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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
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 'ss'240.14a-11(c) or 'ss'240.14a-12
NOEL GROUP, INC.
(Name of Registrant as Specified In Its Charter)
N/A
------------------------------------------------
(Name of Person(s) Filing the Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)3.
[x] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): In
accordance with Rule 0-11 (c), the fee was calculated to be
one-fiftieth of one percent of the aggregate of the cash and value of
the securities and other property to be distributed to Noel's security
holders. Market values as of June 27, 1996 are used for all applicable
securities as defined in accordance with Rule 0-11 (a) (4). Securities
for which no market values are available are valued at book value at
May 31, 1996 in accordance with Rule 0-11 (a) (4). All other property
is valued at a bona fide estimate of its current fair market value net
of liabilities which would reduce the amount distributed to security
holders.
4) Proposed maximum aggregate value of transaction: $199,598,000.
5) Total fee paid: $39,920
[ ] 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: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
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Preliminary Copy
NOEL GROUP, INC.
667 Madison Avenue
New York, New York 10021
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
[ ], 1996
------------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Noel
Group, Inc. will be held at [_____________________________________,] on
[________], 1996, at 10:00 A.M. (local time) for the following purposes:
1. To consider and act upon a proposal to approve and adopt the Plan of
Complete Liquidation and Dissolution attached as Exhibit A to the Proxy
Statement; and
2. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
[August 20], 1996, has been fixed as the record date for the
determination of the shareholders entitled to notice of and to vote at such
meeting or any adjournment thereof, and only shareholders of record at the close
of business on that date are entitled to notice of and to vote at such meeting.
You are cordially invited to attend the meeting. Whether or not you
plan to attend the meeting, it is important that your shares be represented.
Accordingly, the Board of Directors and management urges each shareholder to
read the Proxy Statement carefully and thereafter to complete, date and sign the
enclosed proxy card and return it promptly.
By Order of the Board of Directors
Todd K. West
Secretary
New York, New York
[August __], 1996
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
TO ENSURE A QUORUM, PLEASE COMPLETE AND RETURN THE PROXY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND
THE MEETING, YOUR PROXY WILL BE RETURNED TO YOU UPON REQUEST TO THE SECRETARY OF
THE MEETING.
- --------------------------------------------------------------------------------
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NOEL GROUP, INC.
667 Madison Avenue
New York, New York 10021
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PROXY STATEMENT
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Special Meeting of Shareholders
[ ], 1996
----------------------
General
This Proxy Statement and accompanying form of proxy are being furnished
in connection with the solicitation of proxies by the Board of Directors of Noel
Group, Inc., a Delaware corporation ("Noel" or the "Company"), for use at the
Special Meeting of Shareholders to be held on [__________], 1996, at 10:00 A.M.
(local time) at the [___________________________________] or any adjournment
thereof (the "Meeting"). Copies of this Proxy Statement, the attached Notice of
Special Meeting of Shareholders, and the enclosed form of proxy card were first
mailed to shareholders on or about [August __,] 1996.
The principal executive office of Noel is located at 667 Madison
Avenue, New York, New York 10021. The telephone number of Noel's principal
executive office is (212) 371-1400.
The Company is proposing for adoption by the shareholders at the
Meeting a Plan of Complete Liquidation and Dissolution of the Company (the
"Plan"), a copy of which is attached as Exhibit A to this Proxy Statement. If
the Plan is approved by the shareholders, Noel will be liquidated (i) by the
sale of such of its assets as are not to be distributed in kind to its
shareholders, and (ii) after paying or providing for all its claims, obligations
and expenses, by cash and in-kind distributions to its shareholders pro rata
and, if required by the Plan or deemed necessary by the Board of Directors, by
distributions of its assets from time to time to one or more liquidating trusts
established for the benefit of the then shareholders, or by a final distribution
of its then remaining assets to a liquidating trust established for the benefit
of the then shareholders. The Company anticipates that substantial distributions
will be made within one year following shareholder approval of the Plan although
complete distribution may take from one to more than two years from the date of
such approval. Should the Board of Directors determine that one or more
liquidating trusts are required by the Plan or are otherwise necessary,
appropriate or desirable, adoption of the Plan will constitute shareholder
approval of the appointment by the Board of Directors of one or more trustees to
any such liquidating trusts and the execution of liquidating trust agreements
with the trustees on such terms and conditions as the Board of Directors, in its
absolute discretion, shall determine. See "Approval of Plan of Complete
Liquidation and Dissolution" for a complete description of the Plan.
THE BOARD OF DIRECTORS OF THE COMPANY, AFTER CAREFUL REVIEW AND
CONSIDERATION OF THE TERMS OF THE PLAN, BELIEVES THAT THE LIQUIDATION OF THE
COMPANY IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THIS PROPOSAL. MEMBERS
OF THE BOARD OF DIRECTORS MAY BE DEEMED TO HAVE A POTENTIAL CONFLICT OF INTEREST
IN RECOMMENDING THIS PROPOSAL. SEE "APPROVAL OF PLAN OF COMPLETE LIQUIDATION AND
DISSOLUTION -- Potential Conflict of Interest of Members of the Board of
Directors."
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Solicitation
The cost of soliciting proxies will be borne by the Company. In
addition to the solicitation of proxies by the use of the mails, management and
regularly engaged employees of the Company may, without additional compensation
therefor, solicit proxies on behalf of the Company by personal interviews,
telephone or other means, as appropriate. The Company may retain one or more
solicitors to solicit proxies from the shareholders at fees to be negotiated
which fees will be paid by the Company. The Company will, upon request,
reimburse brokers and others who are only record holders of the Company's common
stock, par value $.10 per share ("Common Stock"), for their reasonable expenses
in forwarding proxy material to, and obtaining voting instructions from, the
beneficial owners of such stock.
Voting
The close of business on [August 20,] 1996 has been fixed as the record
date (the "Record Date") for determining the shareholders entitled to notice of
and to vote at the Meeting or any adjournment thereof. As of the Record Date,
there were 20,211,642 shares of Common Stock issued and outstanding and entitled
to vote.
Each share of Common Stock entitles the holder thereof to one vote. A
majority of the shares of Common Stock issued and outstanding constitutes a
quorum. Assuming a quorum is present, the affirmative vote of the holders of a
majority of the shares of Common Stock issued and outstanding and entitled to
vote is required for approval of the Plan. Abstentions and broker non-votes
(i.e. shares held by brokers or nominees as to which (i) the broker or nominee
does not have discretionary authority to vote on a particular matter and (ii)
instructions have not been received from the beneficial owners) are counted as
present in determining whether the quorum requirement is satisfied. Abstentions
and broker non-votes have the same legal effect as a vote against approval of
the Plan.
As of the Record Date, directors and executive officers of the Company
had the right to vote an aggregate of 354,121 shares of Common Stock,
representing approximately 1.8% of the shares of Common Stock then outstanding.
Each of the Company's directors and executive officers has indicated that he or
she intends to vote all of his or her shares in favor of the approval of the
Plan.
A proxy in the accompanying form, which is properly executed, duly
returned to the Board of Directors and not revoked, will be voted in accordance
with the instructions indicated in the proxy. If no instructions are given with
respect to any matter specified in the Notice of Special Meeting to be acted
upon at the Meeting, the proxy will vote the shares represented thereby FOR
adoption of the Plan, and in accordance with his best judgment on any other
matters which may properly be brought before the Meeting. The Board of Directors
currently knows of no other business that will be presented for consideration at
the Meeting. Each shareholder who has executed a proxy and returned it to the
Board of Directors may revoke the proxy by notice in writing to the Secretary of
the Company, or by attending the Meeting in person and requesting the return of
the proxy, in either case at any time prior to the voting of the proxy. Presence
at the Meeting does not itself revoke the proxy.
As set forth under "APPROVAL OF PLAN OF COMPLETE LIQUIDATION AND
DISSOLUTION -- Potential Conflict of Interest of Members of the Board of
Directors", the Company's current directors and certain of the former directors
and executive officers have an interest in the matters to be acted upon at the
Meeting.
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APPROVAL OF PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
General
The Board of Directors is proposing the Plan for approval by the
shareholders at the Meeting. The Plan was approved by the Board of Directors,
subject to shareholder approval, on May 21, 1996. A copy of the Plan is attached
as Exhibit A to this Proxy Statement. Certain material features of the Plan are
summarized below; these summaries do not purport to be complete and are subject
in all respects to the provisions of, and are qualified in their entirety by
reference to, the Plan. SHAREHOLDERS ARE URGED TO READ THE PLAN IN ITS ENTIRETY.
Background and Reasons for the Plan; Directors' Recommendation
Since March, 1988, when Noel adopted its strategy of concentrating on
the acquisition of control and other significant equity interests in established
operating entities, it has been the declared objective of Noel's management and
its Board of Directors to manage the affairs of the Company so as to maximize
the values realized by its shareholders. The pursuit of this objective has lead,
from time to time, to the direct distribution by Noel of certain of its holdings
to its shareholders; beginning in September, 1992, the Company has distributed
interests to its shareholders which at their present market values would
aggregate approximately $158 million. The Board of Directors and management have
at all times sought to maintain maximum flexibility in pursuing its objective to
maximize shareholder value. Accordingly, in late 1995 Noel disposed of its
interest in Simmons Outdoor Corporation ("Simmons") to realize a gain over its
initial investment of approximately $12.1 million (a return of approximately
233% on Noel's four year investment). At other times, management and the Board
of Directors has concluded that it was in the best interest of Noel's
shareholders for Noel to continue holding interests in certain of its operating
companies for several years while Noel directed the revamping and improvement of
the operations and financial condition of such entities. Throughout this period,
securing maximum shareholder value rather than the perpetuation of the Company
as an entity has been the concern of the Board of Directors.
During recent years, the Board of Directors and management have
considered various strategic alternatives. Continuation of the Company's
existence without continuation of the Company's participation in acquisitions
was considered and rejected as inconsistent with the Company's stated business
plans. If the Company were to continue to participate in acquisitions, it is the
opinion of the Board of Directors and management that additional financing of
the Company would be required. Various financing alternatives were explored,
including the raising of additional capital either publicly or privately,
through debt or equity securities or a combination of both. The issuance of debt
securities was deemed to be unacceptable on the basis of current market
conditions and because it would result in excessive financial leverage. In view
of the disparity, discussed below, between the market value of the Common Stock
and the estimate of the Board of Directors and management of the current and
projected value of its assets net of estimated liabilities, it is the opinion of
the Board of Directors and management that further equity financing of the
Company under these conditions would be disadvantageous to the Company's
existing shareholders, since such equity financing could result in substantial
dilution to such shareholders. The possibility of a disposal of certain assets
with a view to raising cash for additional acquisitions was also considered and
rejected on the basis that it would not be in the best interests of Noel's
shareholders. In the opinion of the Board of Directors and management, the
distribution by the Company of substantial assets followed by the continued
operation of the Company would result in tax treatment which could have results
which would be less favorable to the Company and to many of the shareholders
than the results from the tax treatment of the distribution of assets following
approval of the Plan by the shareholders. See "Certain Federal Income Tax
Consequences."
