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Kaiser Aluminum Corporation
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<PAGE>
[KAC Logo]
February ____, 1996
To Our Stockholders:
You are cordially invited to attend a Special Meeting of
Stockholders (the "Special Meeting") of Kaiser Aluminum Corporation (the
"Company") to be held at 9:00 a.m. on March __, 1996, at 5847 San Felipe,
Room 1245, Houston, Texas.
At the Special Meeting, the holders of record of the Company's
Common Stock, par value $.01 per share (the "Existing Common Stock") and
8.255% PRIDES SM, Convertible Preferred Stock, par value $.05 per share
(the "PRIDES"), (all such holders being collectively referred to as the
"Stockholders"), will consider and vote, as a single class, upon a proposed
amendment to the Company's Restated Certificate of Incorporation (the
"Recapitalization Amendment"), which would, among other things, (i) create
two series of common stock, one series designated as Class A Common Shares
and a lesser voting series designated as Common Stock, (ii) redesignate the
100,000,000 authorized shares of Existing Common Stock currently authorized
for issuance as Class A Common Shares and authorize an additional
250,000,000 shares to be designated Common Stock, and (iii) change each
issued share of Existing Common Stock into .33 of a Class A Common Share
and .67 of a share of Common Stock. Cash will be paid in lieu of
fractional shares. For round lots of 100 shares of the Company's Existing
Common Stock, the change would be equivalent to converting such round lot
into 33 Class A Common Shares and 67 shares of Common Stock. The Class A
Common Shares would have essentially the same voting rights as the Existing
Common Stock of one vote per share, and the Common Stock would be lesser
voting stock with 1/10 vote per share. The specific features of the two
series and the details of the Recapitalization Amendment are described in
the accompanying proxy statement, which also sets forth the reasons for the
Board s recommendation, certain potential advantages and disadvantages of
the Recapitalization Amendment, and other information as to the effects of
the Recapitalization Amendment on existing Stockholders, including MAXXAM
Inc. ("MAXXAM"). The Recapitalization Amendment must be approved by an
affirmative vote of the holders of a majority of the outstanding shares of
Existing Common Stock and PRIDES, voting as a single class, at the Special
Meeting.
MAXXAM owns approximately 62% of the Existing Common Stock on a
fully diluted basis assuming the conversion of each outstanding share of
PRIDES into one share of Existing Common Stock. The shares of Existing
Common Stock owned by MAXXAM will be voted in favor of the Recapitalization
Amendment. As a result, the Recapitalization Amendment can be approved
without the affirmative vote of any Stockholders other than MAXXAM. THE
BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE RECOMMENDATION OF A
SPECIAL COMMITTEE OF THE BOARD TO ADOPT THE RECAPITALIZATION AMENDMENT AND
RECOMMENDS THAT ALL STOCKHOLDERS VOTE IN FAVOR OF THE RECAPITALIZATION
AMENDMENT.
Each Stockholder of record at the close of business on February
13, 1996 is entitled to receive notice of and to vote at the Special
Meeting and is invited to attend the Special Meeting. Whether or not you
intend to be present at the Special Meeting, we urge you to review the
proxy statement carefully and to complete, date, sign and promptly return
the enclosed proxy card.
We look forward to seeing as many of you as possible at the
Special Meeting.
GEORGE T. HAYMAKER, JR.
Chairman and Chief Executive
Officer
<PAGE>
KAISER ALUMINUM CORPORATION
5847 San Felipe, Suite 2600
Houston, Texas 77057
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held March __, 1996
A Special Meeting of Stockholders (the "Special Meeting") of
Kaiser Aluminum Corporation (the "Company") will be held at 9:00 a.m. on
March __, 1996, at 5847 San Felipe, Room 1245, Houston, Texas, for the
following purposes:
1. To consider and vote upon a proposal to amend the
Company s Restated Certificate of Incorporation (the
"Recapitalization Amendment"), to (i) provide for two
series of common stock, one series designated as Class
A Common Shares, $.01 par value, with one vote per
share, and a lesser voting series designated as Common
Stock, $.01 par value, with 1/10 vote per share; (ii)
redesignate the 100,000,000 authorized shares of
Existing Common Stock as Class A Common Shares and
authorize an additional 250,000,000 shares to be
designated as Common Stock, and (iii) change each
issued share of the Company s existing common stock,
par value $.01 per share (the "Existing Common Stock"),
into (a) .33 of a Class A Common Share and (b) .67 of
a share of Common Stock, as described in the
accompanying proxy statement; and
2. To transact such other business as may be properly
presented to the Special Meeting or any adjournments
thereof.
Holders of record of the Existing Common Stock, par value $.01
per share, and 8.255% PRIDES SM, Convertible Preferred Stock, par value
$.05 per share, (all such holders being collectively referred to as the
"Stockholders"), as of the close of business on February 13, 1996, are
entitled to notice of, and to vote at, the Special Meeting. All
Stockholders will vote as a single class at the Special Meeting.
Stockholders lists will be available commencing the date of the proxy
statement and may be inspected for purposes germane to the Special Meeting
during normal business hours prior to the Special Meeting at the offices of
the Company, 5847 San Felipe, Suite 2600, Houston, Texas.
By Order of the Board of
Directors
BYRON L. WADE
Secretary
February __, 1996
IMPORTANT
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH HAS BEEN PROVIDED FOR YOUR
CONVENIENCE AND WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
ANY STOCKHOLDER PRESENT AT THE SPECIAL MEETING MAY VOTE PERSONALLY ON ALL
MATTERS BROUGHT BEFORE THE SPECIAL MEETING AND, IN THAT EVENT, HIS OR HER
PROXY WILL NOT BE USED.
<PAGE>
KAISER ALUMINUM CORPORATION
5847 San Felipe, Suite 2600
Houston, Texas 77057
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
To be held March __, 1996
This proxy statement (the "Proxy Statement"), the accompanying
proxy card and the Notice of Special Meeting are being mailed on or about
February __, 1996 to the holders of the Company s existing common stock,
par value $.01 per share (the "Existing Common Stock"), and 8.255% PRIDES ,
Convertible Preferred Stock, par value $.05 per share (the "PRIDES"), (all
such holders being collectively referred to as the "Stockholders"), of
Kaiser Aluminum Corporation (the "Company"), a Delaware corporation.
This Proxy Statement is furnished to Stockholders in connection
with the solicitation of proxies on behalf of the Board of Directors of the
Company to be voted at a Special Meeting of Stockholders (the "Special
Meeting") to be held at 5847 San Felipe, Room 1245, Houston, Texas on March
__, 1996 at 9:00 a.m. and any adjournments thereof, at the time and place
and for the purposes set forth in the accompanying Notice of Special
Meeting. The principal executive offices of the Company are located at
5847 San Felipe, Suite 2600, Houston, Texas 77057, telephone (713) 267-
3777.
We cordially invite you to attend the Special Meeting. Whether
or not you plan to attend, please complete, date, sign and promptly return
your proxy card in the enclosed envelope. Any one or more of the persons
authorized to act as proxies at the Special Meeting as listed on the proxy
card are Charles E. Hurwitz, John T. La Duc and George T. Haymaker, Jr.
You may revoke your proxy at any time prior to its exercise at the Special
Meeting by giving notice to the Company s Secretary, by filing a later
dated proxy or, if you attend the Special Meeting, by voting your shares in
person. Proxies will be voted in accordance with the directions specified
thereon or, in the absence of instructions, "FOR" the approval of the
Recapitalization Amendment described in this Proxy Statement. Under
applicable Delaware law, abstentions and broker non-votes will have the
same effect as a vote "AGAINST" the proposal relating to the
Recapitalization Amendment. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE
RECOMMENDATION OF A SPECIAL COMMITTEE OF THE BOARD TO ADOPT THE
RECAPITALIZATION AMENDMENT AND RECOMMENDS THAT ALL STOCKHOLDERS VOTE IN
FAVOR OF SUCH AMENDMENT.
Only holders of record of the Company s ____________ shares of
Existing Common Stock and ______________ shares of PRIDES outstanding as of
the close of business on February 13, 1996, are entitled to vote at the
Special Meeting. Each share of Existing Common Stock is entitled to one
vote and each share of PRIDES is entitled to 4/5 vote. Approval of the
Recapitalization Amendment requires the affirmative vote by the holders of
a majority of the outstanding shares of Existing Common Stock and PRIDES,
voting as a single class, at the Special Meeting.
Holders of a majority of the outstanding shares of Existing
Common Stock and PRIDES must be represented in person or by proxy at the
Special Meeting in order to have a quorum. 50,000,000 shares of the
Existing Common Stock are held by MAXXAM Inc. ("MAXXAM"). The shares of
Existing Common Stock owned by MAXXAM will be voted in favor of the
Recapitalization Amendment. As a result, a quorum can be present and the
Recapitalization Amendment can be approved without the presence or
affirmative vote of any Stockholders other than MAXXAM.
APPROVAL OF THE RECAPITALIZATION AMENDMENT
SUMMARY DESCRIPTION OF THE RECAPITALIZATION AMENDMENT
At the Special Meeting, the Stockholders of the Company will be
asked to consider and vote upon a proposal to amend the Company s Restated
Certificate of Incorporation to (i) provide for two series of common stock,
one series designated as Class A Common Shares, $.01 par value ("Class A
Common Shares"), and a lesser voting series designated as Common Stock,
$.01 par value ("Common Stock"); (ii) redesignate the 100,000,000
authorized shares of Existing Common Stock as Class A Common Shares and
authorize an additional 250,000,000 shares to be designated as Common Stock
and (iii) change each issued share of the Existing Common Stock into (a)
.33 of a Class A Common Share and (b) .67 of a share of Common Stock
(round lots of 100 shares of Existing Common Stock will change into 33
Class A Common Shares and 67 shares of Common Stock). Cash will be paid in
lieu of fractional shares. Such proposed amendments are referred to
collectively herein as the "Recapitalization Amendment." The
Recapitalization Amendment is set forth in Annex A to this Proxy Statement.
The Class A Common Shares and the Common Stock are referred to collectively
herein as the "Common Shares."
If the Recapitalization Amendment is approved by the
Stockholders, the Board of Directors of the Company intends to file the
Recapitalization Amendment with the Secretary of State of the State of
Delaware promptly after the Special Meeting. The Recapitalization
Amendment will be effective immediately upon acceptance of that filing by
the Secretary of State of the State of Delaware (the "Effective Date").
Upon the filing of the Recapitalization Amendment, and without any further
action by the Company or its Stockholders, each outstanding share of
Existing Common Stock will automatically be changed into .33 of a Class A
Common Share and .67 of a share of Common Stock. Fractional Common Shares
will not be issued. In lieu thereof, the Company will, as provided below,
pay a cash amount to the Stockholders otherwise entitled to such fractional
shares equal to the total fractional amount represented by such shares
times the greater of (i) the average closing price of a share of the
Existing Common Stock on the New York Stock Exchange (the "NYSE") for the
fifteen trading days immediately preceding the Effective Date and (ii) the
closing price of a share of the Existing Common Stock on the NYSE on the
trading day immediately preceding the Effective Date. For example, a
holder of 10 shares of Existing Common Stock would receive three Class A
Common Shares, six shares of Common Stock and cash for the fractional
Common Shares. The Board of Directors may decline to file the
Recapitalization Amendment, even if the Recapitalization Amendment is
approved by the Stockholders, if the Board of Directors determines that
such action would be in the best interests of the Company under the
circumstances at the time. The Company currently knows of no reason why
the Recapitalization Amendment would not be filed if approved by the
Stockholders. The Restated Certificate of Incorporation, as amended on
the Effective Date of the Recapitalization Amendment, is referred to
hereinafter as the "Amended Articles."
As soon as practicable after the Effective Date, the Company s
transfer agent will mail a form of a letter of transmittal ("Letter of
Transmittal") to each record holder of Existing Common Stock as of the
close of business on the Effective Date. New certificates representing .33
of a Class A Common Share and .67 of a share of Common Stock for each
outstanding share of Existing Common Stock held by such holders will be
issued to each such record holder that delivers a properly executed Letter
of Transmittal accompanied by the certificates representing the shares of
Existing Common Stock. In lieu of fractional shares of Common Shares that
would otherwise have been issuable, a check for the cash amount calculated
pursuant to the formula set out above will be issued to such record holder.
