SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
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240.14a-12
RJR Nabisco Holdings Corp.
(Name of Registrant as Specified In Its Charter)
RJR Nabisco Holdings Corp.
(Name of Person(s) Filing Proxy Statement)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
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(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
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PRELIMINARY REVOCATION
OF CONSENT STATEMENT
--SUBJECT TO COMPLETION--
RJR NABISCO HOLDINGS CORP.
1301 Avenue of the Americas
New York, N.Y. 10019
(212) 258-5600
REVOCATION OF CONSENT STATEMENT
BY BOARD OF DIRECTORS IN
OPPOSITION TO BROOKE GROUP LTD.
December [__], 1995
Dear Stockholder:
This Preliminary Revocation of Consent Statement (the "Consent
Revocation Statement") is furnished by the Board of Directors (the "Board") of
RJR Nabisco Holdings Corp., a Delaware corporation (the "Company"), to the
holders of outstanding shares of the Company's Common Stock, par value $.01
per share (the "Common Stock"), the Company's Series C Conversion Preferred
Stock, par value $.01 per share (the "PERCS"), and the Company's ESOP
Convertible Preferred Stock, par value $.01 per share and stated value $16 per
share (the "ESOP Preferred Stock" and, collectively with the Common Stock and
the PERCS, the "Capital Stock") in connection with the Board's opposition to
the solicitation (the "LeBow/Icahn Solicitation") by Brooke Group Ltd.
("Brooke Group"), a company controlled by Bennett S. LeBow, and with the
support of Carl C. Icahn (collectively, the "LeBow/Icahn Group"), of written
stockholder consents, pursuant to a Consent Statement (the "LeBow/Icahn Group
Consent Statement") dated December [__], 1995.
Each share of Common Stock, PERCS and ESOP Preferred Stock,
voting together as a single class, entitles the record date holder thereof to
one vote, one-fifth of a vote and one-fifth of a vote, respectively, on the
matters presented for consideration and action by the stockholders.
THE BOARD UNANIMOUSLY OPPOSES THE LEBOW/ICAHN GROUP
SOLICITATION AND URGES YOU NOT TO SIGN ANY BLUE CONSENT CARDS SENT TO YOU BY
THE LEBOW/ICAHN GROUP.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED ANY SUCH CONSENT
CARD TO THE LEBOW/ICAHN GROUP, YOU HAVE EVERY RIGHT TO CHANGE YOUR MIND. THE
BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED YELLOW REVOCATION OF
CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
EVEN IF YOU HAVE NOT PREVIOUSLY SIGNED AND RETURNED ANY SUCH
CONSENT TO THE LEBOW/ICAHN GROUP, YOU MAY SEND A YELLOW REVOCATION OF CONSENT
CARD TO THE COMPANY, WHICH WILL HAVE NO LEGAL EFFECT BUT WOULD ASSIST US IN
MONITORING THE PROGRESS OF THE CONSENT SOLICITATION.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER
NOMINEE, ONLY YOUR BANK, BROKER OR NOMINEE CAN VOTE YOUR SHARES AND ONLY
PURSUANT TO YOUR SPECIFIC VOTING INSTRUCTIONS. ACCORDINGLY, YOU ARE URGED TO
REJECT THE LEBOW/ICAHN SOLICITATION BY SIGNING, DATING AND RETURNING THE
ENCLOSED YELLOW REVOCATION OF CONSENT CARD PROMPTLY, USING THE ACCOMPANYING
POSTAGE-PAID ENVELOPE PROVIDED BY YOUR BANK, BROKER OR NOMINEE.
If you have any questions about revoking your consent or require
assistance, please call:
MACKENZIE PARTNERS, INC. D. F. KING & CO., INC.
156 FIFTH AVENUE - 9TH FLOOR 77 WATER STREET
NEW YORK, NY 10010 NEW YORK, NY 10005
(212) 929-5500 (COLLECT) (212) 269-5550 (COLLECT)
OR OR
CALL TOLL FREE 1-800-322-2885 CALL TOLL FREE 1-800-290-6430
INTRODUCTION
In a purported attempt to force an immediate spin-off of your
Company's remaining equity interest in Nabisco Holdings Corp. ("Nabisco"), and
in what the Company believes is only the first step in an attempt by the
LeBow/Icahn Group to seize control of the Company with no guarantee of a
spin-off or other transaction that would benefit stockholders, the LeBow/Icahn
Group has commenced the LeBow/Icahn Solicitation. The LeBow/Icahn Group is
also seeking to elect its own slate of nine candidates -- five of whom are
directors or officers of entities controlled by Mr. LeBow -- to replace your
existing Board at the Company's next Annual Meeting of stockholders.
Notwithstanding public statements of the LeBow/Icahn Group that
it is "not interested in taking control of the Company,"(1) the Company has
received reports that Mr. LeBow has, during the course of the summer and
continuing into October, attempted to organize a group sufficient to acquire a
de facto controlling voting interest in the Company. The Company believes
that Mr. LeBow, Mr. Icahn and others have secretly conspired to form a group
to purchase a controlling interest in the Company's Common Stock, without
paying a premium to the Company's stockholders, and with the ultimate
objective of combining the Company's tobacco business with the Liggett Group
Inc. ("Liggett") tobacco subsidiary of Mr. LeBow's Brooke Group in a
transaction which the Company has previously rejected as not in the best
interests of stockholders. See "Other Information." Indeed, Messrs. LeBow
and Icahn have negotiated specific provisions with respect to that
combination, and its consequences to their partnership, which were not
disclosed in the description of the LeBow/Icahn arrangements contained in
their publicly filed preliminary proxy materials. Their agreements
contemplate that Mr. LeBow will attempt to combine Liggett with the Company's
tobacco business, and, if Mr. LeBow is successful in effecting such a
combination, Mr. Icahn will receive a cash payment of $50 million.
_____________
(1) Quote taken from an article by Glenn Collins in The New York Times,
October 31, 1995. No permission has been sought or received to quote from, or
refer to, published materials cited in this Consent Revocation Statement.
WE STRONGLY URGE YOU TO REFRAIN FROM SIGNING OR RETURNING ANY
OF THE BLUE CONSENT CARDS OR OTHER DOCUMENTS SENT TO YOU BY THE LEBOW/ICAHN
GROUP OR THEIR AGENTS. PLEASE CONSIDER THE FOLLOWING:
LEBOW/ICAHN IMMEDIATE SPIN-OFF PROPOSAL
The Board of Directors is already committed to effecting a
spin-off of Nabisco. The Board has been and continues to be committed to a
spin-off of Nabisco. We also believe that a majority of our stockholders
agree that a spin-off of Nabisco is an attractive option. The Board's
commitment to a spin-off of Nabisco is premised on the fact that, in order for
such a spin-off to be advisable, it must be both in the best interests of the
Company's stockholders and consistent with the Company's public commitments.
