SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
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 Rule 14a-11(c) or Rule 14a-12
REXENE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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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PRELIMINARY COPY
REXENE CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
APRIL 30, 1997
Please take notice that a Special Meeting of Stockholders of Rexene
Corporation, a Delaware corporation, will be held at the offices of The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, on
Wednesday, April 30, 1997 at 11:00 a.m. local time to consider and vote upon the
following matters, all of which are more completely set forth in the
accompanying Proxy Statement.
The items of business for the Special Meeting are:
(1) A proposal by Mr. Guy P. Wyser-Pratte, Wyser-Pratte & Co.,
Inc. and Spear, Leeds & Kellogg (collectively, the
"Wyser-Pratte Group") to remove from office all of the
incumbent directors of the Company (the "Director Removal
Resolution");
(2) The election of directors of the Company to fill the vacancies
created in the event that the Director Removal Resolution is
approved ( the "Election of Directors Resolution");
(3) A proposal by the Wyser-Pratte Group to amend the Amended and
Restated By-laws of the Company (the "By-laws") in a number of
respects to facilitate the Director Removal Resolution and the
election of the Wyser-Pratte Group's nominees for election to the
Board (the "Facilitating By-laws Resolutions");
(4) A proposal by the Wyser-Pratte Group to amend the By-laws to set
a time limit on certain actions by the Company in response to a
takeover offer unless approved by stockholders (the "Stockholder
Rights Resolution");
(5) A proposal by the Wyser-Pratte Group to amend the By-laws to
elect that the Company not be governed by Section 203 of the
Delaware General Corporation Law (the "Business Combination
Statute Resolution");
(6) An omnibus resolution proposed by the Wyser-Pratte Group setting
the order in which the resolutions will be voted upon by the
stockholders at the Special Meeting (the "Omnibus Resolutions");
(7) A proposal by the Rexene Board of Directors to grant the Rexene
Board the authority to implement the second $50 million part of
the Company's $85 million stock repurchase program (the "Stock
Repurchase Proposal").
Only stockholders of record at the close of business on April 18, 1997
are entitled to receive notice of, and to vote at, the Special Meeting and any
adjournment thereof.
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The second item of business will be withdrawn if stockholders reject
the Director Removal Resolution.
Your Board of Directors unanimously urges you to vote:
-- AGAINST the proposals of the Wyser-Pratte Group (items 1-6)
-- FOR the Rexene Board's Stock Repurchase Proposal (item 7) by
signing, dating and returning the enclosed WHITE Special Meeting proxy card in
the enclosed postage-prepaid envelope.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE SPECIAL MEETING PROXY
CARD REGARDLESS OF WHETHER YOU HAVE PREVIOUSLY SIGNED ANY PROXY CARD SENT TO YOU
BY THE WYSER-PRATTE GROUP.
By order of the Board of Directors
Bernard J. McNamee
Dallas, Texas
April __, 1997
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED WHITE SPECIAL MEETING PROXY CARD IMMEDIATELY.
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REXENE CORPORATION
5005 LBJ FREEWAY
DALLAS, TEXAS 75244
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
APRIL 30, 1997
This Proxy Statement and the accompanying WHITE Proxy Card are being
furnished to holders of outstanding shares of common stock, par value $.01 per
share ("Common Stock"), of Rexene Corporation, a Delaware corporation ("Rexene"
or the "Company"), in connection with the solicitation by the Board of Directors
of the Company (the "Board") of proxies for use at the special meeting of
stockholders of the Company (the "Special Meeting") to be held on Wednesday,
April 30, 1997, at 11:00 a.m. local time at the offices of The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801, or at any adjournment
or postponement thereof. The Special Meeting is being called pursuant to the
request of holders of a majority of the outstanding shares of Common Stock as
permitted by the Restated Certificate of Incorporation of the Company following
a solicitation of Appointments of Designated Agents by a group comprised of Mr.
Guy P. Wyser-Pratte ("Wyser-Pratte"), Wyser-Pratte & Co., Inc. ("WPC") and
Spear, Leeds & Kellogg ("Spear Leeds" and, together with Wyser-Pratte and WPC,
the "Wyser-Pratte Group"). The Board has fixed April 18, 1997 as the record date
for determining stockholders entitled to notice of and to vote at the Special
Meeting (the "Record Date"). This Proxy Statement and the enclosed WHITE Proxy
Card are first being mailed to stockholders on or about April __, 1997.
At the Special Meeting, stockholders will consider and vote upon two
groups of proposals made by the Wyser-Pratte Group and opposed by the Board (the
"Wyser-Pratte Proposals"). One group of proposals would (i) remove all of the
members of the Board (the "Director Removal Resolution") and (ii) fill four of
the resulting vacancies with nominees of the Wyser-Pratte Group (the "Election
of Directors Resolution" and, together with the Director Removal Resolution, the
"Director Replacement Proposals"). According to the Proxy Statement filed by the
Wyser-Pratte Group with the Securities and Exchange Commission (the "SEC") on
March __, 1997 (the "Wyser-Pratte Proxy Statement") and Amendment No. 2 to their
Schedule 13D with respect to the Common Stock, the Wyser-Pratte Group
anticipates that such nominees following their election would elect Mr. Werner
Goeckel to the Board and cause the Board to reduce its size to a total of five
directors (or six directors if Andrew J. Smith, the current Chairman of the
Board and Chief Executive Officer of the Company, is offered and accepts an
invitation to remain as the Chief Executive Officer and a director of the
Company). Another group of proposals would amend the Amended and Restated
By-laws of the Company (the "By-laws") to (i) clarify the right of stockholders
to fill vacancies on the Board and change the stockholder vote required to fill
such vacancies, eliminate the advance notification requirement for stockholder
nominations of directors at special meetings, reduce the size of a quorum for
action by the Board, give the Chairman of the Board the status of an officer of
the Company and authorize the stockholders to appoint the Chairman, and repeal
any by-law amendments adopted by the Board since October 1, 1996 (the
"Facilitating By-laws Resolutions"), (ii) set a time limit on certain actions by
the Company in response to certain takeover offer unless approved by
stockholders (the "Shareholder Rights Resolution") and (iii) elect that the
Company not be governed by Section 203 of the Delaware General Corporation Law
(the "DGCL") (the "Business Combination Statute Resolution" and, together with
the Facilitating By-laws Resolutions and the Shareholder Rights Resolution, the
"By-laws Proposals"). Stockholders also will
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consider and vote at the Special Meeting on an omnibus resolution setting the
order in which the resolutions will be voted upon by the stockholders at the
Special Meeting (the "Omnibus Resolution"). See "The Wyser-Pratte Proposals."
In addition, at the Special Meeting, stockholders will consider and
vote upon the Company's proposal to grant the Rexene Board the authority to
implement the second $50 million part of the Company's $85 million stock
repurchase program (the "Stock Repurchase Proposal"). It currently is
contemplated that, if approved by stockholders, any such repurchases would be
funded through the issuance of a new series of preferred stock of the Company.
See "The Stock Repurchase Proposal."
YOUR BOARD OF DIRECTORS UNANIMOUSLY AND VIGOROUSLY OPPOSES THE
WYSER-PRATTE GROUP'S SOLICITATION OF PROXIES AND URGES YOU NOT TO SIGN ANY GOLD
PROXY CARD SENT TO YOU BY THE WYSER-PRATTE GROUP. WHETHER OR NOT YOU HAVE
PREVIOUSLY EXECUTED A GOLD PROXY CARD SENT TO YOU BY THE WYSER-PRATTE GROUP, THE
BOARD URGES YOU TO SIGN, DATE AND DELIVER THE ENCLOSED WHITE PROXY CARD AS
PROMPTLY AS POSSIBLE, BY FAX OR BY MAIL (USING THE ENCLOSED ENVELOPE), TO D.F.
KING & CO., INC., 77 WATER STREET, NEW YORK, NEW YORK, 10005- 4495.
If your shares of Common Stock are held in the name of a bank, broker
or other nominee, you are urged to contact the person responsible for your
account and direct him or her to execute a WHITE Proxy Card on your behalf.
If you have any questions concerning the Company's solicitation, please
contact D.F. King & Co., Inc., Toll-Free, at 1-800-714-3310.
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BACKGROUND OF THE SOLICITATION
On July 17, 1996, Jon Huntsman, Chairman and Chief Executive Officer of
Huntsman Corporation ("Huntsman"), telephoned Ilan Kaufthal, a member of the
Board of Directors of the Company and a managing director of Schroder Wertheim &
Co. Incorporated, the Company's financial advisor ("Schroder Wertheim"), to
inform Mr. Kaufthal that Huntsman intended to make a proposal to acquire all of
the outstanding shares of Common Stock. On July 18, 1996, Mr. Smith received
from Mr. Huntsman a letter containing an unsolicited proposal to acquire the
outstanding shares of Common Stock at $14 per share in a merger transaction
subject to financing and due diligence.
The Board, together with its legal and financial advisors, met to
review the Huntsman proposal and determine an appropriate response. After
carefully considering a wide range of factors, including the market valuation of
the Common Stock, the condition of the commodity chemical industry and the
Company's prospects, the Board determined that the Huntsman proposal did not
adequately reflect the long-term value of the Common Stock and prospects of the
Company. Accordingly, the Board determined that stockholders of the Company
would be better served by the Company continuing to execute its long-term
business plans and strategies. On July 22, 1996, the Company issued a press
release explaining the action taken by the Board and the Board's reasoning, the
full text of which follows:
Rexene Corporation (NYSE: RXN) announced today that its Board of
Directors unanimously has determined to reject an unsolicited
acquisition proposal by Huntsman as not being in the best interest of
Rexene and its shareholders.
Andrew Smith, Rexene's Chairman and Chief Executive Officer, said that
the Board considered a wide range of factors, including the historical
and present market valuation of the Company's Common Stock, the present
condition of the commodity chemical industry and the Company's future
prospects in reaching its conclusions. "The Board has determined that
this is not a propitious time to engage in this type of a transaction,"
said Mr. Smith. "Huntsman's proposal appears to represent a unilateral
attempt to acquire Rexene in a transaction that is harmful to the best
interest of Rexene's shareholders and customers and that only benefits
Huntsman."
"The Company's financial performance has not yet begun to reflect the
substantial benefits expected from our capital expenditure program and
we believe the Company and its shareholders will be far better served
by continuing our current strategic plan to create shareholder value as
an independent public company," Mr. Smith said. "We believe that
implementing our long-term strategic plan beginning with the
introduction of REXflex(R) polymers in the fourth quarter this year and
culminating with the start-up in 1998 of the first `compact process'
linear low density polyethylene plant in the United States will realize
a far greater financial return to our shareholders than the Huntsman
offer."
The Board's decision followed a meeting at which the directors received
and considered a report by the Company's financial advisor, Schroder
Wertheim.
Rexene Corporation, through its Rexene Products and CT Film divisions,
manufactures thermoplastic resins and plastic film. Headquartered in
Dallas, Texas, the Company has manufacturing facilities in Texas,
Wisconsin, Georgia, Delaware, Utah and in England.
On July 25, 1996, Mr. Smith sent a letter to the stockholders of the
Company explaining the Board's reasons for rejecting Huntsman's proposal. The
Board also communicated its determination and reasons directly to Mr. Huntsman.
On August 1, 1996, while the Board was meeting, Mr. Huntsman delivered
another letter to Mr. Smith in which Huntsman then proposed to acquire all of
the outstanding shares of Common Stock for $15 per share in
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a merger transaction purportedly not subject to due diligence or financing. On
August 2, 1996, the Rexene directors met with its financial and legal advisors
to review Mr. Huntsman's revised proposal. At that meeting, the Board
unanimously determined that the revised proposal was not in the best interests
of the Company and its stockholders. The directors based their decision in part
upon their belief that Rexene would generate increased value to stockholders
through the profitable growth of Rexene's specialty businesses aided by the
Company's ongoing strategic investment program. The Board's determination and
reasoning were publicly disclosed in a press release issued by the Company later
that same day. At that meeting, the Rexene directors determined that it would be
beneficial and appropriate to explore whether any person or group, in addition
to Huntsman, might be interested in engaging in a mutually beneficial business
combination or other appropriate transaction with the Company. Accordingly, at
that meeting the Board directed management, with the assistance of Schroder
Wertheim, to develop a list of companies that would likely have an interest in
acquiring the Company. During the first two weeks of August 1996, six investment
firms and companies were contacted by the Company, three of which subsequently
executed confidentiality/standstill agreements with the Company for the purpose
of conducting a due diligence review of the Company.
