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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT No. 2
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Marcum Natural Gas Services, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
566323309
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(CUSIP NUMBER)
FamCo Value Income Partners, L.P.
121 Outrigger Mall
Marina del Rey, CA 90292
(310) 577-7887
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
- with copies to -
Michael G. Tannenbaum, Esq.
Newman Tannenbaum Helpern Syracuse & Hirschtritt
900 Third Avenue - 13th Floor
New York, New York 10022
(212) 508-6700
March 15, 1999
(Date of event which requires
filing of this statement)
CUSIP No. 566323309
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box
[ ]
Page 1 of 6 Pages
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| CUSIP NO.566323309 | 13D | Page 2 of 6 |
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1 NAME OF REPORTING PERSONS
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FamCo Value Income Partners, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California, USA
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NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 290,250 (See Item 5)
BENEFICIALLY | 8 | SHARED VOTING POWER
OWNED BY | | 0
EACH | 9 | SOLE DISPOSITIVE POWER
REPORTING | | 290,250 of Common Stock (See Item 5)
PERSON WITH | 10 | SHARED DISPOSITIVE POWER
| | 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
290,250 shares of Common Stock (See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.12% of Common Stock (See Item 5)
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14 TYPE OF REPORTING PERSON
PN
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Page 2 of 6 Pages
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USIP No. 566323309 SCHEDULE 13D
This Amendment No.2 to Schedule 13D is filed to report the intentions of the
reporting person to take certain actions with respect to Marcum Natural Gas
Services, Inc. (the "Issuer") as discussed in Item 4 hereof. FamCo Value Income
Partners, L.P. and its general partners, Funsten Asset Management and Mr.
Kenneth B. Funsten, are referred to as the "Reporting Persons."
Item 1. Security and Issuer.
There has been no change in the information previously reported in this item of
this Schedule 13D and amendments to the same filed by the Reporting Persons.
Item 2. Identity and Background.
There has been no change in the information previously reported in this item of
this Schedule 13D and amendments to the same filed by the Reporting Persons.
Item 3. Source and Amount of Funds or Other Consideration.
There has been no change in the information previously reported in this item of
this Schedule 13D and amendments to the same filed by the Reporting Persons.
Item 4 Purpose of Transaction
The purpose of the transactions reported in this Schedule 13D and amendments
thereto was and is investment in the securities of the Issuer. The Reporting
Persons are concerned that the Issuer's existing stockholder rights plan is not
in the best interest of the Issuer's shareholders and believe that it should be
terminated. The Reporting Persons are also of the opinion that the shareholders
of the Issuer should be permitted to vote with regard to any of the Issuer's
future stockholder rights plans, rights agreements, staggered board or other
devices commonly known as a "poison pill." Mr. Funsten has submitted a letter to
Mr. W. Phillip Marcum together with a written stockholder proposal with respect
to these matters requesting that such proposal be included in the Issuer's proxy
materials. A copy of the letter and the proposal described above is attached
hereto as Exhibit #1. Mr. Funsten has met with the members of the Board of
Directors of the Issuer to discuss his concerns.
In addition to the foregoing, Mr. Funsten may hold talks and discussions with
various parties, including, but not limited to, the Issuer's management, its
board of directors and other shareholders on a variety of possible subjects,
regarding ways to increase shareholder value. Mr. Funsten intends to pay close
attention to developments at and pertaining to the Issuer, and,
Page 3 of 6 Pages
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subject to market conditions and other factors deemed relevant to him, the
Reporting Persons may purchase, jointly or separately, directly or indirectly,
additional shares of the Issuer's stock or dispose of some or all of such shares
in open-market purchases or privately negotiated transactions. Furthermore, the
Issuer may from time to time contact large shareholders with a view towards
discussing the acquisition of their shares. Other than as described above, the
Reporting Persons do not have any current plans or proposals which would result
in any of the following:
a. the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
b. an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
c. a sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
d. any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or
term of directors or to fill any vacancies on the board;
e. any material change in the present capitalization or dividend
policy of the Issuer;
f. any other material change in the Issuer's business or corporate
structure;
g. changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
h. causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be
quoted in an interdealer quotation system of a registered
national securities association;
i. causing a class of securities of the Issuer to become eligible
for termination of registration pursuant to Section 12(g)(4) of
the Act; or
j. any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) - (b) There has been no change in the information previously
reported in this item of this Schedule 13D and amendments to the
same filed by the Reporting Persons.
(c) There have been no transactions in the securities of the Issuer
by the Reporting Persons since the date of the prior amendment,
Amendment No. 1, to this Schedule 13D.
(d) Not Applicable.
Page 4 of 6 Pages
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(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Not Applicable.
Item 7. Material to be Filed as Exhibits
Letter to Mr. W. Phillip Marcum from Kenneth B. Funsten dated March 15, 1999,
with enclosure.
Page 5 of 6 Pages
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Signatures
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: March 15, 1999
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Signature
/s/ Kenneth B. Funsten
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Name/Title
Kenneth B. Funsten, General Partner
Page 6 of 6 Pages
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EXHIBIT
March 15, 1999
Mr. W. Phillip Marcum
President, Chief Executive Officer and Chairman
Marcum Natural Gas Services, Inc.
1675 Broadway, Suite 2150
Denver, CO 80202
FamCo Value Income Partners, L.P. ("FamCo VIP") believes that it is important
for the stockholders of Marcum Natural Gas Services, Inc. ("Marcum" or the
"Company") to have the opportunity to vote upon a proxy statement proposal that
directs the Company's Board of Directors (the "Board") to terminate the existing
Stockholder Rights Plan or "poison pill" which has been in place since December
12, 1991. The Stockholder Rights Plan in our opinion is not in the best
interests of the stockholders.
