's Code of Regulations, the
aggregate number of votes entitled to be cast by all shareholders present in
person or represented by proxy at the meeting, whether those shareholders vote
for, against or abstain from voting on any matter, will be counted for purposes
of determining the minimum number of affirmative votes required for approval of
such matters, and the total number of votes cast for each of these matters will
be counted for purposes of determining whether sufficient votes have been cast.
Abstentions, withheld votes and broker non-votes with respect to a matter by a
shareholder present in person, or represented by proxy at the Special Meeting
will have the same legal effect as a vote against the matter.
SHARE HOLDINGS OF DIRECTORS AND OFFICERS
The following table sets forth the number and percentage of the outstanding
shares of Common Stock held by each person who, to the knowledge of the
Company, beneficially owns more than 5% of the outstanding shares of Common
Stock, by each of the Company's directors, nominees and executive officers and
by all of the directors and executive officers of the Company as a group.
Except as set forth in the footnotes to the table, the shareholders have sole
voting and investment power over such shares.
SHARE HOLDINGS OF DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
Shares Percent of Shares Under Ownership
of Stock Common Option Deemed Assuming
Beneficially Stock Owned Under Exercise
Name Owned Outstanding SEC Rules Of Options
---- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Lyman Brownfield, Director 254,056(1) 23.4% 15,000 24.8%
341 S. Third Street Suite 10
Columbus, Ohio 43215
Bob Binsky, Director 139,874 12.9% 20,000 14.7%
1973 Corvair Avenue
Columbus, Ohio 43207
Donald S. Boston, Jr., Director 5,000 0.5% 20,000 2.3%
Richard R. Corna, Director 2,700 0.2% 20,000 2.1%
Robert S. Ryan, Director & Officer 10,056 0.9% 20,000 2.8%
Terry L. Sanborn, Director - 0 - 20,000 1.8%
Charles T. Sherman 83,470(2) 7.7% 19,000 9.4%
Director and Secretary
2365 Scioto Harper Drive
Columbus, Ohio 43204
Howard Daniel Smith, Director 9,500 0.9% 20,000 2.7%
Candace Brownfield, Secretary 40,000(3) 3.7% 20,000 5.5%
3310 Creek Rd.
Sunbury, OH 43074
- ----------------------------------------------------------------------------------------
All officers and directors 544,656 50.2% 174,000 66.2%
</TABLE>
3
<PAGE> 5
Nine persons, including
those named above
(1) includes 254, 056 shares owned beneficially and of record by Mr. Brownfield
of which 200,000 shares are assigned as collateral for a loan and by Mr.
Brownfield's wife, as to the latter of which he disclaims any beneficial
interest.
(2) Includes 14,220 shares owned by Mr. Sherman's parents.
(3) 20,000 shares were transferred to Charlotte Huddle Trustee on January 2,
for which Ms. Brownfield disclaims any beneficial interest.
PROPOSAL NO. 1
PROPOSED CHANGE IN CONTROL TRANSACTIONS
BACKGROUND
On April 12, 1996, Bob Binsky, Michael Gardner, Theodore P. Schwartz, Charles
T. Sherman and Kenneth J. Warren (the "Purchase Group") delivered to the
Company an Acquiring Person Statement, and on April 17, 1996 the Purchase Group
delivered to the Company an amended Acquiring Person Statement, the latter of
which is attached hereto as Exhibit I, reporting the execution of two stock
purchase agreements, the consummation of which will give the Purchase Group
more than 50% beneficial ownership of the Company's Common Stock (the "Proposed
Acquisitions"). Mr Schwartz, Mr. Sherman and Mr. Gardner are executive
officers of PH Hydraulics and Automation, Inc., a wholly-owned subsidiary of
the Company, and Mr. Binsky and Mr. Sherman are directors of the Company. The
Purchase Group is an informal association of individuals whose sole business
purpose is the acquisition of the Common Stock of the Company. The Purchase
Group may, however, form an entity to be the actual purchaser of the Common
Stock. In accordance with Section 1701.831 of the Ohio Revised Code, the
Proposed Acquisitions must be authorized by the shareholders of the Company at
a Special Meeting.
THE DISCUSSION OF THE PROPOSED CHANGE IN CONTROL TRANSACTIONS IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE ACQUIRING PERSON STATEMENT ATTACHED HERETO AS
EXHIBIT I.
PROPOSED ACQUISITIONS
Mr. Schwartz and Mr. Sherman entered into an agreement to purchase 200,000
shares of Common Stock (the "Gillmore Shares") from Paul Gillmore on March 25,
1996, as revised on April 3, 1996 (the "Gillmore Agreement"). The purchase
price for the Gillmore Shares is $1.25 per share for an aggregate purchase
price of $250,000. Forty Thousand of the Gillmore Shares will be purchased
with a down payment of $50,000. The purchase of the remaining Gillmore Shares
will be financed by Mr. Gillmore. Mr. Schwartz and Mr. Sherman will execute a
promissory note payable to Mr. Gillmore providing for repayment of the
remaining $200,000 in sixteen quarterly payments. The quarterly payments will
be $6,250 for the first year, $12,500 for the second and third years and
$18,750 for the fourth year. Interest will be paid on the unpaid balance of
the promissory note at the rate of four percent per annum. Five Thousand
Gillmore Shares will be transferred upon each quarterly payment in the first
year, 10,000 Gillmore Shares will be transferred upon each quarterly payment in
the second and third years and 15,000 Gillmore Shares will be transferred upon
each quarterly payment in the fourth year. Mr.
4
<PAGE> 6
Schwartz and Mr. Sherman have also agreed to grant Mr. Gillmore an option to
purchase 20,000 shares of Common Stock. The voting power of all of the
Gillmore Shares will be transferred to Mr. Schwartz and Mr. Sherman upon
payment of the down payment and execution of the promissory note.
