RJR NABISCO News Release
CONTACT: Carol Makovich
(212) 258-5785
NEW YORK, NEW YORK -- December 19, 1995 -- RJR Nabisco Holdings Corp. said
today that the Company's president and chief executive officer, Steven F.
Goldstone, is sending the following letter to its shareholders:
Dear Fellow Shareholder:
As you may know, I was recently elected chief executive officer
of RJR Nabisco by your board of directors. I come to my new position
with enthusiasm and excitement about RJR Nabisco and its future. I'm
writing to you now, early on in my tenure as your CEO, to brief you
on our company, its prospects and other key issues facing RJR Nabisco
My top priority as chief executive is simple: to increase the
value of RJR Nabisco shares for the benefit of all shareholders.
The work our company has done over the past few years, to pay down
billions of dollars in debt left over from the 1989 leveraged buy-
out, has gotten us to the point where we can begin to deliver
solid performance for shareholders. We've finally reached the
stage where we can truly focus on what needs to be done to improve
share price.
Our businesses are fundamental to RJR Nabisco's platform for
building earnings and shareholder value. We are entering 1996
with a stable domestic tobacco share position, renewed
international tobacco strength and a food business poised to
perform. These vital businesses should blossom again in 1996,
particularly in the second half. Our strong business prospects
mean that RJR Nabisco will have growing cash-flow resources which
we can use to improve shareholder wealth.
An important strategic priority of mine is the completion of
a tax-free distribution of Nabisco shares to our shareholders.
Our board has taken the steps necessary to position Nabisco for
such a distribution and we know that many of our shareholders
would like to see us move forward. Our board and management will
accomplish this transaction when it is in the best interests of
shareholders and when it can be successfully completed.
The central issue regarding a spin-off of Nabisco is timing.
In our view, with tobacco litigation at an unprecedented high
level and with several untested lawsuits still unresolved, an
immediate spin-off may be unsuccessful and may jeopardize our
ability to complete a spin-off in the future.
If the litigation environment improves as we expect it will,
we believe a more likely time to consider a spin-off would be
later in 1997 or 1998. If we though a spin-off was likely to be
successfully accomplished now and would meet our commitments
regarding the investment grade ratings of our companies, we'd do
it. I can't be any more plain-spoken than that.
Many independent security analysts on Wall Street who have
written on this subject agree with our views. Just last week, I
received a research report from Smith Barney's analyst, Martin
Feldman, who said that, "...pressure for a quick Nabisco spin-off
is bad news in our view...We strongly support the RN board's view
that to enhance shareholder value, the NA disposal should be timed
to minimize the possibility of fraudulent conveyance accusations
and/or a downgrade of RN's corporate debt rating."
As your new CEO, I am committed to doing what's necessary to
increase the market value of your stock. I will be communicating
with you in the coming months regarding our progress in pursuit of
enhanced shareholder value and other issues which will be coming
before you during that time. I want to thank you for your support
of this company and its management in the past and I'd like to
take this opportunity to convey my best wishes to you during this
holiday season and for the new year.
Sincerely,
Steven f. Goldstone
President and Chief Executive Officer
CERTAIN ADDITIONAL INFORMATION: RJR Nabisco Holdings Corp. will be
soliciting revocations of consents to the proposals of Brooke Group, Ltd.
The following individuals may be deemed to be participants in the
solicitation of revocations of consents by RJR Nabisco Holdings Corp.: RJR
Nabisco Holdings Corp.; John T. Chain, Jr.; Julius L. Chambers; John
L. Clendenin; Steven F. Goldstone; H. John Greeniaus; Ray J. Groves;
Charles M. Harper; James W. Johnston; John G. Medlin, Jr.; Robert S.
Roath; Rozanne L. Ridgway; and Huntley R. Whitacre. As of December 6,
1995, Mr. Chain is the beneficial owner of 8,393 shares of the company's
common stock; Mr. Chambers is the beneficial owner of 6,393 shares of the
company's common stock; Mr. Clendenin is the beneficial owner of 6,846
shares of the company's common stock; Mr. Goldstone is the beneficial
owner of 16,529 shares of the company's common stock; Mr. Greeniaus is
the beneficial owner of 126,308 shares of the company's common stock; Mr.
Groves is the beneficial owner of 7,000 shares of the common stock; Mr.
Harper is the beneficial owner of 524,882 shares of the company's common
stock; Mr. Johnston is the beneficial owner of 114,381 shares of the
company's common stock; Mr. Medlin is the beneficial owner of 7,259
shares of the company's common stock; Mr. Roath is the beneficial owner
of 44,205 shares of the company's common stock; Mr. Ridgway is the
beneficial owner of 6,393 shares of the company's common stock; and Mr.
Whitacre is the beneficial owner of 27,891 shares of the company's common
stock.
