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MARIETTA CORPORATION
37 HUNTINGTON STREET
CORTLAND, NEW YORK 13045
ANNUAL MEETING--AUGUST 31, 1995
PLEASE VOTE TODAY!
August 17, 1995
Dear Marietta Shareholder:
In less than two short weeks, you will make a critical decision affecting your
investment and the future of Marietta Corporation. Your choice is clear.
Support your Board and its unwavering commitment to continue taking those
actions which are in the best interests of all Marietta shareholders.
Marietta's Board of Directors has established a clear and well-defined
strategy for your Company which includes completing our search for a buyer for
the Company, part of a process to maximize shareholder value which is now well
underway. In your own best interests, we urge you to reject the Dickstein
proxy solicitation to seize control of your Company. SUPPORT YOUR BOARD'S
NOMINEES--NOMINEES PLEDGED TO WORK ON BEHALF OF ALL MARIETTA SHAREHOLDERS--BY
SIGNING, DATING, MARKING AND MAILING YOUR WHITE PROXY. TIME IS SHORT, SO
PLEASE ACT TODAY!
A CLOSER LOOK AT THE DICKSTEIN PROPOSAL
Just weeks ago, your Company was negotiating with Dickstein regarding his
offer to purchase Marietta at a price of $11 per share. On July 31, Dickstein
unilaterally withdrew his offer to buy Marietta and instead is now seeking
control of your Company through a proxy contest. Instead of purchasing your
shares, Dickstein now wants you to elect his nominees in place of the
qualified and experienced nominees selected by your Board of Directors. DON'T
LET MARK DICKSTEIN AND HIS HAND-PICKED NOMINEES TAKE CONTROL OF YOUR COMPANY
UNLESS THEY ARE WILLING TO PAY YOU FOR IT.
In place of Dickstein's offer to purchase Marietta, he is now proposing that
your Company implement a Marietta-financed self-tender offer. Dickstein's
proposal contemplates Marietta repurchasing up to $16,000,000 of its common
stock at prices between $8.00 and $9.00 per share, though Dickstein has not
stated that financing has been committed for such an offer.
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Dickstein's proposed transaction, if ever implemented, could adversely affect
your investment. Consider the following:
. DICKSTEIN WILL SIGNIFICANTLY INCREASE HIS OWNERSHIP OF YOUR COMPANY
WITHOUT SPENDING A SINGLE CENT OF HIS OWN MONEY. Dickstein states that
he does not intend to participate in his proposed Marietta-financed self
tender; yet he admits that the result of it doubles his ownership of
your Company to approximately 29% of Marietta's outstanding shares
without spending any of his own money.
. DICKSTEIN'S PROPOSAL IS SUBJECT TO FINANCING AND, IN HIS OWN WORDS, "WILL
BE SUBJECT TO CHANGE BASED UPON BUSINESS AND MARKET CONDITIONS
APPLICABLE AT THE TIME." In other words, Dickstein's proposal is just
that, merely a proposal which is subject to change--just as his previous
offer to acquire all Marietta shares for $11 per share was subject to
change. As you know, he unilaterally withdrew that offer. Dickstein is
not assuring Marietta shareholders when, or if, his new proposal would
be put into effect.
. UNDER DICKSTEIN'S PROPOSAL, YOU WILL CONTINUE TO OWN A SUBSTANTIAL
INTEREST IN A HIGHLY LEVERAGED MARIETTA. Implementation of Dickstein's
proposal requires Marietta to incur significant indebtedness which could
at this time weaken your Company's financial condition and jeopardize or
reduce the value of your remaining shares of Marietta common stock.
. DICKSTEIN ADMITS IN HIS OWN PROXY MATERIALS THAT IF ELECTED, HE WILL
CAUSE MARIETTA TO REIMBURSE HIM FOR HIS EXPENSES WHICH HE CURRENTLY
ESTIMATES AT $675,000. These include expenses for his unsolicited and
subsequently withdrawn offer to acquire Marietta. The result--a further
decrease in the overall value of Marietta.
We are convinced that a proposal of the magnitude and type urged upon you by
Dickstein is not in the best interests of all Marietta shareholders but,
instead, primarily will serve to benefit the interests of Dickstein.
Finally, you should ask yourself if you are willing to turn over control of
your Company to Dickstein who has failed to offer any concrete plans for
running Marietta, should he and his hand-picked nominees take control.
Remember, the Mark Dickstein slate has no experience operating a company such
as Marietta. ARE YOU PREPARED FOR THE DICKSTEIN NOMINEES TO UNDERGO ON-THE-JOB
TRAINING AT MARIETTA WHILE YOU STILL OWN MARIETTA STOCK?
