UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PUBLICKER INDUSTRIES INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $ 125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $ 500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to
which transaction applies:
N/A
(2) Aggregate number of securities to
which transaction applies:
N/A
(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):
N/A
(4) Proposed maximum aggregate value of
transaction:
N/A
(5) Total fee paid:
N/A
[x] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement
No.:
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(4) Date Filed:
<PAGE>
PUBLICKER INDUSTRIES INC.
Notice of 1996 Annual Meeting of Shareholders
July 22, 1996
To the Shareholders of Publicker Industries Inc.
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of
Shareholders of Publicker Industries Inc. (the "Company") will be
held at The Carlyle Hotel, 35 East 76th Street, East Trianon Suite,
Second Floor, New York, New York on Wednesday, August 21, 1996 at
10:00 a.m. for the following purposes:
1. To elect six directors to hold office until the annual meeting
of shareholders to be held in 1997 and until their respective
successors shall be duly elected and qualified;
2. To consider and act upon a proposal to approve a Plan of Asset
Transfer authorizing the sale of the Company's Masterview
Window Company, Inc. and Greenwald Industries, Inc.
subsidiaries or the property or assets thereof on such terms
and conditions (including the consideration to be received by
the Company) as may be determined by the Company's Board of
Directors, in its sole discretion;
3. To consider and act upon a proposal to amend the Company's
Amended and Restated Articles of Incorporation to increase the
aggregate number of authorized shares of the Company's common
stock, par value $.10 per share, from 30,000,000 to
40,000,000;
4. To ratify the selection of Arthur Andersen LLP as auditors for
the fiscal year ending December 31, 1996; and
5. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June
24, 1996, as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting and any
adjournments.
By Order of the Board of
Directors
ANTONIO L. DELISE,
Secretary
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN
AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE EVEN IF YOU
INTEND TO BE PRESENT AT THE MEETING. RETURNING THE PROXY WILL NOT
LIMIT YOUR RIGHT TO VOTE IN PERSON OR TO ATTEND THE ANNUAL MEETING,
BUT WILL ENSURE YOUR REPRESENTATION IF YOU CAN NOT ATTEND. THE
PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. PLEASE NOTE,
HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR
OTHER NOMINEE AND YOU WISH TO ATTEND AND VOTE AT THE MEETING, YOU
MUST OBTAIN FROM SUCH BROKER, BANK OR OTHER NOMINEE, A PROXY ISSUED
IN YOUR NAME.<PAGE>
PUBLICKER INDUSTRIES INC.
1445 East Putnam Avenue
Old Greenwich, Connecticut 06870
(203) 637-4500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
August 21, 1996
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Publicker
Industries Inc., a Pennsylvania corporation (the "Company"), to be
voted at the 1996 Annual Meeting of Shareholders of the Company
referred to in the foregoing Notice (the "Annual Meeting"). All
proxies received pursuant to this solicitation will be voted, and,
where a choice is specified as to the proposal described in the
foregoing Notice, they will be voted in accordance with that
specification. If no choice is specified with respect to any
proposal, the proxy will be voted in favor of such proposal.
Shareholders who execute proxies may revoke them at any time before
they are voted by written notice delivered to the Secretary of the
Company. The Company anticipates that mailing of the proxy material
to shareholders will commence on or about July 22, 1996.
RECORD DATE AND VOTING SECURITIES
Only holders of Common Stock of record at the close of business
on June 24, 1996 (the "Record Date") are entitled to notice of and
to vote at the meeting. On that date the Company had outstanding
and entitled to vote 15,441,785 shares of Common Stock, par value
$.10 per share (the "Common Stock"). Each outstanding share
entitles the record holder to one vote on each matter. Abstentions
and broker non-votes are each included in the determination of the
number of shares present and voting. Each is tabulated separately.
Abstentions are counted in tabulations of the votes cast on
proposals presented to shareholders, whereas broker non-votes are
not.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of May 31, 1996, except as
otherwise noted, the beneficial ownership of the Company's Common
Stock by each person who owns of record or is known by the Company
to own beneficially more than 5% of the Common Stock of the Company.
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership(1) Percent of Class
Harry I. Freund 2,104,022 (2) 12.4%
c/o Balfour Investors, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
Jay S. Goldsmith 2,105,522 (3) 12.4%
c/o Balfour Investors, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
R. Weil & Associates, L.P., 1,731,900 (4) 11.3%
Appleton Associates L.P. and
Ralph Weil
c/o R. Weil & Associates
2 Crossfield Avenue
West Nyack, NY 10994
Foreign & Colonial Management 1,233,750 (5) 8.0%
Limited and Hypo Foreign &
Colonial Management (Holdings)
Limited
Exchange House
Primrose Street
London EC2 ANY, England
(1) Calculated in accordance with Rule 13d-3 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended.
(2) Includes shares of Common Stock which may be acquired by Mr. Freund
within 60 days as follows: 375,000 shares through the exercise of
stock options and l,064,960 shares through the exercise of stock
purchase warrants. Also includes 314,125 shares that may be deemed
to be owned beneficially by Mr. Freund which are held by Balfour
Investors Inc. ("Balfour") for its clients in discretionary accounts,
as to which Mr. Freund disclaims beneficial ownership. Messrs. Freund
and Goldsmith are Chairman and President, respectively, and the only
shareholders of Balfour. The discretionary clients of Balfour have
the sole power to vote and direct the vote of the shares held in their
account. Balfour and its discretionary clients have shared power to
dispose of or direct the disposition of the shares held in such
clients' accounts. At present, Balfour has the right to receive or
the power to direct the receipt of dividends from, or the proceeds
from the sale of the Company's Common Stock for all of its
discretionary clients. Also includes options to purchase 200,000
shares of Common Stock held by Mr. Freund, the expiration of which has
been extended by five years to April 12, 2000.
(3) Includes shares of Common Stock which may be acquired by Mr. Goldsmith
within 60 days as follows: 375,000 shares through the exercise of
stock options and 1,034,240 shares through the exercise of stock
purchase warrants. Also includes 1,500 shares of Common Stock and
30,720 shares which may be acquired through the exercise of stock
purchase warrants over which Mr. Goldsmith has shared voting and
investment power but as to which he disclaims any beneficial interest,
and includes 314,125 shares that may be deemed to be owned
beneficially by Mr. Goldsmith which are held by Balfour for its
clients in discretionary accounts as to which Mr. Goldsmith disclaims
beneficial ownership (see Note 2 above). Also includes options to
purchase 200,000 shares of Common Stock held by Mr. Goldsmith, the
expiration of which has been extended by five years to April 12, 2000.
(4) Based on a statement on Schedule 13D filed with the Securities and
Exchange Commission on August 31, 1995. Includes 1,673,700 shares
owned by a group consisting of R. Weil & Associates L.P., Appleton
Associates L.P. and Ralph Weil. These parties affirm that there is
no formal arrangement among them or among any of the other persons or
entities named in the Schedule 13D with respect to the Common Stock
of the Company. Mr. Weil has the power to vote and direct the vote
and the power to dispose or to direct the disposition of these shares.
Also includes 58,200 shares as to which Mr. Weil has shared voting and
disposition power but as to which he disclaims any beneficial
interest.
(5) Based on a statement on Schedule 13G filed with the Securities and
Exchange Commission on February 3, 1995. Foreign & Colonial
Management Limited and Hypo Foreign & Colonial Management (Holdings)
Limited have shared power to vote and direct the vote and shared power
to dispose or to direct the disposition of such shares.<PAGE>
PROPOSAL 1.
ELECTION OF DIRECTORS
At the Annual Meeting, six directors are to be elected to hold
office until the next annual meeting of shareholders and until their
respective successors have been elected and qualified. In order to
be elected, each nominee must receive a plurality of the votes cast
at the Annual Meeting.
Unless otherwise directed, proxies given to the persons named in
the enclosed proxy pursuant to this solicitation will be voted for
the election as directors of Messrs. Freund, Goldsmith, Herman,
Cohn, Schafran and Weis. If any such nominee should become
unavailable for any reason, which the Board of Directors has no
reason to anticipate, the proxy holders reserve the right to
substitute another person of their choice in his place.
All of the persons named in the enclosed proxy are currently
directors of the Company, having been elected by the shareholders at
the Company's last annual meeting. See "Employment and Change in
Control Agreements."
Set forth below as to each director nominated for reelection as
a director of the Company is information regarding age (as of
May 31, 1996), position with the Company, principal occupation,
business experience, period of service as a director of the Company
and directorships currently held in public corporations.
HARRY I. FREUND: Age 56; Director of the Company since April 12,
1985. Chairman of the Board since December 1985. Since 1975, Mr.
Freund has been Chairman of Balfour Investors Inc. (formerly known
as Balfour Securities Corporation), a merchant banking firm that had
previously been engaged in a general brokerage business. Mr. Freund
is also Vice Chairman of the Board of Directors of Glasstech, Inc.
JAY S. GOLDSMITH: Age 52; Director of the Company since April 12,
1985. Vice Chairman of the Board since December 1985. Since 1975,
Mr. Goldsmith has been President of Balfour Investors Inc. Mr.
Goldsmith is also Chairman of the Board of Directors of Glasstech,
Inc.
DAVID L. HERMAN: Age 82; Director of the Company since April 12,
1985. Mr. Herman was President and Chief Executive Officer of the
Company from March 31, 1986 until March 8, 1995. Prior to 1986, Mr.
Herman was an independent consultant advising clients on the
reorganization of businesses and potential acquisitions. Prior
thereto, Mr. Herman was the sole owner of Darman Tool and
Manufacturing Company, a private company engaged in the manufacture
of appliances and photocopying machines.
CLIFFORD B. COHN: Age 44; Director of the Company since July 31,
1980. Vice President of Government Affairs of the Company from
April 1, 1982 to November 20, 1984. Since 1977, Mr. Cohn has been
engaged in the private practice of law in Philadelphia,
Pennsylvania. Mr. Cohn is a director of Glasstech, Inc.
L. G. SCHAFRAN: Age 57; Director of the Company since December 3,
1986. Mr. Schafran is the Managing General Partner of L. G.
Schafran & Associates, a real estate investment and advisory firm
established in October 1984. For more than five years prior
thereto, Mr. Schafran was a senior officer in The Palmieri Company,
specializing in the acquisition, management and disposition of
distressed properties. Mr. Schafran is a director of Glasstech,
Inc., Capsure Holdings Corp., OXiGENE, Inc., Dart Group Corp. and
its two publicly traded affiliates: Trak Auto Corp. and Crown Books
Corp. Mr. Schafran is also a trustee of National Income Realty
Trust, Chairman of the Board of Delta-Omega Technologies, Inc. and
Chairman of the Executive Committee of Dart Group Corp.
