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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
Filed by the registrant [ ]
Filed by a party other than the registrant [X]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SAFETY-KLEEN CORP.
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(Name of Registrant as Specified in Its Charter)
LAIDLAW ENVIRONMENTAL SERVICES, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(a)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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PRELIMINARY COPY -- SUBJECT TO COMPLETION
DATED JANUARY 6, 1998
[LAIDLAW ENVIRONMENTAL SERVICES INC.]
JANUARY , 1998
Dear Fellow Safety-Kleen Corp. Shareholder:
I am pleased to enclose our Proxy Statement for the Special Meeting of
shareholders of Safety-Kleen Corp. to be held at 10:00 a.m. central time on
February 11, 1998, at The First Chicago Center, The First National Bank of
Chicago Building, 38 South Dearborn Street, Chicago, Illinois 60670.
As you know by now, Laidlaw Environmental Services, Inc. ("Laidlaw
Environmental") has announced its intention to make an exchange offer to acquire
all outstanding shares of common stock (and associated share purchase rights) of
Safety-Kleen Corp. ("Safety-Kleen"), for consideration per Safety-Kleen share
consisting of $15.00 in cash (subject to reduction for certain break-up fees and
expenses of Safety-Kleen as described in the accompanying Proxy Statement) and
common stock of Laidlaw Environmental with a market value of $15.00 (assuming
that the market value of Laidlaw Environmental common stock is not less than
$4.28571) for each share of common stock of Safety-Kleen. The detailed terms and
conditions of the Laidlaw Environmental offer will be set forth in Laidlaw
Environmental's prospectus and the related letter of transmittal, which will be
separately mailed to Safety-Kleen shareholders in the future.
Safety-Kleen has entered into a merger agreement with a buyout group which
would result in each share of Safety-Kleen common stock being converted into the
right to receive $27.00 (the "Buyout Merger"). The Safety-Kleen board of
directors is soliciting your vote to approve the Buyout Merger at the special
meeting. As discussed in the accompanying Proxy Statement, we believe our
proposal has a higher value than the Buyout Merger proposal, and is also
superior to the Buyout Merger proposal in other respects.
WE BELIEVE YOU SHOULD VOTE AGAINST THE BUYOUT MERGER BECAUSE:
-- We believe the Laidlaw Environmental proposal would produce a higher
value per Safety-Kleen share than the Buyout Merger by giving you cash
and stock with a combined value in excess of $27.00, and allowing you
to participate in the upside potential of the combined enterprise.
-- We intend to abandon our exchange offer if Safety-Kleen shareholders
approve the Buyout Merger. Preserve your opportunity to consider the
superior value provided by the Laidlaw Environmental exchange offer.
-- Safety-Kleen's shareholders should send a strong message to
Safety-Kleen's board of directors to remove the obstacles that prevent
market forces from valuing Safety-Kleen (e.g., Safety-Kleen's "poison
pill" rights plan).
YOUR VOTE IS ESSENTIAL! IF YOU WANT THE OPPORTUNITY TO CONSIDER THE LAIDLAW
ENVIRONMENTAL EXCHANGE OFFER, VOTE AGAINST THE BUYOUT MERGER.
Because Laidlaw Environmental has announced its intention to make an
exchange offer to acquire all outstanding shares of common stock of Safety-Kleen
and the Buyout Merger would preclude Laidlaw Environmental from consummating its
offer, Laidlaw Environmental has an interest in the proxy solicitation with
respect to the Buyout Merger that is different from other Safety-Kleen
shareholders.
If you have any questions concerning the enclosed Proxy Statement or need
assistance in voting your shares, please contact our Information Agent, Morrow &
Co., Inc., at 1-800-662-5200 or call collect at (212) 754-8000.
We thank you in advance for your support.
Sincerely,
[KENNETH W. WINGER]
Kenneth W. Winger
President and Chief Executive Officer
Laidlaw Environmental Services, Inc.
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THESE ARE PRELIMINARY PROXY MATERIALS AND, IN ACCORDANCE WITH U.S. SECURITIES
LAWS, DO NOT INCLUDE A PROXY CARD. ONCE OUR PROXY MATERIALS BECOME DEFINITIVE,
YOU WILL RECEIVE ANOTHER COPY ALONG WITH OUR GREEN-STRIPED PROXY CARD THAT WE
WILL ASK YOU TO SIGN, DATE AND PROMPTLY RETURN TO US.
THIS PROXY STATEMENT RELATES SOLELY TO THE SOLICITATION OF PROXIES WITH RESPECT
TO THE BUYOUT MERGER AND IS NOT A REQUEST FOR THE TENDER OF SHARES OF
SAFETY-KLEEN COMMON STOCK. THE DETAILED TERMS AND CONDITIONS OF THE LAIDLAW
ENVIRONMENTAL OFFER WILL BE SET FORTH IN A PROSPECTUS AND THE RELATED LETTER OF
TRANSMITTAL, WHICH WILL BE SEPARATELY MAILED TO SAFETY-KLEEN SHAREHOLDERS IN THE
FUTURE.
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PRELIMINARY COPY -- SUBJECT TO COMPLETION
DATED JANUARY 6, 1998
PROXY STATEMENT
OF
LAIDLAW ENVIRONMENTAL SERVICES, INC.
FOR THE
SPECIAL MEETING OF SHAREHOLDERS
OF
SAFETY-KLEEN CORP.
TO BE HELD ON FEBRUARY 11, 1998
SOLICITATION OF PROXIES IN OPPOSITION
TO THE PROPOSED ACQUISITION OF SAFETY-KLEEN CORP.
BY SK PARENT CORP.
Laidlaw Environmental Services, Inc., a Delaware corporation ("Laidlaw
Environmental"), is furnishing this Proxy Statement to holders of outstanding
shares of common stock, par value $0.10 per share, of Safety-Kleen Corp., a
Wisconsin corporation whose principal executive offices are located at 1000
North Randall Road, Elgin, Illinois 60123 ("Safety-Kleen"), in connection with
the solicitation by Laidlaw Environmental of proxies to be voted at a special
meeting of shareholders of Safety-Kleen to be held at 10:00 a.m. central time on
February 11, 1998 at The First Chicago Center, The First National Bank of
Chicago Building, 38 South Dearborn Street, Chicago, Illinois 60670, and at any
adjournments or postponements thereof (the "Special Meeting"). The record date
for the Special Meeting is January 5, 1998 (the "Record Date"). This Proxy
Statement is first being sent or given to shareholders on or about January ,
1998.
As described in Safety-Kleen's preliminary proxy statement which was filed
with the Securities and Exchange Commission (the "Commission") on November 26,
1997, as amended by Amendment No. 1 to the Proxy Statement filed December 22,
1997 (the "Safety-Kleen Proxy Statement"), the purpose of the Special Meeting is
to consider and vote upon a proposal to approve and adopt an Agreement and Plan
of Merger dated as of November 20, 1997 (the "Buyout Merger Agreement"), among
SK Parent Corp., a newly formed Delaware corporation ("Parent"), SK Acquisition
Corp., a newly formed Wisconsin corporation and wholly-owned subsidiary of
Parent ("Purchaser") and Safety-Kleen, pursuant to which (a) Purchaser will be
merged (the "Buyout Merger") with and into Safety-Kleen, and (b) each
outstanding share of Common Stock of Safety-Kleen, par value $0.10 per share
(including, unless the context otherwise requires, each associated Right, as
defined below) (each a "Share" and collectively, the "Shares"), other than
treasury Shares and Shares owned by Parent, Purchaser or any subsidiary thereof,
will be converted into the right to receive $27.00 in cash, without interest.
According to the Safety-Kleen Proxy Statement, dissenters' rights are not
available to Safety-Kleen shareholders in connection with the Buyout Merger.
Parent and Purchaser are affiliates of a buyout group recently formed by Philip
Services Corp., Apollo Advisors, L.P., and Blackstone Management Associates III,
L.P. (the "Buyout Group").
Laidlaw Environmental will vote its Shares AGAINST, and is soliciting
proxies authorizing Laidlaw Environmental to vote your Shares AGAINST,
Safety-Kleen's proposal to approve and adopt the Buyout Merger Agreement.
On November 20, 1997, Laidlaw Environmental announced its intention to
commence an offer (the "Laidlaw Environmental Offer") to exchange (i) $15.00 net
in cash (subject to reduction) and (ii) Common Stock, par value $1.00 per share,
of Laidlaw Environmental ("Laidlaw Environmental Common Stock"), with a market
value of $15.00 (assuming that the fair market value of Laidlaw Environmental
Common Stock is not less than $4.28571) for each outstanding Share, including
the associated Common Share Purchase Rights granted under that certain Rights
Agreement, dated as of November 9, 1988, between Safety-Kleen and First National
Bank of Chicago, as Rights Agent, as amended (the "Rights"), validly tendered
and not properly withdrawn. The amount of the cash consideration is subject to
reduction for certain break-up fees and expenses of Safety-Kleen (as described
under "Introduction" below), and the actual fair market value of the Laidlaw
Environmental
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Common Stock to be exchanged pursuant to the Laidlaw Environmental Offer may be
more or less than $15.00 depending on the Exchange Ratio (as defined under
"Comparison of the Laidlaw Environmental Offer and the Buyout Merger -- Premium"
below) and the trading price of the Laidlaw Environmental Common Stock at the
time of the exchange. Laidlaw Environmental has filed with the Commission a
Registration Statement on Form S-4 (as amended from time to time, the
"Registration Statement"), which contains a preliminary prospectus (the "Laidlaw
Environmental Preliminary Prospectus") setting forth the detailed terms and
conditions of the Laidlaw Environmental Offer. The Laidlaw Environmental Offer
will be made solely pursuant to the definitive prospectus (the "Laidlaw
Environmental Prospectus") included in the Registration Statement, the Tender
Offer Statement on Schedule 14D-1 to be filed prior to the commencement of the
Laidlaw Environmental Offer (the "Schedule 14D-1") and the related letter of
transmittal (the "Letter of Transmittal"), which will be mailed separately to
the shareholders of Safety-Kleen immediately after the Commission declares the
Registration Statement effective. This Proxy Statement is not a request for the
tender of Shares.
THE PURPOSE OF THIS PROXY SOLICITATION IS TO ENABLE HOLDERS OF SAFETY-KLEEN
SHARES TO DECIDE FOR THEMSELVES WHICH PROPOSAL IS SUPERIOR. LAIDLAW
ENVIRONMENTAL IS SOLICITING PROXIES AGAINST THE BUYOUT MERGER AND URGES YOU TO
VOTE AGAINST APPROVAL AND ADOPTION OF THE BUYOUT MERGER AGREEMENT.