The Company has taken significant steps to prepare itself for,
and to preserve its ability to effect, a possible spin-off of Nabisco. When
the time comes, the Company will be in a position to move quickly to effect
the spin-off of Nabisco.
This is not the time to effect a spin-off of Nabisco. For a
spin-off to be in the best interests of stockholders, (i) it must be tax-
free, (ii) it must be accomplished in a manner that avoids long litigation
delays and the resulting uncertainty and (iii) it must preserve the
financial integrity of both our food and tobacco businesses. The Board
believes that the LeBow/Icahn proposal for an immediate spin-off does not
satisfy these criteria, as further described below. In consultation with
its independent financial, tax and legal advisors, the Board has carefully
considered a spin-off of Nabisco for more than one year and has studied all
of its ramifications. The Board has concluded that effecting a spin-off at
this time would not be in the best interests of the Company's stockholders
and would subject the Company and its stockholders to unacceptable risks.
The LeBow/Icahn Group's focus on stockholder value jeopardizes
the tax-free status of its proposed immediate spin-off. The Company believes
that an eventual spin-off of Nabisco will be tax-free, and believes that the
reasons it has considered for the spin-off are similar to reasons that in the
past have been approved by the Internal Revenue Service ("IRS") as valid
"corporate business purposes" for a tax-free spin-off. The Company does not
have the same degree of confidence with respect to the tax-free status of an
immediate spin-off undertaken at the request of the LeBow/Icahn Group.
Treasury Regulations clearly state that increasing stockholder value itself is
not a valid corporate business purpose for a tax-free spin-off. The Company's
motivation for a spin-off is not the increase in the respective stock prices
of the Company and Nabisco that could accompany such a transaction. The
LeBow/Icahn Group, however, has repeatedly indicated in its solicitation
materials that the primary purpose of its proposed immediate spin-off is to
increase stockholder value. The Company believes that such pronouncements are
reckless and could jeopardize the tax-free status of the LeBow/Icahn Group's
proposed immediate spin-off.
Potential litigation by tobacco claimants. The Board believes
that, in the face of the current status of litigation against tobacco
companies, an announcement of a spin-off at this time could cause great damage
to the Company.
First, the Company believes that the announcement of a spin-off
would aggravate the current tobacco litigation situation because plaintiffs'
lawyers who have mounted class actions and other lawsuits against tobacco
companies would likely seek an injunction to prevent an immediate spin-off. A
spokesman for a consortium of nearly 60 plaintiffs' law firms involved in the
Castano class action has confirmed that "[i]f they want a spin-off, they will
absolutely be hit with an injunction."(2) Any such injunctive proceeding
would likely result in protracted litigation. Even if an injunction were not
granted, given the current litigation environment, the Company believes that
these plaintiffs' lawyers can be expected to pursue claims attacking such a
spin-off for years, placing a cloud over the validity of the transaction and
depressing the value of the stocks of both the Company and Nabisco. Such
litigation would not only be damaging to the Company and the spun-off food
company but could also involve claims directly against the Company's
stockholders.(3)
Moreover, tobacco plaintiffs are likely to argue that an
immediate spin-off for the purpose of protecting the food company and its
stockholders from potential liabilities of the tobacco company would under the
law itself be a fraudulent conveyance, regardless of the Company's solvency at
the time of the spin-off. The LeBow/Icahn Group has made clear that a
principal intent of its proposal is to alleviate "investors' concerns about
potential tobacco liabilities." The Company believes that the LeBow/Icahn
position would likely lead to claims by tobacco plaintiffs that the immediate
spin-off proposed by the LeBow/Icahn Group is an intentional fraudulent
conveyance.
_________________
(2) From an article by Glenn Collins in The New York Times, November
4, 1995, quoting John P. Coale.
(3) For example, in In re Integra Realty Resources, Inc., an institutional
stockholder has been named as a representative defendant for a class action
against stockholders in an action in which a spin-off of Integra's shares in
ShowBiz Pizza Time, Inc. is alleged to be a fraudulent conveyance. 179 B.R.
264 (Bnkrtcy., D. Colo. 1995).
By waiting until the current tobacco litigation situation
improves, the Company believes that the likelihood of litigation challenging
the spin-off can be reduced.
Other potential claims. Last year, the Board publicly
committed not to spin off Nabisco prior to December 31, 1996, and not to spin
off Nabisco prior to December 31, 1998 if the spin-off would cause the senior
debt of either the Company's subsidiary, RJR Nabisco, Inc. ("RJRN"), or
Nabisco to be rated below investment grade. The Company has stated these
commitments in numerous publicly-filed and publicly-disclosed documents over
the past year, including offering documents for the sale of securities of the
Company, RJRN and Nabisco.
The Company initially made these public commitments, after
consultation with major rating agencies, in order to permit it to pursue the
significant restructuring initiatives it has achieved over the past year,
while maintaining investment grade ratings for its senior debt. These
commitments enabled Nabisco to complete an initial public offering of its
shares, establishing an independent value for such shares. In addition, these
commitments enabled the Company to pay a regular quarterly cash dividend of
$1.50 per share on an annualized basis and to allocate debt between Nabisco
and RJRN. The Company believes that these transactions have benefitted
stockholders by enabling them to receive a cash return on their investment and
permitting the Company to reduce its aggregate cost of capital. Importantly,
these public commitments and transactions also have laid the groundwork for a
spin-off of Nabisco at such time as the spin-off can be achieved in a manner
that is in the best interests of the Company's stockholders.
The Board believes that abrogating these public commitments
would be improper and clearly not in the best interests of the Company's
stockholders. First, the Board believes that, as a general matter, boards of
directors of major public corporations should honor their commitments.
Second, based on discussions that the Company has had with credit rating
agencies, the Company believes that the announcement of an immediate spin-off
would likely have an adverse effect on the Company's and RJRN's credit
ratings. Finally, although its commitments are not contractual, the Company
also believes that an announcement of an immediate spin-off of Nabisco could
result in lawsuits from purchasers and sellers of the Company's and RJRN's
securities who have relied on the Company's public commitments.
Lack of consensus as to the "upside" that might result from a
spin-off. Finally, it is appropriate to question the "upside" that might be
realized by the Company's stockholders in return for the risks described
above. The LeBow/Icahn Group has portrayed a spin-off of Nabisco as having
the potential to increase the value of the Company's shares "as much as 50% or
more." This view relies principally on statements by three analysts, one of
whom (Gary Black) assumed that the spin-off would be combined with a dividend
increase and another (Ronald B. Morrow) who assumed that the Company's tobacco
business would be sold at a premium. Other analysts, however, have stated
that an immediate spin-off of Nabisco would likely result only in a small
increase in the value of the Company's shares. For example:
bullet On October 30, 1995, David Adelman, an analyst with Dean
Witter Reynolds, Inc., estimated that the incremental
value of a spin-off would be between $2 and $4 per share.
bullet On November 1, 1995, Marc Cohen, an analyst with Goldman,
Sachs & Co., stated his view that a spin-off "would
likely produce only a $2-$3 increase" in the value of the
shares. Mr. Cohen noted that contrary to the assertion
of the LeBow/Icahn Group, a spin-off would not remove any
perceived tobacco "taint."
bullet On November 1, 1995, in an article from the Knight-Ridder
news service, Fred Taylor, an analyst with Salomon
Brothers, was quoted as saying "I am not convinced that
[the value of the shares] would go up if tobacco gets a
less-than-investment grade rating, and if you end up with
a lot of lawsuits to stop such a spin-off."