On August 20, 1996, Huntsman issued a press release announcing that it
was dropping its proposal to acquire the Company. The press release quoted Mr.
Huntsman as stating "I'm washing my hands of the entire matter. Huntsman Corp.
is not interested in pursuing further negotiations nor in commencing an
unsolicited tender offer at this time. It is simply not worth the aggravation."
The Huntsman press release also indicated that its decision came after Schroder
Wertheim had indicated to Mr. Huntsman that the Board would reject bids
substantially above Huntsman's $15 per share proposal.
On August 26, 1996, Schroder Wertheim issued a press release stating
that, contrary to statements contained in Huntsman's August 20 press release,
representatives of Schroder Wertheim never told Mr. Huntsman or anyone else that
the Board would reject higher bids.
During August, September and October 1996, the Company and its
representatives met with the companies that had executed a
confidentiality/standstill agreement with the Company. The Company urged these
companies to complete their due diligence review of the Company and, if they
remained interested in a transaction at that time, to submit their best proposal
for consideration by the Board.
At Mr. Huntsman's request, Messrs. Smith and Kaufthal also traveled to
Salt Lake City to meet with Mr. Huntsman on September 16, 1996. At that meeting,
Mr. Huntsman indicated that he would not make an offer for the Company that was
not supported by the Board, but that he was still interested in acquiring the
Company. Mr Huntsman asked that Mr. Smith present to him some ideas about
combining parts of Huntsman's businesses with the Company's businesses. Mr.
Smith indicated that he would report that request to the Rexene directors, and
if they concurred, he would meet again with Mr. Huntsman some time in mid to
late October. The Board, at a meeting held on September 26, 1996, directed Mr.
Smith to meet again with Mr. Huntsman.
On October 15, 1996, the Wyser-Pratte Group filed a joint Schedule 13D
with the SEC (the "Schedule 13D") relating to the Common Stock. In the Schedule
13D, the members of the Wyser-Pratte Group reported that they intended to take
certain actions, including 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 Bylaws, if necessary, to clarify the right of stockholders to
fill vacancies on the Board and replace the directors who had been removed with
directors nominated by the Wyser-Pratte Group. In addition, the Wyser-Pratte
Group disclosed that it intended to submit to the stockholders of the Company
proposed amendments to the Bylaws which would (i) require that the Board
terminate defensive 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 DGCL.
On October 17, 1996, Mr. Smith and representatives of Schroder Wertheim
met with Mr Huntsman and another representative of Huntsman as a follow-up to
the September 16, 1996 meeting. At this meeting, Mr. Huntsman stated that the
acquisition of the Company was no longer as important to Huntsman's business as
he
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visualized several months earlier, but that he might be willing to consider a
transaction at no more than $15.50 per share of Common Stock so long as the
Board did not oppose such an offer. In the view of Mr. Smith and the Schroder
Wertheim representatives, Mr. Huntsman did not express any urgent interest in
pursuing a transaction. Following the meeting, Mr. Smith asked the Company's
general counsel to furnish to Huntsman a copy of the Company's form of
confidentiality/standstill agreement for execution so that the Company could
provide Huntsman and its representatives with non-public information to
facilitate a due diligence review by Huntsman of the Company.
On October 29, 1996, the Company received from Mr. Huntsman a letter in
which he (i) indicated that Huntsman would not execute a
confidentiality/standstill agreement with the Company and (ii) proposed that
Huntsman acquire all of the outstanding shares of Common Stock at $16 per share.
Mr. Huntsman's letter stated that the Huntsman offer was "unconditional both
with respect to financing and due diligence." Later that same day, Mr. Smith
telephoned Mr. Huntsman to request the details of Huntsman's proposal and a
draft merger agreement for review by the Board and the Company's counsel.
On November 1, 1996, the Company's counsel received a draft merger
agreement from Huntsman's counsel.
On November 4, 1996, the Board of Directors met to consider Huntsman's
latest proposal, including the terms of Huntsman's draft merger agreement. The
Rexene directors determined that Huntsman's proposal was unacceptable for the
following reasons:
o Huntsman had no financing for its proposal
o Huntsman's proposal was subject to numerous conditions and, in
the Board's view, not likely to lead to a transaction in the
near term, even if financing was obtained
o The proposal prohibited the Company from continuing to
implement its capital expenditure program and placed other
unacceptable restrictions on the Company's ability to operate
during the pendency of the transaction
o In the Board's view, the value of the Company could be
materially diminished over the long period of time
contemplated by the proposal
o Huntsman's proposal contained demands for "lock-up" stock
options and "breakup" fees that, in the view of the Company's
counsel, were illegal under Delaware law
The Board unanimously determined that Mr. Smith should contact Mr.
Huntsman and advise him that the Board believed that Huntsman should increase
the purchase price it was proposing and modify the terms of its proposal to make
the accomplishment of a transaction more certain for the Rexene stockholders. In
addition, the Company's counsel was instructed to communicate the Board's
position to Huntsman's counsel.
The next day, Mr. Smith telephoned Mr. Huntsman to discuss the terms of
Huntsman's proposal. After Mr. Smith informed Mr. Huntsman of the Board's
position concerning the structure of his proposal, Mr. Huntsman indicated that
he was not prepared to discuss any points and that he was no longer interested
in acquiring the Company.
Notwithstanding Mr. Huntsman's previous telephone conversation with Mr.
Smith, on November 8, 1996, Huntsman's counsel contacted the Company's counsel
and indicated that they would like to meet to discuss the draft merger
agreement. Huntsman's and the Company's counsel met later that day and discussed
their respective views concerning the draft merger agreement and the Huntsman
proposal.
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On November 12, 1996, the Company received from Mr. Huntsman a letter
in which Mr. Huntsman expressed disappointment with the Board's unwillingness to
accept Huntsman's latest proposal. On November 15, 1996, Mr. Smith faxed a
letter to Mr. Huntsman which communicated the Board's views regarding the
defects in his proposal.
The Company has received only a brief response from Mr. Huntsman to Mr.
Smith's letter of November 15, 1996, which did not contain any substantive
information.
During October and November 1996, the Company was advised by the
various parties who had executed confidentiality/standstill agreements with the
Company that no such party was interested in making a firm proposal to acquire
all of the outstanding shares of Common Stock.
On November 29, 1996, the publication "Chemical Week Executive Edition"
reported Mr. Huntsman as saying that Huntsman could still be interested in the
Company, "but not with the existing directors and officers." A December 9, 1996
article in "Mergers and Restructuring" reported that a Huntsman spokesman had
reaffirmed Huntsman's interest in acquiring Rexene.
On December 23, 1996, the Board met again and confirmed its position
that although it believes a $16 per share price does not fully reflect the
long-term prospects of the Company, the Board would not oppose a fully-financed
cash offer to acquire all of the outstanding Common Stock on customary terms at
$16 per share, as long as the offer is capable of being consummated through a
tender offer or otherwise within 60 days. If such an offer were made, the Board
would take all actions necessary to make the Company's stockholder rights plan
(the so-called "poison pill") inapplicable to such an offer.
On or about January 23, 1997, the Wyser-Pratte Group mailed to
stockholders of the Company a definitive Solicitation Statement soliciting
Appointments of Designated Agents to call the Special Meeting (the "Wyser-Pratte
Solicitation Statement"). On or about January 27, 1997, the Company mailed to
stockholders a Revocation Solicitation Statement soliciting revocations of
Appointments of Designated Agents in opposition to the solicitation by the
Wyser-Pratte Group. In February 1997, the Wyser-Pratte Group delivered to the
Company executed and unrevoked Appointments of Designated Agents from the
holders of the requisite number of shares of Common Stock required pursuant to
the Company's Restated Certificate of Incorporation to call the Special Meeting.
On March 2, 1997, the Board fixed April 30, 1997 as the date of the
Special Meeting and April 18, 1997 as the Record Date.
Following the publication in late 1996 and early 1997 of the Board's
position relating to bona fide proposals to acquire the Company at $16 per
share, the Company was contacted by four parties that previously had not held
discussions with the Company and who expressed an interest in exploring a
possible acquisition of the Company. Two of such parties executed a
confidentiality/standstill agreement with the Company for the purpose of
conducting a due diligence review of the Company. No such party subsequently
made a proposal to acquire all of the outstanding shares of Common Stock.
In a published statement issued on March 17, 1997, Huntsman reaffirmed
its interest in acquiring Rexene at $16 per share.
On March 19, 1997, the Board met and further considered alternatives to
maximize the value of the Common Stock. At the meeting, the Board determined
that a stock repurchase program would serve the best interests of the Company
and its stockholders and would be responsive to the desires of many of the
Company's stockholders as expressed to management of the Company at meetings
held in connection with the Company's solicitation of revocations of the
Appointments of Designated Agents solicited by the Wyser-Pratte Group.
Accordingly, at the meeting the Rexene directors authorized the repurchase by
the Company of up to $85 million of Common Stock (the "Stock Repurchase
Program"). Initial repurchases under the program are being made
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pursuant to open market purchases funded by $35 million in borrowings under the
Company's existing bank loan facility. The Board also determined to submit the
second $50 million part of the Stock Repurchase Program to stockholders for
their consideration at the Special Meeting.
At the March 19, 1997 Board meeting, the Rexene directors also
increased the size of the Board and elected Stephen C. Swid and Richard C. Perry
to the Board, effective at the close of the Board meeting. Entities affiliated
with the new independent directors own in the aggregate approximately 1.2
million shares of Common Stock, or approximately 6.6% of the outstanding shares.
At the March 19, 1997 meeting, the Rexene directors also authorized the
following public announcement made by the Company later that day: "Separately,
in response to recent comments from Jon Huntsman, Rexene reiterated that its
Board of Directors would not oppose an all-cash, fully-financed offer to
purchase the Company for $16 per share from Mr. Huntsman or any other party."
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THE WYSER-PRATTE PROPOSALS
THE DIRECTOR REPLACEMENT PROPOSALS
Set forth below are the Wyser-Pratte Proposals to be acted upon at the
Special Meeting. According to the Wyser-Pratte Proxy Statement, the Wyser-Pratte
Proposals are part of an effort by the Wyser-Pratte Group to take control of the
Company in order to attempt a sale of the Company. As more fully described under
"Recommendation of the Company's Board of Directors," the Board has determined
that the Wyser-Pratte Proposals are not in the best interest of the Company's
stockholders and is opposing the Wyser-Pratte Group's solicitation.
Item 1. Director Removal Resolution. The Wyser-Pratte Group has
proposed the following resolution for adoption by the Company's stockholders at
the Special Meeting:
"RESOLVED, that all of the directors of the Company,
including, without limitation, any such directors purportedly elected
at this Special Meeting, be, and hereby are, removed from the Board of
Directors, effective immediately; provided, however, that if,
notwithstanding the Omnibus Resolution, any nominees of the Soliciting
Group have been elected to the Board prior to the time this Resolution
is adopted, such nominees of the Soliciting Group shall not be removed
from the Board (capitalized terms have the meanings set forth in the
Proxy Statement of the Soliciting Group)."
FOR THE REASONS SET FORTH UNDER "-RECOMMENDATION OF THE BOARD," THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "AGAINST" THE DIRECTOR REMOVAL
RESOLUTION.
Item 2. Election of Directors Resolution. If the Wyser-Pratte Group
succeeds in removing all of the current members of the Board pursuant to the
Director Removal Resolution, stockholders will vote to elect directors to fill
the resulting vacancies. If the Director Removal Resolution is adopted, the
Wyser-Pratte Group has nominated Jonathan R. Macey, Robert C. Mauch, Laurence C.
