SCHEDULE 14A INFORMATION
Rule 14a-101
Proxy Statement Pursuant to Section 14(A)
of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for
Use by the Commission
Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Rule 14a-12
Petrolite Corporation
Name of Registrant as Specified in its Charter
Wm. S. Barnickel & Company
Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), or 14a-6(j)(2) 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:
[ ] 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:
PRELIMINARY COPY SUBJECT TO COMPLETION
November __, 1996
Wm. S. Barnickel & Company Letterhead
November __, 1996
Dear Fellow Petrolite Stockholder:
Wm. S. Barnickel & Company, as the owner of
approximately 47% of the outstanding stock of Petrolite
Corporation since the 1930s, is by far the largest holder
of Petrolite shares. Barnickel's longstanding
relationship with Petrolite and its predecessors dates
back to the 1920s, when William S. Barnickel and John
Lehmann established a business to pursue a process that
Mr. Barnickel had patented for removing salt water from
crude petroleum. Today, the Barnickel Company believes
that it would be in the best interests of all
stockholders of Petrolite for Petrolite to maximize
stockholder value by actively pursuing a sale or merger
of Petrolite.
Barnickel is a private company whose primary asset
is Petrolite stock. For a number of years, Barnickel has
considered ways to provide the owners of Barnickel stock
with liquidity and diversification in a tax-efficient
manner. In addition, Barnickel has been concerned with
the performance of Petrolite and the price of the
Petrolite shares.
For over two years Barnickel has explored various
alternatives, including the initiation of contacts with a
number of third parties to ascertain their interest in
the acquisition of Petrolite. Based on these contacts
and follow-up discussions with parties who delivered
written expressions of interest to acquire Petrolite at
values of at least $40 per share in which all
stockholders of Petrolite would receive stock of the
acquiror in a tax-free transaction, Barnickel believes
that the value of Petrolite can and should be maximized
now through a sale or merger (there can, of course, be no
assurances that any agreement regarding a transaction
will be executed or any transaction consummated).
Barnickel has attempted to discuss this with
Petrolite, but Petrolite has continually refused to
consider a possible sale or merger. The Board of
Directors of Petrolite has informed Barnickel that it
does not believe that this is the time to sell Petrolite
and that Petrolite should pursue its business plan as an
independent company. As explained in the accompanying
Consent Statement, Barnickel is quite concerned with the
uncertainties associated with Petrolite's business plan.
Accordingly, given the resistance of the Board of
Directors of Petrolite to a sale or merger, Barnickel is
now soliciting consents from Petrolite's stockholders to
remove five members of the Company's current Board of
Directors and replace them with Barnickel's nominees.
Barnickel has a high regard for the members of
Petrolite's Board of Directors and is not challenging
their good faith or diligence regarding their view of
Petrolite's future. The reason for this consent
solicitation is an honest difference of opinion as to
whether the projections underlying management's business
plan are realistically achievable and whether this is the
time to seek a sale of Petrolite. Barnickel firmly
believes that the projections are not realistically
achievable and that this is an opportune time to seek the
sale of Petrolite.
Barnickel's nominees, if elected, and subject to
their fiduciary duties, intend to analyze the financial
and operating status of Petrolite and, if deemed to be in
the best interests of Petrolite stockholders, to pursue a
process for the sale or merger of Petrolite on the most
advantageous terms for all stockholders, as set forth in
the attached Consent Statement. Barnickel's nominees
intend to seek to consult with Petrolite's present
management and financial advisors in order to assist in
such process.
Barnickel holds approximately 47% of the outstanding
Petrolite shares. Approval of Barnickel's proposals will
require the consent of a majority of the Petrolite shares
outstanding on the record date for this consent
solicitation.
We thank you for your consideration and support.
Sincerely,
Michael V. Janes
President
IMPORTANT
1. If your shares are held in your own name, please
complete, sign and date the accompanying BLUE Consent
Card and send it to [TrustCo] in the enclosed postage-
paid envelope. [TrustCo], as agent for stockholders,
will forward the Consent Card to the Company and
provide a copy to MacKenzie Partners Inc., the
Information Agent, so that Barnickel will be aware of
the consents given.
2. If your shares are held in the name of a bank,
broker or other nominee, please contact the party
responsible for your account and give instructions for
a BLUE Consent Card to be signed representing your
shares. We urge you to confirm in writing your
instructions to the person responsible for your account
and provide a copy of those instructions to MacKenzie
Partners Inc., the Information Agent, so that Barnickel
will be aware of all instructions given and can attempt
to ensure that such instructions are followed.
3. If you have any questions or require any
assistance in executing your consent, please contact:
MACKENZIE PARTNERS INC
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (call collect)
or
Toll Free (800) 322-2885
CONSENT STATEMENT
OF
WM. S. BARNICKEL & COMPANY
This Consent Statement and the accompanying form of
consent (the "Consent Card") are furnished by Wm. S.
Barnickel & Company, a Missouri corporation
("Barnickel"), in connection with the solicitation by
Barnickel of written consents from the holders of capital
stock, without par value (the "Shares"), of Petrolite
corporation, a Delaware corporation (the "Company"), to
take the following actions without a stockholders'
meeting, as permitted by Delaware law:
(1) Remove all of the members of the Board of Directors
of the Company (the "Company Board") (and any person
elected or designated by any of such directors to
fill any vacancy or newly created directorship),
other than Andrew B. Craig, III, Louis Fernandez,
Wayne J. Grace, William E. Maritz, and Fairfax F.
Pollnow (collectively, the "Remaining Directors");
and
(2) Elect Robert E. Kresko, John Peters MacCarthy,
Robert H. Quenon, John Sexton and V. Raymond
Stranghoener (collectively, the "Nominees") as
directors of the Company.
These actions (collectively, the "Proposals") are
designed to maximize stockholder value by electing
directors who, if elected and subject to their fiduciary
duties, intend to analyze the financial and operating
status of the Company and, if deemed to be in the best
interests of the Company's stockholders, to pursue a
process for the sale or merger of the Company on the most
advantageous terms for all stockholders. The actions
that the Nominees are expected to take once elected may
include (i) consideration of an orderly process to review
the Company's prospects and determine the best means of
maximizing stockholder value, (ii) seeking an acquiror
which would offer the most advantageous terms to the
Company's stockholders, (iii) seeking to consult with the
Company's present management and financial advisors in
order to assist in such process, (iv) negotiating and
executing a definitive agreement to implement a sale or
merger, if appropriate, (v) taking such actions as may be
necessary to cause the Company's Rights Agreement dated
as of March 28, 1994, as amended (the "Rights Agreement")
to be inapplicable to a sale or merger, if appropriate
(see "Certain Information Concerning the Company -- The
Rights Agreement"), and (vi) approving a sale or merger,
if appropriate, under Section 203 of the Delaware General
Corporation Law (the "DGCL") (see "Certain Information
Concerning the Company -- DGCL Section 203").
Under the Rights Agreement, the redemption or
amendment of the rights issued thereunder (the "Rights")
following the adoption of the Proposals would require the
concurrence of a majority of the Continuing Directors (as
defined in the Rights Agreement). Barnickel believes
that certain of the Remaining Directors would constitute
Continuing Directors for purposes of the Rights
Agreement. There can be no assurances that such
Remaining Directors would act to redeem or amend the
Rights Agreement in order to facilitate any transaction.
Barnickel has commenced litigation seeking to invalidate
this provision of the Rights Agreement (see "Litigation")
and reserves the right to consider and take action with
respect to other means intended to cause the Rights
Agreement to be inapplicable to a sale or merger of the
Company.
Barnickel is committed to a transaction in which all
stockholders are offered the same consideration or choice
of consideration. Barnickel would prefer a tax-free
transaction which would allow it to distribute value to
its stockholders in a tax-efficient manner, such as the
three party structure described under "Background of the
Consent Solicitation." Barnickel is committed to
achieving maximum value for all holders of Shares. While
it is expected that the Nominees will take Barnickel's
preferences into account, the Nominees believe that, once
elected, their fiduciary duties will require them to act
in the best interests of all holders of Shares.
This Consent Statement and the accompanying Consent
Card are first being furnished to Company stockholders on
or about November __, 1996.
THE CONSENT CARDS DO NOT GRANT ANY PERSON THE RIGHT
TO VOTE ANY SHARES, OR CONFER ANY OTHER POWER ON ANY
PERSON. THE CONSENT CARD DOES NOT APPOINT ANY PERSON A
"PROXY" TO VOTE ANY SHARES. BARNICKEL IS REQUESTING EACH
COMPANY STOCKHOLDER TO EXERCISE ITS INDEPENDENT JUDGMENT
REGARDING THE PROPOSALS, AND THE EXECUTION AND DELIVERY
BY ANY STOCKHOLDER OF A CONSENT CARD DOES NOT CONSTITUTE
ANY AGREEMENT, ARRANGEMENT OR UNDERSTANDING BETWEEN
BARNICKEL AND ANY STOCKHOLDER EXECUTING AND DELIVERING A
CONSENT CARD, AND SUCH CONSENT CARDS REMAIN REVOCABLE BY
THE STOCKHOLDER AS DESCRIBED UNDER "CONSENT PROCEDURE --
EFFECTIVENESS AND REVOCATION OF CONSENTS." Delivery of a
Consent Card will not constitute approval of the sale or
merger of the Company. If a definitive agreement
contemplating such sale or merger is signed, stockholder
approval will be sought pursuant to a separate
solicitation. There can, of course, be no assurances
that any such agreement will be signed.
Record holders should send executed Consent Cards to
[TrustCo] in the enclosed postage-paid envelope.
[TrustCo], as agent for stockholders, will forward the
Consent Cards to the Company and provide copies to
MacKenzie Partners Inc. (the "Information Agent"), so
that Barnickel will be aware of the consents given.
Although record holders could send Consent Cards directly
to the Company, Barnickel requests that you use the
enclosed postage-paid envelope to send your Consent Card
to [TrustCo], so that Barnickel can monitor the number of
consents given.
If your Shares are held in the name of a bank,
broker or other nominee, please contact the party
responsible for your account and give instructions for a
Consent Card to be signed representing your Shares. We
urge you to confirm in writing your instructions to the
person responsible for your account and provide a copy of
those instructions to MacKenzie Partners Inc., the
Information Agent, so that Barnickel will be aware of all
instructions given and can attempt to ensure that such
instructions are followed.
The Company has fixed ________ __, 1996 as the
record date for the solicitation made hereby (the "Record
Date"). [If the Record Date is not set by the time this
Consent Statement is to be mailed, revise appropriately.]
The Proposals will be adopted when properly
completed, unrevoked Consent Cards are signed by the
holders of record on the Record Date of a majority of the
Shares then outstanding and such Consent Cards are
delivered to the Company, provided that the requisite
consents are so delivered within 60 days of the earliest
dated consent delivered to the Company. Barnickel,
acting through Cede & Co., the record holder of the
Shares beneficially owned by Barnickel, intends to
deliver a Consent Card to the Company.
Because the Proposals will become effective only
when executed Consent Cards are returned by holders of
record on the Record Date of a majority of the total
number of Shares then outstanding, the failure to execute
and return a Consent Card will have the same effect as
voting against the Proposals.
If you have any questions or require any assistance
in executing your consent, please call MacKenzie
Partners, the Information Agent, toll free at 1-800-322-
2885.
Barnickel is the holder of 5,337,360 Shares,
approximately 47.1% of the outstanding Shares.
[According to the Company, there were ____________ Shares
outstanding on the Record Date.][According to the
Company's Quarterly Report on Form 10-Q for the Quarter
ended July 31, 1996, as of August 1, 1996, there were
11,341,448 Shares outstanding.] Based on the foregoing,
the consent or consents from holders representing
approximately 333,365 additional Shares, or approximately
3% of the outstanding Shares, will be required to approve
the Proposals.
THE PROPOSALS
Removal of Incumbent Directors. The Proposals
include the removal of all of the Company's current
directors (and any other person who may be a director at
the time the action proposed to be taken by this consent
procedure becomes effective), other than the Remaining
Directors. Barnickel is soliciting consents to remove as
directors Jerry B. Davis, Paul H. Hatfield, Richard L.