In sum, after many months of consultation with independent
financial, tax and legal advisors, the Board has determined that an immediate
separation of the stockholders' equity interest in our food and tobacco
companies, as proposed by the LeBow/Icahn Group, would be irresponsible.
Although the Company is committed to effecting a spin-off of its remaining
interest in Nabisco at a time when the spin-off can be consummated in a manner
that is in the best interests of stockholders, we must oppose the poorly timed
and imprudent actions proposed by the LeBow/Icahn Group. The Board of
Directors urges you to reject the LeBow/Icahn Group's requests for your
consent.
WHO ARE MESSRS. LEBOW AND ICAHN?
In our opinion, Messrs. LeBow and Icahn are poorly qualified to
suggest significant change at your Company. They are best known for their
corporate raids financed largely by "junk bonds" and "greenmailing" activities
at the expense of other stockholders in the 1980s. In recent years, both have
been involved with highly visible corporate bankruptcies.
You should know that, earlier this year, The New York Times
reported that "Mr. LeBow is not a favorite of public [company]
shareholders, who have accused him of emptying companies he controls of
their cash and assets. Brooke [Group, one of LeBow's public companies,]
has poured millions of dollars into the LeBow family coffers through its
purchase of assets controlled by Mr. LeBow. And it has financed his high-
flying lifestyle with loans and unsecured credit lines amounting to
millions of dollars."(4) For example, Brooke Group and related companies
paid management fees to Brooke Management Inc., a company controlled by Mr.
LeBow ("BMI"), of $5,025,000 and $4,650,000 in 1990 and 1991, respectively,
and, in 1992, Brooke Group acquired BMI for total consideration of
$9,600,000. Mr. LeBow also received loans or lines of credit from Brooke
of $5,000,000, $6,515,000 and $1,475,000 in 1991, 1992 and 1993,
respectively.(5) In 1993, a stockholder of Brooke Group sued Mr. LeBow
alleging that Mr. LeBow had obtained improper loans from the company. The
suit was settled in 1994 with Mr. LeBow agreeing to make certain payments
to Brooke Group, to waive his right to $6.25 million in preferred dividends
and to cap increases of his annual salary over the next four years unless
certain conditions were met.(6) Indeed, Brooke Group was labelled by
Fortune magazine as the "least admired" company in America in 1994,(7) and
ranked in the bottom three companies in all eight attributes of reputation
in the survey.
_____________
(4) Quoted from an article by Stephanie Strom, in The New York
Times, August 30, 1995.
(5) See Note 16 of the Notes to the Consolidated Financial Statements of
Brooke Group's Annual Report on Form 10-K for each of the fiscal years ended
December 31, 1992 and December 31, 1993.
(6) Taken from an article in the Los Angeles Times, March 18, 1994.
(7) Taken from an article by Tricia Welsh in Fortune, February 7, 1994.
Not surprisingly, Mr. LeBow has already proposed a transaction
to the Company that would benefit him at the expense of the Company's other
stockholders. In May 1995, he proposed a transaction pursuant to which,
following the spin-off of Nabisco, the Liggett tobacco subsidiary of Mr.
LeBow's Brooke Group would merge with the Company. The proposal contemplated
that, in exchange for Liggett, a company which in 1994 had net income of less
than $16 million and had at December 31, 1994 approximately $184 million in
debt, Brooke Group would receive 20% of the common stock and $350 million of
preferred stock of the merged company, and the right to appoint all of the
members of the merged company's board of directors. As discussed above, Mr.
LeBow is still pursuing this effort. See "Introduction."
Similarly, Mr. Icahn is a well-known corporate raider with
a history of purchasing shares in corporations and obtaining a significant
profit for himself. In particular, Mr. Icahn is reported to have accepted
greenmail on at least three occasions including Saxon Industries, Inc. in
1980, Hammermill Paper Co. in 1981, and Viacom International, Inc. in
1986.(8) Importantly, in the case of Hammermill Paper Co., Mr. Icahn
reportedly accepted greenmail after having explicitly pledged not to do
so.(9) On another occasion, Chesebrough-Ponds Inc. bought back Mr.
Icahn's shares at market price and paid $95 million to acquire a division
of ACF Industries, an Icahn-controlled company.(10) Additionally, under
Mr. Icahn's stewardship, Trans World Airlines, Inc. ended up in
bankruptcy.
_____________
(8) Taken from an article by Richard L. Stern in Forbes, February
10, 1986, an article in Business Week, dated October 27, 1986 and an
article by Geraldine Fabrikant in The New York Times, March 15, 1987,
respectively.
(9) Taken from a book by Mark Stevens, King Icahn: The Biography of
a Renegade Capitalist (1993), page 101.
(10) Taken from an article by Colin Leinster in Fortune, March 18, 1985.
Mr. Icahn's interest in the LeBow/Icahn Solicitation is clear.
As described above, Mr. Icahn will be paid $50 million if Mr. LeBow
successfully merges Liggett with the Company's tobacco business in connection
with a spin-off. In addition, according to the LeBow/Icahn Group Consent
Statement, Mr. Icahn is entitled to 20% of any profits on the Common Stock of
the Company held by one of Mr. LeBow's affiliates. Given Mr. Icahn's history
and his arrangements with Mr. LeBow, do you think Mr. Icahn's interest in the
long-term health of the Company is the same as yours?
Remember, unlike your Board, neither Mr. LeBow nor Mr. Icahn
has any fiduciary duties toward you. They are free to pursue their own agenda
for your Company by any means available to them. As indicated by the
LeBow/Icahn Solicitation, they are willing to run a high-stakes gamble with
your money.
LEBOW/ICAHN PROPOSALS TO AMEND THE COMPANY'S BY-LAWS
The LeBow/Icahn Group has also proposed amendments to the
Company's By-laws to (i) reinstate a provision providing that special meetings
of the Company's stockholders shall be called by the Chairman or the Secretary
if requested in writing by holders of not less than 25% of the Company's
Common Stock, (ii) delete a newly added provision establishing procedures
governing action by written consent of stockholders without a meeting and
(iii) repeal all provisions of, or amendments to, the By-laws adopted by the
Board after October 31, 1995.