JAMES J. WEIS: Age 47; President, Chief Executive Officer and
Director of the Company since March 8, 1995. Mr. Weis joined the
Company in September 1984 as Assistant to the President and was
elected Vice President in November 1984, Chief Financial Officer and
Secretary in April 1986, Executive Vice President - Finance in
August 1989 and President, Chief Executive Officer and Director in
March 1995.
The Board of Directors recommends a vote FOR each of Messrs.
Freund, Goldsmith, Herman, Cohn, Schafran and Weis for election as
directors of the Company.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors who were not officers of the Company, other than
Messrs. Freund and Goldsmith, are paid $2,500 per month for services
as directors and, in addition, $750 per day for each meeting of the
Board or of shareholders that they attended without regard to the
number of meetings attended each day.
Pursuant to informal arrangements with the Company, Messrs.
Freund and Goldsmith each receive annual compensation at the rate of
$325,000 per year as Chairman and Vice Chairman of the Board,
respectively, and for providing certain services described below.
The arrangements have indefinite terms and are terminable at any
time by either party. The compensation received by them is approved
from time to time by the Directors Compensation Committee of the
Board of Directors, consisting of David L. Herman, Clifford B. Cohn
and L.G. Schafran.
Messrs. Freund and Goldsmith provide advice and counsel to the
Company on a variety of strategic and financial matters, including
business acquisitions and divestitures, raising capital and
shareholder relations. Messrs. Freund and Goldsmith do not render
any services in connection with the day-to-day operations of the
Company. Services are provided on a less than full time basis, with
the amount of time varying depending on the activities in which the
Company is engaged from time to time. The arrangements with the
Company do not provide for a minimum amount of time to be spent on
Company matters.
Messrs. Freund, Goldsmith, Herman and Weis are each party to an
agreement with the Company providing for payments to them under
certain circumstances following a change in control of the Company.
See "Employment and Change in Control Agreements."
On March 8, 1995, following Mr. Herman's retirement as President
of the Company, the Company and Mr. Herman entered into an informal
Consulting Agreement pursuant to which Mr. Herman will render
consulting services to the Board of Directors of the Company. The
Consulting Agreement has an indefinite term and provides for a
monthly consulting fee at a rate of $80,000 per year. The services
to be rendered to the Company by Mr. Herman include consultation on
acquisitions and divestitures, litigation, including the Company's
environmental litigation, and other matters. The Consulting
Agreement is terminable at any time by the Company or Mr. Herman.
The Company and Balfour Investors Inc. ("Balfour"), are parties
to a License Agreement, dated as of October 26, 1994, with respect
to a portion of the office space leased by the Company in New York
City. Harry I. Freund and Jay S. Goldsmith are Chairman and
President, respectively, and the only shareholders of Balfour. The
term of the License Agreement commenced on January 1, 1995 and will
expire on June 30, 2004, unless sooner terminated pursuant to law or
the terms of the License Agreement. The License Agreement provides
for Balfour to pay the Company an amount equal to 30% of the rent
paid by the Company under its lease, including base rent,
electricity, water, real estate tax escalations and operation and
maintenance escalations. In addition, Balfour has agreed to
reimburse the Company for 30% of the cost of insurance which the
Company is obligated to maintain under the terms of its lease with
respect to the premises. The base rent payable by Balfour under the
License Agreement is $5,618 per month through September 30, 1999 and
$6,045 per month thereafter.
Directors of the Company are elected at each annual meeting of
shareholders to hold office until the next annual meeting of
shareholders, and executive officers are elected to hold office
until the first meeting of directors following the next annual
meeting of shareholders or until their successors are sooner elected
by the Board and qualified.
During 1995 there were 14 meetings of the Board of Directors of
the Company. The Board of Directors has various committees,
including an Audit Committee, a Compensation Committee, a Directors
Compensation Committee and a Nominating Committee. During 1995,
each of the Directors attended at least 75% of the total number of
meetings held by the Board of Directors and the committees of which
each such Director was a member.
The Audit Committee of the Board of Directors reviews with the
Company's independent public accountants the plan and scope of the
audit for each year, as well as the results of each audit when
completed and the accountants' fee for services performed. The
Audit Committee also reviews with management and with the
independent accountants the Company's internal control procedures.
The Audit Committee is composed of members of the Board of Directors
who are not otherwise officers or employees of the Company. The
present members of the Audit Committee are L. G. Schafran
(Chairman), Harry I. Freund and Jay S. Goldsmith. The Audit
Committee met two times during 1995.
The Compensation Committee of the Board of Directors, which
consists entirely of outside directors, reviews the compensation of
key employees of the Company. The present members of the
Compensation Committee are Jay S. Goldsmith (Chairman), Clifford B.
Cohn and L. G. Schafran. The Compensation Committee met two times
during 1995.
The Directors Compensation Committee of the Board of Directors
reviews the compensation of directors of the Company. The present
members of the Directors Compensation Committee are David L. Herman
(Chairman), Clifford B. Cohn and L. G. Schafran. The Directors
Compensation Committee met once during 1995.
The Nominating Committee of the Board of Directors advises and
makes recommendations to the Board of Directors on the selection of
candidates as nominees for election as directors. The members of
the Nominating Committee are David L. Herman (Chairman), Jay S.
Goldsmith and Clifford B. Cohn. The Nominating Committee met once
during 1995. The Nominating Committee will consider nominees
recommended by shareholders pursuant to procedures described in
"SHAREHOLDER NOMINATIONS."
SHAREHOLDER NOMINATIONS
Nominations for election of directors may be made by any
shareholder entitled to vote for the election of directors, provided
that written notice (the "Notice") of such shareholder's intent to
nominate a director at the meeting is given by the shareholder and
received by the Secretary of the Company in the manner and within
the time specified herein. The Notice shall be delivered to the
Secretary of the Company not less than 14 days nor more than 50 days
prior to any meeting of the shareholders called for the election of
directors; provided, however, that if less than 21 days' notice of
the meeting is given to shareholders, the Notice shall be delivered
to the Secretary of the Company not later than the earlier of the
seventh day following the day on which notice of the meeting was
first mailed to shareholders or the fourth day prior to the meeting.
In lieu of delivery to the Secretary of the Company, the Notice may
be mailed to the Secretary of the Company by certified mail, return
receipt requested, but shall be deemed to have been given only upon
actual receipt by the Secretary of the Company.
The Notice shall be in writing and shall contain or be
accompanied by:
(a) the name and residence of the shareholder
submitting the nomination;
(b) a representation that such shareholder is a holder
of record of the Company's voting stock and intends to appear in
person or by proxy at the meeting to nominate the persons specified
in the Notice;
(c) such information regarding each nominee as would
have been required to be included in a proxy statement filed
pursuant to Regulation 14A of the rules and regulations established
by the Securities and Exchange Commission under the Securities
Exchange Act of 1934 (or pursuant to any successor act or
regulation) had proxies been solicited with respect to such nominee
by the management or Board of Directors of the Company;
(d) a description of all arrangements or
understandings among such shareholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which
such nomination or nominations are to be made by the shareholder;
and
(e) the consent of each nominee to serve as director
of the Company if so elected.
Unless a judge or judges of election shall have been appointed
pursuant to the By-Laws, the Chairman of the meeting may, if the
facts warrant, determine and declare to the meeting that any
nomination made at the meeting was not made in accordance with the
foregoing procedures and, in such event, the nomination shall be
disregarded. Any decision by the Chairman of the meeting shall be
conclusive and binding upon all shareholders of the Company for any
purpose.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished as of May 31, 1996 with
respect to each class of equity securities of the Company
beneficially owned by all directors and nominees, and by all
directors, nominees and officers as a group.
The information concerning the directors, nominees and officers
and their security holdings has been furnished by them to the
Company.
Beneficial Ownership of Shares of
Common Stock as of Percent
Name Position May 31, 1996 (1) of Class (1)
Harry I. Freund Director and Chair- 2,104,022 (2) 12.4%
man of the Board
Jay S. Goldsmith Director and Vice 2,105,522 (3) 12.4%
Chairman of the Board
James J. Weis President, Chief Executive 284,500 (4) 1.8%
Officer and Director
Clifford B. Cohn Director 234,070 (5) 1.5%
David L. Herman Director 311,200 (6) 2.0%
L.G. Schafran Director 292,690 (7) 1.9%
Antonio L. DeLise Vice President, Chief 25,000 (8) Less than 1%
Financial Officer and
Secretary
All directors, nominees and 5,357,004 (9) 27.2%
officers as a group (7 persons)
(1) Calculated in accordance with Rule 13d-3 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
(2) See Note 2 on page 2.
(3) See Note 3 on page 2.
(4) Includes 220,000 shares which may be acquired by Mr. Weis within 60 days
through the exercise of stock options.
(5) Includes 220,000 shares which may be acquired by Mr. Cohn within 60 days
through the exercise of stock option
(6) Includes shares of Common Stock which may be acquired by Mr. Herman
within 60 days as follows: 210,000 shares through the exercise of stock
options and 51,200 shares through the exercise of stock purchase warrants.
(7) Includes shares of Common Stock which may be acquired by Mr. Schafran
within 60 days as follows: 220,000 shares through the exercise of stock
options and 10,240 shares through the exercise of stock purchase warrants.
Also includes 11,250 shares of Common Stock and 51,200 shares that may be
acquired through the exercise of stock purchase warrants over which Mr.
Schafran has shared voting and investment power but as to which he disclaims
any beneficial interest.
(8) Consists of shares which may be acquired by Mr. DeLise within 60 days
through the exercise of stock options.
(9) Includes shares of Common Stock which may be acquired by such persons
within 60 days as follows: 1,645,000 shares through the exercise of stock
options and 2,242,560 shares through the exercise of stock purchase
warrants. Also includes options to purchase 400,000 shares of Common
Stock held by Messrs. Freund and Goldsmith, the expiration of which has
been extended by five years to April 12, 2000.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth information concerning the cash
compensation, stock options and retirement benefits provided to the
Company's Chief Executive Officer, its other executive officer and
one former Chief Executive Officer. The notes to these tables
provide more specific information concerning compensation. The
Company's compensation policies are discussed in the Compensation
Committee Report on Executive Compensation.