McQuade and James C. Pasman, Jr. for election as directors (the "Wyser-Pratte
Nominees"). According to the Wyser-Pratte Proxy Statement and Amendment No. 2 to
their Schedule 13D with respect to the Common Stock as filed with the SEC, the
Wyser- Pratte Group anticipates that the Wyser-Pratte Nominees, if elected,
would add Mr. Werner Goeckel to the Board and cause the Board to reduce its size
to a total of five directors (or six directors if Mr. Smith is offered and
accepts an invitation to remain as the Chief Executive Officer and a director of
the Company).
If the Director Removal Resolution is adopted, the Board has nominated
each of the persons currently serving on the Board for re-election to the Board
(the "Board Nominees"). Each of these individuals has previously been elected to
the Board by the stockholders, except for Messrs. Swid and Perry, who were
elected to the Board by the Company's directors in March 1997. See "Background
of the Solicitation." For information concerning the Board Nominees, see
"Information Concerning the Board of Directors and Executive Officers."
FOR THE REASONS SET FORTH UNDER "-RECOMMENDATION OF THE BOARD," THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE BOARD NOMINEES. If
the Director Removal Resolution is defeated, the Election of Directors
Resolution will be deemed withdrawn and not considered at the Special Meeting.
THE BY-LAWS PROPOSALS
Item 3. Facilitating By-Laws Resolutions. The Wyser-Pratte Group has
proposed the following resolutions for adoption by the Company's stockholders at
the Special Meeting:
"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 2.5(b) of the By-laws in its entirety and
replacing therewith the following:
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`(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of
meeting. Nominations of persons for election to the board of directors
may be made at a special meeting of stockholders at which directors are
to be elected pursuant to the Corporation's notice of meeting (a) by or
at the direction of the board of directors or (b) by any stockholder of
the Corporation who shall be entitled to vote at the meeting.'"
"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 3.4 of the By-laws in its entirety and
replacing therewith the following:
`3.4 Vacancies. Except as otherwise provided in the Certificate of
Incorporation, any vacancy in the Board, whether because of death,
resignation, disqualification, an increase in the number of directors,
or any other cause, may be filled by vote of the majority of the
remaining directors, although less than a quorum, or by the affirmative
vote of a majority of the shares present in person or represented by
proxy at a stockholders meeting, or by written consent of
stockholders.'"
"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 3.9 of the By-laws in its entirety and
replacing therewith the following:
`3.9 Quorum and Manner of Acting. Except as otherwise provided in these
Bylaws, the Certificate of Incorporation, or by law, the presence of
two-fifths of the authorized number of directors shall be required to
constitute a quorum for the transaction of business at any meeting of
the Board, and all matters shall be decided at any such meeting, a
quorum being present, by the affirmative votes of a majority of the
directors present. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of
directors, provided any action taken is approved by at least a majority
of the required quorum for such meeting. In the absence of a quorum, a
majority of directors present at any meeting may adjourn the same from
time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given. The directors shall act only as a Board, and
the individual directors shall have no power as such.'"
"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 4.1(a) of the By-laws in its entirety and
replacing therewith the following:
`(a) The officers of the Corporation shall be a Chairman of the Board,
Chief Executive Officer, a President, one or more Vice Presidents (the
number thereof and their respective titles to be determined by the
Board), a Secretary and a Treasurer, and such other officers as may be
appointed at the discretion of the Board in accordance with the
provisions of Section 4.1(b).'"
"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 4.2 of the By-laws in its entirety and
replacing therewith the following:
`4.2 Election, Term of Office and Qualifications. The officers of the
Corporation shall be appointed annually by the Board at the first
meeting thereof held after the election of the Board; provided,
however, that if there is a vacancy in the office of Chairman of the
Board of Directors, such vacancy may be filled by either the Board of
Directors or the stockholders by the vote required to fill vacancies on
the Board of Directors. Each officer shall hold office until such
officer shall resign or shall be removed or otherwise disqualified to
serve, or the officer's successor shall be appointed and qualified.'"
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"RESOLVED, that in accordance with Section 7.3 of the By-laws
of the Company, the stockholders of the Company hereby amend the
By-laws by deleting Section 4.6 of the By-laws in its entirety and
replacing therewith the following:
`4.6 Chairman of the Board. The Chairman of the Board shall preside as
chairman at all meetings of the stockholders and the Board, unless a
chairman of such meeting or meetings shall be otherwise appointed and
given such duties by the Board. The Chairman of the Board shall perform
all duties incident to the office of the Chairman of the Board and such
other duties as may from time to time be assigned to such person by the
Board.'"
"RESOLVED, that pursuant to Section 7.3 of the By-laws of the
Company, any and all amendments, to the By-laws adopted by the Board
since October 1, 1996 through the date hereof, [be repealed] effective
immediately (capitalized terms have the meanings set forth in the Proxy
Statement of the Soliciting Group)."
STOCKHOLDERS MUST APPROVE THE FOREGOING FACILITATING BY-LAWS
RESOLUTIONS IN ORDER TO MAKE IT POSSIBLE TO IMPLEMENT THE WYSER-PRATTE'S
DIRECTOR REPLACEMENT PROPOSALS. FOR THIS REASON AND FOR THE REASONS SET FORTH
UNDER "-RECOMMENDATION OF THE BOARD," THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "AGAINST" THE FACILITATING BY-LAWS RESOLUTIONS.
Item 4. Shareholder Rights Resolution. The Wyser-Pratte Group has
proposed the following resolution for adoption by the Company's stockholders at
the Special Meeting:
"RESOLVED, that the Shareholders hereby amend the Company's
By-laws by adding a new Section 7.5, which shall read as follows:
`If an Offer is made to purchase all of the Common Stock and the Board
of Directors opposes such Offer, the Board of Directors shall terminate
all defensive measures against such Offer at the end of the ninetieth
day after such Offer is first published or sent to security holders
unless the Board of Directors' policy of opposition to such Offer is
approved by a vote of a majority of the shares of Common Stock present
and entitled to vote on the subject matter at a meeting of shareholders
which is held on or before such ninetieth day and at which a quorum is
present; provided, however, that the Board of Directors shall not be
required to terminate defensive measures against such Offer at the end
of such ninetieth day unless at such time such Offer has an expiration
date which is at least ten business days thereafter. Notwithstanding
anything to the contrary contained in Section 2.4 of the by-laws, if
the Offer is to be effected by a tender offer, unless the record date
for such shareholders meeting was set prior to the date on which such
Offer was first published or sent to security holders, the record date
for such meeting shall be at least five business days after the date on
which the Company files its statement of position with respect to such
offer in accordance with Rule 14e-2 of the Securities Exchange Act of
1934, as amended. At such time as it is required, pursuant to the first
sentence of this by-law, to terminate defensive measures against such
Offer, the Board of Directors shall redeem the outstanding Rights under
the Rights Agreement between the Company and American Stock Transfer
Company, as Rights Agent, or any successor agreement. Prior to the end
of such ninetieth day, unless the Board's policy of opposition to such
Offer has been approved by a shareholder vote as provided in this
by-law, the Board of Directors shall take such reasonable actions as
are necessary to preserve the possibility of satisfying the conditions
to such Offer after such ninetieth day. This Section 7.5 may be
amended, altered, repealed or rescinded ("Changed") (i) by the Board
only if (A) such Change is made at a meeting of the Board held in
connection with an annual meeting of stockholders, (B) there is public
announcement at least ninety days in advance of such annual meeting
that the Board intends to make such Change and (C) 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 or
(ii) by a shareholder vote (and not by a vote of the Board) pursuant to
Section 7.3 of the By-laws. An "Offer" shall mean a fully financed
offer to purchase all of the Company's outstanding shares of Common
Stock for cash, by means of a tender offer, merger or
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other transaction, at a price that satisfies either of the following
two requirements: (A) such price is at least 25% greater than the
average closing price of such shares on the New York Stock Exchange
during the 30 days prior to the date on which such offer is first
published or sent to security holders or (B) a prior offer was made to
purchase all of the Common Stock during the twelve months preceding the
date on which the current offer is made, and the price in the current
offer is at least equal to the greater of (x) the closing price of the
Common Stock on the New York Stock Exchange on the trading date next
preceding the day on which the current offer is made and (y) the per
share price of such prior offer.'"
FOR THE REASONS SET FORTH UNDER "-RECOMMENDATION OF THE BOARD," THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "AGAINST" THE SHAREHOLDER RIGHTS
RESOLUTION.
Item 5. Business Combination Statute Resolution. The Wyser-Pratte Group
has proposed the following resolution for adoption by the Company's stockholders
at the Special Meeting:
"RESOLVED, that pursuant to Section 203(b)(3) of the Delaware
General Corporation Law, the Shareholders hereby amend the Company's
By-laws by adding a new section 7.6 which shall read as follows:
`The corporation shall not be governed by Section 203 of the Delaware
General Corporation Law.'"
FOR THE REASONS SET FORTH UNDER "-RECOMMENDATION OF THE BOARD," THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "AGAINST" THE BUSINESS COMBINATION
STATUTE RESOLUTION.
Item 6. Omnibus Resolution. The Wyser-Pratte Group has proposed the
following resolution for adoption by the Company's stockholders at the Special
Meeting:
"RESOLVED, that the resolutions to be considered at the
Special Meeting of Stockholders of Rexene Corporation to be held [PLACE
OF MEETING] on [DAY OF THE WEEK], [DATE], at [TIME OF DAY] (the
"Special Meeting") shall be presented in the following order
(capitalized terms have the meanings set forth in the Proxy Statement
of the Soliciting Group):
(1) This Omnibus Resolution
(2) The Facilitating By-laws Resolutions;
(3) The Shareholder Rights Resolution;
(4) The Business Combination Statute Resolution;
(5) The Director Removal Resolution; and
(6) The Election of Director Resolution."
FOR THE REASONS SET FORTH UNDER "-RECOMMENDATION OF THE BOARD," THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "AGAINST" THE OMNIBUS RESOLUTION.
RECOMMENDATION OF THE BOARD
The Board opposes the solicitation by the Wyser-Pratte Group and
recommends that stockholders vote against each of the Wyser-Pratte Group
Proposals because, in its opinion:
The proposed actions of the Wyser-Pratte Group are unnecessary:
o As has been stated publicly by the Company, the current Rexene
directors would not oppose a fully-financed cash offer to
acquire all of the outstanding Common Stock at $16 per share.
o The Board has publicly stated that it would take all actions
that are necessary to make the Company's stockholders rights
plan (the so-called "poison pill") inapplicable to an offer
that
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meets the foregoing conditions so that the offeror could make
an offer directly to the stockholders, who would then be in a
position to determine whether to accept or reject the offer.
o The Board has taken active steps to determine the interest of
Huntsman and others in potential business combinations with
the Company, beginning even before the Wyser-Pratte Group
purchased shares of Common Stock.
o Notwithstanding the Company's public statement regarding its
intention not to oppose a fully-financed offer to acquire the
Company at $16 per share, its solicitation of indications of
interest and its grant of access to non-public information to
a number of potential acquirors, neither Huntsman nor any
other party has made a fully-financed offer to acquire the
Company at $16 per share.