O'Shields, Brian M. Rushton and Joseph T. Williams. The
Remaining Directors are Andrew B. Craig, III, Louis
Fernandez, Wayne J. Grace, William E. Maritz, and Fairfax
F. Pollnow. BARNICKEL RECOMMENDS THAT YOU EXECUTE THE
ACCOMPANYING BLUE CONSENT CARD FOR REMOVAL OF FIVE OF THE
PRESENT MEMBERS OF THE COMPANY BOARD (AND ANY PERSON
ELECTED BY THE INCUMBENT DIRECTORS TO FILL ANY VACANCY
CREATED THEREBY OR ANY NEWLY CREATED DIRECTORSHIP).
Proposed Election of Nominees. The Company's by-
laws provide for a board consisting of 10 directors and
there are currently 10 directors. To fill the five
vacancies following the removal action, Barnickel
proposes the election of the Nominees named in the table
below, each of whom has consented to serve as a director,
if elected, until the next annual meeting of stockholders
and until his successor has been elected and qualified.
Barnickel's primary purpose in seeking to elect the
Nominees to the Company Board is to seek to maximize
stockholder value by actively pursuing a sale or merger
of the Company. When elected, the Nominees will be
responsible for managing the business and affairs of the
Company. Each director of the Company has an obligation
under the DGCL to discharge his duties as a director on
an informed basis, in good faith, with the care an
ordinarily careful and prudent person in a like position
would exercise under similar circumstances and in a
manner the director honestly believes to be in the best
interests of the Company. In this connection,
circumstances may arise in which the interests of
Barnickel, on the one hand, and the interests of other
stockholders of the Company, on the other hand, may
differ. In any such case, the Nominees intend to
discharge fully the obligations owing to the Company and
its stockholders under the DGCL. Although Barnickel has
no reason to believe that any of the Nominees will be
unable or unwilling to serve as directors, if any of the
Nominees is not available for election, the persons
listed in the table below will vote for the election of
such other nominee or nominees as may be proposed by
Barnickel.
Name, Age and Present Principal Occupation and
Business Address Five-Year Employment History
---------------- --------------------------------
Robert E. Kresko, 62 Vice Chairman of Nooney
7701 Forsyth Boulevard Krombach Co., a real estate
Suite 680 brokerage company and
St. Louis, Missouri 63105 President of Epic Home Corp.,
a single family home builder,
since 1989. Director of
Nooney Estate Investment
Trust. In 1989, Mr. Kresko
retired as Managing Partner of
Trammell Crow Co., a real
estate development company.
John Peters MacCarthy, 63 Vice Chairman of Boatmen's
6 Robin Hill Lane Bancshares Inc. and Chairman
St. Louis, Missouri 63124 and Chief Executive Officer of
Boatmen's Trust Company from
1988 until retirement in May
1995. Director of Union
Electric Company and Brown
Group, Inc.
Robert H. Quenon, 68 Mining consultant since August
7800 Forsyth Boulevard 1991. Prior to August 1991,
St. Louis, Missouri 63105 Former Chairman and Chief
Executive Officer of Peobody
Holding Company. Director of
Laclede Gas Company, Union
Electric Company and Newmont
Gold Company.
John Sexton, 49 President and Director of
Gross & Janes Company Gross & Janes Company, a
511 Rudder Road railroad tie supply company.
Fenton, Missouri 63026 Director of Barnickel.
V. Raymond Stranghoener, Executive Vice President,
45 General Counsel and Secretary
Boatmen's Trust Company of Boatmen's Trust Company
100 North Broadway since 1993. From 1985 to
St. Louis, Missouri 63102 1993, partner at the law firm
of Bryan Cave LLP. Director
of Barnickel since 1994.
It is anticipated that each Nominee upon election
will receive director's fees, consistent with the
Company's past practice, for services as a director of
the Company. According to the Company's Notice of 1996
Annual Meeting and Proxy Statement (the "1996 Proxy
Statement"), directors who are not full-time salaried
employees of the Company receive an annual retainer of
$18,000 and receive a fee of $1,000 per meeting for
attendance at meetings of the Board of Directors.
Directors who serve on committees of the Board receive a
fee of $750 per meeting for each committee meeting
attended.
Barnickel has agreed to indemnify each Nominee
against liabilities, losses, claims, damages and expenses
arising out of this solicitation of consents. Barnickel
has also agreed to reimburse each Nominee for his
reasonable out-of-pocket expenses. The indemnification
and reimbursement described in this paragraph would not
extend to any Nominee's acts as a director of the
Company.
Annex III attached to this Consent Statement sets
forth certain information relating to Shares owned by the
Nominees and certain transactions between any of them and
the Company.
BARNICKEL RECOMMENDS THAT STOCKHOLDERS EXECUTE THE
ACCOMPANYING BLUE CONSENT CARD FOR THE ELECTION OF THE
NOMINEES TO THE COMPANY BOARD.
BACKGROUND OF THE SOLICITATION
Barnickel's relationship with the Company and its
predecessors dates back to the 1920's, when William S.
Barnickel and John Lehmann established a business to
pursue a process that Mr. Barnickel had patented for
removing salt water from crude petroleum. Following a
series of reorganizations in the 1920s and 1930s,
Barnickel became the owner of approximately 47.1% of the
then outstanding Shares. That holding has been unchanged
(other than as a result of stock splits and stock
dividends) for several decades.
Until 1993, 90% of the common stock of Barnickel was
owned by The William S. Barnickel Testamentary Trust (the
"Barnickel Trust"), which was formed in 1923 following
the death of Mr. Barnickel. (The other 10% of the stock
of Barnickel was, and still is, owned by two trusts
established by Mr. Lehmann.) In 1993, the death of the
then income beneficiary resulted in the termination of
the Barnickel Trust pursuant to its terms. The two co-
trustees of the Barnickel Trust, Boatmen's Trust Company
("BTC") and Michael V. Janes, proceeded to analyze how to
effectuate the termination and how the Trust should
distribute its assets in view of the objectives of
maximizing liquidity, minimizing taxes and providing for
impartial treatment of the beneficiaries, to the extent
practicable. In June 1995, the stock of Barnickel owned
by the Barnickel Trust was distributed to the
approximately 90 beneficiaries of the Barnickel Trust.
Exploration of Alternatives. In February 1994 and
at the recommendation of BTC and Mr. Janes, as co-
trustees of the Barnickel Trust, the Board of Directors
of Barnickel authorized the retention of Morgan Stanley &
Co. Incorporated ("Morgan Stanley") to explore possible
alternative transactions involving Barnickel, including a
potential sale, merger or reorganization. For a
description of the terms of Morgan Stanley's retention,
see "Consent Procedure --Solicitation of Consents."
On February 24, 1994, Boatmen's Bancshares, Inc.
("BBI") (the parent corporation of BTC), BTC, Barnickel
and the Barnickel Trust filed a Schedule 13D disclosing,
among other things, beneficial ownership of 6,355,408
Shares, the retention of Morgan Stanley and certain
related matters. On February 25, 1994, Mr. Janes filed a
Schedule 13D also disclosing such matters. Such filings
were subsequently amended from time to time to disclose
various of the matters discussed herein.
On March 28, 1994, the Company announced that it had
adopted a Rights Agreement, or "poison pill", the effect
of which would be to dramatically dilute the holdings of
anyone who acquires 15% or more of the Company's
outstanding stock without the approval of the Company's
Board of Directors. The current holdings of Barnickel
were "grandfathered." See "Certain Information
Concerning the Company -- The Rights Agreement."
Promptly after this announcement, the Company's
financial advisors called Barnickel to discuss the
possibility of a business combination between the Company
and Barnickel in which Shares would be issued in exchange
for Barnickel stock. The Company's proposal contemplated
that certain Barnickel stockholders would enter into
standstill agreements. The Company's proposal was
unacceptable to Barnickel.
With the assistance of Morgan Stanley, Barnickel
began actively exploring alternatives for providing the
owners of Barnickel stock with liquidity on a basis that
would maximize stockholder value and minimize taxes. As
part of those efforts, after Barnickel informed the
Company that Morgan Stanley would do so, Morgan Stanley
approached a number of third parties to ascertain their
possible interest in a transaction which would result in
their acquisition of the Company. These third parties
were approached based on Morgan Stanley's assessment of
their likely interest in completing a transaction with
the Company. Similar discussions were held with third
parties which approached Morgan Stanley as a result of
the disclosures made in the Schedule 13D filed by
Barnickel. Approximately nine parties expressed an
interest in a possible transaction with the Company, one
of whom indicated that it would be prepared to proceed
with a transaction which was not supported by the
Company.
Barnickel continued its discussions with the Company
concerning a possible business combination directly
between Barnickel and the Company. These discussions
resulted in a letter of intent (the "Letter of Intent")
dated as of December 9, 1994, between the Company,
Barnickel, the then stockholders of Barnickel (the
Barnickel Trust and the Lehmann trusts), and the
principal beneficiaries of the Barnickel Trust. The
Letter of Intent set forth the principal terms of a
proposed acquisition by the Company of substantially all
of the assets of Barnickel pursuant to a tax-free
reorganization (the "Proposed Reorganization"). Such
assets were to include the Shares owned by Barnickel and
some or all of the oil and gas properties then owned by
Barnickel. The Company was also to assume $9 million of
certain liabilities and obligations of Barnickel. In
return, Barnickel was to receive Shares equal, in effect,
to the number of Shares previously owned by Barnickel,
plus additional Shares equal in value to the after-tax
fair market value of the oil and gas properties to be
acquired by the Company.
The Letter of Intent also contemplated that two
directors proposed by Barnickel would be added to the
Company's Board of Directors, but would also have
required the principal beneficiaries of the Barnickel
Trust (Michael Janes, his brothers William and John, and
their sister, Genevieve Brown; collectively, the
"Janeses") to enter into a "standstill agreement." That
agreement would have precluded the Janeses,
notwithstanding the approximately 29% of the outstanding
Shares which they would have beneficially owned, from
calling or participating in the call of a special meeting
of the Company's stockholders, submitting any stockholder
proposals for consideration by the Company's
stockholders, or encouraging or participating in any
proxy contests or acquisition proposals involving the
Company. The standstill agreement would also have
precluded the Janeses from selling their Shares to anyone
who would then own more than 10% of the outstanding
Shares, would have given the Company a right of first
refusal on their Shares, and would have precluded them
from increasing the percentage of the Shares owned by
them by more than one percent. Finally, the Janeses
would have been required to vote their Shares either in
accordance with the recommendations of the Company's
Board, or in the same proportion as the Shares owned by
all other stockholders of the Company, except with
respect to certain transactions recommended by the
Company's Board. The standstill agreement would have
been effective for approximately two years.
One of the conditions to the obligations of the
parties to consummate the Proposed Reorganization was the
issuance of a favorable letter ruling from the Internal
Revenue Service (the "IRS") regarding qualification of
the Proposed Reorganization as a tax-free reorganization.
In January 1995, Barnickel and the Company were advised
by the IRS that the Proposed Reorganization was subject
to a procedure whereby the IRS had suspended
consideration of requests for such rulings pending the
completion of a designated study. As a result, the
parties determined not to complete the Proposed
Reorganization on the terms originally agreed upon. The
parties proceeded to review alternatives to the Proposed
Reorganization in light of the application of this
procedure.
As part of the review of alternatives, the Company
invited Barnickel to propose two individuals for
nomination to the Company's Board of Directors at the
Company's March 1995 Annual Meeting of Stockholders.
Barnickel proposed Fairfax F. Pollnow and Wayne J. Grace,
the Company's Board of Directors was expanded from nine
to eleven members to accommodate them and they were
elected as directors of the Company. In connection
therewith, the Rights Plan was amended to allow
distribution of the assets of the Barnickel Trust and
include Pollnow and Grace in the "grandfather" provision.
See "Certain Information Concerning the Company -- The
Rights Plan."
Throughout 1995, Barnickel continued to monitor the
Company's performance. In early 1995, an unsolicited
third party approached Barnickel to discuss the
possibility of a transaction with the Company.
Preliminary discussions were held, but ended without any
significant progress. During the summer of 1995, another
unsolicited third party approached Barnickel to discuss
the possibility of a transaction with the Company.