Mr. Schwartz and Mr. Sherman entered into an agreement to purchase 110,000
shares of Common Stock (the "Brownfield Shares") from Lyman Brownfield (a
Director of the Company and, from 1986 until August 1, 1995, President of the
Company), Candace Brownfield (Secretary of the Company) and Charlotte Huddle
(collectively, the "Brownfield Family") on March 28, 1996, as revised on April
2, 1996 (the "Brownfield Agreement"). The purchase price for the Brownfield
Shares is $1.25 per share for an aggregate purchase price of $137,500. Twenty
Thousand of the Brownfield Shares will be purchased with a down payment of
$25,000. The purchase of the remaining Brownfield Shares will be financed by
the Brownfield Family. Mr. Schwartz and Mr. Sherman will execute a promissory
note payable to the Brownfield Family providing for repayment of the remaining
$112,500 in twenty quarterly payments. The quarterly payments will be $2,800
for the first year, $5,625 for the second, third and fourth years and $8,437.50
for the fifth year. Interest will be paid quarterly on the unpaid balance of
the promissory note at the rate of four percent per annum. Two Thousand Two
Hundred Fifty Brownfield Shares will be transferred upon each quarterly payment
in the first year, 4,500 Brownfield Shares will be transferred upon each
quarterly payment in the second, third and fourth years and 6,750 Brownfield
Shares will be transferred upon each quarterly payment in the fifth year. The
voting power of all of the Brownfield Shares will be transferred to Mr.
Schwartz and Mr. Sherman upon payment of the down payment and execution of the
promissory note. Finally, Mr. Brownfield and Ms. Brownfield have executed an
agreement to vote all shares of Common Stock owned by them, or with respect to
which they have the power to vote, in favor of the Proposed Acquisitions at the
Special Meeting.
Notwithstanding the foregoing, to fund the debt due under the Gillmore Agreement
and the Brownfield Agreement, the Purchaser Group is contemplating the sale of
a portion of its Common Stock to an employee Stock ownership plan to be formed
by the Company.
All payments required under the Gillmore Agreement and the Brownfield Agreement
will be financed with the personal funds of the members of the Purchase Group.
Each member of the Purchase Group has verbally agreed to contribute the
percentage of the total payments shown in the following Table required by the
Gillmore Agreement and the Brownfield Agreement and is entitled to receive a
corresponding percentage of the total number of shares purchased.
<TABLE>
<CAPTION>
Total
Member of Principal
Purchase Group Percentage Payments
-------------- ---------- --------
<S> <C> <C>
Bob Binsky 30.080% $116,560
Michael W. Gardner 5.000% $ 19,375
Theodore P. Schwartz 31.665% $122,702
Charles T. Sherman 31.665% $122,702
Kenneth J. Warren 1.590% $ 6,161
-------------------------------------------------------
TOTALS 100% $387,500
</TABLE>
5
<PAGE> 7
SHARE OWNERSHIP OF THE PURCHASE GROUP
The following table shows the common Stock that is currently beneficially owned
by each member of the Purchase Group, the Common Stock that each member of the
Purchase Group has a right to purchase under the Gillmore Agreement and the
Brownfield Agreement and the aggregate shares of Common Stock that each member
of the Purchase Group will own if all the Common Stock is purchased under the
Gillmore Agreement and the Brownfield Agreement. The total shares for Mr.
Binsky and Mr. Sherman included 20,000 and 19,000 unissued shares,
respectively, which are the subject of currently issued but not exercised stock
options. As of April 28, 1996, there were 1,086,020 shares of Common Stock
issued and outstanding. Finally, the bottom line of the table shows the
same information for the Purchase Group as a whole.
<TABLE>
<CAPTION>
CURRENTLY BENEFICIALLY RIGHT TO PURCHASE AGGREGATE
---------------------- ----------------- ------------------
OWNED
-----
NAME NUMBER PERCENTAGE NUMBER PERCENTAGE NUMBER PERCENTAGE
- ---- ------ ---------- ------ ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bob Binsky 159,874 14.7% 93,248.0 8.6% 253,122.0 23.3%
Michael W. 1,000 0.1% 15,500.0 1.4% 16,500.0 1.5%
Gardner
Theodore P. 12,848 1.2% 98,161.5 9.1% 111,009.5 10.2%
Schwartz
Charles T. 102,670 9.5% 98,161.5 9.1% 200,831.5 18.5%
Sherman
Kenneth J. 0 0.0% 4,929.0 0.5% 4,929.0 0.5%
Warren
- ------------------------------------------------------------------------------
TOTAL 276,392 25.4% 310,000.0 28.5% 586,392.0 54.0%
</TABLE>
CONTROL SHARE ACQUISITION LAW
Section 1701.831 of the Ohio Revised Code (the "Control Share Acquisition Law")
provides that unless the articles of incorporation or the regulations of the
issuing public corporation provide otherwise, any control share acquisition of
such corporation shall be made only with the prior authorization of the
shareholders in accordance with the provisions of the Control Share Acquisition
Law. An "issuing public corporation" is defined as a corporation organized for
profit under the laws of Ohio, with 50 or more shareholders that has its
principal place of business, principal executive offices or assets having
substantial value or a substantial percentage of its assets in Ohio, and as to
which no valid close corporation agreement exists. The Company is an issuing
public corporation, as so defined.
A "control share acquisition" means the acquisition, directly or indirectly, by
any person of shares of an issuing public corporation that, when added to all
other shares of the issuing public corporation in respect of which such person
may exercise or direct the exercise of voting power, would entitle such person,
immediately after such acquisition, directly or indirectly, alone or with
others, to control any of the following ranges of voting power of such issuing
public corporation in the election of directors: (a) one-fifth or more but
less than one-third of such voting power; (b) one-third or more but less than
a majority of such voting power; or (c) a majority or more of such voting
power. A "person" includes two or more persons having a joint or common
interest. An acquisition of shares of an issuing public corporation, however,
does not constitute a control share acquisition if, among other things, the
acquisition is consummated by bequest, inheritance, operation of law upon death
of an individual, transfer without consideration, pursuant to the satisfaction
of a pledge or other security interest created
6
<PAGE> 8
in good faith and not in circumvention of law or pursuant to a merger,
consolidation, combination or majority share acquisition effected in compliance
with the Ohio Revised Code if the issuing public corporation is the surviving
or new corporation in the merger or consolidation or is the acquiring
corporation in the combination or majority share acquisition.