The proposed Wyser-Pratte Group actions are not likely to maximize the
value of the Common Stock:
o In the Board's view, if the Wyser-Pratte Group gains control
of the Board and is incapable of selling the Company at $16
per share (as the current Board of Directors has been despite
its knowledge of the Company and efforts in this regard), the
Wyser-Pratte nominees -- who have no experience in managing a
specialized polymer company like Rexene -- will be forced to
manage the Company or sell the Company at an unacceptably low
price.
o A new Board that has only a short-term view and no experience
or interest in managing a specialized polymer company is not
likely to promote or sustain continued growth of the Company
and the long-term value of the Common Stock.
o The capital expenditure and improvement programs authorized by
the Board and now in progress are intended to maximize
stockholder value through increased cash flow and earnings in
future years, yet in the Board's view the Wyser-Pratte Group
has no interest in any method to maximize stockholder value
other than an immediate sale.
o In the Board's view, the Company's recently-implemented Stock
Repurchase Program, especially when coupled with the Company's
capital expenditure and improvement programs, is a valuable
tool to build stockholder value.
o The Company's current management team has a proven track
record in enhancing the value of the Company: from the end of
1993 to the end of 1996, Rexene's stock price has increased
from $2.88 to $13.63, its net worth has increased from -$5
million to $169 million, its debt to total capital has
decreased from 100% to 58% and its earnings (loss) per share
has grown from a loss of $2.40 to earnings of $1.55.
o Although the Board would not oppose a fully-financed offer to
acquire the Company at $16 per share, the Board does not
believe it currently is the optimal time to sell or auction a
petrochemical and polymer company like Rexene because current
stock market prices for Rexene and other companies in these
industries are depressed and fail to reflect their expected
long-term value.
In addition, the Board believes that the Wyser-Pratte Proposals are not
in the best interests of the Company's stockholders for the reasons described
below.
Director Replacement Proposals. The Board believes that the adoption of
the Director Replacement Proposals could have a serious detrimental effect on
the financial condition of the Company and result in a substantial decrease in
the value of the Common Stock. Pursuant to Section 10.01(k) of the Company's
Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of
April 24, 1996, as amended, with The Bank
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of Nova Scotia, as agent (the "Agent"), and the lenders signatory thereto (the
"Banks"), Wyser-Pratte's attempts to replace a majority of the Rexene directors,
if adopted by the stockholders of the Company at the Special Meeting, 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' obligations to
make loans to the Company and/or declare the loans then outstanding under the
Credit Agreement due and payable. In April 1997, the Bank of Nova Scotia issued
a commitment letter to the Company providing for an increase in borrowings under
the Credit Agreement from $150 million to $225 million.
Wyser-Pratte's attempts to replace a majority of the Rexene directors,
if successful, also would be a "change of control" under the Indenture, dated as
November 29, 1994 (the "Senior Notes Indenture"), 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. Each holder of Senior Notes
would then 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.
If the Banks and the holders of the Senior Notes were to elect to
exercise their rights as described above, the Company would have to refinance
the aggregate amount of the loans under the Credit Agreement and the Senior
Notes outstanding under the Indenture. The aggregate amount of such indebtedness
currently is approximately $283 million. There is no certainty that the Company
would be capable of arranging such financing, especially in the context of a
possible sale of the Company. An inability to arrange for such financing could
require the Company to seek the protection of the federal bankruptcy laws, which
could have a substantial negative impact on the value of the Common Stock.
The Wyser-Pratte Proxy Statement discloses that the Wyser-Pratte Group
has no plans for the Company should the Wyser-Pratte Group gain control of the
Board of Directors and thereafter fail in its efforts to sell the Company.
Stockholders should consider what will happen to the value of the Common Stock
if the Wyser-Pratte Group gained control of the Board but failed to sell the
Company, leaving Rexene in the hands of directors who in the Board's view have
no experience in the Company's business and no strategic plan for the future and
the prospect of having to refinance more than $283 million in indebtedness.
Approval of the Director Replacement Proposals also could result in
certain benefits becoming vested under the Company's benefit plans and
agreements.
The Board also believes that the Shareholder Rights Resolution is
ill-advised and against the best interests of the Rexene stockholders. As a
general matter, the Board believes that a corporation's board of directors is
the proper body to evaluate the merits of takeover proposals. Stockholders may
not have all the information possessed by the board of directors regarding a
company's business, financial condition and future prospects. If a board
determines that a sale is in the best interests of the company and the
stockholders, the Rexene Board believes that it is the board, rather than the
stockholders as a whole, that is better able to negotiate and conclude a
transaction in a timely manner.
In the Wyser-Pratte Proxy Statement, the Wyser-Pratte Group asserts
that the Shareholder Rights Resolution is necessary because a potential buyer
like Huntsman does not have the option of dealing directly with stockholders if
the Board disapproves its acquisition proposal. The Rexene Board does not oppose
a fully-financed offer to acquire all of the outstanding Common Stock of the
Company at $16 per share. The Board also has publicly stated that it would take
all actions that are necessary to make the Company's stockholder rights plan
inapplicable to such an offer. Accordingly, if Huntsman were to obtain financing
for his proposal, Huntsman currently could make an offer directly to the
stockholders, who would then be in a position to determine whether to accept or
reject the offer. In addition, the Wyser-Pratte Group's Stockholder Rights
Resolution has no application to any of Huntsman's proposals, because none of
them were financed.
In addition, counsel has advised Rexene that it believes that the
Shareholder Rights Resolution may be invalid as a matter of Delaware law. The
Board believes that it has the affirmative legal duty under Delaware law
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to respond to and resist takeover attempts that it determines in good faith to
be against the best interests of the Company and the stockholders. Such a duty
has been set forth in a line of Delaware cases, including Unocal Corp. v. Mesa
Petroleum Co., 493 A.2d 946 (1985), and Ivanhoe Partners v. Newmont Mining
Corp., 535 A.2d 1334 (1987). The Wyser-Pratte Group's proposals would, by a
By-law amendment, attempt to remove this legal obligation from the Board. The
Board believes that such a restriction of statutory and fiduciary responsibility
may not be effected through a By-law amendment under Delaware law.
The Board of Directors believes that passage of the Business
Combination Statute Resolution would not be in the best interests of the
stockholders or the Company. By virtue of being incorporated in Delaware, the
Company is subject to the provisions of Section 203 of the DGCL. Section 203 of
the DGCL prohibits the Company from engaging in a business combination, such as
a merger or consolidation, with any person who acquires 15% or more of the
Common Stock (an "interested stockholder") for three years, unless the Company's
Board of Directors approves the proposed business combination before the
interested stockholder reaches the 15% threshold. However, this three year ban
will not apply if the interested stockholder acquires 85% of the stock in the
same transaction that the stockholder acquires 15% of the stock (excluding
shares owned by officers and directors and certain employee stock plans). Nor
will the ban apply if the business combination is approved by the Board before a
potential acquiror becomes an interested stockholder or thereafter by the
holders of at least two-thirds of stock not owned by the interested stockholder.
Section 203 of the DGCL permits stockholders to "opt-out" of its provisions by
voting to amend the Company's Bylaws to provide that the Company elects not to
be governed by Section 203 of the DGCL.
Section 203 of the DGCL provides potential acquirors with an incentive
to deal with the Board by exempting transactions approved by the Board from its
coverage. Section 203 of the DGCL enhances the likelihood that stockholders will
receive the benefit of Board consideration and evaluation of a takeover proposal
and that any takeover proposal presented to stockholders will be favorable to
all stockholders. If a prospective acquiror seeks Board approval of a proposed
business combination, the Board members have a fiduciary duty to act in the best
interests of stockholders in evaluating such an offer. Section 203 of the DGCL
protects stockholders against inadequate offers or abusive takeover tactics
employed by large stockholders.
-----------------------------------
FOR THE REASONS SET FORTH ABOVE, YOUR BOARD OF DIRECTORS UNANIMOUSLY
AND VIGOROUSLY OPPOSES THE WYSER-PRATTE GROUP'S SOLICITATION OF PROXIES AND
URGES YOU NOT TO SIGN ANY GOLD PROXY CARD SENT TO YOU BY THE WYSER-PRATTE GROUP.
WHETHER OR NOT YOU HAVE PREVIOUSLY EXECUTED A GOLD PROXY CARD SENT TO YOU BY THE
WYSER-PRATTE GROUP, THE BOARD URGES YOU TO SIGN, DATE AND DELIVER THE ENCLOSED
WHITE PROXY CARD AS PROMPTLY AS POSSIBLE, BY FAX OR BY MAIL (USING THE ENCLOSED
ENVELOPE), TO D.F. KING & CO., INC., 77 WATER STREET, NEW YORK, NEW YORK,
10005-4495.
If your shares of Common Stock are held in the name of a bank, broker
or other nominee, you are urged to contact the person responsible for your
account and direct him or her to execute a WHITE Proxy Card on your behalf.
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THE STOCK REPURCHASE PROPOSAL
In the Rexene Board's view, the Company's Stock Repurchase Program,
especially when coupled with the Company's capital expenditure and improvement
programs, is a valuable tool to build stockholder value. On March 19, 1997, the
Rexene directors approved the $85 million Stock Repurchase Program. The first
$35 million part of the program has been commenced pursuant to open market
purchases.
Although applicable law grants the Board the authority to implement the
entire Stock Repurchase Program without stockholder approval, the Board believes
it is appropriate that stockholders have the opportunity to determine whether to
grant the Rexene Board the authority to implement the second $50 million part of
the Stock Repurchase Program. Accordingly, the Board of Directors has proposed
the following resolution for adoption by the Company's stockholders at the
Special Meeting:
"RESOLVED, that the Rexene Board of Directors hereby is authorized
to cause the repurchase by the Company of up to $50 million of the
Common Stock, either through a continuation of and increase in the
Company's current open market repurchase program, privately negotiated
transactions, tender offer or otherwise."
If the Stock Repurchase Proposal is adopted by the Company's
stockholders, the Company currently intends to promptly proceed with the
issuance of a new series of preferred stock of the Company with an aggregate
liquidation value of $50 million (the "Preferred Stock"). The Preferred Stock
will be issued by the Company in a private placement to certain "qualified
institutional buyers" (as such term is defined in Rule 144A promulgated under
the Securities Act of 1933, as amended (the "Securities Act")) and certain other
institutional accredited investors. The sale of the Preferred Stock will not be
registered under the Securities Act and the Preferred Stock may not be offered
or sold in the United States absent registration or an applicable exemption from
the registration requirements of the Securities Act. Set forth below is a brief
summary of the anticipated terms of the Preferred Stock. The Company, after
discussions with its financial advisors, believes it should be successful in
issuing the Preferred Stock. Stockholders should note that the final terms of
the Preferred Stock, if issued, could vary from those set forth below.
Dividends on the Preferred Stock will be payable quarterly out of funds
legally available at a dividend rate to be agreed upon by Rexene and the initial
purchasers of the Preferred Stock (the "Initial Purchasers"). The Preferred
Stock will rank senior to the Common Stock as to dividends and upon liquidation.
The Preferred Stock will not be redeemable prior to the fifth anniversary of the
date of issuance. Thereafter, the Preferred Stock will be redeemable at the
option of the Company for cash at redemption prices to be agreed upon by Rexene
and the Initial Purchasers. In addition, in the event of a sale by the Company
of shares of Common Stock, shares of Preferred Stock with an aggregate
liquidation value of up to $17.5 million will be redeemable at the option of the
Company for cash at a redemption price to be agreed upon by Rexene and the
Initial Purchasers. The Preferred Stock will be mandatorily redeemable by Rexene
on the tenth anniversary of the date of issuance. The holders of the Preferred
Stock will not have voting rights, except in limited circumstances or as
required by law. The terms of the Preferred Stock may include certain of the
covenants included in the Senior Notes Indenture. Upon a change of control of
the Company, (i) the holders of the Preferred Stock will be entitled to elect
two persons to the Board, (ii) the dividend rate on the Preferred Stock will be
increased by an amount to be agreed upon by Rexene and the Initial Purchasers
and (iii) provided that the terms of the Company's outstanding indebtedness at
the time of such change of control do not prevent such a repurchase, each holder
of Preferred Stock will have the right to require the Company to repurchase all
or a portion of the Preferred Stock owned by such holder at a redemption price
equal to 101% of the liquidation value of such Preferred Stock.
If the Stock Repurchase Proposal is not approved by stockholders, the
Company will not implement the second $50 million part of the Stock Repurchase
Program. If the Stock Repurchase Proposal is approved by stockholders and the
Company is successful in issuing the Preferred Stock or has access to alternate
available
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funds, then repurchases may be made from time to time by the Company as directed
by the Rexene Board in its discretion through open market or
privately-negotiated transactions, tender offer or otherwise.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE STOCK
REPURCHASE PROPOSAL.