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The Board of Directors and management is of the view that the Common
Stock has traded at a discount from the estimated value of Noel's underlying net
assets. This view is not based upon any report, opinion or appraisal from an
outside party but is based upon a comparison of the historical and anticipated
market value of the Common Stock with the estimated value of the Company's
assets (primarily controlling and non-controlling interests in operating
companies) net of estimated liabilities. In connection with the estimate of the
value of the Company's assets, management and the Board of Directors have
considered the market prices of publicly-traded securities held by the Company
and as to the other securities held by the Company have considered the financial
and operating information with respect to the business, operations and prospects
of the issuers of such securities. The methods used by the Board of Directors
and management do not result in the exact determination of value. However, the
Board of Directors and management have concluded that the continued market price
of the Common Stock at a value significantly less than the estimated per share
value of the underlying assets net of estimated liabilities presents an
opportunity to benefit the shareholders through the liquidation of the Company
and the distribution of its assets or the proceeds from the sale of such assets.
The Company's recent operating results did not directly affect the Board of
Directors' decision to liquidate except insofar as the continued progress of the
Company's principal operating companies failed to be fully reflected in the
market price of the Common Stock.
The Board of Directors and management believe that it is in the best
interests of the Company's shareholders to distribute to them the Company's net
assets through distributions in kind of certain assets and distributions of the
proceeds of sale of the remaining assets, together with other available cash. If
the Company's assets which are distributed in kind to the Company's shareholders
trade at prices which approximate the estimates of management and the Board of
Directors, and assets which are not so distributed are sold for prices which, in
the aggregate, approximate the current estimate of management and the Board of
Directors of present realizable value, the Board of Directors believes that
holders of Common Stock will, as a consequence of the liquidation, receive
aggregate value which exceeds the prices at which the Common Stock has generally
traded. The Board of Directors also believes that such liquidation value per
share of Common Stock is likely to exceed its probable trading value in the
foreseeable future, absent the proposed liquidation. However, no assurances can
be given that as a consequence of the liquidation holders of the Common Stock
will receive an aggregate value which equals or exceeds the prices at which the
Common Stock has generally traded.
Set forth on Schedule A is an Unaudited Summary of Holdings of Noel
Group, Inc. as of May 31, 1996. The table set forth thereon should be read in
conjunction with (i) Noel's audited consolidated financial statements set forth
in Noel's 1995 Annual Report and (ii) the footnotes to the table.
The information presented on Schedule A is not intended to indicate the
amount a shareholder would receive in liquidation and no assurance can be given
that the amount to be received in liquidation will equal or exceed the prices at
which the Common Stock has generally traded.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" ADOPTION OF THE PLAN. MEMBERS OF THE BOARD OF DIRECTORS
MAY BE DEEMED TO HAVE A POTENTIAL CONFLICT OF INTEREST IN RECOMMENDING ADOPTION
OF THE PLAN. SEE, "APPROVAL OF PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION --
POTENTIAL CONFLICT OF INTEREST OF MEMBERS OF THE BOARD OF DIRECTORS." IN
APPROVING THE PLAN, THE BOARD OF DIRECTORS RECOGNIZED THAT SHAREHOLDERS,
DEPENDING ON THEIR TAX BASIS IN THEIR SHARES, MAY BE REQUIRED TO RECOGNIZE GAIN
FOR TAX PURPOSES UPON RECEIPT OF DISTRIBUTIONS IN LIQUIDATION AND UPON THE
POSSIBLE TRANSFER OF ASSETS TO A LIQUIDATING TRUST OR TRUSTS (SEE "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES").
The adoption of the Plan by the Board of Directors has effectively
terminated the Company's participation in acquisitions and steps have been
initiated to reduce costs and to orient the Company's administrative structure
toward implementation of the Plan.
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If the Plan is not approved by the shareholders, the Board of Directors
will explore the alternatives then available for the future of the Company.
The high and low sale prices of a share of Common Stock on June 27,
1996 was $8.50 and $8.00, respectively.
Potential Conflict of Interest of Members of the Board of Directors
As a consequence of the liquidation and dissolution of the Company
pursuant to the Plan the events set forth below will occur:
William L. Bennett, a director, the sole participant in the
Company's Supplemental Executive Retirement Plan (the
"Supplemental Plan"), which provides retirement income and
death benefits to employees designated by the Company's
Compensation Committee, will, unless otherwise agreed, be
entitled to a lump sum payment equal to the "actuarially
determined" value of his accrued benefits under the
Supplemental Plan. No determination has been made as to the
amount to be received by Mr. Bennett or the nature of any
action to be taken by the Company under the Supplemental
Plan.
As set forth under "Security Ownership of Certain Beneficial
Owners," substantially all of the officers and directors of
the Company hold options or warrants covering various, and
in several cases substantial, numbers of shares of Common
Stock. Joseph S. DiMartino, the Chairman and a director of
Noel, is the holder of a warrant to purchase 800,000 shares
of Common Stock (in addition to an option to purchase 8,334
shares), 75% of which is currently exercisable, with the
additional 25% becoming exercisable in January 1997. Stanley
R. Rawn, Jr., the Chief Executive Officer and a director of
Noel, is the holder of a warrant to purchase 320,000 shares
of Common Stock (in addition to an option to purchase 8,334
shares), 75% of which is currently exercisable, with the
additional 25% becoming exercisable in March 1997. The terms
of the warrants provide that the warrants become fully
vested in the case of, among other things, a "change of
control" (as defined). The execution of an agreement by Noel
to sell or otherwise dispose of all or substantially all of
its assets or to effect any other transaction, consolidation
or reorganization having similar results or effects would
amount to a "change of control." If any of such events were
to occur prior to January 1997, in the case of Mr.
DiMartino, and March 1997, in the case of Mr. Rawn, the
exercisability of their respective warrants would be
accelerated. It is unlikely that any of such events will
occur prior to the date the warrants would otherwise be
fully exercisable. In addition, if the employment of either
Mr. Rawn or Mr. DiMartino were terminated, other than for
cause or as a result of a voluntary resignation then, the
vesting of the warrants would be accelerated. All of the
outstanding options held by directors are currently fully
exercisable. The terms of the warrants and the options
provide that in the event that the Company shall effect a
distribution, other than a normal and customary cash
distribution, upon shares of Common Stock, the Board of
Directors may, in order to prevent significant diminution in
the value of such options and warrants, take such measures
as it deems fair and equitable, including, without
limitation, the adjustment of the purchase price. The Board
of Directors has not decided on what measures will be taken
in this regard, if any.
For the reasons set forth above, the directors may be deemed to have a
potential conflict of interest with respect to approval of the Plan.
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Principal Provisions of the Plan
Pursuant to the Plan:
(a) The Company will distribute to its shareholders in kind or sell or
otherwise dispose of all its property and assets. The determination of which
assets will be sold and which will be distributed to the Company's shareholders
in kind will be based on whether a particular security can be distributed in
accordance with the rules of the Securities and Exchange Commission (the
"Commission") and the judgment of management and the Board of Directors as to
whether sale or distribution of a particular asset will result in realization of
the highest possible value to Noel's shareholders. This judgment will be based,
in part, on the determination of management and the Board of Directors as to
whether or not a viable public market for a particular security exists or can be
established. Sales of the Company's assets will be made on such terms as are
approved by the Board of Directors. It is not anticipated that any further
shareholder votes will be solicited with respect to the approval of the specific
terms of any particular sales of property approved by the Board of Directors.
(b) Subject to payment or provision for payment of the Company's
indebtedness and other obligations, the cash proceeds of any asset sales
together with other available cash will be distributed from time to time pro
rata to the holders of the Common Stock on record dates selected by the Board of
Directors for such distributions. The Company may establish a reasonable reserve
(a "Contingency Reserve") in an amount determined by the Board of Directors to
be sufficient to satisfy the liabilities, expenses and obligations of the
Company not otherwise paid, provided for or discharged. The net balance, if any,
of any such Contingency Reserve remaining after payment, provision or discharge
of all such liabilities, expenses and obligations will also be distributed to
the Company's shareholders pro rata. The Company itself has no current or
long-term bank indebtedness. Bank indebtedness reflected in the Company's
consolidated financial statements consists of the bank indebtedness of the
Company's consolidated subsidiaries. Lenders generally have no recourse to the
Company for the ultimate collection of loans to the Company's subsidiaries. The
Company's accrued obligations at March 31, 1996 were approximately $6.9 million,
including Federal income taxes payable, accrued expenses and $5.1 million
accrued with respect to the Company's obligations under the Supplemental Plan
and outstanding options. No assurances can be given that available cash and
amounts received on the sale of assets will be adequate to provide for the
Company's obligations, liabilities, expenses and claims and to make cash
distributions to shareholders. The Company currently has no plans to repurchase
shares of Common Stock from shareholders. However, if the Company were to
repurchase shares of Common Stock from shareholders, such repurchases would be
open market purchases and would decrease amounts distributable to other
shareholders if Noel were to pay amounts in excess of the per share values
distributable in respect of the shares purchased and would increase amounts
distributable to other shareholders if Noel were to pay amounts less than the
per share values distributable in respect of such shares. See "Liquidating
Distributions" and "Contingent Liabilities; Contingency Reserve; Liquidating
Trust" below.
(c) Any distribution of the Company's holdings of securities will be
made pro rata to the holders of Common Stock on record dates selected by the
Board of Directors for such distributions. A distribution of the Company's
holdings in a security may also be effected by the distribution to Noel
shareholders of interests in a trust holding such security. If securities held
by the Company are to be distributed to shareholders (other than in trust),
applicable rules and regulations of the Commission will be complied with so that
all shareholders (with the possible exception of affiliates of the Company or of
the issuer of the securities which are distributed) will receive securities
which would thereafter be transferable by them under applicable Federal
securities laws. It is anticipated that the securities to be distributed to the
shareholders would be registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and that the corporation issuing such securities would be
subject to substantially the same reporting and proxy rules as currently apply
to the Company. As described under the caption "Principal Assets of the Company"
- -- "Noel's Public Holdings," only certain of Noel's holdings constitute
securities which are currently registered under the Exchange Act. There can be
no assurance that those issuers whose securities are not registered under the
Exchange Act will become registered thereunder in the future. In addition,
assuming satisfaction of required eligibility standards, the Company may seek to
cause any of its
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holdings of securities not currently listed on an securities exchange or
authorized for quotation through Nasdaq to be so authorized for quotation or
listed, although there can be no assurance to such effect. If any distributed
securities are not authorized for quotation through Nasdaq or listed on an
exchange, the effect may be to render such securities illiquid and/or to
diminish the price realizable upon sale. In any event, the sale or distribution
of the Company's holdings and the anticipation of such sale or distribution
resulting from the adoption of the Plan may reduce the market price of such
securities and therefore the values realized by the shareholders. Noel's
holding's of securities registered under the Exchange Act include (i) shares of
common stock of HealthPlan Services Corporation ("HealthPlan Services"), which
shares are currently traded on the New York Stock Exchange; (ii) shares of
common stock of Belding Heminway Company, Inc. ("Belding Heminway"), which
shares are also currently traded on the New York Stock Exchange; and (iii)
shares of common stock of Lincoln Snacks Company ("Lincoln Snacks"), which
shares are currently traded in the over-the-counter market through the Nasdaq
Small Cap Market.