A person who proposes to make a control acquisition must deliver an "acquiring
person statement" to the issuing public corporation, which statement shall
include: (a) the identity of the acquiring person, (b) a statement that the
acquiring person statement is given pursuant to the Control Share Acquisition
Law, (c) the number of shares of the issuing public corporation owned, directly
or indirectly, by the acquiring person, (d) the range of voting power in the
election of directors under which the proposed acquisition would, if
consummated, fall (i.e., in excess of 20%, 331/3% or 50%), (e) a reasonably
detailed description of the terms of the proposed acquisition and (f)
representations of the acquiring person that the acquisition will not be
contrary to law and that the acquiring person has the financial capacity to
make the proposed acquisition (including the reasonably detailed facts upon
which such representations are based). The Purchase Group delivered an
Acquiring Person Statement to the Company on April 12, 1996 and delivered an
amended Acquiring Person Statement attached hereto as Exhibit II to the Company
on April 17, 1996.
Within ten days of receipt of a qualifying acquiring person statement, the
directors of the issuing public corporation must call a special shareholders
meeting to vote on the proposed acquisition. Unless the acquiring person
otherwise agrees, the meeting must be held within 50 days of receipt of receipt
of such statement. However, the acquiring person may request (but the Purchase
Group did not) at the time the acquiring person statement is delivered that the
meeting be held no sooner than 30 days after the receipt of such statement.
The special meeting cannot be held later than certain other special meetings of
shareholders called by the issuing public corporation in compliance with the
Ohio Revised Code after receipt of a qualifying acquiring person statement.
The issuing public corporation is required to send a notice of the special
meeting as promptly as reasonably practicable to all shareholders of record as
of the record date set for such meeting, together with a copy of the acquiring
person statement and a statement by the issuing public corporation, authorized
by its directors, of its position or recommendation, or that it is taking no
position or making no recommendation, with respect to the proposed control
share acquisition.
The acquiring person may make the proposed share acquisition only if (a) at a
meeting of the shareholders at which a quorum is present, shareholders holding
a majority of the voting power entitled to vote in the election of directors
represented (in person or by proxy) at such meeting and shareholders holding a
majority of such voting power excluding "Interested Shares" authorize the
control share acquisition and (b) such acquisition is consummated in accordance
with the terms so authorized, within 360 days following such authorization. A
quorum is present if at least a majority of the voting power in the election of
directors, and a majority of the portion of such voting power excluding the
voting power of "Interested Shares" present, in person or by proxy.
"Interested Shares" is defined in the Ohio Revised Code to mean shares of the
issuing public corporation as to which any of the following may exercise or
direct the exercise of voting power in the election of directors: (i) an
acquiring person, (ii) any officer of the issuing public corporation elected or
appointed by the directors of the issuing public corporation and (iii) any
employee of the issuing public corporation who is also a director of such
corporation. "Interested Shares" also means shares of the issuing public
corporation acquired, directly or
7
<PAGE> 9
indirectly, by any person or group for valuable consideration during the period
beginning with the date of the first public disclosure of a proposed control
acquisition of the issuing public corporation or any proposed merger,
consolidation or other transaction which would result in a change in control of
the corporation or all or substantially all of its assets, and ending on the
date of any special meeting of the corporation's shareholders held thereafter
pursuant to the Control Share Acquisition Law for the purpose of voting on a
control share acquisition proposed by an acquiring person, if either of the
following apply: (i) the aggregate consideration paid or otherwise given by the
person who acquired the shares, and any other persons acting in concert with
such person, for all shares exceeds $250,000 or (ii) the number of shares
acquired by the person who acquired the shares, and any other persons acting in
concert with such person, exceeds 1/2 of 1% of the outstanding shares of the
corporation entitled to vote in the election of directors.
No proxy appointed for or in connection with the shareholder authorization of a
control share acquisition is valid if it provides that it is irrevocable or if
it is sought, appointed and received other than both: (i) in accordance with
all applicable requirements of Ohio and federal law, and (ii) separate and
apart from the sale or purchase, contractor or tender for sale or purchase, or
request or invitation for tender for sale or purchase, of shares of the issuing
public corporation. Dissenters' rights are not available to shareholders of an
issuing public corporation in connection with the authorization of a control
share acquisition.
THE PRECEDING DISCUSSION IS ONLY A SUMMARY OF THE CONTROL SHARE ACQUISITION LAW
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PROVISIONS OF SECTIONS
1701.831 AND 1701.01 OF THE OHIO REVISED CODE ATTACHED HERETO AS EXHIBIT II.
RECOMMENDATION AND VOTE
The consummation of the transactions contemplated by the Gillmore Agreement and
the Brownfield Agreement is subject to shareholder approval under the Control
Share Acquisition Law. Specifically, the Proposed Acquisitions must, at a
meeting at which a quorum is present, be authorized by (i) shareholders holding
a majority of the voting power entitled to vote in the election of directors
represented (in person or by proxy) at such meeting and (ii) shareholders
holding a majority of such voting power excluding Interested Shares.
THE BOARD OF DIRECTORS UNANIMOUSLY VOTED TO TAKE NO RECOMMENDATION WITH RESPECT
TO THE PROPOSED ACQUISITIONS. MR. BINSKY, MR. BROWNFIELD AND MR. SHERMAN
ABSTAINED FROM THE BOARD'S CONSIDERATION OF THE PROPOSED ACQUISITION.
SHAREHOLDERS PROPOSALS
Any proposals of shareholders which are intended to be presented at the next
annual meeting of shareholders must be received by the Company at its principal
executive offices by December 2, 1996. Such proposals may be included in next
year's proxy statement if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
EXPENSES OF SOLICITATION
The entire expenses of preparing, assembling, printing and mailing the proxy
form and the form of material used in the solicitation of proxies will be paid
by the Company. The Company does
8
<PAGE> 10
not expect to pay any compensation for the solicitation of proxies.
OTHER MATTERS
The Board knows of no other matters to be presented at the Special Meeting. If
any other matter is properly brought before the Special Meeting, it is the
intention of the persons named in the proxy to vote in their discretion upon
such matters in accordance with their judgement.