Barnickel determined not to pursue discussions with such
third party. During this time, Barnickel was becoming
increasingly concerned with the Company's business and
operations. For the fiscal year ended October 31, 1995,
the Company's net earnings declined to $6.2 million, from
$9.0 million for fiscal 1994, $14.0 million for fiscal
1993, and $16.5 million for fiscal 1992.
In November, 1995, the Company appointed a new Chief
Executive Officer, who developed a plan to restructure
the Company and improve its performance. Paul Hatfield,
the new Chief Executive Officer, met with certain members
of the Barnickel Board of Directors to present his plan.
Barnickel analyzed and discussed the plan thoroughly with
its advisors. At this time, Barnickel decided to monitor
the situation and the Company's performance in light of
the restructuring plan. See "Reasons for the
Solicitation - The Company's Plan and Projections."
Barnickel continued to receive unsolicited
expressions of interest from third parties. Barnickel
representatives informed Mr. Hatfield of the continuing
third party inquiries, but Mr. Hatfield stated the
Company did not intend to pursue any contact with such
third parties.
In January 1996, Barnickel was approached by certain
large, publicly held companies, which indicated a
significant interest in acquiring the Company. One of
these parties stated that they had recently contacted the
Company but had been told that the Company was not
interested in pursuing any discussions. Barnickel
contacted the Company, which confirmed that it was not
willing to pursue such discussions.
In early February, 1996, representatives of
Barnickel met with the Company to better understand the
restructuring plan. In these meetings, the Company
projected earnings of $3.00 per Share in 1998 and annual
sales growth of 2.5% - 3.0% through 1998. Over the next
two weeks, Barnickel and its advisors reviewed and
analyzed the restructuring plan. See "Reasons for the
Solicitation - The Company's Plan and Projections."
As a result of this review and analysis, Barnickel
and Morgan Stanley determined that there were substantial
uncertainties associated with achieving the results
forecast in the restructuring plan. Consequently, in
late February 1996, in addition to continuing to monitor
the performance of the Company, Barnickel decided to
explore more actively the possibility of a third party
acquisition of the Company. Barnickel informed the
Company of its intentions to talk with potential third
party purchasers, and asked the Company to join the
discussions. The Company flatly refused to take part in
any third party discussions. The Company further
indicated that it would no longer discuss any transaction
alternatives with Barnickel if it went forward with any
discussions with third parties. Over the next few weeks,
Morgan Stanley contacted on behalf of Barnickel a number
of parties which, based on Morgan Stanley's research and
prior discussions, it felt might have an interest in
pursuing a business combination with Barnickel and the
Company.
In April 1996, the Company informed Barnickel that
it had revised its February projections upward and now
estimated earnings of $4.00 per Share in 1998 and annual
sales growth of greater than 7.0% through 1998. See
"Reasons for the Solicitation - The Company's Plan and
Projections." In May 1996, at the Company's request,
representatives of Barnickel met with the Company to
discuss a renewed proposal by the Company for a
transaction between only the Company and Barnickel,
notwithstanding Barnickel's ongoing discussions with
third parties.
During the May meeting, the Company proposed a
merger between the Company and Barnickel in which the
Company would issue a number of Shares equal to the
number of Shares owned by Barnickel and pay cash for
Barnickel's other assets in exchange for the stock of
Barnickel. Barnickel stockholders would be given the
opportunity to receive either Shares or cash, subject to
certain limits. Barnickel and its advisors determined
that this proposal was less favorable to Barnickel than
either the original Proposed Reorganization outlined in
the Letter of Intent or the possible transactions that
Barnickel was discussing with third parties.
In late May, 1996, the parties who had contacted
Barnickel in January 1996 delivered to Barnickel written
expressions of interest evidencing a desire to acquire
the Company in a tax free reorganization based upon a
value of at least $40 per Share. Any transaction would
be subject to the execution of a mutually acceptable
agreement and, in the case of one party, to appropriate
due diligence. Each party stated that its expression of
interest was based on publicly available information, and
that it would be willing to increase the price it had
indicated following its review of non-public information
regarding the Company, if such increase was warranted by
such review.
On June 10, 1996, Barnickel delivered those written
expressions of interest to the Company and again asked
the Company to cooperate with Barnickel in pursuing a
business combination with such companies, or otherwise to
discuss or cooperate in a business combination with any
third party. Management of the Company refused to
participate in discussions with these third parties,
expressing the view that it was not the appropriate time
to sell and questioning the seriousness of the parties
which had delivered written expressions of interest.
After the Company refused to participate in discussions,
Barnickel informed the Company that it would continue to
take steps toward a third party transaction.
Following the June meeting with Barnickel, the
Company formed a Special Committee of the Board of
Directors to (i) review and evaluate a transaction
pursuant to which the Company would be acquired by a
third party, (ii) consider whether it is in the best
interests of the Company and its stockholders to engage
in a business combination at this time, (iii) consider
whether there are strategic alternatives to a transaction
pursuant to which the Company would be acquired by a
third party that would be in the best interests of the
Company and its stockholders, and (iv) determine whether
it is in the best interests of the Company and its
stockholders, and would maximize stockholder value, to
(x) pursue a transaction pursuant to which the Company
would be acquired by a third party, (y) pursue a
strategic transaction, or (z) pursue the Company's
restructuring plan, and to provide reports and
recommendations on the above matters to the Company's
Board of Directors.
On July 11, 1996, Barnickel and Morgan Stanley met
with the Special Committee. At that meeting, Barnickel
was informed that the Company had revised its February
projections upward and now estimated earnings of $4.19
per Share in 1998, increasing to $6.90 by 2000, which
were adjusted to reflect the Company's assessment of risk
to $3.15 by 1998, increasing to $4.55 by 2000. See
"Reasons for the Solicitation - The Company's Plan and
Projections."
Also at the July meeting with the Special Committee,
Barnickel and Morgan Stanley made a presentation with
respect to the written expressions of interest that had
been received, as well as an analysis of the Company's
restructuring plan and the uncertainties inherent in that
plan. Barnickel's and Morgan Stanley's presentation
concluded that, in light of the attractiveness of the
third party proposals and the uncertainties inherent in
the restructuring plan, the Company should actively
explore a sale of the Company to a third party.
The Company informed Barnickel that, based on the
recommendation of the Special Committee, it would not
participate in discussions with third parties. Over a
series of discussions with Barnickel, the Company cited a
number of reasons for its refusal to cooperate with
Barnickel in pursuing a third party transaction,
including that (i) in the Company's view, it was not the
appropriate time to sell the Company, (ii) the Company
questioned the seriousness of the parties which submitted
written expressions of interest, (iii) the Company
questioned whether the transaction could be accomplished
as a tax-free reorganization (this reason was later
withdrawn), (iv) the Company doubted whether the
transaction could be accomplished as a pooling-of-
interests, and (v) the Company was concerned that
antitrust issues, with respect to one of the third
parties, might prevent the consummation of a transaction
with such party. In September 1996, the Special
Committee confirmed these reasons in a report to the
Company's Board of Directors.
On September 24, 1996, the Company proposed a
transaction whereby the Company would purchase up to 55%
of the outstanding stock of Barnickel for a cash price
equivalent to $38.50 per Share, a premium of
approximately $6.75 over the closing price on September
23, 1996, and exchange the remaining stock of Barnickel
for Shares at no premium. The Company also indicated
that it would expect the principal Barnickel stockholders
to enter into standstill arrangements imposing longer
restrictions than those contemplated by the Letter of
Intent. In addition, on September 24, 1996, the Company
again advised Barnickel that it had revised its
projections, estimating earnings per Share to be $3.46 in
1998 and $5.47 in 2000. See "Reasons for the
Solicitation - The Company's Plan and Projections."
After careful analysis and discussion with its
advisors, Barnickel concluded that the Company's proposal
was less attractive than the third party expressions of
interest and would not maximize stockholder value. In
addition, the Company's proposal did not fully address
Barnickel's liquidity and tax objectives. The Company's
proposal also would have required the Company to incur a
material amount of debt in a transaction which did not
permit the participation of all Company stockholders,
leaving the remaining stockholders of the Company as
stockholders in a much more leveraged corporation.
Moreover, the future success of the Company would be
based on the accomplishment of its restructuring plan,
which entails significant uncertainties.
In the course of discussions with the companies
which delivered expressions of interest, such parties
indicated in May 1996 that they were prepared to structure a
business combination in a manner that would allow all the
Company's stockholders to receive equivalent value for
their stock, while still addressing the liquidity and tax
objectives of Barnickel and its stockholders and the
accounting objectives of the potential acquirors. Barnickel
has determined that it will be necessary to structure the
transaction as a three party transaction involving a third
party, the Company and Barnickel to accomplish those
objectives, subject to the tax requirement of the retention
of certain Shares issued in such transaction. Barnickel also
has recognized that to implement such a transaction,
ultimately the approval of the Company's Board of
Directors will be required. Barnickel believes that the
best way to negotiate the highest price and obtain the
best available terms would be to complete negotiations
with a third party with the cooperation and participation
of the Company. Consequently, in light of the Company's
repeated and ongoing refusal to participate in any
discussions with third parties and in order to allow for
such cooperation, participation and implementation,
Barnickel has decided to undertake this consent
solicitation in order to accomplish changes in the
composition of the Company's Board of Directors.
Barnickel would prefer a tax-free transaction, such
as the three party structure described above, which would
allow it to distribute the maximum value to its
stockholders and give all of the Company's stockholders
the option to retain or sell shares of the acquiring
party. Barnickel is committed to achieving maximum value
and liquidity for all holders of Shares. While it is
expected that the Nominees will take Barnickel's
preference into account, the Nominees believe that, once
elected, their fiduciary duties will require them to act
in the best interests of all holders of Shares.
REASONS FOR THE SOLICITATION
Barnickel believes that it would be in the best
interests of all the stockholders of the Company for the
Company to maximize stockholder value and liquidity by
actively pursuing a sale or merger.
Given the Company's refusal to consider proposals
for the sale or merger of the Company at what Barnickel
believes would be an attractive price level, Barnickel is
proposing the replacement of members of the Company Board
with its Nominees, who, if elected, and subject to
their fiduciary duties, intend to analyze the financial
and operating status of the Company and, if deemed to be
in the best interests of the Company's stockholders, to
pursue a process for the sale or merger of the Company
on the most advantageous terms for all stockholders.
Barnickel is a private company with no public market
for its stock. The Shares are Barnickel's largest asset
and dividends on the Shares are Barnickel's primary
source of income. Many of the holders of Barnickel stock
have a desire for achieving greater liquidity and
diversity in their investment in a tax-efficient manner.
Barnickel believes that a merger of the Company,
Barnickel and a larger, publicly held third party in
which the holders of Barnickel stock would receive stock
of the third party in a tax-free exchange may be the best
way to accomplish these objectives. In this regard, the
interests of Barnickel and its stockholders may differ
from the interests of other holders of Shares.
Regardless of this potential difference in interests,
Barnickel believes that a merger of the Company,
Barnickel and a larger, publicly held third party is the
best way to maximize value and liquidity for all holders
of Shares. Barnickel is particularly concerned with the
uncertainty associated with the Company achieving the
financial goals outlined in the Company's restructuring
plan.
While it is expected that the Nominees will take
Barnickel's preference into account, the Nominees believe
that, once elected, their fiduciary duties will require
them to act in the best interests of all holders of
Shares.
The Company's Performance
In Barnickel's view, the Company's performance has
been disappointing for a number of years, and the market
price of the Shares has suffered accordingly. Despite a
recent improvement in stock price, the Company's stock
price has underperformed specialty chemical companies,
consisting of Betz Dearborn Inc., Ethyl Corporation,
Great Lakes Chemical Corporation, Fuller (H.B.) Company,
Loctite Corporation, Nalco Chemical Company and Lubrizol
Corporation (the "Specialty Chemicals Composite") and the
Standard & Poor's 500 over the past ten year period.
[Table presented in lieu of graph.]
