================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 19, 1997
REXENE CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-9988 75-2104131
- --------------------------------------------------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
5005 LBJ FREEWAY, DALLAS, TEXAS 75244
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 450-9000
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
Item 6. Resignation of Registrant's Director
Following the meeting of the Rexene Board of Directors held on March
19, 1997, Arthur L. Goeschel resigned as a Rexene director. The stated reason
for the resignation was Mr. Goeschel's opposition to the Stock Repurchase
Program, which Mr. Goeschel believes was implemented for the purpose of
purchasing shares held by stockholders who would support the removal of Rexene's
current directors at the Special Meeting. Mr. Goeschel also expressed his
opposition to borrowing funds for the purpose of financing repurchases under the
program because of his personal views regarding the dangers of leverage.
The Company strongly disagrees with Mr. Goeschel's characterization
of the Stock Repurchase Program and the motivations of the Rexene directors in
authorizing the program. The Rexene Board authorized the Stock Repurchase
Program as a result of the requests of many of the Company's stockholders as
expressed to Rexene management and directors in recent months and because the
Rexene directors feel that the program compliments the Company's capital and
improvement programs and will build stockholder value. The first part of the
program, which is limited to purchases of up to $35 million, will be conducted
as an open market purchase program in accordance with rules and regulations
promulgated by the SEC. The program will not discriminate among stockholders and
will be open to all stockholders who desire to sell their shares at current
market prices. In fact, the Stock Repurchase Program will have the effect of
reducing the number of affirmative votes that the Wyser-Pratte Group will need
to obtain at the Special Meeting to be successful in removing Rexene's current
directors. In addition, at current market prices, the program should make Rexene
a more attractive acquisition candidate for an acquiror intending to pay $16 per
share. Further, as designed by the Board, the majority of repurchases pursuant
to the program will be made only if stockholders approve the Stock Repurchase
Proposal at the Special Meeting and, accordingly, could not possibly have any
impact on the vote at the Special Meeting. The Company's financial advisors
expressed to the Board their view that the financing of the program would not
negatively impact the financial condition of the Company, a view which Mr.
Goeschel agreed with when discussed by the Board and its advisors.
A copy of the letter sent by Mr. Goeschel to the Company in
connection with his resignation as a director of the Company is filed as Exhibit
17 to this Report. A copy of the letter sent by the Company to Mr. Goeschel in
response to such letter is filed as Exhibit 99 to this Report.
<PAGE>
Item 7. Financial Statements and Exhibits
17. Letter re Director Resignation from Arthur L. Goeschel
to Rexene Corporation
99. Letter from Rexene Corporation to Arthur L. Goeschel
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REXENE CORPORATION
Date: March 27, 1997 By:/s/ Bernard J. McNamee
----------------------
Bernard J. McNamee,
Executive Vice President,
Secretary and General Counsel
3
<PAGE>
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Sequentially
Exhibit No. Description of Exhibit Numbered
- ----------- ---------------------- --------
17. Letter re Director Resignation
from Arthur L. Goeschel to
Rexene Corporation
99. Letter from Rexene Corporation
to Arthur L. Goeschel
4
NYFS05...:\38\69638\0004\139\FRM3267L.11A
EXHIBIT 17
ARTHUR L. GOESCHEL
Consultant
March 19, 1997
Mr. Andrew Smith Bernard McNamee, Esq.
Chief Executive Officer General Counsel
Rexene Corporation Rexene Corporation
Suite 500, Occidental Tower Suite 500, Occidental Tower
5005 LBJ Freeway 5005 LBJ Freeway
Dallas, TX 75244 Dallas, TX 75244
Gentlemen:
I have served on the Board of Directors ("Board") of Rexene Corporation
("Company") for many years and was the Chairman of the Board for over four and
one-half years. During my tenure on the Board, I believe that I have always
served the best interest of the Company's shareholders and carried out my
fiduciary obligations to them in a manner which I believed was, and is, to the
best of my ability and judgment. It is in this context that I must now resign my
position as a director of the Company due to actions that have been taken by the
Board of the Company, which I believe are not in the best interest of the
Company's shareholders.