YOU ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED IF THE ENVELOPE IS MAILED WITHIN THE UNITED
STATES. IF YOU SUBSEQUENTLY DECIDE TO ATTEND THE SPECIAL MEETING AND WISH TO
VOTE YOUR SHARES IN PERSON, YOU MAY DO SO. YOUR COOPERATION IN GIVING THIS
MATTER YOUR PROMPT ATTENTION IS APPRECIATED.
BY ORDER OF THE BOARD OF DIRECTORS
CHARLES T. SHERMAN, SECRETARY
9
<PAGE> 11
EXHIBIT I
ACQUIRING PERSON STATEMENT WITH RESPECT TO
RESOURCE GENERAL CORPORATION
1. The identity of the acquiring person (the "Acquiring Person") is an
association of Bob Binsky, Michael w. Gardner, Theodore P. Schwartz, Charles
t. Sherman, and Kenneth J. Warren. The individuals making up the acquiring
person may, prior to the consummation of the proposed control share
acquisition, form an entity which will be the actual purchaser of the subject
shares.
2. This Acquiring Person Statement is given pursuant to Section 1701.831 of
the Ohio Revised Code ("ORC").
3. As of April 11, 1996, the Acquiring Person owned directly or indirectly,
276,392 shares of common stock, without par value ("Common Shares"), of
Resource General Corporation (the "Issuing Public Corporation") (including
39,000 unissued shares subject to currently issued but unexercised options).
4. If the proposed control share acquisition is consummated, the voting power
acquired by the Acquiring Person would be more than a majority of such voting
power as set forth in ORC Section 1701.01(Z)(1).
5. The Acquiring Person intends to consummate the control share acquisition by
purchasing 310,000 Common Shares from Lyman Brownfield, Charlotte Huddle,
Candace Brownfield and Paul Gillmore.
On March 25, 1996, Mr. Schwartz and Mr. Sherman entered into an agreement to
purchase 200,000 shares of Common Stock (the "Gillmore Shares") from Paul
Gillmore (the "Gillmore Agreement"). No Gillmore Shares have yet been
purchased. The total purchase price for the Gillmore Shares is $250,000 ($1.25
per share). Forty Thousand of the Gillmore Shares will be purchased and
transferred with a down payment of $50,000. The purchase of the remaining
160,000 Gillmore Shares will be financed by Mr. Gillmore. Mr. Schwartz and Mr.
Sherman will execute a promissory note payable to Mr. Gillmore providing for
repayment of the remaining $200,000 in 16 quarterly payments. The quarterly
payment for the first year will be $6,250, the quarterly payments for the
second and third years will be $12,500 and the quarterly payments for the
fourth year will be $18,750. Interest will be paid on the unpaid balance of
the note at the rate of four percent per annum. Upon receipt of each quarterly
payment, 5,000 Gillmore Shares will be transferred the first year, 10,000
Gillmore Shares will be transferred in the second and third years and 15,000
Gillmore Shares per quarter will be transferred in the fourth year. However,
the power to vote all of the remaining Gillmore Shares will be transferred to
Mr. Schwartz and Mr. Sherman when the promissory note for the remaining
Gillmore Shares is executed. In addition, Mr. Schwartz and Mr. Sherman have
agreed to grant Mr. Gillmore an option for 20,000 Common Shares owned by the
Acquiring Person.
On March 25, 1996, Mr. Schwartz and Mr. Sherman also entered into an agreement
to purchase 110,000 shares of Common Stock (the "Brownfield Shares") from Mr.
Lyman Brownfield and Ms. Candace Brownfield (the "Brownfield Agreement"). No
Brownfield Shares have yet been purchased. The total purchase price for the
Brownfield Shares is $137,500 ($1.25
10
<PAGE> 12
per share). Twenty thousand Brownfield Shares will be purchased and
transferred with a down payment of $25,000. The remaining Brownfield Shares
will be purchased over a five-year period, with 9,000 Brownfield Shares being
purchased in year one, 18,000 Brownfield Shares being purchased in each of
years two, three and four and 27,000 Brownfield Shares being purchased in year
five. The purchase of the 90,000 Brownfield Shares will be financed by Mr.
Brownfield. Mr. Schwartz and Mr. Sherman will execute a promissory note
payable to Mr. Brownfield in the amount $112,500. The promissory note will be
repayable in quarterly installments at an interest rate of four percent per
annum. As each quarterly payments is made, 25 percent of the Brownfield Shares
allocable to the year in which the Brownfield Shares are purchased will be
transferred to Mr. Schwartz and Mr. Sherman. However, the power to vote all of
the remaining Brownfield Shares will be transferred to Mr. Schwartz and Mr.
Sherman the promissory note for the remaining Brownfield Shares is executed.
Mr. Schwartz and Mr. Sherman have also agreed to give Mr. Brownfield an option
for 20,000 Common shares owned by the Acquiring Person.
All payments required by the Gillmore Agreement and the Brownfield Agreement
($387,500) will be financed with the personal funds of the individuals making
up the Acquiring Person. Each such individual has orally agreed to contribute a
percentage of the total payments required by the Gillmore Agreement and the
Brownfield Agreement and, in turn, each such individual will acquire a
corresponding percentage of the total Common Shares being acquired (310,000
shares). Mr. Binsky will finance approximately 30.08 percent of the total
payments ($116,560), Mr Gardner will finance approximately 5 percent of the
total payments ($19,375), Mr. Schwartz will finance approximately 31.665
percent of the total payments ($122,702), Mr. Sherman will finance
approximately 31.665 percent of the total payments ($112,702) and Mr. Warren
will finance approximately 1.59 percent of the total payments ($6,161). Each
of the Acquiring Persons will be responsible for the amounts due under the
Gillmore Agreement and the Brownfield Agreement on a several, but not joint,
basis.
The Acquiring Person represents that any common Shares purchased pursuant to
the control share acquisition will be purchased for its own account and not
with a view to the distribution thereof, except to the extent such distribution
is pursuant to exemption from, or compliance with, the registration and
prospectus delivery requirements of the Securities Act of 1933 and the
registration requirements of ORC Chapter 1707.