(d) If deemed necessary by the Board of Directors for any reason, the
Company may, from time to time, transfer any of its unsold assets to one or more
trusts established for the benefit of the then shareholders which property would
thereafter be sold or distributed on terms approved by its trustees. Prior to
the third anniversary of the adoption of the Plan by the Company's shareholders,
the Company may in its discretion transfer all of its unsold assets (other than
property distributed in kind to shareholders), including, the Contingency
Reserve, to a trust. In addition, if all the Company's assets (other than the
Contingency Reserve) are not sold or distributed prior to the third anniversary
of the adoption of the Plan by the Company's shareholders, the Company must
transfer in final distribution such assets to a trust. The Board of Directors
may also elect in its discretion to transfer the Contingency Reserve, if any, to
such a trust. Any of such trusts are referred to herein as "liquidating trusts."
Notwithstanding the foregoing, to the extent that distributions of any asset
cannot be effected without the consent of a governmental authority, no such
distribution shall be effected without such consent. In the event of a transfer
of assets to a liquidating trust, the Company would distribute, pro rata to the
holders of its Common Stock, beneficial interests ("Interests") in any such
liquidating trust or trusts. It is anticipated that the Interests will not be
transferable; hence, although the recipients of the Interests would be treated
for tax purposes as having received their pro rata share of property transferred
to the liquidating trust or trusts and will thereafter take into account for tax
purposes their allocable portion of any income, gain or loss realized by such
liquidating trust or trusts, the recipients of the Interests will not realize
the value thereof unless and until such liquidating trust or trusts distributes
cash or other assets to them. The Plan authorizes the Board of Directors to
appoint one or more individuals or entities to act as trustee or trustees of the
liquidating trust or trusts and to cause the Company to enter into a liquidating
trust agreement or agreements with such trustee or trustees on such terms and
conditions as may be approved by the Board of Directors. Adoption of the Plan
also will constitute the approval by the Company's shareholders of any such
appointment and any liquidating trust agreement or agreements.
(e) The Company will close its stock transfer books and discontinue
recording transfers of shares of Common Stock on the earlier to occur of (i) the
close of business on the record date fixed by the Board of Directors for the
final liquidating distribution, or (ii) the date on which the dissolution
becomes effective under the DGCL (the "Final Record Date"), and thereafter
certificates representing shares Common Stock will not be assignable or
transferable on the books of the Company except by will, intestate succession or
operation of law. After the Final Record Date the Company will not issue any new
stock certificates, other than replacement certificates. See "Listing and
Trading of the Common Stock and Interests in the Liquidating Trust or Trusts"
and "Final Record Date" below.
(f) Following completion of the foregoing steps, a Certificate of
Dissolution will be filed with the State of Delaware dissolving the Company. The
dissolution of the Company will become effective, in accordance with the
Delaware General Corporation Law ("DGCL"), upon proper filing of the Certificate
of Dissolution with the Secretary of State or upon such later date as may be
specified in the Certificate of Dissolution. Pursuant to the DGCL, the Company
will continue to exist for three years after the dissolution becomes effective
or for such longer period as the Delaware Court of Chancery shall direct, for
the purpose of prosecuting and defending suits,
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whether civil, criminal or administrative, by or against it, and enabling the
Company gradually to settle and close its business, to dispose of and convey its
property, to discharge its liabilities and to distribute to shareholders any
remaining assets, but not for the purpose of continuing the business for which
the Company was organized.
Abandonment; Amendment
Under the Plan, the Board of Directors may modify, amend or abandon the
Plan, notwithstanding shareholder approval, to the extent permitted by the DGCL.
The Executive Committee of the Board of Directors may exercise all of
the powers of the Board of Directors in implementing the Plan. Accordingly,
references to the Board of Directors herein should be deemed also to refer to
such committee.
Liquidating Distributions; Nature; Amount; Timing
Although the Board of Directors has not established a firm timetable
for distributions to shareholders if the Plan is approved, the Board of
Directors will, subject to exigencies inherent in winding up the Company's
business, make such distributions as promptly as practicable. Steps towards
distribution and monetization of Noel's assets will commence after shareholder
approval of the Plan. Noel anticipates that substantial distributions will be
made within the twelve month period following approval of the Plan by the
shareholders, although complete distribution may take from one to more than two
years from the date of such approval. The Board of Directors is, however,
currently unable to predict the precise amount of any distributions of cash or
in kind pursuant to the Plan. The actual nature, amount and timing of, and
record date for all distributions will be determined by the Board of Directors,
in its sole discretion, and will depend in part upon the Board of Directors'
determination as to whether particular assets are to be distributed in kind or
otherwise disposed of through sale, exchange (such as the exchange of preferred
stocks for common stocks distributable in kind), refinancing or other means; the
progress of the issuers of securities held by Noel; and the amounts deemed
necessary by the Board of Directors to pay or provide for all the Company's
liabilities and obligations.
The Company does not plan to satisfy all of its liabilities and
obligations prior to making distributions to its shareholders, but instead will
reserve assets deemed by management and the Board of Directors to be adequate to
provide for satisfying such liabilities and obligations. See "Contingent
Liabilities; Contingency Reserve; Liquidating Trust". Management and the Board
of Directors believe that the Company has sufficient cash to pay its current and
accrued obligations, without the sale of any of its assets. It is anticipated,
however, that the sale or distribution of all of the Company's holdings will
result in the net realization of substantial net gain and the generation of tax
obligations exceeding the amount of cash currently available. The Company plans
to meet such tax obligations through the sale of a portion of its holdings.
Uncertainties as to the net value of Noel's assets and the ultimate
amount of its liabilities make it impracticable to predict the aggregate net
values ultimately distributable to shareholders. Claims, liabilities and
expenses from operations (including operating costs, salaries, income taxes,
payroll and local taxes and miscellaneous office expenses) will continue to
occur following approval of the Plan, and the Company anticipates that expenses
for professional fees and other expenses of liquidation will be significant.
These expenses will reduce the amount of assets available for ultimate
distribution to shareholders, and, while the Company does not believe that a
reliable estimate of those expenses can currently be made, management and the
Board of Directors believe that available cash and amounts received on the sale
of assets will be adequate to provide for the Company's obligations,
liabilities, expenses and claims (including contingent liabilities) and to make
cash distributions to shareholders. However, no assurances can be given that
available cash and amounts received on the sale of assets will be adequate to
provide for the Company's obligations, liabilities, expenses and claims and to
make cash distributions to shareholders. If such available cash and amounts
received on the sale of assets
8
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<PAGE>
are not adequate to provide for the Company's obligations, liabilities, expenses
and claims, distributions of cash and other assets to the Company's shareholders
will be reduced.
Disposition of Certain Assets
The Plan gives the Board of Directors the power to sell all of the
assets of the Company. As of June 27, 1996, no sale has been effected and no
agreement to sell any of the assets of the Company had been reached.
Any sales will only be made after the Board of Directors has determined that
any such sale is in the best interests of the shareholders. However, certain
agreements may be entered into prior to the Meeting and contingent upon the
approval of the Plan at the Meeting. Approval of the Plan will constitute
approval of any such agreements. The Company does not anticipate amending or
supplementing the Proxy Statement to reflect any such agreement or sale. Certain
of the Company's assets may be sold to one or more of the Company's affiliates
if such a transaction is approved by a disinterested majority of the Board of
Directors. The prices at which the Company will be able to sell its various
assets depend largely on factors beyond the Company's control, including,
without limitation, the rate of inflation, changes in interest rates, the
condition of financial markets, the availability of financing to prospective
purchasers of the assets and United States and foreign regulatory approvals. The
Company may not obtain as high a price for a particular property as it might
secure if the Company were not in liquidation.
Principal Assets of the Company
Set forth below is a table setting forth Noel's current principal
holdings. The Board of Directors and management have not yet determined whether
or when to sell or distribute any of these holdings. The Board of Directors and
management anticipate making such determinations within the twelve month period
following approval of the Plan by the shareholders and anticipates that
substantial distributions will be made within such twelve month period, although
complete distribution may take from one to more than two years from the date of
such approval. The determination of which holdings will be sold and which will
be distributed to the Company's shareholders in kind will be based on the
judgment of the Board of Directors and management as to whether sale or
distribution of a particular holding will result in realization of the highest
possible value to Noel's shareholders. This judgment will be based, in part, on
the determination of management and the Board of Directors as to whether or not
a viable public market for a particular security exists or can be established.
Sales of the Company's assets will be made on such terms as are approved by the
Board of Directors. If securities held by the Company are to be distributed to
shareholders (other than in trust), applicable rules and regulations of the
Commission will be complied with so that all shareholders (with the possible
exception of affiliates of the Company or of the issuer the securities of which
are distributed) will receive securities which would thereafter be transferable
by them under applicable Federal securities laws. It is anticipated that the
securities to be distributed would be registered under the Exchange Act and that
the corporation issuing such securities would be subject to substantially the
same reporting and proxy rules as currently apply to the Company. There can be
no assurance that those issuers whose securities are not registered under the
Exchange Act will become registered thereunder in the future. In addition,
assuming satisfaction of required eligibility standards, the Company may seek to
cause any of its holdings of securities not currently listed on an securities
exchange or authorized for quotation through Nasdaq to be so authorized for
quotation or listed, although there can be no assurance to such effect. If any
distributed securities are not authorized for quotation through Nasdaq or listed
on an exchange, the effect may be to render such securities illiquid and/or to
diminish the price realizable upon sale. In any event, the sale or distribution
of the Company's holdings and the anticipation of such sale or distribution
resulting from the adoption of the Plan may reduce the market price of such
securities and therefore the values realized by the shareholders.
9
<PAGE>
<PAGE>
Noel's Principal Holdings
<TABLE>
<CAPTION>
Approximate
Approximate % of
No. of % of Outstanding
Shares of Outstanding No. of Shares Shares of
Common Shares of Common Stock of Preferred Preferred
Name of Company Stock Held Common Stock Traded on Stock Stock
- --------------- ---------- ------------ --------- ---------------- -----
<S> <C> <C> <C> <C> <C>
HealthPlan Services 5,595,846(1) 38% New York -- --
Corporation Stock
Exchange
Staffing Resources, Inc. 2,026,104(2) 16% --(3) -- --
Belding Heminway 2,205,814(1) 30% New York 19,312,838 93%
Company, Inc. Stock shares of
Exchange Series B
Preferred
Lincoln Snacks Company 3,769,755(1) 60% Nasdaq Stock -- --
Market Small
Cap Market
Curtis Industries, Inc. 163,449(2) 63% -- 142,619 67%
Ferroviaria Novoeste, S.A. 1,200,000(2) 20% -- 5,660,076 47%
shares of
Preferred
Stock
</TABLE>
(1) These securities are registered under the Exchange Act.