IF YOU WANT THE OPPORTUNITY TO CONSIDER THE LAIDLAW ENVIRONMENTAL OFFER,
VOTE AGAINST THE BUYOUT MERGER AGREEMENT BY SIGNING, DATING AND RETURNING THE
GREEN-STRIPED PROXY CARD THAT WILL BE FURNISHED TO YOU WITH THE DEFINITIVE PROXY
STATEMENT.
When the Laidlaw Environmental Offer is commenced, tendering Shares
pursuant to the Laidlaw Environmental Offer will NOT constitute a vote AGAINST
the Buyout Merger. Instead, you must vote against the Buyout Merger by using the
GREEN-STRIPED proxy card that will be furnished to you with the definitive proxy
statement or by voting in person at the Special Meeting.
IMPORTANT
LAIDLAW ENVIRONMENTAL INTENDS TO ABANDON ITS OFFER IF SAFETY-KLEEN
SHAREHOLDERS VOTE TO APPROVE THE BUYOUT MERGER.
YOUR VOTE AGAINST THE BUYOUT MERGER WILL SEND A STRONG MESSAGE TO THE
SAFETY-KLEEN BOARD OF DIRECTORS THAT YOU WANT IT TO REMOVE THE OBSTACLES IT IS
MAINTAINING TO PREVENT MARKET FORCES FROM DETERMINING THE VALUE OF SAFETY-KLEEN.
EVEN IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF SAFETY-
KLEEN, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. YOU MAY REVOKE THAT PROXY AND
VOTE AGAINST THE BUYOUT MERGER BY SIGNING, DATING AND MAILING THE GREEN-STRIPED
PROXY CARD THAT WILL BE FURNISHED TO YOU WITH THE DEFINITIVE PROXY STATEMENT.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SAFETY-KLEEN SHARES YOU OWN.
THE ISSUANCE OF LAIDLAW ENVIRONMENTAL SECURITIES IN CONNECTION WITH THE
LAIDLAW ENVIRONMENTAL OFFER OR THE LAIDLAW ENVIRONMENTAL MERGER MUST BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH SECURITIES
WILL BE OFFERED ONLY BY MEANS OF A PROSPECTUS COMPLYING WITH THE REQUIREMENTS OF
SUCH ACT. COMMENCEMENT AND CONSUMMATION OF THE LAIDLAW ENVIRONMENTAL OFFER ARE
SUBJECT TO A NUMBER OF CONDITIONS. IF THE BUYOUT MERGER IS DEFEATED, THERE IS NO
ASSURANCE THAT THE LAIDLAW ENVIRONMENTAL OFFER WILL COMMENCE, OR THAT, IF
COMMENCED, THE LAIDLAW ENVIRONMENTAL OFFER WILL BE CONSUMMATED.
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Only shareholders of record on the Record Date are entitled to vote.
1. If your Shares are held in your own name, please sign, date and return
the GREEN-STRIPED proxy card that will be furnished to you with the definitive
proxy statement in the postage-paid envelope that will also be provided. If your
Shares are held in the name of a brokerage firm, bank or other institution,
please sign, date and return the GREEN-STRIPED proxy card to such brokerage
firm, bank or other institution in the envelope that will be provided by that
firm.
2. Please be sure that your latest dated proxy is a GREEN-STRIPED card
authorizing the proxies named therein to vote AGAINST the BUYOUT MERGER. If you
have already voted for the BUYOUT MERGER on Safety-Kleen's proxy card, it is not
too late to change your vote; simply sign, date and return the GREEN-STRIPED
proxy card. ONLY YOUR LATEST DATED PROXY WILL BE COUNTED.
If you have any questions about the voting of Shares or the Laidlaw
Environmental Offer, please contact Morrow & Co., Inc. ("Morrow & Co.") at 909
Third Avenue, New York, New York 10022, or by telephone at 212/754-8000 (call
collect) or 800/662-5200 (toll free).
INTRODUCTION
On November 4, 1997, Laidlaw Environmental publicly announced its intention
to make an offer to exchange $14.00 in cash and 2.4 shares of Laidlaw
Environmental Common Stock for each Share. On November 20, 1997, Safety-Kleen
announced that it had entered into the Buyout Merger Agreement with the Buyout
Group. Later that same day, Laidlaw Environmental increased its offer to $15.00
in cash (subject to reduction for break-up fees, the incremental increase in
cost caused by certain modifications to severance arrangements, and other
expenses described below) and Laidlaw Environmental Common Stock with a market
value of $15.00 (assuming that the market value of Laidlaw Environmental Common
Stock is not less than $4.28571). On January 5, 1997, Laidlaw Environmental
announced that it would modify the terms of the Laidlaw Environmental Offer to
deduct from the cash consideration only break-up fees payable to the Buyout
Group pursuant to the terms of the Buyout Merger Agreement and certain expenses
paid or reimbursed by Safety-Kleen in connection with the Buyout Group Merger.
Based on the terms of the Buyout Merger Agreement, Laidlaw Environmental
believes that the maximum reduction in the cash consideration would be not more
than $75 million ($50 million break-up fee and up to $25 million in
reimbursement of Buyout Group expenses). Assuming that there are outstanding on
a fully diluted basis 64,072,067 Shares and that the cash consideration is
reduced by the full $75 million, the cash consideration per Share would be
reduced by approximately $1.171. The actual fair market value of the Laidlaw
Environmental Common Stock to be exchanged pursuant to the Laidlaw Environmental
Offer may be more or less than $15.00 depending on the Exchange Ratio and the
trading price of the shares of Laidlaw Environmental Common Stock at the time of
the exchange. The Laidlaw Environmental Offer will be made solely pursuant to,
and the detailed terms and conditions of the Laidlaw Environmental Offer will be
set forth in, the Laidlaw Environmental Prospectus and the related Letter of
Transmittal, which will be separately mailed to the shareholders of Safety-Kleen
immediately after the Commission declares the Registration Statement effective.
Laidlaw Environmental urges you to vote your Shares AGAINST the approval of
the Buyout Merger Agreement for the following reasons:
- LAIDLAW ENVIRONMENTAL BELIEVES A VOTE AGAINST THE BUYOUT MERGER AGREEMENT
WILL ALLOW YOU THE OPPORTUNITY TO RECEIVE GREATER VALUE FOR YOUR SHARES.
Laidlaw Environmental believes the Laidlaw Environmental Offer would
provide a value per Share in excess of the $27.00 per Share Buyout Merger
consideration even after deducting up to approximately $1.171 per Share for the
fees and expenses referred to above.
- A VOTE AGAINST THE BUYOUT MERGER AGREEMENT SENDS A STRONG MESSAGE TO THE
SAFETY-KLEEN BOARD OF DIRECTORS THAT YOU WANT THE BOARD TO REMOVE
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ANY OBSTACLES PREVENTING MARKET FORCES FROM DETERMINING THE VALUE OF
SAFETY-KLEEN.
Laidlaw Environmental believes Safety-Kleen shareholders should have the
right and opportunity to decide whether the Laidlaw Environmental Offer is in
their best interests.
A vote against the Buyout Merger Agreement will not obligate you to tender
your Shares pursuant to the Laidlaw Environmental Offer. Unless the Buyout
Merger is rejected, you will not have the opportunity to consider the Laidlaw
Environmental Offer. Laidlaw Environmental intends to abandon the Laidlaw
Environmental Offer if the Buyout Merger is approved.
The Safety-Kleen Board has attempted to prevent Safety-Kleen shareholders
from having the opportunity to choose between the Laidlaw Environmental Offer
and the Buyout Merger. On November 13, 1997, Laidlaw Environmental sent a notice
to Safety-Kleen pursuant to Section 180.1150 of the Wisconsin Statutes
requesting that the Safety-Kleen Board of Directors convene a special meeting of
shareholders and submit for shareholder approval a resolution to restore full
voting power to any Shares Laidlaw Environmental would acquire as a result of
the Laidlaw Environmental Offer. On November 13, 1997, Laidlaw Environmental
also requested the right to inspect and copy Safety-Kleen's shareholder list. On
November 17, 1997, Safety-Kleen commenced litigation in the United States
District Court for the Northern District of Illinois seeking a declaratory
judgment that Safety-Kleen was not required to call a special shareholders
meeting as requested by Laidlaw Environmental or to provide a shareholder list
to Laidlaw Environmental. On November 20, 1997, Safety-Kleen agreed to the
Buyout Merger, including an obligation to pay up to $75 million in break-up fees
and expenses to the Buyout Group in certain circumstances. Although the
Safety-Kleen Board has amended Safety-Kleen's "poison pill" rights plan to
permit the Buyout Merger to occur, it has refused to remove this "poison pill"
as an obstacle to the Laidlaw Environmental Offer.
Laidlaw Environmental is fighting for your right to choose between the
Laidlaw Environmental Offer and the Buyout Merger. In response to Safety-Kleen's
lawsuit, Laidlaw Environmental has requested a preliminary injunction requiring
Safety-Kleen to hold the meeting to vote to restore full voting power to any
Shares Laidlaw Environmental would acquire as a result of the Laidlaw
Environmental Offer and prohibiting the payment of the break-up fees and
expenses. On December 4, 1997, the United States District Court for the Northern
District of Illinois ordered Safety-Kleen to hold the meeting and provide
Laidlaw Environmental with a shareholder list and set a hearing on Laidlaw
Environmental's motion for preliminary injunction prohibiting payment of the
break-up fees and expenses for January 6, 1998. The date of this hearing was
subsequently changed to January 28, 1998.
BACKGROUND OF THE SOLICITATION
On August 8, 1997 Safety-Kleen announced the resignation of John G.
Johnson, Jr., President and Chief Executive Officer of Safety-Kleen. Donald W.
Brinckman, Chairman of Safety-Kleen's Board of Directors, who had previously
served as Safety-Kleen's Chief Executive Officer from 1968 until December 31,
1994, was appointed Chief Executive Officer. Safety-Kleen also announced that
its Board of Directors had engaged the services of William Blair & Company
("William Blair") to act as advisor to Safety-Kleen and manage the process of
exploring strategic options for enhancing shareholder value.
On August 8, 1997, William Blair sent a copy of the Safety-Kleen
confidentiality letter to one of Laidlaw Environmental's investment bankers, Mr.