STOCKHOLDERS SHOULD NOT SUBMIT ANY CERTIFICATES REPRESENTING SHARES OF
EXISTING COMMON STOCK WITH THEIR PROXIES AND INSTEAD SHOULD RETAIN THEM
PENDING THE EFFECTIVENESS OF THE RECAPITALIZATION AMENDMENT AND THE RECEIPT
OF A FORM OF LETTER OF TRANSMITTAL.
Upon the change of the Existing Common Stock, the Class A Common
Shares will continue to have the present express terms of the Existing
Common Stock, except to the extent voting rights with regard to those
shares would be affected by the Minority Protection Provisions described
below. See "Description of Common Shares--Minority Protection Provisions."
As more fully described below, the shares of Common Stock issued as a
result of such change will have substantially identical rights as the
Class A Common Shares except for a few certain characteristics as set forth
in the Recapitalization Amendment. For instance, the holders of Common
Stock will have only 1/10 vote per share. The Recapitalization Amendment
will not change the relative voting power or equity of existing
Stockholders of the Company (except as a result of the treatment of
fractional shares) since the Recapitalization Amendment will apply equally
to all Stockholders in proportion to the number of shares of Existing
Common Stock owned by them at the close of business on the Effective Date.
BACKGROUND OF THE RECAPITALIZATION PROPOSAL
In recent years a number of publicly held companies have adopted
capital structures utilizing two series of common stock. The operating
management of the Company became interested in effecting a dual class
structure for its Existing Common Stock in order to provide flexibility in
considering, proposing and structuring acquisition and financing
transactions to potentially augment the Company s growth.
Currently, MAXXAM owns 50,000,000 shares of the Company s
Existing Common Stock which after giving effect on a pro forma basis, to
the conversion of each of the 8,673,850 shares of PRIDES into one share of
Existing Common Stock would result in MAXXAM owning approximately 62% of
the Company s Existing Common Stock. In light of the possible effects of
the Recapitalization Amendment on the ownership interest of, and other
possible effects on, the Stockholders, including MAXXAM, on July 20, 1995
the Board of Directors appointed an ad hoc Special Committee (the "Special
Committee") of two independent directors. The two members were Robert J.
Petris and Robert Marcus, who served as Chairman of the Committee. The
Special Committee was asked to consider a recapitalization in detail,
recommend to the Board of Directors whether or not to proceed and if so,
the appropriate terms. The Special Committee formally met eleven times
relating to a proposed recapitalization (such number does not include
informal meetings or discussions that the Special Committee has had with
its independent legal counsel or financial advisor).
On August 25, 1995, the Special Committee met with
representatives of Salomon Brothers Inc ("Salomon") and special legal
counsel to the Company. The objectives sought to be achieved by, and
various proposed terms of, the recapitalization were reviewed. The
anticipated benefits and possible disadvantages of a recapitalization were
discussed. The Special Committee also reviewed in detail a written
presentation prepared by Salomon and distributed before the meeting to the
Special Committee, which included analyses of the impact of similar
proposals on the aggregate market value of outstanding common equity on
companies with dual class structures of common equity, the potential market
price differential between voting and nonvoting or lesser voting shares,
the potential impact on market liquidity, the potential reaction of
institutional investors to nonvoting or lesser voting stock structures and
the impact on the Company s ability to raise capital. Salomon also
discussed the market impact of various features of the nonvoting or lesser
voting shares.
The Special Committee held its last meeting on January 23, 1996,
at which time both members were present. At this meeting, the Special
Committee reviewed a draft of the opinion of Salomon substantially in the
form as discussed below under "--Financial Advisor to the Special
Committee" and formulated its recommendation to the Board of Directors that
a new series of lesser voting common stock be authorized and issued in a
recapitalization whereby each outstanding share of Existing Common Stock
would be changed into .33 of a Class A Common Share and .67 of a share of
Common Stock. The Special Committee specified that the Board should retain
the discretion to pay larger dividends in cash or property on the Common
Stock than on the Class A Common Shares. The Special Committee s purpose
for this provision, as well as for the features designed to protect holders
of the lesser voting stock in the event of mergers or substantial stock
purchases, was to attempt to minimize any disparity that might develop in
the market prices of the two series of stock. Both of the members of the
Special Committee voted to recommend the Recapitalization Amendment to the
Board of Directors.
At its meeting on January 24, 1996, the Board of Directors
considered the Special Committee s recommendation. Following discussions,
four members of the Board of Directors present at the meeting voted to
approve the recommendation of the Special Committee to adopt the
Recapitalization Amendment and to recommend it to the Company s
Stockholders; two directors, Messrs. Hurwitz and Levin, abstained. After
reviewing the Company s market liquidity, stockholder positions, growth
objectives and capital structure and after consultation with its financial
and legal advisors, the Board of Directors came to believe that such a
structure offers the Company a number of possible advantages that outweigh
the potential disadvantages. The Board of Directors then called the
Special Meeting of Stockholders, and authorized the preparation and filing
with the Securities and Exchange Commission (the "SEC") of a proxy
statement.
FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE
The Special Committee retained Salomon as its financial advisor
in connection with its consideration of a recapitalization. Salomon
examined the historical market and volume data of companies with multiple
series of common stock with different voting rights, reviewed voting rights
and other terms of the series of common stock for such companies and
analyzed data relating to the issuance of stock by companies with multiple
series of common stock with different voting rights. Among other things,
Salomon also reviewed certain publicly available financial, market and
trading information relating to the Company, including the historical
financial statements of the Company, and examined the historical market and
volume data of the Company.
Thereafter, Salomon rendered an opinion to the Special Committee
that (i) the combined theoretical market value (on a fully distributed
basis) and the liquidity of the Common Shares outstanding immediately after
the recapitalization will not be materially less than the market value and
the liquidity of the Existing Common Stock immediately prior to the
announcement of the recapitalization, and (ii) the Company s ability to
raise equity capital through an offering or offerings of common equity will
not be materially adversely affected by the implementation of the
recapitalization. The form of the opinion of Salomon is set out in full in
Annex B to this Proxy Statement.
Salomon has been paid a retainer fee of $50,000 and will be paid
an additional $200,000, plus reimbursement of out-of-pocket expenses. In
addition, the Company has agreed to indemnify Salomon against certain
liabilities and expenses it may incur in connection with such services.
Salomon has acted as financial advisor to the Company and to MAXXAM with
respect to matters unrelated to the recapitalization and has received fees
for its services.
REASONS FOR THE RECAPITALIZATION PROPOSAL; RECOMMENDATION OF THE BOARD
OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE RECAPITALIZATION AMENDMENT.
The Board of Directors of the Company believes, after careful
consideration of, among other things, the advantages and disadvantages of
the Recapitalization Amendment and the opinion of Salomon, that the
Recapitalization Amendment is in the best interest of the Company. The
material advantages and disadvantages of the Recapitalization Amendment
considered by the Special Committee and the Board of Directors are set
forth herein. The Board of Directors believes that the creation of a
capital structure with both voting and lesser voting Common Shares would
offer a number of potential benefits to the Company and its Stockholders,
which are described below.
Stockholder Flexibility and Liquidity
Stockholders who receive shares of Common Shares as a result of
the effectiveness of the Recapitalization Amendment will be able to
maintain approximately 83% of their voting power even if they decide to
sell or otherwise dispose of up to slightly more than two-thirds of their
equity interest in the Company. The proposed Recapitalization Amendment
thus would give all Stockholders, including MAXXAM, increased flexibility
to dispose of a portion of their equity interest in the Company without
significantly affecting their relative voting power. In January 1995,
MAXXAM filed a "shelf" registration statement with the SEC for up to
$200,000,000 of MAXXAM secured or unsecured debt securities, including debt
securities that could be exchangeable into Existing Common Stock owned by
MAXXAM. Contemporaneous with such filing, the Company filed a "shelf"
registration with the SEC covering up to 10,000,000 shares of Existing
Common Stock owned by MAXXAM (which shares could be offered in connection
with debt securities offered by MAXXAM that are exchangeable for such
shares of the Company or for sale by MAXXAM directly to purchasers).
Neither of such registration statements have been declared effective by the
SEC. MAXXAM has informed the Company that it has not made any
determination regarding the timing of an offering of its debt securities or
of any Existing Common Stock that could be included in such registration
statements. MAXXAM has also informed the Company that if the
Recapitalization Amendment becomes effective, MAXXAM intends to have the
shelf registration statements amended to substitute shares of Common Stock
for the Existing Common Stock that would be covered by such registration
statements.
Because Stockholders who are interested in maintaining their
voting interest in the Company may be more willing to sell shares of the
Company if such sale does not result in a decrease in their relative voting
power, the Recapitalization Amendment may also result in increased trading
of equity securities of the Company, thereby increasing liquidity. It is
anticipated that both series of the Common Shares will be listed on the
NYSE. Furthermore, the presence of both voting and lesser voting shares
will allow holders of Class A Common Shares, including MAXXAM, to increase
their voting power without necessarily increasing their equity investment
by selling or exchanging shares of Common Stock and acquiring Class A
Common Shares (subject to the Minority Protection Provisions).
Repurchase Obligations
The implementation of the Recapitalization Amendment will also
lessen the likelihood of possible repurchase obligations with respect to
various issues of the Company s indebtedness, which would occur in the
event that MAXXAM no longer beneficially owned a minimum of the Company s
voting stock (defined to range from 30%-40% of such voting stock depending
on various circumstances).
Financing Flexibility
By authorizing the Company to issue either voting or lesser
voting shares, the Recapitalization Amendment will provide the Company with
increased flexibility to issue Common Stock or some combination of Common
Shares (i) to raise equity capital (either through direct issuances of
stock or through issuances of convertible securities) to finance future
capital expenditures and to finance the future growth of the Company, (ii)
as consideration for future acquisitions, and (iii) in connection with
employee stock plans as a means of attracting, compensating and retaining
key employees, without materially diluting the voting power of the
Company s existing Stockholders. By providing the Company with the ability
to issue lesser voting equity securities, the Recapitalization Amendment
should help mitigate any reluctance that MAXXAM might otherwise have to
support the issuance of significant additional common stock because of the
accompanying voting dilution. The Company is currently evaluating various
acquisition and financing transactions in which the issuance of Common
Shares could be involved, but there is no specific plan to issue additional
equity or convertible securities.
Continuity
Approval of the Recapitalization Amendment would give the Company
the flexibility to issue Common Stock or some combination of Common Shares
for financing, acquisition and compensation purposes without materially
diluting the voting power of the Company s existing Stockholders, including
MAXXAM, although their equity interests would be diluted. As a practical
matter, the Recapitalization Amendment would permit MAXXAM to retain a
majority of the voting power of the Company even if it substantially
reduces its equity position in the Company by more than two-thirds (whether
for financial, diversification or other reasons). Accordingly, the
Recapitalization Amendment is expected to reduce the risk of disruption in
the continuity of the Company s current operating policies and long-range
strategy that might otherwise result if MAXXAM were to dispose of a
significant percentage of its shares of Existing Common Stock.
Key Employees
The Recapitalization Amendment is intended to permit all
employees of the Company to continue to concentrate on their employment
responsibilities by reducing concern, if any, that the future of the
Company could be affected by real or perceived succession issues or by an
unsolicited takeover attempt that might otherwise be triggered by
significant sales of shares of Existing Common Stock by MAXXAM in the
future. By reducing these uncertainties, the Recapitalization Amendment
may enhance the ability of the Company to attract and retain highly
qualified key employees. In addition, the Company s ability to issue
Common Stock should increase the Company s flexibility in structuring
compensation plans and arrangements so that employees may continue to
participate in the growth of the Company without materially diluting the
voting power of existing stockholders, although equity interests may be
diluted.
CERTAIN POTENTIAL DISADVANTAGES OF THE RECAPITALIZATION PROPOSAL
While the Board of Directors has determined that implementation
of the Recapitalization Amendment is in the best interest of the Company,
the Recapitalization Amendment may also be considered to have certain
disadvantages, including, but not limited to, those set forth below and
those set forth under "Certain Effects of the Recapitalization Amendment."