Special meeting By-law. The Board eliminated the special
meeting provision from, and added the consent administration procedures to,
the Company's By-laws in August, after the Company rejected Mr. LeBow's
proposal to merge Liggett with the Company's tobacco business, and after Mr.
LeBow filed for clearance under the Hart-Scott-Rodino Act of 1976 to acquire
up to 15% of the Company's Common Stock. The LeBow/Icahn Group has attempted
to portray the Board's action as impairing stockholders' ability to hold a
referendum on a spin-off. Since the Company's By-laws already permit holders
of a majority of the vote represented by the Company's Capital Stock to take
action by written consent at any time -- as evidenced by the LeBow/Icahn
Solicitation -- this portrayal is unpersuasive and hides the true effect of
the LeBow/Icahn Group's proposal.
In seeking to permit holders of 25% of the Company's Common
Stock to require a special meeting to be called, the LeBow/Icahn Group is
seeking the power to precipitate a change in control or fundamental policy, at
any time of its choosing, without having to obtain the support of holders of a
majority of the vote represented by the Company's Capital Stock. The sole
rationale for the LeBow/Icahn Group's preference for being able to take action
at a special meeting rather than by written consent, is that it might be able
to "win" a vote of stockholders at a special meeting without a majority vote
of the outstanding Capital Stock. In contrast, the written consent procedure
does not allow the LeBow/Icahn Group to "win" without the support of a true
majority of the votes represented by the Company's outstanding Capital Stock.
What are the intentions of the LeBow/Icahn Group? The Company
believes the LeBow/Icahn Solicitation is only the first step in a scheme to
seize control of the Company with no guarantee of a spin-off of Nabisco or any
other transaction that would benefit stockholders. The LeBow/Icahn Group has
nominated a slate of nine directors -- including Mr. LeBow and four other
officers or directors of entities he controls -- for election at the Company's
next Annual Meeting of stockholders. Although these directors might publicly
state that they are committed to an immediate spin-off of Nabisco, there is no
guarantee that they would, or could, effect such a spin-off. Indeed, in
papers filed in federal court in connection with the lawsuit described under
"Other Information," Mr. LeBow was willing only to state that his slate of
directors would be committed to effect a "prompt" spin-off of Nabisco, despite
his demands that the Company itself commit to an immediate spin-off. In
addition, notwithstanding Mr. LeBow's statement that he and Mr. Icahn are "not
interested in taking control of the Company,"(11) the Company has received
reports that Mr. LeBow has, during the course of the summer and continuing
into October, attempted to organize a group to acquire a controlling voting
interest in the Company. See "Other Information" below.
__________________
(11) Quote taken from an article by Glenn Collins in The New York Times,
October 31, 1995.
The question of control relates directly to the LeBow/Icahn
Group's proposed amendment to the By-laws. If a small group of dissident
stockholders wants to take control of a corporation by changing the board of
directors prior to the next regular annual meeting of stockholders, it may do
so in several ways. One alternative -- which is available only if that group
is able to require a special meeting to be held -- is for the dissident group
to solicit proxies for a special meeting of stockholders, in which case it
could propose to expand the size of the board of directors and nominate a
slate of directors that would constitute a majority of the newly-constituted
board. A second alternative is for the dissident group to solicit written
consents, as the LeBow/Icahn Group is doing now.
At a special meeting of stockholders, just as at the annual
meeting, only a plurality of the voting shares -- which, in theory, may be as
low as one share more than 25% of the shares outstanding -- is necessary to
wrest control of a corporation. This is in contrast to the written consent
solicitation procedure which requires a true majority of the outstanding
voting shares. (Section 211 of the Delaware General Corporation Law requires
that an annual meeting be held for the purpose of election of directors.
Because, as a practical matter, it is not possible to guarantee that any
individual director will garner a true majority of the votes at any such
meeting, a plurality vote is sufficient to elect directors at that meeting.)
The Board believes that, other than at the regular Annual Meeting of the
Company's stockholders, control of the Company should change only if it is
supported by holders of a majority of the votes represented by the Company's
Capital Stock. The Board also believes that it is in the best interests of
the Company's stockholders to prohibit a small, dissident group of
stockholders from requiring a special meeting to be held without the support
of a majority vote of the Company's Capital Stock.
For these reasons, the bylaws of many large public companies
require the consent of a majority of the shares to force the company to
call a special meeting, just as the law requires a majority of the shares
to change control of a company's board of directors through the consent
process. In fact, as of the date that Mr. LeBow informed the Company that
he intended to commence a consent solicitation, even the bylaws of Mr.
LeBow's Brooke Group, and its affiliate, New Valley Corporation (both of
which are public companies), required 50% and a majority, respectively, of
the shares to call a special meeting.
The By-law that the LeBow/Icahn Group is seeking to amend
prevents it from taking control of the Company without the support of a
true majority of the Company's outstanding Capital Stock. If the
LeBow/Icahn Group believed that such a majority supported its efforts to
obtain control of the Board, it could have sought stockholder consents to
change the composition of the Board as described above, without having to
amend the By-laws to provide for the calling of a special meeting. We
believe that the LeBow/Icahn Group is attacking this By-law because it
believes that the holders of a majority of votes represented by the
outstanding Capital Stock do not support turning control of the Company
over to the LeBow/Icahn Group or its designees.
Administrative procedures. The Board believes all participants
in a consent solicitation, as well as all stockholders, should understand in
advance the procedures that would be followed in the event of any consent
solicitation. The procedures set forth in Section 9 of Article I of the
By-laws, labelled by the LeBow/Icahn Group as "burdensome new conditions," are
designed simply to ensure a fair and orderly process. These procedures are
discussed below under "The Consent Procedure." Stockholders should consider
whether the LeBow/Icahn Group is truly objecting to these administrative
procedures for the stockholders' benefit or for the covert purpose of
assisting its scheme to wrest control of the Company.
Other By-law provisions or amendments adopted after October 31,
1995. The Board believes that the Company's stockholders deserve a corporate
structure that is sufficiently flexible to be able to respond to, and protect
the stockholders from, events that may arise in the Company's day-to-day
operations. The LeBow/Icahn Group's proposed resolution to repeal all
provisions of, or amendments to, the By-laws adopted by the Board after
October 31, 1995 runs contrary to this proposition. The Company's Certificate
of Incorporation permits the Board to alter, amend or repeal the By-laws.
This provision is included in the Certificate of Incorporation to permit the
Company to adapt to changes as they occur, in instances ranging from corporate
governance to the description and terms of office of the Company's officers
and the requirements for signatures on stock certificates. The Company
believes that if the LeBow/Icahn Group intends to prohibit the Board from
amending the By-laws, the appropriate mechanism to do so would be a proposed
amendment to the Certificate of Incorporation.