David E. Thomas, Jr. of Raymond James & Associates, Inc. ("Raymond James") and
stated that an offering circular would be available early in the week of August
18, 1997, and that such circular would be distributed to parties that had
executed a confidentiality agreement. Laidlaw Environmental did not respond to
this letter. William Blair called Laidlaw Environmental's representative and
asked that Laidlaw Environmental sign the confidentiality agreement. Laidlaw
Environmental was willing to sign a confidentiality agreement, but not the one
proposed by Safety-Kleen, which contained a standstill provision that would
prohibit Laidlaw Environmental for a period of two years from submitting any
proposal to acquire Safety-Kleen unless such proposal is directed solely to the
management of Safety-Kleen and Safety-Kleen shall have requested in advance the
submission of such proposal.
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In mid-September 1997, there were further discussions between the two
investment banks in which Laidlaw Environmental's representatives requested a
meeting of the two companies and their advisors so that Laidlaw Environmental
could fully describe why it believed a business combination was in both
companies' best interests. Safety-Kleen's representative continued to request
that Laidlaw Environmental sign a confidentiality agreement containing the
two-year standstill provision. He also stated that if Laidlaw Environmental
would submit its proposal in writing, Safety-Kleen would consider a meeting with
Laidlaw Environmental.
On September 24, 1997, Mr. Thomas delivered a letter to Mr. Jeffrey W.
Corum of William Blair, informing Mr. Corum of Laidlaw Environmental's interest
in pursuing negotiations with Safety-Kleen. In particular, Mr. Thomas's letter
requested a meeting between the management of Laidlaw Environmental and the
management of Safety-Kleen and pointed out several unique features of Laidlaw
Environmental's proposed transaction, including the potential cost savings
available from combining the operations of Laidlaw Environmental and
Safety-Kleen.
Shortly thereafter Mr. Corum responded to Mr. Thomas's letter by telephone
stating that only upon Laidlaw Environmental's delivery of a confidentiality and
standstill agreement acceptable to Safety-Kleen would Safety-Kleen meet with
Laidlaw Environmental. Subsequent to their telephone conversations, Mr. James R.
Bullock, Chairman of Laidlaw Environmental, attempted to call Mr. Brinckman, who
did not return his call. Mr. Bullock then called Mr. E. David Coolidge of
William Blair in an effort to arrange a meeting with Safety-Kleen. Mr. Coolidge
repeated Safety-Kleen's refusal to meet with Laidlaw Environmental in the
absence of a confidentiality and standstill agreement.
On November 3, 1997, the Laidlaw Environmental Board of Directors met and
determined to proceed with the Laidlaw Environmental Offer as well as to retain
Bear, Stearns & Co. Inc. ("Bear Stearns") to work together with Raymond James as
its financial adviser. Laidlaw Environmental management had previously retained
Katten Muchin & Zavis to serve as legal counsel. Also on November 3, 1997, in a
letter to Mr. Brinckman, Mr. Bullock informed Mr. Brinckman and the Safety-Kleen
Board of Directors of Laidlaw Environmental's intention to acquire Safety-Kleen
for a price per Share of $14.00 in cash and 2.4 shares of Laidlaw Environmental
Common Stock (the "Initial Offer"), and that Laidlaw Environmental was willing
to execute a confidentiality agreement provided such agreement did not contain a
standstill provision. The letter also informed Mr. Brinckman that Laidlaw
Environmental had executed a commitment letter with Toronto-Dominion Bank to
provide all necessary financing for the Laidlaw Environmental Offer and the
merger and again encouraged Mr. Brinckman and the Safety-Kleen Board of
Directors to meet with representatives of Laidlaw Environmental to discuss the
possibility of a mutually beneficial negotiated transaction.
On November 3, 1997 after receipt of Mr. Bullock's letter, Mr. Brinckman
delivered a letter to Mr. Bullock requesting that Laidlaw Environmental execute
a confidentiality and standstill agreement and informing Mr. Bullock that the
Safety-Kleen Board of Directors would fully consider Laidlaw Environmental's
proposal along with others received by Safety-Kleen. In addition, Mr. Brinckman
stated that representatives of Safety-Kleen, together with its financial
advisors, would meet with representatives of Laidlaw Environmental, together
with its financial advisors, to discuss information concerning Laidlaw
Environmental and the estimated cost savings and synergies.
On November 4, 1997, Laidlaw Environmental publicly announced its intention
to commence the Initial Offer.
On November 5, 1997, Mr. Bullock and a representative of Bear Stearns met
with Mr. Brinckman, Mr. Joseph Chalhoub, Senior Vice President of Safety-Kleen,
and representatives of William Blair to discuss potential synergies that could
be achieved through a combination of the two companies and ways the parties
could work together. Mr. Bullock stated that Laidlaw Environmental was prepared
to sign a mutual confidentiality agreement that would not contain a standstill
provision so that Laidlaw Environmental and Safety-Kleen could share information
with each other. In response, Safety-Kleen repeated its requirement that Laidlaw
Environmental sign a confidentiality and standstill agreement.
Subsequent to the November 5th meeting, the representatives of the parties
exchanged correspondence reiterating their positions with respect to the
confidentiality and standstill agreement.
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On November 13, 1997, Laidlaw Environmental filed the Registration
Statement. A copy of the Registration Statement was sent to Mr. Brinckman, along
with a letter from Mr. Bullock emphasizing the strategic importance of combining
the two companies and reiterating Laidlaw Environmental's desire to engage in
negotiations with Safety-Kleen. Mr. Bullock also expressed Laidlaw
Environmental's willingness to put the decision to accept the Initial Offer
directly to the Safety-Kleen shareholders. Mr. Bullock requested the cooperation
of Safety-Kleen Board of Directors in eliminating any antitakeover obstacles
which would prohibit the shareholders from accepting the Initial Offer.
On November 13, 1997, Laidlaw Environmental also sent a notice to
Safety-Kleen pursuant to Section 180.1150 of the Wisconsin Statutes requesting
that the Safety-Kleen Board of Directors convene a special meeting of
shareholders and submit for shareholder approval a resolution to restore full
voting power to any Shares Laidlaw Environmental would acquire as a result of
the Laidlaw Environmental Offer.
By a second letter dated November 13, 1997, Laidlaw Environmental also
requested the right to inspect and copy the Safety-Kleen shareholder list for
the purpose of communicating directly with Safety-Kleen shareholders.
On November 20, 1997, Safety-Kleen announced that it had entered into the
Buyout Merger Agreement with newly formed entities affiliated with Philip
Services Corp., Apollo Advisors, L.P. and Blackstone Management Associates III,
L.P. (the "Buyout Group"). As a result of the Buyout Merger, Safety-Kleen would
become a wholly-owned subsidiary of a new holding company formed by the Buyout
Group and would continue to operate under its current management and out of its
current headquarters. The closing of the Buyout Merger is subject to certain
conditions, including the approval of at least 66 2/3% of Safety-Kleen's
shareholders and both the debt and equity funding of the financing arrangements
of the Buyout Group. Pursuant to the Buyout Merger Agreement, Safety-Kleen is
required to pay a termination fee of $50 million and to reimburse the Buyout
Group for its expenses in an amount up to $25 million under certain conditions,
including in the event that the Buyout Merger Agreement is terminated and the
Laidlaw Environmental Offer by Laidlaw Environmental is accepted by the
Safety-Kleen shareholders.
Later that day, in a letter from Mr. Bullock to Mr. Brinckman, Laidlaw
Environmental increased its per Share offer as described above.
On November 26, 1997, Safety-Kleen filed the Safety-Kleen Proxy Statement
with respect to the proposal to consider and approve the Buyout Merger Agreement
and the Buyout Merger.
On December 2, 1997, Laidlaw Environmental and LES Acquisition, Inc., a
Delaware corporation and indirect wholly owned subsidiary of Laidlaw
Environmental ("LES Acquisition"), filed a proxy statement on Schedule 14A (the
"Control Share Proxy Statement"), relating to Laidlaw Environmental's and LES
Acquisition's proposal (the "Voting Rights Proposal") that Safety-Kleen's
shareholders restore full voting power to all Shares to be acquired by Laidlaw
Environmental and its direct and indirect subsidiaries pursuant to Section
180.1150 (the "Wisconsin Control Share Statute") of the Wisconsin Statutes. As
noted in the Control Share Proxy Statement, consummation of the Laidlaw
Environmental Offer is conditioned upon approval of the Voting Rights Proposal
or LES Acquisition and Laidlaw Environmental being satisfied that the Wisconsin
Control Share Statute is invalid or inapplicable to Shares held by LES
Acquisition or Laidlaw Environmental.
On December 9, 1997, in compliance with a court ruling of December 4, 1997,
Safety-Kleen announced that a Safety-Kleen shareholder meeting to consider the
Voting Rights Proposal would be held on January 9, 1998, (the "Control Share
Meeting") and set the record date for such meeting of December 19, 1997.
On December 22, 1997, Safety-Kleen filed an amendment to its November 26,
1997 proxy statement. This amendment indicated that the shareholder meeting to
consider the Buyout Merger would be held on February 11, 1998.
Also on December 22, 1997, Safety-Kleen filed a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Laidlaw Environmental Offer. The
Schedule 14D-9 recommends that the Safety-Kleen Shareholders reject the Laidlaw
Environmental Offer.
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LITIGATION
On November 17, 1997, Safety-Kleen commenced litigation in the United
States District Court for the Northern District of Illinois alleging that
Laidlaw Environmental had violated Section 5(b)(1) of the Securities Act of 1933
by making a "premature offer" and unlawful proxy solicitation. As a remedy for
that alleged violation, Safety-Kleen requested that it be relieved of its
obligation to provide Laidlaw Environmental with a list of its shareholders so
that Safety-Kleen would not be in the position of facilitating a violation of
the federal securities laws. The Safety-Kleen complaint further alleged that
Laidlaw Environmental's request pursuant to Section 180.1150 of the Wisconsin
Statutes that Safety-Kleen call the Special Meeting failed to comply with the
state law notice requirements. Safety-Kleen contended that the notice served by
Laidlaw Environmental failed to provide sufficient disclosure of the financing
for the Laidlaw Environmental Offer. Safety-Kleen sought a declaratory judgment
that it need not schedule the Special Meeting or provide access to its
shareholder list.