IT'S A MATTER OF TRUST
In deciding how to vote there is one important question shareholders should
ask of themselves: Can I trust Mark Dickstein? We urge shareholders to look at
Dickstein's recently waged proxy fight at Hills Stores Company, in an effort
to answer this important question.
. Dickstein made an offer to acquire all of the common stock of Hills,
which offer was subject to a number of conditions, including obtaining
financing.
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. Dickstein also determined to wage a proxy fight to elect his own slate of
directors for Hills.
. In his proxy materials Dickstein proposed that Hills be auctioned to the
highest bidder, and he made a proposal to acquire Hills for $27 per
share.
. Hills' Board opposed Dickstein and his unfinanced offer and instead
encouraged shareholders to elect the Board's nominees and stay the
course as the best means of enhancing value.
. This July Dickstein prevailed; his slate of directors was elected and he
took control of Hills.
. Once in control and contrary to his stated intent, Dickstein abruptly
dropped his offer to purchase Hills.
. Hills shareholders watched in shock as the price of Hills stock plummeted
following Dickstein taking control of the Hills Board and the withdrawal
of his offer.
You are encouraged to carefully read the enclosed copy of a recent Wall Street
Journal story which describes the Hills situation more fully. THEN, ASK
YOURSELF: CAN YOU TRUST MARK DICKSTEIN TO ACT IN YOUR BEST INTERESTS? DO NOT
LET HISTORY REPEAT ITSELF WITH YOUR INVESTMENT IN MARIETTA.
OUR PLATFORM
YOUR BOARD OF DIRECTORS, TOGETHER WITH ITS FINANCIAL ADVISORS, GOLDMAN, SACHS
& CO., IS CONTINUING THE PROCESS OF EXPLORING A BROAD RANGE OF FINANCIAL
ALTERNATIVES IN AN EFFORT TO ENHANCE SHAREHOLDER VALUE. Your Board believes
that all Marietta shareholders will best be served if it continues to control
and complete the ongoing process.
THE BOARD CONTINUES TO TRY TO FIND A BUYER FOR THE COMPANY. This process,
however, must have finality and if no buyer is found, the Board will cease its
efforts to find a buyer for the Company.
ACCORDINGLY, IF BY SEPTEMBER 30, 1995 NO AGREEMENT FOR THE SALE OF ALL OF
MARIETTA'S COMMON STOCK IS ENTERED INTO BY THE COMPANY, THEN YOUR BOARD WILL
CONTINUE TO EVALUATE OTHER POTENTIAL TRANSACTIONS. SUCH TRANSACTIONS INCLUDE A
PARTIAL SALE OF ASSETS OR A RECAPITALIZATION TRANSACTION SUCH AS A SPECIAL
DIVIDEND OR REPURCHASE BY THE COMPANY OF A PORTION OF ITS SHARES. Any such
transaction will be designed to benefit all Marietta shareholders.
In addition, as we are actively doing now, we will concentrate on enhancing
shareholder value through improving Marietta's core business and financial
condition. Your Board and management is not pleased with current operating
performance. Accordingly, we have implemented a number of strategic steps
designed to increase productivity, manufacturing efficiency, revenue and
profitability which benefit Marietta in both the near and long term:
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. We have reduced our costs by identifying and purchasing new raw
materials.
. We have modified pricing for our Contract Packaging division to improve
our profit margins.
. We have reduced freight costs and improved customer service by
consolidating warehouses through the construction of an addition to our
Olive Branch facility.
. We recently instituted a price increase in our Guest Amenities division
to offset increased costs.
. We have made significant capital investments which are expected to reduce
soap manufacturing costs.
. We have introduced new Guest Amenity programs to target the upscale and
luxury hotel markets.
YOUR VOTE IS IMPORTANT
No matter how many shares you own, your vote is important. Please take a
moment to sign, date, mark and mail your WHITE proxy in the enclosed postage-
paid envelope. Please act today. Remember, do not sign any card sent to you by
Dickstein.
On behalf of your Board of Directors, thank you for your support.
Sincerely,
/s/ Stephen D. Tannen
Stephen D. Tannen
President and Chief
Executive Officer
IMPORTANT
Your vote is important. Regardless of the number of shares of Marietta
Common Stock you own, please vote as recommended by your Board of
Directors by signing, marking, dating and mailing your WHITE proxy card.
Please act today.
If you own your shares in the name of a brokerage firm, only your broker
can vote your shares on your behalf and only after receiving your specific
instructions. Please call your broker and instruct him/her to execute a
WHITE card on your behalf. You should also promptly sign, mark, date and
mail your WHITE card when you receive it from your broker. Please do so
for each separate account you maintain. You should return your WHITE proxy
card immediately to ensure that your vote is counted.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE
CALL D.F. KING & CO., INC. WHICH IS ASSISTING US TOLL-FREE AT 1-800-359-
5559.
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