Specialty
Chemicals Standard & Petrolite
Date Composite Poor's 500 Corporation
---- --------- ---------- -----------
11/10/86 100.000 100.000 100.000
12/31/86 98.137 98.391 109.091
12/31/87 110.015 100.386 92.929
12/30/88 120.708 112.835 90.909
12/29/89 157.010 143.583 111.111
12/31/90 176.953 134.165 88.889
12/31/91 256.980 169.459 112.121
12/31/92 260.767 177.024 115.152
12/31/93 240.465 189.514 141.414
12/30/94 206.117 186.597 105.051
12/29/95 216.801 250.246 115.152
11/08/96 210.988 296.924 131.313
Over the fiscal years ended from October 31, 1991 to
October 31, 1995, the Company's revenue grew at only a
3.1% compound annual growth rate versus a 7.3%(*)
compound annual growth rate over the years from 1991 to
1995 for the companies included in the Specialty Chemical
Composite. The Company's earnings per Share, excluding
extraordinary items, over that same period ranged from a
low of $1.30 in fiscal year 1991 to a high of $1.82 in fiscal
year 1993, ending with $1.34 in 1995, only a 0.8% compound
annual growth rate for the five year period. Based on
the latest financial information published by the
Company, the earnings per Share was $1.43, excluding
extraordinary items, and $0.54, as reported by the Company,
for the twelve month period ended July 31, 1996. Since fiscal
year 1993, operating income, excluding extraordinary items,
as a percentage of sales has declined from 9.0% to 4.4% in the
twelve month period ended July 31, 1996, a decrease of 51.1%.
Adjusted for extraordinary items, net income as a percentage of
sales has declined from 5.8% to 4.6%, a decrease of 20.7%.
Over the five year period ended December 31, 1995, the
Company has underperformed the Specialty Chemical
Composite in sales growth, operating margin, return on
assets and return on equity.
----------------------
* Excludes Ethyl Corporation in the calculation of
compound annual growth rate of revenue due to Ethyl
Corporation's spin-off of Abermarle Corporation in
1994.
The Company's Plan and Projections
Since becoming Chief Executive Officer in November,
1995, Mr. Hatfield and his management team have developed
a restructuring plan (the "Plan") in an effort to improve
the Company's performance. The Plan was explained to
Barnickel on various occasions since December 1995 and
includes adoption of what Mr. Hatfield referred to as the
"S3" (Strategic Selling System) philosophy, focusing on
growing business with existing key customers, overhauling
and streamlining core business systems, recruiting key
senior managers and streamlining organizations. The
overall goals of those initiatives were to reduce the
current cost structure and enhance revenue.
In presentations to, and communications with,
Barnickel during 1996, management of the Company
repeatedly increased its performance projections for the
Company:
Date Estimate/Comment
____ ________________
February 1996 * 2.5% - 3.0% revenue growth through
1996.
* Earnings per Share of $3.00 by 1998.
April 1996 * Goal of matching top quartile of
specialty chemical companies.
* 7% or more revenue growth for 1998
and 1999.
* Earnings per Share of approximately
$4.00 by 1998.
July 1996 * Earnings per Share of $4.19 by 1998,
increasing to $6.90 by 2000, which
were adjusted to reflect the
Company's assessment of risk to $3.15
by 1998, increasing to $4.55 by 2000.
September 1996 * Earnings per Share of $3.46 by 1998,
increasing to $5.47 by 2000.
* Net sales increasing from
approximately $355 million in 1996 to
$467 million in 2000.
* Net earnings increasing from
approximately $16.4 million in 1996
to $62.0 million in 2000.
The Company attributed its increased estimates of
earnings per Share to the discovery of increased
opportunities. In Barnickel's view, the Company did not
sufficiently specify increased opportunities to explain
the increases. Barnickel has no information as to
whether management has further modified the Plan and its
projections since September 1996.
Uncertainties Inherent in Meeting the Company's
Projections Under the Plan
Barnickel believes that there are numerous
uncertainties associated with the realization of both the
operational and financial benefits of the Plan.
Underlying Assumption Barnickel Analysis
--------------------- ------------------
Significant personnel and -- There are significant
cultural changes within the uncertainties in being successful
Company will occur and in both developing a new Company
improve the Company's culture and establishing a new
performance. management team that can
effectively execute a difficult
operating plan.
-- In its operating performance
projections, the Company does not
adequately provide for risks
associated with making significant
personnel and cultural changes and
improving its performance through
such changes.
The Company projects 7% -- Extremely aggressive. The
compound annual growth rate Company's projected revenue
in sales from 1996-2000(1) assumptions include aggressive
while simultaneously annual average price increases of
increasing operating 4% and annual average volume
margins from 4.4%(2) increases of 3%. Historically, the
to 17.1% by the year 2000 average price increases and volume
increases from 1991 through 1995
were approximately 2% and 3%,
respectively, for the Specialty
Chemicals Composite.(3) The Company
is attempting to achieve this price
and volume growth, while
simultaneously attempting to
increase margins by approximately
12.5 percentage points, which would
be extremely difficult to achieve.
The Company projects that much of
the volume growth should come
internationally. To achieve volume
growth internationally, the Company
would have to incur additional
selling and other infrastructure
costs, thereby constraining margin
expansion.
-- The Company does not produce
the higher value-added,
differentiated products consistent
with producing gross margins in the
range of 55%- 65%, as do companies
like Nalco Chemical Company, Betz
Dearborn Inc. and Loctite
Corporation, and consequently, it
will be extremely difficult to
achieve operating margins in the
17% range. Instead, the Company's
gross margins have historically
been consistent with petroleum
chemical businesses like NEEC
(the Nalco-Exxon oil field
services joint venture), Lubrizol
Corporation and Ethyl Corporation's
lube additives business, which had
produced gross margins in 1995
ranging from 24% to 35%.
---------------------
1 Does not include any sales increases resulting from
acquisitions.
2 Calculated based on the twelve month period ended July 31,
1996.
3 Source: Morgan Stanley Research. Excludes Ethyl
Corporation and Loctite Corporation, as certain
information was unavailable with respect to these
companies.
-- The median operating margin for
the Specialty Chemicals Composite
was 16.7% from 1991 to 1995,
compared to the Company's operating
margin of 7.6% over fiscal years
1991-1995. In 1995, the Company
posted a 5.4% operating margin
compared to margins for more
directly comparable companies of
7.7% for NEEC, 11.4% for Lubrizol
and 7.0% for Ethyl's lube additives
business.
-- The levels of revenue, gross
margin and operating margin growth
forecasted by the Company are very
aggressive relative to the results
achieved by the Company's direct
competitors.
The Company projects -- Extremely aggressive. The
earnings per Share of $5.47 Company operates in an industry
for 2000, reflecting a characterized by significant
projected compound annual competitive rivalry and sells its
growth rate of 39.4% from products to, and buys its raw
estimated 1996 earnings materials from, large companies
per Share. which exercise considerable
influence within the industry. This
projected level of improvement in
earnings per Share is extremely
difficult to achieve in such an
operating environment. Lubrizol, a
comparable public company, has
recently announced a restructuring
plan with many of the same themes
as the Company's plan. Lubrizol's
five year projected earnings per
Share compound annual growth rate
is only 8.2%, as reported in the
Institutional Brokers Estimates
Services ("I/B/E/S").
-- In a report dated August 23,
1996, a Goldman Sachs' research
analyst projected earnings per
Share in the range of $3.00 - $4.00
by the year 2000, which would imply
a 19.9% - 28.9% compound annual
growth rate. Median earnings per
share growth for the Specialty
Chemicals Composite was 4.8% for
the five year period from 1991 -
1995, although the I/B/E/S projects
a median compound annual growth
rate for the group of 10% for the
next five years.
The Company projects -- The average return on equity
earnings per Share of $5.47 for the Specialty Chemical
for the year 2000, implying Composite from 1991 through 1995
a return on average equity was approximately 22.0%. In that
of approximately 23.2%. period, Lubrizol achieved a return
on equity of approximately 16.2%.
The Company's latest twelve month
return on average equity was 9.9%.
It is highly unlikely, in Barnickel's
view, that the Company will be able
to achieve a 45% premium to Lubrizol's
historical return and a 134% increase
of the Company's current return over
the next five years.
Liquidity
The Shares are a relatively illiquid investment.
Trading in the Company Shares has averaged approximately
13,000 Shares per trading day over the past two years
compared to an average of approximately 129,370 shares
for the companies in the Specialty Chemicals Composite.
A merger with a larger, more actively traded public
company would provide for greater liquidity than the
Shares currently have. Furthermore, if the third party
were a company within the industry, such a merger would
allow stockholders to have the option of easily selling
their shares of the combined entity for cash or to
continue their investment in the industry.
Conclusion
Barnickel believes that a sale or merger now would
provide substantially more value and liquidity, and a
substantially lower level of uncertainty, than holding
Shares in the hope that the Company's performance will
improve significantly and that such improvement will be
reflected in the price of the Shares.
Barnickel believes that a substantial premium can be
realized by aggressively pursuing a sale or merger,
especially in light of the value levels proposed by the
parties which have submitted written expressions of
interest. There can, of course, be no assurances as to
any transaction being consummated, just as there can be
no assurances as to the Company's performance and stock
price.
Barnickel believes that a stock-for-stock merger
between the Company and a larger, more actively traded
public company, especially one in the same industry as
the Company, would allow stockholders who wish to
participate in the future performance of the Company the
opportunity to do so, while allowing others the
opportunity to sell their Shares and invest elsewhere.
Based on the foregoing, including the preliminary
indications of interest referred to in "Background of the
Solicitation," Barnickel and Morgan Stanley, its
financial advisor, believe that exploring a sale of the
Company would be in the best interests of the
stockholders of the Company. A sale or merger of the
Company cannot be accomplished without the cooperation of
the Company. Among other impediments to a transaction is
the Rights Agreement, which could effectively prevent any
person from acquiring 15% or more of the outstanding
Shares without the concurrence of the Company Board. For
a description of the Rights Agreement, including the
requirement for Continuing Director approval of amendment
or redemption under certain circumstances, see "Certain
Information Concerning the Company -- The Rights
Agreement." In addition, under Delaware law, a merger
with a Delaware corporation (other than with the holder
of at least 90% of the outstanding shares) must be
pursuant to an agreement of merger approved by the board
of directors of the corporation. The DGCL provides that
an agreement of merger must be adopted by the holders of
at least a majority of the outstanding shares of a
Delaware corporation. If the board of directors of the
Company were to approve an agreement of merger with a
third party prior to the time such third party might be
deemed to be the beneficial owner of 15% of the
outstanding Shares, Section 203 of the DGCL would also be
satisfied. The Company's Certificate of Incorporation
also requires that holders of 75% of the outstanding
Shares approve a merger, unless the merger was approved
by 75% of the members of the Company Board. In light of
the Company's actions described under "Background" above,
including the Company's unwillingness to pursue a third
party transaction, Barnickel does not believe the Company
Board, as presently constituted, will redeem the Rights,
approve a merger agreement or otherwise facilitate a
transaction.
Barnickel's Nominees, once elected, intend to seek to
consult with the Company's present management and
financial advisors in order to assist in maximizing
stockholder value. There can be no assurances that the
Company's management and financial advisors will
cooperate with the Nominees.
IF YOU AGREE THAT IT WOULD BE IN THE BEST INTERESTS
OF THE HOLDERS OF SHARES FOR THE COMPANY TO MAXIMIZE
STOCKHOLDER VALUE BY ACTIVELY PURSUING A SALE OR MERGER,
PLEASE SIGN A BLUE CONSENT CARD AND SEND IT TO [TRUSTCO].
LITIGATION
On November 12, 1996, Barnickel filed a complaint
with the Delaware Court of Chancery against the Company,
Paul H. Hatfield, Jerry B. Davis, Richard L. O'Shields,
Brian M. Rushton and Joseph T. Williams. The complaint
challenges an interpretation of a provision of the Rights
Agreement which the complaint alleges the Company will
claim should be read as providing that Barnickel's
attempt to obtain stockholders' support for the removal
and election of Company Directors pursuant to a public
consent solicitation would cause Barnickel to be deemed
the beneficial owner of Shares with respect to which
consents were submitted pursuant to the solicitation. In
other words, the complaint alleges that the Company will
claim that the Rights would be triggered if holders of
more than one percent of the Shares (beyond the level of
beneficial ownership by Barnickel otherwise
"grandfathered" by the Rights Agreement) execute consents
to the action sought by Barnickel.