6. The Acquiring Person represents and warrants that the proposed control
share acquisition, if consummated, will not be contrary to law. The proposed
control share acquisition will be made in compliance with all federal and state
securities laws. The Acquiring Person has no interest in any other corporation
or business or entity which would violate state or federal antitrust laws or
state or federal securities laws.
The Acquiring Person further represents that the Acquiring Person has the
financial capacity to make the proposed control share acquisition. Mr. Binsky
is the Chairman of the Board of Cable Link, Inc. a public corporation,
receives annual compensation from such company of $100,000 and has sufficient
liquid assets and borrowing capacity to finance his respective percentage of
the total payments required by the Gillmore Agreement and the Brownfield
Agreement. Mr. Schwartz and Mr. Sherman have been executive officers of PH
Hydraulics, a subsidiary of the Issuing Public Corporation, for the past six
and nine years respectively, have salaries of $75,000 and $99,225 respectively,
and have sufficient liquid assets and borrowing capacity to finance their
respective percentages of the total payments required by the Gillmore Agreement
and the Brownfield Agreement. Mr. Gardner has been a
11
<PAGE> 13
Vice President of PH Hydraulics for nine years with a current annual salary of
$63,000 and has sufficient liquid assets and borrowing capacity to finance his
respective percentage of the total payments required by the Gillmore Agreement
and the Brwonfield Agreement. Mr. Warren has been a licensed practicing
attorney for over 29 years and has a sufficient salary, liquid assets and
borrowing capacity to finance his percentage of the total payments required by
the Gillmore Agreement and the Brownfield Agreement.
IN WITNESS WHEREOF, the undersigned Acquiring Person has caused this
Acquiring Person Statement to be executed as of the 11th day of April, 1996.
ACQUIRING PERSON
Signed by Bob Binsky
_____________________________________________
Bob Binsky
Signed by Michael W. Gardner
_____________________________________________
Michael W. Gardner
Signed by Theodore P. Schwartz
_____________________________________________
Theodore P. Schwartz
Signed by Charles T. Sherman
_____________________________________________
Charles T. Sherman
Signed by Kenneth J. Warren
_____________________________________________
Kenneth J. Warren
12
<PAGE> 14
EXHIBIT II
SECTIONS 1701.01 AND 1701.831 OF THE
OHIO REVISED CODE
1701.01 DEFINITIONS
As used in sections 1701.01 to 1701.98 of the Revised Code, unless the context
otherwise requires:
(A) "Corporation" or "domestic corporation" means a corporation for profit
formed under the laws of this state.
(B) "Foreign corporation" means a corporation for profit formed under the laws
of another state, and "foreign entity" means an entity formed under the laws of
another state.
(C) "State" means the United States; any state, territory, insular possession,
or other political subdivision of the United States, including the District of
Columbia; any foreign country or nation; and any province, territory, or other
political subdivision of such foreign country or nation.
(D) "Articles" includes original articles of incorporation, agreements of
merger or consolidation if and only to the extent that articles of
incorporation are adopted or amended in the agreements as provided in this
chapter, certificates or reorganization, amended articles, and amendments to
any of these, and, in the case of a corporation created before September 1,
1851, the special charter and any amendments to it made by special act of the
general assembly or pursuant to general law.
(E) "Incorporator" means a person who signed the original articles of
incorporation.
(F) "Shareholder" means a person whose name appears on the books of the
corporation as the owner of shares of such corporation. Unless the articles,
the regulations, or the contract of subscription otherwise provides,
"shareholder" includes a subscriber to shares, whether the subscription is
received by the incorporators or pursuant to authorization by the directors,
and such shares shall be deemed to be outstanding shares.
(G) "Person" includes, without limitation, a corporation, whether nonprofit or
for profit, a partnership, a limited liability company, an unincorporated
society or association, and two or more persons having a joint or common
interest.
(H) The location of the "principal office" of a corporation is the place named
the principal office in its articles.
(I) The "express terms" of shares of a class are the statements expressed in
the articles with respect to such shares.
(J) Shares of a class are "junior" to shares of another class when any of
their dividend or distribution rights are subordinate to, or dependent or
contingent upon, any right of, or dividend on, or distribution to, shares of
such other class.
(K) "Treasury shares" means shares belonging to the corporation and not
retired, that have been either issued and thereafter acquired by the
corporation, or paid as a
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<PAGE> 15
dividend or distribution in shares of the corporation on treasury shares of the
same class; such shares shall be deemed to be issued, but they shall not be
considered as an asset or a liability of the corporation, or as outstanding for
dividend or distribution, quorum, voting, or other purposes, except, when
authorized by the directors, for dividends or distributions in authorized but
unissued shares of the corporation of the same class.
(L) To "retire" a share means to restore it to the status of an authorized but
unissued share.
(M) "Redemption price of shares" means the amount required by the articles to
be paid on redemption of shares.
(N) "Liquidation price" means the amount or portion of assets required by the
articles to be distributed to the holders of shares of any class upon
dissolution, liquidation, merger, or consolidation of the corporation, or upon
sale of all or substantially all of its assets.
(O) "Insolvent" means that the corporation is unable to pay its obligations as
they become due in the usual course of its affairs.
(P) "Parent corporation" or "parent" means a domestic or foreign corporation
which owns and holds of record shares of another corporation, domestic or
foreign, entitling the holder of the shares at the time to exercise a majority
of the voting power in the election of the directors of the other corporation
without regard to voting power which may thereafter exist upon a default,
failure, or other contingency; "subsidiary corporation" or "subsidiary" means a
domestic or foreign corporation of which another corporation, domestic or
foreign, is the parent.
(Q) "Combination" means a transaction, other than a merger or consolidation,
wherein either of the following apply:
(1) Voting shares of a domestic corporation are issued or transferred in
consideration in whole or in part for the transfer to itself or to one or more
of its subsidiaries, domestic or foreign, of all or substantially all the
assets of one or more corporations, domestic or foreign, with or without good
will or the assumption of liabilities;
(2) Voting shares of a foreign parent corporation are issued or transferred in
consideration in whole or in part for the transfer of such assets to one or
more of its domestic subsidiaries.