(2) These securities are not registered under the Exchange Act.
(3) A limited number of shares of common stock of Staffing Resources, Inc. are
traded in the over the counter market and prices are quoted in the "pink
sheets."
Conduct of the Company Following Adoption of the Plan
The adoption of the Plan by the Board of Directors has effectively
terminated the Company's participation in acquisitions. Consequently, since the
adoption of the Plan by the Board of Directors, Louis Marx, Jr., has resigned as
a director and as Chairman of the Executive Committee, and Thomas C. Israel has
resigned as a director. It is anticipated that certain of the present directors
and principal executive officers of the Company will continue to serve in such
capacities following adoption of the Plan by the shareholders. The continuing
officers and directors will receive compensation for the duties then being
performed as determined by the Compensation Committee of the Board of Directors.
Neither the Board of Directors nor the Compensation Committee have established
specific guidelines for determination of the compensation to be paid to
directors and officers of the Company following adoption of the Plan. Such
compensation will be determined by evaluation of all relevant factors,
including, without limitation, the efforts of such individuals in successfully
implementing the Plan and compensation payable in the financial community to
individuals exercising similar authority and bearing similar responsibilities.
Following approval of the Plan by Noel's shareholders, Noel's
activities will be limited to winding up its affairs, taking such action as may
be necessary to preserve the value of its assets and distributing its assets in
accordance with
10
<PAGE>
<PAGE>
the Plan. The Company will seek to distribute or liquidate all of its assets in
such manner and upon such terms as the Board of Directors determines to be in
the best interests of the Company's shareholders.
Following the approval of the Plan by Noel' shareholders, the Company
shall continue to indemnify its officers, directors, employees and agents in
accordance with its certificate of incorporation, as amended, and by-laws and
any contractual arrangements, for actions taken in connection with the Plan and
the winding up of the affairs of the Company. The Company's obligation to
indemnify such persons may be satisfied out of the assets of any liquidating
trust. The Board of Directors and the trustees of any liquidating trust, in
their absolute discretion, are authorized to obtain and maintain insurance as
may be necessary to cover the Company's indemnification obligations under the
Plan.
Contingent Liabilities; Contingency Reserve; Liquidating Trust
Under Delaware law the Company is required, in connection with its
dissolution, to pay or provide for payment of all of its liabilities and
obligations. Following approval of the Plan by Noel's shareholders, the Company
will pay all expenses and fixed and other known liabilities, or set aside as a
Contingency Reserve assets which it believes to be adequate for payment thereof.
The Company is currently unable to estimate with precision the amount of any
Contingency Reserve, which may be required, but any such amount (in addition to
any cash contributed to a liquidating trust, if one is utilized) will be
deducted before the determination of amounts available for distribution to
shareholders.
The actual amount of the Contingency Reserve will be based upon
estimates and opinions of management and the Board of Directors and derived from
consultations with outside experts (such as an independent actuary with respect
to Noel's obligations under the Supplemental Plan) and review of the Company's
estimated operating expenses, including, without limitation, anticipated
compensation payments, estimated investment banking, legal and accounting fees,
rent, payroll and other taxes payable, miscellaneous office expenses and
expenses accrued in the Company's financial statements. There can be no
assurance that the Contingency Reserve in fact will be sufficient. The Company
has not made any specific provision for an increase in the amount of the
Contingency Reserve. Subsequent to the establishment of the Contingency Reserve,
the Company will distribute to its shareholders any portions of the Contingency
Reserve which it deems no longer to be required. After the liabilities, expenses
and obligations for which the Contingency Reserve had been established have been
satisfied in full, the Company will distribute to its shareholders any remaining
portion of the Contingency Reserve.
If deemed necessary by the Board of Directors for any reason, the
Company may, from time to time, transfer any of its unsold assets to one or more
liquidating trusts established for the benefit of the then shareholders which
property would thereafter be sold or distributed on terms approved by its
trustees. Prior to the third anniversary of the adoption of the Plan by the
Company's shareholders, the Company may in its discretion transfer all of its
unsold assets (other than property distributed in kind to shareholders),
including the Contingency Reserve, to a liquidating trust. In addition, if all
the Company's unsold assets (other than the Contingency Reserve) are not sold or
distributed prior to the third anniversary of the adoption of the Plan by the
Company's shareholders, the Company must transfer in final distribution such
unsold assets to a liquidating trust. The Board of Directors may also elect in
its discretion to transfer the Contingency Reserve, if any, to such a
liquidating trust. Notwithstanding the foregoing, to the extent that
distributions of any asset cannot be effected without the consent of a
governmental authority, no such distribution shall be effected without such
consent. The purpose of a liquidating trust would be to distribute such property
and assets, or to sell such property and assets on terms satisfactory to the
liquidating trustees, and distribute the proceeds of such sale after paying
those liabilities of the Company, if any, assumed by the trust, to the Company's
shareholders. Any liquidating trust acquiring all the unsold assets of the
Company will assume all of liabilities and obligations of the Company and will
be obligated to pay any expenses and liabilities of the Company which remain
unsatisfied. If the Contingency Reserve transferred to the liquidating trust is
exhausted, such expenses and liabilities will be satisfied out of the
liquidating trust's other unsold assets.
The Plan authorizes the Board of Directors to appoint one or more
individuals or entities to act as trustee or trustees of the liquidating trust
or trusts and to cause the Company to enter into a liquidating trust agreement
or
11
<PAGE>
<PAGE>
agreements with such trustee or trustees on such terms and conditions as may be
approved by the Board of Directors. It is anticipated that the Board of
Directors will select such trustee or trustees on the basis of the experience of
such individual or entity in administering and disposing of assets and
discharging liabilities of the kind to be held by the liquidating trust or
trusts and the ability of such individual or entity to serve independently the
best interests of the Company's shareholders. Adoption of the Plan also will
constitute the approval by the Company's shareholders of any such appointment
and any liquidating trust agreement or agreements.
The Company has no present plans to use a liquidating trust or trusts,
but the Board of Directors believes the flexibility provided by the Plan with
respect to the liquidating trusts to be advisable.
In the event the Company fails to create an adequate Contingency
Reserve for payment of its expenses and liabilities, or should such Contingency
Reserve and the assets held by the liquidating trust or trusts be exceeded by
the amount ultimately found payable in respect of expenses and liabilities, each
shareholder could be held liable for the payment to creditors of such
shareholder's pro rata share of such excess, limited to the amounts theretofore
received by such shareholder from the Company or from the liquidating trust or
trusts.
If the Company were held by a court to have failed to make adequate
provision for its expenses and liabilities or if the amount ultimately required
to be paid in respect of such liabilities exceed the amount available from the
Contingency Reserve and the assets of the liquidating trust or trusts, a
creditor of the Company could seek an injunction against the making of
distributions under the Plan on the ground that the amounts to be distributed
were needed to provide for the payment of the Company's expenses and
liabilities. Any such action could delay or substantially diminish the cash
distributions to be made to shareholders and/or Interest holders under the Plan.
Final Record Date
The Company will close its stock transfer books and discontinue
recording transfers of shares of Common Stock on the Final Record Date, and
thereafter certificates representing shares of Common Stock will not be
assignable or transferable on the books of the Company except by will, intestate
succession or operation of law. After the Final Record Date the Company will not
issue any new stock certificates, other than replacement certificates. It is
anticipated that no further trading of the Company's shares will occur on or
after the Final Record Date. See "Listing and Trading of the Common Stock and
Interests in the Liquidating Trust or Trusts" below. All liquidating
distributions from the Company or a liquidating trust on or after the Final
Record Date will be made to shareholders according to their holdings of Common
Stock as of the Final Record Date. Subsequent to the Final Record Date, the
Company may at its election require shareholders to surrender certificates
representing their shares of the Common Stock in order to receive subsequent
distributions. Shareholders should not forward their stock certificates before
receiving instructions to do so. If surrender of stock certificates should be
required, all distributions otherwise payable by the Company or the liquidating
trust, if any, to shareholders who have not surrendered their stock certificates
may be held in trust for such shareholders, without interest, until the
surrender of their certificates (subject to escheat pursuant to the laws
relating to unclaimed property). If a stockholder's certificate evidencing the
Common Stock has been lost, stolen or destroyed, the stockholder may be required
to furnish the Company with satisfactory evidence of the loss, theft or
destruction thereof, together with a surety bond or other indemnity, as a
condition to the receipt of any distribution.
12
<PAGE>
<PAGE>
Listing and Trading of the Common Stock and Interests in the Liquidating Trust
or Trusts
The Company currently intends to close its transfer books on the Final
Record Date and at such time cease recording stock transfers and issuing stock
certificates (other than replacement certificates). Accordingly, it is expected
that trading in the shares will cease on and after such date.
The Common Stock is currently listed for trading on the Nasdaq Stock
Market's National Market. In connection with such listing Noel is required to
continue to comply with certain criteria prescribed by Nasdaq for continued
designation as a national market security. Failure to continue to comply
therewith could result in delisting of the Common Stock prior to the Final
Record Date. Any such delisting would make it more difficult for an investor to
dispose of or obtain accurate quotations as to the market value of the Common
Stock. Delisting of the Common Stock may result in lower prices for the Common
Stock than would otherwise prevail.
It is anticipated that the Interests in a liquidating trust or trusts
will not be transferable, although no determination has yet been made. Such
determination will be made by the Board of Directors and management prior to the
transfer of unsold assets to the liquidating trusts and will be based on, among
other things, the Board of Directors and managements' estimate of the value of
the assets being transferred to the liquidating trust or trusts, tax matters and
the impact of compliance with applicable securities laws. Should the Interests
be transferable, the Company plans to distribute an information statement with
respect to the liquidating trust or trusts at the time of the transfer of assets
and the liquidating trust or trusts may be required to comply with the periodic
reporting and proxy requirements of the Exchange Act. The costs of compliance
with such requirements would reduce the amount which otherwise could be
distributed to Interest holders. Even if transferable, the Interests are not
expected to be listed on a national securities exchange or quoted through Nasdaq
and the extent of any trading market therein cannot be predicted. Moreover, the
Interests may not be accepted by commercial lenders as security for loans as
readily as more conventional securities with established trading markets.
As shareholders will be deemed to have received a liquidating
distribution equal to their pro rata share of the value of the net assets
distributed to an entity which is treated as a liquidating trust for tax
purposes (see "Certain Federal Income Tax Consequences - The Liquidating Trust
or Trusts"), the distribution of non-transferable Interests could result in tax
liability to the Interest holders without their being readily able to realize
the value of such Interests to pay such taxes or otherwise.