On December 5, 1995, Steven F. Goldstone, who had been
President of the Company, became President and Chief Executive Officer of the
Company. Charles M. Harper, who had been Chairman and Chief Executive Officer
of the Company, continues to serve as Chairman. The Board has amended the
By-laws to reflect these management changes by (i) providing for the position
of President, (ii) separating the positions of Chairman and Chief Executive
Officer, (iii) setting forth certain specific powers of such officers, (iv)
providing for an "office of the Chief Executive Officer," consisting of the
Chief Executive Officer and such Vice Chairmen and other officers as are
designated by the Chief Executive Officer, and (v) permitting the Chief
Executive Officer to call special meetings of stockholders. The Company
believes that repealing these amendments would not benefit the Company's
stockholders and would interfere significantly with the Company's corporate
governance.
The Board of Directors opposes the LeBow/Icahn Group's
proposals to amend the By-Laws and to repeal all provisions of, and any
amendments to, the By-laws adopted by the Board after October 31, 1995 and
urges you to reject its request for your consent.
OTHER INFORMATION
On November 20, 1995, the Company filed a complaint against
Messrs. LeBow and Icahn and Brooke Group in the United States District
Court for the Middle District of North Carolina, alleging that Messrs.
LeBow and Icahn and Brooke Group have violated Sections 14(a) and 10(b) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Rules 14a-9 and 10b-5 thereunder, by making materially false and incomplete
statements concerning the purpose and background of the LeBow/Icahn
Solicitation. Specifically, the complaint alleges that Messrs. LeBow and
Icahn have made repeated false statements that the sole purpose of the
LeBow/Icahn Solicitation is to promote a spin-off of Nabisco when, in fact,
Messrs. LeBow and Icahn and Brooke Group have secretly conspired to form a
group to purchase in the open market a controlling interest in the
Company's stock, without paying a control premium to the Company's
stockholders, and with the ultimate objective of combining the Company's
tobacco business with the tobacco business of Liggett. The Company seeks,
among other things, to enjoin Messrs. LeBow and Icahn and Brooke Group
from continuing with the LeBow/Icahn Solicitation, from taking any other
steps in furtherance of their efforts to cause the Company to engage in a
spin-off of Nabisco, from taking any other steps in furtherance of their
plan to form a group to take control of the Company, or otherwise from
taking any steps in furtherance of their unlawful conduct, and to require
Messrs. LeBow and Icahn and Brooke Group to comply fully with the
disclosure obligations imposed by the Exchange Act.
THE CONSENT PROCEDURE
The record date for determination of the stockholders of the
Company entitled to execute, withhold or revoke consents relating to the
LeBow/Icahn Solicitation is December [__], 1995 (the "Record Date"). Under
Delaware law, in order for the LeBow/Icahn Solicitation to succeed, the
LeBow/Icahn Group must obtain the unrevoked consents to each of its proposals
from the holders of record of a majority of the votes represented by the
Capital Stock outstanding on the Record Date. Thus, an abstention from voting
or a broker non-vote will have the practical effect of a vote against the
LeBow/Icahn Solicitation. A stockholder may revoke any previously signed
consent by signing, dating and returning a YELLOW Revocation of Consent Card.
As of the Record Date, there were [______] shares of Common Stock, [_______]
shares of PERCS and [_______] shares of ESOP Preferred Stock outstanding.
With each class of the Capital Stock voting together as one class, the
respective votes of the classes of the Capital Stock are counted as follows:
each share of Common Stock is entitled to one vote per share, each share of
PERCS is entitled to one-fifth of a vote per share, and each share of ESOP
Preferred Stock is entitled to one-fifth of a vote per share.
Under Section 228 of the Delaware General Corporation Law, in
order to be effective, consents must be delivered within 60 days of the
earliest dated consent delivered to the Company. The earliest dated consent
was delivered to the Company on December [__], 1995. Accordingly, any consent
dated or delivered to the Company after February [__], 1996 will not be valid.
Section 9, Article I of the By-laws provides that in order that
the Company may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board may fix a record date, which
record date may not precede the date upon which the resolution fixing the
record date is adopted by the Board, and which date may not be more than 10
days after the date upon which the resolution fixing the record date is
adopted by the Board. Any stockholder seeking to have the stockholders act by
written consent is required to request the Board to fix a record date and the
Board will then promptly, but in all events within 10 days after the date on
which such a request is received, adopt a resolution fixing the record date.
If no record date has been fixed by the Board within 10 days of the date on
which such a request is received, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board is required by applicable law, would be the first
date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Company by delivery to its registered
office in the State of Delaware, its principal place of business or to any
officer or agent of the Company having custody of the book in which
proceedings of meetings of stockholders are recorded, to the attention of the
Secretary. Delivery made to the Company's registered office must be by hand
or by certified or registered mail, return receipt requested. If no record
date has been fixed by the Board and prior action by the Board is required by
applicable law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting will be at the close
of business on the date which the Board adopts the resolution taking such
prior action.
Such By-law further provides that in the event of the delivery,
in the manner described above, to the Company of the requisite written consent
or consents to take corporate action and/or any related revocation or
revocations, the Company will engage nationally recognized independent
inspectors of elections for the purpose of promptly performing a ministerial
review of the validity of the consents and revocations. For the purpose of
permitting the inspectors to perform such review, no action by written consent
without a meeting will be effective until such date as the independent
inspectors certify to the Company that the consents delivered to the Company
in accordance with such By-law represent at least the minimum number of votes
that would be necessary to take the corporate action. However, neither the
Board nor any stockholder will be prevented by such By-law from contesting the
validity of any consent or revocation thereof, whether before or after such
certification by the independent inspectors, or to take any other action
(including, without limitation, the commencement, prosecution or defense of
any litigation with respect thereto, and the seeking of injunctive relief in
such litigation).
Such By-law requires every written consent to bear the date of
signature of each stockholder who signs the consent and no written consent may
be effective to take the corporate action referred to therein unless, within
60 days of the earliest dated written consent delivered in accordance with
such By-law, a written consent or consents signed by a sufficient number of
stockholders to take such action are delivered to the Company in the manner
prescribed in such By-law.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information, as of the
Record Date, regarding the beneficial ownership of (i) Common Stock and (ii)
Class A Common Stock, par value $.01 per share, of Nabisco, by each director
of the Company, by each of the five most highly compensated executive officers
of the Company during this fiscal year,(12) and each associate of any such
director or officer, and by all directors and executive officers of the
Company as a group. Nabisco was a wholly owned indirect subsidiary of the
Company prior to the January 1995 initial public offering by Nabisco of its
Class A Common Stock. As of the Record Date, the Company indirectly owned all
213,250,000 shares of Nabisco Class B Common Stock outstanding which
represents approximately 80.5% of the economic interest in Nabisco and
approximately 97.6% of the combined voting power of all classes of Nabisco
voting stock. Except as otherwise noted, the persons named in the table below
do not own any other Capital Stock of the Company or Nabisco and have sole
voting and investment power with respect to all shares shown as beneficially
owned by them.