"Transferee corporation" in a combination means the corporation, domestic or
foreign, to which the assets are transferred, and "transferor corporation" in a
combination means the corporation, domestic or foreign, transferring such
assets and to which, or to the shareholders of which, the voting shares of the
domestic or foreign corporation are issued or transferred.
(R) "Majority share acquisition" means the acquisition of shares of a
corporation, domestic or foreign, entitling the holder of the shares to
exercise a majority of the voting power in the election of directors of such
corporation without regard to voting power which
<PAGE> 16
may thereafter exist upon a default, failure, or other contingency, by either
of the following:
(1) A domestic corporation in consideration in whole or in part, for the
issuance or transfer of its voting shares;
(2) A domestic or foreign subsidiary in consideration in whole or in part for
the issuance or transfer of voting shares of its domestic parent.
(S) "Acquiring corporation" in a combination means the domestic corporation
whose voting shares are issued or transferred by it or its subsidiary or
subsidiaries to the transferor corporation or corporations or the shareholders
of the transferor corporation or corporations; and "acquiring corporation" in a
majority share acquisition means the domestic corporation whose voting shares
are issued or transferred by it or its subsidiary in consideration for shares
of a domestic or foreign corporation entitling the holder of the shares to
exercise a majority of the voting power in the election of directors of such
corporation.
(T) When used in connection with a combination or a majority share
acquisition, "voting shares" means shares of a corporation, domestic or
foreign, entitling the holder of the shares to vote at the time in the election
of directors of such corporation without regard to voting power which may
thereafter exist upon a default, failure, or other contingency.
(U) "An emergency" exists when the governor, or any other person lawfully
exercising the power and discharging the duties of the office of governor,
proclaims that an attack on the United States or any nuclear, atomic, or other
disaster has caused an emergency for corporations, and such an emergency shall
continue until terminated by proclamation of the governor or any other person
lawfully exercising the powers and discharging the duties of the office of
governor.
(V) "Constituent corporation" means an existing corporation merging into or
into which is being merged one or more other entities in a merger or an
existing corporation being consolidated with one or more other entities into a
new entity in a consolidation, whether any of the entities are domestic or
foreign, and "constituent entity" means any entity merging into or into which
is being merged one or more other entities in a merger, or an existing entity
being consolidated with one or more other entities into a new entity in a
consolidation, whether any of the entities are domestic or foreign.
(W) "Surviving corporation" means the constituent domestic or foreign
corporation that is specified as the corporation into which one or more other
constituent entities are to be or have been merged, and "surviving entity"
means the constituent domestic or foreign entity that is specified as the
entity into which one or more other constituent entities are to be or have been
merged.
(X) "Close corporation agreement" means an agreement that satisfies the three
requirements of division (A) of section 1701.591 of the Revised Code.
(Y) "Issuing public corporation" means a domestic corporation with fifty or
more shareholders that has its principal place of business, its principal
executive offices, assets having substantial value, or a substantial percentage
of its assets within this state, and as to
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<PAGE> 17
which no valid close corporation agreement exists under division (H) of section
1701.591 of the Revised Code.
(Z)(1) "Control share acquisition" means the acquisition, directly or
indirectly, by any person of shares of an issuing public corporation that, when
added to all other shares of the issuing public corporation in respect of which
such person may exercise or direct the exercise of voting power as provided in
this division, would entitle such person, immediately after such acquisition,
directly or indirectly, alone or with others, to exercise or direct the
exercise of the voting power of the issuing public corporation in the election
of directors within any of the following ranges of such voting power;
(a) One-fifth or more but less than one-third of such voting power;
(b) One-third or more but less than a majority of such voting power;
(c) A majority or more of such voting power.
A bank, broker, nominee, trustee, or other person who acquires shares in the
ordinary course of business for the benefit of others in good faith and not for
the purpose of circumventing section 1701.831 of the Revised Code shall,
however, be deemed to have voting power only of shares in respect of which such
person would be able, without further instructions from others, to exercise or
direct the exercise of votes on a proposed control share acquisition at a
meeting of shareholders called under section 1701.831 of the Revised Code.
(2) The acquisition by any person of any shares of an issuing public
corporation does not constitute a control share acquisition for the purpose of
section 1701.831 of the Revised Code if the acquisition was or is consummated
in, results from, or is the consequence of any of the following circumstances:
(a) Prior to November 19, 1982;
(b) Pursuant to a contract existing prior to November 19, 1982;
(c) By bequest or inheritance, by operation of law upon the death of an
individual, or by any other transfer without valuable consideration, including
a gift, that is made in good faith and not for the purpose of circumventing
section 1701.831 of the Revised Code;
(d) Pursuant to the satisfaction of a pledge or other security interest
created in good faith and not for the purpose of circumventing section 1701.831
of the Revised Code;
(e) Pursuant to a merger or consolidation adopted, or a combination or
majority share acquisition authorized, by shareholder vote in compliance with
the provisions of section 1701.78, 1701.781, or 1701.83 of the Revised Code
provided the issuing public corporation is the surviving or new corporation in
the merger or consolidation or is the acquiring corporation in the combination
or majority share acquisition;
(f) The person's being entitled, immediately thereafter, to exercise or direct
the exercise of voting power of the issuing public corporation in the election
of directors within
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<PAGE> 18
the same range theretofore attained by that person either in compliance with
the provisions of section 1701.831 of the Revised Code or as a result solely of
the issuing public corporation's purchase of shares issued by it.
The acquisition by any person of shares of an issuing public corporation in a
manner described under division (Z)(2) of this section shall be deemed a
control share acquisition authorized pursuant to section 1701.831 of the
Revised Code within the range of voting power under division (Z)(1)(a), (b), or
(c) of this section that such person is entitled to exercise after such
acquisition, provided in the case of an acquisition in a manner described under
division (Z)(2)(c) or (d) of this section, the transferor of shares to such
person had previously obtained any authorization of shareholders required under
section 1701.831 of the Revised Code in connection with such transferor's
acquisition of shares of the issuing public corporation.