On November 24, 1997, Laidlaw Environmental filed an answer to the
Safety-Kleen complaint in which Laidlaw Environmental denied each of
Safety-Kleen's claims and raised certain affirmative defenses. On that date,
Laidlaw Environmental also filed a counterclaim against Safety-Kleen and each
member of its board of directors (the "Director Defendants") seeking, among
other things: (i) an order compelling Safety-Kleen to call the Special Meeting
to vote on the Voting Rights Proposal in accordance with Section 180.1150(5) (a)
to restore full voting rights to any Shares acquired by Laidlaw Environmental in
the Laidlaw Environmental Offer and the Proposed Merger; (ii) an order
compelling the production of Safety-Kleen's shareholder list, to be produced
promptly and at Safety-Kleen's expense; (iii) an order (w) declaring that the
Director Defendants have breached their fiduciary duties to Safety-Kleen's
shareholders, including Laidlaw Environmental, by refusing to negotiate with
Laidlaw Environmental, entering into the Buyout Merger Agreement, and agreeing
to the unlawful provisions of the Buyout Merger Agreement, including the
break-up fee, (x) compelling the Director Defendants to carry out their
fiduciary duties to Safety-Kleen's shareholders, including Laidlaw
Environmental, by implementing and adhering to procedures under which the
transaction providing the best value reasonably available can be obtained for
Safety-Kleen's shareholders, (y) enjoining Safety-Kleen and the Director
Defendants from proceeding with the Buyout Merger or paying a break-up fee to
the Buyout Group, and (z) directing the Director Defendants to negotiate with
Laidlaw Environmental regarding the Laidlaw Environmental Offer; (iv) an order
compelling the Director Defendants to amend Safety-Kleen's rights plan to make
it inapplicable to the Laidlaw Environmental Offer or to redeem the Rights; (v)
an order (pursuant to the derivative claim) requiring the Director Defendants to
account to Safety-Kleen for waste of corporate assets and all other damages
caused by their approval of the Buyout Merger; and (vi) an award of costs of
suit and reasonable attorneys' fees, and for such other relief as the court may
deem just and appropriate.
On November 26, 1997, Laidlaw Environmental presented its Motion for
Preliminary Injunction in which Laidlaw Environmental sought (i) an order
compelling Safety-Kleen to call the Control Share Meeting to vote on the Voting
Rights Proposal in accordance with the Wisconsin Control Share Statute and (ii)
an order compelling production of the list of Safety-Kleen shareholders.
In a ruling issued on December 4, 1997, the United States District Court
for the Northern District of Illinois ordered Safety-Kleen to comply with the
provisions of the Wisconsin Control Share Statute by calling a meeting of
Safety-Kleen shareholders to consider the Voting Rights Proposal and to provide
the Safety-Kleen shareholder list to Laidlaw Environmental.
Also on December 4, 1997, Laidlaw Environmental filed a second Motion for
Preliminary Injunction in which it seeks to (i) enjoin Safety-Kleen and its
Board of Directors from consummating an unlawful agreement to sell Safety-Kleen
for $27 per share or paying a break-up fee to the Buyout Group; (ii) require
Safety-Kleen's Board of Directors to fulfill their fiduciary duties of loyalty
and care to Safety-Kleen shareholders and fairly consider all offers for the
purchase of Safety-Kleen, including the Laidlaw Environmental Offer; and (iii)
direct Safety-Kleen's Board of Directors to amend the Rights Agreement to make
it inapplicable to the Laidlaw Environmental Offer or redeem the Rights. An
evidentiary hearing on the December 4 motion is scheduled to be held on January
28, 1998.
On December 10, 1997, Parent and Purchaser filed a Motion for Leave to
Intervene in the Northern District of Illinois proceedings involving Laidlaw
Environmental and Safety-Kleen. The Court granted the motion to
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intervene with respect to issues relating to Parent and Purchaser by order dated
December 12, 1997. Parent and Purchaser are now defendants to the claims brought
by Laidlaw Environmental in its counterclaim.
Between November 4, 1997 and November 12, 1997, seven class action lawsuits
were filed against Safety-Kleen and various directors of Safety-Kleen by
Safety-Kleen shareholders not affiliated with Laidlaw Environmental. In general,
these lawsuits seek to (i) cause Safety-Kleen to cooperate with any entity or
person having a bona fide interest in a transaction with Safety-Kleen, (ii)
order the Safety-Kleen Board of Directors to appropriately evaluate
Safety-Kleen's value and to take appropriate steps to enhance this value, and
(iii) cause Safety-Kleen's Board of Directors to act independently in the best
interest of the public shareholders of Safety-Kleen.
COMPARISON OF THE LAIDLAW ENVIRONMENTAL OFFER AND THE BUYOUT MERGER
The following comparison contains forward-looking statements and actual
results may differ materially from those expressed or implied by such
statements. See "Forward-Looking Statements" below. In addition to the factors
referred to below under "Forward-Looking Statements," the risks associated with
the operation, integration and growth of combining the businesses could cause
actual results of the combined entity to differ materially from the results
expected by Laidlaw Environmental.
PREMIUM
Laidlaw Environmental believes the Laidlaw Environmental Offer would
provide a value per Share in excess of the $27.00 per Share consideration
offered in the Buyout Merger Agreement even assuming a reduction of
approximately $1.171 in the cash consideration payable pursuant to the Laidlaw
Environmental Offer for the break-up fees and expenses of Safety-Kleen (and
assuming that the market value of Laidlaw Environmental Common Stock is not less
than $4.28571). The actual per Share price premium will depend on the amount of
the fees and expenses payable by Safety-Kleen and the market value of Laidlaw
Environmental at the time of consummation of the Laidlaw Environmental Offer.
Safety-Kleen shareholders should be aware that depending upon the Exchange Ratio
(as defined below), the trading price of the Laidlaw Environmental Common Stock
at the time of the exchange and the reduction to the cash consideration, the
total per Share consideration payable pursuant to the Laidlaw Environmental
Offer may have a market value of less than $30.00.
"Exchange Ratio" means the quotient (rounded to the nearest 1/100,000)
determined by dividing $15.00 by the weighted average trading prices for Laidlaw
Environmental Common Stock (as reported on the New York Stock Exchange, Inc.
(the "NYSE") Composite Transactions reporting system as published in The Wall
Street Journal or, if not published therein, in another authoritative source)
for ten NYSE trading days (each, a "Trading Day") selected by lot from the
twenty Trading Days ending three business days immediately prior to the
Expiration Date (the "Laidlaw Environmental Average Price"), provided, that the
Exchange Ratio shall not be less than 2.80 nor greater than 3.50. If the Laidlaw
Environmental Average Price is $4.286 or less, and the trading price of the
Laidlaw Environmental Common Stock at the time of the exchange is $4.286 or
less, the market value of the Laidlaw Environmental Common Stock to be received
in exchange for the Shares will be below $15.00 per Share. Based on the closing
price for the Laidlaw Environmental Common Stock on , 199 , each
Share would be exchanged for, in addition to the Cash Consideration,
shares of Laidlaw Environmental Common Stock, having a market value of
$ .
FUTURE GROWTH AND APPRECIATION
Unlike the Buyout Merger Agreement, the Laidlaw Environmental Offer
provides Safety-Kleen shareholders the ability to participate in the future
growth of the combined Laidlaw Environmental and Safety-Kleen entity and the
potential appreciation of the value of its stock. Laidlaw Environmental believes
the consummation of the Buyout Merger would not only result in the payment to
Safety-Kleen shareholders of an inferior price for their Shares, but would also
deprive them of an opportunity to participate in the upside potential of the
combined entity.
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Strategic Fit. Laidlaw Environmental believes the combination of Laidlaw
Environmental and Safety-Kleen will bring together complimentary assets that on
a combined basis will be better able to compete in the hazardous waste
management marketplace. A service center network that links Laidlaw
Environmental's customers to its treatment and disposal facilities such as
landfills and incinerators is one of the company's primary operational
strengths. These service centers differentiate Laidlaw Environmental from its
competitors and allow for both responsiveness and accountability in managing a
customer's hazardous waste stream. The acquisition of Safety-Kleen will further
increase vertical integration of the Laidlaw Environmental business and enhance
its service centers' recovery capabilities by processing waste streams collected
by Safety-Kleen. In addition, Laidlaw Environmental believes that its
acquisition of Safety-Kleen will result in a further strengthening of Laidlaw
Environmental's market position by:
- providing additional service center market coverage in key geographic
regions including Kentucky, Minnesota, and New Jersey;
- introducing a smaller-sized customer base to complement Laidlaw
Environmental's existing customer base of medium- and large-sized
customers; and
- providing significant expansion into the solvent recycling market.
Synergies. Upon consummation of the Laidlaw Environmental Offer, Laidlaw
Environmental intends to build upon Safety-Kleen's leading market presence and
quality brand equity. Laidlaw Environmental's management believes that annual
cost savings of approximately $100 to $130 million would result from the
combination of the two companies due to an anticipated elimination of
duplicative head office and regional office general and administrative and other
public company costs, the closure of 40 to 50 overlapping service center and
other facilities, the increased utilization of those facilities that remain open
from such efficiencies as improved transportation route density, for example,
and the internalization of various waste streams.
These estimated cost savings from synergies are described in detail below.
Laidlaw Environmental believes these estimated savings are achievable and has
fully considered the contrary arguments asserted by Safety-Kleen in its Schedule
14D-9.
Waste internalization. Laidlaw Environmental has estimated from publicly
available sources that Safety-Kleen spends approximately $17 million annually
for outside disposal of hazardous wastes it generates, consisting of fuel blend
material, as well as waste disposed of at hazardous waste incinerators,
landfills and wastewater treatment facilities. Laidlaw Environmental currently
receives an insignificant amount of waste material for disposal from
Safety-Kleen.
Laidlaw Environmental would internalize the incinerable and wastewater
waste materials for disposal at company owned facilities. The fuel blend
material would be either used as a fuel source or blended with solid waste
material for burning at Laidlaw Environmental's three solid hazardous waste
incinerator facilities. When used as a fuel source, Laidlaw Environmental avoids
incurring the cost of purchasing conventional fuel from third parties.
Based on the above, and taking into account an estimate for possible
incremental transportation costs, Laidlaw Environmental estimates the cost
savings from waste internalization to be $13.5 million to $25 million.
Facility consolidation. Laidlaw Environmental estimates that 40 to 50
processing and service center facilities can be rationalized and closed due to
the overlapping coverage areas of Laidlaw Environmental and Safety-Kleen
operations. These facility closure estimates are based upon a thorough review of
the 53 existing Laidlaw Environmental service center and processing facilities
and the 167 existing Safety-Kleen North American branch network and recycling
facilities.
Laidlaw Environmental obtained information on the Safety-Kleen facilities
from a variety of public sources to determine each facility's geographic
coverage and permit capabilities. The Safety-Kleen facilities were then
overlayed against the existing Laidlaw Environmental facilities to determine the
redundant operating locations. Based on this analysis, Laidlaw Environmental has
estimated that 5 processing facilities and 35 to 45 service center operations
could be closed.