Summary Compensation Table
Annual Compensation
Other Annual
Name and Principal Position Year Salary Bonus(1) Compensation
James J. Weis(1), President, 1995 $315,737 $130,000 $ -
Chief Executive Officer 1994 233,750 100,000 -
and Directors 1993 233,750 175,000 -
Antonio L. DeLise (1)
Vice President, Chief
Financial Officer and
Secretary 1995 98,438 40,000 -
David L. Herman (1) (3) 1995 37,500 - -
Director and former 1994 127,500 75,000 -
President and Chief 1993 127,575 75,000 -
Executive Officer
Long-Term Compensation
Awards Payouts
Restricted Stock Options/ All Other
Awards SAR's (#)(2) LTIP Payouts Compensation
James J. Weis (1) - 100,000 - $ 9,641 (4)
President, Chief Executive - 60,000 - 8,728 (4)
Officer and Director - 60,000 - 7,081 (4)
Antonio L. DeLise (1)
Vice President, Chief
Financial Officer nad - 25,000 - 2,100 (5)
Secretary
David L. Herman (1) (3) - 30,000 - 90,409 (6)
Director and former - 60,000 - 553 (6)
President and Chief - 60,000 - 964 (6)
Executive Officer
(1) Reflects bonus earned during the fiscal year. In some instances all
or a portion of the bonus was paid during the next fiscal year.
(2) Options to acquire shares of Common Stock.
(3) Mr. Herman was the President and Chief Executive Officer of the
Company prior to his retirement on March 8, 1995.
(4) Consists of $4,620, $4,620 and $2,249 in contributions to the
Company's 401(k) plan for 1995, 1994 and 1993, respectively, and
$5,021, $4,108 and $4,832 for term life and disability insurance
premiums paid on behalf of Mr. Weis for 1995, 1994 and 1993,
respectively.
(5) Consists of $2,100 for term life and disability insurance payments
paid on behalf of Mr. DeLise for 1995.
(6) Consists of Board of Directors fees of $30,000 and fees received
pursuant to a Consulting Agreement of $60,000 for 1995 and $409, $553
and $964 for term life and disability insurance premiums paid on
behalf of Mr. Herman for 1995, 1994 and 1993, respectively.
Stock Options Granted During 1995
Individual Grants
% of Options
Options Granted to all Exercise Price
Name Granted (3) Employees Per Share
James J. Weis 100,000 17.6% $1.875
Antonio L. DeLise 12,500 2.2% 1.625
12,500 2.2% 1.875
David L. Herman 30,000 5.3% 1.875
All Shareholders(2) N/A N/A 1.625
Named officers' gain as % N/A N/A N/A
of all shareholders' gain
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
For Five Year Option Term(1)
Expiration Date 5% 10%
James J. Weis 6/23/00 $51,803 $114,471
Antonio L. DeLise 12/12/00 5,612 12,401
6/23/00 6,475 14,309
David L. Herman 7/1/00 15,541 34,341
All Shareholders(2) N/A 7,698,366 17,011,377
Named officers' gain as % N/A 1.03% 1.03%
of all shareholders' gain
(1) The potential gain is calculated from the closing price of
Common Stock on June 23, 1995, July 1, 1995 and December 12,
1995, the dates of grants to executive officers. These
amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the future performance of the
Common Stock and overall market conditions. There can be no
assurance that the amounts reflected in this table will be achieved.
(2) Based on the number of shares outstanding at December 31, 1995.
(3) Options granted under the Company's 1993 Long-Term Incentive Plan and
the Non-employee Director Stock Option Plan expire five years from the
date of grant.
Aggregated Stock Options Exercised in 1995
and December 31, 1995 Option Values
Exercised in 1995
Shares Value
Name of Executive Acquired Realized
James J. Weis - $ -
Antonio L. DeLise - -
David L. Herman - -
Unexercised at December 31, 1995(1)
Number of Options Value of Options
Exercisable Unexercisable Exercisable(2) Unexercisable
James J. Weis 280,000 - $237,500 $ -
Antonio L. DeLise 25,000 - 15,625 -
David L. Herman 210,000 - 202,500 -
(1) These values are based on the December 29, 1995 closing price for the
Company's stock on the New York Stock Exchange of $2.375 per share.
(2) This represents the aggregate value of "in-the-money" stock options as of
December 29, 1995.
Retirement Income Plan
Effective December 31, 1993, benefits under the Publicker
Retirement Plan (the "Plan") were frozen. Accordingly, Plan
participants will accumulate no additional credited service and
earnings subsequent to December 31, 1993 will no longer have an
impact on accumulated benefits. The annual benefits payable upon
retirement for Mr. Weis is $23,831. The foregoing amount is based
on a straight life annuity. Retirement benefits are payable at age
65 to married employees in the form of a 50% joint and survivor
annuity with their spouses, at a reduced amount, unless they elect
to receive a straight life annuity. Single employees receive a
straight life annuity. The foregoing benefit amount is not subject
to any deduction for Federal Insurance Contributions Act or other
offset amounts.
Stock Option Plans
Under stock option plans for directors, officers and key
employees adopted by shareholders of the Company in 1988, 1989 and
1991, the Company has been authorized to grant nonqualified stock
options to purchase up to 3,500,000 shares of Common Stock. Under
the 1993 Long-Term Incentive Plan and the Non-employee Director
Stock Option Plan adopted by shareholders of the Company in 1994,
the Company may grant stock options, restricted stock options, stock
appreciation rights, performance awards and other stock-based awards
equivalent to up to 3,550,000 shares of Common Stock.
The plans are administered by the Board of Directors of the
Company. Subject to the express provisions of the plans, the Board
of Directors has full and final authority to determine the terms of
all options granted to key employees under the plans including (a)
the purchase price of the shares covered by each option, (b) whether
any payment will be required upon grant of the option, (c) the
individuals to whom, and the time at which, options shall be
granted, (d) the number of shares to be subject to each option, (e)
when an option can be exercised and whether in whole or in
installments, (f) whether the exercisability of the options is
subject to risk of forfeiture or other condition and (g) whether the
stock issued upon exercise of an option is subject to repurchase by
the Company, and the terms of such repurchase.
The term of options granted to directors shall be five years from
the date of grant and shall be immediately exercisable. Under the
1988, 1989 and 1991 plans, the term of all other options shall be
for such period as the Board of Directors shall determine, but shall
not in any event exceed 12 years from the date of the option's
grant. Under the 1993 Long-Term Incentive Plan, the term of options
granted shall be prescribed by the Board of Directors provided,
however, that no stock option may be exercised after five years from
the date it is granted.
During the year ended December 31, 1995, no stock options were
granted to or exercised by any executive officers of the Company
other than options granted under the 1993 Long-Term Incentive Plan
and the Non-employee Director Stock Option Plan. During such year,
the Company granted 100,000 options to Mr. Weis, 25,000 options to
Mr. DeLise and 30,000 options to Mr. Herman. No directors or
officers of the Company exercised options during 1995.
Employment and Change in Control Agreements
In August 1987, the Company entered into change in control
agreements with each of Messrs. Freund, Goldsmith, Herman and Weis,
which agreements provide for payments to them under certain
circumstances following a change in control of the Company. These
agreements were not adopted in response to any specific acquisition
of shares of the Company or any other event threatening to bring
about a change in control of the Company. For purposes of the
agreements, a change in control is defined as any of the following:
(i) the Company ceasing to be a publicly owned corporation having at
least 2,000 shareholders, (ii) any person or group acquiring in
excess of 30% of the voting power of the Company's securities, (iii)
Continuing Directors (as defined below) ceasing for any reason to
constitute at least a majority of the Board of Directors, (iv) the
Company merging or consolidating with any entity, unless approved by
a majority of the Continuing Directors or (v) the sale or transfer
of a substantial portion of the Company's assets to another entity,
unless approved by a majority of the Continuing Directors. A
majority of the Continuing Directors have approved the prior sales
of the Company's Bright Star Industries Incorporated and Fenwal
Electronics, Inc. subsidiaries, as well as the proposed sales of the
Company's Masterview Window Company, Inc. and Greenwald Industries,
Inc. subsidiaries or the property or assets thereof on such terms
and conditions (including the consideration therefor) as may
subsequently be determined by the Board of Directors, in its sole
discretion. See "Proposal 2. -- Proposed Plan of Asset Transfer."
For purposes of the agreements, "Continuing Director" means Messrs.
Freund, Goldsmith, Herman, Cohn, Schafran and Weis, and any other
director designated as such prior to his election as a director by
a majority of the then remaining Continuing Directors.
In the event the Company discontinues the services (as defined
below) of one of the above-named individuals as a director or
officer, as the case may be, following a change in control, the
individual will be entitled to receive in a lump sum within 10 days
of the date of discontinuance, a payment equal to 2.99 times the
individual's average annual compensation for the shorter of (i) the
five years preceding the change in control, or (ii) the period the
individual received compensation from the Company for personal
services. Assuming a change in control of the Company and the
discontinuance of an individual's services were to occur at the
present time, payments in the following amounts (assuming there are
no excess parachute payments, as defined below) would be made
pursuant to the change in control agreements: Mr. Freund --
$861,307; Mr. Goldsmith -- $861,307; Mr. Herman -- $615,011 and Mr.
Weis -- $1,158,074. In the event any such payment, either alone or
together with others made in connection with the individual's
discontinuance, is considered to be an "excess parachute payment"
(as defined in the Internal Revenue Code of 1986, as amended (the
"Code")), the individual is entitled to receive an additional
payment in an amount which, when added to the initial payment,
results in a net benefit to the individual (after giving effect to
excise taxes imposed by Section 4999 of the Code and income taxes on
such additional payment) equal to the initial payment before such
additional payment. The Company shall be deemed to have
discontinued an individual's services if any of the following
occurs: (i) he is terminated as an employee of the Company for any
reason other than conviction of a felony or any act of fraud or
embezzlement, his disability for six consecutive months or his
death, (ii) failure to elect and maintain him in the office which he
now occupies, (iii) failure of the Board of Directors to include him
in the slate of directors recommended to stockholders, (iv) a
reduction in his salary or fringe benefits, (v) a change in his
place of employment or excessive travel or (vi) other substantial,
material and adverse changes in conditions under which the
individual's services are to be rendered. Since the change in
control agreements would require large cash payments to be made by
any person or group effecting a change in control of the Company
absent the assent of a majority of the Continuing Directors, these
agreements may discourage hostile takeover attempts of the Company.
The change in control agreements would have expired on December
31, 1995 but have been and will continue to be automatically
extended for a period of one year on each December 1, unless
terminated by either party prior to any such December 1. In the
event a change in control occurs during the term of any of the
agreements, including any extension thereof, the term of such
agreements shall automatically be extended to three years from the
date of such change in control.