Change of Control Impact
MAXXAM currently owns approximately 62% of the Existing Common
Stock on a fully diluted basis assuming the conversion of each outstanding
share of PRIDES into one share of Existing Common Stock, and holds
approximately 63.5% of the voting power of the Company. In the event that
the Recapitalization Amendment is implemented, MAXXAM could retain a
majority of the voting power of the Company even if it reduced its total
holdings of the Company s equity securities by more than two-thirds. By
permitting MAXXAM to sell Common Stock while retaining Class A Common
Shares, implementation of the Recapitalization Amendment may limit the
future circumstances in which a sale or transfer of equity by MAXXAM could
lead to a merger proposal or tender offer or to a proxy contest for the
removal of incumbent directors.
Consequently, the Recapitalization Amendment may deprive
Stockholders of the Company of an opportunity to sell their shares at a
premium over prevailing market prices in a change of control transaction
and may also make it more difficult to replace the current members of the
Board of Directors and management of the Company.
Increased Availability of Number of Authorized Shares
As of January 31, 1996, there were 100,000,000 shares of Existing
Common Stock authorized, of which there were 71,638,514 issued and
outstanding and 28,361,486 available for future issuance (19,687,636 if the
current outstanding PRIDES are converted on a one-for-one basis). If the
Recapitalization Amendment is adopted by the Stockholders, its
implementation will result in 100,000,000 shares of Class A Common Shares
being authorized, of which approximately 23,640,709 will be issued and
outstanding and approximately 76,359,291 will be available for future
issuance without any requirement of further stockholder approval.
Additionally, 250,000,000 shares of Common Stock will be authorized, of
which approximately 47,997,804 will be issued and outstanding and
approximately 202,002,196 will be available for future issuance without any
requirement of further stockholder approval, except as may be required by
the NYSE or Delaware law. The Board of Directors believes it desirable
that the Company have the flexibility of being able to issue the additional
shares without stockholder approval. Stockholders have no preemptive
rights to purchase any stock of the Company, and may not cumulate votes in
the election of directors. The additional shares might be issued at such
times and under such circumstances as to have a dilutive effect on earnings
per share and on the equity ownership or voting power of the present
holders of the Existing Common Stock.
While the Recapitalization Amendment is not being proposed for
this reason, the availability of the additional shares could enhance the
Board of Directors bargaining capability on behalf of the Company s
Stockholders in a takeover situation. The additional shares of the two
series could also be used, either alone or in combination, to render more
difficult or discourage a merger, tender offer or proxy contest, the
assumption of control by a holder of a larger block of the Company s
securities, or the removal of incumbent management, even if such a
transaction were favored by the holders of the requisite number of shares,
by increasing the aggregate outstanding shares and, thus, the number of
shares required to accomplish such a transaction. The situations referred
to in this paragraph seem unlikely at present by reason of the voting power
of MAXXAM.
Investment By Institutions
Implementation of the Recapitalization Amendment may affect the
decision of certain institutional investors that would otherwise consider
investing in or retaining the Existing Common Stock. The holding of lesser
voting shares may not be permitted by the investment policies of certain
institutional investors or may be less attractive to managers of certain
institutional investors. The Company is not aware of the effect, if any,
the implementation of the Recapitalization Amendment will have on the
continued holdings of those institutional investors who currently own
Existing Common Stock.
Acquisition Accounting
In order for the Company to effect a business combination to be
accounted for using the "pooling of interests" method, the Company would be
required to issue Class A Common Shares in order to effect any such
combination. Common Stock may not be used, either alone or in combination
with Class A Common Shares, to effect a business combination utilizing
such method of accounting.
State Statutes
Some state securities law statutes contain provisions which, due
to the issuance of Common Stock, may restrict an offering of equity
securities by the Company or the secondary trading of its equity securities
in those states. However, due to exemptions available if the Class A
Common Shares and shares of Common Stock are trading on the NYSE and the
limited number of states involved, the Company does not believe that such
provisions will have a material adverse effect on the amount of equity
securities that the Company will be able to offer, on the price obtainable
for such equity securities in such an offering, or on the secondary trading
market for the Company s equity securities.
Security For Credit
While there can be no assurance, the Company does not expect that
the adoption of the Recapitalization Amendment will affect the ability of
stockholders to use either the Class A Common Shares or the Common Stock as
security for the extension of credit by financial institutions, securities
brokers or dealers.<PAGE>
DESCRIPTION OF COMMON SHARES
The terms of the Class A Common Shares and the Common Stock are
set forth in full in Article Fourth of the proposed Recapitalization
Amendment. The rights of the two series of Common Shares will be identical
except as otherwise described below. The text of the Recapitalization
Amendment and Article Fourth as proposed to be amended and restated are set
forth in Annex A-1 and Annex A-2, respectively, to this Proxy Statement and
incorporated herein by reference. Although the following is a summary of
all of the material terms of the Recapitalization Amendment and Article
Fourth, it should nevertheless be read in conjunction with, and is
qualified in its entirety by reference to, Annex A-1 and Annex A-2.
Voting
Under the Company s current Restated Certificate of
Incorporation, each share of Existing Common Stock is entitled to one vote
per share and each share of PRIDES is entitled to 4/5 vote, and both such
classes have the right to vote on all matters. Upon the effectiveness of
the Recapitalization Amendment, each Class A Common Share will, subject to
the Minority Protection Provisions described below, continue to entitle the
holder thereof to vote on all matters on which stockholders currently are
entitled to vote, including the election of directors. The Common Stock
would entitle the holders thereof to 1/10 vote per share on all matters on
which stockholders are currently entitled to vote, including the election
of directors. The PRIDES would entitle the holders thereof to .3176 vote
per share (see "--Certain Effects of the Recapitalization Amendment--Effect
on Related Ownership Interest and Voting Power"). The Recapitalization
Amendment will not affect the relative voting power of the holders of the
Existing Common Stock or of the PRIDES, except as a result of the treatment
of fractional shares.
Dividends and Distributions
The Recapitalization Amendment provides that dividends and
distributions may be declared and paid to the holders of Class A Common
Shares and Common Stock in cash, property, or other securities of the
Company (including shares of any class whether or not shares of such class
are already outstanding) out of funds legally available therefor. Each
Class A Common Share and each share of Common Stock will have identical
rights with respect to dividends and distributions, subject to the
following: (i) at the discretion of the Board of Directors, a dividend or
distribution in cash or property on a share of Common Stock may be greater
(but not less) than any dividend or distribution in cash or property on a
Class A Common Share; (ii) a stock dividend on Class A Common Shares may be
paid in Class A Common Shares or shares of Common Stock; and (iii) a stock
dividend on shares of Common Stock may be paid only in shares of Common
Stock. If a stock dividend on Class A Common Shares is paid in Class A
Common Shares, a stock dividend on Common Stock will be paid in a
proportionate number of shares of Common Stock. The dividend provisions of
the Recapitalization Amendment provide the Board of Directors with the
flexibility to determine appropriate dividend levels, if any, under the
circumstances from time to time.
The Company is prohibited under the Credit Agreement, dated
February 15, 1994 among the Company, Kaiser Aluminum & Chemical Corporation
("KACC"), the financial institutions which are parties thereto, and
BankAmerica Business Credit, Inc. (as amended, the "1994 Credit
Agreement") from paying dividends on its Existing Common Stock and does not
anticipate paying dividends on its Existing Common Stock or, if the
Recapitalization Amendment is approved, on the Common Shares in
the foreseeable future. The 1994 Credit Agreement expressly permits the
declaration and payment of dividends by the Company on the PRIDES to the
extent the Company receives payment on certain intercompany notes or
certain other permitted distributions from KACC under the 1994 Credit
Agreement.
The holders of the PRIDES are entitled to receive (when, as and
if the Board of Directors declares dividends out of funds legally available
therefor) cumulative preferential cash dividends at the rate of $.97 per
annum or $.2425 per quarter for each share of the PRIDES, payable quarterly
in arrears on the last day of each March, June, September and December,
provided however, that, with respect to any dividend period during which a
redemption occurs, the Company may, at its option, declare accrued
dividends on the shares of PRIDES on the earliest of (i) December 30, 1997,
or (ii) the day immediately prior to the date of redemption of any such
shares. The Recapitalization Amendment will have no effect on the dividend
rights of the PRIDES.
Mergers and Consolidations
In the event of a merger, consolidation or combination of the
Company with another entity (whether or not the Company is the surviving
entity) or in the event of dissolution of the Company, the holders of
shares of Common Stock will be entitled to receive the same per share
consideration as the per share consideration, if any, received by holders
of Class A Common Shares in that transaction, except that any common stock
that holders of Common Stock are entitled to receive in any such event may
have terms substantially similar to those of the Common Stock as set forth
in the Recapitalization Amendment.
Convertibility
Except as described below, neither the Common Stock nor the Class
A Common Shares would be convertible into another class of securities of
the Company.
The Common Stock may be converted into Class A Common Shares on a
share-for-share basis by resolution of the Board of Directors if the Class
A Common Shares, the Common Stock or both become excluded from trading on
the principal national securities exchange on which the shares are then
traded and all other such exchanges and are also excluded from quotation on
the NASDAQ National Market System and other comparable quotation systems
then in use.
In addition, if at any time the number of outstanding shares of
Class A Common Shares as reflected on the stock transfer books of the
Company falls below 10% of the aggregate number of outstanding shares of
Common Stock and Class A Common Shares, then, immediately upon the
occurrence of such event, all the outstanding shares of Common Stock will
be automatically converted into Class A Common Shares, on a share-for-share
basis. For purposes of the immediately preceding sentence, any shares of
Common Stock or Class A Common Shares repurchased by the Company will no
longer be deemed "outstanding" from and after the date of repurchase. The
Company has no present intention to repurchase any shares of its Common
Stock or Class A Common Shares. In view of the absence of a present
intention by the Company to repurchase any shares of Common Stock or Class
A Common Shares and the substantial number of shares of Common Stock that
would be required to be issued to reach the 10% threshold, the Board of
Directors believes it unlikely that this provision will be triggered in the
foreseeable future. However, in the event of any such change, to the
extent that the market price of the Common Stock is higher or lower than
the market price of the Class A Common Shares immediately prior to such
change, the market price of the shares held by particular holders may be
adversely affected by the change. The mechanism for automatic conversion
provided for in this paragraph may also be deemed a part of the Minority
Protection Provisions referred to below.
In the event of any such conversion of the Common Stock,
certificates which formerly represented outstanding shares of Common Stock
will thereafter be deemed to represent a like number of Class A Common
Shares.
Minority Protection Provisions
After the Effective Date, voting rights disproportionate to
equity ownership could be acquired through acquisitions of Class A Common
Shares without corresponding purchases of Common Stock. In order to reduce
somewhat the likelihood of Class A Common Shares and shares of Common Stock
trading at significantly different market prices and to give holders of
Common Stock the opportunity to participate in any premium paid in the
future relating to the acquisition of 15% or more of the Class A Common
Shares by a buyer who has not acquired a proportionate number of shares of
Common Stock, the Recapitalization Amendment includes "Minority Protection
Provisions" as described below. The Minority Protection Provisions might
have an anti-takeover effect by making the Company a less attractive target
for a takeover bid. As discussed below, there can be no assurance that the
Company will in all instances be able to readily identify persons whose
holdings subject them to the Minority Protection Provisions.
If any person or group, as defined below (excluding the Company,
<F1> but including MAXXAM), acquires after the Effective Date beneficial
ownership of 15% or more of the then outstanding Class A Common Shares ,
and such person or group (a "Significant Stockholder") does not then own an
equal or greater percentage of all then outstanding shares of Common Stock,
the Minority Protection Provisions require that such Significant
Stockholder must, in order to maintain all of its voting power, commence
(within a ninety-day period beginning the day after becoming a Significant
Stockholder) a public cash tender offer to acquire additional shares of
Common Stock, as described below (a "Minority Protection Transaction").
The 15% ownership threshold of the number of Class A Common Shares which
triggers a Minority Protection Transaction may not be waived by the Board
of Directors, nor may the Board of Directors amend this threshold in the
Amended Articles without stockholder approval, including a majority vote of
the outstanding Common Stock voting separately as a class.