The complaint also seeks declaratory, injunctive and
other relief against a separate provision in the Rights
Agreement which, under certain circumstances, provides
that the decision to redeem the Rights issued thereunder
will require the concurrence of a majority of Continuing
Directors (as defined in the Rights Agreement). The
complaint further alleges that, as a result of this
provision, a majority of the Company's Directors would be
unable to exercise their fiduciary duties to approve and
facilitate transactions they might believe were in the
best interests of the Company and its stockholders.
Finally, the complaint alleges that the Company and
the defendant Directors will take the position, which the
complaint challenges, that, based on a provision in the
Company's by-laws, Directors of the Company cannot be
removed from office or elected by written consent of
stockholders, but instead must be elected at an annual
meeting of the Company's stockholders.
Barnickel has also filed with the Court a motion for
summary judgment or, in the alternative, for a temporary
restraining order.
CERTAIN INFORMATION CONCERNING BARNICKEL
Barnickel, a Missouri corporation, is a privately
held company, which maintains a portfolio of securities
consisting primarily of stock of the Company. The
business address of Barnickel is Wm. S. Barnickel &
Company, c/o Mr. Jules Chasnoff, Esq., Lowenhaupt &
Chasnoff, L.L.C., 10 South Broadway, Suite 600, St.
Louis, Missouri 63102.
Messrs. Pollnow, Stranghoener and Sexton, each of
whom is a Barnickel director, have been and are expected
to be instrumental in assisting Barnickel in pursuing its
goals of liquidity, diversification, value maximization
and equality of treatment of all of the Company's
stockholders. Barnickel's Board of Directors anticipates
compensating such individuals for their efforts in
amounts to be determined in the future. While no
understanding currently exists, consideration has been
given to amounts that would be significant for such
individuals, and which would not be contingent on the
success of the Consent Solicitation or the occurrence of
any transaction involving Barnickel or the Company or
their actions as directors of the Company.
Messrs. Kresko, MacCarthy and Quenon, each of whom is
a Barnickel nominee but not a director, officer or
employee of Barnickel, will not receive any compensation
from Barnickel, although they will be indemnified and
have expenses reimbursed as described in the section
captioned "Proposals - Proposed Election of Nominees."
CERTAIN INFORMATION CONCERNING THE COMPANY
The Company's principal executive offices are at 369
Marshall Avenue, St. Louis, Missouri 63119, and its
telephone number at that address is 314-961-3500.
Rights Plan.
On March 28, 1994, the Company Board declared a
dividend distribution of one Right for each outstanding
Share. Each Right, when exercisable, entitles the
registered holder to purchase from the Company one Share
at a price of $120 per Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Society National
Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all
certificates representing Shares then outstanding, and no
separate certificates evidencing the Rights will be
distributed. The Rights will separate from the Shares
and a distribution of Rights Certificates will occur upon
the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of
15% or more of the outstanding Shares (the "Stock
Acquisition Date") or (ii) 10 business days (or such
later date as the Continuing Directors may determine)
following the commencement of a tender offer or exchange
offer the consummation of which would result in the
beneficial ownership by a person of 15% or more of the
outstanding Shares (the earlier of such dates being
called the "Distribution Date").
Notwithstanding the foregoing, "Acquiring Person"
shall not include BBI, BTC, Barnickel, the Barnickel
Trust and Michael V. Janes (each, together with its
Affiliates and Associates, an "Exempt Person"), each of
whom has reported beneficial ownership of Shares in
excess of 15% of the outstanding Shares, unless such an
Exempt Person acquires beneficial ownership of an
additional 1% of the Shares in excess of the amount
reported by the Exempt Person on a Schedule 13D dated
February 24, 1994, excluding in each case, those Shares
held pursuant to the terms of any Company employee
benefit plan (other than as a result of acquisitions of
Shares by the Company which increases the proportionate
number of Shares beneficially owned by such Exempt
Person, so long as such Exempt Person has not taken any
actions which caused the proportionate number of Shares
beneficially owned by such Exempt Person to increase by
1%).
Until the Distribution Date, (i) the Rights will be
evidenced by the Share certificates, and will be
transferred with and only with the Share certificates,
(ii) new Share certificates issued after April 8, 1994
upon transfer or new issuance of the Share will contain a
notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any certificates
for Share outstanding will also constitute the transfer
of the Rights associated with the Share represented by
such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on March
28, 2004, unless earlier redeemed or exchanged by the
Company as described below. The Rights will not be
exercisable by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Rights has not
been obtained or is not obtainable.
As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of
record of the Shares as of the close of business on the
Distribution Date and, thereafter, the separate Rights
Certificates alone will evidence the Rights. Except as
otherwise determined by the Board of Directors, only
Shares issued prior to the Distribution Date will be
issued with Rights.
In the event that a Person becomes the beneficial
owner of 15% or more (or an Exempt Person acquires an
additional 1%) of the then outstanding Shares (except
pursuant to an offer for all outstanding Shares which the
Outside Directors determine to be fair to and otherwise
in the best interests of the Company and its
stockholders), each holder of a Right will thereafter
have the right to receive upon exercise at one-half of
the Purchase Price, Shares (or, in certain circumstances,
cash, property or other securities of the Company) having
a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following
the occurrence of the events set forth in this paragraph,
all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the
occurrence of the events set forth above until such time
as the Rights are no longer redeemable by the Company as
set forth below.
For example, at a Purchase Price of $120 per Right,
each Right not owned by an Acquiring Person (or by
certain related parties) following an event set forth in
the preceding paragraph would entitle its holder to
purchase $120 worth of Shares (or other consideration, as
noted above) for $60. Assuming that the Shares had a per
Share value of $40 at such time, the holder of each valid
Right would be entitled to purchase 3 Shares for $60.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger
or other business combination transaction in which the
Company is not the surviving corporation (other than a
merger which follows an offer described in the second
preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously
have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, capital stock
of the acquiring company having a value equal to two
times the exercise price of the Right, e.g., capital
stock of the acquiring company having a value of $240 for
the $120 exercise price.
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board
of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which
have become void), in whole or in part, at an exchange
ratio of one Share per Right (subject to adjustment).
The Purchase Price payable, and the number of Shares
or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of
Shares (ii) upon the grant to holders of the Shares of
certain rights or warrants to subscribe for Shares or
convertible securities at less than the current market
price of the Shares or (iii) upon the distribution to
holders of the Shares of evidence of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares will be issued and
in lieu thereof, an adjustment in cash will be made based
on the market price of the Shares on the last trading
date prior to the date of exercise.
In general, the Company may redeem the Rights in
whole, but not in part, at any time until ten days
following the Stock Acquisition Date, at a price of $.01
per Right (payable in cash, Shares or other consideration
deemed appropriate by the Board of Directors). Under
certain circumstances set forth in the Rights Agreement,
the decision to redeem the Rights will require the
concurrence of a majority of the Continuing Directors.
After the redemption period has expired, the Company's
right of redemption may be reinstated (with the
concurrence of the Continuing Directors) if an Acquiring
Person reduces his beneficial ownership to 10% or less of
the outstanding Shares in a transaction or series of
transactions not involving the Company and there are no
other Acquiring Persons. Immediately upon the action of
the Board of Directors of the Company ordering redemption
of the Rights, with, where required, the concurrence of
the Continuing Directors, the Rights will terminate and
the only right of the holders of Rights will be to
receive the $.01 redemption price.
The term "Continuing Director" means any member of
the Board of Directors of the Company who was a member of
the Board prior to the date of the Rights Agreement, and
any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of
the Continuing Directors, but shall not include an
Acquiring Person or an affiliate or associate of an
Acquiring Person, or any representative of the foregoing
entities. The term "Outside Directors" means "Continuing
Directors" who are not officers of the Company.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the
Rights will not be subject to federal taxation to
stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable
for Shares (or other consideration) of the Company or for
capital stock of the acquiring company as set forth
above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of
Directors of the Company (acting by at least a majority
of the Continuing Directors) prior to the Distribution
Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board (acting by
at least a majority of the Continuing 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), or to shorten or lengthen any time
period under the Rights Agreement; provided however, no
amendment to adjust the time period governing redemption
may be made at such time as the Rights are not
redeemable.
On December 1, 1994, the Company and the Rights Agent
amended the Rights Agreement to clarify that neither the
execution of the Letter of Intent nor any actions taken by
the parties thereto or their affiliates with respect to
the Letter of Intent, including the execution of a
definitive agreement with respect to the Proposed
Reorganization would trigger the Rights Agreement.
On February 7, 1995, the Company and the Rights Agent
executed Amendment No. 2 to the Rights Agreement which
(i) clarified that no Rights will become exercisable
solely by reason of the distribution of the Barnickel
Trust pursuant to its terms, (ii) treats Messrs. Pollnow
and Grace, and any other persons proposed by Barnickel
for nomination by the Company for election as Directors
of the Company (a "Barnickel Nominee"), as "Exempt
Persons" insofar as they might be deemed a member of a
"group" (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act")) solely by
reason of such proposed nomination, nomination or
subsequent election, (iii) excludes the Barnickel
Nominees and any person who is an "Exempt Person" or
representative of an "Exempt Person" from the definition
of "Continuing Directors(s)" and (iv) clarifies that the
furnishing of proxies or the casting of votes in favor,
or the withholding of votes from, the election of
nominees for election as Directors of the Company by
Barnickel and certain other persons in respect of the
Company's 1995 Annual Meeting of Stockholders will not,
directly or indirectly, cause any Rights to become
exercisable.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an exhibit to
the Company's Current Report on Form 8-K dated April 6,
1994. Amendments were filed as exhibits to the Current
Reports on 8-K dated December 13, 1994 and February 13,
1995. This summary description of the Rights does not
purport to be complete and is qualified in its entirety
by reference to the Rights Agreement.
Section 203 of the DGCL.
Section 203, in general, prohibits a Delaware
corporation such as the Company from engaging in a
"Business Combination" (defined as a variety of
transactions, including mergers, as set forth below) with
an "Interested Stockholder" (defined generally as a
person that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock) for a period of
three years following the date that such person became an
Interested Stockholder unless (a) prior to the date such
person became an Interested Stockholder, the board of
directors of the corporation approved either the Business
Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder, (b) upon
consummation of the transaction that resulted in the
stockholder becoming an Interested Stockholder, the
Interested Stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the
transaction commenced, excluding stock held by directors
who are also officers of the corporation and employee
stock ownership plans that do not provide employees with
the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or
exchange offer or (c) on or subsequent to the date such
person became an Interested Stockholder, the Business
Combination is approved by the board of directors of the
corporation and authorized at a meeting of stockholders,
and not by written consent, by the affirmative vote of
the holders of at least 66 2/3% of the outstanding voting
stock of the corporation not owned by the Interested
Stockholder.
Under Section 203, the restrictions described above
do not apply if, among other things (a) the corporation's
original certificate of incorporation contains a
provision expressly electing not to be governed by
Section 203; (b) the corporation, by action of its
stockholders, adopts an amendment to its certificate of
incorporation or by-laws expressly electing not to be
governed by Section 203, provided that, in addition to
any other vote required by law, such amendment to the
certificate of incorporation or by-laws must be approved
by the affirmative vote of a majority of the shares
entitled to vote, which amendment would not be effective
until 12 months after the adoption of such amendment and
would not apply to any Business Combination between the
corporation and any person who became an Interested
Stockholder of the corporation on or prior to the date of
such adoption; (c) the corporation does not have a class
of voting stock that is (1) listed on a national
securities exchange, (2) authorized for quotation on an
inter-dealer quotation system of a registered national
securities association or (3) held of record by more than
2,000 stockholders, unless any of the foregoing results
from action taken, directly or indirectly, by an
Interested Stockholder or from a transaction in which a
person becomes an Interested Stockholder; or (d) a
stockholder becomes an Interested Stockholder
"inadvertently" and thereafter divests itself of a
sufficient number of shares so that such stockholder
ceases to be an Interested Stockholder. Under Section
203, the restrictions described above also do not apply
to certain Business Combinations proposed by an
Interested Stockholder following the announcement or
notification of one of certain extraordinary transactions
involving the corporation and a person who had not been
an Interested Stockholder during the previous three years
or who became an Interested Stockholder with the approval
of a majority of the corporation's directors. At this
time, clauses (a) through (d) of this paragraph do not
apply to the Company.