Absence of Appraisal Rights
Under the DGCL, the shareholders of the Company are not entitled to
appraisal rights for their shares of the Common Stock in connection with the
transactions contemplated by the Plan or to any similar rights of dissenters
under the DGCL.
Regulatory Approvals
Except for (i) compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, to the extent applicable, in connection
with certain sales by the Company of its assets, and (ii) compliance by the
Company with the applicable rules and regulations of the Commission, in
connection with the distribution by the Company to its shareholders of
securities held by the Company, no federal or state regulatory requirements must
be complied with or approvals obtained in connection with the liquidation. The
disposition by Noel of its voting interest in Novoeste is restricted by the
terms of the concession granted to Novoeste to operate the western network of
the Brazilian federal rail system. The terms of the concession require that the
three members of the "control group," of which Noel is a member, own at all
times while the concession is in effect, greater than 50% of the voting stock of
Novoeste. Members of the control group currently own in the aggregate 60% of the
voting stock.
13
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<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of all material Federal income
tax consequences to the Company's shareholders relevant to the Plan, but does
not purport to be a complete analysis of all the potential tax effects. The
discussion is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations, Internal Revenue Service (the "IRS") rulings, and
judicial decisions now in effect, all of which are subject to change at any
time; any such changes may be applied retroactively. The following discussion
has no binding effect on the IRS or the courts and assumes that Noel will
liquidate substantially in accordance with the Plan.
Distributions pursuant to the Plan may occur at various times and in
more than one tax year. No assurances can be given that the tax treatment
described herein will remain unchanged at the time of such distributions.
Consequences to Noel
After the adoption of the Plan and until the liquidation is completed,
Noel will continue to be subject to income tax on its taxable income. Noel will
recognize gain or loss on sales and distributions of its property pursuant to
the Plan. Upon any distribution of property to shareholders pursuant to the
Plan, Noel will recognize gain or loss as if such property was sold to the
shareholders at its fair market value. It is anticipated that the sale or
distribution of all of the Company's holdings will result in the realization of
substantial net gain and the generation of tax obligations exceeding the amount
of cash currently available. The Company plans to meet such tax obligations
through the sale of a portion of its holdings.
Consequences to Shareholders
As a result of the liquidation of Noel, shareholders will recognize
gain or loss equal to the difference between (i) the sum of the amount of cash
distributed to them and the fair market value (at the time of distribution) of
property distributed to them, and (ii) their tax basis for their shares of
Noel's common stock. A shareholder's tax basis in his or her shares will depend
upon various factors, including the shareholders cost and the amount and nature
of any distributions received with respect thereto.
A shareholder's gain or loss will be computed on a "per share" basis.
Noel expects to make more than one liquidating distribution, each of which will
be allocated proportionately to each share of stock owned by a shareholder. The
value of each liquidating distribution will be applied against and reduce a
shareholder's tax basis in his or her shares of stock. Gain will be recognized
by reason of a liquidating distribution only to the extent that the aggregate
value of such distributions received by a shareholder with respect to a share
exceeds his or her tax basis for that share. Any loss will generally be
recognized only when the final distribution from Noel has been received and then
only if the aggregate value of the liquidating distributions with respect to a
share is less than the shareholder's tax basis for that share. Gain or loss
recognized by a shareholder will be capital gain or loss provided the shares are
held as capital assets. Gain resulting from distributions of cash or assets from
a corporation pursuant to a plan of liquidation is generally capital gain rather
than ordinary income; ordinary income would be the result in the event of the
receipt of a distribution, not in liquidation, characterized as a dividend for
tax purposes.
Upon any distribution of property, the shareholder's tax basis in such
property will be the fair market value of such property at the time of
distribution. The gain or loss recognized upon the shareholder's future sale of
that property will be measured by the difference between the shareholder's tax
basis in the property at the time of such sale and the sales proceeds.
After the close of its taxable year, Noel will provide shareholders and
the IRS with a statement of the amount of cash distributed to the shareholders
and its best estimate as to the value of the property distributed to them during
that year. In the case of property which consists of stock or other securities
which are traded in a public market, the fair
14
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<PAGE>
market value will be based on the prices at which such stocks or securities are
so traded. In the case of other property, the fair market value will be
determined by the Board of Directors based upon reports by independent
appraisers or such other evidence as the Board of Directors shall elect. There
is no assurance that the IRS will not challenge such valuation. As a result of
such a challenge, the amount of gain or loss recognized by shareholders might be
changed. Distributions to shareholders could result in tax liability to any
given shareholder exceeding the amount of cash received, requiring the
shareholder to meet the tax obligations from other sources or by selling all or
a portion of the assets received. Such sales, or the prospect of such sales,
could reduce the market price of the securities received.
The Liquidating Trust or Trusts
If the Company transfers assets to a liquidating trust or trusts,
shareholders will be treated for tax purposes as having received their pro rata
share of the property transferred to the liquidating trust or trusts. The amount
of the distribution will be reduced by the amount of known liabilities assumed
by the liquidating trust or trusts or to which the property transferred is
subject. The liquidating trust or trusts themselves should not be subject to
tax. After formation of the liquidating trust or trusts, the shareholders will
take into account for Federal income tax purposes their allocable portion of any
income, gain or loss recognized by the liquidating trust or trusts. As a result
of the transfer of property to the liquidating trust or trusts and the ongoing
operations of the liquidating trust or trusts, shareholders should be aware that
they may be subject to tax, whether or not they have received any actual
distributions from the liquidating trust or trusts with which to pay such tax.
Taxation of Non-United States Shareholders
Foreign corporations or persons who are not citizens or residents of
the United States should consult their tax advisors with respect to the U.S. and
non-U.S. tax consequences of the Plan.
State and Local Tax
Shareholders may also be subject to state or local taxes.
Noel recommends that each shareholder consult his or her own tax
advisor regarding the tax consequences of the Plan.
15
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person who, to
the knowledge of the Board of Directors, as of the Record Date, was the
beneficial owner of more than 5% of the issued and outstanding shares of Common
Stock:
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percent of
Beneficial Owner of Common Stock Class (1)
- ------------------- --------------- ----------
<S> <C> <C>
Spears, Benzak, Salomon & Farrell, Inc.
45 Rockefeller Plaza
New York, New York 10111 3,158,771(2) 15.6%(2)
Louis Marx, Jr.
667 Madison Avenue
New York, New York 10021 1,642,756(3) 8.1%
Brae Group, Inc.
11011 Richmond Avenue
Houston, Texas 77042 1,622,313(4) 8.0%
Rockefeller & Co., Inc.
30 Rockefeller Plaza
New York, New York 10112 1,126,599(5) 5.6%
</TABLE>
(1) Based on 20,211,642 shares of Common Stock issued and outstanding on the
Record Date.
(2) The information set forth in the table and this footnote regarding shares
beneficially owned by Spears, Benzak, Salomon & Farrell, Inc. ("Spears
Benzak") is based on a Schedule 13G dated May 31, 1993, as subsequently
amended, filed by Spears Benzak, as an indirect wholly-owned subsidiary of
KeyCorp., reflecting beneficial ownership of Common Stock by Spears Benzak
as of May 31, 1996. The Schedule 13G states that the shares beneficially
owned by Spears Benzak consist entirely of shares as to which Spears Benzak
shares the power to vote and dispose or direct the disposition of such
shares with various customers for whom the shares were purchased, but in
each case the customer has the ultimate power to vote and dispose of the
shares and may at any time revoke Spears Benzak's authority to vote and
dispose of the shares.
(3) Consists of 20,443 shares held directly by Mr. Marx and 1,622,313 shares
held by Brae Group, Inc. ("Brae"), of which shares Mr. Marx may be deemed
the beneficial owner.
(4) The shares beneficially owned by Brae are also reported as beneficially
owned by Louis Marx, Jr. See Footnote (3).
(5) The information set forth in the table and this footnote regarding shares
beneficially owned by Rockefeller & Co., Inc. ("R&Co.") is based on a
Schedule 13G dated February 8, 1995 filed by R&Co., as amended, reflecting
beneficial ownership by R&Co. of Common Stock as of December 31, 1995, and
supplementary information provided by R&Co. in connection with preparation
of this Proxy Statement. The number includes 8,334 shares issuable upon
exercise of options granted to Wendell W. Robinson, a former director of
the Company, under the 1988 Stock Option Plan. The Schedule 13G filed by
R&Co. states that the shares beneficially owned by R&Co. are held by six
limited partnerships for which R&Co. is the investment manager and which
have granted R&Co. voting and dispositive power.
16
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<PAGE>
The table which follows sets forth certain information, as of the
Record Date, concerning shares of Common Stock owned of record or beneficially
by each director of the Company, by each of the "Named Officers" (as hereinafter
defined), and by all executive officers and directors of the Company as a group.
The footnotes reflect the ownership by such persons of each class of equity
securities of certain entities some or all of which may be deemed to be
subsidiaries of Noel within the meaning of the federal securities laws. The term
"Named Officers" means any person who either (i) served as the Company's Chief
Executive Officer during the fiscal year ended December 31, 1995 or (ii) was one
of the Company's four most highly compensated officers (other than the Chief
Executive Officer) serving as an officer at December 31, 1995 and whose total
salary and bonus during 1995 exceeded $100,000.
<TABLE>
<CAPTION>
Name of Number of Shares Percent of
Beneficial Owner of Stock (1) Class (2)
---------------- --------------------- ----------
<S> <C> <C>
William L. Bennett 445,315(3) 2.2%
Karen Brenner 233,334(4) 1.1%
Livio M. Borghese 28,334(5) *
Joseph S. DiMartino 608,334(6) 2.9%
Vincent D. Farrell, Jr. 3,167,105(7) 15.7%
Herbert M. Friedman 22,334(8) *
John A. MacDonald 375,478(9) 1.9%
Louis Marx, Jr. 1,642,756(10) 8.1%
James K. Murray, Jr. 12,334(11) *
James G. Niven 22,223(12) *
Donald T. Pascal 245,302(13) 1.2%
Samuel F. Pryor, III 13,889(14) *
Stanley R. Rawn, Jr. 512,523(15) 2.5%
James A. Stern 38,334(16) *
Edward T. Tokar 8,334(17) *
All Executive Officers and Directors
as a group (includes 16 persons) 6,066,838(18) 27.1%
</TABLE>
- --------------
* Less than 1%
(1) Unless otherwise indicated, each of the parties listed has sole voting and
investment power over the shares owned. The number of shares indicated
includes in each case the number of shares of Common Stock issuable upon
exercise of (i) stock options ("Options") granted under (a) Noel's 1988
Option Plan, (b) Noel's 1995 Stock Option Plan, and (c) Noel's Non-Employee
Directors' Stock Option Plan and (ii) non-plan warrants, to the extent that
such Options and warrants are currently exercisable. For purposes of this
table, Options and warrants are deemed to be "currently exercisable" if
they may be exercised within 60 days following the date of mailing of this
Proxy Statement.