INFORMATION CONCERNING THE SPECIAL MEETING
The Board has fixed the close of business on April 18, 1997 as the
Record Date for the determination of the holders of Common Stock entitled to
notice of and to vote at the Special Meeting. Only stockholders of record at the
close of business on the Record Date will be entitled to notice of and to vote
at the Special Meeting. In order to ensure that all stockholders entitled to
vote at the Special Meeting receive timely notice of the Special Meeting, the
Company plans to commence mailing of the notice and a copy of this proxy
statement and form of proxy on or about April __, 1997 to all stockholders of
record as of a recent date and also to provide on a daily basis notice and such
materials to all persons who become stockholders of the Company through April
18, 1997.
Each holder of Common Stock on the Record Date will be entitled to one
vote for each share of Common Stock held of record upon each matter properly
submitted at the Special Meeting. The presence, either in person or by proxy, of
a majority of the outstanding shares of Common Stock entitled to be voted at the
Special Meeting is necessary to constitute a quorum thereat. Abstentions and
broker non-votes will be included in the calculation of the number of votes
represented at the meeting for purposes of determining whether a quorum has been
achieved. A "broker non-vote" occurs when a broker holding shares for a
beneficial owner votes on one proposal pursuant to discretionary authority or
instructions from the beneficial owner, but does not vote on another proposal
because the broker has not received instructions from the beneficial owner and
does not have discretionary power. As of March __, 1997, there were __________
shares of Common Stock issued and outstanding.
If the enclosed WHITE Proxy Card is properly executed and received by
the Company in time to be voted at the Special Meeting, the shares of Common
Stock represented thereby will be voted in accordance with the instructions
marked thereon. Executed proxies with no instructions indicated thereon will be
voted "AGAINST" each of the Wyser-Pratte Proposals, "FOR" the Board Nominees
pursuant to the Election of Directors Resolution and "FOR" the Stock Repurchase
Proposal.
The Board is not aware of any matters other than those set forth in the
Notice of Special Meeting of Stockholders that may be brought before the Special
Meeting, and under the By-laws no business may be transacted at the Special
Meeting other than such business as is designated in the Notice of Special
Meeting of Stockholders. If any other procedural matters properly come before
the Special Meeting, the persons named in the accompanying WHITE Proxy Card will
vote the shares represented by all properly executed proxies on such matters in
such manner as shall be determined by such persons.
Pursuant to the DGCL and the Restated Certificate of Incorporation of
the Company, (i) the adoption of each of the Omnibus Resolution, the
Facilitating By-laws Resolutions and the Shareholder Rights Resolution will
require the affirmative vote of a majority of the shares of Common Stock present
in person or represented by proxy and entitled to vote on the subject matter;
(ii) the adoption of each of the Business Combination Statute Resolution and the
Director Removal Resolution will require the approval of a majority of the
outstanding shares of Common Stock as of the Record Date; and (iii) assuming
that the Director Removal Resolution is approved, directors will be elected by
the affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy (if the Omnibus Resolution and Facilitating
By-Laws Resolutions are approved) or a plurality vote of the shares of Common
Stock present in person or represented by proxy and entitled to vote on the
election of directors (if the Omnibus Resolution and Facilitating By-Laws
Resolutions are not approved).
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The required vote of the stockholders of the Company on the Business
Combination Statute Resolution and the Director Removal Resolution is based upon
the total number of outstanding shares of Common Stock as of the Record Date.
Accordingly, the abstention from voting by a stockholder and broker non-votes
will have the same effect as a vote "AGAINST" the Business Combination Statute
Resolution and the Director Removal Resolution. The required vote of the
stockholders of the Company on the Omnibus Resolution, the Facilitating By-laws
Resolutions, the Shareholder Rights Resolution and the Stock Repurchase Proposal
is based upon the number of outstanding shares of Common Stock present in person
or represented by proxy at the Special Meeting and entitled to vote on the
subject matter. Accordingly, the abstention from voting by a stockholder will
have the same effect as a vote "AGAINST" the Omnibus Resolution, the
Facilitating By-laws Resolutions, the Shareholder Rights Resolution and the
Stock Repurchase Proposal and broker non-votes will have the effect of reducing
the number of affirmative votes required for approval of the Omnibus Resolution,
the Facilitating By-Laws Resolutions, the Shareholder Rights Resolution and the
Stock Repurchase Proposal. Abstentions and broker non-votes will have the same
effect as votes "AGAINST" the Election of Directors Resolution (if the Omnibus
Resolution and the Facilitating By-Laws Resolutions are approved) or will have
no effect on voting on such resolution (if the Omnibus Resolution and the
Facilitating By-Laws Resolutions are not approved).
A proxy may be revoked prior to its being voted by: (i) delivering to
the Secretary of the Company, at or before the Special Meeting, a written
instrument bearing a later date than the proxy which instrument, by its terms,
revokes the proxy; (ii) duly executing a subsequent proxy relating to the same
shares and delivering it to the Secretary of the Company at or before the
Special Meeting; or (iii) attending the Special Meeting and giving notice of
revocation to the Secretary of the Company or in open meeting prior to the proxy
being voted (although attendance at the Special Meeting will not in and of
itself constitute a revocation of a proxy). Any written instrument revoking a
proxy should be sent to: Rexene Corporation, 5005 LBJ Freeway, Dallas, Texas
75244, Attention: Secretary of the Corporation.
If you have any questions concerning the Company's solicitation of
Revocation Cards, or the Wyser-Pratte Group's solicitation of Agent
Designations, please contact D.F. King & Co., Inc., Toll-Free, at 1-800-714-
3310.
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
The individuals named as proxies in the form of proxy solicited by the
Board of Directors may 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 Wyser-Pratte Proposals or the Stock Repurchase
Proposal, or to allow the solicitation of additional votes, if necessary,
against the Wyser-Pratte Proposals or for the Stock Repurchase Proposal, to vote
against proposals to recess or adjourn the Special Meeting, and to vote, in
their discretion, upon such other procedural matters as may properly come before
the Special Meeting and any adjournment or postponement thereof.
CERTAIN LEGAL MATTERS
On July 23, 1996, the Company was served with a purported stockholder
class action lawsuit as filed in the Chancery Court of the State of Delaware, in
and for New Castle County, arising from the Company's rejection of Huntsman's
unsolicited offer to purchase all of the issued and outstanding shares of Common
Stock for $14.00 per share. The lawsuit names the Company and each of its
directors as defendants. The complaint alleges that the defendant directors
breached their fiduciary duty to stockholders by refusing to attempt in good
faith to maximize stockholders value in the sale of the Company and engaging in
a plan to thwart and reject offers from third parties, including Huntsman, in
order to entrench management. Plaintiff seeks certification of the lawsuit as a
class action, an order requiring defendants to take various actions including
exposing the Company to the market place in an effort to create an auction of
the Company and an unspecified amount of damages. The
17
<PAGE>
Company is also aware of two other similar lawsuits that are also pending in the
Chancery Court. The Company believes that these lawsuits are without merit and
intends to contest them vigorously.
On February 14, 1997, the Wyser-Pratte Group filed a complaint in the
Chancery Court of the State of Delaware seeking to compel Rexene to hold the
Special Meeting on April 30, 1997 at 11:00 a.m. at the offices of The
Corporation Trust Company in Wilmington. On March 3, 1997, after the Board
announced the notice of the Special Meeting for April 30, 1997 at the time and
place requested by the Wyser-Pratte Group plaintiffs, the Wyser-Pratte Group
filed an amended complaint seeking to have the court set aside the record date
of April 18 set by the Board in accordance with Section 213(a) of the DGCL and,
instead, set March 20, 1997 as the record date for the Special Meeting. On March
7, 1997, the Company filed a motion to dismiss the Wyser-Pratte Group's amended
complaint. On March 18, 1997, the court granted the Company's motion to dismiss,
thereby upholding the Rexene Board's setting of April 18, 1997 as the record
date for the Special Meeting. The Wyser-Pratte Group has appealed the court's
decision to the Delaware Supreme Court.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The table set forth below provides certain information with respect to
those persons who are currently serving as directors of the Company and
executive officers of the Company.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Andrew J. Smith 55 Chairman of the Board, Director and Chief Executive Officer
Lavon N. Anderson 61 Director, President and Chief Operating Officer
James R. Ball 54 Director
Harry B. Bartley 69 Director
R. James Comeaux 58 Director
William B. Hewitt 58 Director
Ilan Kaufthal 49 Director
Charles E. O'Connell 65 Director
Jack E. Knott 42 Director, Executive Vice President and President-Rexene Products
Richard C. Perry 42 Director
Stephen C. Swid 56 Director
Jonathan R. Wheeler 45 Executive Vice President and President-CT Film
James M. Ruberto 50 Executive Vice President-Administration
Bernard J. McNamee 61 Executive Vice President, Secretary and General Counsel
Geff Perera 43 Executive Vice President and Chief Financial Officer
</TABLE>
ANDREW J. SMITH has been Chairman of the Board of Directors since April
1996 and Chief Executive Officer and a director of the Company since March 1992.
From December 1991 to March 1992, he was a private consultant. From June 1991 to
December 1991, he was President and Chief Operating Officer of Itex Enterprises,
Inc., an environmental remediation company. Mr. Smith also served as a
consultant to Old Rexene from January 1991 to June 1991. Immediately prior
thereto, he had been a director of Old Rexene since May 1988 and the President
and Chief Executive Officer of Old Rexene since June 1988. Mr. Smith joined the
Company in 1976.
LAVON N. ANDERSON has been President and Chief Operating Officer of the
Company since January 1991 and a director since February 1990. From May 1988 to
January 1991, Dr. Anderson was Executive Vice President-Manufacturing and
Technical of Old Rexene. Prior thereto, Dr. Anderson served the Company in
various capacities since 1972.
18
<PAGE>
JAMES R. BALL has been a director of the Company since April 1996. He
is a private investor and is engaged in private consulting. Mr. Ball served
Vista Chemical Company in a number of capacities from 1984 to 1994, including
Vice President, Marketing from July 1984 to August 1987, Senior Vice President,
Commercial from August 1987 to February 1992, Executive Vice President and Chief
Operations Officer, from February 1992 to July 1992, and President and Chief
Executive Officer from July 1992 to December 1994. Prior to July 1984, Mr. Ball
held various positions with Conoco since 1969. Mr. Ball is a director of The
Carbide/Graphite Group.
HARRY B. BARTLEY has served as a director of the Company since April
1995. He is currently retired. Mr. Bartley served Hoechst Celanese Corporation
in a number of capacities from 1950 to 1989, including President of Celanese
Chemical Co. from 1976 to 1987, President of Hoechst Celanese Chemical Group
from 1987 to 1989 and director of Hoechst Celanese Corporation from 1987 to
1989.
R. JAMES COMEAUX has served as a director of the Company since April
1995. He has served as President of Petrochemical Management, Inc., a consulting
firm, since April 1993. From August 1989 to January 1993, Mr. Comeaux was
President, Chief Executive Officer and Director of Arcadian Corporation, a
fertilizer manufacturer. Prior to such time, Mr. Comeaux was Senior Vice
President of FINA, Inc. from 1984 to 1989 and served Gulf Oil Corporation in a
number of capacities from 1967 to 1984.
WILLIAM B. HEWITT has served as a director of the Company since
February 1990. He has been President of Union Corporation, a receivables
management and customer service outsourcing company, since May 1995 and Chairman
of the Board and Chief Executive Officer of Capital Credit Corporation, a
receivables management company, since September 1991. Mr. Hewitt was Executive
Vice President of First Manhattan Consulting Group, a management consulting
firm, from 1980 to September 1991. He is also a director of the Union
Corporation.
ILAN KAUFTHAL has served as a director of the Company since September
1992. He has been a managing director of Schroder Wertheim & Co. Incorporated,
an investment banking firm, since 1987. He is also a director of United Retail
Group, Inc., Cambrex Corporation and Russ Berrie & Company.