Section 203 provides that, during such three-year
period, the corporation may not merge or consolidate with
an Interested Stockholder or any affiliate or associate
thereof, and also may not engage in certain other
transactions with an Interested Stockholder or any
affiliate or associate thereof, including, without
limitation, (a) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of assets (except
proportionately as a stockholder of the corporation)
having an aggregate market value equal to 10% or more of
the aggregate market value of all assets of the
corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of a
corporation; (b) any transaction which results in the
issuance or transfer by the corporation or by certain
subsidiaries thereof of any stock of the corporation or
such subsidiaries to the Interested Stockholder, except
pursuant to a transaction which effects a pro rata
distribution to all stockholders of the corporation; (c)
any transaction involving the corporation or certain
subsidiaries thereof which has the effect of increasing
the proportionate share of the stock of any class or
series, or securities convertible into the stock of any
class or series, of the corporation or any such
subsidiary which is owned directly or indirectly by the
Interested Stockholder (except as a result of immaterial
changes due to fractional share adjustments) or (d) any
receipt of the Interested Stockholder of the benefit
(except proportionately as a stockholder of such
corporation) of any loans, advances, guarantees, pledges
or other financial benefits provided by or thorough the
corporation.
Section 203 does not apply to Barnickel, but may
apply to any person with whom Barnickel reaches any
agreement, arrangement or understanding with respect to
the Shares held by Barnickel or who might be deemed to
beneficially own the Shares held by Barnickel.
Change in Control Provisions in Executive Employment
Agreements
According to the Company's 1996 Proxy Statement, the
Company has entered into employment agreements with
several executive officers. The agreements provide
severance compensation in the event of the executive's
voluntary or involuntary termination in connection with a
change in control of the Company. This compensation
would be in the form of a lump sum payment equal to two
times the executive's annual base salary and target
incentive payment, and continuation of certain other
executive benefits for a period specified in the
agreement. Under the employment agreements, the election
of the Nominees to the Company's Board of Directors may
constitute a change in control. Barnickel has, and to
its knowledge the Nominees have, no present intention to
replace any executive officers of the Company.
Stockholders Proposals for the 1997 Annual Meeting
According to the Company's 1996 Proxy Statement, any
proposal of a stockholder intended to be presented at the
1997 Annual Meeting of Stockholders must have been
received by the Secretary of the Company at its executive
offices no later than October 17, 1996, to be included in
the Company's Proxy Statement and form of Proxy relating
to that meeting. The by-laws of the Company provide for
the 1997 Annual Meeting to be held on March 4, 1997.
Barnickel has no information as to the deadline for the
1998 Annual Meeting.
Other Information.
The Company is subject to the information filing
requirements of the Exchange Act and, in accordance
therewith, is required to file periodic reports, proxy
statements and other information with the Commission
relating to its business, financial condition and other
matters. Information, as of particular dates, concerning
the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of
the Company's securities, any material interests of such
persons in transactions with the Company and other
matters is required to be described in proxy statements
distributed to the Company's stockholders and filed with
the Commission. These reports, proxy statements and
other information should be available for inspection at
the public reference facilities of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and should
also be available for inspection and copying at
prescribed rates at the regional offices of the
Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a
site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and
other information regarding registrants that file
electronically with the Commission.
Other than the projections and plans for the Company
supplied to Barnickel by the Company referenced in the
sections captioned "Background of the Solicitation" and
"Reasons for the Solicitation," the information
concerning the Company contained in this Consent
Statement has been taken from or based upon publicly
available documents and records on file with the
Commission and other publicly available information.
Although Barnickel has no knowledge that any such
information is untrue, Barnickel takes no responsibility
for the accuracy or completeness of such information or
for any failure by the Company to disclose events that
may have occurred or may affect the significance or
accuracy of such information.
CONSENT PROCEDURE
General
Section 228 of the DGCL states that, unless otherwise
provided in the certificate of incorporation of a
Delaware corporation, any action required to be or which
may be taken at any annual or special meeting of
stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, is signed
by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted,
and those consents are delivered to the corporation by
delivery to its registered office in Delaware, its
principal place of business or an officer or agent of the
corporation having custody of the books in which
proceedings of meetings of stockholders are recorded.
The Company's certificate of incorporation does not
prohibit stockholder action by written consent.
Section 213(b) of the DGCL provides that if no record
date has been fixed by the board of directors, the record
date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no
prior action by the board of directors is required, shall
be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its
registered office in Delaware, its principal place of
business, or an officer or agent of the corporation
having custody of the books in which proceedings of
meetings of the stockholders are recorded.
The Company's by-laws provide that any stockholder
seeking to have the stockholders of the Company authorize
or take action by written consent is required to request
that the Company Board fix a record date. The Company
Board is required to promptly, but in all events within
10 days after the date on which the request is received,
adopt a resolution fixing the record for the solicitation
(which may not be more than 10 days after the date of the
resolution). If the Company Board does not fix a record
date within 10 days after the receipt of the request, the
record date for the solicitation will be the first date
on which a signed consent setting forth the action taken
or proposed to be taken is delivered to the Company.
On November _, 1996, Barnickel, acting through Cede &
Co., the record holder of the Shares beneficially owned
by Barnickel, requested that the Company Board fix a
record date. On _______________, 1996, the Company Board
fixed _______________, 1996 as the Record Date. [If the
Record Date is not set by the time this Consent Statement
is to be mailed, revise appropriately.]
If the Proposals are adopted pursuant to the consent
procedure, prompt notice will be given pursuant to
Section 228(d) of the DGCL to stockholders who have not
executed consents.
Effectiveness and Revocation of Consents
The Proposals will be adopted when properly
completed, unrevoked Consent Cards are signed by the
holders of record on the Record Date of a majority of the
Shares then outstanding and such Consent Cards are
delivered to the Company, provided that the requisite
consents are so delivered within 60 days of the earliest
dated consent delivered to the Company. Barnickel,
acting through Cede & Co., the record holder of the
Shares beneficially owned by Barnickel, intends to
deliver to the Company a Consent Card.
Record holders should send executed Consent Cards to
[TrustCo] in the enclosed postage-paid envelope.
[TrustCo], as agent for stockholders, will forward the
Consent Cards to the Company and provide copies to the
Information Agent, so that Barnickel will be aware of the
consents given. Although record holders could send
Consent Cards directly to the Company, Barnickel requests
that you use the enclosed postage-paid envelope to send
your Consent Card to [TrustCo], so that Barnickel can
monitor the number of consents given.
If your Shares are held in the name of a bank, broker
or other nominee, please contact the party responsible
for your account and give instructions for a Consent Card
to be signed representing your Shares. We urge you to
confirm in writing your instructions to the person
responsible for your account and provide a copy of those
instructions to MacKenzie Partners Inc., the Information
Agent, so that Barnickel will be aware of all
instructions given and can attempt to ensure that such
instructions are followed.
An executed Consent Card may be revoked at any time
before effectiveness of the action taken pursuant to the
Consent Card by marking, dating, signing and delivering a
written revocation before the time that the action
authorized by the executed Consent Card becomes
effective. A revocation may be in any written form
validly signed by the record holder as long as it clearly
states that the consent previously given is no longer
effective. The delivery of a subsequently dated Consent
Card which is properly completed will constitute a
revocation of any earlier consent. The revocation may be
delivered to [TrustCo] at ____________. [TrustCo] will
forward the revocation to the Company and will provide a
copy to the Information Agent, so that Barnickel will be
aware of the revocations given. Although record holders
could send revocations directly to the Company, Barnickel
requests that you send revocations to [TrustCo], so that
Barnickel will be aware of all revocations and can more
accurately determine if and when requisite consents to
the actions described herein have been received. If you
choose to deliver the revocation directly to the Company,
such revocation may be delivered to the Company at 369
Marshall Avenue, St. Louis, Missouri 63119 or at any
other address provided by the Company. Although the
revocation is effective if delivered to the Company,
Barnickel requests that either the original or
photostatic copies of all revocations of consents be
mailed or delivered to the Information Agent at MacKenzie
Partners, Inc., 156 Fifth Avenue, New York, New York
10010, so that Barnickel will be aware of all revocations
and can more accurately determine if and when requisite
consents to the actions described herein have been
received.
Consents Required
[According to the Company, there were ____________
Shares outstanding on the Record Date.][According the
Company's quarterly report on Form 10-Q for the quarter
ended July 31, 1996, as of August 1, 1996, there were
11,341,448 Shares outstanding.] Each Share entitles the
holder of record on the Record Date to one vote on the
Proposals. Accordingly, written consents of holders of
record on the Record Date of approximately ________
Shares will be required to adopt and approve each of
Barnickel's proposals.
As of the Record Date, Barnickel owned of record
______ Shares, constituting approximately 47% of the
Shares believed to be outstanding as of the Record Date.
As a result, the unrevoked consents of other Record Date
stockholders owning 333,365 Shares, or approximately 3%
of the outstanding Shares, on the Record Date are
required to adopt the Proposals.
Solicitation of Consents
Solicitation of consents may be made by the directors
and officers of Barnickel. Consents may be solicited by
mail, advertisement, telephone, telegraph, telex,
facsimile transmission, electronic mail and in person.
No such persons will receive additional compensation for
such solicitation.
In addition, Barnickel has retained MacKenzie
Partners Inc. as its Information Agent to assist in the
solicitation for which it will receive a fee of up to
$50,000 plus reimbursement of its reasonable out-of-
pocket expenses. In addition, Barnickel has retained
[TrustCo] to act as agent for stockholders executing
Consent Cards to deliver such Consent Cards to the
Company and copies to the Information Agent. Barnickel
has executed an engagement letter with [TrustCo]
providing for the payment of a fee of $___ plus
reimbursement of its reasonable out-of-pocket expenses.
Additionally, Barnickel has agreed to indemnify each of
the Information Agent and [TrustCo] against certain
liabilities and expenses, including certain liabilities
and expenses arising under Federal securities laws.
Banks, brokers, custodians, nominees and fiduciaries
will be requested to forward solicitation material to
beneficial owners of Shares. Barnickel will reimburse
banks, brokers, custodians, nominees and fiduciaries for
their reasonable expenses for sending solicitation
material to the beneficial owners of Shares.
Morgan Stanley is acting as financial advisor to
Barnickel in connection with the consent solicitation.
Pursuant to an engagement letter dated April 6, 1996,
Barnickel has agreed to pay Morgan Stanley a retainer fee
of $50,000, of which a pro rata portion would be refunded
if Morgan Stanley were to terminate the engagement before
12 months. In the event that a transaction were not to
occur, Morgan Stanley would charge an advisory fee in
addition to the retainer fee to reimburse it for time and
effort expended. If the transaction were not to occur or
the assignment is terminated by Barnickel within 12
months, an additional advisory fee of $100,000 would be
charged, of which a pro rata portion would be refunded if
the assignment is terminated within twelve months, and
$50,000 would be credited to an additional year's
retainer fee if the engagement were extended. In the
event a sale, merger or reorganization of Barnickel is
accomplished, Morgan Stanley shall receive a transaction
fee of $2,500,000, against which $372,500 of certain
prior advisory fees plus any additional advisory fees
described above would be credited. The transaction fee
would be payable when control of 50% of the common stock
of Barnickel changes hands. In addition, Barnickel
agreed to reimburse Morgan Stanley for reasonable out-of-
pocket expenses and indemnify Morgan Stanley against
certain losses, damages, liabilities and expenses arising
from their engagement.
In connection with Morgan Stanley's engagement as
financial advisor, Barnickel anticipates that certain
employees of Morgan Stanley may communicate in person, by
telephone or otherwise with a number of institutions,
brokers or other persons who are stockholders of the
Company for the purpose of assisting in the solicitation
of consents. Morgan Stanley will not receive any fee for
or in connection with such solicitation activities by
employees of Morgan Stanley apart from the fees it is
otherwise entitled to receive as described above.
The cost of the solicitation of consents to the
Proposals will be borne by Barnickel. Costs related to
the solicitation of consents to the Proposals include
expenditures for attorneys, consent solicitors, public
relations advisors, printing, advertising, postage and
filing fees, are expected to aggregate approximately $__
million. The portion of such costs allocable solely to
the solicitation of consents to the Proposals is not
currently determinable. Barnickel intends to seek
reimbursement from the Company for its costs and expenses
in connection with the consent solicitation. Barnickel
does not intend to seek stockholder approval of such
reimbursement.