For example, if a stockholder owns 4% of the Existing Common
Stock prior to the Effective Date and thereafter purchases an additional
16% of the Class A Common Shares without purchasing any additional shares
of Common Stock, such stockholder must either commence a tender offer for an
additional 16% of the Common Stock at the prescribed price or he will
not be allowed to vote the 16% of the Class A Common Shares acquired after
the Effective Date. Alternatively, such stockholder could sell 2% of the
outstanding Class A Common Shares, thus dropping the threshold to 14%,
leaving the stockholder with an aggregate of 18% of the Class A Common
Shares, all of which could be voted.
In a Minority Protection Transaction, the Significant Stockholder
must offer to acquire from holders of the Common Stock at least that number
of additional shares of Common Stock (the "Additional Shares") determined
by (i) multiplying (x) the percentage of the number of outstanding Class A
Common Shares that are beneficially owned by such Significant Stockholder
and were acquired after the Effective Date by (y) the total number of the
shares of Common Stock outstanding on the date such person or group became
a Significant Stockholder, and (ii) subtracting therefrom the number of
shares of Common Stock beneficially owned by such Significant Stockholder
on the date such person or group became a Significant Stockholder
(including shares acquired at or prior to the time such person or group
became a Significant Stockholder) which were acquired after the Effective
Date (as adjusted for stock splits, stock dividends and similar
recapitalizations). The Significant Stockholder must acquire all shares of
Common Stock validly tendered or, if the number of shares tendered exceeds
the number determined pursuant to such formula, a pro-rata number from each
tendering holder (based on the number of shares tendered by each tendering
stockholder).
The offer price for any Additional Shares required to be
purchased by the Significant Stockholder pursuant to the Minority
Protection Provisions would be the greatest of: (i) the highest price per
share paid by the Significant Stockholder for any Class A Common Share or
any share of Common Stock in the six-month period ending on the date such
person or group became a Significant Stockholder (or such shorter period
after the Effective Date if the date such person or group became a
Significant Stockholder is not more than six months following the Effective
Date); (ii) the highest sale price of a Class A Common Share or share of
Common Stock on the NYSE (or such other securities exchange or quotation
system as is then the principal trading market for such shares) during the
thirty-day period preceding the date such person or group became a
Significant Stockholder; or (iii) the highest reported sale price for a
Class A Common Share or share of Common Stock on the NYSE (or such other
securities exchange or quotation system constituting the principal trading
market for such shares) on the business day preceding the date the
Significant Stockholder commences the required tender offer.
If a Significant Stockholder fails to undertake a Minority
Protection Transaction within the time provided, the voting rights of all
of the Class A Common Shares beneficially owned by such Significant
Stockholder which were acquired after the Effective Date would be
automatically suspended until completion of a Minority Protection
Transaction or until divestiture of the excess Class A Common Shares that
triggered such requirement. To the extent that the voting power of any
Class A Common Shares is so suspended, such shares will not be included in
the determination of aggregate voting shares for any purpose.
A Minority Protection Transaction would also be required of any
Significant Stockholder that acquires after the Effective Date an
additional amount of Class A Common Shares equal to or greater than the
next highest integral multiple of 5% (e.g., 20%, 25%, 30%, etc.) of the
<F2> outstanding Class A Common Shares and such Significant Stockholder does
not then own an equal or greater percentage of all then outstanding Common
Stock that such Significant Stockholder acquired after the Effective Date.
Such Significant Stockholder would be required to offer to buy
that number of Additional Shares prescribed by the formula set forth above;
provided that, for purposes of such formula, the date on which the
Significant Stockholder acquired the next highest integral multiple of 5%
of the outstanding Class A Common Shares will be deemed to be the date on
which such person or group became a Significant Stockholder. The
requirement to engage in a Minority Protection Transaction will be
satisfied by making the requisite offer and purchasing validly tendered
shares, even if the number of shares tendered is less than the number of
shares included in the required offer.
Neither the Minority Protection Transaction requirement nor the
related possibility of suspension of voting rights applies to any increase
in percentage ownership of Class A Common Shares resulting solely from a
change in the total number of Class A Common Shares outstanding. All
calculations with respect to percentage ownership of outstanding shares of
either series of Common Shares shall be based upon the number of
outstanding shares reflected in either the stock transfer records or a
certificate from the Company s stock transfer agent.
Since the definition of Significant Stockholder is based on the
beneficial ownership percentage of Class A Common Shares acquired after the
Effective Date of the Recapitalization Amendment, a person or group who is
a stockholder of the Company at the Effective Date will not become a
Significant Stockholder unless such person or group acquires an additional
15% of the then outstanding Class A Common Shares, regardless of the number
of shares of Existing Common Stock owned prior to the Effective Date of the
Recapitalization Amendment. For purposes of the Minority Protection
Provisions, the terms "beneficial ownership" and "group" generally have the
same meanings as used in Regulation 13D promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), subject to certain exceptions
set forth therein.
The Minority Protection Provisions do not prevent any person or
group from acquiring a significant or controlling interest in the Company,
provided such person or group acquires a proportionate percentage of the
Common Stock, undertakes a Minority Protection Transaction or incurs the
suspension of the voting rights of the Class A Common Shares as provided by
the Minority Protection Provisions. If a Minority Protection Transaction
is required, the purchase price to be paid in such offer may be higher than
the price at which a Significant Stockholder might otherwise be able to
acquire an identical number of shares of Common Stock. Such requirement
could make an acquisition of a significant or controlling interest in the
Company more expensive and, if the Minority Protection Transaction is
required, more time consuming, than if such requirement did not exist.
Consequently, a person or group might be deterred from acquiring a
significant or controlling interest in the Company as a result of such
requirement. See "Certain Potential Disadvantages of the Recapitalization
Amendment--Change of Control Impact." Moreover, by restricting the ability
of an acquiror to acquire a significant interest in the Class A Common
Shares by paying a "control premium" for such shares without acquiring, or
paying a similar premium for, Common Stock, the Minority Protection
Provisions are designed to help reduce or eliminate any discount on either
of these series of Common Shares.
There can be no assurance that the Company will be able to
readily identify a person or group as a Significant Stockholder. Although
the Exchange Act will require persons or groups holding 5% or more of the
Class A Common Shares or the Common Stock to file reports specifying the
level of their ownership with the SEC and to send a copy of such filing to
the Company, there can be no assurance that a person or group will comply
with such law or that alternative methods of identifying such holders will
be available. As a result, the benefits of the Minority Protection
Provisions may be difficult to enforce.
Change in Number of Authorized Shares
As part of the Recapitalization Amendment, Article Fourth will be
revised to provide that the number of authorized shares of Common Stock may
be increased or decreased (but not below the number then outstanding) by an
affirmative vote, voting as a separate class, of the holders of a majority
of the aggregate number of outstanding Class A Common Shares entitled to
vote in the election of directors.
Preemptive Rights
None of the Class A Common Shares or shares of the Common Stock
will carry any preemptive rights enabling a holder to subscribe for or
receive shares of the Company of any class or any other securities
convertible into any class of the Company s stock.
Sales and Repurchases
As part of the Recapitalization Amendment, Article Fourth of the
Company s Restated Certificate of Incorporation will be revised to make it
clear that the Board of Directors is authorized to repurchase shares of any
class or series without regard to whether a lesser price could be paid for
the same number of shares of any other class or series of stock. The
proposed amendment to Article Fourth of the Company s Restated Certificate
of Incorporation also makes it clear that the Board of Directors is
permitted to authorize the sale of shares of a class or series of stock
even though a higher price could be obtained by selling shares of another
class or series since the two series of Common Shares may have differing
values and market prices.
Transferability; Trading Market
The Class A Common Shares and the Common Stock will be freely
transferable, subject to the current restrictions on certain shares of the
Existing Common Stock issued to certain employees of the Company. The
Existing Common Stock is traded on the NYSE. It is expected that both the
Class A Common Shares and the Common Stock will be approved for trading on
the NYSE. The NYSE has advised the Company that the issuance of the lesser
voting Common Stock pursuant to the Recapitalization Amendment will not
violate the NYSE's rules and regulations and is permitted thereunder.
However, there can be no assurance that the NYSE will accept either series
for trading. In the unlikely event that both series of Common Shares are
not approved for trading on the NYSE or other principal national securities
exchange and are also excluded from quotation on the NASDAQ National Market
System, the Company will not go forward with the recapitalization.
Stockholder Information
The Company will deliver to the holders of Common Shares the same
proxy statements, annual reports and other information and reports as it
currently delivers to holders of the Existing Common Stock.
CERTAIN EFFECTS OF THE RECAPITALIZATION AMENDMENT
Effect on Relative Ownership Interest and Voting Power
Upon effectiveness of the Recapitalization Amendment,each share
of Existing Common Stock would be changed into .33 of a Class A Common
Share and .67 of a share of Common Stock. As a result, each share of
PRIDES would be entitled to .3176 vote [(.33 x 4/5) + (.67 x 4/5 x 1/10)].
The relative ownership interest and voting power of each record holder at
the Effective Date will be the same immediately after the effectiveness of
the Recapitalization Amendment as it was immediately prior thereto, except
as the result of treatment of fractional shares. Stockholders who sell
their Class A Common Shares after the Effective Date of the
Recapitalization Amendment would lose a greater amount of voting power in
proportion to equity than they would have prior to such time. At the same
time, stockholders desiring to maintain somewhat more than 80% of their
voting rights in the Company would be free to continue to hold the Class A
Common Shares and elect to sell their shares of Common Stock.
Effect on Market Value and Price
Based on the advice of Salomon provided to the Special Committee
of the Board of Directors, the Company anticipates that combined market
value of the Common Shares immediately after the Effective Date will not be
materially less than the market value of the Existing Common Stock
immediately prior to the announcement of the proposed recapitalization, but
there can be no assurance as to the trading prices of either series. On
February ___, 1996, the closing sale price of the Existing Common Stock as
reported on the NYSE was $____________. If the market price of the shares
of Common Stock were to drop significantly below the price of the Class A
Common Shares, the potential benefits of the Recapitalization Amendment
with respect to flexibility for financings by the Company or resales by the
stockholders may be limited.
It is possible that either the Class A Common Shares or the
shares of Common Stock may trade from time to time at a premium or discount
to the other. The Minority Protection Provisions and the flexibility
afforded by the provision permitting the Board of Directors, in its
discretion, to declare larger dividends on the Common Stock are expected to
somewhat reduce the reasons for the Class A Common Shares to trade at a
premium compared with the Common Stock. Should a premium on series of the
Common Shares develop, the Recapitalization Amendment permits the Board of
Directors to issue and sell authorized but unissued shares of any series of
common stock even if the consideration which could be obtained by issuing
or selling shares of another series may be greater. The Recapitalization
Amendment also expressly permits the Board of Directors to purchase shares
of any series of common stock even if the consideration which would be paid
for shares of another series may be less.
Effect on Trading Market
Upon effectiveness of the Recapitalization Amendment,
approximately 23,640,709 Class A Common Shares and 47,997,804 shares of
Common Stock will be issued and outstanding. MAXXAM has advised the
Company that if it decides to sell any Common Shares, it is more likely
over time to sell shares of Common Stock than Class A Common Shares. Any
issuance of additional shares of Common Stock by the Company or sales of
shares of Common Stock by stockholders may serve to increase market
activity in Common Stock relative to the Class A Common Shares. Greater
market activity may result in increased volatility in pricing and could
enlarge any price differential, either higher or lower, between the Class A
Common Shares and Common Stock.
Effect on Benefit Plans
The incentive stock plans of the Company that will be affected by
the Recapitalization Amendment are the (i) Kaiser 1993 Omnibus Stock
Incentive Plan (the "Omnibus Plan"), (ii) Kaiser 1995 Executive Incentive
Compensation Program (the "Executive Plan"), and (iii) Kaiser 1995 Employee
Incentive Compensation Program (the " Employee Plan"). As a result of the
Recapitalization Amendment, each share of Existing Common Stock reserved
for future issuance and each share of Existing Common Stock subject to an
outstanding option will be changed into .33 of a Class A Common Share and
.67 of a share of Common Stock . There are currently no stock appreciation
rights outstanding. In addition, the Company anticipates that the Omnibus
Plan, the Executive Plan and the Employee Plan will be amended to provide
that options and stock appreciation rights granted thereunder after the
Effective Date may relate solely to Class A Common Shares, the Common
Stock, or a combination of the two.