CHARLES E. O'CONNELL has served as a director of the Company since
April 1995. He is currently retired. From 1985 to 1988, Mr. O'Connell served as
President of the Society of Plastics Industries, a trade association. From 1964
to 1984, he served Gulf Oil Corporation in a variety of capacities.
JACK E. KNOTT has been a director of the Company since April 1996 and
Executive Vice President of the Company and President of Rexene Products since
March 1995. Prior to March 1995, Mr. Knott had been Executive Vice
President-Sales and Market Development of the Company since March 1992. Prior
thereto, Mr. Knott was an Executive Vice President of Old Rexene since January
1991 and President of CT Film since February 1989.
RICHARD C. PERRY has served as a director of the Company since March
19, 1997. Mr. Perry is President of Perry Corp., a New York based private
investment management firm, which he founded in November 1988. From 1977 to
1988, Mr.Perry implemented investment strategies in the equity trading area of
Goldman, Sachs & Co. He also is Chairman of the Board of FTD Corporation and a
director of Radio & Records, Inc.
STEPHEN C. SWID has served as a director of the Company since March 19,
1997. Mr. Swid has served as Chairman and Chief Executive Officer of SCS
Communications, an owner and operator of diverse media properties, since late
1989. From February 1990 to January 1995, Mr. Swid was the Chairman and Chief
Executive Officer of Westview Press. Prior thereto, Mr. Swid had been the
Chairman and Chief Executive Officer of SBK Entertainment World, Inc., from
November 1986 to May 1989. For the twelve years prior thereto, Mr. Swid had been
the Co-Chairman and Co-Chief Executive Officer of Knoll International Holdings,
Inc.
19
<PAGE>
JONATHAN R. WHEELER has been Executive Vice President of the Company
and President of CT Film since January 1996. Prior thereto, Mr. Wheeler was
Executive Vice President-Administration since April 1995. Prior thereto, Mr.
Wheeler had been Senior Vice President-Administration of the Company since
December 1990.
JAMES M. RUBERTO has been Executive Vice President-Administration since
January 1996. Prior thereto, Mr. Ruberto had been Executive Vice President of
the Company and President of CT Film since March 1992. Prior thereto, Mr.
Ruberto had been Executive Vice President-Sales and Market Development of Rexene
since January 1991. From April 1989 to January 1991, Mr. Ruberto was Executive
Vice President-Marketing and Business Planning of Old Rexene.
BERNARD J. MCNAMEE has been Executive Vice President, Secretary and
General Counsel of the Company since April 1995. Prior thereto, Mr. McNamee had
been Vice President, Secretary and General Counsel of the Company since May
1993. From September 1989 to November 1992, Mr. McNamee was Vice President and
General Counsel of Ferro Corporation, a multinational manufacturer of specialty
materials.
GEFF PERERA has been Executive Vice President and Chief Financial
Officer of the Company since May 1996. Prior thereto, Mr. Perera had been Vice
President of the Company since January 1991 and Controller since February 1989.
On July 7, 1992, the United States Bankruptcy Court for the District of
Delaware entered an order confirming a First Amended Plan of Reorganization,
which became effective on September 18, 1992, relating to the Company's
bankruptcy proceedings pursuant to voluntary petitions filed by the Company's
predecessor under Chapter 11 of the United States Bankruptcy Code on October 18,
1991. Messrs. Anderson, Hewitt and Smith, directors of the Company, were also
directors of the Company's predecessor that filed such petitions.
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.
During 1996, the Board of Directors held 16 meetings. The Board of
Directors has an Executive Committee. When the Board is not in session, the
Executive Committee may, to the extent permitted by law, exercise the powers of
the Board of Directors in the management of the business and affairs of the
Company.
20
<PAGE>
The Executive Committee of the Board of Directors is composed of Lavon N.
Anderson, William B. Hewitt and Andrew J. Smith. During 1996, the Executive
Committee held no meetings.
The Company has standing audit, compensation and nominating committees
of the Board of Directors. The Management Development and Compensation Committee
(the "Compensation Committee"), which held 8 meetings during 1996, is composed
of William B. Hewitt (Chairman), Harry B. Bartley, Jr., R. James Comeaux and
Charles E. O'Connell. The Compensation Committee exercises the powers of the
Board of Directors in connection with all matters relating to compensation of
executive officers, employee benefit plans and the administration of Rexene's
stock option programs.
The Audit Committee, which held 2 meetings in 1996, is composed of Ilan
Kaufthal (Chairman), Harry B. Bartley, Jr. and James R. Ball. The Audit
Committee's primary responsibilities are to (i) recommend Rexene's independent
auditors to the Board of Directors, (ii) review with Rexene's auditors the plan
and scope of the auditors' annual audit, the results thereof and the auditors'
fees, (iii) review internal audit procedures and periodically meet with Rexene's
internal auditors to review the results of such procedures, (iv) review Rexene's
financial statements and (v) take such other action as they deem appropriate as
to the accuracy and completeness of financial records of Rexene and financial
information gathering, reporting policies and procedures of Rexene.
The function of the Nominating Committee is to recommend nominees for
election as directors at the annual meeting of stockholders and to recommend the
candidates for election to fill vacancies on the Board as they occur. The Board
of Directors considers and takes action upon the recommendations of the
Nominating Committee. Although this committee has no formal policy on the
subject, the Board of Directors believes that any nominee recommended by a
stockholder in writing to the Secretary of the Company with complete
biographical data regarding the nominee would be considered by the Nominating
Committee. The Nominating Committee, which held two meetings in 1996, is
composed of R. James Comeaux, Ilan Kaufthal and Andrew J. Smith.
CERTAIN TRANSACTIONS
A son of Andrew J. Smith, the Chief Executive Officer and a director of
the Company, became a Vice President of Orion Pacific, Inc. ("Orion") in 1990
and was a shareholder of Orion between 1993 and 1994. In August 1993, the son of
Mr. Smith resigned as an officer and employee of Orion. Pursuant to contractual
arrangements originated in 1988, (i) the Company sells to Orion certain
discarded byproducts which Orion extracts from Company landfills and (ii) Orion
packages and processes a portion of the REXtac APAO manufactured by the Company
at its plant in Odessa, Texas. During the year ended December 31, 1996, the
Company sold approximately $36,000 of such by-products to Orion in the ordinary
course of business. For the same period, the Company purchased approximately
$1.3 million of APAO processing and packaging services and miscellaneous
materials from Orion. The Company also has agreed to pay Orion an additional
$250,000 per plant for each APAO plant utilizing the technology which the
Company builds or licenses outside the United States (excluding a former joint
venture plant in Japan). The Company currently licenses this technology to Orion
so that Orion can continue providing these services to the Company.
21
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning
the compensation paid or awarded to the Chief Executive Officer of the Company
and the four other highest paid executive officers of the Company in 1996 (the
"named executive officers") for the years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
---------------------------------------------
OPTIONS
(NUMBER ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OF SHARES) COMPENSATION
--------------------------- ---- ------ ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Andrew J. Smith 1996 $452,088 $357,186 80,000 $6,300(1)
Chief Executive Officer 1995 431,671 469,808 - 7,176
1994 367,502 380,000 70,000 4,902
Lavon N. Anderson, President and 1996 $297,000 $70,000 - $8,568(2)
Chief Operating Officer 1995 297,000 248,054 - 10,888
1994 292,000 297,000 40,000 6,273
Jack E. Knott, Executive Vice 1996 $241,267 $160,162 40,000 $3,106(3)
President and President of 1995 221,675 203,338 - 3,542
Rexene Products Company 1994 217,921 176,000 38,000 3,209
("Rexene Products"), a
division of the Company
Jonathan R. Wheeler, Executive 1996 $225,845 $138,914 40,000 $3,573(4)
Vice President and President 1995 206,675 190,630 - 3,548
of Consolidated 1994 200,838 164,000 32,000 2,703
Thermoplastics Company
("CT Film"), a division of
the Company
James M. Ruberto, Executive Vice 1996 $220,008 $87,727 20,000 $4,427(5)
President-Administration 1995 220,008 165,270 - 3,579
1994 217,921 175,000 38,000 3,762
<FN>
- ----------
(1) Consists of Company contributions to employee benefit plans (and
related cash supplements) of $2,250, $4,584 and $2,310 in 1996, 1995
and 1994, respectively, and imputed income for life insurance of
$4,050, $2,592 and $2,592 for 1996, 1995 and 1994, respectively.
(2) Consists of Company contributions to employee benefit plans (and
related cash supplements) of $2,250, $4,570 and $2,223 in 1996, 1995
and 1994, respectively, and imputed income for life insurance of
$6,318, $6,318 and $4,050 in 1996, 1995 and 1994, respectively.
22
<PAGE>
(3) Consists of Company contributions to employee benefit plans (and
related cash supplements) of $2,225, $2,744 and $2,426 in 1996, 1995
and 1994, respectively, and imputed income for life insurance of $881,
$798 and $783 in 1996, 1995 and 1994, respectively.
(4) Consists of Company contributions to employee benefit plans (and
related cash supplements) of $2,175, $2,812 and $1,988 in 1996, 1995
and 1994, respectively, and imputed income for life insurance of
$1,398, $736 and $715 in 1996, 1995 and 1994, respectively.
(5) Consists of Company contributions to employee benefit plans (and
related cash supplements) of $2,175, $2,218 and $2,426 in 1996, 1995
and 1994, respectively, and imputed income for life insurance of
$2,252, $1,361 and $1,336 in 1996, 1995 and 1994, respectively.
</FN>
</TABLE>
OPTION GRANTS, EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to
options to purchase Common Stock granted during the year ended December 31, 1996
to the named executive officers.
23
<PAGE>
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
Potential Realizable
Value At Assume Annual
Rate of Stock Price
Appreciation
Individual Grants for Option Term
--------------------------------------------------------- ------------------------
Number of
Securities
Underlying % of Total
Options Granted Options Exercise
(number of Granted to or
shares) Employees Base Price Expiration
Name (1) in 1996 ($/sh)(2) Date 5%($)(3) 10%($)(4)
---- ----- -------- ----------- ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. Smith............ 80,000 16.34% $10.79 8/01/06 $543,816 $1,372,488
Jack E. Knott.............. 40,000 8.17% 10.79 8/01/06 271,908 686,244
Jonathan R. Wheeler........ 40,000 8.17% 10.79 8/01/06 271,908 686,244
James M. Ruberto........... 20,000 4.08% 10.79 8/01/06 135,954 343,122
<FN>
(1) Options represent the right to purchase shares of Common Stock at a
fixed price per share. Fifty percent (50%) of the options become
exercisable when the market value of the Common Stock first reaches
$16,185 per share, and the balance of such options become exercisable
when the market value of the Common Stock first reaches $21.58 per
share. In any event, all of the options become exercisable on August 1,
2004 or upon the death, disability or retirement of an optionee or upon
a change of control of the Company.
(2) Based on the average trading price on the New York Stock Exchange of
the Common Stock for the preceding twenty trading days.
(3) Represents an assumed market price per share of Common Stock of $17.59.
(4) Represents an assumed market price per share of Common Stock of $27.95.
</FN>
</TABLE>
No named executive officer exercised options to purchase Common Stock in 1996.
The following table sets forth certain information with respect to the
unexercised options to purchase Common Stock held at December 31, 1996 by each
of the Company's named executive officers.