______________
(12) Item 5(a) of Schedule 14A of the Exchange Act, requires that the
Company disclose the securities ownership of its directors and executive
officers as of the beginning of the last fiscal year. Item 6(d) of
Schedule 14A and Items 403(b) and 402(a)(3) of Regulation S-K of the
Exchange Act require that the Company disclose the securities ownership of
its five most highly compensated executives as of the end of the last
fiscal year. Item 402(a)(3)(iii) also requires that the Company update
such disclosures with the securities ownership of two more executives who
are currently among the Company's five most highly compensated executives,
but did not fall within the group of the Company's five most highly
compensated executives at the end of the last fiscal year. Because several
directors and executive officers of the Company have resigned since the end
of the last fiscal year, and in order to make the following table easier to
read, the Company has included only the beneficial ownership of the current
directors and executive officers in such table. The Company has, however,
complied with its obligations under the Exchange Act by disclosing in the
footnotes to this table the beneficial ownership of the Common Stock by the
directors and executive officers who served in such capacities at the
beginning and the end, respectively, of the last fiscal year but no longer
serve in such capacities.
<TABLE>
<CAPTION> NUMBER OF SHARES OF
NUMBER OF SHARES NABISCO CLASS A
OF COMMON STOCK PERCENT OF COMMON STOCK PERCENT OF
BENEFICIALLY OWNED COMMON BENEFICIALLY OWNED NABISCO CLASS A
NAME OF BENEFICIAL OWNER (1) STOCK (1)(3) COMMON STOCK
________________________ __________________ ___________ __________________ _______________
<S> <C> <C> <C> <C>
John T. Chain, Jr. (2)........ 8,393 * 1,000 *
Julius L. Chambers (2)........ 6,393 * 0 *
John L. Clendenin (2)......... 6,846 * 500 *
Steven F. Goldstone .......... 16,529 * 0 *
H. John Greeniaus (2)......... 126,308 * 10,100 *
Ray J. Groves (2)............. 7,000 * 0 *
Charles M. Harper (2)......... 524,882 0.1920 71,429 0.1380
James W. Johnston (2)(5)...... 114,381 * 1,000 *
John G. Medlin, Jr. (2)....... 7,259 * 1,000 *
Rozanne L. Ridgway (2)........ 6,393 * 0 *
Andrew J. Schindler (2)....... 28,891 * 0 *
All Directors and Officers
as a Group (2)(4)............. 1,351,824 0.4943% 91,229 0.1763%
<FN>
_______________
* Less than 0.1%
(1) For purposes of this table, a person or group of persons is deemed to
be the "beneficial owner" of any shares that such person has the
right to acquire within 60 days. For purposes of computing the
percentage of outstanding shares held by each person or group of
persons named above on a given date, any security that such person or
persons has the right to acquire within 60 days is deemed to be
outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.
(2) The number of shares of Common Stock beneficially owned includes (i)
6,393 shares subject to currently exercisable options granted to each
of Gen. Chain, Messrs. Chambers and Clendenin and Ms. Ridgway; 6,000
shares and 393 shares respectively subject to currently exercisable
options granted to each of Messrs. Groves and Medlin; 462,500 and
741,664 shares subject to currently exercisable options granted to
Mr. Harper and all directors and executive officers as a group,
respectively; and (ii) 272, 160, 274, 271 and 2,466 shares of Common
Stock currently issuable on conversion of shares of ESOP Preferred
Stock owned by, respectively, Messrs. Greeniaus, Harper, Johnston,
Schindler and all directors and executive officers as a group.
(3) No director or officer of the Company holds any options exercisable
within 60 days to acquire shares of Nabisco Class A Common Stock.
(4) On March 14, 1995, Kohlberg Kravis Roberts & Co. LLP ("KKR") sold all
of its then remaining holdings in the Company. James H. Greene, Jr.,
Henry R. Kravis, Paul E. Raether, Clifton S. Robbins, George R.
Roberts, Scott M. Stuart, and Michael T. Tokarz previously served on
the Board as representatives of KKR. Messrs. Greene, Kravis,
Raether, Robbins, Roberts, Stuart and Tokarz (the "KKR Directors")
did not run for reelection at the Company's Annual Meeting of
Stockholders held on April 12, 1995. Their respective terms in
office expired effective as of that date. The Company cannot
independently verify the exact nature of their current holdings in
the Company because they are no longer subject to the disclosure
requirements of Section 16(a) of the Exchange Act, discussed below.
However, their last Section 16(a) filings with the Securities and
Exchange Commission (the "SEC") dated as of April 7, 1995 indicate
that, as of that date, none of the KKR Directors had any beneficial
ownership in the Capital Stock of the Company.
(5) The outstanding shares of Common Stock shown as beneficially owned by
Mr. Johnston include 12,000 shares held in trust for the benefit of
Mr. Johnston's children, as to which Mr. Johnston disclaims
beneficial ownership.
(6) Lawrence R. Ricciardi retired as both an executive officer and a
director of the Company effective March 3, 1995. Mr. Ricciardi is no
longer subject to the disclosure requirements of Section 16(a) of the
Exchange Act. Therefore, the Company cannot independently verify Mr.
Ricciardi's current stock ownership. As of September 3, 1995, Mr.
Ricciardi beneficially owned 407,845 shares of Common Stock of the
Company.
(7) Eugene R. Croisant retired as an executive officer of the Company
effective March 3, 1995. Mr. Croisant is no longer subject to the
disclosure requirements of Section 16(a) of the Exchange Act.
Therefore, the Company cannot independently verify Mr. Croisant's
current stock ownership. As of September 3, 1995, Mr. Croisant
beneficially owned 324,597 shares of Common Stock of the Company.
</TABLE>
Section 16(a) of the Exchange Act requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file initial
statements of beneficial ownership (Form 3), and statements of changes in
beneficial ownership (Forms 4 and 5), of Common Stock and other equity
securities of the Company with the SEC and The New York Stock Exchange, Inc.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all such forms they file.
Based solely on its review of the copies of such forms received
by it, or written representations from certain reporting persons that no
additional forms were required for those persons, the Company believes that
during 1994 and 1995 its officers, directors, and greater than ten-percent
beneficial owners were complied with all applicable filing requirements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of the
Record Date, regarding the beneficial ownership of persons known to the
Company to be the beneficial owners of more than five percent of any class of
the Company's voting securities. The information was obtained from Company
records and information supplied by the stockholders, including information on
Schedules 13D and 13G and Forms 3, 4 and 5 provided to the SEC. Except as
otherwise noted, the persons named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by
them.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIAL BENEFICIALLY PERCENT OF
TITLE OF CLASS OWNER OWNED CLASS
______________ ______________________________ ________________ __________
<S> <C> <C> <C>
Common Stock FMR Corp.(1).......................... 34,305,862 12.58%
82 Devonshire Street
Boston, MA 02109
Series C College Retirement Equities Fund(2)... 1,782,680 6.68%
Conversion 730 Third Avenue
Preferred Stock New York, NY 10017
Series C Brinson Partners, Inc.(3)............. 1,745,310 6.54%
Conversion 209 South LaSalle
Preferred Stock Chicago, IL 60604-1295
Series C The Prudential Insurance Company 1,680,205 6.30%
Conversion of America(4).......................