Record holders of Shares should sign, date and mail
the enclosed BLUE Consent Card to [TrustCo] in the
postage-paid envelope provided. [TrustCo], as agent for
stockholders, will forward the Consent Card to the
Company and provide a copy to MacKenzie Partners Inc.
(the "Information Agent"), so that Barnickel will be
aware of the consents given.
Special Instructions
If you were a record holder of Shares as of the close
of business on the Record Date, you may elect to consent
to, withhold consent to or abstain with respect to each
Proposal by marking the "CONSENTS," "DOES NOT CONSENT" or
"ABSTAIN" box, as applicable, underneath each such
Proposal on the accompanying BLUE Consent Card and
signing, dating and returning it promptly in the enclosed
postage-paid envelope. IN ADDITION, YOU MAY WITHHOLD
CONSENT TO THE REMOVAL OF ANY INDIVIDUAL MEMBER OF THE
COMPANY BOARD OR TO THE ELECTION OF ANY INDIVIDUAL
NOMINEE BY WRITING SUCH PERSON'S NAME ON THE CONSENT
CARD.
IF THE STOCKHOLDER WHO HAS EXECUTED AND RETURNED THE
CONSENT CARD HAS FAILED TO CHECK ONE OF THE BOXES MARKED
"CONSENTS," "DOES NOT CONSENT" OR "ABSTAIN" FOR EITHER OR
BOTH OF THE PROPOSALS, SUCH STOCKHOLDER WILL BE DEEMED TO
HAVE CONSENTED TO ANY PROPOSAL FOR WHICH THERE IS NO BOX
MARKED. IF A STOCKHOLDER WRITES AN INDIVIDUAL'S NAME ON
THE CONSENT CARD, REGARDLESS OF SUCH STOCKHOLDER'S
FAILURE TO CHECK ONE OF THE BOXES LISTED ABOVE, SUCH
STOCKHOLDER WILL BE DEEMED TO HAVE CONSENTED TO THE
PROPOSAL IN QUESTION AND TO HAVE WITHHELD CONSENT TO THE
REMOVAL OF ANY MEMBER OF THE COMPANY BOARD OR THE
ELECTION OF ANY NOMINEE WHOSE NAME IS WRITTEN ON THE
CONSENT CARD.
BARNICKEL RECOMMENDS THAT YOU CONSENT TO EACH OF THE
PROPOSALS. YOUR CONSENT IS IMPORTANT. PLEASE MARK, SIGN
AND DATE THE ENCLOSED BLUE CONSENT CARD AND RETURN IN THE
ENCLOSED POSTAGE-PAID ENVELOPE PROMPTLY. FAILURE TO
RETURN YOUR CONSENT CARD WILL HAVE THE SAME EFFECT AS
VOTING AGAINST THE PROPOSALS.
If you have any questions about completing or signing
the BLUE Consent Card or require assistance, including
assistance in assuring that any of your Shares held by
brokers or other nominees are voted, please contact the
Information Agent at MACKENZIE PARTNERS INC., 156 FIFTH
AVENUE, NEW YORK, NEW YORK 10010, (212) 929-5500 (CALL
COLLECT) OR TOLL FREE (800) 322-2885.
If your Shares are held in the name of a brokerage
firm, bank nominee or other institution, only it can
execute a consent with respect to your Shares and only
upon receipt of specific instructions from you.
Accordingly, you should contact the person responsible
for your account and give instructions to sign the BLUE
Consent Card representing your Shares. Barnickel urges
you to confirm in writing your instructions to the person
responsible for your account and provide a copy of those
instructions to MACKENZIE PARTNERS INC. at the address
set forth below so that Barnickel will be aware of all
instructions given and can attempt to ensure that such
instructions are followed.
If you have any questions about giving your consent
or require assistance, please contact:
MACKENZIE PARTNERS INC
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (call collect)
or
Toll Free (800) 322-2885
Dated: November __, 1996
ANNEX I
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Shares constitute the only class of voting
securities of the Company. The Company stated in its
Quarterly Report on Form 10-Q for the quarter ended July
31, 1996, that as of August 1, 1996, there were
11,341,448 Shares outstanding. Each Share entitles its
record holder to one vote. Stockholders of the Company
do not have cumulative voting rights.
The following table sets forth the name of each
person who, based on publicly available information,
owned beneficially more than 5% of the Shares outstanding
at the most recent date for which such information is
available, the number of Shares owned by each such person
and the percentage of the outstanding Shares represented
thereby. The information below with respect to
beneficial ownership is based upon information filed with
the Commission pursuant to Sections 13(d) or 13(g) of the
Exchange Act.
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
Wm. S. Barnickel & Company 5,337,360 47.1%
c/o Mr. Jules Chasnoff, Esq.
Lowenhaupt & Chasnoff,
L.L.C.
10 South Broadway, Suite 600
St. Louis, Missouri 63102
T. Rowe Price Associates, 730,900(1) 6.4%
Inc.
100 E. Pratt Street
Baltimore, Maryland 21202
Scudder Stevens & Clark, 665,000(2) 5.9%
Inc.
175 Federal Street
Boston, Massachusetts 02110
Twentieth Century Companies, 581,900 5.1%
Inc.
450 Main Street
P.O. Box 418210
Kansas City, Missouri 64141
___________
Note (1): As of December, 31, 1995, T. Rowe Price
Associates, Inc. possessed sole voting power
over 68,300 Shares and sole dispositive power
over 730,900 Shares.
Note (2): As of December 31, 1995, Scudder Stevens &
Clark, Inc. possessed shared voting power over
665,000 Shares and sole dispositive power over
665,000 Shares.
ANNEX II
SHARES HELD BY THE COMPANY'S DIRECTORS
AND EXECUTIVE OFFICERS
As reported in the Company's 1996 Proxy Statement,
the following table shows the number and percentage of
Shares beneficially owned, directly or indirectly, by
each of the Company's Directors and Executive Officers,
and by the Directors and Executive Officers of the
Company as a group. Except as noted otherwise, these
persons possessed sole voting and sole dispositive power
with respect to the entire number of Shares reported.
DIRECTORS
Amount and
Nature of
Name of Beneficial Percent
Beneficial Owner Ownership of Class
Paul F. Cornelsen 7,100(1) *
Andrew B. Craig, III 7,000(2) *
Jerry B. Davis 500(2) *
Louis Fernandez 7,000(2) *
Wayne J. Grace 3,700(3) *
Paul H. Hatfield 14,500(2)(4) *
William E. Maritz 7,000(2) *
William E. Nasser 18,857(5)(6)(7) *
Richard L. O'Shields 2,500(2) *
Fairfax F. Pollnow 3,000(3) *
Thomas P. Reidy 7,000(2)(8) *
Brian M. Rushton 200(2) *
Joseph T.Williams 1,000(2) *
EXECUTIVE OFFICERS
Amount and
Nature of
Name of Beneficial Percent
Beneficial Owner Ownership of Class
John M. Casper 5,437(5) *
Toby R. Graves 4,829(5) *
Richard J. Seidel 4,869(5)(9)(7) *
James M. Zemenick 11,221(5)(6) *
All Directors and
Officers as a Group
(21 persons) 119,126(9) 1%
________
* Less than 1%
Note (1): Prior to March 4, 1996, Mr. Cornelsen retired
from the board.
Note (2): The number shown includes Shares deemed to be
outstanding pursuant to stock options that are
presently exercisable, as follows: Mr. Craig,
6,000 Shares; Dr. Fernandez, 6,000 Shares; Mr.
Hatfield 8,000 Shares; Mr. Maritz 6,000 Shares;
Mr. O'Shields, 2,000 Shares; Mr. Reidy, 6,000
Shares. According to the description of the
compensation of directors in the Company's 1996
Proxy Statement, each director re-elected at
the 1996 Annual Meeting should have received
options to purchase an additional 2,000 Shares.
If these options were granted and were
presently exercisable, each of the directors
re-elected at the 1996 Annual Meeting would
have an additional 2,000 Shares.
Note (3): The number shown includes Shares deemed to be
outstanding pursuant to stock options that are
presently exercisable, as follows: Mr. Grace,
2,000 Shares; Mr. Pollnow, 2,000 Shares. These
options were granted pursuant to the Company's
policy on compensation to directors described
in Note (2). The grants were confirmed by Mr.
Grace and Mr. Pollnow, and are more recent than
the numbers provided in the 1996 Proxy
Statement
Note (4): Mr. Hatfield was elected Chairman of the Board,
President and Chief Executive Officer of the
Company on November 20, 1995.
Note (5): The number shown includes Shares which are
deemed to be outstanding pursuant to stock
options that are presently exercisable, as
follows: Mr. Nasser, 5,000; Dr. Graves, 1,000;
Mr. Zemenick, 6,000. The number shown includes
Shares held in trust through the Company
Employees' Savings Plan, as follows: Mr.
Nasser, 7,186; Mr. Casper, 387; Dr. Graves,
2,578; Mr. Seidel, 3,886; Mr. Zemenick, 3,053.
(Savings Plan information presented as of
September 30, 1995.).
Note (6): Mr. Nasser disclaims beneficial ownership of 50
of the Shares shown. Mr. Zemenick disclaims
beneficial ownership of 298 of the Shares
shown.
Note (7): Mr. Nasser retired as Chairman of the Board,
President, Chief Executive Officer and Director
of the Company on November 20, 1995. Mr.
Seidel resigned as a Vice President, General
Manager of the Company effective November 30,
1995.
Note (8): Mr. Reidy died on April 18, 1996.
Note (9): The number shown includes 50,200 Shares which
are deemed to be outstanding pursuant to stock
options that are presently exercisable, and
26,600 Shares held through the Company
Employees' Savings Plan. (Savings Plan
information presented as of September 30,
1995.)
ANNEX III
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS AND CERTAIN STOCKHOLDERS OF BARNICKEL
AND OTHER REPRESENTATIVES OF BARNICKEL
The following tables sets forth the name and the
present principal occupation or employment, and the name,
principal business and address of any corporation or
other organization in which such employment is carried
on, of the directors and executive officers of Barnickel
and other representatives of Barnickel soliciting
consents and certain stockholders of Barnickel. Unless
otherwise indicated, the principal business address of
each director, executive officer, employee or representative
is Wm. S. Barnickel & Company, c/o Mr. Jules Chasnoff, Esq.,
Lowenhaupt & Chasnoff, L.L.C., 10 South Broadway, Suite 600,
St. Louis, Missouri 63102.
DIRECTORS AND EXECUTIVE OFFICERS OF BARNICKEL
Name and Principal Present Office or Other
Business Address Principal
Occupation or Employment
Michael V. Janes President, Treasurer and
Director of Barnickel. Mr.
Janes is also engaged in private
investments.
William B. Janes Vice President and Director of Barnickel.
Mr. Janes is engaged also in private
investments.
Genevieve J. Brown Vice President and Director of
Barnickel. Ms. Brown is also
engaged in private investments.
Fairfax F. Pollnow Vice President and Director of
Arbor Land Company Barnickel. Mr. Pollnow is
300 Hunter Avenue, President of Arbor Land Company,
Suite 301 a real estate development and
St. Louis, Missouri investment firm.
63124
V. Raymond Vice President and Director of
Stranghoener Barnickel. Mr. Stranghoener is
Boatmen's Trust Executive Vice President,
Company General Counsel and Secretary of
100 North Broadway Boatmen's Trust Company, a
St. Louis, Missouri Missouri trust company.
63178
John Sexton Director of Barnickel. Mr.
Gross & Janes Company Sexton is President of Gross &
511 Rudder Road Janes Co., a railroad tie supply
Fenton, Missouri company.
63026
The following individuals are officers of Barnickel who
may also solicit consents:
Name and Principal Principal Occupation or
Business Address Employment
John L. Phillips, Jr. Assistant Secretary and Assistant
Boatmen's Trust Company Treasurer of Barnickel. Mr. Phillips
100 North Broadway is also Vice President and Assistant
St. Louis, Missouri Secretary of Boatmen's Trust Company.
63178
Bruce L. Talen Assistant Secretary of Barnickel.