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Laidlaw Environmental estimates that the cost savings from these facility
closings would be approximately $2.0 to $2.5 million per processing facility and
$1.0 to $1.5 million per service center facility based on its historical
experience in cost savings achieved by Laidlaw Environmental following the
acquisition of Rollins Environmental Services, Inc. ("Rollins") and other cost
studies.
The cost savings per location are based on the concept that waste
collection and routing efficiencies would be achieved by combining the
transportation resources of the overlapping operating locations and reducing the
total number of vehicles and drivers required to service the existing combined
customer base. The closure of redundant facilities would also result in cost
savings related to the personnel and property costs associated with such
facilities.
Selling, general and administrative cost savings. Laidlaw Environmental
estimates that selling, general and administrative cost savings of approximately
$45 million to $60 million would be achieved through the elimination of
duplicative regional and head office costs. Laidlaw Environmental intends to
incorporate the Safety-Kleen operations directly into Laidlaw Environmental's
existing operational organization, which will result in the elimination of all
duplicate administrative support functions. These estimates are based on the
reduction of 600 to 800 personnel at annualized savings of $75,000 each.
Based on the estimated cost savings identified by Laidlaw Environmental
management, Laidlaw Environmental believes that it can achieve annualized
benefits of approximately $100 to $130 million. Laidlaw Environmental expects to
begin achieving cost savings within three months of the Merger, and to fully
implement the cost savings within the first year after consummation of the
Merger. Laidlaw Environmental will also consider the sale of Safety-Kleen's
European operations and its oil recovery business. This rationalization is
expected to strengthen Laidlaw Environmental's market position, improve the
overall industry fundamentals through capacity reduction and result in immediate
cost savings. Laidlaw Environmental management estimates that Laidlaw
Environmental will incur one-time costs of not more than $100 million relating
to facilities closure and severance expenses incurred in connection with
achieving these synergies. Through the successful merger with Rollins, which
took place in May of 1997, Laidlaw Environmental has demonstrated its ability to
manage the integration of an acquisition and capitalize on the benefits that can
accrue to merged companies in its industry. To date, Laidlaw Environmental
believes synergies achieved in the Rollins merger, on an annualized basis, total
approximately $90 million. There can be no assurance, however, that after
consummation of the Merger the projected cost savings will be achieved or will
be equal to those achieved in the Rollins acquisition.
CONDITIONAL NATURE OF THE BUYOUT MERGER AGREEMENT
General. Unlike the Laidlaw Environmental Offer, which will be subject to
conditions that are standard in transactions of this type, the Buyout Merger
Agreement is subject to significant additional risks that are inherent in the
absence of any direct contractual arrangements between Safety-Kleen and any
member of the Buyout Group. Safety-Kleen shareholders should be aware that the
Safety-Kleen Proxy Statement does not refer to any agreement with Safety-Kleen
that is binding on any member of the Buyout Group. The Buyout Merger Agreement
was executed by Parent and Purchaser, both newly organized shell companies with
no operating history and no assets. In addition, other agreements related to the
transactions described in the Safety-Kleen Proxy Statement appear to have been
entered on behalf of the Buyout Group only by the shell companies and not the
parties constituting the Buyout Group. Based on the filed documents, Laidlaw
Environmental does not believe Safety-Kleen has contractual recourse against any
member of the Buyout Group should Parent refuse to consummate the Buyout Merger
or breach any of its obligations under the Buyout Merger Agreement or any
related agreement or arrangement.
Funding Commitments. The Buyout Merger Agreement provides that the Buyout
Group's obligations are subject to obtaining both the debt and equity financing
for the transaction. According to the Safety-Kleen Proxy Statement, the equity
portion of the Buyout Merger financing is to consist of contributions of $200
million from each of the Buyout Group members, who have executed a commitment
letter addressed to the shell company Parent to that effect. However, the
purported "equity commitments" have not been made directly to Safety-Kleen and
are not enforceable by it. Moreover, Laidlaw Environmental is unaware of any
covenant binding on any
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member of the Buyout Group to use any efforts to ensure that the Parent will
receive the equity contributions required to consummate the Buyout Merger.
In connection with the Laidlaw Environmental Offer, Laidlaw Environmental
has received a written financing commitment from the Toronto-Dominion Bank and
TD Securities (USA), Inc. and the Laidlaw Environmental Offer is not contingent
on financing.
Uncertainties of Pending Litigation. According to the Safety-Kleen Proxy
Statement, the Buyout Merger is conditioned upon there being no pending
litigation that challenges the Buyout Merger and has a substantial likelihood of
success against Parent, Purchaser, Safety-Kleen or any subsidiary of
Safety-Kleen. According to the Safety-Kleen Proxy Statement, Safety-Kleen is
currently involved in litigation in the District Court for the Northern District
of Illinois involving Laidlaw Environmental and seven shareholder derivative
actions in Illinois state court. Safety-Kleen does not disclose in its Proxy
Statement whether the Parent determined that any such pending court actions
would cause the litigation condition to fail to be satisfied.
The Laidlaw Environmental Offer is not subject to a comparable condition.
AVAILABLE INFORMATION
Laidlaw Environmental is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. A copy of the Registration Statement,
and, after its filing with the Commission, a copy of the Schedule 14D-1 and all
amendments thereto, and all other reports, proxy statements and other
information filed by Laidlaw Environmental with the Commission may be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at the public reference facilities in the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
information may be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Because
Laidlaw Environmental files certain documents electronically with the
Commission, reports, proxy and information statements and other information
regarding Laidlaw Environmental may also be accessed through the Commission's
Web site, http//:www.sec.gov. Laidlaw Environmental common stock is listed and
traded on the New York Stock Exchange (the "NYSE"), and the Pacific Exchange,
Inc. Reports, proxy statements and other information filed by Laidlaw
Environmental with the Commission may be inspected at the offices of the NYSE,
20 Broad Street, New York, New York 10005, and in the case of Laidlaw
Environmental, at the offices of the Pacific Exchange at 301 Pine Street, San
Francisco, California 94104.
FORWARD-LOOKING STATEMENTS
Certain statements contained in the cover letter to this Proxy Statement
and the sections titled "INTRODUCTION" and "COMPARISON OF THE LAIDLAW
ENVIRONMENTAL OFFER AND THE BUYOUT MERGER," herein regarding matters that are
not historical facts are forward-looking statements. When used in this Proxy
Statement, the words "believes," "anticipates," "may," "expects," "estimates"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to risks, uncertainties and assumptions, including
those identified below. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated or projected. There are
many factors that could cause actual results to differ materially, such as:
adoption of new environmental laws and regulations and changes in the way
environmental laws and regulations are interpreted and enforced; general
economic conditions; general business conditions, such as the level of
competition, changes in demand for Laidlaw Environmental's or Safety-Kleen's
services and the strength of the economy in general; prices for petroleum based
products; changes in control of Laidlaw Environmental; changes in management of
Laidlaw Environmental; and the occurrence of natural disasters and other
occurrences beyond the control of Laidlaw Environmental. These and other factors
are discussed in this Proxy Statement and other documents Laidlaw Environmental
has filed with the Commission. Laidlaw Environmental undertakes no obligation to
update any such factors or to publicly announce the result of any revisions to
any of the forward-
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looking statements contained herein to reflect future events or developments.
Laidlaw Environmental undertakes no obligation to release publicly any revisions
to these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events except as may
be required by the federal securities laws.
OTHER MATTERS
Except as set forth herein, Laidlaw Environmental is not aware of any other
substantive matter to be considered at the Special Meeting. However, if any
other matter properly comes before the Special Meeting, the proxies also confer
authority to the persons named in the accompanying proxy to vote the Shares to
which the proxy relates on such matter at their discretion, including any
adjournment or postponement of the Special Meeting.
VOTING AT THE SPECIAL MEETING
At the Special Meeting, shareholders of Safety-Kleen will be asked to vote
upon the proposal to approve the Buyout Merger Agreement and the Buyout Merger.
Pursuant to this Proxy Statement, Laidlaw Environmental is requesting (i)
authority to vote your shares AGAINST the Buyout Merger Agreement and the Buyout
Merger, and (ii) that you confer authority to the proxies named in the
accompanying proxy to initiate and vote for any adjournments or postponements of
the Special Meeting (the "Adjournment Proposal").
Under Safety-Kleen's bylaws, a majority of the outstanding Shares entitled
to vote, represented in person or by proxy, shall constitute a quorum at the
Special Meeting. If a quorum is present, authorization of the Buyout Merger
requires approval of at least two-thirds of the outstanding Shares entitled to
vote thereon. Under the Wisconsin Statutes, if a quorum is present, the
authorization of the Adjournment Proposal requires the affirmative vote of a
majority of votes cast at the Special Meeting.
According to Safety-Kleen's Form 10-Q for the fiscal quarter ended
September 6, 1997, as of September 6, 1997 there were 58,400,729 Shares
outstanding.
A VOTE AGAINST THE BUYOUT MERGER WILL NOT REQUIRE THAT YOU TENDER SHARES IN
THE LAIDLAW ENVIRONMENTAL OFFER. DISAPPROVAL OF THE BUYOUT MERGER WILL HELP MAKE
IT POSSIBLE FOR YOU TO HAVE THE OPPORTUNITY TO DECIDE FOR YOURSELF WHETHER TO
ACCEPT THE LAIDLAW ENVIRONMENTAL OFFER. IF YOU ARE A SHAREHOLDER OF RECORD ON
THE RECORD DATE, JANUARY 5, 1998, YOU WILL BE ENTITLED TO VOTE AT THE SPECIAL
MEETING EVEN IF YOU SUBSEQUENTLY TENDER YOUR SHARES IN THE LAIDLAW ENVIRONMENTAL
OFFER.
Whether or not you plan to attend the Special Meeting, we urge you to
authorize the proxies that will be named in the proxy card that will be
furnished to you with the definitive proxy statement to vote AGAINST the Merger
by so indicating on the GREEN-STRIPED proxy card accompanying the definitive
proxy statement and immediately mailing it. You may revoke a proxy at any time
before it is voted by delivering a written notice of revocation or a later dated
proxy for the Special Meeting to Safety-Kleen, 1000 North Randall Road, Elgin,
Illinois 60123. Laidlaw Environmental requests that you send a copy of any
revocation sent to Safety-Kleen to Morrow & Co., Inc., 909 Third Avenue, 20th
Floor, New York, New York 10022. Proxies may also be revoked at the Special
Meeting; however, attendance at the Special Meeting will not in and of itself
revoke a proxy. Unless revoked in the manner set forth above, proxies in the
form that will be furnished to you with the definitive proxy statement will be
voted at the Special Meeting in accordance with your instructions. In the
absence of such instructions, such proxies will be deemed to grant the proxies
named therein authority to vote AGAINST the Buyout Merger.