(2) Based on 20,211,642 shares of Common Stock issued and outstanding on the
Record Date. In addition, treated as outstanding for the purpose of
computing the percentage ownership of each director or Named Officer and of
all executive officers and directors as a group are shares issuable to such
individual or group upon exercise of currently exercisable Options or
warrants.
(3) Consists of 3,000 shares held by Mr. Bennett's wife as trustee for Mr.
Bennett's children (as to which shares Mr. Bennett disclaims beneficial
ownership) and 442,315 shares issuable upon exercise of currently
exercisable Options. Mr. Bennett is also the beneficial owner of 139,528
shares (1.9%) of common stock of Belding Heminway Company Inc. ("Belding
Heminway") consisting of 115,124 shares held directly, 3,400
17
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shares issuable upon exercise of currently exercisable options, 526 shares
of Belding Heminway common stock held by Mr. Bennett's wife as trustee for
Mr. Bennett's children, and 20,478 shares of Belding Heminway common stock
held by Mr. Bennett's wife (with Mr. Bennett disclaiming beneficial
ownership in such shares held by his wife as trustee for his children and
by his wife), 98,012 shares (less than 1%) of Belding Heminway Series B
preferred stock, 214,486 shares (1.5%) of common stock of HealthPlan
Services Corporation ("HPS"), consisting of 199,486 shares held directly by
Mr. Bennett and 15,000 shares issuable upon exercise of currently
exercisable options, 600 shares (less than 1%) of common stock of Curtis
Industries, Inc. ("Curtis"), 9,100 shares (less than 1%) of common stock of
Lincoln Snacks Company ("Lincoln Snacks"), and 6,000 shares (less than 1%)
of common stock of TDX Corporation ("TDX"), consisting of 3,000 shares held
by Mr. Bennett directly and 3,000 shares held by trusts for the benefit of
his children as to which shares Mr. Bennett disclaims beneficial interest.
(4) Consists of shares issuable upon exercise of currently exercisable Options.
Ms. Brenner is also the beneficial owner of 30,111 shares (less than 1%) of
HPS common stock (all of which is held by Ms. Brenner's 401(k) account),
202,200 shares (2.7%) of common stock of Belding Heminway, consisting of
50,000 shares held by Ms. Brenner's 401(k) account and 152,200 shares
issuable upon exercise of currently exercisable options, and 194,167 shares
(3.1%) of common stock of Lincoln Snacks, consisting of 9,100 shares held
directly and 185,067 shares issuable upon exercise of currently exercisable
options, of which options for 18,400 shares were granted by Lincoln Snacks
and options for 166,667 shares were granted by Noel.
(5) Consists of 20,000 shares held directly by Mr. Borghese and 8,334 shares
issuable upon exercise of currently exercisable Options. Mr. Borghese is
the beneficial owner of 74,563 shares (28.5%) of Curtis common stock,
63,015 shares (29.7%) of Curtis series B convertible preferred stock, 3,216
shares (less than 1%) of Belding Heminway common stock and 5,000 shares
(less than 1%) of HPS common stock.
(6) Consists of 8,334 shares issuable upon exercise of currently exercisable
Options and 600,000 shares issuable upon exercise of a portion of a warrant
which is currently exercisable. Mr. DiMartino is also the beneficial owner
of 12,800 shares (less than 1%) of HPS common stock, consisting of 8,000
shares held directly and 4,800 shares issuable upon exercise of options
that are currently exercisable, and 3,400 shares (less than 1%) of Belding
Heminway common stock consisting of options which are currently
exercisable.
(7) Consists of 8,334 shares issuable upon exercise of currently exercisable
Options and 3,158,771 shares beneficially owned by Spears Benzak, with
respect to which shares Mr. Farrell disclaims beneficial ownership.
See Footnote (2) of the preceding table.
(8) Consists of 14,000 shares held directly by Mr. Friedman and 8,334 shares
issuable upon exercise of currently exercisable Options. Mr. Friedman is
also the beneficial owner of 877 shares (less than 1%) of Belding Heminway
common stock, 8,000 shares (less than 1%) of Lincoln Snacks common stock
and 2,000 shares (less than 1%) of common stock of HPS.
(9) Consists of 3,000 shares held directly by Mr. MacDonald, 2,850 shares held
by minor children, 8,334 shares issuable upon exercise of currently
exercisable Options, 359,066 shares held by the Hall Family Foundation of
Kansas (of which Mr. MacDonald is Vice President and Treasurer and with
respect to which shares Mr. MacDonald disclaims beneficial ownership), and
2,228 shares held by Limit & Company, an investment partnership controlled
by members of the Hall family, in which shares Mr. MacDonald has a
pecuniary interest. The number indicated does not include other shares held
by Limit & Company in which Mr. MacDonald does not have a pecuniary
interest. Mr. MacDonald is also the beneficial owner of 87,944 shares
(1.2%) of Belding Heminway common stock, consisting of 391 shares held
directly and 87,553 shares held by the Hall Family Foundation, the
beneficial ownership of which is disclaimed.
(10) Consists of 20,443 shares held directly by Mr. Marx and 1,622,313 shares
held by Brae, of which shares Mr. Marx may be deemed the beneficial owner.
Mr. Marx is also the beneficial owner of 313,393 shares (2.1%)
18
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<PAGE>
of HPS common stock, consisting of 65,775 shares held directly and 247,619
shares held by Brae, 510,000 shares (6.7%) of TDX common stock, consisting
of 260,000 shares held directly by Brae and 250,000 shares issuable upon
exercise of currently exercisable warrants held by Brae, 226,402 shares
(3.1%) of common stock of Belding Heminway consisting of 133,586 shares
held directly and 92,816 shares held by Brae, and 170,200 shares (2.7%) of
Lincoln Snacks common stock, consisting of 125,700 shares held directly and
44,500 shares held by Brae.
(11) Consists of 4,000 shares held by Mr. Murray's wife (as to which Mr. Murray
disclaims beneficial ownership) and 8,334 shares issuable upon exercise of
currently exercisable Options. Mr. Murray is also the beneficial owner of
923,559 shares (6.3%) of HPS common stock, consisting of 1,600 shares held
directly by Mr. Murray, 150,000 shares held by Mr. Murray's wife (as to
which Mr. Murray disclaims beneficial ownership), 169,094 shares held by
two private companies in which Mr. Murray has a pecuniary interest in only
a portion of such securities and disclaims ownership except to the extent
thereof, 587,865 held by a family limited partnership and 15,000 shares
issuable upon exercise of currently exercisable options.
(12) Consists of 22,223 shares issuable upon exercise of currently exercisable
Options. Mr. Niven is also the beneficial owner of 16,050 shares (less than
1%) of HPS common stock, consisting of 11,250 shares held directly by Mr.
Niven and 4,800 shares issuable upon exercise of currently exercisable
options, 27,500 shares (less than 1%) of Lincoln Snacks common stock,
consisting of 9,100 shares held directly and 18,400 shares issuable upon
exercise of currently exercisable options, and 3,899 shares (less than 1%)
of Belding Heminway common stock.
(13) Consists of 11,968 shares held directly by Mr. Pascal and 233,334 shares
issuable upon exercise of currently exercisable Options. Mr. Pascal is the
beneficial owner of 30,113 shares (less than 1%) of HPS common stock,
consisting of 20,078 shares held directly by Mr. Pascal and 10,035 shares
held in Mr. Pascal's 401(k) rollover account, 100,000 shares (1.4%) of TDX
Corporation ("TDX") common stock, all of which are issuable pursuant to
currently exercisable options, 240 shares (less than 1%) of Curtis common
stock, 9,100 shares (less than 1%) of Lincoln Snacks common stock, and the
following shares of Belding Heminway: 57,709 shares (less than 1%) of
Belding Heminway common stock and 24,503 shares (less than 1%) of Belding
Heminway Series B preferred stock held of record, and 7,708 shares (less
than 1%) of Belding Heminway common stock and 24,502 (less than 1%) shares
of Belding Heminway Series B preferred stock held in Mr. Pascal's 401(k)
rollover account.
(14) Consists of 5,555 shares held directly by Mr. Pryor and 8,334 shares
issuable upon exercise of currently exercisable Options. Mr. Pryor is the
beneficial owner of 2,436 shares (less than 1%) of Belding Heminway common
stock.
(15) Consists of 254,189 shares held directly by Mr. Rawn, 10,000 shares held by
Mr. Rawn's daughter with respect to which shares Mr. Rawn disclaims
beneficial ownership, 8,334 shares issuable upon exercise of currently
exercisable Options and 240,000 shares issuable upon exercise of a
currently exercisable portion of a warrant. Mr. Rawn is also the beneficial
owner of 22,081 shares (less than 1%) of Belding Heminway common stock,
consisting of 2,196 shares held directly and 19,885 shares held by Mr. Rawn
as trustee under a certain "rabbi" trust (with Mr. Rawn disclaiming
beneficial ownership in such shares held by such trust). and 196,023 shares
of Series B preferred stock of Belding Heminway consisting of shares held
by Mr. Rawn as trustee under a "rabbi" trust (with respect to which shares
Mr. Rawn disclaims beneficial ownership).
(16) Consists of 25,000 shares held directly by Mr. Stern, 5,000 shares held by
Mr. Stern's wife as custodian for their children, and 8,334 shares issuable
upon exercise of currently exercisable Options. Mr. Stern is the beneficial
owner of 1,054 shares (less than 1%) of TDX common stock consisting of 586
shares held directly and 468 shares are held by members of his family,
6,724 shares (less than 1%) of Belding Heminway common stock consisting of
5,847 shares held directly and 877 shares held by Mr. Stern's wife as a
custodian for their children.
19
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<PAGE>
(17) Consists of 8,334 shares issuable upon exercise of currently exercisable
Options. Mr. Tokar is the beneficial owner of 1,462 shares (less than 1%)
of Belding Heminway common stock and 1,000 shares (less than 1%) of Lincoln
Snacks common stock.
(18) Includes 2,177,880 shares issuable upon exercise of currently exercisable
Options and warrants and certain shares with respect to which beneficial
interest is disclaimed; see Footnotes (3) through (9) and (11) through
(17). The executive officers and directors as a group hold shares of
capital stock (including certain shares as to which beneficial interest is
disclaimed, including as indicated in Footnotes (3) through (9) and (11)
through (17)) of the following entities some or all of which may be deemed
to be subsidiaries of Noel within the meaning of the federal securities
laws: HPS: 1,350,559 shares (9.1%) of common stock, including 44,400 shares
issuable upon exercise of currently exercisable options; TDX: 107,054
shares (1.4%) of common stock, including 100,000 shares issuable upon
exercise of currently exercisable options; Curtis: 76,003 shares (29.1%) of
common stock and 63,015 shares (29.7%) of Series B convertible preferred
stock; Lincoln Snacks: 253,867 shares (4.0%) of common stock, including
36,800 shares issuable upon exercise of currently exercisable options
issued by Lincoln Snacks and 166,667 shares transferable upon exercise of
currently exercisable options issued by Noel; Belding Heminway: 874,694
shares (13.5%) of common stock, including, 162,400 shares issuable upon
exercise of currently exercisable options and 698,292 shares (9.2%) of
Series B preferred stock.