(3) The acquisition of shares of an issuing public corporation in good faith
and not for the purpose of circumventing section 1701.831 of the Revised Code
from any person whose control share acquisition previously had been authorized
by shareholders in compliance with section 1701.831 of the Revised Code, or
from any person whose previous acquisition of shares of an issuing public
corporation would have constituted a control share acquisition but for division
(Z)(2) or (3) of this section, does not constitute a control share acquisition
for the purpose of section 1701.831 of the Revised Code unless such acquisition
entitles the person making the acquisition, directly or indirectly, alone or
with others, to exercise or direct the exercise of voting power of the
corporation in the election of directors in excess of the range of such voting
power authorized pursuant to section 1701.831 of the Revised Code, or deemed to
be so authorized under division (Z)(2) of this section.
(AA) "Acquiring person" means any person who has delivered an acquiring person
statement to an issuing public corporation pursuant to section 1701.831 of the
Revised Code.
(BB) "Acquiring person statement" means a written statement that complies with
division (B) of section 1701.831 of the Revised Code.
(CC)(1) "Interested shares" means the shares of an issuing public corporation
in respect of which any of the following persons may exercise or direct the
exercise of the voting power of the corporation in the election of directors:
(a) An acquiring person;
(b) Any officer of the issuing public corporation elected or appointed by the
directors of the issuing public corporation;
(c) Any employee of the issuing public corporation who is also a director of
such corporation.
(2) "Interested shares" also means any shares of an issuing public corporation
acquired, directly or indirectly, by any person from the holder or holders
thereof for a valuable consideration during the period beginning with the date
of the first public disclosure of a proposed control share acquisition of the
issuing public corporation or any proposed
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merger, consolidation, or other transaction which would result in a change in
control of the corporation or all or substantially all of its assets, and
ending on the date of any special meeting of the corporation's shareholders
held thereafter pursuant to section 1701.831 of the Revised Code, for the
purpose of voting on a control share acquisition proposed by any acquiring
person if either of the following apply:
(a) The aggregate consideration paid or given by the person who acquired the
shares, and any other persons acting in concert with him, for all such shares
exceeds two hundred fifty thousand dollars;
(b) The number of shares acquired by the person who acquired the shares, and
any other persons acting in concert with him, exceeds one-half of one percent
of the outstanding shares of the corporation entitled to vote in the election
of directors.
(3) If any part of this division is held to be illegal or invalid in
application, the illegality or invalidity does not affect any legal and valid
application thereof or any other provision or application of this division or
section 1701.831 of the Revised Code which can be given effect without the
invalid or illegal provision, and the parts and applications of this division
are severable.
(DD) "Certificated security" and "uncertificated security" have the same
meanings as in section 1308.01 of the Revised Code.
(EE) "Entity" means any of the following:
(1) A for profit corporation existing under the laws of this state or any
other state;
(2) Any of the following organizations existing under the laws of this state,
the United States, or any other state:
(a) A business trust or association;
(b) A real estate investment trust;
(c) A common law trust;
(d) An unincorporated business or for profit organization, including a general
or limited partnership;
(e) A limited liability company.
1701.831 CONTROL SHARE ACQUISITIONS; PRIOR SHAREHOLDER AUTHORIZATION REQUIRED;
SEVERABILITY OF SECTION
(A) Unless the articles or the regulations of the issuing public corporation
provide that this section does not apply to control share acquisitions of
shares of such corporation, any control share acquisition of an issuing public
corporation shall be made only with the prior authorization of the shareholders
of such corporation in accordance with this section.
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<PAGE> 20
(B) Any person who proposes to make a control share acquisition shall deliver
an acquiring person statement to the issuing public corporation at the issuing
public corporation's principal executive offices. Such acquiring person
statement shall set forth all of the following:
(1) The identity of the acquiring person;
(2) A statement that the acquiring person statement is given pursuant to this
section;
(3) The number of shares of the issuing public corporation owned, directly or
indirectly, by the acquiring person;
(4) The range of voting power, described in division (Z)(1)(a), (b), or (c) of
section 1701.01 of the Revised Code, under which the proposed control share
acquisition would, if consummated, fall;
(5) A description in reasonable detail of the terms of the proposed control
share acquisition;
(6) Representations of the acquiring person, together with a statement in
reasonable detail of the facts upon which they are based, that the proposed
control share acquisition, if consummated, will not be contrary to law, and
that the acquiring person has the financial capacity to make the proposed
control share acquisition.
(C) Within ten days after receipt of an acquiring person statement that
complies with division (B) of this section, the directors of the issuing public
corporation shall call a special meeting of shareholders of the issuing public
corporation for the purpose of voting on the proposed control share
acquisition. Unless the acquiring person agrees in writing to another date,
such special meeting of shareholders shall be held within fifty days after
receipt by the issuing public corporation of the acquiring person statement.
If the acquiring person so requests in writing at the time of delivery of the
acquiring person statement, such special meeting shall be held no sooner than
thirty days after receipt by the issuing public corporation of the acquiring
person statement. Such special meeting of shareholders shall be held no later
than any other special meeting of shareholders that is called, after receipt by
the issuing public corporation of the acquiring person statement, in compliance
with section 1701.76, 1701.78, 1701.79, 1701.83, or 1701.831 of the Revised
Code.
(D) Notice of the special meeting of shareholders shall be given as promptly
as reasonably practicable by the issuing public corporation to all shareholders
of record as of the record date set for such meeting, whether or not entitled
to vote thereat. Such notice shall include or be accompanied by both of the
following:
(1) A copy of the acquiring person statement delivered to the issuing public
corporation pursuant to this section;
(2) A statement by the issuing public corporation, authorized by its
directors, of its position or recommendation, or that it is taking no position
or making no recommendation, with respect to the proposed control share
acquisition.