Holders of restricted shares of Existing Common Stock issued
under the Omnibus Plan or otherwise will participate in the
recapitalization as any other holder of Existing Common Stock, and
therefore, after the Effective Date, such holders will hold .33 of a Class
A Common Share and .67 of a share of Common Stock for each share of
Existing Common Stock held immediately before the Effective Date of the
Recapitalization Amendment. All such shares, regardless of series, will be
subject to all restrictions that applied previously to the Existing Common
Stock issued under such plans or otherwise.
Effect on Book Value and Earnings per Share
The interest of each Stockholder in the total equity of the
Company would remain unchanged as a result of the Recapitalization
Amendment. The Company believes that the change of each issued share of
Existing Common Stock into .33 of a Class A Common Share and .67 of a share
of Common Stock will not impact the Company s calculation of book value and
earnings per share attributable to its common equity securities, except as
a result of the treatment of fractional shares.
Effect on Preferred Stock
The Recapitalization Amendment will not have any effect on the
number of shares of preferred stock, including the PRIDES, or the ability
of the Board of Directors to issue shares of preferred stock and to fix the
rights, powers or limitations thereof. The Company has no current plans to
issue any additional shares of preferred stock.
As of January 31, 1996, there were 8,673,850 shares of PRIDES
issued and outstanding. At any time prior to December 31, 1997, unless
previously redeemed, each share of PRIDES is convertible at the option of
the holder into .8333 of a share of Existing Common Stock, subject to
adjustment. On December 31, 1997, the PRIDES are automatically converted
on a share-for-share basis into Existing Common Stock, unless earlier
redeemed or converted. Shares of PRIDES are not redeemable by
the Company before December 31, 1996. On or after such date until December
31, 1997, the Company may redeem all or any of such shares in exchange for
a number of shares of Existing Common Stock per share of PRIDES equal to
the sum of (i) $11.9925 (which amount declines in stages to $11.75 on or
after November 30, 1997), (ii) all accrued and unpaid dividends per share
of PRIDES (other than previously declared dividends payable to a holder of
record as of a prior date) the "Call Price"), divided by the Current Market
Price (as defined) per share of Existing Common Stock; provided, however,
that in no event is the number of shares of Existing Common Stock to be
delivered on such redemption to be less than .8333 of a share of Existing
Common Stock for each share of PRIDES.
Pursuant to the antiduilution provisions applicable to the
PRIDES, upon the effectiveness of the Recapitalization amendment, (i) each
share of PRIDES will be convertible at the option of the holder into .56 of
a share of Common Stock and .27 of a Class A Common Share, (ii) if not
previously redeemed or converted, on December 31, 1997, each share of
PRIDES will be automatically converted into .67 of a share of Common Stock
and .33 of a Class A Common Share and (iii) on or after December 31, 1996,
the Company may redeem the PRIDES in exchange for (A) a number of shares of
Common Stock per share of PRIDES determined by (x) multiplying the
applicable Call Price by .67 and (y) dividing the amount so obtained by the
Current Market Price per share of Common Stock and (B) a number of Class A
Common Shares per share of PRIDES determined by (x) multiplying the
applicable Call Price by .33 and (y) dividing the result so obtained by the
Current Market Price per Class A Common Share; provided, however, that in
no event is the number of shares of Common Stock to be delivered on such
redemption to be less than .56 of a share of Common Stock, and in no event
is number of Class A Common Shares to be delivered on such redemption to be
less than .27 of a Class A Common Share, for each share of PRIDES. See
also, "--Effect on Relative Ownership and Voting Power."
Credit Agreement
In order for the recapitalization to be effected, the 1994 Credit
Agreement has to be amended or a waiver obtained relating to the
reclassification. The Company expects that such amendment or waiver will
be obtained.
Certain United States Federal Income Tax Consequences
The Company has been advised by the law firm of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel with respect to the principal United
States federal income tax consequences resulting from the exchange (for tax
law purposes) of shares of Existing Common Stock for Class A Common Shares
and shares of Common Stock in connection with the Recapitalization
Amendment. The following discussion is based on existing tax law, which is
subject to change, possibly with retroactive effect. It does not deal with
all tax consequences that may be relevant in the particular circumstances
of each holder (some of which, such as dealers in securities, insurance
companies, tax-exempt organizations and foreign persons, may be subject to
special rules). Stockholders are urged to consult their own tax advisors
with respect to the application of the United States federal income tax
laws to their particular situations as well as any tax consequences arising
under the laws of any state, local or foreign taxing jurisdiction.
No taxable income, gain or loss will be recognized by a holder of
shares of Existing Common Stock with respect to those shares that are
exchanged for Class A Common Shares and shares of Common Stock. The basis
for tax purposes of each such share of Existing Common Stock held
immediately before the Recapitalization Amendment will be allocated between
the Class A Common Shares and shares of Common Stock in proportion to their
relative fair market values at the Effective Date of the Recapitalization
Amendment. The holding period for each Class A Common Share and each share
of Common Stock received in the exchange will be the same as the holding
period of the Existing Common Stock given up in the exchange.
Taxable income, gain or loss will be recognized by a holder of
shares of Existing Common Stock with respect to those shares that are
exchanged for cash in lieu of fractional shares. The holder will be
treated as having received such fractional shares and having exchanged them
for cash in a transaction subject to Section 302 of the Internal Revenue
Code of 1986, and related provisions. In general, the holder will
recognize a gain or loss equal to the difference between the cash received
and the tax basis in the fractional shares.
No taxable income, gain or loss would be recognized by a holder
of a share of Common Stock upon the conversion of such Common Stock into a
Class A Common Share pursuant to the convertibility feature described
above. The cost or other basis for tax purposes of the resulting Class A
Common Share will be the same as the cost or other basis for tax purposes
of the Common Stock held immediately before the conversion. The holding
period for such Class A Common Share would include the holding period for
the corresponding Common Stock held prior thereto.
Securities Act of 1933
The change of each share of Existing Common Stock into .33 of a
Class A Common Share and .67 of a share of Common Stock will not constitute
an "offer," "offer to sell," "offer for sale," or "sale" of a security
within the meaning of Section 2(3) of the Securities Act and Rule 145
thereunder. Consequently, the Company has not registered the Class A
Common Shares or the Common Stock under the Securities Act for purposes of
the Recapitalization Amendment.
Since there would be no sale of either the Class A Common Shares
or the Common Stock at the Effective Date of the Recapitalization
Amendment, stockholders would not be deemed to have acquired such shares
separately from the Existing Common Stock for purposes of the Securities
Act and Rule 144 thereunder. Class A Common Shares and shares of Common
Stock held immediately upon effectiveness of the Recapitalization
Amendment, other than any such shares held by affiliates of the Company
within the meaning of the Securities Act, may be offered for sale and sold
in the same manner as the Existing Common Stock without registration under
the Securities Act. Affiliates of the Company, including MAXXAM, and
holders of "restricted" shares would continue to be subject to, among
others, the restrictions specified in Rule 144 under the Securities Act
with respect to sales of Class A Common Shares and shares of Common Stock.
NYSE Criteria
The Existing Common Stock is currently traded on the NYSE. The
NYSE has advised the Company that the issuance of the lesser voting shares
of Common Stock pursuant to the Recapitalization Amendment would not
violate the NYSE's rules and regulations and would be permitted thereunder.
The Company presently anticipates that both the Class A Common Shares and
the Common Stock will be approved for trading on the NYSE, although there
can be no assurance of such approval.
Subsequent Amendments
The Recapitalization Amendment would not prevent the Company from
taking any action, or otherwise affect the Company s ability, with the
requisite approval of its stockholders, to adopt any future amendments to
the Amended Articles for the purpose of further changing the Company s
capital structure or for any other lawful purpose.
INTERESTS OF CERTAIN PERSONS
MAXXAM has an interest in the implementation of the
Recapitalization Amendment because, as noted above, it may retain somewhat
more than 80% of its current voting power of the Company, even if it
disposes of all of the shares of Common Stock received by it as a result of
the adoption of the Recapitalization Amendment. In addition, as a result
of the Recapitalization Amendment, MAXXAM would be able to increase its
voting power without increasing its equity investment by selling or
exchanging shares of Common Stock and by acquiring Class A Common Shares
(subject to the Minority Protection Provisions).
EXPENSES
The costs associated with the Recapitalization Amendment (such as
transfer agent's fees, printing and mailing costs, legal fees, financial
advisory fees, and NYSE fees) are estimated to be approximately
$____________, inclusive of fees of financial and legal advisors both to
the Company and independently to the Special Committee.
VOTE REQUIRED
The affirmative vote of holders of a majority of the outstanding
Existing Common Stock and the PRIDES, voting as a single class, is needed
to approve the Recapitalization Amendment. Unless otherwise directed
thereon, proxies will be voted "FOR" the Recapitalization Amendment.
AS NOTED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE RECAPITALIZATION AMENDMENT.
VOTING AND PROXY PROCEDURES
Execution of a proxy card will not affect your right to attend
the Special Meeting and to vote in person. Any proxy may be revoked as to
all matters covered thereby at any time prior to the time a vote is taken
by (i) filing with the Secretary of the Company a later dated written
revocation, (ii) submitting to the Company a duly executed proxy bearing a
later date, or (iii) attending and voting at the Special Meeting in person.
Attendance at the Special Meeting will not in and of itself constitute a
revocation of a prior proxy.
If your shares of Existing Common Stock or PRIDES are held in
the name of a brokerage firm, bank or nominee, only that entity can vote
such shares and only upon receipt of your specific instructions. For
further information concerning how you may ensure that your shares of
Existing Common Stock or PRIDES are voted at the Special Meeting, please
contact your brokerage firm, bank or nominee or the Secretary of the
Company at the address set forth in this Proxy Statement or by calling
(713) 267-3670.
Only holders of record of Existing Common Stock and PRIDES at
the close of business on February 13, 1996, the record date established by
the Board of Directors for the Special Meeting, will be entitled to vote at
the Special Meeting.
AVAILABLE INFORMATION AND
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended, and in accordance
therewith files reports, information statements and other information with
the SEC. Such reports, proxy statements, information statements and other
information filed by the Company can be inspected and copied at the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the SEC at 7 World Trade Center, New
York, New York 10048 and at Northwestern Atrium Center, 500 W. Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Reports, proxy
statements, information statements and other information concerning the
Company may also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.
This Proxy Statement incorporates documents by reference which
are not presented herein or delivered herewith. Copies of any such
documents are available upon request and without charge from Ms. Chris
Buvens, Investor Relations Coordinator of the Company, 5847 San Felipe,
Suite 2600, Houston, Texas 77057, telephone (713) 267-3675.
The following documents filed with the SEC are hereby
incorporated by reference into this Proxy Statement:
1. The Company s Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.
2. The Company s Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, June 30 and September
30, 1995.
3. Form 8-A, filed on January 27, 1994, for registration of
the Company s PRIDES and Existing Common Stock.
Any statement contained in a document incorporated or deemed
incorporated by reference herein shall be deemed to be modified or replaced
for purposes of this Proxy Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or replaces
such statement. Any such statement so modified or replaced shall not be
deemed, except as so modified or replaced, to constitute a part of this
Proxy Statement.
OTHER MATTERS
The cost of soliciting proxies in connection with the Special
Meeting will be borne by the Company. The Company will, if requested,
reimburse banks, brokerage houses and other custodians, nominees and
certain fiduciaries for their reasonable expenses incurred in mailing proxy
material to their principals. Proxies may be solicited by directors,
officers and employees of the Company without special remuneration. The
Company has retained Corporate Investor Communications, Inc. to assist in
the distribution of proxies at an estimated cost of approximately $5,500
(including expenses). In addition to the use of mails, proxies and
instruction cards may be solicited by personal interviews, telephone or
telegraph.
The persons designated to vote shares covered by management
proxies intend to exercise their judgment in voting such shares on other
matters that may properly come before the Special Meeting. Management
knows of no other matters which will be presented at the Special Meeting
other than as referred to in this Proxy Statement.