Preferred Stock Prudential Plaza
Newark, NJ 07102-3777
ESOP Convertible Wachovia Bank of North Carolina, 15,187,141 100%
Preferred Stock N.A.(5)
Box 3075, Trust Operations
Winston-Salem, NC 27102
Nabisco Class A Janus Capital Corporation(6) 4,472,875 9.90%
Common Stock 100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Nabisco Class A Tiger Management Corporation(7) 9,145,300 17.7%
Common Stock 101 Park Avenue
New York, NY 10178
____________
(1) According to Amendment No. 1 to Schedule 13G dated February 13, 1995
jointly filed by FMR Corp. and Edward C. Johnson 3d, Chairman of
FMR Corp. and a member of a controlling group with respect to FMR
Corp., the 34,305,862 shares of the Common Stock shown as
beneficially owned by FMR Corp. and Mr. Johnson as of December
31, 1994 include (i) 31,736,702 shares beneficially owned by
Fidelity Management & Research Company, a registered investment
adviser and wholly owned subsidiary of FMR Corp., as a result of
acting as investment adviser to several registered investment
companies that own such shares (the "Fidelity Funds"), (ii)
2,493,360 shares beneficially owned by Fidelity Management Trust
Company ("Fidelity Trust"), a bank and wholly owned subsidiary of
FMR Corp., as a result of serving as investment manager of
institutional accounts, (iii) 10,400 shares owned directly by Mr.
Johnson or in trusts for the benefit of Mr. Johnson or a member
of his family and (iv) 65,400 shares beneficially owned by
Fidelity International Limited ("Fidelity International"), an
investment adviser of which Mr. Johnson is also Chairman and a
member of a controlling group, but which is managed independently
from FMR Corp. Each of FMR Corp. and Fidelity International
disclaim beneficial ownership of shares beneficially owned by the
other. According to the Schedule 13G, FMR Corp. and Mr. Johnson
also beneficially own 516,580 shares of Series C Preferred Stock
as a result of (i) the Fidelity Funds owning 4,071,700 Series C
Depositary Shares and (ii) the institutional accounts managed by
Fidelity Trust owning 1,094,100 Series C Depositary Shares.
According to the Schedule 13G, (a) FMR Corp. and Mr. Johnson
each has sole investment power, but neither has sole voting power,
over the shares owned by the Fidelity Funds, (b) FMR Corp. and
Mr. Johnson each has sole investment power over all of, has sole
voting power over certain of, and has no voting power over the
remainder of, the shares owned by the institutional accounts
managed by Fidelity Trust and (c) Mr. Johnson has sole voting
and investment power over certain of, has shared voting and
investment power over certain of, and has no voting or investment
power over the remainder of, the shares owned directly by him or
in family trusts. All of the figures in this footnote relating to
holdings of the Common Stock have been revised to reflect the one-
for-five reverse split of the Common Stock which occurred on April
12, 1995.
(2) College Retirement Equities Fund, a registered investment company,
beneficially owned 1,782,680 shares of Series C Preferred Stock as of
December 31, 1994 as a result of its beneficial ownership of
17,826,800 Series C Depositary Shares as reported in its Schedule 13G
dated February 10, 1995.
(3) According to the Schedule 13G dated February 10, 1995 jointly filed
by Brinson Partners, Inc. ("Brinson Partners"), Brinson Trust Company
("Brinson Trust") and Brinson Holdings, Inc. ("Brinson Holdings"), as
of December 31, 1994 (i) Brinson Partners, a registered investment
adviser and wholly owned subsidiary of Brinson Holdings, beneficially
owned 1,238,560 shares of Series C Preferred Stock as a result of its
beneficial ownership of 12,385,600 Series C Depositary Shares and
(ii) Brinson Trust, a bank and wholly owned subsidiary of Brinson
Partners, beneficially owned 506,750 shares of Series C Preferred
Stock as a result of its beneficial ownership of 5,067,500 Series C
Depositary Shares.
(4) According to the Schedule 13G dated March 10, 1995 filed by The
Prudential Insurance Company of America ("Prudential"), a registered
insurance company, broker-dealer and investment adviser, Prudential
beneficially owned an aggregate of 1,680,205 shares of Series C
Preferred Stock as of December 31, 1994 as a result of having shared
voting and investment discretion over 16,802,050 Series C Depositary
Shares which were held for the benefit of its clients.
(5) Wachovia Bank holds the shares of the ESOP Preferred Stock in its
capacity as Trustee of the RJRN Defined Contribution Master Trust.
Under the terms of the Master Trust, Wachovia Bank is required to
vote shares of ESOP Preferred Stock allocated to participants'
accounts in accordance with instructions received from such
participants and to vote allocated shares of ESOP Preferred Stock for
which it has not received instructions and unallocated shares in the
same ratio as shares with respect to which instructions have been
received. The holders of the ESOP Preferred Stock vote as a class
with the Common Stock, at a ratio of one vote for each share of ESOP
Preferred Stock for every five shares of the Common Stock. Wachovia
Bank has no investment power with respect to shares of ESOP Preferred
Stock.
(6) According to Amendment No. 2 to the Schedule 13G dated September 8,
1995 jointly filed by the Janus Capital Corporation ("Janus
Capital"), a registered investment adviser, and Thomas H. Bailey
("Bailey"), President and Chairman of, stockholder in, and
thereby, a control person of Janus Capital, Janus Capital and
Bailey beneficially own 4,472,875 shares of the Nabisco Class A
Common Stock as a result of shared voting and dispositive power
over such shares held for the benefit of its clients. Such
beneficial ownership includes 4,169,500 shares of the Nabisco
Class A Common Stock, or 9.3% of the Nabisco Class A Common Stock
outstanding, beneficially owned by the Janus Fund, a registered
investment company to which Janus Capital provides investment
advice.
(7) According to Amendment No. 1 to the Schedule 13G dated June 6, 1995
jointly filed by Tiger Management Corporation ("Tiger"), Panther
Partners L.P. ("Panther") and Panther Management Company L.P.