Boatmen's Trust Company Mr. Talen is also Vice President,
100 North Broadway Assistant General Counsel and
St. Louis, Missouri Assistant Secretary of Boatmen's
63178 Trust Company.
CERTAIN STOCKHOLDERS OF BARNICKEL*
Name and Principal Principal Occupation or
Business Address Employment
John V. Janes Mr. Janes is engaged in private
141 Gulf Dunes Lane investments.
Santa Rosa Beach,
Florida 32459
John S. Lehmann
Trusts
c/o Boatmen's Trust
Company
100 North Broadway
St. Louis, Missouri
63102
* Boatmen's Trust Company ("BTC") has sole voting
power over approximately 33% of the outstanding
shares of capital stock of Barnickel Company
and shared voting power over approximately 37%
of the outstanding shares of capital stock of
Barnickel Company. BTC has sole dispositive
power over approximately 15% and shared
dispositive power over approximately 49% of the
outstanding shares of capital stock of
Barnickel Company. Accordingly, BTC may be
deemed to be an affiliate of Barnickel. BTC
holds such voting power and dispositive power
as trustee of various trusts and in other
fiduciary capacities and not as a principal.
The following individuals are employees of Morgan Stanley
who may also solicit consents:
Name and Principal Present Office or Other
Business Address Principal
Occupation or Employment
James B. Stynes Managing Director of Morgan
Morgan Stanley & Co. Stanley & Co. Incorporated.
Incorporated
1585 Broadway
New York, New York
10036
Kenneth H. Boone Vice President of Morgan Stanley
Morgan Stanley & Co. & Co. Incorporated.
Incorporated
1585 Broadway
New York, New York
10036
ANNEX IV
CERTAIN BENEFICIAL OWNERS OF SHARES
The following table sets forth the name and beneficial
ownership of Shares, as of November 8, 1996, of the
directors and executive officers of Barnickel, the
nominees and other representatives of Barnickel
soliciting consents and certain stockholders of Barnickel.
The figures for percent of class owned were calculated based
on [________ number of Shares outstanding on the Record Date,
according to the Company][11,341,448 Shares outstanding as of
August 1, 1996, according the Company's quarterly report on Form
10-Q for the quarter ended July 31, 1996].
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership of Class
Wm. S. Barnickel & 5,337,360(1) 47.1%
Company
Michael V. Janes 88,303(2) *
Genevieve J. Brown 44,336 *
William B. Janes 23,400 *
Fairfax F. Pollnow 3,000(3) *
John Sexton 100 *
V. Raymond Stranghoener 0(4) *
Robert E. Kresko 0 *
John Peters MacCarthy 0 *
Robert H. Quenon 0 *
John V. Janes 500(5) *
John H. Lehmann Trusts 0 *
John L. Phillips, Jr. 0(4) *
Bruce L. Talen 0(4) *
1 Barnickel is a party to an investment advisory
agreement in which Barnickel receives investment
advise from BTC with respect to, among other things,
the Shares. The annual fees to BTC vary, but average
about $250,000 per year.
2 On June 6, 1995, BTC and Mr. Janes, as co-trustees of
the Barnickel Trust, distributed the trust assets
(including 90% of the stock of Barnickel) to its
beneficiaries. Includes 37,703 Shares held in trusts
of which Mr. Janes is co-trustee. Over the past two
years, Mr. Janes or the trusts of which Mr. Janes is
trustee have engaged in several transfers of the
Shares, although none of such transfers involved a
purchase or a sale. On December 23, 1994, Mr. Janes
transferred 9,600 Shares to a private foundation of
which he is a director.
The Genevieve B. Janes 1972 Trust divided into
sixteen separate trusts in accordance with its terms
on May 19, 1995. At the time of the division, the
trust held 8,000 Shares and eleven of the
beneficiaries had already attained ages that entitled
them to receive partial distributions of the trust
principal. Thus, BTC, Michael V. Janes and John F.
Brown, as co-trustees of the continuing trusts, with
shared voting and dispositive authority over the
trusts' Shares, distributed 2,315 Shares to these
eleven beneficiaries at the time of the division. In
addition, they distributed 133 Shares from one of
these trusts on January 4, 1996 and 134 Shares on
October 18, 1996 from another, pursuant to the terms
of the trusts.
The John V. Janes Testamentary Trust divided into
sixteen separate trusts in accordance with its terms
on February 6, 1996. At the time of the division,
the trust held 33,600 Shares and eleven of the
beneficiaries had already attained ages that entitled
them to receive partial distributions of the trust
principal. Thus, BTC and Michael V. Janes, as co-
trustees of the continuing trusts, with shared voting
and dispositive authority over the trusts' Shares,
distributed 8,399 Shares to these eleven
beneficiaries at the time of the division. In
addition, they distributed 560 Shares from one of
these trusts on October 18, 1996, pursuant to the
terms of the trust.
The Genevieve Janes 1987 Trust divided into sixteen
separate trusts in accordance with its terms on
October 16, 1996. At the time of the division, the
trust held 19,200 Shares and eleven of the
beneficiaries had already attained ages that entitled
them to receive partial distributions, and in some
cases, final distributions, of the trust principal.
Thus, BTC, Michael V. Janes and John F. Brown, as co-
trustees of the continuing trusts, with shared voting
and dispositive authority over the trusts' Shares,
distributed 11,400 Shares to these eleven
beneficiaries at the time of the division. In
addition, they distributed 600 Shares from one of the
continuing trusts on October 18, 1996 and 600 Shares
on October 20, 1996 from another, pursuant to the
terms of the trusts.
3 Includes options to purchase 2,000 Shares which were
granted on March 4, 1996 under the terms of the
Petrolite 1993 Stock Incentive Plan. Mr. Pollnow
purchased 1,000 Shares on April 24, 1995.
4 Mr. Stranghoener is Executive Vice President, General
Counsel and Secretary of BTC. Mr. Phillips is Vice
President and Assistant Secretary of BTC. Mr. Talen
is Vice President, Assistant General Counsel and Assistant
Secretary of BTC. BTC is a party to an investment advisory
agreement with Barnickel as described above in Note 1.
5 Includes 300 Shares held as custodian under the
Uniform Gift to Minors Act.
In the ordinary course of its business, Morgan
Stanley engages in securities trading, market-making and
brokerage activities and may, at any time, hold long or
short positions and may trade or otherwise effect
transactions in the Shares. As of November 8, 1996,
Morgan Stanley beneficially owned approximately 400
Shares. Neither James B. Stynes nor Kenneth H. Boone
own any Shares, beneficially or of record.
______________________________________
______________________________________
[BACK COVER OF SOLICITATION STATEMENT]
IMPORTANT
If your Shares are held in your own name,
please sign, date and mail the enclosed BLUE Consent
Card to [TrustCo] in the postage-paid envelope provided.
If your Shares are held in the name of a
brokerage firm, bank nominee or other institution, only
it can execute a consent with respect to your Shares and
only upon receipt of your specific instructions.
Accordingly, you should contact the person responsible
for your account and give instruction to sign the BLUE
Consent Card representing your Shares. Barnickel urges
you to confirm in writing your instructions to the
person responsible for your account and provide a copy
of those instructions to MACKENZIE PARTNERS INC. so that
Barnickel will be aware of all instructions given and
can attempt to ensure that such instructions are
followed.
If you have any questions or require any
assistance in executing your consent, please contact:
MACKENZIE PARTNERS INC
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (call collect)
or
Toll Free (800) 322-2885
______________________________________
______________________________________
FORM OF CONSENT CARD
PRELIMINARY COPY--SUBJECT TO COMPLETION
WRITTEN CONSENT BY STOCKHOLDERS
OF PETROLITE CORPORATION
TO ACTION WITHOUT A MEETING
SOLICITED BY
WM. S. BARNICKEL & COMPANY
Unless otherwise indicated below, the
undersigned, a stockholder of record of Petrolite
Corporation (the "Company") on _________________, 1996
(the "Record Date"), hereby consents pursuant to Section
228(a) of the Delaware General Corporation Law with
respect to all shares of capital stock, without par
value (the "Shares"), of the Company held by the
undersigned to the taking of the following actions
without a meeting of the stockholders of the Company,
without prior notice and without a vote:
WM. S. BARNICKEL & COMPANY STRONGLY RECOMMENDS
THAT THE STOCKHOLDERS OF THE COMPANY CONSENT TO ALL OF
THE FOLLOWING RESOLUTIONS. EACH OF THE RESOLUTIONS
REQUIRES THE APPROVAL OF A MAJORITY OF THE OUTSTANDING
SHARES ON THE RECORD DATE.
THIS CONSENT CARD IS CONTINUED ON THE REVERSE
SIDE. PLEASE MARK, SIGN AND DATE THIS CONSENT CARD ON
THE REVERSE SIDE BEFORE RETURNING THIS CONSENT CARD IN
THE ENCLOSED ENVELOPE.
1. Removal of directors from the Board of Directors of
the Company.
RESOLVED, that all of the members of the Board of
Directors of the Company (and any other person
elected by the incumbent directors to fill any
vacancy created thereby or any newly created
directorship) other than Andrew B. Craig, III,
Louis Fernandez, Wayne J. Grace, William E. Maritz,
and Fairfax F. Pollnow are hereby removed from the
Board of Directors of the Company.
// CONSENTS // DOES NOT CONSENT // ABSTAIN
To consent, withhold consent or abstain from
consenting to the removal of all the above-named
directors (and any other person elected by the
incumbent directors to fill any vacancy created
thereby or any newly created directorship), check
the appropriate box above.
2. Election of new directors to the Board of Directors
of the Company:
RESOLVED, that Robert E. Kresko, John Peters
MacCarthy, Robert H. Quenon, John Sexton and V.
Raymond Stranghoener are hereby elected as
directors of the Company to hold office until their
successors are elected and qualified (collectively,
the "Nominees").
// CONSENTS // DOES NOT CONSENT // ABSTAIN
To consent, withhold consent or abstain from
consenting to the election of all the above-named
persons, check the appropriate box above.
IF YOU WISH TO CONSENT TO THE REMOVAL OR
ELECTION OF CERTAIN OF THE ABOVE-NAMED PERSONS, BUT NOT
ALL OF THEM, CHECK THE "CONSENTS" BOX IN THE APPROPRIATE
SPACE ABOVE AND WRITE THE NAME OF EACH SUCH PERSON YOU
DO NOT WISH REMOVED OR ELECTED IN THE FOLLOWING SPACE:
IF NO BOX IS MARKED ABOVE WITH RESPECT TO A
PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT TO
SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL NOT BE
DEEMED TO CONSENT TO THE REMOVAL OR ELECTION OF ANY
INDIVIDUAL WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED
ABOVE.
The execution and delivery of this Consent
Card does not grant any person the right to vote any
Shares, or confer any other power on any person. This
Consent Card does not appoint any person a "proxy" to
vote any Shares. Wm. S. Barnickel & Company is
requesting that you exercise your independent judgment
regarding each of the proposals, and the execution and
delivery of this Consent Card does not constitute any
agreement, arrangement or understanding between you and
Wm. S. Barnickel & Company. This Consent Card remains
revocable by the stockholder as described in the Consent
Statement enclosed herewith under the caption entitled
"Consent Procedure -- Effectiveness and Revocation of
Consents."
IN THE ABSENCE OF DISSENT OR ABSTENTION BEING
INDICATED ABOVE, THE UNDERSIGNED HEREBY CONSENTS TO EACH
ACTION LISTED ABOVE.
[REVERSE OF FORM OF CONSENT CARD]
Please sign exactly as name appears on stock
certificates. When shares are held by joint tenants,
both should sign. In case of joint owners, EACH joint
owner should sign. When signing as attorney, executor,
administrator, trustee, guardian, corporate officer,
partner, etc., sign in official capacity, giving full
title as such. If a corporation, please sign in the
full corporate name by president or other authorized
officer. If a partnership, please sign in the
partnership name by authorized person.
DATED: ___________________, 1996
_________________________________
Signature
_________________________________
Signature, if held jointly
_________________________________
Title or Authority
IN ORDER FOR YOUR CONSENT TO BE VALID, IT MUST BE DATED.
PLEASE SIGN, DATE AND MAIL YOUR CONSENT PROMPTLY IN THE
POSTAGE-PAID ENVELOPE ENCLOSED.