BUSINESS OF THE COMPANY
General
Noel conducts its principal operations through small and medium-sized
operating companies in which Noel holds controlling or other significant equity
interests. Noel's holdings in operating companies include (i) HealthPlan
Services, a leading managed health care services company providing distribution,
enrollment, premium billing and collection, claims administration and
information and analysis services on behalf of health care payors and providers;
(ii) Staffing Resources, a provider of staffing services to businesses in
various industries in the Southwest and Rocky Mountain regions of the United
States and, more recently in the Southeast; (iii) Belding Heminway, a
manufacturer and marketer of industrial and consumer threads and a distributor
of home sewing and craft products, principally buttons; (iv) Curtis Industries,
a national distributor of fasteners, security products, chemicals, automotive
replacement parts, fittings and connectors, tools and hardware; (v) Lincoln
Snacks, one of the leading manufacturers and marketers of caramelized pre-popped
popcorn in the United States and Canada; and (vi) Ferroviaria Novoeste, a
Brazilian company which operates the concession for the western network of the
Brazilian federal rail system which is being privatized by the Brazilian
government.
Reference is made to Noel's 1995 Annual Report and Noel's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, for detailed
information concerning the business of Noel and its subsidiaries and principal
operating companies.
Noel maintains its principal executive office at 667 Madison Avenue, New
York, New York 10021. Its telephone number is (212) 371-1400.
Recent Developments
As reported on a Current Report on Form 8-K filed with the Commission on
May 30, 1996, on May 21, 1996, Noel's Board of Directors adopted the Plan and
directed that the Plan be submitted to Noel's shareholders for approval. The
high and low sale prices of a share of Noel's Common Stock on May 20, 1996, the
date preceding the public announcement by the Board of Directors of the Plan,
was $8.50 and $8.25, respectively.
20
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<PAGE>
There have been no material changes in the Company's affairs since
December 31, 1995 that have not been described in a report on a Form 10-Q or a
Form 8-K filed with the Commission under the Exchange Act.
Certain Financial Information
Reference is made to Noel's 1995 Annual Report to Shareholders and Noel's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995, for
Noel's audited financial statements, selected financial information,
supplementary financial information, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and the market price of and
dividends paid on Noel's Common Stock. Reference is also made to Noel's
Quarterly Report on Form 10-Q for the period ended March 31, 1996 for certain
unaudited financial statements and additional information.
AUDITORS
Arthur Andersen LLP, independent public accountants, were selected to
audit the financial statements of the Company for the year ending December 31,
1995. The Company's policy is to select the independent public accountants to
audit the current year's financial statements at the end of the current year.
Accordingly, no independent public accountants have been selected to audit the
financial statements of the Company for the year ending December 31, 1996.
Representatives of Arthur Andersen LLP are expected to be present at the Meeting
and will have the opportunity to make a statement if they desire. They will also
be available to respond to appropriate questions.
DEADLINE FOR SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual meeting
of shareholders, to be held in 1997, must be received by the Company at 667
Madison Avenue, New York, New York 10021 by December 27, 1996, to be included in
the proxy statement and form of proxy relating to that meeting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference into this Proxy Statement
the following documents filed with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1995 (File No. 0-19737);
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996 (File Number 0-19737);
(c) The Company's Current Report on Form 8-K dated May 21, 1996 (File
Number 0-19737); and
(d) All other reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date hereof and prior to the date of the Meeting to which this
Proxy Statement relates are deemed to be incorporated herein by
reference and shall be deemed a part hereof from the date of filing
such document.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Proxy Statement, shall be
deemed to be modified or superseded for purposes of this Proxy
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<PAGE>
Statement to the extent that a statement contained herein or in any subsequently
filed document which also is deemed to be incorporated herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed to constitute a part of this Proxy Statement, except as so modified or
superseded.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Proxy Statement is delivered, upon the written or oral
request of such person, and by first class mail or other equally prompt means
within one business day of receipt of such request, a copy of any and all of the
information that has been incorporated by reference in this Proxy Statement (not
including exhibits to the information that is incorporated by reference unless
such exhibits are specifically incorporated by reference into the information
that this Proxy Statement incorporates). Requests for such copies of any such
information should be directed to Todd K. West, Secretary, Noel Group, Inc., 667
Madison Avenue, New York, New York 10021, telephone number (212) 371-1400.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy and information statements
and other information with the Commission. Such reports, proxy and information
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following
regional offices: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission at Room 1024, 450 Fifth Street, Washington, D.C. 20549 at prescribed
rates.
OTHER BUSINESS
The Board of Directors does not know of any matter to be brought before
the Meeting other than the matters specified in the Notice of Special Meeting
accompanying this Proxy Statement. The persons named in the form of proxy by the
Board of Directors will vote all proxies which have been properly executed. If
any matters other than those set forth in the Notice of Special Meeting are
properly brought before the Meeting, such persons will vote thereon in
accordance with their best judgment.
By Order of the Board of Directors
TODD K. WEST
Secretary
22
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<PAGE>
SCHEDULE A
Unaudited Summary of Holdings of Noel Group, Inc.
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
May 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Shares
and % Market
Owned Price Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Publicly Traded Securities:
HealthPlan Services Corporation 5,595,846 (38%) $25.750 $144,093
Belding Heminway
Company, Inc. common 2,205,814 (30%) $2.125 4,687
Lincoln Snacks Company 3,769,755 (60%) 1.375 5,183
--------
153,963
--------
Other:
Cash and equivalents 17,968
Staffing Resources, Inc. (at cost) 2,026,104 (16%) 19,619
Belding Heminway Company, Inc. pfd. (at cost 21,069
with dividends)
Curtis Industries, Inc. (at cost) 15,000
Ferroviaria Novoeste, S.A. (at cost) 3,833
Other holdings 1,938
Other assets 3,004
Liabilities net (1,753)
Estimated deferred tax (33,323)
--------
47,355
--------
Total $201,318
========
Amount per outstanding Noel share $9.97
-----
Amount per fully diluted Noel share $9.57
-----
</TABLE>
Notes to Unaudited Supplemental Summary of Holdings:
This table is supplemental information which should be read in conjunction
with Noel's audited consolidated financial statements set forth in the 1995
Annual Report.
The information presented is not intended to indicate the amount a
shareholder would receive in liquidation. The summary does not reflect certain
liabilities which would be recorded upon the adoption of
23
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liquidation accounting and may not reflect the valuations of liabilities and
assets which would be determined through the application of liquidation
accounting.
In cases where a public market exists for common stock owned, the amount
is calculated as the market price multiplied by the number of shares owned
without adjustment for whether the shares owned are registered for sale, any
other restriction on transfer, control premiums, or whether the market has
sufficient liquidity to support the sale of the volume of securities owned at
the quoted prices. The sale or distribution of the Company's holdings and the
anticipation of such sale or distribution resulting from the adoption of the
Plan may reduce the market price of such securities and therefore the values
realized by the shareholders.
For both Belding Heminway preferred stock and for Curtis Industries, a
public market does not exist and the amounts are stated (i) at cost plus accrued
dividends and (ii) at cost, respectively. Because only a limited number of
Staffing Resources shares of common stock trade over the counter, the
unregistered Staffing Resources shares of common stock held by Noel, are carried
at cost. Because any sale of these securities would be a negotiated transaction,
cost does not necessarily represent the amount which would be received. On May
31, 1996, the common shares of Staffing Resources were quoted at a bid price of
$25.00, or $50.7 million for Noel's holding without reflecting any discount for
the restriction or market illiquidity.
Noel's investment in Ferroviaria Novoeste was made in the current year and
is carried at cost. The balance of $4.2 million of Noel's total $8.0 million
commitment was paid in June 1996.
Other holdings are included at estimated values.
Other assets and liabilities are presented at book value on a parent
company basis and include $1.5 million of split dollar insurance premiums
receivable.
Estimated deferred tax is the amount of income taxes which would be
payable upon the realization of the amounts shown above.
Because of the inherent uncertainty of the valuation of securities both
where a public market exists and where a public market does not exist, the
amounts shown may differ materially from actual amounts which may be received in
the future.
The amounts per fully diluted share is based on the treasury stock method
for exercisable options and warrants for 2,732,237 shares of Noel. Using this
method, there are 21,037,476 shares of Noel common stock outstanding on a fully
diluted basis.
<PAGE>
<PAGE>
EXHIBIT A
PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION OF
NOEL GROUP, INC.
This Plan of Complete Liquidation and Dissolution (the "Plan") of Noel
Group, Inc., a Delaware corporation (the "Company"), is intended to accomplish
the complete liquidation and dissolution of the Company in accordance with the
Delaware General Corporation Law and Section 331 of the Internal Revenue Code of
1986, as amended (the "Code"), as follows:
1. The Board of Directors of the Company has adopted this Plan and
called a meeting of the Company's shareholders to take action on this Plan. If
at said meeting of the Company's shareholders a majority of the outstanding
Common Stock, par value $0.10 per share (the "Common Stock"), of the Company
votes for the adoption of this Plan, the Plan shall constitute the adopted Plan
of the Company as of the date on which such shareholder approval is obtained
(the "Adoption Date").
2. After the Adoption Date, the Company shall not engage in any
business activities except to the extent necessary for preserving the values of
its assets, winding up its business and affairs, and distributing its assets in
accordance with this Plan.
3. From and after the Adoption Date, the Company shall complete the
following corporate actions:
(a) The Company shall collect, sell, exchange or otherwise
dispose of all of its property and assets in one or more transactions
upon such terms and conditions and for such consideration, which may
consist in whole or in part of money or other property, as the Board of
Directors, in its absolute discretion, deems expedient and in the best
interests of the Company and its shareholders. In connection with such
collection, sale, exchange and other disposition, the Company shall
marshall its assets and collect or make provision for the collection of
all accounts receivable, debts and claims owing to the Company.
(b) The Company shall pay or, as determined by the Board of
Directors, make reasonable provision to pay, all claims and obligations
of the Company, including all contingent, conditional or unmatured
claims known to the Company and all claims which are known to the
Company but for which the identity of the claimant is unknown.
(c) The Company shall distribute pro rata to the Company's
shareholders all its remaining property and assets, including the
proceeds of any sale, exchange or disposition, except such property or
assets as are required for paying or making provision for the claims
and obligations of the Company. Such distribution may occur all at once
or in a series of distributions and may be in cash or in kind, in such
manner, and at such time, as the Board of Directors, in its absolute
discretion, may determine. If and to the extent deemed necessary,
appropriate or desirable by the Board of Directors, in its absolute
discretion, the Company may establish and set aside a reasonable amount
(the "Contingency Reserve") to satisfy claims against the Company
(other than claims of a shareholder in its capacity as such) and all
expenses of the sales of the Company's property and assets, of the
collection and defense of the Company's property and assets, and of the
liquidation and dissolution provided for in this Plan. The Contingency
Reserve may consist of cash or property.