The Company has entered into an agreement with Mr. Weis which
provides that, in the event his employment is terminated without
cause or is considered terminated by reason of a change in Mr. Weis'
duties which would require him to relocate his principal residence,
he will receive a continuation of salary payments and all other
employee benefits then provided him until the earlier of one year
from the date of notice of termination or the date upon which he
begins full-time employment with a new employer.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that
might incorporate future filings, including the Proxy Statement in
whole or in part, the following report and the Performance Graph
shall not be incorporated by reference into any such filing.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting
entirely of outside directors, approves all of the policies under
which compensation is paid or awarded to the Company's executive
officers. The present members of the Compensation Committee are Jay
S. Goldsmith, Clifford B. Cohn and L. G. Schafran. The Company's
compensation program for executive officers currently consists of
salary and bonuses and periodic grants of nonqualified stock
options. The elements of this program have different purposes.
Salary and bonus payments are primarily designed to reward current
and past performance, while stock option grants are designed to
provide strong incentives for long-term future performance, and are
generally forfeited should the executive officer leave the Company
before retirement. All stock option grants are made under the
Company's stock option plans which have been approved by the
Company's shareholders. The granting of stock options is directly
linked to the shareholders' interests since the value of the grants
will increase or decrease based upon the future price of the
Company's stock.
In determining the executive compensation to be paid or granted
during 1995, the Committee considered several factors. These
included the assessment of the future objectives and challenges
facing the Company as well as the significant problems the Company
has been dealing with during 1995, particularly its ongoing
environmental litigation. In view of the Company's efforts to
achieve profitability, the Committee's actions have been guided less
on quantitative measures of operating results than on other goal-
directed endeavors such as the Company's acquisitions and
dispositions, elimination and rationalization of underperforming
operations and the efforts of the executive personnel to bring about
improvements in the operations and profitability of the Company's
subsidiaries. The Committee's decisions concerning the compensation
of individual executive officers during 1995 were made in the
context of historical practices and the current competitive
environment together with the need to attract and retain highly
qualified executives who will be best able to achieve the successes
needed by the Company. The Committee also considered the fact that
the Company has had only two executive officers and the effect this
has on their workload and diversity of responsibilities.
BASES FOR CHIEF EXECUTIVE OFFICER COMPENSATION
In 1995, Mr. Weis received total cash payments of $445,737 in
salary and bonus (as shown in the Summary Compensation Table above).
In addition, options to purchase 100,000 shares of Common Stock were
granted to Mr. Weis during 1995 under the Company's 1993 Long-Term
Incentive Plan. The Compensation Committee considered the 1995
compensation appropriate in light of the Company's significantly
improved financial results, increased shareholder value, his
leadership in the Company's settlement of certain environmental
litigation and performance with respect to implementing strategic
initiatives for the Company. The Committee noted Mr. Weis'
considerable efforts to revitalize the Company, his direct
involvement in the significant transactions of the Company during
1995 and his knowledge and historical perspective of the Company's
problems and issues.
This report is submitted by the members of the Compensation
Committee of the Board of Directors.
Compensation Committee
Jay S. Goldsmith
Clifford B. Cohn
L. G. Schafran
<PAGE>
FIVE YEAR PERFORMANCE GRAPH: 1990 - 1995
The annual changes for the five year period from 1990 through
1995 are based on the assumption that $100 had been invested in
Publicker stock and each index on December 31, 1990 (as required by
SEC rules), and that all quarterly dividends were reinvested at the
average of the closing stock prices at the beginning and end of the
quarters. The total cumulative dollar returns shown in the graphs
represent the value that such investments would have had on December
31, 1995.
1990 1991 1992 1993 1994 1995
Publicker 100 94 100 138 238 238
Peer Group 100 143 198 211 162 171
Composite 100 129 134 154 153 198
*Based on Medial General Composit Index.
**Based on Medial General Multi-industry Group of 14 companies with market
capitalization of under $100 million.
The peer group index is based on all companies contained in the
Multi-industry Group of Media General Financial Services with a
market capitalization of under $100 million as of December 31, 1995.
The returns of each component issuer of the peer group have been
weighted according to the respective issuer's stock market
capitalization at the beginning of each period for which a return is
indicated. This group was selected since the diversity of the
Company's operations does not place it within any more specific
industry group. In addition, the market capitalization criteria was
applied to eliminate from comparison those multi-industry companies
that are extremely large. The resulting peer group consists of the
following fourteen companies for 1995: American Pacific Corp., ARC
International Corp., Autocam Corp., Drew Industries Inc., Met-Pro
Corporation, Pacific Dunlop Ltd. ADR, Prime Equities International,
Quixote Corp., SL Industries Inc., Somerset Group Inc., TCC
Industries, Inc., Triton Group Ltd., Intelect Communications Ltd.,
and Tyler Corp. The companies shown in italics are new to this peer
group during 1995. The following companies that were included in
this peer group for 1994 were no longer included in the peer group
for 1995: Challenger International Ltd., Katy Industries and
Wellstead Industries Inc.<PAGE>
PROPOSAL 2.
PROPOSED PLAN OF ASSET TRANSFER
Introduction
At the Annual Meeting, shareholders will be asked to approve a
Plan of Asset Transfer authorizing the sale of the Company's
Masterview Window Company, Inc. ("Masterview") and Greenwald
Industries, Inc. ("Greenwald") subsidiaries or the property or assets
thereof on such terms and conditions (including the consideration to
be received by the Company) as may be determined by the Company's
Board of Directors, in its sole discretion (the "Proposed Plan").
On May 29, 1996, the Company entered into a non-binding letter of
intent to sell substantially all of the assets of Masterview to an
affiliate of BancBoston Capital (the "Letter of Intent"). The
Company has recently begun to explore the possible sale of Greenwald.
In recent months, the Company has completed the sale of its Bright
Star Industries, Incorporated subsidiary ("Bright Star") in February
1996 to a company formed by an affiliate of BancBoston Capital and an
investor group, and the sale of its Fenwal Electronics, Inc.
subsidiary ("Fenwal") in March 1996 to Elmwood Sensors, Inc., an
affiliate of BTR Dunlop, Inc.
Under Pennsylvania law, the approval of shareholders is required
in order to sell "all or substantially all" of the property and
assets of the Company. It is not clear what constitutes
"substantially all" of such property and assets and whether
individual sales should be aggregated in making such determination.
The Company believes that the sales of Bright Star and Fenwal,
whether considered individually or together, did not constitute a
sale of "substantially all" of the property and assets of the Company
under Pennsylvania law. Accordingly, the Company has not sought and
is not seeking shareholder approval of such transactions by
themselves. However, the Company is also currently pursuing the
potential sales of Masterview and Greenwald. Although the matter is
not free from doubt, the Company believes that the sale of either
Masterview or Greenwald, when viewed together with the sales of
Bright Star and Fenwal, could constitute a sale of "substantially
all" of the assets of the Company under Pennsylvania law. Therefore,
in order to address this uncertainty, the Company is seeking
shareholder approval of such proposed sales. While the Company has
entered into a non-binding Letter of Intent to sell substantially all
of the assets of Masterview, there can be no assurance that the
Company will enter into a definitive sale agreement or ultimately
complete a sale on terms contemplated by the Letter of Intent.
Furthermore, at this time the Company has only begun to explore the
possible sale of Greenwald. Accordingly, the shareholders are being
asked to approve a Plan of Asset Transfer authorizing the sale of
Masterview and Greenwald or the property or assets thereof on such
terms and conditions (including the consideration to be received by
the Company) as may be determined by the Company's Board of
Directors, in its sole discretion. If the Proposed Plan is not
approved, the Board may still authorize the sale of Masterview or
Greenwald if it determines, after receiving an opinion of counsel
(taking into account, to the extent deemed appropriate by counsel,
the sales of Bright Star and Fenwal), that such sale will not
constitute "substantially all" of its property and assets. See
"Shareholder Approval Requirement Under Pennsylvania Law."
Holders of shares of Common Stock will not be entitled to any
appraisal or dissenters' rights with respect to the Proposed Plan.
See "Absence of Dissenters' Rights" below.
On January 17, 1996 and June 12, 1996, the Board of Directors of
the Company, including a majority of Continuing Directors (see
"Proposal 1. -- ELECTION OF DIRECTORS - Employment and Change of
Control Agreements"), unanimously approved the Proposed Plan and
directed that it be submitted to shareholders of the Company for
approval.
The Board of Directors recommends a vote FOR approval of the
Proposed Plan.
The Company
Background
The Company was originally incorporated in 1913 in the
Commonwealth of Pennsylvania and became a public company in 1946
when its shares were first listed on the New York Stock Exchange.
At that time, the Company was one of the largest alcohol producers
in the world. Publicker remained profitable until the early 1950s
when it began to incur losses. By 1986 the Company had departed
from the business of manufacturing and selling alcohol and ceased
operations at its alcohol manufacturing plant and bulk liquid
storage facility in Philadelphia, Pennsylvania. On March 31, 1986,
the Company sold the facility for $3 million. The Company then
entered a period of acquiring and disposing of businesses. In
September 1987, the Company acquired Golding Industries, Inc.
("Golding") for $25 million in cash. It subsequently sold Golding
in March of 1989 for the aggregate sale price of $43.5 million. In
late 1990 and early 1991, the Company completed the acquisition of
ten businesses (including the Company's existing businesses) from a
subsidiary of Hanson PLC for an aggregate purchase price of $31.8
million.
From 1992 through early 1995 the Company undertook a series of
dispositions of businesses and selected assets. For a description
of such dispositions, see "Item 1. Business" of the Company's Annual
Report on Form 10-K/A for the fiscal year ended December 31, 1995
(the "1995 10-K"), a copy of which is enclosed with this Proxy
Statement. These dispositions were consummated generally in order
to consolidate the Company's operations and improve liquidity,
thereby allowing it to satisfy certain sinking fund obligations
under the Company's Subordinated Notes and meet on-going expenses of
its environmental litigation. See "-- Subordinated Notes" and "--
Environmental Litigation" below.
This series of dispositions left the Company with the following
businesses: Bright Star, Fenwal, Masterview, Greenwald and Orr-
Schelen-Mayeron & Associates, Inc. ("OSM"). On February 16, 1996,
the Company completed the sale of substantially all of the assets of
Bright Star, a manufacturer and distributor of flashlights and
lanterns. On March 29, 1996, the Company completed the sale of
substantially all of the assets of Fenwal, a designer and
manufacturer of negative temperature coefficient thermistors and
thermistor assemblies. The Company continues to operate its
remaining businesses. Masterview is engaged in the manufacture,
sale, distribution and installation of aluminum windows and doors
for the single and multi-family new housing marketplace. Greenwald
designs and manufactures coin meter systems used primarily in the
commercial laundry appliance, vending, amusement and car wash
industries. OSM provides general engineering, design and
architectural services. As of June 30, 1996, the Company had
approximately 425 employees at continuing operations engaged in
manufacturing operations, engineering, marketing, sales, service and
administrative activities.
