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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REXENE CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)
GUY P. WYSER-PRATTE
and
SPEAR, LEEDS & KELLOGG
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
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SOLICITATION OF AGENT DESIGNATIONS
IN CONNECTION WITH THE
CALL OF A SPECIAL MEETING OF STOCKHOLDERS
OF
REXENE CORPORATION
--------------------
SOLICITATION STATEMENT
OF
MR. GUY P. WYSER-PRATTE
Wyser-Pratte & Co., Inc.
63 Wall Street
New York, New York 10005
(212) 495-5350
and
SPEAR, LEEDS & KELLOGG
120 Broadway
New York, New York 10271
(212) 433-7000
--------------------
This Solicitation Statement and the accompanying GOLD Agent Designation
card are being furnished to holders of outstanding common stock, par value $.01
per share (the "Common Stock"), of Rexene Corporation, a Delaware corporation
("Rexene" or the "Company"), in connection with the solicitation of Appointments
of Designated Agents ("Agent Designations") from holders of the Common Stock.
The Agent Designations are being solicited by Guy P. Wyser-Pratte
("Wyser-Pratte"), Wyser-Pratte & Co., Inc. ("WPC"), and Spear, Leeds & Kellogg
("Spear, Leeds") (collectively, the "Soliciting Group") to provide for the call
of a special meeting of stockholders of the Company (the "Special Meeting") for
the purposes of considering and voting upon the proposals described below under
the heading "Special Meeting Proposals." Under the Company's Certificate of
Incorporation (the "Certificate of Incorporation"), a special meeting of
stockholders may be called at any time by the holders of a majority of the then
outstanding shares of the Common Stock (the "Requisite Holders"). Accordingly,
the Designated Agents (as defined below) will call the Special Meeting by
delivering a notice including the date, time and place of such Meeting to the
Secretary of the Company after the Designated Agents have received Agent
Designations from the Requisite Holders (excluding Agent Designations from
holders of Common Stock who are not record holders on the date such notice is
given).
This Solicitation Statement and the accompanying GOLD Agent Designation
card are first being sent to stockholders of the Company on or about November
- --, 1996. Agent Designations should be delivered as promptly as possible, by fax
or by mail (using
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the enclosed envelope), to the Soliciting Group's information agent, MacKenzie
Partners, Inc. ("MacKenzie Partners"), 156 Fifth Avenue, New York, New York
10010, Fax: (212) 929-0308.
THE FAILURE TO EXECUTE AND RETURN THE GOLD AGENT DESIGNATION WILL HAVE
THE SAME EFFECT AS OPPOSING THE CALL OF THE SPECIAL MEETING.
REASONS FOR THE SOLICITATION
On July 22, 1996, The Wall Street Journal reported that on July
17, 1996 Huntsman Corporation ("Huntsman") had made an unsolicited offer to
purchase the Common Stock at a price of $14 per share, representing a premium
of over 49% above the prior day's closing price for the Common Stock.
On August 2, 1996, The Wall Street Journal reported an announcement
by Huntsman that it had raised its offer to $15 per share. Only
four days later, The Wall Street Journal reported that Rexene's
Board of Directors (the "Board") had unanimously rejected the higher
offer. In light of those events and subsequent reports that Huntsman was willing
to raise its offer and that the Board would have rejected even higher offers
(see "Background and Recent Events"), the Soliciting Group believes that the
Board does not support the goal of maximizing the current value of the Common
Stock. The Soliciting Group further believes that this should be the Company's
goal and that, under current circumstances, a sale of the Company is the
best way to achieve that objective.
The Soliciting Group now solicits your Agent Designations to call the
Special Meeting to adopt two groups of proposals designed to advance the goal of
maximizing the current value of the Common Stock:
One group of proposals (the "Director Replacement Proposals")
would remove all but two of the ten members of the Board and fill
four of the resulting vacancies with nominees of the Soliciting Group
(the "Nominees"). It is anticipated that the Nominees would cause the
Board to reduce its size to a total of six directors. The Nominees
would then constitute a majority of the Board, committed to the goal
of maximizing the current value of the Common Stock by selling the
Company. The Nominees have not yet been selected and will be
identified in the Soliciting Group's proxy materials in connection
with the Special Meeting.
Another group of proposals (the "By-laws Proposals"), which would
be proposed for adoption by the shareholders in advance of the
Director Replacement Proposals, are intended to facilitate
passage of the Director Replacement Proposals and to
assist the stockholders of the Company in achieving the goal of
maximizing the current value of the Common Stock. The By-laws
Proposals would adopt a series of amendments to the Company's By-laws
(the "By-laws") that would (i) clarify the stockholders' right to
fill vacancies on the Board created by the removal of
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Directors by the Company's stockholders, (ii) facilitate the
reduction of the size of the Board and (iii) prevent the Board from
conducting, without stockholder approval, a prolonged resistance to
certain takeover bids.
EFFECT OF EXECUTION AND DELIVERY OF AGENT DESIGNATIONS
In accordance with the Certificate of Incorporation, a special meeting
of the stockholders of the Company may be called by the Requisite Holders.
According to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, as of October 25, 1996, there were 18,806,034 shares of
Common Stock outstanding (the "Outstanding Common Stock"). Following receipt of
Agent Designations from the Requisite Holders, the persons designated as the
stockholders' agents in the Agent Designations (each a "Designated Agent") will
call the Special Meeting, fix the place, date and time of the Special Meeting
and cause notice thereof to be given to the Company's stockholders entitled
thereto. The Agent Designations grant to the Designated Agents the full rights
and authority of the Requisite Holders to take these actions in connection with
the Special Meeting, but THE AGENT DESIGNATIONS WILL NOT GIVE THE DESIGNATED
AGENTS THE RIGHT TO VOTE ANY SHARES OF COMMON STOCK AT THE SPECIAL MEETING.
The record date for determining stockholders entitled to notice of, or
to vote at, the Special Meeting shall be at the close of business on the day
next preceding the day on which notice of the Special Meeting is given to
stockholders, unless the Board sets a different record date in accordance with
the Delaware General Corporation Law.
The purpose of the Special Meeting is to provide stockholders of the
Company the opportunity to consider and vote on the Special Meeting Proposals.
By executing and returning the GOLD Agent Designation to MacKenzie
Partners you are not committing to vote in favor of or against the Special
Meeting Proposals or any other matter to be brought before the Special Meeting,
nor are you granting any proxies to vote on such matters. A validly executed and
unrevoked Agent Designation authorizes the Designated Agents (i) to call the
Special Meeting, (ii) to set the place, date and time of the Special Meeting,
(iii) to give notice of the Special Meeting and any adjournment thereof and (iv)
to exercise all rights of Requisite Holders incidental to calling and convening
the Special Meeting. To vote on the matters to be brought before the Special
Meeting you must vote by proxy or in person at the Special Meeting.
If any of your shares of Common Stock are held in the name of a
brokerage firm, bank, bank nominee or other institution, only it can execute an
Agent Designation for such shares and will do so only upon receipt of your
specific instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute the GOLD Agent Designation.
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BACKGROUND AND RECENT EVENTS
On July 22, 1996, The Wall Street Journal reported an announcement by
Huntsman that it had made an unsolicited offer to acquire the Company at a price
of $14 per share (the "Original Offer"). The closing price of the Common Stock
on the New York Stock Exchange on July 16, 1996, the day before the Original
Offer was announced, was $9 3/8.