(d) If and to the extent deemed necessary, appropriate or
desirable by the Board of Directors, in its absolute discretion, the
Company may distribute assets in trust for the benefit of the
shareholders, provided that such trust is intended to constitute a
trust the assets of which are treated as owned by the shareholders for
Federal income tax purposes. The Board of Directors is hereby
authorized to appoint one or more individuals, corporations,
partnerships or other persons, or any combination thereof, to act as
the trustees for the benefit of the Company's shareholders and to
receive any such assets distributed
A-1
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<PAGE>
to it. Any conveyance to such trustees shall be deemed to be a
distribution of property and assets by the Company to its shareholders.
Any such conveyance to such trustees shall be in trust for the
shareholders of the Company and not for the use or benefit of the
trustees or any other person and any assumption of liabilities and
obligations of the Company by the trustees shall be solely in their
capacity as trustees. The Company, subject to this paragraph (d) and as
authorized by the Board of Directors, in its absolute discretion, may
enter into a trust agreement with such trustee or trustees, on such
terms and conditions as the Board of Directors, in its absolute
discretion, may deem necessary, appropriate or desirable. Adoption of
this Plan by a majority of the outstanding Common Stock shall
constitute the approval of the Company's shareholders of any such
appointment and any such trust agreement as their act and as a part
hereof as if herein written.
4. The distributions to the Company's shareholders pursuant to Section
3 hereof shall be in complete redemption and cancellation of all of the
outstanding Common Stock of the Company. If requested by the Board of Directors,
in its absolute discretion, as a condition to receipt of any distribution, the
Company's shareholders shall surrender their certificates evidencing the Common
Stock to the Company or its agent for recording of such distributions thereon.
As a condition to receipt of any distribution to the Company's shareholders, the
Board of Directors, in its absolute discretion, may require shareholders to (i)
surrender their certificates evidencing the Common Stock to the Company or its
agent for cancellation or (ii) furnish the Company with evidence satisfactory to
the Board of Directors of the loss, theft or destruction of their certificates
evidencing the Common Stock, together with such surety bond or other security or
indemnity as may be required by and satisfactory to the Board of Directors.
The Company will finally close its stock transfer books and discontinue
recording transfers of Common Stock on the earlier to occur of (i) the close of
business on the record date fixed by the Board of Directors for the final
liquidating distribution, or (ii) the date on which the dissolution becomes
effective under the Delaware General Corporation Law, and thereafter
certificates representing Common Stock will not be assignable or transferable on
the books of the Company except by will, intestate succession or operation of
law.
5. If any distribution to a shareholder cannot be made, whether because
the shareholder cannot be located, has not surrendered its certificates
evidencing the Common Stock as required hereunder or for any other reason, the
distribution to which such shareholder is entitled shall (unless transferred to
a trust established pursuant to Section 6 hereof) be transferred at such time as
the final liquidating distribution is made by the Company to and deposited with
the state official authorized by the laws of the State of Delaware to receive
the proceeds of such distribution; such transfer shall comply in all respects
with the laws of the State of Delaware and the Code. The proceeds of such
distribution shall thereafter be held solely for the benefit of and for ultimate
distribution to such shareholder as the sole equitable owner thereof and shall
escheat to the State of Delaware or be treated as abandoned property in
accordance with the laws of the State of Delaware. In no event shall the
proceeds of any such distribution revert to or become the property of the
Company.
6. If deemed necessary, appropriate or desirable by the Board of
Directors, in its absolute discretion, to effect the liquidation and
distribution of the Company's assets to the Company's shareholders, the Company
may from time to time transfer to one or more liquidating trustees for the
benefit of the Company's shareholders (the "Trustees") under a trust or trusts
(the "Trusts"), any assets of the Company which are (i) not reasonably
susceptible to distribution to the Company's shareholders, including, assets
held on behalf of the Company's shareholders who cannot be located or who do not
tender their certificates evidencing the Common Stock to the Company or its
agent as hereinafter required; or (ii) held as the Contingency Reserve.
The Board of Directors is hereby authorized to appoint one or more
individuals, corporations, partnerships or other persons, or any combination
thereof, to act as the Trustees for the benefit of the Company's shareholders
and to receive all remaining assets of the Company. Any Trustee appointed as
provided in the preceding sentence shall succeed to all the right, title and
interest of the Company of any kind and character, including, without
limitation, any uncollected claims, contingent assets and any Contingency
Reserve, and shall assume all of the liabilities and obligations of the Company,
including, without limitation, any unsatisfied claims and unascertained or
contingent liabilities. Further, the Trustee or Trustees shall have the full
power to liquidate, deal with, give receipt for and manage all of the property
and assets of the Company, to the exclusion of the Company and its officers and
directors, and any conveyance of assets to the Trustees shall be
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<PAGE>
deemed to be a distribution of property and assets by the Company to its
shareholders for the purposes of Section 3 of this Plan. Any such conveyance to
the Trustees shall be in trust for the shareholders of the Company and not for
the use or benefit of the Trustees or any other person and any assumption of
liabilities and obligations of the Company by the Trustees shall be solely in
their capacity as Trustees. The Company, subject to this Section 6 and as
authorized by the Board of Directors, in its absolute discretion, may enter into
a liquidating trust agreement with the Trustee or Trustees, on such terms and
conditions as the Board of Directors, in its absolute discretion, may deem
necessary, appropriate or desirable. Adoption of this Plan by a majority of the
outstanding Common Stock shall constitute the approval of the Company's
shareholders of any such appointment and any such liquidating trust agreement as
their act and as a part hereof as if herein written.
7. Whether or not a Trust is established pursuant to Section 6, in the
event it should not be feasible for the Company to make the final distribution
to shareholders of all assets and properties of the Company (other than the
Contingency Reserve) prior to the date which is three years after the Adoption
Date, then, on or before such date the Company shall transfer any remaining
assets and properties (other than the Contingency Reserve) to one or more
Trustees as set forth in Section 6. Such distribution may, at the discretion of
the Board of Directors, include the Contingency Reserve. Notwithstanding the
foregoing, to the extent that distribution of any asset of the Company cannot be
effected without the consent of a governmental authority, no such distribution
shall be effected without such consent.
8. After the Adoption Date, the officers of the Company shall, at such
time as the Board of Directors, in its absolute discretion, deems it necessary,
appropriate or desirable, obtain any certificates required from the Delaware tax
authorities, and on or after obtaining such certificates, the Company shall file
with the Secretary of State of the State of Delaware a certificate of
dissolution (the "Certificate of Dissolution") in accordance with Section 275 of
the Delaware General Corporation Law. Adoption of this Plan by a majority of the
outstanding Common Stock shall constitute the approval of the Company's
shareholders of any such filing of a Certificate of Dissolution as their act and
as a part hereof as if herein written.
9. Adoption of this Plan by a majority of the outstanding Common Stock
shall constitute the approval of the Company's shareholders of the sale,
exchange or other disposition in liquidation of all of the property and assets
of the Company not otherwise distributed to the shareholders in kind, whether
such sale, exchange or other disposition occurs in one transaction or a series
of transactions, and shall constitute ratification of all contracts for sale,
exchange or other disposition entered into prior to the date upon which the
Certificate of Dissolution becomes effective under the Delaware General
Corporation Law which are conditioned on adoption of this Plan.
10. In connection with and for the purpose of implementing and assuring
completion of this Plan, the Company may, in the absolute discretion of the
Board of Directors, pay any brokerage, agency and other fees and expenses of
persons rendering services to the Company in connection with the collection,
sale, exchange or other disposition of the Company's property and assets and the
implementation of this plan.
11. In connection with and for the purpose of implementing and assuring
completion of this Plan, the Company may, in the absolute discretion of the
Board of Directors, pay to the Company's officers, directors and employees, or
any of them, compensation or additional compensation above their regular
compensation, in money or other property, in recognition of the extraordinary
efforts they, or any of them, will be required to undertake, or actually
undertake, in connection with the successful implementation of this Plan.
Adoption of this Plan by a majority of the outstanding Common Stock shall
constitute the approval of the Company's shareholders of the payment of any such
compensation.
12. The Company shall continue to indemnify its officers, directors,
employees and agents in accordance with its certificate of incorporation, as
amended, and by-laws and any contractual arrangements, for actions taken in
connection with this Plan and the winding up of the affairs of the Company. The
Company's obligation to indemnify such persons may be satisfied out of the
assets of the Trust. The Board of Directors and the Trustees, in their absolute
discretion, are authorized to obtain and maintain insurance as may be necessary
to cover the Company's obligations hereunder.
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<PAGE>
13. Notwithstanding authorization or consent to this Plan and the
transactions contemplated hereby by the Company's shareholders, the Board of
Directors may modify, amend or abandon this Plan and the transactions
contemplated hereby without further action by the Company's shareholders to the
extent permitted by the Delaware General Corporation Law.
14. The Board of Directors of the Company is hereby authorized, without
further action by the Company's shareholders, to do and perform, or cause the
officers of the Company, subject to approval of the Board of Directors, to do
and perform, any and all acts, and to make, execute, deliver or adopt any and
all agreements, resolutions, conveyances, certificates and other documents of
every kind which are deemed necessary, appropriate or desirable, in the absolute
discretion of the Board of Directors, to implement this Plan and the
transactions contemplated hereby, including, without limiting the foregoing, all
filings or acts required by any state or federal law or regulation to wind up
its affairs.
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<PAGE>
APPENDIX A
NOEL GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Shareholders, ____, 1996
The undersigned shareholder of NOEL GROUP, INC., a Delaware corporation
(the "Company"), hereby appoints Joseph S. DiMartino, Stanley R. Rawn, Jr. and
Todd K. West, or any of them voting singly in the absence of the others,
attorneys and proxies, with full power of substitution and revocation, to vote,
as designated on the reverse side, all shares of Common Stock of the Company
which the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Company to be held at the ____________________________________, on
_______, 1996 at 10:00 A.M. (local time) or any adjournment thereof, in
accordance with the following instructions:
(Continued and to be signed on the reverse side)
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FOLD AND DETACH HERE
<PAGE>
<PAGE>
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, the proxy will be voted
"FOR" Proposal No. 1.
Please mark
your votes as
indicated in
this example [X]
1. PROPOSAL NO. 1-APPROVAL AND ADOPTION OF THE PLAN OF COMPLETE LIQUIDATION
AND DISSOLUTION OF THE COMPANY. attached as Exhibit A to the Proxy
Statement for the meeting
[ ] [ ] [ ]
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon.
Dated: _____________________ , 1996
____________________________________
Signature
____________________________________
Signature if held jointly
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by an authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING ENCLOSED
ENVELOPE.
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FOLD AND DETACH HERE
STATEMENT OF DIFFERENCES
------------------------
The section mark symbol shall be expressed as.... 'ss'