Any abstention from voting on a proxy will count as a vote withheld and
will be included in computing the number of Shares present for purposes of
determining whether a quorum is present at the Special Meeting. If a broker
indicates on a proxy that it does not have discretionary authority as to certain
Shares to vote on the Buyout Merger (a "broker non-vote"), those Shares will
also be considered present for purposes of determining the presence of a quorum
and entitled to vote with respect to the Buyout Merger proposal, but not for the
Adjournment Proposal. With respect to the Buyout Merger, an abstention or a
broker non-vote will have the same effect as a vote AGAINST such proposal. With
respect to any Adjournment Proposal, since abstentions and
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broker non-votes are not considered votes cast, neither will have any effect on
the voting on such proposal. The inspector of election appointed by
Safety-Kleen's Board of Directors and Laidlaw Environmental will determine the
Shares represented at the meeting and the validity of the proxies and ballots,
and will count all votes and ballots. The voting requirements and procedures
described herein are based upon provisions of the Wisconsin Statutes,
Safety-Kleen's charter documents and interpretations deemed relevant.
Only holders of record of Shares as of the close of business on the Record
Date will be entitled to vote. If you are a shareholder of record on the Record
Date, you will retain your voting rights for the Special Meeting even if you
sell such Shares after the Record Date or if you tender such Shares pursuant to
the Laidlaw Environmental Offer. The tender of Shares pursuant to the Laidlaw
Environmental Offer does not constitute the grant to Laidlaw Environmental of a
proxy or any voting rights with respect to the tendered Shares until such time
as such Shares are accepted for payment by Laidlaw Environmental and LES
Acquisition. Accordingly, it is important that you vote the Shares held by you
on the Record Date, or grant a proxy to vote such Shares on the GREEN-STRIPED
proxy card that will be furnished to you with the definitive proxy statement
even if you sell such Shares after the Record Date or tender such Shares
pursuant to the Laidlaw Environmental Offer.
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the Record Date, only it can execute a proxy for
such Shares and will do so only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and instruct
that person to execute the GREEN-STRIPED proxy card that will be furnished to
you with the definitive proxy statement.
YOU WILL BE ASKED TO SIGN, DATE AND MAIL THE GREEN-STRIPED PROXY CARD THAT
WILL BE FURNISHED TO YOU WITH THE DEFINITIVE PROXY STATEMENT AND RETURN IT
PROMPTLY TO MORROW & CO., INC. 909 THIRD AVENUE, 20th FLOOR, NEW YORK, NEW YORK
10022, IN THE ENVELOPE ENCLOSED WITH THE DEFINITIVE PROXY STATEMENT. NO POSTAGE
WILL BE REQUIRED IF MAILED IN THE UNITED STATES. BY SIGNING AND MAILING THE
GREEN-STRIPED PROXY CARD, ANY PROXY PREVIOUSLY SIGNED BY YOU WITH RESPECT TO THE
BUYOUT MERGER WILL BE AUTOMATICALLY REVOKED.
SOLICITATION OF PROXIES
This solicitation is not being made by or on behalf of Safety-Kleen or
Safety-Kleen's Board of Directors. Proxies may be solicited by mail, telephone,
telecopier, e-mail, telegram and in person. Solicitations may be made by
directors, officers, investor relations personnel and other employees of Laidlaw
Environmental or LES Acquisition, none of whom will receive additional
compensation for such solicitations. Laidlaw Environmental also anticipates that
certain officers, directors, employees or representatives of Morrow & Co., Bear
Stearns and Raymond James may communicate in person, by telephone or otherwise
with shareholders of Safety-Kleen for the purpose of assisting in the
solicitation of proxies. Additional information concerning such participants in
the solicitation of proxies is listed in Schedule I. Laidlaw Environmental has
requested banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all of its solicitation materials to the beneficial owners of the
Shares they hold of record. Laidlaw Environmental will reimburse these record
holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
Laidlaw Environmental has retained Morrow & Co. for solicitation and
advisory services in connection with this solicitation. Laidlaw Environmental
has also retained Morrow & Co. to act as Information Agent in connection with
the Laidlaw Environmental Offer. Laidlaw Environmental will pay Morrow & Co.
usual and customary compensation for all such services, including up to
$ as compensation for this solicitation, and will reimburse Morrow &
Co. for reasonable out-of-pocket expenses in connection therewith. Laidlaw
Environmental has agreed to indemnify Morrow & Co. against certain liabilities
and expenses in connection with the Laidlaw Environmental Offer, including, but
not limited to, certain liabilities under the federal securities laws. Morrow &
Co. will solicit proxies from individuals, brokers, bank nominees and other
institutional holders.
Bear Stearns is acting as financial advisor to Laidlaw Environmental in
connection with its effort to acquire Safety-Kleen and as Dealer Manager in
connection with the Laidlaw Environmental Offer, for which services
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Laidlaw Environmental has paid to Bear Stearns aggregate fees equal to
$1,500,000, and has agreed to pay additional amounts to Bear Stearns (up to a
maximum of $3,250,000).
Raymond James is also acting as financial advisor to Laidlaw Environmental
in connection with its effort to acquire Safety-Kleen, for which services, and
for assistance rendered by Raymond James in connection with prior purchases of
Shares by Laidlaw Environmental, Laidlaw Environmental has agreed to pay Raymond
James aggregate fees up to a maximum of $1,000,000 (all of which is contingent
upon consummation of the Merger).
Laidlaw Environmental has also agreed to reimburse each of the financial
advisors for all out-of-pocket expenses incurred by such financial advisors
(including consultant and attorney's fees), and has agreed to indemnify each of
Bear Stearns and Raymond James and certain related persons and entities against
certain liabilities and expenses in connection with their respective
engagements, including certain liabilities under the federal securities laws. In
connection with each of Bear Stearns' and Raymond James' engagement, Laidlaw
Environmental anticipates that certain employees of Bear Stearns and Raymond
James may communicate in person, by telephone or otherwise with a limited number
of institutions, brokers or other persons who are Safety-Kleen shareholders.
Neither Bear Stearns nor Raymond James will receive any fee for or in connection
with such solicitation activities by its employees apart from the fees it is
otherwise entitled to receive as described above.
In addition to the fees to be received by each of Bear Stearns and Raymond
James in connection with its engagement as financial advisor to Laidlaw
Environmental, Raymond James has in the past rendered various investment banking
and financial advisory services for Laidlaw Environmental for which it has
received customary compensation. Both Bear Stearns and Raymond James may in the
future render services to Laidlaw Environmental for which they will receive
customary fees.
Except as set forth above, neither Laidlaw Environmental nor, to the best
of Laidlaw Environmental's knowledge, any subsidiary, entity, or person acting
on its behalf has retained any other person to make solicitations or
recommendations to security holders on its behalf in connection with the
solicitation of proxies.
The entire expense of soliciting proxies for the Special Meeting is being
borne by Laidlaw Environmental or a subsidiary of Laidlaw Environmental. Neither
Laidlaw Environmental nor any such subsidiary will seek reimbursement for such
expenses from Safety-Kleen. In addition to the above costs, costs incidental to
soliciting proxies including expenditures for printing, postage, legal and
related expenses are expected to be approximately $ .
If Laidlaw Environmental should terminate, or materially amend the terms
of, the Laidlaw Environmental Offer prior to the Special Meeting, Laidlaw
Environmental or LES Acquisition will disseminate such information regarding
such changes to Safety-Kleen shareholders and, in appropriate circumstances,
will provide Safety-Kleen shareholders with a reasonable opportunity to revoke
their proxies prior to the Special Meeting.
INTEREST OF LAIDLAW ENVIRONMENTAL IN THE BUYOUT MERGER
If the Buyout Merger is consummated, Laidlaw Environmental will receive the
Buyout Merger consideration for the 601,100 Shares owned by Laidlaw
Environmental and its direct and indirect subsidiaries (unless such Shares have
been sold or otherwise transferred prior to the date of the Buyout Merger). If
the Buyout Merger proposal fails, Laidlaw Environmental intends to continue
pursuing the Laidlaw Environmental Offer.
SHAREHOLDER PROPOSALS
According to the preliminary proxy materials filed by Safety-Kleen with the
Commission on November 26, 1997, the deadline for receipt of shareholders'
proposals for inclusion in Safety-Kleen's proxy material for the 1998 Annual
Meeting of Shareholders was November 21, 1997.
OTHER INFORMATION
Laidlaw Environmental was incorporated in Delaware in 1968. Its principal
executive office is located at 1301 Gervais Street, Suite 300, Columbia, South
Carolina, 29201. Its telephone number is (803) 933-4200. Laidlaw Environmental
provides hazardous industrial waste management services throughout North
America. Laidlaw Environmental collects, transports, treats and disposes of
waste by incineration, landfilling and other
14
<PAGE> 18
methods at its facilities located in the United States and Canada. Laidlaw
Environmental also operates waste processing, recycling and repackaging
facilities and has analytical laboratories at its facilities in several states.
LES Acquisition is a newly incorporated Delaware corporation and an
indirect wholly owned subsidiary of Laidlaw Environmental which to date has not
conducted any business other than in connection with the Laidlaw Environmental
Offer and the proposed merger. LES Acquisition's Executive Office is located at
1301 Gervais Street, Suite 300, Columbia, South Carolina, 29201.
Certain information about the directors and executive officers of Laidlaw
Environmental and LES Acquisition and certain employees and other
representatives of Laidlaw Environmental who may also assist Morrow & Co. in
soliciting proxies is set forth in the attached Schedule I. Schedule II sets
forth certain information relating to Shares owned by Laidlaw Environmental, LES
Acquisition, Bear Stearns and Raymond James. Schedule III sets forth certain
information, as made available in public documents, regarding Shares held by
Safety-Kleen's principal shareholders and its management.
THIS PROXY STATEMENT RELATES SOLELY TO THE SOLICITATION OF PROXIES WITH
RESPECT TO THE BUYOUT MERGER AND IS NOT A REQUEST FOR THE TENDER OF SHARES OF
SAFETY-KLEEN COMMON STOCK. THE DETAILED TERMS AND CONDITIONS OF THE LAIDLAW
ENVIRONMENTAL OFFER WILL BE SET FORTH IN THE LAIDLAW ENVIRONMENTAL PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL, WHICH WILL BE SEPARATELY MAILED TO
SAFETY-KLEEN SHAREHOLDERS AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT.
YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE AND MAIL THE GREEN-STRIPED PROXY
CARD PROMPTLY UPON RECEIPT.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
, 1998
15
<PAGE> 19
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF LAIDLAW ENVIRONMENTAL AND LES ACQUISITION
Directors and Executive Officers of Laidlaw Environmental and LES
Acquisition. The name, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officer of Laidlaw Environmental and LES Acquisition are set forth
below. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Laidlaw Environmental. Unless
otherwise indicated, each director and executive officer listed below is a
citizen of the United States.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE
NAME AND BUSINESS ADDRESS AGE LAST FIVE YEARS, DIRECTORSHIPS OF PUBLIC COMPANIES
------------------------- --- --------------------------------------------------
<S> <C> <C>
Kenneth W. Winger President, Chief Executive 59 President, Chief Executive Officer and Director of
Officer and Director of Laidlaw Environmental Laidlaw Environmental since May 15, 1997;
since May 1997 Laidlaw Environmental Services, President and sole Director of LES Acquisition,
Inc. 1301 Gervais Street, Suite 300 Columbia, Inc. since November 12, 1997; President, Chief
S.C. 29201 Operating Officer and sole director of Laidlaw
Environmental Services (US), Inc. from July 1995
until May 1997; Executive Vice President for
Business Development of Laidlaw Waste Systems,
Ltd. from January 1995 until July 1995; from May
1991 until December 1994, Senior Vice President
for Corporate Development of Laidlaw Inc. Mr.
Winger also is a director of ViroGroup, Inc.
Non-U.S. citizen.
James R. Bullock Director of Laidlaw 53 President and Chief Executive Officer of Laidlaw
Environmental and Chairman of the Board since Inc. since October 1993; for more than a year
May 1997 Laidlaw Inc. 3221 North Service Road prior thereto, President and Chief Executive
Burlington, Ontario L7R 3Y8 Officer of Cadillac Fairview Corporation Limited.
Mr. Bullock also is a director of Laidlaw Inc.
Non-U.S. citizen.
John R. Grainger Director of Laidlaw 48 Executive Vice President and Chief Operating
Environmental since May 1997 Laidlaw Inc. 3221 Officer of Laidlaw Inc. since September 1997;
North Service Road Burlington, Ontario L7R 3Y8 President and Chief Operating Officer of Laidlaw
Transit, Inc. since May 1992. Mr. Grainger
currently serves as Chairman of the Human
Resources and Compensation Committee. Non-U.S.
citizen.
Leslie W. Haworth Director of Laidlaw 54 Senior Vice President and Chief Financial Officer
Environmental since May 1997 Laidlaw Inc. 3221 of Laidlaw Inc. for more than five years. Mr.
North Service Road Burlington, Ontario L7R 3Y8 Haworth currently serves as Chairman of the Audit
Committee. Non-U.S. citizen.
</TABLE>
16
<PAGE> 20
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE
NAME AND BUSINESS ADDRESS AGE LAST FIVE YEARS, DIRECTORSHIPS OF PUBLIC COMPANIES
------------------------- --- --------------------------------------------------
<S> <C> <C>
John W. Rollins, Sr. Director of Rollins 81 Chairman of the Board and Chief Executive Officer
Environmental Services, Inc. since 1982 of Rollins Truck Leasing Corp. for more than five
Rollins Truck Leasing Corp. 2200 Concord Pike years. Mr. Rollins was Chairman of the Board and
One Rollins Plaza Wilmington, DE 19803 Chief Executive Officer of Rollins Environmental
Services, Inc. from 1988 until May 15, 1997. Mr.
Rollins also is a director of Matlack Systems,
Inc., Rollins, Inc., RPC, Inc. and Dover Downs
Entertainment, Inc. Mr. Rollins is the father of
John W. Rollins, Jr.
John W. Rollins Jr. Director of Rollins 55 President and Chief Operating Officer and a
Environmental Services, Inc. since 1982 director of Rollins Truck Leasing Corp. for more
Rollins Truck Leasing Corp. 2200 Concord Pike than five years; Chairman of the Board of Matlack
One Rollins Plaza Wilmington, DE 19803 Systems, Inc. for more than five years. Mr.
Rollins was Senior Vice Chairman of the Board of
Rollins Environmental Services, Inc. from 1988
until May 15, 1997. Mr. Rollins also is a director
of Dover Downs Entertainment, Inc. Mr. Rollins is
a member of the Human Resources and Compensation
Committee. Mr. Rollins is the son of John W.
Rollins, Sr.
David E. Thomas, Jr. Director of Laidlaw 40 Senior Managing Director and the Head of the
Environmental since June 1997 Raymond James & Investment Banking Group of Raymond James since
Associates, Inc. 880 Carillon Parkway St. July 1996; from 1991 until July 1996, Managing
Petersburg, FL 33716 Director of Raymond James. Mr. Thomas also is a
director of Reynolds, Smith and Hills, Inc. Mr.
Thomas is a member of the Human Resources and
Compensation Committee.
Henry B. Tippie Director of Rollins 71 For more than five years, Chairman of the Board
Environmental Services, Inc. since 1982 Tippie and President of Tippie Services; for more than
Service, Inc. 3420 Executive Center Drive, NW five years, Chairman of the Executive Committee
Suite 163 Austin, TX 78731 and Vice Chairman of the Board of Rollins Truck
Leasing Corp. Mr. Tippie was Chairman of the
Executive Committee of Rollins Environmental
Services, Inc. from 1988 until May 15, 1997. Mr.
Tippie also is a director of Matlack Systems,
Inc., Dover Downs Entertainment, Inc., RPC, Inc.
and Rollins Inc. Mr. Tippie is a member of the
Audit Committee.
James L. Wareham Director of Laidlaw 58 President of AK Steel Corporation since March
Environmental since June 1997 AK Steel 1997; from 1992 until 1996, Chief Executive
Corporation 703 Curtis Street Middleton, OH Officer of Wheeling-Pittsburgh Steel Corporation.
45043 Mr. Wareham is a member of the Audit Committee.
</TABLE>
17
<PAGE> 21
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE
NAME AND BUSINESS ADDRESS AGE LAST FIVE YEARS, DIRECTORSHIPS OF PUBLIC COMPANIES
------------------------- --- --------------------------------------------------
<S> <C> <C>
Grover C. Wrenn Director of Laidlaw 55 Chairman and Chief Executive Officer of Better
Environmental since July 1997 4 Wolfe Street Health Network, Inc. since June 1996; Chief
Alexandria, VA 22314 Executive Officer of EnSys Environmental Products,
Inc. from April 1995 through December 1996; and
President and Chief Executive Officer of Applied
Bioscience International from 1991 through March
1995. Mr. Wrenn also is a director of Strategic
Diagnostics, Inc. and Pharmakinetics Laboratories,
Inc.
Michael J. Bragagnolo Executive Vice President 51 Executive Vice President and Chief Operating
and Chief Operating Officer of Laidlaw Officer of Laidlaw Environmental Services, Inc.
Environmental since May 1997 Laidlaw since May 15, 1997; Executive Vice President and
Environmental Services, Inc. 1301 Gervais Chief Operating Officer of Laidlaw Environmental
Street, Suite 300 Columbia, SC 29201 Services (US), Inc. from January 1997 until May
1997; Executive Vice President of United States
Operations of Laidlaw Waste Systems, Inc. from
September 1993 until January 1997; Vice President
of Strategic Analysis and Planning of Laidlaw
Waste Systems, Inc. from December 1991 until
September 1993. Non-U.S. citizen.
Henry H. Taylor Vice President, General Counsel 53 Vice President, General Counsel and Secretary of
and Secretary of Laidlaw Environmental since Laidlaw Environmental Services, Inc. since May 15,
May 1997 Laidlaw Environmental Services, Inc. 1997; Secretary of LES Acquisition, Inc. since
1301 Gervais Street, Suite 300 Columbia, SC November 12, 1997; Vice President of Legal and
29201 Regulatory Affairs and Secretary of Laidlaw
Environmental Services (US), Inc. September 1995
until May 1997; Vice President of Legal Affairs of
Laidlaw Environmental Services (US), Inc. May 1990
until January 1995.
Paul R. Humphreys Senior Vice President, Finance 38 Senior Vice President of Finance and Chief
and Chief Financial Officer of Laidlaw Financial Officer of Laidlaw Environmental
Environmental since May 1997 Laidlaw Services, Inc. since May 15, 1997; Senior Vice
Environmental Services, Inc. 1301 Gervais President and Chief Financial Officer of LES
Street, Suite 300 Columbia, SC 29201 Acquisition, Inc. since November 12, 1997; Vice
President of Finance for Laidlaw Environmental
Services (US), Inc. January 1995 until May 1997;
Manager of Finance for Laidlaw Inc. from 1988
until January 1995. Non-U.S. citizen.
</TABLE>
18
<PAGE> 22
SOLICITATIONS OF PROXIES
BEAR, STEARNS & CO. INC.
The following individuals are the representatives of the Dealer Manager who
may solicit proxies:
Paul A. Berman
Barry J. Cohen
Ashar H. Khan
Douglas T. Lake
Anthony J. Magro
Richard M. Osler
Each of the above named individuals is
employed by Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
RAYMOND JAMES & ASSOCIATES, INC.
The following individuals are the representatives of Raymond James who may
solicit proxies:
David E. Thomas, Jr.
J. Davenport Mosby III
R. Ike Ikauniks
19
<PAGE> 23
SCHEDULE II
SHARES HELD BY LAIDLAW ENVIRONMENTAL AND LES ACQUISITION
As of the date hereof, Laidlaw Environmental and its subsidiaries
(including LES Acquisition) hold beneficially 601,100 Shares.
Neither Laidlaw Environmental nor, to the best of its knowledge, any of the
persons listed on Schedule I hereto has (i) any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of Safety-Kleen, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies; (ii) had any contacts or negotiations with Safety-Kleen or its
affiliates concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets, except as described herein; or (iii)
has had any transaction with Safety-Kleen or any of its executive officers,
directors or affiliates that would require disclosure under the rules and
regulations of the Commission applicable to the Laidlaw Environmental Offer
except existing and present business relationships (e.g., providing services to
each other or considering the purchase of sale of discrete assets or operations
or alliances) in the ordinary course of business, none of which are material,
other than the sale of certain assets of a Laidlaw Environmental subsidiary to
Safety-Kleen in February 1996 and the accompanying cooperative services
agreement which is in the process of being terminated.