On July 23, 1996 The Wall Street Journal reported that the Board had
voted unanimously to reject the Original Offer. A letter to shareholders, dated
July 25, 1996 and signed by Andrew J. Smith, Chairman and Chief Executive
Officer of the Company, stated: "Your board of directors, committed to act in
your best interest and with intimate knowledge of our strategic plan and its
expected financial returns to you, has determined that this proposal is not in
your best interest and that this is not the time to engage in this kind of
transaction."
Then, on August 2, 1996, The Wall Street Journal reported an
announcement by Huntsman that it had increased its offer to $15 per share for
all of the Common Stock (the "Amended Offer" and together with the Original
Offer, the "Huntsman Offers"). The Wall Street Journal also reported a statement
by Huntsman that its offer was "`unconditional,' meaning it doesn't depend on a
due diligence look at Rexene's books."
On August 6, 1996, The Wall Street Journal reported an announcement by
the Company that the Board had unanimously rejected the Amended Offer.
On August 21, 1996, The Wall Street Journal reported an announcement by
Huntsman that it had dropped the Amended Offer "after Schroder Wertheim & Co.,
Rexene's financial adviser, indicated that the Dallas-based chemicals company
would reject offers even in excess of $15 a share." On the same day, Reuters
reported that in an interview with the Chairman and Chief Executive Officer of
Huntsman he had stated that he was willing to pay $16 per share for Rexene, but
that Schroder Wertheim & Co. had indicated that offer would also be refused.
On October 15, 1996, the Soliciting Group filed a joint Schedule 13D
(the "Schedule 13D") that indicated its members' belief that the Board's
rejection of, and failure to explore, the Huntsman Offers "was improper and not
in the best interests of the Company." The Schedule 13D indicated that the
members of the Soliciting Group intended to take certain actions "in an effort
to encourage greater responsiveness by the Company to the views of its
shareholders and to maximize value for all of the shareholders of the
Company...." These actions included calling a special meeting of stockholders of
the Company in order to remove all or a majority of the current directors of the
Company, amend the By-laws, if necessary, to give stockholders the right to fill
vacancies on the Board and replace the directors who have been removed with
directors nominated by the Soliciting Group who would explore alternative ways
to maximize value for the stockholders of the Company. In addition, at such a
meeting, the Soliciting Group disclosed that it intended to submit to the
stockholders of the Company proposed amendments to the By-laws which would (i)
require that the Board terminate defensive
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measures against a fully financed cash offer after 90 days, unless the
stockholders of the Company vote to support the Board's policy of opposition to
such offer and (ii) provide that the Company shall not be governed by Section
203 of the Delaware General Corporation Law.
On October 21, 1996 the publication, Plastics News, reported that in an
interview on October 14 the Chairman and Chief Executive Officer of Huntsman
would not rule out an acquisition of Rexene. The story quoted him as saying:
"The jury's still out on Rexene...I wouldn't write that off by any means." The
story also stated:
"When the Rexene bid stalled, Huntsman said another run at Rexene wasn't
`worth the aggravation' and he said he would drop any further negotiations.
Since then, however, Huntsman said he has maintained cordial relations with
officers and managers of Rexene.
"Rexene spokesman Neil J. Devroy noted that Rexene, as a publicly held
company, has a responsibility to review all potential acquisition offers,
including any new bids from Huntsman.
" `If he made another offer, we would consider it,' he said."
On November 4, 1996, a story in the American Banker-Bond Buyer reported
that Huntsman "remains interested in Rexene" and quoted Don Olsen, Huntsman's
Vice President of Public Affairs, as saying, "Clearly we had an interest in
Rexene and the factors that made us interested have not changed. There are still
a lot of synergies between the two companies."
SPECIAL MEETING PROPOSALS
DIRECTOR REPLACEMENT PROPOSALS
The Soliciting Group believes that the Board's response to Huntsman's
acquisition proposal shows that the present Board is not seeking to maximize the
current value of the Common Stock. The $15 per share price offered by Huntsman
after increasing its bid represented a 60% premium over the closing price of
the Common Stock on the New York Stock Exchange on July 16, 1996, the day before
Huntsman made the Original Offer. Moreover, The Wall Street Journal reported on
August 21, 1996 that Huntsman had decided to terminate its acquisition bid
"after Schroder Wertheim & Co., Rexene's financial adviser, indicated that the
Dallas-based chemicals company would reject offers even in excess of $15 a
share." On the same day, Reuters reported that in an interview with the Chairman
and Chief Executive Officer of Huntsman he had stated that he was willing to pay
$16 per share for Rexene, but that Schroder Wertheim & Co. had indicated that
offer would also be refused. See "Background and Recent Events." Based on these
reports, the Soliciting Group believes that the Board did not attempt to obtain
a higher offer from Huntsman and that Huntsman would have been prepared to pay
more than $15 per share.
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Given the attitude that the Board showed in its response to the Huntsman
Offers, the Soliciting Group believes that the replacement of a majority of the
directors is the most effective way of pursuing the goal of maximizing the
current value of the Common Stock. Accordingly, the Soliciting Group intends to
submit the following proposals for stockholder action at the Special Meeting:
Removal of all but two of the directors of the Company. Section
141(k) of the Delaware General Corporation Law authorizes this
action, with or without cause, by a vote of a majority of the shares
entitled to vote on the election of directors. The Soliciting Group
believes it would be desirable for two of the current directors to
remain on the Board to provide continuity. The Soliciting Group has
not yet determined which directors it would ask to remain on the
Board nor has it had any discussions with any of the directors about
remaining on the Board after the other members were removed. The
Soliciting Group does not presently intend to seek to replace such
continuing directors if they resign from the Board.
Election of the Nominees to fill four of the vacant positions on the
Board, with one of the Nominees being elected Chairman of the Board,
while allowing the other four vacancies to remain unfilled. Assuming
that the stockholders adopt the by-laws being proposed by the
Soliciting Group to clarify the right of stockholders to fill
vacancies on the Board and to facilitate the reduction in the size of
the Board, the stockholders would be entitled to take these actions
by the vote of a majority of the Common Stock represented and
entitled to vote at the Special Meeting.
It is anticipated that the Nominees would then cause the Board to adopt
a resolution reducing the size of the Board from ten to six directors (or four
directors if the two continuing directors were to resign from the Board).
It is anticipated that the Nominees would propose that the Company
either conduct negotiations with Huntsman or other parties that by then may have
indicated an interest in acquiring the Company or retain investment bankers to
prepare offering materials and solicit proposals to acquire the Company for cash
and/or securities. Except for these steps, the Soliciting Group has no specific
plans for selling the Company. If it is not feasible to sell the Company on
terms that the Board and the stockholders find advantageous, the Nominees would
seek to have the Board explore other means of maximizing the current value of
the Common Stock.