<PAGE> 21
(E) The acquiring person may make the proposed control share acquisition if
both of the following occur:
(1) The shareholders of the issuing public corporation who hold shares of such
corporation entitling them to vote in the election of directors authorize such
acquisition at the special meeting held for that purpose at which a quorum is
present by an affirmative vote of a majority of the voting power of such
corporation in the election of directors represented at such meeting in person
or by proxy, and a majority of the portion of such voting power excluding the
voting power of interested shares. A quorum shall be deemed to be present at
such special meeting if at least a majority of the voting power of the issuing
public corporation in the election of directors, and a majority of the portion
of such voting power excluding the voting power of interested shares are
represented at such meeting in person or by proxy.
(2) Such acquisition is consummated, in accordance with the terms so
authorized, no later than three hundred sixty days following shareholder
authorization of the control share acquisition.
(F) Except as expressly provided in this section, nothing in this section
shall be construed to affect or impair any right, remedy, obligation, duty,
power, or authority of any acquiring person, any issuing public corporation,
the directors of any acquiring person or issuing public corporation, or any
other person under the laws of this or any other state or of the United States.
(G) If any application of any provision of this section is for any reason held
to be illegal or invalid, the illegality or invalidity shall not affect any
legal and valid provision or application of this section, and the parts and
applications of this section are severable.
1701.831 CONTROL SHARE ACQUISITIONS; PRIOR SHAREHOLDER AUTHORIZATION REQUIRED;
SEVERABILITY OF SECTION
(A) Unless the articles or the regulations of the issuing public corporation
provide that this section does not apply to control share acquisitions of
shares of such corporation, any control share acquisition of an issuing public
corporation shall be made only with the prior authorization of the shareholders
of such corporation in accordance with this section.
(B) Any person who proposes to make a control share acquisition shall deliver
an acquiring person statement to the issuing public corporation at the issuing
public corporation's principal executive offices. Such acquiring person
statement shall set forth all of the following:
(1) The identity of the acquiring person;
(2) A statement that the acquiring person statement is given pursuant to this
section;
(3) The number of shares of the issuing public corporation owned, directly or
indirectly, by the acquiring person;
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<PAGE> 22
(4) The range of voting power, described in division (Z)(1)(a), (b), or (c)
of section 1701.01 of the Revised Code, under which the proposed control share
acquisition would, if consummated, fall;
(5) A description in reasonable detail of the terms of the proposed control
share acquisition;
(6) Representations of the acquiring person, together with a statement in
reasonable detail of the facts upon which they are based, that the proposed
control share acquisition, if consummated, will not be contrary to law, and
that the acquiring person has the financial capacity to make the proposed
control share acquisition.
(C) Within ten days after receipt of an acquiring person statement that
complies with division (B) of this section, the directors of the issuing public
corporation shall call a special meeting of shareholders of the issuing public
corporation for the purpose of voting on the proposed control share
acquisition. Unless the acquiring person agrees in writing to another date,
such special meeting of shareholders shall be held within fifty days after
receipt by the issuing public corporation of the acquiring person statement.
If the acquiring person so requests in writing at the time of delivery of the
acquiring person statement, such special meeting shall be held no sooner than
thirty days after receipt by the issuing public corporation of the acquiring
person statement. Such special meeting of shareholders shall be held no later
than any other special meeting of shareholders that is called, after receipt by
the issuing public corporation of the acquiring person statement, in compliance
with section 1701.76, 1701.78, 1701.79, 1701.83, or 1701.831 of the Revised
Code.
(D) Notice of the special meeting of shareholders shall be given as promptly
as reasonably practicable by the issuing public corporation to all shareholders
of record as of the record date set for such meeting, whether or not entitled
to vote thereat. Such notice shall include or be accompanied by both of the
following:
(1) A copy of the acquiring person statement delivered to the issuing public
corporation pursuant to this section;
(2) A statement by the issuing public corporation, authorized by its
directors, of its position or recommendation, or that it is taking no position
or making no recommendation, with respect to the proposed control share
acquisition.
(E) The acquiring person may make the proposed control share acquisition if
both of the following occur:
(1) The shareholders of the issuing public corporation who hold shares of such
corporation entitling them to vote in the election of directors authorize such
acquisition at the special meeting held for that purpose at which a quorum is
present by an affirmative vote of a majority of the voting power of such
corporation in the election of directors represented at such meeting in person
or by proxy, and a majority of the portion of such voting power excluding the
voting power of interested shares. A quorum shall be deemed to be present at
such special meeting if at least a majority of the voting power of the issuing
public corporation in the election of directors, and a majority of the portion
of such voting power excluding the voting power of interested shares are
represented at such meeting in person
<PAGE> 23
or by proxy.
(2) Such acquisition is consummated, in accordance with the terms so
authorized, no later than three hundred sixty days following shareholder
authorization of the control share acquisition.
(F) Except as expressly provided in this section, nothing in this section
shall be construed to affect or impair any right, remedy, obligation, duty,
power, or authority of any acquiring person, any issuing public corporation,
the directors of any acquiring person or issuing public corporation, or any
other person under the laws of this or any other state or of the United States.
(G) If any application of any provision of this section is for any reason held
to be illegal or invalid, the illegality or invalidity shall not affect any
legal and valid provision or application of this section, and the parts and
applications of this section are severable.
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<PAGE> 24
P R O X Y
RESOURCE GENERAL CORPORATION
2365 Scioto Harper Drive THIS PROXY IS SOLICITED ON BEHALF
Columbus, Ohio 43204 OF THE BOARD OF DIRECTORS
_____________________________________
The undersigned hereby appoints Robert S. Ryan and Charles T. Sherman each
of them as proxies, each with the power to appoint his substitute, and hereby
authorizes them and each of them to represent and to vote, as designated below,
all of the shares held of record by the undersigned on April 28, 1996, at the
special meeting of shareholders to be held on May 28, 1996, or any adjournment
thereof.
1. PROPOSED CHANGE IN CONTROL TRANSACTIONS
_____FOR ____AGAINST _____ABSTAIN
********************************************************(REVERSE SIDE OF CARD)
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as ttorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please give full corporate name and signed by President or other
authorized officer. If a partnership, please sign partnership partnership name
by authorized person.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder.
Dated .................................. 1996
.............................................
Signature
.............................................
Signature if jointly held
2