24
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT 12/31/96 IN-THE-MONEY OPTIONS AT
(SHARES) 12/31/96
---------------------- -----------------------
EXERCISABLE/ EXERCISABLE/
Name UNEXERCISABLE UNEXERCISABLE
- ---- ------------- -------------
<S> <C> <C>
Andrew J. Smith.................................. 68,666/103,334 389,533/309,342
Lavon N. Anderson................................ 45,916/13,334 313,668/66,103
Jack E. Knott.................................... 37,333/52,667 241,320/172,890
Jonathan R. Wheeler.............................. 33,333/50,667 214,877/159,673
James M. Ruberto................................. 37,333/32,667 241,320/116,190
</TABLE>
RETIREMENT PLANS
The Company has a trusteed non-contributory defined benefit pension plan (the
"Retirement Plan") for substantially all non-union employees. The normal
retirement age of participants is 65. An employee is entitled, subject to
various Internal Revenue Code limitations, to annual pension benefits equal to
0.9% of the employee's average annual base salary during the highest paid three
consecutive years of the employee's final ten calendar years of service ("Final
Average Pay") multiplied by years of service under the Retirement Plan, plus
0.5% of the employee's Final Average Pay which exceeds an average, computed
under Internal Revenue Service rules, of the employee's wages taken into account
for social security purposes, multiplied by the number of years of the
employee's participation in the Retirement Plan (up to a maximum of 35 years).
In October 1994, the Company adopted the Rexene Corporation Supplemental
Executive Retirement Plan (the "SERP"), which was amended in 1996. The purposes
of the SERP are to provide supplemental retirement and survivor benefits, in
addition to amounts payable under the Retirement Plan, for a certain select
group of management or highly compensated employees who complete a specified
period of service and otherwise become eligible under the SERP. The Company
intends to fund the SERP from time to time at the discretion of the Management
Development and Compensation Committee or the Board of Directors; the general
assets of the Company are the source of funds for the SERP. Participants of SERP
are entitled on or after age 60 and completion of 15 years of service from and
after the later to occur of January 1, 1988 and their employment commencement
date to receive monthly pension benefits which, when aggregated with benefits
payable under the Retirement Plan, equal 65% of the monthly average of Final
Average Pay multiplied by the participant's percentage of vesting and credited
service under SERP. Generally, participants vest 20% for each of the first five
years of service, commencing October 1, 1994. Such pension benefits will be paid
to the extent allowable under the Internal Revenue Code from the Retirement Plan
and thereafter from the SERP. Pension payments to be received by Dr. Anderson
under the SERP will be further reduced by any monthly pension benefits received
under a predecessor company retirement plan, but he will be totally vested and
given full service credit if he elects early retirement after August 1997. In
addition, benefits payable to participants in the SERP who have less than 15
years of service will be reduced at the rate of 6 2/3% per year. If a
participant elects to retire prior to age 60, he is eligible to receive benefits
upon reaching age 55 and in such event his benefits under the SERP may be
reduced in an amount not to exceed 10% for each year of early retirement. Under
the SERP, pension payments will be permitted in excess of the limit imposed by
the Internal Revenue Code under the Retirement Plan, which in 1996 provides that
the highest annual salary on which benefits can be calculated is $150,000.
Messrs. Smith, Anderson, Knott, Wheeler and Ruberto and two other executive
officers are the only current participants in the SERP.
The following table illustrates the amount of combined annual pension benefits
payable under the Retirement Plan and the SERP to participants in specified
average annual earnings and years of service classifications.
25
<PAGE>
Benefit payments under the Retirement Plan are not subject to any reduction for
social security benefits or other offset amounts. Although the amounts set forth
below include benefits payable under the SERP assuming participant vesting of
100%, all of the current participants in the SERP except one is only currently
vested to the extent of 40% of his accrued benefits in such plan.
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR YEARS OF SERVICE
------------------------------------------------------------------------------------
FINAL AVERAGE PAY 5 10 15 20 25
- ----------------- ---------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
$100,000......................... $21,665 $43,336 $65,000 $65,000 $65,000
150,000......................... 32,497 65,003 97,500 97,500 97,500
200,000......................... 43,329 86,671 130,000 130,000 130,000
300,000......................... 64,994 130,007 195,000 195,000 195,000
400,000......................... 86,658 173,342 260,000 260,000 260,000
500,000......................... 108,323 216,678 325,000 325,000 325,000
</TABLE>
For purposes of calculation of benefits under the Retirement Plan, only years
of service since 1984 count in the benefits formula. As of December 31, 1996,
the named executive officers had the following credited years of service under
the Retirement Plan: Mr. Smith - thirteen years; Dr. Anderson - thirteen years;
Mr. Knott eleven years; Mr. Wheeler - eight years and Mr. Ruberto - seven years.
For purposes of calculation of benefits under SERP, the years of credited
service for each of the named executive officers as of December 31, 1996 were as
follows: Mr. Smith - nine years; Dr. Anderson - nine years; Mr. Knott - nine
years; Mr. Wheeler - eight years and Mr. Ruberto - seven years.
EXECUTIVE SECURITY PLAN
The beneficiaries of two executive officers of the Company, Dr. Anderson and
Mr. Knott, are entitled to receive under the Executive Security Plan of the
Company (the "Security Plan") death benefits equal to lump sum of $300,000 in
the event of the death of Dr. Anderson or Mr. Knott while employed by the
Company. The Company purchases life insurance covering such benefits. At the
present time, it is not expected that any additional executive officers will be
selected for participation in the Security Plan.
COMPENSATION OF DIRECTORS
In 1996, each director who is not an employee of the Company received a fee of
$1,000 for each meeting of the Board attended, $1,000 for each committee meeting
attended which was not held on the same day as a Board meeting and an annual fee
of $10,000 payable in quarterly installments. In addition, on April 30, 1996,
each director who is not an employee of the Company received options to purchase
an aggregate of 2,000 shares of Common Stock under the Company's 1995 Stock
Option Plan for Outside Directors. Such 1996 options are exercisable at $3.22
per share, equal to the average of the fair market value per share of Common
Stock for the last 20 trading days immediately preceding April 30, 1996, less
$10.00. The Company also reimburses directors for travel, lodging and related
expenses they may incur in attending Board and committee meetings.
STOCK OPTION PLANS
Certain executive officers of the Company have been granted options to
purchase shares of Common Stock pursuant to the terms of the Rexene Corporation
1994 Long-Term Incentive Plan (the "1994 Incentive Plan"). Pursuant to the terms
of the 1994 Incentive Plan, the Compensation Committee of the Board may, in its
sole discretion, in connection with a Change of Control (as defined in the 1994
Incentive Plan), (i) accelerate the time at which such options may be exercised
so that such options may be exercised in full for a limited period of time
26
<PAGE>
on or before a specified date, (ii) require the mandatory surrender to the
Company of some or all of such options (whether or not such options are then
exercisable under the 1994 Incentive Plan) in exchange for an amount of cash per
share of Common Stock subject to such options equal to the excess, if any, of
the Change of Control Value (as defined in the 1994 Incentive Plan) of the
Common Stock over the per share exercise price(s) under such options for such
shares, (iii) make such adjustments to such options as it deems appropriate to
reflect such Change of Control or (iv) provide that, after the Change of
Control, upon any exercise of an option the holder shall be entitled to purchase
under such option the number of shares of stock or other securities to which the
holder would have been entitled pursuant to the terms of the transaction
constituting the Change of Control if, immediately prior to such transaction,
the holder had been the holder of the number of shares of Common Stock then
covered by such option. Adoption of the Director Replacement Proposals would
constitute a Change of Control under the 1994 Incentive Plan.
Certain executive officers of the Company have been granted options to
purchase shares of Common Stock pursuant to the terms of the Rexene Corporation
1993 Non-Qualified Stock Option Plan (the "1993 Non-Qualified Option Plan").
Pursuant to the terms of the 1993 Non-Qualified Option Plan, if the employment
with the Company or any of its subsidiaries of a holder of such options is
terminated without cause after a Change of Control (as defined in the 1993
Non-Qualified Option Plan), or if such holder voluntarily resigns his or her
employment with the Company or any of its subsidiaries after such a Change of
Control because as a condition to such employment such holder would be required
to relocate outside the continental United States or within the continental
United States without assistance equal to that provided under Rexene's standard
relocation policy or accept a reduction in base salary, then such holder's
options shall become fully exercisable. Adoption of the Director Replacement
Proposals would constitute a Change of Control under the 1993 Non-Qualified
Option Plan.
TERMINATION AGREEMENTS
Mr. Smith, Lavon N. Anderson, President and Chief Operating Officer and a
director of the Company, Geff F. Perera, Executive Vice President and Chief
Financial Officer of the Company, Jack E. Knott, Executive Vice President of the
Company and President of Rexene Products and a director of the Company, James M.
Ruberto, Executive Vice President - Administration of the Company, Jonathan R.
Wheeler, Executive Vice President of the Company and President of CT Film, a
division of the Company, and Bernard J. McNamee, Executive Vice President,
Secretary and General Counsel of the Company, are each parties to termination
agreements entered into in 1996. Each termination agreement provides that in the
event the employee is terminated without cause (as defined in the agreement)
within three years after a change in control (as defined in the agreement) of
Rexene or if the employee voluntarily resigns his employment with Rexene because
as a condition to continued employment with Rexene such employee is required to
relocate outside the continental United States or within the continental United
States without assistance equal to that provided under Rexene's standard
relocation policy, accept a reduction in base salary or accept a position of
lesser responsibility, Rexene is obligated to pay the employee within ten
business days after the effective date of such termination, a lump sum cash
severance equal to three times his then current annual base salary less $1.00.
Additionally, in the event such employee voluntarily resigns because he is
required to locate within the continental United States after a change in
control even though he is offered assistance equal to that provided under the
Company's standard location policy, such employee is entitled to receive a lump
sum cash severance amount equal to 18 months of such employee's then current
base salary. Adoption of the Director Replacement Proposals would constitute a
change in control under the termination agreements.
27
<PAGE>
OWNERSHIP OF COMMON STOCK
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 14, 1997, information with respect
to each person who was known by the Company (based upon a review of schedules
and reports filed with the SEC) to be the beneficial owner of more than 5% of
the Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
------------------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES CLASS
- ------------------------------------ --------- ----------
<S> <C> <C>
Guy P. Wyser-Pratte and Spear, Leeds & Kellogg 2,483,800(1) 13.2%
c/o Guy P. Wyser-Pratte
63 Wall Street
New York, NY 10005
David C. Swalm 1,850,000(2) 9.8%
11102 Hedwig Lane
Houston, Texas 77024
<FN>
- -------------------------
(1) Based upon information reported in Amendment No. 2 to the Wyser-Pratte
Group's Schedule 13D. According to Amendment No. 2, Wyser-Pratte has
sole voting and investment power with respect to 1,369,700 shares of
Common Stock beneficially owned by him and Spear Leeds has sole voting
and investment power with respect to 1,114,100 shares of Common Stock
beneficially owned by it. According to the Wyser-Pratte Proxy
Statement, although Wyser-Pratte and Spear Leeds may be deemed a
"group" within the meaning of Rule 13d-5 under the Exchange Act, each
of Wyser-Pratte and Spear Leeds disclaims beneficial ownership of the
shares of Common Stock owned by the other.
(2) Based upon information reported in Amendment No. 2 to Schedule 13D
dated February 28, 1997 filed by Mr. Swalm with the SEC. Mr. Swalm has
sole voting and investment power with respect to 350,000 shares of
Common Stock he beneficially owns. Mr. Swalm has shared voting and
investment power with respect to 1,500,000 shares he beneficially owns.
</FN>
</TABLE>
28
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of the Common Stock as of March 12, 1997 by each director
of the Company, the named executive officers of the Company and all current
directors and executive officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
---------------------------------------
NUMBER OF PERCENT OF
NAME SHARES(1)(2) CLASS
- ------------------------------------- ------------ ----------
<S> <C> <C>
DIRECTORS
Lavon N. Anderson 54,383 (3) *
James R. Ball 2,000 *
Harry B. Bartley, Jr. 7,000 *
R. James Comeaux 7,000 *
William B. Hewitt 29,000 *
Ilan Kaufthal 29,000 *
Jack E. Knott 47,333 (4) *
Richard C. Perry 602,400 (5) 3.2%
Charles E. O'Connell 4,000 *
Andrew J. Smith 103,557 *
Stephen C. Swid 639,254 3.4%
NAMED EXECUTIVE OFFICERS (EXCLUDING ANY DIRECTOR NAMED ABOVE)
James M. Ruberto 43,333 *
Jonathan R. Wheeler 38,500 *
All current directors and executive officers as a group (15 persons) 1,665,176 8.7%
<FN>
- ------------------------
(*) 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 - 52,583; Mr. Ball - 2,000; Mr. Bartley - 4,000;
Mr. Comeaux - 4,000; Mr. Hewitt - 2,000; Mr. Kaufthal - 29,000; Mr.