The Board has recently approved the borrowing of Thirty Five Million Dollars
($35,000,000) and will, in the near future, ask the shareholders to approve the
Issuance of preferred stock, which will generate an additional Fifty Million
Dollars ($50,000,000). The $35,000,000 in borrowed funds is to be used to
conduct an immediate stock buy-back program ("Program"), and the $50,000,000
from the issuance of the preferred stock will also be used for the Program at a
later date. The Program will be conducted in such a manner so as to purchase the
stock of individuals or groups that have indicated their intention to vote for
the removal of the Company's current Board at a Special Meeting of Shareholders
of the Company to be held on April 30, 1997. The intent of the Program has been
made clear to me at
<PAGE>
several meetings of the Board and, in my opinion, as confirmed by statements
made by certain of the Company's financial advisors will be targeted and
therefore will serve no purpose other than to entrench the current Board, some
of whom are also executives of the Company. I am not opposed to stock repurchase
programs that are designed to enhance shareholder value. I cannot, however,
rationalize how a targeted stock repurchase program, designed to benefit a group
of shareholders who have expressed dissatisfaction with the current Board
concerning their inability or sincere desire to sell the Company at a fair and
reasonable price, is anything other than an attempt to entrench the current
Board at the expense of those shareholders who are remaining after the Program
is executed. The Company, if the full Program is executed, will have an
additional $85,000,000 in obligations, either in loans or preferred stock
obligations, and will have in its Treasury, stock possibly repurchased at a
price that is at or near the highest price the stock has traded for in the last
several years. This action is particularly inappropriate in view of the
Company's press release on March 19, 1997, indicating that the operating
earnings for the first quarter will be very weak. These results, the taking on
of additional debt, and the cost of the Treasury stock in a period of poor
operating earnings, will be the aftermath of the Program designed, in my opinion
and confirmed to me at several Board meetings, to eliminate those shareholders
who are attempting to unseat the current Board and to replace them with
directors who, in their opinion, will realize a fair and reasonable price for
the Company, which will benefit all shareholders.
The actions taken by the current Board, as outlined in this letter, have caused
me to resign my position as a director of the Company, which I believe is my
only alternative if I am to fulfill my fiduciary obligations to the Company's
shareholders. This decision on my part was not arrived at easily, but only after
very serious thought and consultation with counsel. As you know, my position on
this subject has been made very clear in the numerous Rexene board meetings that
have taken place over the last weeks. I hereby request that the Company publicly
disclose my resignation from the Board with a complete and accurate description
of the reasons therefor.
Sincerely,
/s/ Arthur L. Goeshel
Arthur L. Goeschel
NYFS05...:\38\69638\0004\1530\LTR3277P.580
[LETTERHEAD OF REXENE CORPORATION]
March 26, 1997
Mr. Arthur L. Goeschel
Way Hollow Road & Woodland Road
Sewickley, Pennsylvania 15143
Dear Art:
We are in receipt of your letter of resignation, which the Board
accepts. In order to set the record straight, it is necessary to respond to the
allegations and outright misstatements set forth in your letter.
As you know, based upon the many Board meetings and personal
meetings I have had with you regarding this subject, the Rexene Board authorized
the stock repurchase program solely as a result of the requests of many of the
Company's stockholders as expressed to Rexene management and directors in recent
months and because the Rexene directors feel that the program complements the
Company's capital and improvement programs and will build stockholder value. The
first part of the program, which is limited to purchases of up to $35 million,
will be conducted as an open market purchase program in accordance with rules
and regulations promulgated by the Securities and Exchange Commission. It is
indisputable that the program will not discriminate among stockholders and will
be open to all stockholders who desire to sell their shares at current market
prices. You conveniently ignore the fact that the stock repurchase program will
have the effect of actually reducing the number of affirmative votes that the
Wyser-Pratte Group will need to obtain at the Special Meeting to be successful
in removing Rexene's current directors. You also understandably fail to
acknowledge that, at current market prices, the program should make Rexene a
more attractive acquisition candidate for an acquiror intending to pay $16.00
per share. Further, as designed by the Board, the majority of repurchases
pursuant to the program will be made only if stockholders approve the stock
repurchase proposal at the Special Meeting and, accordingly, could not
<PAGE>
Mr. Arthur L. Goeschel
March 26, 1997
Page 2
possibly have any impact on the vote at the Special Meeting. You have refused to
listen to the explanations of the workings of the stock repurchase program
because it doesn't match your preconceived views. You have consistently refused
to accept the advice of professionals because in your own mind, you have said
you know better.
Your stated concerns regarding the possible effects of the financing
of the program are, at best disingenuous. The Company's financial advisors have
on several occasions expressed to the Board their view (and demonstrated with
their detailed financial analyses) that the financing of the program would not
negatively impact the financial condition of the Company. You yourself have
stated on more than one occasion at our Board meetings that the additional
borrowings and proposed preferred stock issuance will not in any way put the
Company in financial jeopardy.
An honest review of the record can only lead to the conclusion that
the Rexene directors have acted based solely upon a full and fair consideration
of the facts in a manner that they believe is in the best interest of all of the
Rexene shareholders. Regrettably, your actions have been taken solely as part of
a personal desire to advance your own selfish interests and retaliate for the
Board's intent to decrease its size and decline to ask that you stand for
re-election at the Annual Meeting. Every Board member believes that you were
entitled to voice your opinion as a director in the meeting, but you are not
entitled to manipulate the board process through false and unsupported
accusations and threats of publicly accusing your fellow Board members of
unethical conduct in an attempt to coerce them into adopting your point of view,
especially when such is not the case. I am confident that the Rexene Board has
reached the right decisions on these matters and I am gratified that the Board
will be able to continue to work to enhance the interests of our stockholders
free of the distractions resulting from your unwillingness to respond to efforts
to maximize stockholder value.
Very truly yours,
/s/ Andrew J. Smith
Andrew J. Smith