Based in part on the reduction in the Company's operations due to
recent subsidiary sales and to the Proposed Plan, the New York Stock
Exchange has advised the Company of its intention to suspend trading
in the Company's Common Stock before the opening of trading on
Thursday, August 1, 1996, and thereafter apply to the Securities and
Exchange Commission to delist the issue. See "CERTAIN INFORMATION
REGARDING MARKETS, MARKET PRICES AND DIVIDENDS."
The principal executive offices of the Company are located at
1445 East Putnam Avenue, Old Greenwich, Connecticut 06870 and its
telephone number is (203) 637-4500.
Subordinated Notes
In order to reduce a working capital deficit and to finance
future acquisitions, in December 1986, the Company issued $30
million aggregate principal amount of 13% Subordinated Notes (the
"Subordinated Notes"). Under the terms of the Subordinated Notes,
the Company was required to make annual sinking fund payments of 25%
of the principal amount of the Subordinated Notes in December of
1993, 1994, 1995 and 1996. On April 19, 1996, the Company made the
one remaining payment of $7.5 million due in December 1996 using
proceeds from the sales of Bright Star and Fenwal. See "Use of
Proceeds."
Environmental Litigation
In December 1990, the United States Environmental Protection
Agency (the "EPA") commenced an action in the United States District
Court, Eastern District of Pennsylvania (the "Court"), against the
Company and two other parties seeking recovery of costs incurred by
the EPA and other federal agencies in responding to releases or
threatened releases of hazardous substances at the Company's
Philadelphia facility which had been sold in 1986. The Commonwealth
of Pennsylvania intervened as a second plaintiff in 1993, seeking
recovery of costs allegedly incurred by the Pennsylvania Department
of Environmental Protection ("PADEP") in responding to such releases
or threatened releases at the facility. On October 6, 1995, the
parties agreed on the final text of a proposed consent decree (the
"Consent Decree") setting forth the terms of a settlement of this
litigation (the "Settlement"). The Consent Decree was entered by
the Court on April 12, 1996 and is considered final.
Under the terms of the Settlement, on April 6, 1995, the Company
deposited $4.5 million with the clerk of the Court. Upon entry of
the Consent Decree by the Court, the Company made another payment to
the Court of $4.5 million, plus interest. Further payments to the
EPA totaling $4.35 million, plus interest, will be made over the
next six years. Pursuant to the Settlement, the Company will pay
the Commonwealth of Pennsylvania a total of $1 million, consisting
of an initial payment of $350,000 which the Company made following
entry of the Consent Decree, plus four annual payments of $162,500
each, plus interest. Payments made to the EPA and PADEP following
entry of the Consent Decree were made using proceeds from the sales
of Bright Star and Fenwal. See "Use of Proceeds." These payments
are in settlement of all of the EPA's and PADEP's claims against the
Company and the Company's counterclaims against the EPA relating to
the Philadelphia site, subject only to certain "reopener" provisions
in the event of future discovery of certain defined types of
presently unknown conditions or information pertaining to the site.
In the fourth quarter of 1993, the Company recorded a liability of
$14.35 million to cover the estimated costs of settlement.
Congress Financial Financing
On October 11, 1995, the Company and certain of it subsidiaries
entered into a three-year credit agreement (the "Loan Agreement")
with Congress Financial Corporation (New England), a subsidiary of
Corestates Financial Corp. ("Congress Financial"), providing for a
$13,161,000 revolving credit line, a $1,750,000 credit facility for
future capital expenditures, and a term loan of $2,149,000.
Borrowings under the Loan Agreement bear interest at a rate of prime
plus one and one-half percent. The initial drawdown under the Loan
Agreement of $7,449,000, together with existing cash, was used to
repay a credit facility at one of the Company's subsidiaries and to
satisfy the Company's $7.5 million December 1995 sinking fund
obligation under the Subordinated Notes. As of June 30, 1996,
after giving effect to the repayment of approximately $6 million in
outstanding borrowings from the proceeds of the Bright Star and
Fenwal sales, the Company had approximately $4 million in available
borrowings under the Loan Agreement. See "Use of Proceeds."
Background and Reasons for the Proposed Plan
Background
From time to time during the past several years, the Company has
considered the sale of certain of its operating subsidiaries as part
of its overall business strategy. During 1995, the Board considered
the prospect of selling a significant portion of the Company's
subsidiaries. The Board undertook such consideration in recognition
of the fact that the Company needed to generate cash in order to
meet obligations coming due in 1995 and 1996 under the Subordinated
Notes and the Settlement of the Company's environmental litigation.
See "Reasons for the Proposed Plan." This resulted in the Board's
determination in late 1995 to explore the possibility of selling
several of its subsidiaries by commencing efforts to seek potential
buyers for Bright Star and Masterview. The decision by the Board of
Directors to explore the sale of these subsidiaries resulted from
consideration of the following factors: (i) the types of businesses
operated by each of these subsidiaries, (ii) the Company's ability
to find likely buyers, (iii) sale prices reasonably expected to be
obtained, (iv) the ease of selling each subsidiary and (v) the
respective subsidiaries' contributions to the Company's earnings.
The Board did not ascribe relative weights to these factors. The
Company subsequently decided to sell Fenwal after receiving an
unsolicited offer to purchase Fenwal at a purchase price
representing what the Company considered to be a favorable multiple
of earnings. The Company initially decided not to sell Greenwald
and OSM due, in the case of Greenwald, to a pending move of its
operations to a new location and, in the case of OSM, to recent
unfavorable operating results and a change in management. With the
completion of the move of Greenwald's operations in April 1996, the
Company determined in June 1996 to seek a sale of such subsidiary.
Sale Process
Bright Star. On February 16, 1996, the Company completed the
sale of substantially all of the assets of Bright Star to a company
formed by an affiliate of BancBoston Capital and an investor group
for a purchase price of $5.5 million in cash, plus the assumption of
certain liabilities. Neither the buyer nor, to the Company's
knowledge, any affiliate thereof is an affiliate of or has any prior
relationship with the Company. See "Sale Agreements -- Bright Star
Asset Purchase Agreement."
Fenwal. On March 29, 1996, the Company completed the sale of
substantially all of the assets of Fenwal to Elmwood Sensors, Inc.,
an affiliate of BTR Dunlop, Inc., for a purchase price of $25.3
million in cash, subject to adjustment, plus the assumption of
certain liabilities. Neither the buyer nor, to the Company's
knowledge, any affiliate thereof is an affiliate of or has any prior
relationship with the Company. See "Sale Agreements -- Fenwal Asset
Purchase Agreement."
Masterview. On November 9, 1995, the Company engaged Bowles
Hollowell Connor & Co. in order to initiate the process of assessing
the market for Masterview and identifying potential purchasers. A
confidential offering memorandum describing Masterview was prepared
and distributed to potential buyers. Representatives of several
potential buyers visited Masterview's facility in Phoenix, Arizona.
On May 29, 1996, the Company entered into a non-binding Letter of
Intent to sell substantially all of the assets of Masterview to an
affiliate of BancBoston Capital for a sale price of $15.25 million,
subject to adjustment, plus the assumption of certain liabilities.
Neither the prospective buyer nor, to the Company's knowledge, any
affiliate thereof is an affiliate of or has any prior relationship
with the Company. There can be no assurance that the parties will
enter into a definitive agreement or ultimately consummate the
proposed sale of Masterview.
Greenwald. On June 12, 1996, the Company's Board of Directors
determined to explore the sale of Greenwald. This decision was
based, in part, on the completion in April 1996 of the move of
Greenwald's operations. Since that time, the Company has had
preliminary discussions with an investment banking firm regarding
such a sale, and certain limited discussions with potential buyers.
There can be no assurance that the Company will be successful in
finding a buyer for Greenwald on terms that it would find
acceptable, or that any offer would result in a sale of the
Greenwald business.
Reasons for the Proposed Plan
In making the decisions to sell Bright Star, Fenwal, Masterview
and Greenwald, the factors considered by the Company's Board of
Directors consisted of the following. The Board did not ascribe
relative weights to these factors.
Future Business Acquisitions. For the fiscal
years ended December 31, 1995, 1994 and 1993, the Company
reported net losses of approximately $.3 million, $2.3 million
and $9.4 million, respectively. The Company recognizes the
need to improve earnings per share for shareholders. In
evaluating the financial condition of the Company and
considering ways in which the Company can improve operating
results, the Board of Directors has concluded that the Company
is more likely to be able to generate significant income
through the acquisition of new businesses. Sale of the
businesses operated by its existing subsidiaries will generate
capital for the acquisition of such businesses.
Liquidity. In late 1995, when the Board of
Directors approved the sale of several of the Company's
subsidiaries, the Company was obligated or expected to become
obligated to make payments in 1996 of (i) $7.5 million under
the Subordinated Notes due in December, and (ii) approximately
$5 million in the aggregate to the EPA and Commonwealth of
Pennsylvania under the terms of the Settlement of the
Company's environmental litigation upon entry by the Court of
the Consent Decree. The decision to approve such sales,
including the Proposed Plan, was based, in part, on the need
to generate cash sufficient to meet those obligations in 1996.
See "The Company -- Subordinated Notes" and "-- Environmental Litigation."
Favorable Sale Market. The Company believes
that the current market for corporate acquisitions is
favorable to sellers. This belief is based on several factors
having the combined effect of increased sale prices. These
factors include a high level of activity in the mergers and
acquisition market in recent years, including a record $450
billion in domestic transactions completed in 1995 according
to the Wall Street Journal, and a substantial amount of
available equity capital and a willing institutional lending
market providing financing for acquisitions.
Use of Proceeds
To date, the Company has used the proceeds from the sales of
Bright Star and Fenwal to make the final sinking fund payment of
$7.5 million under the Subordinated Notes, to make payments of
approximately $5 million in the aggregate to the EPA and
Commonwealth of Pennsylvania and to repay outstanding borrowings of
approximately $6 million under the Congress Financial Loan
Agreement. The Company expects to repay an additional $1 million and
$2 million in outstanding borrowings upon the sales of Masterview
and Greenwald, respectively, if consummated.
