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SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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/ / Preliminary consent statement Rule 14a-6(e)(2))
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RJR NABISCO HOLDINGS CORP.
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(Name of Registrant as Specified in its Charter)
BROOKE GROUP LTD.
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(Name of Person(s) Filing Consent Statement)
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[LOGO} SARD VERBINNEN & CO NEWS
FOR IMMEDIATE RELEASE
Contact: George Sard/Anna Cordasco/Paul Caminiti
Sard Verbinnen & Co
212/687-8080
BENNETT LEBOW PRESS BRIEFING COMMENTS
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NEW YORK, NY, April 16, 1996 -- Bennett S. LeBow, Chairman and Chief
Executive Officer of Brooke Group Ltd., today made the following statement in a
press briefing:
Based on the analysis of our proxy solicitors, it is apparent that Brooke
Group's slate of nominees will not be elected as the next Board of RJR
Nabisco. It also appears there will be a very low turnout, with an
unusually large number of shareholders not voting. Although this result
is obviously disappointing, it comes as no surprise to us. We always knew
we were facing an uphill battle -- made even tougher by the swirl of
recent events in the tobacco industry -- and none of the analysts
expected us to win this time.
I want to thank all the stockholders who supported us so overwhelmingly
during our consent solicitation earlier this year. At that time, too, the
experts gave us no chance to win, but we did, with well over 140 million
votes. This was the first time a Fortune 100 company had ever lost a
consent solicitation. We also restored the stockholders previous right to
call a special meeting, which management had taken away, and we sent a
clear message to spin off Nabisco now.
Management continues to ignore the stockholders' wishes, refusing to
implement the spinoff. But at least they've acknowledged they have some
duty to respond. They grudgingly raised the dividend to $1.85 per share
and promised a small share repurchase program. This is certainly not an
adequate substitute for the spinoff of Nabisco, but there's no doubt that
without the pressure we applied with our consent solicitation, management
would not have gone even that far.
RJR has bought itself some time with its diversionary "attack LeBow"
program. But now it can't sidestep the fact that RJR Nabisco shares have
gone nowhere in the last five years and are currently trading for less
than $30. What is needed is decisive action.
-more-
<PAGE>
Last month, Brooke Group and Liggett acted decisively, entering into
historic settlements with the Castano plaintiffs and the Attorneys
General of Mississippi, Florida, Massachusetts, West Virginia and
Louisiana. I was convinced then -- and am even more convinced now -- that
we did the right thing both for Liggett's business and for Brooke's
stockholders. For a small price, we have secured an insurance policy
protecting Liggett from all addiction-based claims -- the most serious
litigation risks facing the industry.
We also believed, as they came to understand the tobacco litigation
issues, RJR Nabisco's stockholders would conclude that it was the right
thing for them as well. Obviously, many RJR Nabisco stockholders don't
yet see it this way, but time will tell.
Nevertheless, we remain persuaded that the settlement is the right thing
and that, over time, the consensus of stockholder opinion will come to
our view. One of the most rewarding developments in recent weeks has been
the appearance of numerous thoughtful commentaries, from analysts, public
health officials, journalists and political figures discussing and
supporting the concept of an industry-wide settlement patterned after the
settlements achieved by Brooke Group and Liggett -- industry acceptance
of additional restrictions on advertising, and of a portion of the health
care costs associated with smoking, in return for assurance that it may
continue to sell to adults who choose to smoke.
This is the first time a compromise proposal has gained such wide
credibility within the industry and among its detractors. As a result, it
is now possible to speak rationally and constructively about a new
economic model for the tobacco business -- something we believe is
essential, but was unspeakable within the industry just a few weeks ago.
For those who have invested in tobacco stocks, there is no more important
issue today. You can look at any analyst report to appreciate just how
important it is. Estimates are that, if the liability issues were
resolved along the lines of Liggett's settlement, RJR Nabisco and Philip
Morris stock could each more than double. As RJR Nabisco stockholders, we
think these potential gains in equity value are well worth a modest
reduction in net margin.
We continue to believe strongly in the Nabisco spinoff -- we are
absolutely convinced it can and should be done now. And we are still
waiting for RJR Nabisco to say exactly when they will do the spinoff they
have told the shareholders they are committed to. But if the Board's fear
of litigation risk is causing them to tread water on the spinoff, then
that's all the more reason to bring about a reasonable liability
settlement. There is too much value locked up in RJR Nabisco, too much
value being denied its stockholders, for anyone to be content with
"business as usual."
-more-
<PAGE>
We will continue to make our views known. Our group owns over 18 million
RJR Nabisco shares -- 25 times the combined ownership of RJR's Board and
management. We want the Nabisco spinoff -- and we want actions, not empty
rhetoric, to get us there.
Change hurts. But if the tobacco industry is to have a future, it must
give up cherished but outmoded ideas -- and lift its head out of the
sand. But make no mistake: the change is happening! And we will keep
working to make it happen.
Nearly 60 million shares of RJR Nabisco stock have changed hands since
the February 29 record date for tomorrow's annual meeting. Many of the
new holders haven't voted in this election -- although we know of some
cases where holders on the record date who later sold their positions
voted against us because of what we supposedly "did to Philip Morris." As
most everyone knows, we found ourselves fighting not only RJR Nabisco
management, but also Philip Morris.
It's now up to RJR Nabisco to stop looking out for the interests of
Philip Morris -- the company responsible for Marlboro Friday -- and
deliver on its promise to increase value for RJR Nabisco stockholders. We
intend to keep holding the Board accountable -- and we expect other
shareholders will too.
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