By Order of the Board of
Directors
BYRON L. WADE
Secretary
<F1> Excluding for purposes of determining the shares owned by such person
or group, but not for the purposes of determining shares outstanding, (i)
shares beneficially owned immediately after the Effective Date; (ii) shares
acquired by will, by laws of descent and distribution, by gift made in good
faith, or by foreclosure of a bona fide loan; (iii) shares acquired from
the Company; (iv) shares acquired by operation of law (including a merger
or consolidation effected for the purpose of recapitalizing or
reincorporating such person but not for the purpose of acquiring another
person); (v) shares acquired in exchange for Common Stock by a holder of
Common Stock (or by a parent, lineal descendant or donee of such holder of
Common Stock who received such Common Stock from such holder) if the Common
Stock so exchanged was acquired by such holder directly from the Company as
a dividend on Class A Common Shares; (vi) shares acquired by or from a
qualified employee benefit plan of the Company; and (vii) shares
beneficially owned by a Person or group immediately after the Effective
Time which are acquired thereafter by an Affiliate of such Person or group
collectively, (i) through (vii), "Excluded Shares").
<F2> Excluding those share which are Excluded Shares.
February __, 1996
Houston, Texas
<PAGE>
TABLE OF CONTENTS
Letter to Stockholders
Notice of Special Meeting of Stockholders
Proxy Statement
Approval of the Recapitalization Amendment
Voting and Proxy Procedures
Available Information and Incorporation of Certain Documents
By Reference
Other Matters
Annex A-1
Annex A-2
Annex B
[KAC Logo]
NOTICE OF 1996 SPECIAL MEETING
AND
PROXY STATEMENT
IMPORTANT
PLEASE SIGN AND DATE YOUR PROXY CARD
AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
ANNEX A-1
PROPOSED TEXT OF THE AMENDMENT TO THE RESTATED CERTIFICATE
OF INCORPORATION OF
KAISER ALUMINUM CORPORATION
RELATING TO THE RECLASSIFICATION OF EXISTING COMMON STOCK
Upon the effectiveness of this Amendment to the Restated
Certificate of Incorporation of the Corporation pursuant to the General
Corporation Law of the State of Delaware (the "Effective Time"), and
without any further action on the part of the Corporation or its
stockholders, each share of the Corporation's common stock existing
immediately prior to the Effective Time, par value One Cent ($.01) per
share (the "Existing Common Stock"), then issued (including shares held in
the treasury of the Corporation) shall be changed automatically into .33
of a share of Class A Common Shares (as defined below) and .67 of a share
of Common Stock (as defined in Article Fourth of the Restated Certificate
of Incorporation of the Corporation), all of which shall be fully paid and
non-assessable. Fractional shares of Class A Common Shares and fractional
shares of Common Stock will not be issued to any holder of Existing Common
Stock or reflected on the transfer records of the Corporation by reason of
the reclassification described herein. In lieu thereof, the Corporation
will, as provided in the immediately following paragraph, pay a cash amount
to the stockholders otherwise entitled to such fractional shares equal to
the total fractional amount represented by such shares times the greater of
(i) the average closing price of a share of the Existing Common Stock on
the New York Stock Exchange for the fifteen trading days immediately
preceding the date on which the Effective Time occurs and (ii) the closing
price of a share of the Existing Common Stock on the New York Stock
Exchange on the trading day immediately preceding the date on which the
Effective Time occurs.
As soon as practicable after the Effective Time, the
Corporation's transfer agent shall mail a letter of transmittal (the
"Letter of Transmittal") to each record holder of Existing Common Stock as
of the close of business on the date on which the Effective Time occurs.
Subject to the immediately preceding paragraph, new certificates
representing .33 of a share of Class A Common Share and .67 of a share of
Common Stock for each outstanding share of Existing Common Stock held by
such holders will be issued to each such record holder that delivers to the
Corporation's transfer agent a properly executed Letter of Transmittal
accompanied by the certificates representing the shares of Existing Common
Stock. In lieu of fractional shares of Class A Common Shares or Common
Stock that would otherwise have been issuable, a check for the cash amount
calculated pursuant to the formula set out in the immediately preceding
paragraph will be issued to such record holder.
<PAGE>
ANNEX A-2
ARTICLE FOURTH OF THE
RESTATED CERTIFICATE OF INCORPORATION
(as proposed to be amended and restated)
FOURTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is THREE HUNDRED SEVENTY
MILLION (370,000,000) shares consisting of:
(a) ONE HUNDRED MILLION (100,000,000) shares of the par
value of One Cent ($.01) per share, which shall be designated Class A Common
Shares ("Class A Common Shares");
(b) TWO HUNDRED FIFTY MILLION (250,000,000) shares of the
par value of One Cent ($.01) per share, which shall be designated Common Stock
("Common Stock"); and
(c) TWENTY MILLION (20,000,000) shares of the par value of
Five Cents ($.05) per share, which shall be designated Preferred Stock
("Preferred Stock").
The shares of each class and series specified above shall have
the express terms set forth in this Article Fourth.
A. Statement of Preferences, Limitations and Relative Rights in
Respect of Shares of Preferred Stock and Authority of Board of Directors to Fix
Designations, Powers, Preferences, Rights, Qualifications, Limitations and
Restrictions Thereof Not Fixed Hereby.
Shares of Preferred Stock may be issued from time to time in
one or more classes or one or more series within any class thereof, as may be
determined from time to time by the Board of Directors, each of said
classes and series to be distinctly designated. All shares of any one
series of Preferred Stock shall be alike in every particular. The voting
rights, if any, of each such class and series and the preferences and
relative, participating, optional and other special rights of each such
class and series and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other classes and
series at any time outstanding; and, subject to the provisions of Section C
of this Article Fourth, the Board of Directors of the Corporation is hereby
expressly granted authority to fix, by resolutions duly adopted prior to
the issuance of any shares of a particular class or series of Preferred
Stock, the voting powers, if any, of stock of such class or series and the
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions of
such class or series within such class, including, but without limiting the
generality of the foregoing, the following:
(a) The rate and times at which, and the terms and
conditions on
which, dividends on Preferred Stock of such class or series shall be paid;
(b) The right, if any, of the holders of Preferred Stock of
such class or series to convert the same into, or exchange the same for, shares
of other classes or series of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(c) The redemption price or prices and the time or times at
which, and the terms and conditions on which, Preferred Stock of such class
or series may be redeemed;
(d) The rights of the holders of Preferred Stock of such
class or series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding up, of the Corporation;
(e) The terms of the sinking fund or redemption
or purchase account, if any, to be provided for the Preferred Stock of such
class or series;
(f) The distinctive designation of, and the
number of
shares of Preferred Stock which shall constitute such class or
series, which number may be increased (except where otherwise
provided by the Board of Directors) or decreased (but not below
the number of shares thereof then outstanding) from time to time
by like action of the Board of Directors; and
(g) The voting powers, if any, of the holders of
such class or series of Preferred Stock which may, without limiting the
generality of the foregoing, include (i) the right to more or
less than one vote per share on any or all matters voted upon by
the stockholders, and (ii) the right, voting as a class or series
by itself or together with other classes or series of Preferred
Stock or all classes and series of Preferred Stock as a class, to
elect one or more directors of the Corporation if there shall
have been a default in the payment of dividends on any one or
more classes or series of Preferred Stock or under such other
circumstances and on such conditions as the Board of Directors
may determine.
B. Statement of Limitations, Relative Rights and Powers in
Respect of Class A Common Shares and shares of Common Stock.
1. GENERAL. The Class A Common Shares and the Common Stock
shall be subject to the express terms of the Preferred Stock and any class
or series thereof. The powers, preferences and rights of the Class A
Common Shares and the Common Stock and the qualifications, limitations and
restrictions thereof, shall in all respects be identical, except as
otherwise required by law or as expressly provided in this Restated
Certificate of Incorporation.
2. VOTING. Except as may otherwise be required by law or by
the provisions of such resolution or resolutions as may be adopted by the
Board of Directors pursuant to Section A of this Article Fourth or as
otherwise expressly provided in this Restated Certificate of Incorporation.
(a) The holders of Class A Common Shares shall be entitled
to one vote for each Class A Common Share standing in such stockholder's
name on the stock transfer records of the Corporation on all matters
presented to stockholders for their vote, consent, waiver, release or other
action, except to the extent voting rights with regard to those shares
would be affected by the Minority Protection Provisions described below in
Paragraph 7 of this Section B of this Article Fourth.
(b) The holders of shares of Common Stock shall be entitled
to one-tenth (1/10) of a vote for each share of Common Stock standing in
such stockholder's name on the stock transfer records of the Corporation on
all matters presented to stockholders for their vote, consent, waiver,
release or other action.
3. DIVIDENDS AND DISTRIBUTIONS.
(a) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of Section A of this Article Fourth) shall have been met
and after the Corporation shall have complied with all of the
requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts in respect of the
Preferred Stock (fixed in accordance with the provisions of Section A
of this Article Fourth) and subject to any other conditions that may
be fixed in accordance with the provisions of Section A of this
Article Fourth, including, without limitation, the right of any of the
holders of any class or series of Preferred Stock to participate
therein, then and not otherwise the holders of Class A Common Shares
and shares of Common Stock shall be entitled to receive such dividends
as may be declared from time to time by the Board of Directors in
accordance with this Paragraph 3.
(b) Dividends and distributions may be declared and paid to
the holders of Class A Common Shares and Common Stock in cash, property,
or other securities of the Corporation (including shares of any class
whether or not shares of such class are already outstanding) out of
funds legally available therefor. Each Class A Common Share and each
share of Common Stock shall have identical rights with respect to
dividends and distributions, subject to the following:
(i) subject to Paragraph 4 of this Section B of this
Article Fourth, at the discretion of the Board of
Directors, a dividend or distribution in cash or
property on a share of Common Stock may be greater (but
not less) than any dividend or distribution in cash or
property on a Class A Common Share;
(ii) a dividend or distribution in shares of the
Corporation on Class A Common Shares may be paid or made
in Class A Common Shares or shares of Common Stock; and
(iii)a dividend or distribution in shares of the
corporation on Common Stock may be paid or made
only in shares of Common Stock.
(c) For purposes of paragraph (b) of this Section 3, dividend or
distribution in shares of the Corporation on Class A Common Shares paid or
made in Class A Common Shares shall be considered identical to a dividend
or distribution in shares of the corporation on Common Stock paid or made
in a proportionate number of shares of Common Stock.
4. MERGER, CONSOLIDATION, COMBINATION OR DISSOLUTION OF THE
CORPORATION.
(a) After distribution in full of the preferential amount to
be distributed to the holders of Preferred Stock in the event of the
voluntary or involuntary liquidation, distribution or sale of assets,
dissolution or winding up of the Corporation, the holders of the Class
A Common Shares and shares of Common Stock shall, subject to the
rights, if any, of any of the holders of any class or series Preferred
Stock to participate therein (fixed in accordance with the provisions of
Section A of this Article Fourth), be entitled to receive all the remaining
assets of the Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in proportion to the
number of shares of Class A Common Shares or Common Stock, as the case may
be, held by them respectively, subject to the other provisions set forth in
this Paragraph 4.
(b) In the event of a merger, consolidation or combination of
the Corporation with another entity (whether or not the Corporation is
the surviving entity) or in the event of the dissolution of the
corporation, the holders of shares of Common Stock shall be entitled
to receive in respect of each share of Common Stock the same
indebtedness, other securities, cash, rights, or any other property,
or any combination of shares, evidences of indebtedness, securities,
cash, rights or any other property, as holders of Class A Common
Shares shall be entitled to receive in respect to each share in that
transaction, except that any common stock that holders of Common Stock
shall be entitled to receive in any such event may have terms
substantially similar to those of the Common Stock as set forth in
this Section B of this Article Fourth.
5. SPLITS OR COMBINATIONS OF SHARES. If the Corporation shall
in any manner split, subdivide or combine the outstanding Class A Common
Shares or Common Stock, the outstanding shares of the other such class
shall be proportionately split, subdivided or combined in the same manner
and on the same basis as the outstanding shares of the class that has been
split, subdivided or combined.
6. CHANGE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. The
number of authorized shares of Common Stock may be increased or decreased
(but not below the number then outstanding) by an affirmative vote, voting
as a separate class, of the holders of a majority of the aggregate number
of outstanding Class A Common Shares entitled to vote in the election of
Directors.