Having made such payments and repaid such indebtedness, as of
June 30, 1996, the Company had approximately $7 million in cash on
hand. The Company intends to use such funds, together with
potential indebtedness, to seek out and acquire one or more
businesses. The Company has not yet identified any potential
acquisition candidates or determined the amount or source of any
indebtedness which would be incurred to finance future acquisitions.
The undertaking of any new lines of business will be restricted by
the non-competition provisions agreed to in the Bright Star
transaction and any other non-competition covenants to which the
Company may agree in connection with the sales of Masterview and
Greenwald. No non-competition covenants were agreed to by the
Company or Fenwal in connection with the Fenwal sale. See "Sale
Agreements."
As indicated in "The Company -- Environmental Litigation" above,
the Company is obligated to make additional payments to the EPA and
Commonwealth of Pennsylvania aggregating approximately $5 million
plus interest over a six-year period. The Company expects to fund
these long-term payments through available cash resources, available
borrowings under the Loan Agreement, cash from operations, the
possible issuance of new debt securities and the sale, if
consummated, of one or more of its remaining subsidiary companies.
There can be no assurance that the foregoing sources of financing
will be sufficient to fund the remaining payments due under the
Settlement.
Sale Agreements
Bright Star Asset Purchase Agreement
On February 16, 1996, the Company and Bright Star entered into an
Asset Purchase Agreement (the "Bright Star Agreement") and completed
the sale of substantially all of the assets of Bright Star to a
company (the "Buyer") formed by an affiliate of BancBoston Capital
and an investor group for a purchase price of $5.5 million in cash,
plus the assumption of certain liabilities. The assets purchased
include all of Bright Star's material assets, other than cash. The
assumed liabilities consist generally of the following: (i) post-
closing obligations of Bright Star under executory leases, contracts
and agreements and (ii) trade accounts payable and accrued
liabilities of Bright Star to the extent outstanding on the closing
date. The Buyer paid $5.3 million to Bright Star in cash at the
closing. Of the remaining $200,000 of the purchase price, $100,000
was to be held in escrow to cover a potential purchase price
adjustment. On June 17, 1996, this amount was released from escrow
to the Company together with a $40,000 payment from the Buyer to the
Company representing such adjustment. The other $100,000 is to be
held in escrow for one year from the closing date to cover the
indemnification obligations of the Company and Bright Star described
below.
The Company and Bright Star have each agreed to certain non-
competition provisions restricting each from engaging for a period
of five years in the manufacture, distribution or sale of
flashlights and batteries anywhere in the world, subject to certain
exceptions. In addition, the Company and Bright Star have agreed to
indemnify the Buyer for (i) Bright Star's failure to pay any of its
liabilities or obligations other than liabilities assumed by the
Buyer, (ii) the breach of or failure to perform such party's
representations, warranties, covenants or agreements in the Bright
Star Agreement and (iii) environmental claims based on a breach by
Bright Star of environmental laws or the presence on its properties
of hazardous materials, in each case prior to the closing date. The
Buyer has agreed to indemnify the Company and Bright Star for
(i) Buyer's failure to pay or perform any of the assumed
liabilities, (ii) the breach of or failure to perform its
representations, warranties, covenants or agreements in the Bright
Star Agreement and (iii) environmental claims based on a breach by
the Buyer of environmental laws or the presence on its properties of
hazardous materials, in each case after the closing date. No claims
for indemnification may be asserted by any party until the aggregate
of all such claims (net of insurance and other third party
recoveries) shall total at least $50,000, and the maximum aggregate
liability of the Company and Bright Star (taken together) and the
Buyer is limited to the cash portion of the purchase price. The
indemnification obligations will expire on the second anniversary of
the closing date, other than indemnification for taxes and
environmental matters which will expire on the seventh anniversary
of the closing date.
Fenwal Asset Purchase Agreement
On March 29, 1996, the Company and Fenwal entered into an Asset
Purchase Agreement (the "Fenwal Agreement") and completed the sale
of substantially all of the assets of Fenwal to Elmwood Sensors,
Inc., an affiliate of BTR Dunlop, Inc. ("Elmwood") for a purchase
price of $25.3 million in cash, subject to adjustment, plus the
assumption of certain liabilities. The assets purchased include all
of Fenwal's material assets, other than cash. The assumed
liabilities consist generally of the following: (i) post-closing
obligations of Fenwal under executory leases, contracts and
agreements and (ii) trade accounts payable, accrued liabilities of
Fenwal and certain equipment financing related debt, to the extent
outstanding on the closing date. Elmwood paid the full purchase
price to Fenwal in cash at the closing. On July 16, 1996, Elmwood
paid an additional $1,183,000 to the Company representing an
adjustment to the purchase price based on the net book value of the
Fenwal assets on the closing date.
The Company and Fenwal have agreed to indemnify Elmwood for
(i) Fenwal's failure to pay any of its liabilities or obligations
other than liabilities assumed by Elmwood, (ii) the breach of or
failure to perform such party's representations, warranties,
covenants or agreements in the Fenwal Agreement and
(iii) environmental claims based on a breach by Fenwal of
environmental laws or the presence on its properties of hazardous
materials, in each case prior to the closing date. Elmwood has
agreed to indemnify the Company and Fenwal for (i) Elmwood's failure
to pay or perform any of the assumed liabilities, (ii) the breach of
or failure to perform its representations, warranties, covenants or
agreements in the Fenwal Agreement and (iii) environmental claims
based on a breach by Elmwood of environmental laws or the presence
on its properties of hazardous materials, in each case after the
closing date. No claims for indemnification based on a breach of
representation, warranty, covenant or agreement may be asserted by
any party until the aggregate of all such claims (net of insurance
and other third party recoveries) shall total at least $250,000, and
the maximum aggregate liability of the Company and Fenwal (taken
together) and the Buyer for such claims is limited to the cash
portion of the purchase price. The indemnification obligations will
expire on the tenth anniversary of the closing date other than
claims for indemnification based on a breach of representation or
warranty which will expire on the second anniversary of the closing
date.
Masterview Letter of Intent
On May 29, 1996, the Company and Masterview entered into a
non-binding Letter of Intent to sell substantially all of the assets of
Masterview to an affiliate of BancBoston Capital for a sale price of
$15.25 million, subject to adjustment, plus the assumption of
certain liabilities. The assets to be purchased include all of
Masterview's material assets, other than cash. The assumed
liabilities consist generally of the following: (i) post-closing
obligations of Masterview under executory leases, contracts and
agreements and (ii) accounts payable and accrued liabilities of
Masterview to the extent outstanding on the closing date. The
Letter of Intent provides that $600,000 of the purchase price will
be placed in escrow at the closing. Of this amount, $300,000 will
secure and be payable to the appropriate party upon determination of
the purchase price adjustment, with the remaining $300,000 to remain
in escrow for one year following closing as security for the
indemnification obligations of the Company and Masterview. The
purchase price is subject to adjustment to the extent that the net
book value of the Masterview assets on the closing date is greater
or less than $3,932,000. Completion of the transaction is subject
to, among other things, entering into a definitive asset purchase
agreement containing customary representations and warranties,
covenants, conditions to closing, including the condition that the
transaction be approved by the Company's shareholders, and
indemnities.
The Letter of Intent is non-binding. There can be no assurance
that the parties will enter into a definitive agreement or
ultimately consummate the sale of Masterview.
Shareholder Approval Requirement Under Pennsylvania Law
Pursuant to Sections 1932 and 1924 of the Pennsylvania Business
Corporation Law ("PABCL"), shareholder approval is required in order
to sell "all or substantially all" of the property and assets of the
Company (the "Shareholder Approval Requirement"). It is not clear
what constitutes "substantially all" of such property and assets and
whether individual sales should be aggregated in making such
determination. The Company believes that the sales of Bright Star
and Fenwal, whether considered individually or together, did not
constitute a sale of "substantially all" of the property and assets
of the Company within the meaning of PABCL Section 1932.
Accordingly, the Company has not sought and is not seeking
shareholder approval of such transactions by themselves. However,
the Company is also currently pursuing the potential sales of
Masterview and Greenwald. Although the matter is not free from
doubt, the Company believes that the sale of either Masterview or
Greenwald, when viewed together with the sales of Bright Star and
Fenwal, could constitute a sale of "substantially all" of the assets
of the Company within the meaning of PABCL Section 1932. Therefore,
in order to address this uncertainty, the Company is seeking
shareholder approval of such proposed sales. While the Company has
entered into a non-binding Letter of Intent to sell substantially
all of the assets of Masterview, there can be no assurance that the
Company will enter into a definitive sale agreement or ultimately
complete a sale on terms contemplated by the Letter of Intent.
Furthermore, at this time the Company has only begun to explore the
possible sale of Greenwald. Accordingly, the shareholders are being
asked to approve a Plan of Asset Transfer authorizing the sales of
Masterview and Greenwald or the property or assets thereof on such
terms and conditions (including the consideration therefor) as may
be determined by the Company's Board of Directors, in its sole
discretion. If the Proposed Plan is not approved, the Board may
still authorize the sale of Masterview or Greenwald if it
determines, after receiving an opinion of counsel (taking into
account, to the extent deemed appropriate by counsel, the sales of
Bright Star and Fenwal), that such sale will not constitute
"substantially all" of its property and assets.
The affirmative vote of a majority of the outstanding Common
Stock is required for the Proposed Plan to be approved and adopted
by the shareholders.
Accounting Treatment
Bright Star has been reflected as a discontinued operation in the
Company's financial statements for the fiscal year ended December
31, 1995. Fenwal was reflected as a discontinued operation in the
Company's financial statements beginning with the interim period
ended March 31, 1996. If the sale of Masterview is consummated on
terms contemplated by the Letter of Intent, Masterview will be
reflected as a discontinued operation in the Company's financial
statements beginning with the interim period financial statements
with respect to the period in which a definitive agreement for such
sale is entered into. The accounting treatment for the sale of
Masterview, if consummated on terms other than those contemplated by
the Letter of Intent, cannot be determined at this time.
Furthermore, because the Proposed Plan includes the potential sale
of Greenwald pursuant to terms and conditions to be determined by
the Board of Directors at a future date, the accounting treatment
for such transaction cannot be determined at this time.
Federal Income Tax Consequences
The sales of Bright Star and Fenwal are taxable transactions to
the Company for federal income tax purposes. The Company and its
subsidiaries expect to recognize net taxable income with respect to
such sales. However, it is expected that such income will be
substantially offset by the Company's net operating loss
carryforwards. Similarly, to the extent that the sales of
Masterview and Greenwald are taxable transactions to the Company and
its subsidiaries for federal income tax purposes, the Company
expects that such income will also be substantially offset by the
net operating loss carryforwards.