("PMCLP"), and Julian H. Robertson, Jr. ("Robertson") as the ultimate
controlling person of Tiger and PMCLP, (i) Tiger, a registered
investment adviser, beneficially owned 9,145,300 shares of Nabisco
Class A Common Stock, (ii) Panther, a registered investment company,
beneficially owned 744,700 shares of Nabisco Class A Common Stock,
and (iii) PMCLP, a registered investment adviser, beneficially owned
744,700 shares of Nabisco Class A Common Stock. As ultimate
controlling person of Tiger and PMCLP, Robertson beneficially owned
9,890,000 shares of Nabisco Class A Common Stock. According to the
Schedule 13G, Tiger, Panther, PMCLP and Robertson, by virtue of his
controlling interest in Tiger and PMCLP, each possess shared voting
and investment discretion over such shares that they respectively
beneficially own on behalf of their clients.
</TABLE>
SOLICITATION OF REVOCATIONS OF CONSENTS -- COST AND METHOD
The cost of the solicitation of revocations of consent will be
borne by the Company. The Company estimates that the total expenditures
relating to such solicitation (other than salaries and wages of officers and
employees) will be approximately $[________], of which approximately $[____]
has been spent to date. In addition to solicitation by mail, directors,
officers and other employees of the Company may, without additional
compensation, solicit revocations of consents by mail, in person, by
telecommunication or by other electronic means.
The Company has retained D.F. King & Co., Inc., and MacKenzie
Partners, Inc. at an estimated fee of not more than $[_______], plus
reasonable out-of-pocket expenses, to assist in the solicitation of
revocations. Approximately [__] persons will be utilized by such firms in
their efforts. The Company will reimburse brokerage houses, banks, custodians
and other nominees and fiduciaries for out-of-pocket expenses incurred in
forwarding the Company's consent revocation materials to, and obtaining
instructions relating to such materials from, beneficial owners of Capital
Stock. The Company has also agreed to indemnify D.F. King & Co., Inc. and
MacKenzie Partners, Inc. against certain liabilities and expenses in
connection with their respective engagements, including certain liabilities
under the federal securities laws.
STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal to be
considered at the Company's next Annual Meeting may do so, provided that such
stockholder satisfies the eligibility requirements established by the SEC. To
be considered for submission at the meeting, such proposal must have been
received by the Company (addressed to the attention of the Secretary) not
later than November 21, 1995. To be submitted at the meeting, any such
proposal must be a proper subject for stockholder action under the laws of the
State of Delaware, and must otherwise conform to the applicable regulations of
the SEC and the Company's By-laws.
Charles M. Harper
Chairman
Steven F. Goldstone
Chief Executive Officer and
President
IMPORTANT
1. If your shares are registered in your own name(s), please sign,
date and promptly mail the enclosed YELLOW Revocation of Consent Card, using
the postage-paid envelope provided.
2. If you have previously signed and returned a consent card to the
LeBow/Icahn Group, you have every right to change your mind. Only your latest
dated card will count. You may revoke any earlier card to the LeBow/Icahn
Group by signing, dating and mailing the enclosed YELLOW Revocation of Consent
Card in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a YELLOW Revocation of Consent
Card with respect to your shares and only after receiving your specific
instructions. Accordingly, please sign, date and mail the enclosed YELLOW
Revocation of Consent Card in the postage-paid envelope provided. To ensure
that your shares are voted, you should also contact the person responsible for
your account and give instructions for a YELLOW Revocation of Consent Card to
be issued representing your shares.
4. After signing the enclosed YELLOW Revocation of Consent Card, do
not sign any other cards. Do not even vote "against" on the LeBow/Icahn
Group's blue consent card.
If you have any questions about giving your revocation of consent or
require assistance, please call:
MACKENZIE PARTNERS, INC. D. F. KING & CO., INC.
156 FIFTH AVENUE - 9TH FLOOR 77 WATER STREET
NEW YORK, NY 10010 NEW YORK, NY 10005
(212) 929-5500 (COLLECT) (212) 269-5550 (COLLECT)
OR OR
CALL TOLL FREE 1-800-322-2885 CALL TOLL FREE 1-800-290-6430
PRELIMINARY--SUBJECT TO COMPLETION
RJR NABISCO HOLDINGS CORP.
THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
OF
RJR NABISCO HOLDINGS CORP.
IN OPPOSITION TO THE SOLICITATION BY
BROOKE GROUP LTD.
The undersigned, a holder of shares of Common Stock, par value
$.01 per share, of RJR Nabisco Holdings Corp. (the "Company") and/or a holder
of Series C Conversion Preferred Stock, par value $.01 per share, of the
Company and/or a holder of ESOP Convertible Preferred Stock, par value $.01
per share and stated value $16 per share, of the Company, acting with respect
to all shares of such stock held by the undersigned as of the close of
business on [record date] to which the undersigned is entitled to vote, hereby
acts as follows concerning the following four proposals of Brooke Group Ltd.,
a company controlled by Bennett S. LeBow, and made with the backing of Carl C.
Icahn (the "LeBow/Icahn Group"):
1. The LeBow/Icahn Group non-binding resolution seeking the immediate
spin-off of Nabisco Holdings Corp.:
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU "REVOKE
CONSENT" AS TO THIS PROPOSAL.
2. The LeBow/Icahn Group proposal to amend the By-laws to give holders
of not less than 25% of the Company's Common Stock the right to
require a special meeting:
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU "REVOKE
CONSENT" AS TO THIS PROPOSAL.
3. The LeBow/Icahn Group proposal to delete the By-law provisions
establishing certain administrative procedures for action by written
consent:
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU "REVOKE
CONSENT" AS TO THIS PROPOSAL.
4. The LeBow/Icahn Group proposal to repeal all provisions of, or
amendments to, the By-laws adopted by the Board of Directors of the
Company after October 31, 1995:
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU "REVOKE
CONSENT" AS TO THIS PROPOSAL.
(continued on the reverse side)
(continued from the reverse side)
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
YOU SIGN, DATE AND MAIL THIS CARD TODAY AND THEREBY REVOKE ANY CONSENT THAT
YOU MAY HAVE GIVEN TO THE LEBOW/ICAHN GROUP. If no direction is made, this
revocation card will be deemed to revoke all previously executed consents.
If you mark any of the boxes "do not revoke consent," any consent you may
have given to that particular proposal of the LeBow/Icahn Group will not be
revoked.
Dated: ________________________, 199[_]
_______________________________________
(Signature)
_______________________________________
(Signature)
_______________________________________
(Title)
Please sign exactly as name appears
hereon. 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 the president or
other duly authorized officer. If a
partnership, please sign in partnership
name by authorized person. This
revocation card revokes consents with
respect to all shares of Common Stock,
ESOP Conversion Preferred Stock and
Series C Convertible Preferred Stock
held in all capacities.
PLEASE SIGN, DATE AND MAIL THIS CARD TODAY. IF YOU NEED ASSISTANCE, PLEASE
CALL MACKENZIE PARTNERS, INC. TOLL FREE AT 1-800-322-2885 OR D.F. KING & CO.,
INC. TOLL FREE AT 1-800-290-6430.