We believe that the poison pill unfairly and unnecessarily restricts large
institutional investors like FamCo VIP from acquiring additional shares of
Marcum common stock on the open market or through privately-negotiated purchases
and conveys an image of management entrenchment. Without the ability for FamCo
VIP and others to make such investments, we believe that the stockholders of
Marcum are being deprived of adequate investor interest for their shares and
hence suffer the pain of a diminished share price. Moreover, the poison pill's
meager 15% beneficial ownership limitation is disproportionate in light of other
change-of-control provisions used by the Company in its agreements, which
contain much higher thresholds. Furthermore, on March 23,1998, the Board amended
the Stockholder Rights Plan specifically to exclude one stockholder, American
Meter Company, that received its shares via an asset transaction, from the
ownership limitation. If exceptions are permitted, such discriminatory action is
unfair to all other stockholders. In any event, we believe that it is the
prerogative of the Company's stockholders to decide on any matter which
restricts or otherwise adversely affects their ability to either (1) buy shares
of the Company's common stock from other stockholders willing to sell such
shares or (2) vote those shares on matters of corporate governance.
As you know, we have delayed submitting a written request as an accommodation to
you and the Board in order to first discuss these matters at your invitation
last week, and in reliance on your and other officers' assurances that our
proposal would nonetheless be timely to be included in the Company's 1999 proxy
materials. So that the Company includes our proposal for allowing stockholders
the opportunity to direct the Board to remove the Stockholder Rights Plan, we
have attached the text of such proposal, together with its supporting statement,
for inclusion in Marcum's 1999 proxy materials. We hope that the Board will take
steps to eliminate the poison pill long in advance of being requested to do so
by the Company's stockholders at the next regularly scheduled Annual Meeting.
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In any event, we request the Board to announce immediately that it will withdraw
the Stockholder Rights Plan in the event that our proposal is approved by the
Company's stockholders. If the Board has not made such an announcement by May 1,
1999, FamCo VIP and its affiliates may withhold our shares from participating in
the annual meeting.
In accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, we are including a letter from Bear Stearns Securities Corporation,
which is the record holder of the shares beneficially owned by FamCo VIP,
verifying that FamCo VIP continuously held at least $2,000 worth of Marcum stock
for at least one year. FamCo VIP hearby represents that it intends to continue
to hold these securities through the date of the next meeting of stockholders.
If you or the Board of Directors would like to discuss the merits of the
attached proposal further, we are of course available to do so at your earliest
convenience.
Respectfully yours,
FamCo Value Income Partners, L.P.
By: Funsten Asset Management Co.
Its General Partner
By: _______________________
Kenneth B. Funsten, CFA
President & Portfolio Manager
Attachment
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THE STOCKHOLDER PROPOSAL
Resolved, that the stockholders of Marcum Natural Gas Services, Inc. ("Marcum"
or the "Company") request the Board of Directors (the "Board") to refrain from
adopting any future stockholder rights plan, rights agreement, staggered board
or other device commonly known as a "poison pill" without the prior approval of
stockholders at an Annual or Special Meeting, and to redeem or terminate any
such plan, which may be in effect at the adoption of this resolution.
THE STOCKHOLDER'S STATEMENT OF SUPPORT
On December 2, 1991, the Company adopted a Stockholder Rights Plan whereby the
Board may designate a stockholder owning 15% or more of the Company's stock a
hostile bidder and trigger the poison pill. On March 23,1998, the Board amended
the Stockholder Rights Plan to exclude American Meter and its affiliates.
On September 4, 1998, FamCo Value Income Partners, L.P. ("FamCo VIP") and its
affiliates disclosed ownership of 5.47% of Marcum common stock. Subsequently,
FamCo VIP and affiliates acquired more stock, making fillings disclosing
ownership of 12.83% of Marcum.
On September 25, 1998, the Company announced a stock buy-back plan using Company
money, while allowing to remain in force the 1998 Employee Stock Purchase Plan,
whereby the Company's management and Board could buy stock themselves at half
the current market price from the Company's Treasury. These two actions in
effect subsidized management's remuneration, while diluting earnings, lowering
book value and lowering shareholders' return-on-equity, thus generally
contributing to lower stock prices.
On October 6, 1998, the Board voted to re-set all insider stock options from
their previous exercise prices to two dollars a share, a reduction of over 50%
in all cases. Again, shareholder approval was never asked nor granted for this
lucrative transfer of value.
Marcum's "poison pill" restricts institutional stockholders from materially
increasing their commitment to Marcum by limiting open-market purchase of shares
from investors who may have no other means of achieving liquidity. It also
serves to insulate the Board from following its stockholders' corporate
governance directives. The limitation is unnecessary for assuring the usage of
tax loss carryforwards. The poison pill conveys the image of a management more
interested in itself than in stockholders. The poison pill's 15% beneficial
ownership limitation is discriminatory as the Board makes exceptions as it
pleases. In all instances, we can only conclude that the primary rationale for
maintaining the poison pill is Board and management entrenchment to the
detriment of outside shareholders. We believe that stockholders (the owners of
the Company), not the Board and management (the agents for the owners), should
have the right to decide what is or is not appropriate when it comes to
restricting share ownership. While management may offer empirical studies of
other companies with poison pills, the fact that the Company's common stock has
failed to perform during the existence of this poison pill argues strongly for
its immediate removal.
We propose that the Board terminate the existing Stockholder Rights Plan and
urge all stockholders to VOTE FOR this proposal.