Knott - 43,333; Mr. McNamee - 34,000; Mr. O'Connell - 4,000; Mr. Perera
- 17,670; Mr. Ruberto - 43,333; Mr. Smith - 77,000; and Mr. Wheeler -
38,000.
(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 3,000 shares held by Mr. Knott's spouse in a custodial
capacity under the Uniform Gift to Minors Act.
(5) All shares are owned beneficially by Perry Corp., for the benefit of
investor accounts managed and controlled by Perry Corp. As controlling
stockholder of Perry Corp., Mr. Perry may be deemed a beneficial owner
of all or a portion of such shares.
</FN>
</TABLE>
29
<PAGE>
INFORMATION CONCERNING THE SOLICITATION
The costs of this solicitation will be borne by the Company. In
addition to solicitation by mail, directors, officers and regular employees of
the Company may solicit proxies in person, by telephone, by telegram, by
personal interview, by e-mail, or by telecopier, none of whom will receive
additional compensation for such solicitations. The Company will request banks,
brokerage houses and other custodians, nominees and fiduciaries to forward its
solicitation materials to the beneficial owners of the shares of Common Stock
they hold of record and obtain authorization for, and appropriate certification
in connection with, the execution of Proxy Cards. The Company will reimburse
these record holders for customary mailing expenses incurred by them in
forwarding these materials. The Company also has retained D.F. King & Co., Inc.
to assist the Company in connection with communications with stockholders and to
provide other services in connection with the solicitation of proxies. The fee
of D.F. King & Co., Inc. is estimated to be $___________ plus reasonable
out-of-pocket costs and expenses. D.F. King & Co., Inc. will employ
approximately 40 people in its efforts.
Pursuant to a letter agreement, dated July 21, 1996 (the "SW
Letter Agreement"), the Company has retained Schroder Wertheim to act as its
financial advisor with respect to potential businesses combinations and other
transactions involving the Company and third parties. Pursuant to the SW Letter
Agreement, the Company has agreed to pay to Schroder Wertheim certain fees and
expenses and to indemnify Schroder Wertheim against certain liabilities,
including liabilities under the federal securities laws.
The Company has retained Smith Barney Inc. ("Smith Barney") to
act as its financial advisor with respect to any solicitation or proxy contest
seeking to remove some or all of the directors of the Company, including the
solicitation by the Wyser-Pratte Group, as well as certain unsolicited offers or
proposals, including transactions or recapitalizations involving the Company.
Pursuant to the terms of Smith Barney's engagement, the Company has agreed to
pay to Smith Barney in connection with such matters (i) a retainer/advisory fee
of up to $500,000, (ii) an opinion fee of $250,000, payable upon delivery by
Smith Barney to the Board of an opinion in connection with an unsolicited
proposal or offer, strategic transaction or recapitalization, (iii) an
additional fee of $500,000, payable upon the abandonment or withdrawal of an
unsolicited proposal or offer, including the solicitation by the Wyser-Pratte
Group, and (iv) a transaction fee (against which the fees specified in clauses
(i) through (ii) above will be credited), payable upon consummation of a
strategic transaction or recapitalization, equal to 1% of the transaction value
(including liabilities assumed) of such strategic transaction or
recapitalization.
The Company has also agreed to reimburse Smith Barney upon
request from time to time for travel and other out-of-pocket expenses incurred
by Smith Barney in connection with its engagement, including fees and expenses
of its legal counsel, and to indemnify Smith Barney and certain related parties
against certain liabilities, including liabilities under the federal securities
laws, arising out of Smith Barney's engagement. In the ordinary course of
business, Smith Barney and its affiliates may actively trade the securities of
the Company for their own account and for the account of customers and
accordingly may, at any time, hold long or short positions in such securities.
The total costs of this solicitation are expected to be
approximately $________. The total costs incurred to date in connection with
this solicitation are approximately $_________.
Neither the Company nor, to the best of the Company's
knowledge, any person acting on its behalf has retained any other person to make
solicitations or recommendations to security holders on its behalf in connection
with the solicitation of proxies.
30
<PAGE>
STOCKHOLDER PROPOSALS
In order to have been considered for inclusion in the Company's proxy
materials for the 1997 Annual Meeting of Stockholders, stockholder proposals
must have been received at the Company's principal executive offices in Dallas,
Texas no later than November 22, 1996.
31
<PAGE>
APPENDIX A
INFORMATION CONCERNING THE PARTICIPANTS
Under applicable resolutions of the SEC, each director and executive
officer of the Company, as well as certain other employees and advisors of the
Company, may be deemed to be "participants" in the Company's solicitation of
proxies. Set forth below is certain information concerning such employees and
advisors. For information concerning the directors and executive officers of the
Company, see "Information Concerning the Board of Directors and Executive
Officers" and "Ownership of Common Stock -- Security Ownership of Management."
CONRAD L. BRINGSJORD, age 36, has served as a Managing Director of
Smith Barney since 1994, as Co-Head of the Advisory Group of Smith Barney since
1995 and in various other capacities at Smith Barney since 1993. Before joining
Smith Barney, Mr. Bringsjord was a Vice President in the Advisory Department at
Morgan Stanley & Co. Incorporated from 1987 to 1993. Prior to joining Morgan
Stanley & Co. Incorporated, Mr. Bringsjord was a senior accountant at Deloitte,
Haskins & Sells. Mr. Bringsjord does not beneficially own any shares of Common
Stock. Mr. Bringsjord's address is c/o Smith Barney Inc., 388 Greenwich Street,
New York, New York 10013.
JOHN E. CAPANO, age 27, has been an associate in Smith Barney's
Advisory Group since 1996. Previously, Mr. Capano was an audit and tax analyst
at American Home Products Corporation from 1991 to 1994. Mr. Capano does not
beneficially own any shares of Common Stock. Mr. Capano's address is c/o Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013.
NEIL J. DEVROY, age 49, has served as Vice President of Communications
and Support Services of the Company since March 1995. From November 1990 to
February 1995 Mr. Devroy served as Director of Communications and Public Affairs
of the Company. Mr. Devroy beneficially owns 11,408 shares of Common Stock,
which includes 10,408 shares which Mr. Devroy has the right to acquire within 60
days upon the exercise of options granted to him pursuant to the Company's stock
option plans.
GEFF F. PERERA, age 43, has served as Executive Vice President and
Chief Financial Officer of the Company since May 1996. Prior thereto, Mr. Perera
served as Vice President of the Company from January 1991 to April 1996 and as
Controller of the Company from February 1989 to April 1996.
THOMAS E. REINHART, age 42, has served as a Managing Director and head
of Smith Barney's West Coast Financial Entrepreneurs Group since 1990. Prior
thereto, Mr. Reinhart worked at Drexel Burnham Lambert. Mr. Reinhart does not
beneficially own any shares of Common Stock. Mr. Reinhart's address is c/o Smith
Barney Inc., 350 California Street, Suite 2100, San Francisco, California 94104.
JAMES L. SHUMAN, age 30, has been vice president of Schroder Wertheim
since 1996 and was an associate at the firm prior to such date. Mr. Shuman does
not beneficially own any shares of Common Stock. Mr. Shuman's address is c/o
Schroder Wertheim & Co. Incorporated, 787 Seventh Avenue, New York, New York
10019.
KENNETH SIEGEL, age 40, has been a Managing Director of Schroder
Wertheim since 1991 and served in various other capacities at such firm prior to
such date. Mr. Siegel does not beneficially own any shares of Common Stock. Mr.
Siegel's address is c/o Schroder Wertheim & Co. Incorporated, 787 Seventh
Avenue, New York, New York 10019.
J. STUART WHITE, age 33, has been a vice president of Smith Barney
since January 1997 and was an associate at the firm since 1993. From 1989 to
1993, Mr. White was an Assistant Vice President at Skopbank.
A-1
<PAGE>
Mr. White does not beneficially own any shares of Common Stock. Mr. White's
address is c/o Smith Barney Inc., 388 Greenwich Street, New York, New York
10013.
On July 7, 1992, the United States Bankruptcy Court for the District of
Delaware entered an order confirming a First Amended Plan of Reorganization,
which became effective on September 18, 1992, relating to the Company's
bankruptcy proceedings pursuant to voluntary petitions filed by the Company's
predecessor under Chapter 11 of the United States Bankruptcy Code on October 18,
1991. Messrs. Anderson, Hewitt and Smith, directors of the Company, were also
directors of the Company's predecessor that filed such petitions.
The address of each of the persons listed above other than Messrs.
Bringsjord, Capano, Reinhart, Schuman, Siegel and White is c/o Rexene
Corporation, 5005 LBJ Freeway, Dallas, Texas 75244.
A-2
<PAGE>
PRELIMINARY COPY
REXENE CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1997
THIS PROXY IS SOLICITED BY REXENE CORPORATION
Each of the undersigned hereby constitutes and appoints Andrew J. Smith
and Lavon N. Anderson, and each of them, with full power of substitution, the
proxies of the undersigned to vote all of the outstanding Common Stock, par
value $.01 per share (the "Common Stock"), of Rexene Corporation (the "Company")
that the undersigned is entitled to vote if personally present at the Special
Meeting of Stockholders of the Company to be held on April 30, 1997 (the
"Special Meeting"), or at any adjournment or postponement of the Special
Meeting, as follows on the following matters which are described in the Proxy
Statement (the "Proxy Statement") of the Company, dated April __, 1997, with all
capitalized terms used herein without definition having the meaning set forth
therein.
The Board recommends that stockholders vote "AGAINST" Proposals 1, 3,
4, 5 and 6 and "FOR" Proposals 2 and 7.
1. Director Removal Resolution
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Election of Directors Resolution
Election of Lavon N. Anderson, James R. Ball, Harry B. Bartley, Jr., R.
James Comeaux, William B. Hewitt, Ilan Kaufthal, Jack E. Knott, Charles
E. O'Connell, Richard C. Perry, Stephen C. Swid and Andrew J. Smith.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY for all nominees
INSTRUCTION: To withhold authority to vote for the election of one or
more of the persons nominated by the Board, mark FOR above and write
the name(s) of the person(s) with respect to whom you wish to withhold
authority to vote below:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
3. Facilitating By-laws Resolutions
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Shareholder Rights Resolution
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Business Combination Statute Resolution
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[Proxy Continued On Reverse]
<PAGE>
6. Omnibus Resolution
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. Stock Repurchase Proposal
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE PROVIDED
The above-named proxies of the undersigned are authorized to initiate
and vote for proposals to recess or adjourn the Special Meeting for any reason,
including to allow inspectors to certify the outcome of the Proposals described
above or to allow the solicitation of additional votes, if necessary, against
Proposals 1, 3, 4, 5 and 6 and for Proposals 2 and 7 described above, and to
vote, in their discretion, upon such other matters as may properly come before
the Special Meeting and any adjournment or postponement thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER MARKED
HEREIN BY THE UNDERSIGNED. IF NO MARKING IS MADE AS TO ANY PROPOSAL OR ALL
PROPOSALS, THIS PROXY WILL BE VOTED "AGAINST" PROPOSALS 1, 3, 4, 5 AND 6 AND
"FOR" PROPOSALS 2 AND 7 DESCRIBED ABOVE. THE UNDERSIGNED HEREBY ACKNOWLEDGES
RECEIPT OF THE PROXY STATEMENT OF THE COMPANY DATED APRIL [__], 1997, SOLICITING
PROXIES FOR THE SPECIAL MEETING.
ALL PREVIOUS PROXIES GIVEN BY THE UNDERSIGNED TO VOTE AT THE SPECIAL
MEETING OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF ARE HEREBY REVOKED.
Date ____________________________, 1997
Signature______________________________
Title__________________________________
Signature; if Held Jointly_____________
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.