Regulatory Approvals
If the sale of Masterview is consummated on terms contemplated by
the Letter of Intent, it will likely be subject to compliance with
the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
Company is not aware of any other regulatory approvals that would be
required. It cannot be determined at this time what, if any,
regulatory requirements will need to be complied with or approvals
obtained in order to consummate the sale of Masterview on terms
other than those contemplated by the Letter of Intent. Furthermore,
because the Proposed Plan includes the sale of Greenwald pursuant to
terms and conditions to be determined by the Board of Directors at
a future date, it cannot be determined at this time what, if any,
regulatory requirements will need to be complied with or approvals
obtained in order to consummate such transaction.
Absence of Dissenters' Rights
Under the PABCL, a shareholder has the right to dissent from, and
to obtain payment of the fair value of his shares in the event of a
sale of all or substantially all of the corporation's assets
pursuant to a plan of asset transfer, except that the holders of the
shares of any class or series of shares that, at the record date
fixed to determine the shareholders entitled to notice of and to
vote at the meeting at which a plan of asset transfer is to be voted
on, are either listed on a national securities exchange or held of
record by more than 2,000 shareholders, shall not have the right to
obtain payment of the fair value of any such shares. The Company's
Common Stock was listed on the New York Stock Exchange, a national
securities exchange, on the Record Date. Accordingly, holders of
shares of Common Stock will not be entitled to any dissenters'
rights with respect to the Proposed Plan.
Changes in the Rights of Shareholders
Because the Proposed Plan involves the sale of assets of the
Company's Masterview or Greenwald subsidiaries for cash or other
consideration to be paid to the Company or such subsidiary, the
shareholders of the Company will retain their equity interests in
the Company following the consummation of the Proposed Plan. There
will not be any differences in the rights of security holders of the
Company as a result of the Proposed Plan.
Pro Forma Financial Statements
The following unaudited pro forma financial statements give
effect to the disposition by the Company of substantially all of the
assets of its Masterview and Greenwald subsidiaries. The pro forma
financial information is based on the historical financial
statements of the Company, adjusted to give effect to the
dispositions of Masterview and Greenwald, and on estimates and
assumptions set forth below and in the accompanying notes. Bright
Star and Fenwal have been reflected as discontinued operations in
the historical consolidated financial statements.
The pro forma condensed balance sheet gives effect to the
transactions as if they had occurred as of March 31, 1996. The pro
forma condensed statement of income (loss) for the year ended
December 31, 1995 and for the three months ended March 31, 1996
gives effect to the transactions as if they had occurred as of the
beginning of the period presented.
The pro forma adjustments are based on estimates, available
information and certain assumptions made by management. The pro
forma condensed balance sheet and statements of income (loss) are
not necessarily indicative of future operations or the actual
results that would have occurred had the dispositions been
consummated at the dates indicated above. The pro forma financial
information should be read in conjunction with the Company's
historical financial statements and notes thereto included in the
Company's 1995 10-K.
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
PRO FORMA CONDENSED BALANCE SHEET AS OF
MARCH 31, 1996
(in thousands of dollars)
Eliminate Eliminate
Masterview Greenwald Pro
Window Industries, Pro Forma Forma
Historical Company,Inc. Inc. Adjustments (a) Balances
Cash $24,386 $ - $ - $13,662 $38,048
Restricted cash 4,500 - - - 4,500
Trade receivables 6,715 (2,958) (2,053) - 1,704
Inventories 4,476 (1,782) (2,694) - -
Net assets of dis-
continued operations - 5,608 4,146 (9,754) -
Other 2,084 (1,286) (37) - 761
Total current
assets 42,161 (418) (638) 3,908 45,013
Property, plant
& equipment 8,013 (2,559) (3,518) - 1,936
Less accumulated
depreciation 2,456 (922) (583) - 951
5,557 (1,637) (2,935) - 985
Goodwill 4,604 (1,789) (1,450) - 1,365
Other assets 2,066 (125) (145) (32) 1,764
$ 54,388 $(3,969) $(5,168) $3,876 $49,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities
of long-term debt $8,353 $(298) $(274) $(7,764) $17
Accounts payable 6,090 (2,041) (1,398) - 2,651
Accrued liabilities 16,644 (839) (1,626) 943 15,122
Total current
liabilities 31,087 (3,178) (3,298) (6,821) 17,790
Long-term debt 2,615 (791) (1,762) - 62
Other non-current
liabilities 11,267 - (108) - 11,159
Total liabilities 44,969 (3,969) (5,168) (6,821) 29,011
Shareholders' equity
Common shares 1,591 - - - 1,591
Additional paid-in
capital 46,952 - - - 46,952
Accumulated deficit (35,233) - - 10,697 (24,536)
Common shares held
in treasury (3,891) - - - (3,891)
Total shareholders'
equity 9,419 - - 10,697 20,116
$54,388 $(3,969) $(5,168) $3,876 $49,127
(a) The pro forma adjustments reflect the dispositions of Greenwald and
Masterview as of March 31, 1996 and assume that the estimated proceeds from the
dispositions, net of disposition costs and extinguishment of liabilities
retained by the Company, of $21,762,000 were used to (i) pay down bank debt of
$313,000, (ii) redeem the Subordinated Notes of $7.5 million plus accrued
interest and (iii) write off debt discount and issuance costs related to the
Subordinated Notes. A pro forma adjustment was also recorded to establish a tax
liability related to the dispositions.<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
PRO FORMA CONDENSED STATEMENT OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(in thousands, except per share data)
Eliminate Eliminate
Masterview Greenwald Pro
Window Industries, Pro Forma Forma
Historical Company, Inc. Inc. Adjustments(a) Balances
Net sales $12,003 $(6,252) $(3,736) $ - $2,015
Costs and expenses:
Cost of sales 9,722 (4,684) (3,508) - 1,530
Selling expenses 555 (287) (167) - 101
General & admin-
istrative expenses 2,915 (428) (560) (11) 1,916
Special charge(b) 995 - (995) - -
14,187 (5,399) (5,230) (11) 3,547
Income (loss) from
operations (2,184) (853) 1,494 11 (1,532)
Other (income) expenses:
Interest income (10) - - - (10)
Interest expense 410 (56) (62) (267) 25
Cost of pensions-non
operating 184 - - - 184
Legal settlements and
costs 153 - - - 153
737 (56) (62) (267) 352
Income (loss) from continuing
operations before
income taxes (2,921) (797) 1,556 278 (1,884)
Credit in lieu of
income taxes 1,226 279 (545) (97) 863
Income (loss) from
continuing
operations $(1,695) $(518) $1,011 $181 $(1,021)
Earnings (loss) per common
share from continuing
operations $(0.10) $(0.06)
Weighted average number of shares
outstanding
(in thousands) 16,276 16,276
(a)The pro forma adjustments reflect the disposition of Bright Star, Fenwal,
Greenwald and Masterview as of January 1, 1996, and assume (i) a reduction of
interest expense related to the paydown of the Company's Subordinated Notes
and bank debt and (ii) the elimination of amortization of debt discount and
issuance costs related to the Subordinated Notes.
(b)Represents a charge for severance, lease termination costs and relocation
expenses associated with Greenwald's move from New York to Connecticut.<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
PRO FORMA CONDENSED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1995
(in thousands, except per share data)
Eliminate Eliminate
Masterview Greenwald Pro
Window Industries, ProForma Forma
Historical(a) Company,Inc. Inc. Adjustments(b) Balances
Net Sales $46,717 $(19,761) $(16,680) $ - $10,276
Costs and expenses:
Cost of sales 35,000 (14,988) (12,774) - 7,238
Selling expenses 2,249 (1,056) (722) - 471
General & admin-
istrative expenses 9,589 (1,306) (1,258) (79) 6,946
Total costs and
expenses 46,838 (17,350) (14,754) (79) 14,655
Income (loss) from
operations (121) (2,411) (1,926) 79 (4,379)
Other (income) expenses:
Interest income (138) - - - (138)
Interest expense 2,119 (232) (43) (1,803) 41
Cost of pensions-
non operating 744 - - - 744
Legal settlements
and costs 365 - - - 365
Gain from repurchase
of notes (75) - - 75 -
3,015 (232) (43) (1,728) 1,012
Income (loss) from continuing
operations $(3,136) $(2,179) $(1,883) $1,807 $(5,391)
Earnings (loss) per common share
from continuing
operations $(0.21) $(0.37)
Weighted average number of shares
outstanding
(in thousands) 14,761 14,761
(a)Bright Star was reflected as a discontinued operation in the historical
financial statements. The historical balances have been restated also to
reflect Fenwal as a discontinued operation.
(b)The pro forma adjustments reflect the disposition of Bright Star, Fenwal,
Greenwald and Masterview as of January 1, 1995, and assume (i) a reduction of
interest expense related to the pay down of the Company's Subordinated Notes and
bank debt and (ii) elimination of amortization of debt discount and issuance
costs related to the Subordinated Notes and the gain on repurchase of such
notes.
<PAGE>
PROPOSAL 3.
PROPOSAL TO AMEND THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK
The Board of Directors has adopted a resolution declaring advisable
and recommending to the Company's shareholders that the number of
authorized shares of the Company's Common Stock be increased from
30,000,000 to 40,000,000 shares by amending the first paragraph of
Article FOURTH of the Company's Amended and Restated Articles of
Incorporation. If approved by shareholders, the first paragraph of
Article FOURTH, as amended, would read in its entirety as follows:
"Article Fourth. The aggregate number of shares which the
Corporation shall have authority to issue shall be 41,136,566 of
which 136,566 shares shall be Preferred Stock without par,
1,000,000 shares shall be Class A Preferred Stock without par
value and 40,000,000 shares shall be Common Stock of the par
value $.10 each."
As of June 30, 1996, 15,999,937 shares of Common Stock were
outstanding, 4,539,250 shares were reserved for issuance under stock
option plans, 3,675,375 shares were reserved for issuance upon
exercise of warrants, and 5,785,438 shares were available for future
issuance. If the proposed amendment is adopted, 15,785,438 shares
of Common Stock, 136,566 shares of Preferred Stock without par, and
1,000,000 shares of Class A Preferred Stock without par value would
be available for future issuance.
The purpose of increasing the number of authorized shares of
Common Stock is to provide additional shares which could be issued
for corporate purposes without further shareholder approval unless
required by applicable law or stock exchange regulation. Such
purposes could include effecting acquisitions of other businesses or
meeting requirements for working capital or capital expenditures
through issuance of additional shares. While the Company has no
present intention to issue any additional shares other than shares
of Common Stock in connection with possible future exercises of
warrants and the exercise of stock options granted under stock
option plans, the increase in authorized shares, if approved by
shareholders, will allow the Board of Directors to issue additional
shares if appropriate opportunities should arise.
Holders of the Company's Common Stock have no preemptive rights
in respect of future issuances of Common Stock or securities
convertible into Common Stock. Accordingly, to the extent that any
additional shares of Common Stock or securities convertible to into
Common Stock may be issued on other than a pro rata basis to current
shareholders, the present ownership position of current shareholders
may be diluted. Moreover, the Company's Amended and Restated
Articles of Incorporation authorizes the Board of Directors to issue
Preferred Stock in one or more series and to determine the
designation and relative dividend, conversion, liquidation and other
rights, preferences and limitations of each such series. Although
no offering or other issuance of Preferred Stock is contemplated
presently by management of the Company, to the extent that any
shares of Preferred Stock may be issued, such Preferred Stock may
(a) have priority over the Company's Common Stock with respect to
dividends and the assets of the Company upon liquidation, (b) have
significant voting power, (c) provide for representation of the
holders of Preferred Stock on the Board of Directors upon the
occurrence of certain events, and (d) require the approval of the
holders of the Preferred Stock for the taking of certain corporate
actions.
The additional shares will be issued only upon determination by
the Board of Directors that a proposed issuance is in the best
interests of the Company. The Company will not necessarily seek
further shareholder authorization for the issuance of any additional
shares prior to such issuance.
The proposed amendment is not intended to have an anti-takeover
effect. The issuance, however, of any of the shares proposed to be
authorized, as well as currently authorized but unissued shares, may
potentially have an anti-takeover effect by making it more difficult
to obtain shareholder approval of actions such as certain business
combinations or removal of management. In addition, the ability to
issue preferred stock could have the effect of discouraging
unsolicited acquisition proposals or making it more difficult for a
third party to gain control of the Company. The Board of Directors
is not aware of any possible takeover attempts at this time.
The affirmative vote of a majority of the outstanding Common Stock
is required of the proposed amendment to the Company's Amended and
Restated Articles of Incorporation to be approved and adopted by
shareholders.
The Board of Directors recommends a vote FOR the proposal to approve
the amendment to the Company's Amended and Restated Article of
Incorporation.<PAGE>
PROPOSAL 4.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has appointed Arthur
Andersen LLP as independent accountants to audit the books and
accounts of the Company for the year ending December 31, 1996, and
recommends that the appointment of such auditors be ratified by the
shareholders.
Representatives of Arthur Andersen LLP, the Company's principal
accountants for the most recently completed and the current fiscal
years, are expected to be present at the meeting, will have the
opportunity to make a statement, and will be available to respond to
questions.
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data of the Company presented below for
the five year period ended December 31, 1995, have been derived from
the consolidated financial statements of the Company, which have
been audited by Arthur Andersen LLP, and have been restated to
reflect Fenwal as a discontinued operation. The information set
forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements and
the Notes thereto included in the Company's 1995 10-K, a copy of
which is enclosed with this Proxy Statement, and the Quarterly
Report on Form 10-Q for the three months ended March 31, 1996.
Three
Months
ended
March 31,
Year Ended December 31,
1996 1995* 1994* 1993* 1992* 1991*
(In thousands,
except per
share amounts)
Income Statement Data:
Net sales $12,003 $46,717 $46,176 $41,754 $37,587 $32,991
Income (loss) from
operations1 (2,184) (121) (1,587) (1,800) (1,583) (1,827)
Income (loss) from continuing
operations (1,695)2 (3,136)3 (4,967)4 (20,282)5 (6,468)6(7,035)7
Income (loss) from discontinued
operations 430 2,845 2,678 2,528 2,136 4,092
Gain on sale of discontinued
operations, net 8,764 - - 8,307 - -
Net income (loss) $7,499 $(291) $(2,289) $(9,447) $(4,332)$(2,943)
Per common share:
Income (loss) from continuing
operations $(.10) $(.21) $(.34) $(1.40) $(.45) $(.48)
Income (loss) from discontinued
operations .56 .19 .19 .75 .15 .28
Net income (loss) per common
share $.46 $(.02) $(.15) $(.65) $(.30) $(.20)
March 31, December 31,
1996 1995* 1994* 1993* 1992* 1991*
Balance Sheet Data:8 (In thousands)
Working capital $11,074 $(740) $14,286 $26,015 $28,264 $35,890
Total assets 54,388 40,817 43,029 51,126 48,233 52,722
Total debt9 10,968 13,032 17,280 22,082 25,557 26,097
Non-current
liabilities 11,267 11,390 16,509 21,555 6,504 6,654
Shareholders' equity 9,419 (2,594) (2,616) (340) 9,082 13,414
__________________________________________
(1)Represents income (loss) before interest income, interest expense and items
of a nonoperating or nonrecurring nature.
(2) Includes cost of pension expenses related to discontinued product lines and
related plant closings ("cost of pensions - non-operating") of $184,000 and
legal settlements and costs of $153,000.
(3)Includes cost of pensions - non-operating of $744,000, legal settlements and
costs of $365,000 and a gain from repurchase of notes of $75,000.
(4) Includes cost of pensions - nonoperating of $768,000, legal settlements and
costs of $507,000 and a gain from repurchase of notes of $640,000.
(5) Includes cost of pensions - nonoperating of $776,000, legal settlements and
costs of $14,791,000 and a gain from repurchase of notes of $370,000.
(6) Includes cost of pensions - nonoperating of $930,000, legal settlements and
costs of $790,000 and a gain from repurchase of notes of $352,000.
(7) Includes cost of pensions - nonoperating of $941,000 and legal
settlements and costs of $1,050,000.
(8) No dividends on common shares have been declared or paid during the
last five years.
(9)Includes current maturities of long-term debt and revolving credit line
borrowing.
* Restated for discontinued operations.<PAGE>
CERTAIN INFORMATION REGARDING
MARKETS, MARKET PRICES AND DIVIDENDS
The New York Stock Exchange (the "NYSE") is the principal market
on which the Company's Common Stock is traded (trading symbol: PUL).
The NYSE has advised the Company that trading in the Company's
Common Stock will be suspended before the opening of trading on
Thursday, August 1, 1996. Following suspension, the NYSE will apply
to the Securities and Exchange Commission to delist the issue. The
NYSE has indicated that its decision to delist was based on
consideration of certain qualitative listing criteria, including the
reduction in operations due to recent subsidiary sales and the
Proposed Plan of Asset Transfer, as well as the Company's failure to
meet certain quantitative listing criteria, including average net
income for the last three years and net tangible assets. The
Company has filed an application with The NASDAQ Stock Market
about listing its Common Stock on The NASDAQ Small-Cap Market.
While the Company believes that its Common Stock may be approved
for listing, it is aware that it does not meet certain of the
quantitative listing requirements, and therefore there can be
no assurance that such approval will be obtained.
There were approximately 3,330 registered holders of record of
Common Stock as of June 24, 1996. The Company did not pay dividends
on its Common Stock during the prior five fiscal years and does not
anticipate paying dividends in the foreseeable future. The high and
low sale prices for the Company's Common Stock on the NYSE as of
January 16, 1996, the day preceding the day the Proposed Plan was
approved and adopted by the Board of Directors, were $2 3/8 and $2
1/4 per share, respectively. The high and low sale prices for the
Common Stock on the NYSE during the first quarter of 1996 were $2
7/8 and $2, respectively, and during the second quarter of 1996 were
$2 1/2 and $1 7/8, respectively.
SHAREHOLDER PROPOSALS
Any proposals by shareholders of the Company intended to be
included in the Company's Proxy Statement relating to the Company's
1997 Annual Meeting of Shareholders must be in writing and received
by the Company at its principal executive office no later than
December 31, 1996.
GENERAL
Management of the Company does not know of any matters other than
the foregoing that will be presented for consideration at the Annual
Meeting. However, if other matters properly come before the Annual
Meeting it is the intention of the persons named in the enclosed
proxy to vote thereon in accordance with their judgment.
The entire cost of soliciting management proxies will be borne by
the Company. Proxies will be solicited by mail and may be solicited
personally by directors, officers or regular employees of the
Company, who will not be compensated for their services. In order
to support the Board of Directors' nominees and the other proposal
herein and to help insure the presence of a quorum, the Company has
retained the services of Morrow & Co., Inc. as proxy solicitor to
assist in the solicitation of proxies for this meeting. The fees
payable to Morrow & Co., Inc. in connection with this solicitation
are estimated to be $7,500. The Company will reimburse banks,
brokerage firms, and other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy material to their
principals and obtaining their proxies.
Accompanying this proxy statement is a copy of the Company's 1995
Annual Report.
INCORPORATION BY REFERENCE
The Company's 1995 10-K, as amended by Amendment No. 1 thereto on
Form 10K/A, a copy of which is being delivered with this Proxy
Statement, its Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996 and its Current Reports on Form 8-K,
dated January 16, 1996, March 1, 1996, April 15, 1996 (as amended by
Form 8-K/A dated May 14, 1996), April 16, 1996 and July 15, 1996,
respectively, each as filed with the Securities and Exchange
Commission, are incorporated into this proxy statement by reference.
All documents subsequently filed by the Company pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the Annual Meeting shall be deemed to be
incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a
document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that
a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Proxy Statement.
The Company will provide without charge to each person to whom a
copy of this Proxy Statement is delivered, upon the written or oral
request of such person and by first class mail or other equally
prompt means within one business day of receipt of such request, a
copy of any or all of the documents referred to above which have
been or may be incorporated by reference in this Proxy Statement,
other than exhibits to such documents unless such exhibits are
specifically incorporated by reference. Such written or oral
request should be directed to: Publicker Industries Inc., 1445 East
Putnam Avenue, Old Greenwich, Connecticut 06870, Attention:
Secretary; telephone number (203) 637-4500.
By Order of the
Board of Directors
ANTONIO L. DELISE,
Secretary
July 22, 1996
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Publicker Industries Inc.:
We have audited the accompanying consolidated balance sheets of Publicker
Industries Inc. (a Pennsylvania corporation) and subsidiary companies as of
December 31, 1995 and 1994, and the related consolidated statements of income
(loss), shareholders' equity and cash flows for each of the three years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Publicker Industries Inc. and
subsidiary companies as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Stamford, Connecticut
February 26, 1996