In the ordinary course of its business, Bear Stearns and Raymond James may
trade the securities of Safety-Kleen for their own accounts and the accounts of
their customers and, accordingly, may at any time hold a long or short position
in such securities. As of the date hereof, Bear Stearns holds a net long
position of 3,718 Shares and Raymond James holds no Shares.
20
<PAGE> 24
SCHEDULE III
OWNERSHIP OF SHARES BY CERTAIN BENEFICIAL OWNERS
AND SAFETY-KLEEN MANAGEMENT
The following table and notes thereto, which, other than information
regarding Laidlaw Environmental, are reproduced from the Safety-Kleen Proxy
Statement for the Special Meeting of Shareholders to be held February 11, 1998,
set forth certain information with respect to beneficial ownership of Shares as
of December 19, 1997 by (a) all directors of Safety-Kleen, (b) the named
directors and officers of Safety-Kleen, including the executive officers of
subsidiaries of Safety-Kleen and (c) all directors and executive officers of
Safety-Kleen as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES(2)
---- --------------------- ---------------------
<S> <C> <C>
Donald W. Brinckman................................... 907,100(3) 1.53%
Hyman K. Bielsky...................................... 57,858(4) *
Roy D. Bullinger...................................... 64,295(5) *
Robert J. Burian...................................... 125,036(6) *
Andrew A. Campbell.................................... -- *
Michael H. Carney..................................... 137,244(7) *
Joseph Chalhoub....................................... 352,146(8) *
David A. Dattilo...................................... 121,435(9) *
Lawrence Davenport.................................... 8,158(10) *
Richard T. Farmer..................................... 43,390(11) *
Scott E. Fore......................................... 42,260(12) *
Russell A. Gwillim.................................... 198,493(13) *
F. Henry Habicht II................................... 47,118(14) *
Edgar D. Jannotta..................................... 67,500(11) *
John G. Johnson, Jr................................... 99,179(15) *
Scott D. Krill........................................ 4,362(16) *
Karl G. Otzen......................................... 1,481,093(17) 2.53%
Clark J. Rose......................................... 79,914(18) *
Laurence M. Rudnick................................... 45,590(19) *
Paul D. Schrage....................................... 31,180(11) *
C. James Schulz....................................... 17,300(20) *
Marcia E. Williams.................................... 12,250(21) *
Robert W. Willmschen.................................. 148,755(22) *
W. Gordon Wood........................................ 71,317(11) *
All Directors and Officers as a Group (24 persons).... 4,212,953(23) 6.99%
</TABLE>
- ---------------
* Denotes less than one percent of shares outstanding.
(1) Under regulations of the Securities and Exchange Commission, persons who
own or have the power to vote or dispose of shares, either alone or jointly
with others, are deemed to be the beneficial owners of such shares. Such
persons are also deemed to be the beneficial owners of shares beneficially
owned by certain close family members.
(2) Shares subject to options exercisable within 60 days of December 19, 1997
are considered outstanding for the purpose of determining the percent of
the class held by the holder of such option, but not for the purpose of
computing the percentage held by others.
21
<PAGE> 25
(3) Includes 73 shares owned by his wife, 537,492 shares subject to options
exercisable within 60 days of December 19, 1997 and 1,260 shares held in
Safety-Kleen's 401(k) plan as to which he does not have voting control.
(4) Includes 53,487 shares subject to options exercisable within 60 days of
December 19, 1997 and 1,686 shares held in Safety-Kleen's 401(k) plan as to
which he does not have voting control.
(5) Includes 53,537 shares subject to options exercisable within 60 days of
December 19, 1997.
(6) Includes 121,175 shares subject to options exercisable within 60 days of
December 19, 1997.
(7) Includes 90,775 shares subject to options exercisable within 60 days of
December 19, 1997.
(8) Includes 275,000 shares owned by Breslube Industries, Ltd. of which 100% is
owned by Mr. Chalhoub. Also included are 59 shares owned by his wife, 75
shares owned by his son and 77,012 shares subject to options exercisable
within 60 days of December 19, 1997.
(9) Includes 90,090 shares subject to options exercisable within 60 days of
December 19, 1997.
(10) Includes 8,137 shares subject to options exercisable within 60 days of
December 19, 1997 and 21 shares held in Safety-Kleen's 401(k) plan as to
which he does not have voting control.
(11) Includes 30,000 shares subject to options exercisable within 60 days of
December 19, 1997.
(12) Includes 89,999 shares subject to options exercisable within 60 days of
December 19, 1997 and 332 shares held in Safety-Kleen's 401(k) plan as to
which he does not have voting control.
(13) Includes 30,223 shares owned by his wife and 30,000 shares subject to
options exercisable within 60 days of December 19, 1997. Mr. Gwillim is
also a co-trustee for 45,827 shares held in an irrevocable trust for which
he has no beneficial ownership; such shares are not included in the table.
(14) Includes 44,500 shares subject to options exercisable within 60 days of
December 19, 1997 and 218 shares held in Safety-Kleen's 401(k) plan as to
which he does not have voting control.
(15) Includes 700 shares owned by his wife, 85,375 shares subject to options
exercisable within 60 days of December 19, 1997 and 532 shares held in the
Company's 401(k) plan as to which he does not have voting control. Mr.
Johnson resigned from the Company on August 8, 1997.
(16) Includes 3,974 shares subject to options exercisable within 60 days of
December 19, 1997 and 288 shares held in Safety-Kleen's 401(k) plan as to
which he does not have voting control.
(17) Karl G. Otzen and Lucy T. Otzen (the "Otzens") are husband and wife. For
purposes of this table, each is deemed to own shares owned by the other. In
December 1992, the Otzens caused 683,760 of the shares to be contributed to
Circle L Limited Partnership. The general partner which controls the
Partnership is a corporation in which Karl G. Otzen, Lucy T. Otzen, Joan
Emery Lammers and her husband (the "Lammers") each own 25% of the voting
stock and each occupies one of the four positions on the Board of
Directors. Because the Otzens and Lammers share voting power over all of
the shares held by the Partnership, each of them may be deemed to "own" all
shares in the Partnership under the criteria governing this table. The
shares shown opposite Karl Otzen's name also include 757,721 shares owned
by trusts of which the Otzens are co-trustees, 9,100 shares owned by a
trust of which The Northern Trust Company is trustee and 30,000 shares
subject to options exercisable by Karl G. Otzen within 60 days of December
19, 1997.
(18) Includes 68,157 shares subject to options exercisable within 60 days of
December 19, 1997.
(19) Includes 43,849 shares subject to options exercisable within 60 days of
December 19, 1997.
(20) Includes 15,375 shares subject to options exercisable within 60 days of
December 19, 1997.
(21) Includes 11,250 shares subject to options exercisable within 60 days of
December 19, 1997.
(22) Includes 99,826 shares subject to options exercisable within 60 days of
December 19, 1997.
(23) Includes 1,674,010 shares subject to options exercisable within 60 days of
November 18, 1997 and 4,337 shares held in Safety-Kleen's 401(k) plan as to
which they do not have voting control.
22
<PAGE> 26
IMPORTANT
If your shares are registered in your own name, you may mail or fax your
GREEN-STRIPED proxy card (both sides) to Morrow & Co., Inc. at the address or
fax number listed below.
If your shares are held in "street name" -- held by your brokerage firm or
bank -- immediately instruct your broker or bank representative to sign Laidlaw
Environmental's GREEN-STRIPED proxy card on your behalf. If you have any
questions on voting your shares, please call.
Morrow & Co., Inc.
909 Third Avenue, 20th Floor
New York, NY 10022
CALL COLLECT (212) 754-8000
CALL TOLL-FREE (800) 662-5200
FAX: (212) 754-8300
23
<PAGE> 27
PROXY
THIS PROXY IS SOLICITED BY LAIDLAW ENVIRONMENTAL SERVICES, INC.
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF SAFETY-KLEEN CORP.
TO BE HELD FOR THE PURPOSE OF CONSIDERING A PROPOSED MERGER OF SAFETY-KLEEN
The undersigned hereby appoints Kenneth W. Winger, Henry H. Taylor, Paul R.
Humphreys, and each of them, with full power of substitution, the proxies of the
undersigned to vote all of the outstanding shares of Common Stock, par value
$.10 per share ("Shares"), of Safety-Kleen Corp. ("Safety-Kleen") that the
undersigned is entitled to vote at the Special Meeting of Shareholders of
Safety-Kleen to be held on February 11, 1998 (the "Special Meeting"), or at any
adjournment or postponement of the Special Meeting, on the following matters:
1. Agreement and Plan of Merger. Approve the Agreement and Plan of Merger dated
as of November 20, 1997, which provides for the Merger of SK Acquisition Corp.,
a wholly owned subsidiary of SK Parent Corp., with and into Safety-Kleen.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Adjournment of Meeting. To initiate and vote for a proposal to adjourn the
Special Meeting to solicit additional votes, if necessary, against the Agreement
and Plan of Merger (the "Adjournment Proposal").
[ ] FOR [ ] AGAINST [ ] ABSTAIN
LAIDLAW ENVIRONMENTAL SERVICES, INC. RECOMMENDS THAT YOU VOTE "AGAINST" ITEM 1
AND "FOR" ITEM 2.
The proxies of the undersigned named above are authorized to vote, in their
discretion, upon such other matters as may properly come before the Special
Meeting and any adjournment or postponement thereof.
[PROXY CONTINUED ON REVERSE]
<PAGE> 28
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE.
IF NO DIRECTION IS MADE, THE SHARES COVERED BY THIS PROXY WILL BE VOTED
"AGAINST" THE AGREEMENT AND PLAN OF MERGER AND "FOR" THE ADJOURNMENT PROPOSAL.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF LAIDLAW
ENVIRONMENTAL SERVICES, INC. DATED , , SOLICITING PROXIES FOR THE
SPECIAL MEETING (THE "PROXY STATEMENT").
All previous proxies given by the undersigned to vote at the Special Meeting or
at any adjournment or postponement thereof are hereby revoked.
Dated: ,
---------- ----
------------------------------
(Signature)
------------------------------
(Signature, if jointly held)
Title:
------------------------
Please sign exactly as name
appears hereon. When shares
are held by joint tenants,
both should sign. When signing
as an attorney, executor,
administrator, trustee or
guardian, give full title as
such. If a corporation, sign
in full corporate name by
President or other authorized
officer. If a partnership,
sign in partnership name by
authorized person.
PLEASE PROMPTLY COMPLETE, SIGN, DATE AND FAX OR MAIL IN THE ENCLOSED ENVELOPE TO
MORROW & CO., INC., 909 THIRD AVENUE, 20TH FLOOR, NEW YORK, NEW YORK 10022, FAX:
(212) 754-8300.