7. MINORITY PROTECTION PROVISIONS.
(a) If, at any time after the effective time of this
amendment of Article Fourth (the "Effective Time"), any Person (as defined
below) or group, each as defined in subparagraph (j) below, (excluding the
Corporation) acquires beneficial ownership of shares representing 15% or
more of the number of then outstanding Class A Common Shares and such
Person or group (a "Significant Stockholder") does not then beneficially
own an equal or greater percentage of all then outstanding shares of Common
Stock, all of which Common Stock must have been acquired by such Person or
group after the Effective Time, such Significant Stockholder must,
within a ninety-day period beginning the day after becoming a Significant
Stockholder, make a public cash tender offer in compliance with all
applicable laws and regulations to acquire additional shares of Common
Stock as provided in this Paragraph 7 (a "Minority Protection
Transaction"). The 15% ownership threshold of the number of Class A Common
Shares which triggers a Minority Protection Transaction may not be waived
by the Board of Directors, nor may the Board of Directors amend this
threshold in this Restated Certificate of Incorporation without stockholder
approval, including a majority vote of the outstanding Common Stock voting
separately as a class.
(b) In each Minority Protection Transaction, the Significant
Stockholder must make a public cash tender offer to acquire from the
holders of Common Stock at least that number of additional shares of Common
Stock determined by (i) multiplying the percentage of the number of
outstanding Class A Common Shares beneficially owned and acquired after the
Effective Time by such Significant Stockholder by the total number of
shares of Common Stock outstanding on the date such Person or group became
a Significant Stockholder, and (ii) subtracting therefrom the number of
shares of Common Stock beneficially owned by such Significant Stockholder
on the date such Person or group became a Significant Stockholder
and which were acquired after the Effective Time (as adjusted for stock
splits, stock dividends and similar recapitalizations). The Significant
Stockholder must acquire all shares of Common Stock validly tendered and
not withdrawn or, if the number of shares of Common Stock tendered to the
Significant Stockholder and not withdrawn exceeds the number of shares
required to be acquired pursuant to this subparagraph (b), the number of
shares acquired from each tendering holder shall be pro rata based on the
percentage that the number of shares tendered by such stockholder bears to
the total number of shares tendered and not withdrawn by all tendering
holders.
(c) The cash offer price for any shares of Common Stock
required to be purchased by the Significant Stockholder pursuant to this
Paragraph 7 shall be the greatest of: (i) the highest price per share paid by
the Significant Stockholder for any Class A Common Share or any share of Common
Stock during the six-month period ending on the date such Person or group
became a Significant Stockholder (or such shorter period after the
Effective Time if the date such Person or group became a Significant
Stockholder is not more than six months following the Effective Time), (ii)
the highest reported sale price of a Class A Common Share or a share of
Common Stock on the New York Stock Exchange (or such other securities
exchange or quotation system as is then the principal trading market for
such shares) during the thirty-day period preceding the date such Person or
group became a Significant Stockholder, and (iii) the highest reported sale
price for a Class A Common Share or a share of Common Stock on the New York
Stock Exchange (or such other securities exchange or quotation system as is
then the principal trading market for such shares) on the business day
preceding the date the Significant Stockholder makes the tender offer
required by this Paragraph 7. For purposes of subparagraph (d) below, the
applicable date for each calculation required by clauses (i) and (ii) of
the preceding sentence shall be the date on which the Significant
Stockholder becomes required to engage in the Minority Protection
Transaction for which such calculation is required. In the event that the
Significant Stockholder has acquired Class A Common Shares or shares of
Common Stock in the six-month period ending on the date such Person or
group becomes a Significant Stockholder for consideration other than cash,
the value of such consideration per share of Class A Common Shares shall be
as determined in good faith by the Board of Directors.
(d) A Minority Protection Transaction shall also be required
to be effected by any Significant Stockholder each time that the Significant
Stockholder acquires after the Effective Time beneficial ownership of
additional Class A Common Shares in an amount equal to or greater than the
next higher integral multiple of 5% in excess of 15% (e.g., 20%, 25%, 30%,
etc.) of the number of outstanding Class A Common Shares if such
Significant Stockholder does not then own an equal or greater percentage of
all then outstanding Common Stock (all of which shares of Common Stock must
have been acquired by such Significant Stockholder after the Effective
Time, including pursuant to a previous Minority Protection Transaction).
Such Significant Stockholder shall be required to make a public
cash tender offer to acquire that number of shares of Common Stock
prescribed by the formula set forth in subparagraph (b) above, and must
acquire all shares validly tendered and not withdrawn or a pro rata portion
thereof, as specified in such subparagraph (b), at the price determined
pursuant to subparagraph (c) above, even if a previous Minority Protection
Transaction resulted in fewer shares of Common Stock being tendered than
required in the previous offer.
(e) If any Significant Stockholder fails to make an offer
required by this Paragraph 7 of Section B of this Article Fourth, or to
purchase shares validly tendered and not withdrawn (after proration, if
any), such Significant Stockholder shall not be entitled to vote any
Class A Common Shares beneficially owned by such Significant Stockholder
and acquired by such Significant Stockholder after the Effective Time
unless and until such requirements are complied with or unless and until
all Class A Common Shares causing such offer requirement to be effective
are no longer beneficially owned by such Significant Stockholder. To the
extent that the voting power of any Class A Common Shares is so suspended,
such shares shall not be included in the determination of aggregate voting
shares for any purpose under this Restated Certificate of Incorporation or
applicable law. The requirement to engage in a Minority Protection
Transaction shall be satisfied by the making of the requisite offer and
purchasing validly tendered and not withdrawn shares pursuant to this
Paragraph 7, even if the number of shares tendered is less than the number
of shares included in the required offer.
(f) The Minority Protection Transaction requirement shall
not apply to any increase in percentage beneficial ownership of Class A Common
Shares resulting solely from a change in the aggregate amount of Class A
Common Shares outstanding, provided that any acquisition after such change
which results in any Person or group beneficially owning 15% or more of
the number of outstanding Class A Common Shares (or an additional 5% or
more of the number of shares of the Class A Common Shares after the last
acquisition which triggered the requirement for a Minority Protection
Transaction) shall be subject to any Minority Protection Transaction
requirement that would be imposed pursuant to this Paragraph 7.
(g) In connection with subparagraphs (a) through (d) and (f)
above, the following Class A Common Shares shall be excluded for the
purpose of determining the Class A Common Shares beneficially owned by such
Person or group but not for the purpose of determining shares outstanding:
(i) shares beneficially owned by such Person or group
immediately after the Effective Time;
(ii) shares acquired by will or by the laws of descent and
distribution, or by gift that is made in good faith and not for
the purpose of circumventing this Paragraph 7, or by foreclosure
of a bona fide loan;
(iii) shares acquired upon issuance or sale by the
corporation;
(iv) shares acquired by operation of law (including a
merger or consolidation effected for the purpose of recapitalizing such
Person or reincorporating such Person in another jurisdiction but
excluding a merger or consolidation effected for the purpose of
acquiring another Person);
(v) shares acquired in exchange for Common Stock by a
holder of Common Stock (or by a parent, lineal descendant or
donee of such holder of Common Stock who received such Common
Stock from such holder) if the Common Stock so exchanged was
acquired by such holder directly from the Corporation as a
dividend on Class A Common Shares;
(vi) shares acquired by a plan of the Corporation
qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended, or any successor provision thereto, or acquired by reason of a
distribution from such a plan; and
(vii) shares beneficially owned by a Person or group
immediately after the Effective Time which are thereafter acquired by an
Affiliate of such Person or group (or by the members of the immediate
family (or trusts for the benefit thereof) of any such Affiliate).
Notwithstanding anything to the contrary contained in this Article Fourth,
the sale, transfer or other disposition of any shares of capital stock of a
shareholder or any Affiliate thereof which are owned by a Person or group
immediately after the Effective Time shall not constitute, or be deemed to
constitute, the sale, transfer or other disposition of any Class A Common
Shares beneficially owned by such shareholder or any Affiliate thereof
immediately after the Effective Time for the purposes of this Paragraph 7,
and any Person or group which acquires such shares of capital stock of a
shareholder or any Affiliate thereof shall not be deemed to have acquired
beneficial ownership of any Class A Common Shares beneficially owned by
such shareholder or any Affiliate thereof immediately after the Effective
Time for the purposes of this Paragraph 7.
The "Affiliate" of any Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with a specified Person. For purposes of this definition,
control when used with respect to any specified Person means the possession
of the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms controlling and controlled have
meanings correlative to the foregoing.
(h) In connection with subparagraphs (a) through (d) and (f)
above, for purposes of calculating the number of shares of Common Stock
beneficially owned by any Person or group:
(i) shares of Common Stock acquired by gift shall be deemed
to be beneficially owned by such Person or member of a group if
such gift was made in good faith and not for the purpose of
circumventing the operations of this Paragraph 7; and
(ii) only shares of Common Stock owned of record by such
Person or member of a group or held by others as nominees of such
Person or member of a group and identified as such to the
corporation shall be deemed to be beneficially owned by such
Person or group (provided that shares of Common Stock with
respect to which such Person or member of a group has sole
investment and voting power shall be deemed to be beneficially
owned thereby).
(i) All calculations with respect to percentage beneficial
ownership of either issued and outstanding Class A Common Shares or Common
Stock will be based upon the number of issued and outstanding shares
reflected in either the records of or a certification from the
corporation's stock transfer agent or reported by the Corporation on the
last to be filed of (i) the Corporation's most recent Annual Report on Form
10-K, (ii) its most recent Quarterly Report on Form 10-Q, (iii) its most
recent Current Report on Form 8-K, and (iv) its most recent definitive
proxy statement filed with the Securities and Exchange Commission.
(j) For purposes of this Paragraph 7, the term "Person"
means
any individual, partnership, joint venture, Corporation, association,
trust, incorporated organization, government or governmental department or
agency, or any other individual or entity that would be deemed a "person"
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or any successor regulation or other entity (other than
the Corporation). Subject to subparagraphs (g) and (h) above, "beneficial
ownership" shall be determined pursuant to Rule 13d-3 promulgated under the
1934 Act or any successor regulation and the formation or existence of a
"group" shall be determined pursuant to Rule 13d-5(b) under the 1934 Act or
any successor regulation, subject to the following qualifications:
(i) relationships by blood or marriage between or among any
Persons will not constitute any of such Persons as a member of a
group with such other Person, absent affirmative attributes of
concerted action; and
(ii) any Person acting in his official capacity as a
director or officer of the Corporation shall not be deemed to
beneficially own shares where such ownership exists solely by
virtue of such Person's status as a trustee (or similar position)
with respect to shares held by plans or trusts for the general
benefit of employees or former employees of the Corporation, and
actions taken or agreed to be taken by a Person in such Person's
official capacity as an officer or director of the Corporation
will not cause such Person to become a member of a group with any
other Person.
(k) In the event of an acquisition of Class A Common Shares
beneficially owned by any Person or group by the Corporation, acquired
shares shall be considered issued and outstanding for purposes of
determining the Corporation's obligations under this Paragraph 7.
8. CHANGE OF SHARES OF COMMON STOCK. Each share of Common
Stock (whether or not then issued) shall be changed automatically into one
validly issued, fully paid and non-assessable Class A Common Share upon the
earlier to occur of (i) at the time the number of outstanding Class A
Common Shares is less than 10% of the aggregate number of outstanding Class
A Common Shares and shares of Common Stock; or (ii) upon resolution of the
Board of Directors, if as a result of the existence of the Common Stock,
either the Class A Common Shares or the Common Stock or both are excluded
from trading on the New York Stock Exchange, the American Stock Exchange
and all other principal national securities exchanges then in use and are
also excluded from quotation on the National Association of Securities
Dealers Automated Quotation System - National Market System and other
comparable quotation systems then in use. Upon such change, the total
number of Class A Common Shares the Corporation shall have authority to
issue shall be Three Hundred Fifty Million (350,000,000) and the total
number of shares of Common Stock shall be zero (0) and all references to
Common Stock shall be of no further force or effect. In making the
determination in subsections (i) or (ii), the Board of Directors may
conclusively rely on information and documentation available to it,
including but not limited to, information or certification from the
corporation's stock transfer agent, filings made with the Securities and
Exchange Commission, any stock exchange, the National Association of
Securities Dealers, Inc., or any other national quotation system. At the
time set forth in (i) or (ii) above, the shares of Common Stock shall be
deemed changed automatically into shares of Class A Common Shares and stock
certificates formerly representing shares of Common Stock shall thereupon
and thereafter be deemed to represent a like number of Class A Common
Shares. The determination of the Board of Directors that either (i) or
(ii) has occurred shall be conclusive and binding and the change of each
share of Common Stock into one Class A Common Share shall remain effective
regardless of whether (i) or (ii) has occurred in fact.