Pursuant to Section 10.01(k) of the Amended and Restated Credit
Agreement (the "Credit Agreement"), dated as of April 24, 1996 among the
Company, as borrower, The Bank of Nova Scotia, as agent (the "Agent"), and the
lenders signatory thereto (the "Banks"), the Director Replacement Proposals, if
adopted by the stockholders of the Company, would cause a "change of control" as
defined in the Credit Agreement. Pursuant to the Credit Agreement, the Agent and
the Banks could cancel the Banks'
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obligations to make loans to the Company and/or declare the principal amount
then outstanding of, and the accrued interest on, the loans under the Credit
Agreement due and payable. As reported in the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, there was $30 million outstanding
under the Credit Agreement as of September 30, 1996.
The Director Replacement Proposals, if adopted by the stockholders of
the Company, would also be a "change of control" under the Indenture, dated as
November 29, 1994, between the Company and Bank One, Texas, N.A., as Trustee,
pursuant to which the Company's 11-3/4% Senior Notes due 2004 (the "Senior
Notes") were issued. Accordingly, each holder of Senior Notes would have the
right to require the Company to purchase all or any part of such holder's Senior
Notes at a price in cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest thereon to the date of purchase. As of November
8, 1996, the closing price of the Senior Notes was $112 5/16.
Additionally, it is anticipated that, if elected, the Nominees would
propose to establish a Stockholders' Advisory Committee (the "Stockholders'
Advisory Committee") that would provide non-binding recommendations to the Board
on acquisition proposals received by the Company.
The Stockholders' Advisory Committee would consist of three members that
would have no current affiliation with the Company other than as stockholders.
Members of the committee would be elected by the stockholders by plurality vote
at the Company's annual meeting of stockholders. The term of office of each
member would be one year and in no case would a member be able to serve more
than three consecutive terms. The Company would include in its proxy materials
used in the election of directors nominations and nominating statements for
members of the committee submitted by any stockholder or group of stockholders
which has owned beneficially, within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended, at least $1 million in market value
of Common Stock continuously for the two-year period prior to the nomination.
To assist it in evaluating an acquisition offer, the Stockholders'
Advisory Committee would be empowered to retain, at the Company's expense,
expert assistance, including attorneys and financial advisors, and incur other
reasonable expenses not to exceed, in the aggregate, $.02 multiplied by the
number of shares of Common Stock outstanding at the time the acquisition
proposal is made.
If the Common Stock were the subject of a tender offer or the Company
were otherwise the subject of an acquisition proposal, the Stockholders'
Advisory Committee would have the opportunity to have included in the Company's
Schedule 14A or 14D-9 filed with the Securities and Exchange Commission in
connection with such tender offer or proposal its evaluation of, and
recommendation concerning, such tender offer or proposal in a statement of not
more than 2,500 words.
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The committee's recommendations would be solely advisory in nature and
would not restrict the Board in its ability to take any action it deems in the
Company's best interest.
BY-LAWS PROPOSALS
The text of all the proposed by-law amendments will be included in the
Soliciting Group's proxy materials for the Special Meeting. Based on publicly
available information, the Soliciting Group believes that adoption of the
proposed amendments to the By-laws requires a majority vote of the shares of
stock represented and entitled to vote at the Special Meeting, assuming a quorum
is present, except that a proposal to amend the By-laws to elect not to be
governed by Section 203 of the Delaware General Corporation Law (the "Business
Combination Statute") requires approval by a majority of the Outstanding Common
Stock, as provided in the Business Combination Statute. With respect to
abstentions and broker non-votes, the shares will be considered present at the
Special Meeting, but since they are not affirmative votes for the proposals,
they will have the same effect as votes against the proposals.
PROPOSAL TO AMEND THE BY-LAWS TO CLARIFY RIGHT OF STOCKHOLDERS TO FILL VACANCIES
ON THE BOARD
The Soliciting Group intends to propose amendments to the By-laws that
would clarify the right of stockholders to fill vacancies on the Board. The
Soliciting Group believes there is ambiguity in the language of the existing
By-laws about whether stockholders have the right to fill vacancies on the
Board. Even assuming that the By-laws did not grant stockholders the right to
fill Board vacancies, stockholders may have that right under the authority of
Delaware cases which have held that stockholders have an inherent right to fill
newly created board positions in the absence of a contrary provision in the
certificate of incorporation or by-laws. Moon v. Moon Motor Car Co., Del Ch.,
151 A. 298 (1930); Campbell v. Loew's, Inc; Del. Ch. 134 A.2d 852 (1957);.
Dieleuterio v. Cavaliers of Delaware, Inc. Del.Ch; Civil Action No. 8801 (1987).
To clarify the right of stockholders to fill vacancies on the Board, the
Soliciting Group intends to propose By-law amendments that would (i) explicitly
grant stockholders the right to fill vacancies and newly created positions on
the Board, (ii) provide that if the stockholders remove a director, the Board is
not entitled to fill the resulting vacancy unless the stockholders fail to do so
(A) at the shareholders meeting at which the director is removed or (B) in the
written consent removing the director, and (iii) repeal the requirement that
stockholders wishing to nominate persons for election to the Board at a special
stockholders meeting give advance notice to the Secretary of the Company.
PROPOSALS TO FACILITATE A REDUCTION IN THE SIZE OF THE BOARD
The Board presently consists of ten directors. The Soliciting Group
believes that a smaller number of directors would be a more effective working
group and that a
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reduction in the size of the Board would help the Company to maintain a
uniformly high level of quality on the Board.
The Certificate of Incorporation and By-laws state that subject to the
rights of holders of preferred stock, the number of directors shall be fixed
exclusively by the Board. However, stockholders can cause a reduction in the
size of the Board indirectly by electing a new Board majority which reduces the
number of directors. The Soliciting Group intends to propose that the
stockholders remove eight of the ten members of the Board and fill four of the
resulting vacancies, while leaving the other four Board positions vacant. It is
anticipated that the four-member majority of the directors then in office would
cause the Board to reduce the total number of directors to six. See "Director
Replacement Proposals".
The Soliciting Group intends to propose the following amendments to the
By-laws to enable these actions to be taken:
(i) requiring that in order to fill a vacancy on the Board at a
stockholders meeting, the stockholders must act by a majority
vote of the shares represented and entitled to vote at the
meeting, rather than the plurality vote that is presently
required (a step that is necessary to assure that the holders of
a minority of the Common Stock represented at a meeting do not
fill a vacancy on the Board if the majority elect to leave the
position vacant);
(ii) reducing the number of directors who constitute a quorum for the
transaction of business from one-half to two-fifths of the total
number of directors, including vacancies (which under the present
Board of ten members reduces the size of a quorum from six to
four members);
(iii)granting stockholders the power to appoint the Chairman of the
Board; and
(iv) repealing any By-laws adopted by the Board since October 1, 1996.
PROPOSAL TO AMEND THE BY-LAWS TO SET A TIME LIMIT ON CERTAIN DEFENSIVE ACTIONS
UNLESS APPROVED BY SHAREHOLDERS
The Soliciting Group believes that when a substantial offer is made to
acquire the Company, the stockholders rather than the Board should have the
final word on whether the offer is accepted. Today the Company's Shareholder
Rights Plan or "Poison Pill" enables the Board to block a proposal to acquire
control of the Company even if the acquiror is prepared to implement that
proposal through a tender or exchange offer to the Company's stockholders,
without making the Company a party to the transaction. As a result, potential
buyers like Huntsman do not have the option of dealing directly with
stockholders if the Board opposes their acquisition proposals.
The Soliciting Group is proposing the "Shareholder Rights By-law" so
that if a substantial offer is made to acquire the Company's shares, the
stockholders, not the
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Board, will have the ultimate decision on whether to accept the offer. The
By-law would only apply if the Company received an offer (an "Offer") to
purchase all of the Common Stock for cash, by means of a tender offer, merger or
other transaction, and the Offer met the following criteria: (i) it was fully
financed and (ii) it was at a premium of at least 25% above the average market
price of the Common Stock during the preceding month (the "Trigger Premium");
provided, however, that if another offer had been made to purchase all of the
Common Stock during the twelve months prior to the date on which the Offer was
made, the price offered would have to be equal to or greater than the greater of
(A) the closing price of the Common Stock on the New York Stock Exchange on the
trading day next preceding the day on which the Offer was made and (B) the per
share price of such prior offer. Under the Shareholder Rights By-law, if the
stockholders received such an Offer, the Board would be required to terminate
all defensive measures against the Offer unless the Board's policy of opposition
was approved by stockholders within ninety days after the Offer was made. The
Shareholder Rights By-law would not affect the ability of the Board under
Sections 251 and 271 of the Delaware General Corporation Law to approve or
disapprove of a proposed merger or sale of all or substantially all of the
assets of the Company. The By-law follows an approach to tender offer regulation
that is followed in Canada, the United Kingdom and other European Countries.
The Certificate of Incorporation authorizes the Board "to make, repeal,
alter, amend and rescind the by-laws of the Corporation IN ACCORDANCE WITH THEIR
TERMS." (emphasis added) The Shareholder Rights By-law will provide that it may
be repealed, altered, amended or rescinded ("Changed") by the Board only under
the following conditions: (i) the Change is made at a meeting of the Board held
in connection with an annual meeting of stockholders, (ii) there is a public
announcement at least ninety days in advance of such annual meeting that the
Board intends to make such Change and (iii) the stockholders do not adopt a
resolution at such annual meeting to disapprove such Change by the vote of a
majority of the shares voting on such resolution.
If the Board failed to obtain shareholder approval to continue defensive
measures against a qualified Offer, the Shareholder Rights By-law could require
the Board to terminate such defensive measures whether or not the Offer was
advantageous for the Company's shareholders; but the Soliciting Group believes
that the shareholders' failure to grant such approval would be evidence that the
Offer was advantageous for the Company's shareholders and that therefore the
adoption of the Shareholder Rights By-law is in the shareholders' best
interests.
In the absence of an offer to purchase all of the Common Stock during
the previous twelve months, the By-law only applies to offers of at least the
Trigger Premium. Although the average acquisition premium in Rexene's industry
is higher than the Trigger Premium, the Soliciting Group believes that a premium
of this size is large enough to be worthy of consideration by stockholders. The
Trigger Premium condition does not apply when there has been an offer for the
Common Stock within the preceding twelve months because under those
circumstances it is likely that the market price of the Common Stock
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will be affected by expectations that the offeror may make another offer. While
there can be no assurance that the Company will ultimately get a price higher
than the Trigger Premium, acquisition bids often attract competition that leads
to subsequent offers at a price higher than the initial offer or the initial
bidder may raise its price.
The Soliciting Group believes that the provision for a shareholder vote
assures that the By-law will not be used to facilitate coercive offers. The
courts have defined a coercive offer as "an offer which has the effect of
compelling shareholders to tender their shares out of fear of being treated less
favorably in the second stage." If a majority of the Company's shareholders
consider an offer coercive, the Board will be able to win shareholder approval
to continue defensive measures against the Offer for more than ninety days.
Based on their experiences as investors in target company securities,
the Soliciting Group believes that ninety days is normally sufficient time for a
target company, seeking a higher offer, to complete the bidding process.
However, circumstances could arise in which a board of directors seeking a
higher offer was unable to complete the entire process of finding and closing an
alternative transaction within the ninety-day period prescribed by the
Shareholder Rights By-law. Similarly, if a board were trying to negotiate the
terms of an acquisition with a prospective purchaser, the inability to resist a
hostile tender offer by that purchaser beyond an initial ninety-day period could
reduce the board's leverage to negotiate favorable terms for stockholders. The
Soliciting Group believes the ninety-day limit on defensive measures in the
Shareholder Rights By-law need not prevent the Board from obtaining the best
possible terms for stockholders in either of these situations, because the Board
would be free to seek stockholder approval to continue defensive measures for an
additional period of time. However, given the time periods required to solicit
proxies and possibly to call and hold a stockholders meeting, the Board would
have to plan ahead to get such approval before the end of the ninety-day period;
and if the Board failed to do so it is possible that under the Shareholder
Rights By-law the Board would lose the power to take defensive measures against
an Offer that was not in the best interests of Shareholders.
While the Soliciting Group believes that the Shareholder Rights By-law
is valid, they recognize that the courts have not considered the validity of it
or any similar by-law and, therefore, have not resolved the extent to which
stockholder-adopted by-laws may limit the authority of a board of directors to
oppose, or to adopt or employ defensive measures against, takeover bids.
Accordingly, it is uncertain whether the Shareholder Rights By-law would survive
a court challenge.
The Soliciting Group believes that Section 109 of the Delaware General
Corporation Law authorizes the enactment of the Shareholder Rights By-law.
Section 109(a) gives stockholders the power to "adopt, amend or repeal By-laws."
Section 109(b) states: "The by-laws may contain any provision, not inconsistent
with law or with the certificate of incorporation, relating to the business of
the corporation, the conduct of its affairs, and its rights or powers OR THE
RIGHTS OR POWERS OF ITS STOCKHOLDERS, DIRECTORS,
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officers or employees," (emphasis added). In a review of the Delaware General
Corporation Law, the Certificate of Incorporation and By-laws, the Soliciting
Group has not discovered any provisions that bar stockholders from adopting the
Shareholder Rights By-law. They believe that Section 141(a) of the Delaware
General Corporation Law does not bar the adoption of the Shareholder Rights
By-law. That section states: "The business and affairs of every corporation
organized under this chapter shall be managed by or under the direction of a
board of directors, EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CHAPTER or in
its certificate of incorporation." (emphasis added). The Soliciting Group
believes that the adoption of the Shareholder Rights By-law is not inconsistent
with Section 141(a) for two reasons. First, if Section 141(a) is read as
granting the board of directors exclusive authority over the business and
affairs of the corporation, that grant is qualified by the phrase "except as may
be otherwise provided in this chapter or in its certificate of incorporation."
The savings clause leaves room for the grant of authority in Section 109 for
stockholders to adopt by-laws, such as the Shareholder Rights By-law, which
relate to the rights and powers of stockholders and directors. Second, the
Soliciting Group believes that any reading of Section 141(a) that invalidated
the Shareholder Rights By-law would make meaningless Section 109's broad grant
of authority for stockholders to adopt by-laws relating to the rights of powers
of stockholders and directors.
The Soliciting Group also believes that the Shareholder Rights By-law
does not conflict with Delaware case law dealing with the fiduciary duties of
boards of directors. In certain cases, courts interpreting Delaware law have, on
the basis of particular facts presented, upheld reasonable defensive measure
adopted by directors who, in good faith and upon reasonable investigation,
believed that a hostile offer posed a danger to corporate policy and
effectiveness, even though a majority of the stockholders may have tendered
their shares. The Soliciting Group believes that these cases do not support
invalidating the Shareholder Rights By-law because in none of those cases was
the board's discretion limited by a by-law previously adopted by stockholders
pursuant to their powers under Section 109, nor did the court consider the
stockholders' authority to adopt such a by-law. The Soliciting Group believes it
is inherent in the Delaware scheme of corporate law that while the board is
entitled to exercise its judgment in responding to a tender offer or other
takeover bid, its judgment must be exercised within the framework of statutes,
charter provisions and by-laws which in certain instances limit the actions that
directors may take even when the directors believe that their chosen course of
action is in the best interests of stockholders.
PROPOSAL TO AMEND THE BY-LAWS TO ELECT NOT TO BE GOVERNED BY THE BUSINESS
COMBINATION STATUTE
The Soliciting Group will propose that stockholders adopt an amendment
to the By-laws electing not to be governed by the Business Combination Statute.
The Business Combination Statute provides, in effect, that if any person
acquires beneficial ownership of 15% or more of the Company's outstanding shares
(thereby
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becoming an "Interested Shareholder"), the Interested Shareholder may not engage
in a business combination with the Company for three years thereafter, subject
to certain exceptions. Among the exceptions are (i) the Board's prior approval
of such acquisition; (ii) the acquisition of at least 85% of the Company's
shares (subject to certain exclusions) in the transaction in which such person
becomes an Interested Shareholder; and (iii) the approval of such business
combination by 66 2/3% of the outstanding stock not owned by the Interested
Shareholder. The Company's shareholders may, by a vote of a majority of the
outstanding shares, adopt an amendment to the By-laws or Certificate of
Incorporation electing not to be governed by the Business Combination Statute.
Such amendment would become effective twelve months after adoption and would not
be subject to amendment by the Board and would not apply to a business
combination with a person who became an Interested Shareholder prior to the
adoption of such amendment.
THE FOREGOING IS A SUMMARY OF THE BUSINESS COMBINATION STATUTE AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE THERETO. THE TEXT OF THE BUSINESS COMBINATION
STATUTE IS ATTACHED HERETO AS EXHIBIT A.
While the proposed By-law could facilitate a business combination with a
15% or greater shareholder, whether or not the transaction was advantageous for
shareholders, the Soliciting Group believes that the adoption of this By-law is
in the best interests of shareholders because the Business Combination Statute
discourages offers to acquire the Company's shares; and they believe that the
Delaware "entire fairness" doctrine provides adequate protection of the
interests of the other shareholders in a business combination with a controlling
shareholder.
The Business Combination Statute discourages offers to acquire the
Company's shares, in the Soliciting Group's opinion, by creating obstacles to
second-stage mergers in which successful offerors acquire the remainder of the
Company's shares. The Business Combination Statute has this effect because it
requires the offeror to win the votes of a two-thirds super-majority of the
minority shareholders to approve a second-stage merger unless the offeror
acquired at least 85% of the Company's shares (subject to certain exclusions) in
the transaction in which the offeror became an Interested Shareholder or unless
such transaction was approved by the Board of Directors. If the Company were to
opt out of the Business Combination Statute, there would be no specific vote of
the minority shareholders required by statute to effect a second-stage merger.
In such event, if an Interested Shareholder proposed to acquire the remainder of
the Company's shares in a second-stage merger which was not subject to the
Business Combination Statute, it might be able to accomplish this transaction
without the favorable vote of a majority of the minority shareholders. As a
result an acquiror might be able to accomplish a second-stage merger which was
opposed by a majority of the minority shareholders and which, such shareholders
did not believe was in their best interests.
However, the Soliciting Group believes that the Company's remaining
shareholders would not require the protection of the Business Combination
Statute,
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because under Delaware law a second-stage merger with a controlling shareholder
would have to satisfy the entire fairness test. This test requires the courts to
conduct a comprehensive review of the fairness of such a transaction. Its scope
has been described by the Delaware Supreme Court in Weinberger v. UOP, Inc.:
"The concept of fairness has two basic aspects: fair dealing and fair price. The
former embraces questions of when the transaction was timed, how it was
initiated, structured, negotiated, disclosed to the directors, and how the
approvals of the directors and shareholders were obtained. The latter aspect of
fairness relates to the economic and financial considerations of the proposed
merger, including all relevant factors: assets, market value, earnings, future
prospects, and any other elements that affect the intrinsic or inherent value of
a company's stock." It is common practice for acquirors to satisfy this
requirement by conditioning a second-stage merger on approval by a majority of
the minority shareholders.
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
The Soliciting Group also anticipates requesting, in the proxy
solicitation relating to the Special Meeting, authority to initiate and vote for
proposals to recess or adjourn the Special Meeting for any reason, including to
allow inspectors of the election to certify the outcome of the election of
directors, or to allow the solicitation of additional votes, if necessary, to
approve the Special Meeting Proposals. The Soliciting Group does not currently
anticipate additional Special Meeting Proposals on any substantive matters.
Nevertheless, the Soliciting Group may elect to cause additional Special Meeting
Proposals to be identified in the notice of, and in the proxy materials for, the
Special Meeting.
CERTAIN INFORMATION CONCERNING WYSER-PRATTE
AND OTHER PARTICIPANTS IN THE SOLICITATION
Wyser-Pratte is President and Chief Executive Officer of Wyser-Pratte
Management Company and WPC, which are principally engaged in money management
and event arbitrage. The principal executive offices of WPC are located at 63
Wall Street, New York, New York 10005. As of November 7, 1996, Wyser-Pratte owns
beneficially 953,600 shares of the Common Stock, representing approximately
5.07% of the Outstanding Common Stock. This includes shares owned directly by
Wyser-Pratte and shares owned by investment partnerships and other managed
accounts for which affiliates of WPC are the general partner or investment
manager. Other than Wyser-Pratte, no other officer of WPC owns any shares of
Common Stock. In addition, 52,000 shares of Common Stock, representing
approximately .28% of the Outstanding Common Stock were held by clients of WPC
in certain brokerage accounts maintained with WPC. Neither Wyser-Pratte nor WPC
has any voting or investment power or authority with respect to shares of Common
Stock held in such accounts, and both Wyser-Pratte and WPC disclaim beneficial
ownership of such shares.
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Spear, Leeds is principally engaged as a registered broker-dealer and
market maker. The principal executive offices of Spear, Leeds are located at 120
Broadway, New York, New York 10271. The sole general partner of Spear, Leeds is
SLK LLC, a New York limited liability company, with principal executive offices
located at 120 Broadway, New York, New York 10271. SLK LLC is controlled by SLK
Management Inc., a New York corporation ("SLK Management"). The executive
offices of SLK Management are located at 120 Broadway, New York, New York 10271.
SLK Management's principal business is serving as the Managing Member of SLK
LLC. As of November 7, 1996, Spear, Leeds owns beneficially 948,600 shares of
the Common Stock, representing approximately 5.04% of the Outstanding Common
Stock. No officer of SLK Management owns any shares of Common Stock.
The members of the Soliciting Group have orally agreed (i) to share
expenses incurred in connection with the filing of the Schedule 13D and this
Solicitation Statement and the matters described herein and (ii) that any
purchases or sales of shares of Common Stock made on or after October 3, 1996
will be allocated 50% to Wyser-Pratte and his affiliates, on the one hand, and
50% to Spear, Leeds, on the other, unless otherwise agreed.
Schedule I sets forth certain information, as made available in public
documents, regarding Common Stock held by the Company's principal shareholders
and its management.
GENERAL INFORMATION
This Solicitation Statement and the accompanying GOLD Agent Designation
Card are first being made available to shareholders on or about November __,
1996. Executed Agent Designations will be solicited by mail advertisement,
telephone, telecopier and in person. Solicitation will be made by Wyser-Pratte,
Eric Longmire, Senior Managing Director of WPC, and Fred Kambeitz, George Kohl,
Gregg Villany and Howard Wiesenfeld of Spear, Leeds, none of whom will receive
additional compensation for such solicitation. Proxies will be solicited from
individuals, brokers, banks, bank nominees and other institutional holders. The
Soliciting Group has requested banks, brokerage houses and other custodians,
nominees and fiduciaries to forward all solicitation materials to the beneficial
owners of the shares they hold of record. The Soliciting Group will reimburse
these record holders for their reasonable out-of-pocket expenses.
In addition, the Soliciting Group has retained MacKenzie to
solicit Agent Designations in connection with calling the Special Meeting for
which MacKenzie will be paid a fee of approximately $______ and will be
reimbursed for its reasonable expenses. MacKenzie will employ approximately [40]
people in its efforts. Costs incidental to this solicitation include
expenditures for printing, postage, legal and related expenses and are expected
to be approximately $[______]. The total costs incurred to date in connection
with this solicitation are not in excess of $[______]. If the Nominees
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are elected, the Soliciting Group will ask the Board to have the Company
reimburse it for costs and expenses incurred in connection with this proxy
solicitation. The Soliciting Group does not intend to request that its
reimbursement request be submitted to a vote of stockholders.
REVOCABILITY OF SIGNED AGENT DESIGNATIONS
You may revoke your Agent Designation at any time by executing and
delivering a written revocation to Wyser-Pratte at 63 Wall Street, New York, New
York 10005 or the Company, at 5005 LBJ Freeway, Dallas, Texas 75244 (please send
a copy of any revocation sent to the Company to Wyser-Pratte, so that
the Soliciting Group is aware of the revocation). Such a revocation must
clearly state that your Agent Designation is no longer effective. An Agent
Designation may also be revoked by notice given to the Company in a meeting
of the Company's stockholders. Any revocation of an Agent Designation will not
effect any action taken by the Designated Agents pursuant to the Agent
Designation prior to such revocation.
GUY P. WYSER-PRATTE
SPEAR, LEEDS & KELLOGG
IF YOUR SHARES OF REXENE CORPORATION COMMON STOCK ARE HELD IN THE NAME OF A
BROKERAGE FIRM, BANK, BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN SIGN AN
AGENT DESIGNATION WITH RESPECT TO YOUR COMMON STOCK. ACCORDINGLY, PLEASE CONTACT
THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR AN AGENT
DESIGNATION TO BE SIGNED REPRESENTING YOUR SHARES OF COMMON STOCK.
IF YOU HAVE ANY QUESTIONS ABOUT GIVING YOUR AGENT DESIGNATION OR REQUIRE
ASSISTANCE, PLEASE CONTACT MACKENZIE PARTNERS, INC. TOLL-FREE AT (800) 322-2885,
OR ERIC LONGMIRE, SENIOR MANAGING DIRECTOR OF WPC AT (212) 495-5357.
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EXHIBIT A
203 BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS. (a)
Notwithstanding any other provisions of this chapter, a corporation shall not
engage in any business combination with any interested stockholder for a period
of 3 years following the time that such stockholder became an interested
stockholder, unless:
(1) prior to such time the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder, or
(2) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (i) by persons who are directors and also
officers and (ii) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or
(3) At or subsequent to such time the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
(b) The restrictions contained in this section shall not apply if:
(1) the corporation's original certificate of incorporation contains
a provision expressly electing not to be governed by this section;
(2) the corporation, by action of its board of directors, adopts an
amendment to its bylaws within 90 days of the effective date of this section,
expressly electing not to be governed by this section, which amendment shall not
be further amended by the board of directors.
(3) the corporation, by action of its stockholders, adopts an
amendment to its certificate of incorporation or bylaws expressly electing not
to be governed by this section, provided that, in addition to any other vote
required by law, such amendment to the certificate of incorporation or bylaws
must be approved by the affirmative vote of a majority of the shares entitled to
vote. An amendment adopted pursuant to this paragraph shall be effective
immediately in the case of a corporation that both (i) has never had a class of
voting stock that falls within any of the three categories set out in subsection
(b)(4) hereof, and (ii) has not elected by a provision in its original
certificate of incorporation or any amendment thereto to be governed by this
section. In all other
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cases, an amendment adopted pursuant to this paragraph shall not be effective
until 12 months after the adoption of such amendment and shall not apply to any
business combination between such corporation and any person who became an
interested stockholder of such corporation on or prior to such adoption. A bylaw
amendment adopted pursuant to this paragraph shall not be further amended by the
board of directors;
(4) the corporation does not have a class of voting stock that is
(i) listed on a national securities exchange, (ii) authorized for quotation on
The NASDAQ Stock Market or (iii) held of record by more than 2,000 stockholders,
unless any of the foregoing results from action taken, directly or indirectly,
by an interested stockholder or from a transaction in which a person becomes an
interested stockholder;
(5) a stockholder becomes an interested stockholder inadvertently
and (i) as soon as practicable divests itself of ownership of sufficient shares
so that the stockholder ceases to be an interested stockholder and (ii) would
not, at any time within the 3 year period immediately prior to a business
combination between the corporation and such stockholder, have been an
interested stockholder but for the inadvertent acquisition of ownership;
(6) the business combination is proposed prior to the consummation
or abandonment of and subsequent to the earlier of the public announcement or
the notice required hereunder of a proposed transaction which (i) constitutes
one of the transactions described in the second sentence of this paragraph; (ii)
is with or by a person who either was not an interested stockholder during the
previous 3 years or who became an interested stockholder with the approval of
the corporation's board of directors or during the period described in paragraph
(7) of this subsection (b); and (iii) is approved or not opposed by a majority
of the members of the board of directors then in office (but not less than 1)
who were directors prior to any person becoming an interested stockholder during
the previous 3 years or were recommended for election or elected to succeed such
directors by a majority of such directors. The proposed transactions referred to
in the preceding sentence are limited to (x) a merger or consolidation of the
corporation (except for a merger in respect of which, pursuant to section 251(f)
of the chapter, no vote of the stockholders of the corporation is required); (y)
a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions), whether as part of a dissolution or
otherwise, of assets of the corporation or of any direct or indirect
majority-owned subsidiary of the corporation (other than to any direct or
indirect wholly-owned subsidiary or to the corporation) having an aggregate
market value equal to 50% or more of either that aggregate market value of all
of the assets of the corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the corporation; or (z) a
proposed tender or exchange offer for 50% or more of the outstanding voting
stock of the corporation. The corporation shall give not less than 20 days
notice to all interested stockholders prior to the consummation of any of the
transactions described in clauses (x) or (y) of the second sentence of this
paragraph; or
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(7) The business combination is with an interested stockholder who
became an interested stockholder at a time when the restrictions contained in
this section did not apply by reason of any paragraphs (1) through (4) of this
subsection (b), provided, however, that this paragraph (7) shall not apply if,
at the time such interested stockholder became an interested stockholder, the
corporation's certificate of incorporation contained a provision authorized by
the last sentence of this subsection (b).
Notwithstanding paragraphs (1), (2), (3) and (4) of this
subsection, a corporation may elect by a provision of its original certificate
of incorporation or any amendment thereto to be governed by this section;
provided that any such amendment to the certificate of incorporation shall not
apply to restrict a business combination between the corporation and an
interested stockholder of the corporation if the interested stockholder became
such prior to the effective date of the amendment.
(c) As used in this section only, the term:
(1) "affiliate" means a person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, another person.
(2) "associate," when used to indicate a relationship with any
person, means (i) any corporation, partnership, unincorporated association or
other entity of which such person is a director, officer or partner or is,
directly or indirectly, the owner of 20% or more of any class of voting stock,
(ii) any trust or other estate in which such person has at least a 20%
beneficial interest or as to which such person serves as trustee or in a similar
fiduciary capacity, and (iii) any relative or spouse of such person, or any
relative of such spouse, who has the same residence as such person.
(3) "business combination," when used in reference to any
corporation and any interested stockholder of such corporation, means:
(i) any merger or consolidation of the corporation or any direct or
indirect majority-owned subsidiary of the corporation with (A) the interested
stockholder, or (B) with any other corporation, partnership, unincorporated
association or other entity if the merger or consolidation is caused by the
interested stockholder and as a result of such merger or consolidation
subsection (a) of this section is not applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), except
proportionately as a stockholder of such corporation, to or with the interested
stockholder, whether as part of a dissolution or otherwise, of assets of the
corporation or of any direct or indirect majority-owned subsidiary of the
corporation which assets have an aggregate market value equal to 10% or more of
either the aggregate market value of all the assets of the corporation
determined on a consolidated basis or the aggregate market value of all the
outstanding stock of the corporation;
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(iii) any transaction which results in the issuance or transfer by the
corporation or by any direct or indirect majority-owned subsidiary of the
corporation of any stock of the corporation or of any stock of the corporation
or of such subsidiary to the interested stockholder, except (A) pursuant to the
exercise, exchange or conversion of securities exercisable for, exchangeable for
or convertible into stock of such corporation or any such subsidiary which
securities were outstanding prior to the time that the interested stockholder
became such, (B) pursuant to a merger under Section 251(g) of this title; (C)
pursuant to a dividend or distribution paid or made, or the exercise, exchange
or conversion of securities exercisable for, exchangeable for or convertible
into stock of such corporation or any such subsidiary which security is
distributed, pro rata to all holders of a class or series of stock of such
corporation subsequent to the time the interested stockholder became such, (D)
pursuant to an exchange offer by the corporation to purchase stock made on the
same terms to all holders of said stock, or (E) any issuance or transfer of
stock by the corporation, provided however, that in no case under (C)-(E) above
shall there be an increase in the interested stockholder's proportionate share
of the stock of any class or series of the corporation or of the voting stock of
the corporation;
(iv) any transaction involving the corporation or any direct or
indirect majority-owned subsidiary of the corporation which has the effect,
directly or indirectly, of increasing the proportionate share of the stock of
any class or series, or securities convertible into the stock of any class or
series, of the corporation or of any such subsidiary which is owned by the
interested stockholder, except as a result of immaterial changes due to
fractional share adjustments or as a result of any purchase or redemption of any
shares of stock not caused, directly or indirectly, by the interested
stockholder; or
(v) any receipt by the interested stockholder of the benefit,
directly or indirectly (except proportionately as a stockholder of such
corporation) of any loans, advances, guarantees, pledges, or other financial
benefits (other than those expressly permitted in subparagraphs (i)-(iv) above)
provided by or through the corporation or any direct or indirect majority owned
subsidiary.
(4) "control," including the term "controlling," "controlled by" and
"under common control with," means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting stock, by contract, or
otherwise. A person who is the owner of 20% or more of the outstanding voting
stock of any corporation, partnership, unincorporated association or other
entity shall be presumed to have control of such entity, in the absence of proof
by a preponderance of the evidence to the contrary. Notwithstanding the
foregoing, a presumption of control shall not apply where such person holds
voting stock, in good faith and not for the purpose of circumventing this
section, as an agent, bank, broker, nominee, custodian or trustee for one or
more owners who do not individually or as a group have control of such entity.
(5) "interested stockholder" means any person (other than the
corporation and any direct or indirect majority-owned subsidiary of the
corporation) that (i) is the owner
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of 15% or more of the outstanding voting stock of the corporation, or (ii) is an
affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the 3-year
period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder; and the affiliates and
associates of such person; provided, however, that the term "interested
stockholder" shall not include (x) any person who (A) owned shares in excess of
the 15% limitation set forth herein as of, or acquired such shares pursuant to a
tender offer commenced prior to, December 23, 1987, or pursuant to an exchange
offer announced prior to the aforesaid date and commenced within 90 days
thereafter and either (I) continued to own shares in excess of such 15%
limitation or would have but for action by the corporation or (II) is an
affiliate or associate of the corporation and so continued (or so would have
continued but for action by the corporation) to be the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the 3-year
period immediately prior to the date on which it is sought to be determined
whether such a person is an interested stockholder or (B) acquired said shares
from a person described in (A) above by gift, inheritance or in a transaction in
which no consideration was exchanged; or (y) any person whose ownership of
shares in excess of the 15% limitation set forth herein in the result of action
taken solely by the corporation provided that such person shall be an interested
stockholder if thereafter such person acquires additional shares of voting stock
of the corporation, except as a result of further corporate action not caused,
directly or indirectly, by such person. For the purpose of determining whether a
person is an interested stockholder, the voting stock of the corporation deemed
to be outstanding shall include stock deemed to be owned by the person through
application of paragraph (8) of this subsection but shall not include any other
unissued stock of such corporation which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
(6) "person" means any individual, corporation, partnership,
unincorporated association or other entity.
(7) "Stock" means, with respect to any corporation, capital stock
and, with respect to any other entity, any equity interest.
(8) "Voting stock" means, with respect to any corporation, stock of
any class or series entitled to vote generally in the election of directors and,
with respect to any entity that is not a corporation, any equity interest
entitled to vote generally in the election of the governing body of such entity.
(9) "owner" including the terms "own" and "owned" when used with
respect to any stock means a person that individually or with or through any of
its affiliates or associates:
(i) beneficially owns such stock, directly or indirectly; or
(ii) has (A) the right to acquire such stock (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or
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understanding, or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise; provided, however, that a person shall not be
deemed the owner of stock tendered pursuant to a tender or exchange offer made
by such person or any of such person's affiliates or associates until such
tendered stock is accepted for purchase or exchange; or (B) the right to vote
such stock pursuant to any agreement, arrangement or understanding; provided,
however, that a person shall not be deemed the owner of any stock because of
such person's right to vote such stock if the agreement, arrangement or
understanding to vote such stock arises solely from a revocable proxy or consent
given in response to a proxy or consent solicitation made to 10 or more persons;
or
(iii) has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent as described in item (B) of clause (ii) of this paragraph), or disposing
of such stock with any other person that beneficially owns, or whose affiliates
or associates beneficially own, directly or indirectly, such stock.
(d) No provision of a certificate of incorporation or bylaw shall
require, for any vote of stockholders required by this section a greater vote of
stockholders than that specified in this section.
(e) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all matters with respect to this section.
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SCHEDULE I
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of November 8, 1996,
information with respect to each person who was known by the Soliciting Group
(based upon a review of (i) the Company's Proxy Statement for its 1996 Annual
Meeting of Stockholders and (ii) schedules and reports filed with the Securities
and Exchange Commission (the "SEC")) to be the beneficial owner of more than
five percent of the Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-------------------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES CLASS
- --------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Guy P. Wyser-Pratte and Spear, Leeds & Kellogg 1,901,700(2) 10.11%
c/o Guy P. Wyser-Pratte
63 Wall Street
New York, NY 10005
David C. Swalm 950,000(3) 5.05%
8707 Katy Freeway #300
Houston, TX 77024
</TABLE>
- ----------------------
(1) Although information reported in Amendment No. 1 to Schedule 13G dated
February 2, 1996, filed by the State of Wisconsin Investment Board (the
"Wisconsin Investment Board") with the SEC indicates that the Wisconsin
Investment Board beneficially owned 1,785,000 shares of Common Stock as of
such date, the Wisconsin Investment Board has informed the Group that it
does not currently beneficially own any shares of Common Stock.
(2) Wyser-Pratte has sole voting and investment power with respect to 953,100
shares of Common Stock beneficially owned by him. Spear, Leeds has sole
voting and investment power with respect to 948,600 shares of Common Stock
beneficially owned by it. Although Wyser-Pratte and Spear, Leeds may be
deemed a "group" within the meaning of Rule 13d-5 under the Securities
Exchange Act of 1934, as amended, each of Wyser-Pratte and Spear, Leeds
disclaims beneficial ownership of the shares of Common Stock owned by the
other.
(3) Based upon information reported in a Schedule 13D filed by Dave C. Swalm
("Swalm") with the SEC on May 26, 1995, as amended by an amendment filed
with the SEC on November 3, 1995 and as further amended by an amendment
dated March 7, 1996. Swalm has sole voting and investment power with respect
to 350,000 shares of Common Stock and has shared voting and investment power
with respect to 600,000 shares of Common Stock owned by Texas Olefins
Company, 70% of the voting stock of which is beneficially owned by Swalm.
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of the Common Stock as of November 8, 1996 (based solely
upon a review of (i) the Company's Proxy Statement for its 1996 Annual Meeting
of Stockholders and (ii) schedules and reports filed with the SEC by each
director of the Company and each of the Chief Executive Officer and the other
four highest paid executive officers of the Company.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-------------------------------
NUMBER OF PERCENT OF
NAME SHARES(1)(2) CLASS
- ------------------------------------------------------------- --------------- ---------------
DIRECTORS
<S> <C> <C>
Lavon N. Anderson 35,382 (3) *
James R. Ball 0 0%
Harry B. Bartley, Jr. 5,000 *
R. James Comeaux 5,000 *
Arthur L. Goeschel 27,834 (4) *
William B. Hewitt 27,000 *
Ilan Kaufthal 27,000 *
Jack E. Knott 30,666 (5) *
Charles E. O'Connell 2,000 *
Andrew J. Smith 72,889 *
NAMED EXECUTIVE OFFICERS (EXCLUDING ANY DIRECTOR NAMED ABOVE)
James M. Ruberto 0 0%
Jonathan R. Wheeler 23,833 *
</TABLE>
- ----------------------
(*) Less than 1%
(1) All shares listed are directly held with sole voting and investment power
unless otherwise indicated.
(2) Includes shares subject to stock options which are exercisable within 60
days by the following individuals and group in the following amounts: Dr.
Anderson - 35,282; Mr. Bartley - 2,000; Mr. Comeaux - 2,000; Mr. Kaufthal -
27,000; Mr. Knott - 26,666; Mr. O'Connell - 2,000; Mr. Smith - 46,332; and
Mr. Wheeler - 23,333.
(3) Includes 100 shares owned by a corporation of which Dr. Anderson owns 50%
of the outstanding stock and shares voting and investment power.
(4) Includes 1,000 shares held by Mr. Goeschel's spouse.
(5) Includes 3,000 shares held by Mr. Knott's spouse in a custodial capacity
under the Uniform Gift to Minors Act.
<PAGE>
<PAGE>
APPENDIX A
GOLD AGENT DESIGNATION CARD
AGENT DESIGNATION
THIS AGENT DESIGNATION IS SOLICITED BY GUY P. WYSER-PRATTE,
WYSER-PRATTE & CO., INC. AND SPEAR, LEEDS & KELLOGG (THE "SOLICITING GROUP") FOR
THE APPOINTMENT OF DESIGNATED AGENTS TO CALL A SPECIAL MEETING OF STOCKHOLDERS
OF REXENE CORPORATION (THE "COMPANY").
Each of the undersigned hereby constitutes and appoints Daniel H.
Burch, Stanley J. Kay, Jr., and Mark H. Harnett, and each of them, with full
power of substitution, the proxies and agents of each of the undersigned (said
proxies and agents, together with each substitute appointed by any of them, if
any, collectively, the "Designated Agents") in respect of all shares of Common
Stock, par value $.01 per share (the "Common Stock"), of the Company owned by
the undersigned to do any or all of the following, to which each of the
undersigned hereby consents:
1. To take all such action as shall be necessary or appropriate
to call (BUT NOT TO VOTE AT) a special meeting of the stockholders of the
Company (the "Special Meeting") for the purpose of considering and voting upon
the 'By-laws Proposals' and 'Director Replacement Proposals,' as described in
the Solicitation Statement of the Soliciting Group.
2. To give or cause to be given, to the Company's stockholders
entitled thereto, notice of the Special Meeting to be held on a date and at a
place and time to be determined by the Designated Agents.
(AGENT DESIGNATION CONTINUED ON REVERSE)
<PAGE>
<PAGE>
GOLD AGENT DESIGNATION CARD
3. To exercise any and all of the other rights of each of the
undersigned incidental to (i) calling and convening the Special Meeting and
(ii) causing the purposes of the authority expressly granted hereinabove to the
Designated Agents to be carried into effect; provided, however, that NOTHING
CONTAINED IN THIS INSTRUMENT SHALL BE CONSTRUED TO GRANT TO THE DESIGNATED
AGENTS THE RIGHT, POWER OR AUTHORITY TO VOTE ANY SHARES OWNED BY THE UNDERSIGNED
AT THE SPECIAL MEETING.
PLEASE PROMPTLY COMPLETE, SIGN, DATE AND
MAIL IN THE ENCLOSED ENVELOPE.
DATE ________________________, 1996 SIGNATURE______________________________
SIGNATURE, IF HELD JOINTLY _______________________ TITLE _______________________
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, give full title as such. If a corporation, sign in full
corporate name by President or other authorized officer. If a partnership, sign
in partnership name by authorized person.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