C. Other Provisions.
1. No holder of shares of any class or series of stock of the
corporation shall be entitled as such, as a matter of right (preemptive or
otherwise), to subscribe for or purchase any part of any new or additional
issue of any stock of any class, series or kind whatsoever, or to subscribe
for or purchase securities convertible into stock of, any class, series or
kind whatsoever, whether now or hereafter authorized, and whether issued
for cash, property or services or by way of dividends or otherwise.
2. The powers and rights of the holders of Class A Common
Shares and shares of Common Stock shall be subordinated to the powers,
preferences and rights of the holders of Preferred Stock. The relative
powers, preferences and rights of each class or series of Preferred Stock
in relation to the powers, preferences and rights of each other class or
series of Preferred Stock shall, in each case, be as fixed from time to
time by the provisions of such resolution or resolutions as may be adopted
by the Board of Directors pursuant to the provisions of Section A of this
Article Fourth, and the consent, by class or series vote or otherwise, of
the holders of such of the classes or series of Preferred Stock as are from
time to time outstanding shall not be required for the issuance by the
Board of Directors of any other classes or series of Preferred Stock
whether or not the powers, preferences and rights of such other classes or
series shall be fixed by the Board of Directors as senior to, or on a
parity with, the powers, preferences and rights of such outstanding classes
or series, or any of them; provided, however, that the Board of Directors
may provide in the resolution or resolutions as to any classes or series of
Preferred Stock adopted pursuant to the provisions of Section A of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such classes or series voting thereon shall be required for the issuance of
any or all other classes of series of Preferred Stock.
3. Subject to the provisions of this Article Fourth, shares of
any class or series of Preferred Stock may be authorized or issued, in
aggregate amounts not exceeding the total number of shares of Preferred
Stock authorized by this Restated Certificate of Incorporation from time to
time as the Board of Directors of the corporation shall determine and for
such consideration as shall be fixed by the Board of Directors.
4. Subject to the provisions of this Article Fourth, Class A
Common Shares and shares of Common Stock, in an aggregate amount not
exceeding the total number of Class A Common Shares and shares of Common
Stock authorized in this Restated Certificate of Incorporation,
respectively, may be issued from time to time as the Board of Directors of
the Corporation shall determine and for such consideration as shall be
fixed by the Board of Directors.
5. Subject to the provisions of this Article Fourth
(including,
without limitation, Section B, Paragraph 6 of this Article Fourth), the
authorized number of Class A Common Shares and of shares of Common Stock
and of Preferred Stock may, without a class or series vote, be increased or
decreased from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
6. The Board of Directors shall have the power to cause the
corporation to issue and sell shares of any class of stock herein or
hereafter authorized to such Persons (as defined in Section B, Paragraph
7(j) of this Article Fourth), and for such consideration, as the Board of
Directors shall from time to time, in its discretion determine, whether or
not greater consideration could be received upon the issue or sale of the
same number of shares of another class, and as otherwise permitted by law.
The Board of Directors shall have the power to cause the Corporation to
purchase, out of funds legally available therefor, shares of any class of
stock herein or hereafter authorized from such Persons (as defined in
Section B, Paragraph 7(j) of this Article Fourth), and for such
consideration, as the Board of Directors shall from time to time, in its
discretion, determine, whether or not less consideration could be paid upon
the purchase of the same number of shares of another class, and as
otherwise permitted by law.
<PAGE>
Form of Opinion Annex B
[Letterhead of]
SALOMON BROTHERS INC
February __, 1996
Special Committee of the Board of Directors
Kaiser Aluminum Corporation
[ ]
[ ]
Dear Sirs:
You have requested our opinion as to certain effects, from a financial
point of view, of a proposed reclassification (the "Reclassification") of
the Common Stock, par value $.01 per share ("Existing Common Stock"), of
Kaiser Aluminum Corporation (the "Company"). In the Reclassification, each
issued and outstanding share of Existing Common Stock will be converted
into .33 of a Class A Common Share, par value $.01 per share ("Class
A Common Shares"), and .67 of a share of Common Stock, par value $.01 per
share ("Common Stock", and, together with Class A Common Shares, "New
Common Stock"), all as set forth in the Company's Proxy Statement dated
February ___, 1996 (the "Proxy Statement"), relating to the
Reclassification. Shares of Class A Common Shares and Common Stock will
have substantially identical rights, except that Class A Common Shares will
have one vote per share and shares of Common Stock will have one-tenth of a
vote per share and may receive, at the discretion of the Company's Board of
Directors, a higher, but in no event lower, dividend per share. The
Existing Common Stock is listed on the New York Stock Exchange, and both
the Class A Common Shares and the Common Stock will be listed on the New
York Stock Exchange. The Common Stock will have certain price protection
provisions, as described in the Proxy Statement.
In arriving at our opinion, we have reviewed certain publicly available
financial, market and trading information relating to the Company, as well
as certain other information provided to us by the Company. We have
considered the terms of the New Common Stock as set forth in the Proxy
Statement. We have also considered such other information, financial
studies, analyses, investigations and financial, economic, market and
trading criteria as we deemed relevant.
We have assumed and relied on the accuracy and completeness of the
information reviewed by us for the purpose of this opinion and we have not
assumed any responsibility for independent verification of such information
or for any independent evaluation or appraisal of the assets of the
Company. Our opinion is necessarily based upon business, market, economic
and other conditions as they exist on, and can be evaluated, as of the date
of this letter and does not address the Company s underlying business
decision to effect the Reclassification or constitute a recommendation to
any holder of Existing Common Stock as to how such holder should vote with
respect to the Reclassification.
The market for the New Common Stock may be affected by changes in the
financial condition of the Company, changes in investors' perception of the
Company and the economic implications of the Reclassification and similar
dual class stock structures, changes in the industries in which the Company
operates and changes in interest rates, dividend rates, market conditions,
general economic conditions and other factors that generally influence the
price of securities (and are independent of the terms of the
Reclassification). Accordingly, our opinion as expressed below excludes
the impact of such factors. The announcement or implementation of the
Reclassification may change investors' perceptions of the future plans of
the Company. Consequently, our opinion assumes that the market has had a
reasonable opportunity to understand and evaluate the Reclassification. In
addition, the New Common Stock to be issued in the Reclassification may
initially trade at market prices below those at which it would trade on a
fully distributed basis.
We have acted as financial advisor to the Special Committee of the Board of
Directors of the Company in connection with the Reclassification and will
receive a fee for our services, part of which is payable upon the initial
submission of this opinion. We have acted as financial advisor to the
Company and to MAXXAM Inc., the Company s largest shareholder, with respect
to matters unrelated to the Reclassification and have received fees for our
services. In the ordinary course of our business, we actively trade the
securities of the Company and MAXXAM Inc. for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.
Based upon and subject to the foregoing, it is our opinion that, assuming
the Reclassification had been effective as of the date hereof, (i) the
combined theoretical market value (on a fully distributed basis) and the
liquidity of the New Common Stock outstanding immediately after the
Reclassification will not be materially less than the market value and the
liquidity of the Existing Common Stock immediately prior to the
announcement of the Reclassification and (ii) the Company s ability to
raise equity capital through an offering or offerings of common equity will
not be materially adversely affected by the implementation of the
Reclassification.
Very truly yours,
Salomon Brothers Inc.
<PAGE>
PROXY FOR COMMON STOCK
KAISER ALUMINUM CORPORATION
Solicited on behalf of the Board of Directors for the
Special Meeting of Stockholders to be held March ___, 1996
The undersigned hereby appoints GEORGE T. HAYMAKER, JR., CHARLES E.
HURWITZ and JOHN T. LA DUC as proxies (each with power to act alone and
with power of substitution) to vote, as designated on the reverse side, all
shares of Common Stock the undersigned is entitled to vote at the Special
Meeting of Stockholders to be held on March ___, 1996 and at any and all
adjournments or postponements thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
/SEE REVERSE SIDE/
<PAGE>
/X/ Please mark votes as in this example.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED. THE PROXY WILL BE VOTED "FOR"
THE ELECTION OF NOMINEES TO THE BOARD OF DIRECTORS AS SET FORTH IN THE
PROXY STATEMENT.
1. Approval of proposal to amend the Company's Restated
Certificate of Incorporation (the "Recapitalization Amendment"), to (i) provide
for a dual class, or two series, of common stock, one series designated as
Class A Common Shares, $.01 par value, with one vote per share, and a lesser
voting series designated as Common Stock, $.01 par value, with 1/10 vote per
share; (ii) redesignate the 100,000,000 authorized shares of Existing
Common Stock as Class A Common Shares and authorize an additional
250,000,000 shares to be designated as Common Stock, and (iii) change each
issued share of the Company's existing common stock, par value $.01 per
share, into (a) .33 of a Class A Common Share and (b) .67 of a share of
Common Stock as described in the proxy statement; and
FOR AGAINST ABSTAIN
/ / / / / /
2. In their discretion, the proxies are authorized to vote upon
such other matters as may properly come before the meeting or any adjournments
or postponements thereof, hereby revoking any proxy or proxies heretofore
given by the undersigned.
FOR AGAINST ABSTAIN
/ / / / / /
Please sign name(s) exactly as printed hereon. If stock is held in the
name of more than one person. EACH person should sign. Executors,
administrators, trustees, etc., should give full title as such. If a
corporation, please sign full corporate name by duly authorized officer.
If a partnership, please sign in partnership name by authorized person.
Dated: 1996
Title:
Signature:
Signature:
<PAGE>
PROXY FOR 8.255% PRIDES, CONVERTIBLE PREFERRED STOCK
KAISER ALUMINUM CORPORATION
Solicited on behalf of the Board of Directors for the
Special Meeting of Stockholders to be held March ___, 1996
The undersigned hereby appoints GEORGE T. HAYMAKER, JR., CHARLES E.
HURWITZ and JOHN T. LA DUC as proxies (each with power to act alone and
with power of substitution) to vote, as designated on the reverse side, all
shares of 8.255% PRIDES, Convertible Preferred Stock (the undersigned is
entitled to vote at the Special Meeting of Stockholders to be held on March
___, 1996 and at any and all adjournments or postponements thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
/SEE REVERSE SIDE/
<PAGE>
/X/ Please mark votes as in this example.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED. THE PROXY WILL BE VOTED "FOR"
THE ELECTION OF NOMINEES TO THE BOARD OF DIRECTORS AS SET FORTH IN THE
PROXY STATEMENT.
1. Approval of proposal to amend the Company s Restated
Certificate of Incorporation (the "Recapitalization Amendment"), to (i)
provide for a dual class, or two series, of common stock, one series designated
as Class A Common Shares, $.01 par value, with one vote per share, and a lesser
voting series designated as Common Stock, $.01 par value, with 1/10 vote
per share; (ii) redesignate the 100,000,000 authorized shares of Existing
Common Stock as Class A Common Shares and authorize an additional
250,000,000 shares to be designated as Common Stock, and (iii) change each
issued share of the Company's existing common stock, par value $.01 per
share, into (a) .33 of a Class A Common Share and (b) .67 of a share of
Common Stock as described in the proxy statement; and
FOR AGAINST ABSTAIN
/ / / / / /
2. In their discretion, the proxies are authorized to vote upon
such other matters as may properly come before the meeting or any adjournments
or postponements thereof, hereby revoking any proxy or proxies heretofore
given by the undersigned.
FOR AGAINST ABSTAIN
/ / / / / /
Please sign name(s) exactly as printed hereon. If stock is held in the
name of more than one person. EACH person should sign. Executors,
administrators, trustees, etc., should give full title as such. If a
corporation, please sign full corporate name by duly authorized officer.
If a partnership, please sign in partnership name by authorized person.
Date: 1996
Title:
Signature:
Signature:
