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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934
and Rule 13e-3 (Section 240.13e-3) thereunder)
SPECTEX INDUSTRIES INC.
(Name of the Issuer)
SPECTEX INDUSTRIES, INC. AND NNEWCO-KING, INC.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.01 Per Share 12686100
(Title of Class of Securities) (CUSIP Number of Class of
Securities)
MICHAEL OBERLANDER, PRESIDENT
SPECTEX INDUSTRIES, INC. and NNEWCO-KING, INC.
505 CARROLL STREET
BROOKLYN, NY 11215
(718) 797-9400
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Person(s) Filing Statement)
------------------------
THIS STATEMENT IS FILED IN CONNECTION WITH (CHECK THE APPROPRIATE BOX):
a. /X/ The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b. / / The filing of a registration statement under the Securities Act of 1933.
c. / / A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: / /
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer is Spectex Industries, Inc. having an address of 505
Carroll Street, Brooklyn New York (the "Company"). The class of stock subject to
Rule 13e-3 are all the outstanding shares (approximately 10% of the total) of
the Company held by shareholders other than Nnewco Inc. (hereinafter after
sometimes referred to as the "Public Share holders" or the "Dissenting
Shareholders").
(b) As of January 30, 1997, eight shareholders of the Company will exchange all
their shares of the Company for shares of Nnewco-King, Inc. These eight
shareholders own 4,101,711 shares of the Company which account for over 90% of
the total outstanding. As of this date there remains 436,809 shares of the
Company held by 739 people or institutions. There is only one class of stock.
(c) Although the common stock of the Company is traded in the over-the-counter
market, there is no established trading market for such stock. The stock of
this company is known as a bulletin board stock. The quotations below,
represent prices between dealers and do not include retail markup, markdown or
commission. They do not represent actual transactions.
<TABLE>
<CAPTION>
HIGH/ASK LOW/BID CLOSE/BID VOLUME
<S> <C> <C> <C> <C>
1996
1st Qtr. $0.2500 $0.0325 $0.2800 0
2nd Qtr. $0.2500 $0.0325 $0.2800 0
3rd Qtr. $O.2500 $0.0100 $0.2800 0
4th Qtr. $0.2500 $0.0100 $0.1500 2,500
</TABLE>
As of December 31, 1996, there were 746 holders of record of the Company's
common stock. The Transfer Agent of the Company's common stock is Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016.
(d) No dividends have been paid in the last two years.
(e) Not applicable.
(f) Not applicable.
(e) Not applicable.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed jointly by the Company and Nnewco-King, Inc
(the "Parent Company"). The Parent Company owns over 90% of the Common Stock of
the Company and the officers and directors of the two companies are the same.
The Parent Company maintains its office at the same place as the Company. After
the merger, the Parent will be the only surviving entity and will
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thereafter obtain the name of the Company, all its assets and liabilities.
(b) 505 Carroll Street Brooklyn, NY 11215
(c) Spectex Industries, Inc., is a New York corporation organized in 1971.
The Company is principally engaged in both the knitted sweater business, which
is operated by and through the Company, and since July 15, 1981, in the
wholesale distribution of dairy products. In 1995, the Company's knitted
sweater business resulted in an operating loss of $156,874 before interest
expense and income taxes. The Company's dairy products segment accounted for an
operating profit of $342,107 before taking into account interest expense, and
income taxes. The dairy product business is operated by J&J Farms Creamery,
Inc. ("J&J"), a 51% owned subsidiary of the Company. The remaining shares of
J&J are held by Messrs. Simon Friedman and Morris Schlager, the sons-in-law of
the Company's President.
The Company designs, knits and manufactures cotton, wool and acrylic
sweaters and sportswear at its headquarter's premises in Brooklyn, New York.
Sales are made nationally to department stores, chain stores, discount stores,
jobbers and retail outlets as well as to the United States government. The
Company also operates through certain divisions and its subsidiaries: JA
Knitting Mills, Perfect Knitting Mills, Inc. and Special Studies Development
Corp. J&J purchases dairy and related food products from major food companies
and food distributors and sells and delivers such products to local retailers
and distributors principally in the New York city metropolitan area.
Nnewco-King, Inc. or the Parent Company is a newly formed New York company.
It was formed for the sole purpose of having the Controlling Shareholders
contribute their stock holdings of the Commons Shares of the Company to Nnewco-
King, Inc in a tax free exchange and to facilitate this short form merger.
After the merger is completed the Parent Company will carry on the same business
in the same place of business as the Company has been doing heretofore.
(d) The Directors and Officers of both the Company and the Parent are the same
and it is anticipated they will be even after the merger. Reference to their
personal data is made to Item 10 of the most recent 10-K of the Company filed on
June , 1996.
(e) and (f) During the last five years, none of Parent, the Company nor any of
its officers or Directors, to the best of their knowledge, (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining further
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violations of, or prohibiting activities subject to, Federal or State securities
laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)-(b) Other than the terms of the Merger described more fully in Item 4 below
there have been no transactions or negotiations between the Company and the
Parent Company.
ITEM 4. TERMS OF THE TRANSACTION.
(a) This Rule 13E-3 Transaction Statement relates to the short form statutory
merger (the `Merger') of the Company, Spectex Industries, Inc. into Nnewco-King,
Inc., a newly-formed New York corporation (the `Parent Company'). The Company is
an approximately 91% owned subsidiary of Parent Company. After the merger only
the Parent Company will survive and it will at that time change its name to
Spectex Industries, Inc. On the date of filing a Certificate of Merger with the
Secretary of State of New York (the `Effective Date'), which is expected to
occur on or about April 15, 1997, the Merger will be consummated.
Certain shareholders (listed on the Company's Form 8-K filed on February
15, 1997 and referred to hereinafter as the "Controlling Shareholders") have
contributed to Parent Company all of their shares of Common Stock, constituting
4,101,711 shares of the Company they own so that the Company is an approximately
91%-owned subsidiary of Parent Company. The Controlling Shareholders received
one share of Parent Company for each 1,000 shares of Common Stock they
contributed to the Parent with ownership of more than 1,500 shares of the
Company allowing a one share increase of stock of the Parent Company for
rounding off purposes. Prior to such contribution the Parent Company owned no
stock of the Company. No cash was paid by the Parent Company or anyone else for
the contribution to the Parent Company of the Controlling Shareholders' Common
Stock of the Company.
Each share of Common Stock of the Company outstanding and held of record as
of the close of business on the day immediately preceding the Effective Date by
persons other than (i) Parent Company and (ii) persons who own more than 1,000
shares of the Company and desire to exchange those shares for shares of the
Parent Company (the shares other than those described in (i) and (ii) of this
sentence being hereinafter referred to as the `Shares' and the holders of the
Shares being hereinafter referred to as the 'Public Shareholders') will, without
any action on the part of any holder thereof, be automatically converted on the
Effective Date into the right solely to receive cash in the amount of $.10 per
share without interest (the 'Merger Consideration') upon surrender of such
Shares, upon the terms and subject to the conditions set forth in the Plan of
Merger (the 'Plan') and in the Letter of
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Transmittal, copies of which are included with this Statement.
Each share of Common Stock of the Company outstanding on the Effective Date
held by Parent Company will be cancelled and extinguished. On that date the
Company will no longer exist, it having been merged into the Parent Company.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(c) Other than the fact the Company will be merged into the Parent, have
fewer shareholders and no longer be obligated to file reports pursuant to
Section 15(d), the Company expects its business operations to remain the same.
The present officers and directors are expected the be the same officers and
directors of the Parent Company after the Merger. There are no employment
contracts with any of the officers and Parent Company does expect to enter into
any after completion of the merger.
(d)-(e) Not applicable.
(f)-(g) The Common Stock of the Company is currently registered under Section
12(g) of the Exchange Act. Upon consummation of the Merger, the Company will
apply to the Commission for termination of the registration of its shares under
the Exchange Act. Termination of registration of the shares under the Exchange
Act will eliminate the Company's obligation to furnish information to the public
and the Commission pursuant to Sections 13 and 15(d) of the Exchange Act.
IT IS THE PRESENT INTENTION OF PARENT COMPANY TO SEEK TO CAUSE THE COMPANY TO
MAKE AN APPLICATION FOR TERMINATION OF REGISTRATION OF ITS SHARES OF COMMON
STOCK AS SOON AS PRACTICABLE FOLLOWING THE MERGER.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The Company does not expect the amount of funds necessary to complete the
Rule 13e-3 transaction of purchasing the Common Shares belonging to the Public
Shareholders to exceed $45,000. It expects to be able to meet this amount from
working capital and will not borrow any money to meet this need.
(b) The Company expects the costs involved in this Rule 13e-3 transaction to not
exceed $34,000. The Company will pay for all these costs with working capital.
An itemized list of such expenses is as follows:
<TABLE>
<S> <C>
i. Legal Fees $13,000
ii. Accounting Fees $2,000
iii. Appraisal Fees $10,000
iv. Printing and mailing costs $8,000
v. Filing Fees $1,000
</TABLE>
(c)-(d) not applicable.
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ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a), (c) The purpose of the Merger is for Parent to acquire the entire
equity interest in the Company for fair consideration in a prompt and orderly
manner and to take the Company private. About two years ago the Company began to
analyze the benefit of remaining a public company verses being becoming a
privately held one. After this analysis and a review of the performance of the
Company's stock over the last two years it was determined by the Controlling
Shareholders to create a new company and to contribute all of their stock to
that company. With the Parent owning more than 90% of the outstanding shares of
the Company, a short form merger could be accomplished under the Business
Corporation Law of New York ("BCL"). This short form merger would not need the
approval of the shareholders of either the Company or the Parent, but could be
approved simply by a vote of the Directors of the Parent Company.
The Company had anticipated that by becoming a public company its
shareholders would have received greater liquidity for its investments and the
Company may have been able to use its public position for additional financing.
Over the years the stock of the Company has not appeared as an active investment
vehicle for the Company. Moreover, the Company does not, in the near future,
anticipate seeking additional financing through issuance of stock offerings.
Another one of the reasons the Controlling Shareholders proposed the Merger
when they did, and why the Merger, in the view of the management of Parent, will
be beneficial to the Company and to Parent, is that the Company must now make
full disclosures of its financial statements to the public and its competitors.
Management of the Company does not feel that it is beneficial that competitors
and customers are regularly apprised of the Company's income and the extent to
which the Company may depend on any one customer.
Parent also considered the expense associated with the filing requirements
of a public company. Since the Company's Common Stock is currently registered
under the Securities Exchange Act of 1934, as amended (the `Exchange Act'), the
Company has an obligation to comply with the proxy rules of Regulation 14A and
Section 14 of the Exchange Act. In addition, the Company is obligated to file
reports with the Commission pursuant to Sections 13 and 15(d) of the Exchange
Act or to disseminate the information contained in such reports. Following the
Merger, the Company will not be required to incur the expense in connection with
filing such reports and complying with such proxy rules.
The acquisition of the entire equity interest in the Company has been
structured as a short form merger under the BCL in which Public Shareholders
will receive cash for their shares and the Company will become a wholly-owned
subsidiary of Parent in order to
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enable Parent to acquire 100% ownership of the Company and merge the Company
into the Parent.
Because immediately prior to the adoption of the Plan, Parent Company owned
more than 90% of the outstanding shares of the Common Stock of the Company, the
Plan was adopted solely by the Board of Directors of Parent. The approval of
the Board of Directors, shareholders or Public Shareholders of the Company is
not required.
Upon consummation of the Merger, the Public Shareholders of the Company
will no longer have an equity interest in the Company and, therefore, will not
benefit from future earnings and growth. Instead, under the Plan, each Public
Shareholder will have only the right to receive cash as specified in the Plan
for each Share theretofore held by him or her.
The Company will, as a result of the Merger, become a privately-held
corporation, with no active market for its shares of Common Stock. The
registration of the Company's Common Stock under the Exchange Act will be
terminated. The Company will be relieved of the obligation to comply with the
proxy rules of Regulation 14A under Section 14 of the Exchange Act. Moreover,
the Company will no longer be obligated to file reports with the Commission
pursuant to Sections 13 and 15(d) of the Exchange Act or to disseminate the
information contained in such reports.
The Company and the Parent have chosen the Plan as the most efficient method
to achieve their goals of being a private company while at the same time
providing the Public Shareholders with a fair return on their investment which
has not performed well over the years. The Plan is being adopted now because the
same reasons mentioned above for its adoption have persisted over the last two
years with no foreseeable change in sight. Management of the Company does not
anticipate any change in the business outlook of the Company in the near future.
Economic benefits of going private outlined above have been anticipated for a
few years.
(b) Not applicable.
(d) If the Merger is completed, then the Parent will merge the Company into it.
The shares of the Company will cease to exist. The Company, as an independent
entity will also cease to exist. All of the Company's assets and liabilities
will be assumed by the Parent and business of the Company will carry on as
before. Any Public Shareholder who owns more than 1,000 shares of the Company
will be given the right to convert his or her shares of the Company into one
share of the Parent for each 1,000 shares of the Company. Alternatively, all
Public Shareholder shall have the right to receive $.10 (ten cents) for each
share of the Company to be paid by the Parent. Those Public Shareholders owning
less than 1,000 shares shall only be able to receive $.10 (ten cents) for each
share they surrender of the Company. (See, below at Item 13 for a
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discussion of the law in New York where a shareholder objects to the price
offered by the merger participant. Such an objecting shareholder can seek
judicial determination of the fairness.) Management of the Parent does not
anticipate that any dividends will be paid on the stock of the Parent in the
near future. Moreover the Company does not anticipate that many, if any, of the
Public Shareholders who own more than 1,000 shares of the Company will opt to
exchange there shares for those of the Parent.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Generally, the receipt of cash by a Public Shareholder of the Company in
exchange for his or her Shares pursuant to the Plan or the receipt of cash by
holders of Dissenting Shares (excluding interest, if any, awarded by a court in
a proceeding related thereto) will result in gain or loss for federal income tax
purposes equal to the difference between the amount of cash received in exchange
for the shares sold and such shareholder's adjusted tax basis in such shares.
Provided that the shares constitute capital assets in the hands of the
shareholder, such gain or loss will be capital gain or loss, and will be long-
term capital gain or loss if the holder has held the shares for more than one
year at the time of sale.
The foregoing discussion may not be applicable to certain types of shareholders,
including shareholders who are not citizens or residents of the United States
and foreign corporations, or to entities that are otherwise subject to special
tax treatment under the Internal Revenue Code of 1986, as amended (such as
insurance companies, tax-exempt entities and regulated investment companies).
Neither Controlling Shareholders, the Company nor Parent anticipates the
recognition of any gain, loss or income by reason of the Merger.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. THE PRECISE TAX CONSEQUENCES OF
THE PLAN WILL DEPEND ON THE PARTICULAR CIRCUMSTANCES OF THE HOLDER. SHAREHOLDERS
ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) Since the officers and directors of both the Company and the Parent are the
same, as are the majority shareholders of both companies it was determined that
the appointment of an independent board of directors would be unnecessary and of
no value. In lieu of any independent evaluation of the fairness of the
transaction the Directors hired Alfred Simon of American Capital Group to
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apprise the Company and the Parent of his estimate of a fair consideration for
the shares. This was done and provided to Directors of both the Company and the
Parent on January 15, 1997 (hereinafter the "Simon Report"). All the Directors
of the Parent and Company believe the Merger Consideration is fair to the Public
Shareholders.
Parent considered the Simon Report for the purpose of supporting the fairness
of the Merger Consideration to the Public Shareholders. The Simon Report was
received by the Parent on January 15, 1997.
Simon valued the shares of the Company's Common Stock after taking into
account such factors and information as Simon considered relevant.
Parent and Company considered each of the following valuation approaches
utilized by Simon, solely to determine whether the Merger Consideration is fair
to the Public Shareholders: (i) the current market price; (ii) the historic
market price comparison, (iii) book value; (iv) liquidation value and (v) the
recent sale of a large block of stock of the Company pursuant to a public
auction of the shares.
(b) After review of Simon Report the Directors (See the full Simon Report
reproduced under EXHBIT (b)(1) , the Directors are unable to weigh each factor
separately, but they do note that under all factors considered in the Simon
Report, (except historic market prices) the Merger Consideration of $.10 per
share exceeds the price determined by the other indices.
The Directors believe the one and only recent block sale of a potentially
controlling interest of the shares of the Company to be very instructive as to
fair consideration of the Shares of the Company. In settlment of a lawsuit,
1,707,450 shares of the Company were sold at a public auction to satisfy a debt
owed by the owner of those shares. That many shares represented approximately
39% of the outstanding shares of the Company. Nevertheless the average per share
price was only $.09. (For a full explanation of the circumstances surrounding
the sale these shares referenced is made to the Form 8-K filed by the company on
or about March 17, 1996)
The Merger Consideration of $.10 exceeds every indices except the closing
bid price as reported by IDD Information Services. The Company does not believe
the prices are reflective of the actual price a seller of the stock would expect
to receive for the sale of the shares of the Company. For years the Company has
not been able to generate much interest in the sale of its stocks. Since
September 1, 1996 there has been only one reported trade and that was 2,500
shares in November 1996.
The Company believes that the other indices mentioned in the Simon Report
are more reflective of the true value of the Company
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and its stock. For the last few years the Company has run at a deficit. Even
liquidation value would lead to a per price share value of only $.07.
(c) Because immediately prior to the adoption of the Plan, Parent owned more
than 90% of the outstanding shares of the Common Stock of the Company and the
Plan was adopted by the Board of Directors of Parent, the approval of the Board
of Directors, shareholders or Public Shareholders of the Company is not
required.
(d)-(e) As a consequence of the foregoing, the Board of Directors of Parent
believed that the creation of a special committee of independent directors was
not warranted under the circumstances. Moreover, all of the Directors of Parent
and Company are the same and, consequently, none of the Directors are likely to
be viewed as independent.
Under the New York Business Corporation Law ("BCL"), Parent may effect the
proposed Merger without seeking the approval of the Board of Directors or
shareholders of the Company. On January 31, 1997, the Board of Directors and
the shareholders of Parent Company approved the Plan. Parent believes that the
Merger Consideration is fair to the Public Shareholders. Parent determined the
Merger Consideration solely on the basis of the Simon Report. Parent then
considered a number of factors which support the fairness of its determination
of the Merger Consideration, including, without limitation, the factors set
forth below.
(f) None.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) Parent received an analysis from the Simon Report with respect to the
fair valuation of the Company's shares of Common Stock held by the Public
Shareholders.
(b) Alfred Simon is a certified public accountant, has a MBA from Harvard
School of Business Administration and has been involved in investment banking
since 1978 where he worked for various New York investment houses. Simon has
been engaged in the valuation of businesses and their securities in connection
with mergers and acquisitions. Simon was selected by Parent to act as its
appraiser based upon his expertise and reputation in the valuation of small
companies in the garment business. Moreover Simon has been an expert witness in
litigation controversies concerning fairness compensation matters. His full
resume is attached as exhibit (b)(2).
In conducting its analysis, Simon considered such financial and other
factors as he deemed appropriate under the circumstances,
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including (i) the current market price; (ii) the historic market price
comparison, (iii) book value; (iv) liquidation value and (v) the recent sale of
a large block of stock of the Company pursuant to a public auction of the
shares.
Simon conducted such investigation as he considers appropriate in order to
render an opinion to the Board of Directors of the Company and Parent as to the
fairness of the cash payment of ten cents ($0.10) per share to the holders of
approximately 9% of the outstanding shares of Spectex. In rendering his opinion
he used and relied upon financial statements, information and documents
furnished orally and in writing by Spectex, its affiliates, employees,
independent auditors, and representatives without conducting an independent
audit or investigation of these items.
The following valuation approaches to determine the fairness of the price
to be paid to the public shareholders: (1) current market price; (2) historic
market prices; (3) going concern value; (4) book value; (5) liquidation value;
and (6) the recent sale of a potential controlling block of Spectex shares.
CURRENT MARKET PRICE. The closing bid price on December 12, 1996, was 15.6
cents as reported by IDD Information Services and five cents as reported by the
National Quotation Bureau. However these prices are not representative of the
price a seller could expect to receive, as since September 1, 1996, there was
only one trade of 2,500 shares in November.
HISTORIC MARKET PRICE.
Average quarterly bid price: 1994 $ 0.076
1995 0.145
first half 1996 0.033
Average weekly closing bid Sept. 1 to Dec. 6, 1996 0.142
Again, Simon did not believe this price to necessarily represent the price a
seller could have received due to the small volume of transactions.
GOING CONCERN VALUE. For the five years ending 12-31-95, the Company reported a
cumulative net loss of $536,000, or an average annual loss of $107,000. Even
eliminating 1992, which contained nonrecurring losses and substitute 1990, there
is a cumulative five year profit of $116,000, or an average annual profit of
$23,000. In the last full year, 1995, there was a $148,000 loss and for the nine
months ended 9-30-96, Spectex reported a $163,000 loss verses a $3,000 profit in
the same 1995 period. Management told Simon that it expects losses greater than
the 1995 level to continue into the foreseeable future. His estimate of the
going concern value therefore ranges between zero and eight times the $23,000
five year average annual profit described above, or $184,000, or $0.04 per
share.
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NET BOOK VALUE. At August 3, 1996, the reported shareholder's equity was
calculated at $0.86 per share. However, this figure is not meaningful as the
Company is unprofitable and is expected to remain unprofitable. Also, if
various accounts are adjusted to their realizable or liquidation value the net
book value is reduced to the range of a defect to $0.07 per share.
LIQUIDATION VALUE. Spectex primarily consists of two operating subsidiaries,
the 100% owned J&A Apparel and the 51% owned J&J Farms. If liquidated, Spectex
is computed to produce $362,000 defect. However, if J&A Apparel alone were to
liquidate, a defect of $417,000 would result, and J&J Farms could then be sold
as a separate going concern. J&J Farms reported earnings for the five years
ending 12-31-95 which fluctuated between an $80,000 loss and a $105,000 profit.
For the twelve months ending 9-30-96, he com puted J&J's profit as $118,000. A
sale of J&J might be arranged by Spectex at about twelve times $118,000, or
$1,416,000. Spectex would realize 51% of this amount or $722,000, from which it
would have to pay out its defect on the liquidation of J&A of $417,000.
This course would yield a $305,000, or $0.07 per share.
RECENT SALE OF BLOCK. On February 29, 1996, 1,707,450 shares, or 41.6% of the
outstanding shares of Spectex, were sold as a single block at a public auction
for $158,939, or $0.09 per share, by Michael Oberlander. As a potential
controlling block these shares would be expected to sell at a premium to the
shares of the public shareholders.
A full copy of the report is attached hereto as an exhibit (b)(1). Mr.
Simon was selected by the Directors of Parent based solely on his reputation in
the community in dealing with companies the size of the Company. Other than
retention of Mr. Simon to prepare this report there have been no material
relationships between Mr. Simon and the Company or the Parent in the last two
years. Mr. Simon's fee of $10,000 was negotiated between himself the Directors
of Parent and the Company on an arm's length basis. Neither the Parent nor the
Company gave Mr. Simon any recommendations, instructions or limitations in
connection with the Simon Report other than a request that he determine a fair
and reasonable price to paid to the Public Shareholders.
(c) The foregoing description of the Simon Report is qualified by reference to
the full text of such report included as Exhibit(b)(1) to the Schedule 13E-3
filed with the Securities and Exchange Commission (the 'Commission'). Each
Public Shareholder will be sent a copy of this Form 13e-3 statement and the
exhibits including the Simon Report. Copies of the Simon Report will also be
made available for inspection and copying at the principal executive offices of
Parent during regular business hours by any interested shareholder of the
Company, or by his or her representative who has been so designated in writing,
and may be inspected and copied, and obtained by mail, from the Commission. The
Company will send each
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shareholder of record this Form 13-e, the Merger documents and the Simon Report
20 days prior to filing the Certificate of Merger with the Secretary of State of
Albany.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The filers of this statement are the Company and the Parent. The Parent
now owns over 90% of the Shares of the Company. Theses shares are not a part of
the shares to which the 13-e transaction relates.
(b) none.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES. None.
ITEM 12.
PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO THE
TRANSACTION.
(a) After inquiry by the officers of the Company and Parent there is not known
any executive officer, director, Controlling Shareholders or affiliate of the
Parent or the Company who intends who presently intends to sell or otherwise
dispose of any shares of the Company other than in connection with the Merger
Plan or to sell or dispose of the shares they own of the Parent. Moreover it is
not known that any of these people have entered into any agreement in connection
with the vote of their shares of the Parent.
(b) Other than the officers of the Company who have recommend the Merger Plan,
and the Controlling Shareholders who have contributed their Common Stock of the
Company to the Parent, no other persons mentioned in the preceding paragraph
have made a recommendation in support or in opposition to the Merger Plan. As
regards the Rule 13e-3 transaction (i.e., the fairness of the payment to the
Public Shareholders for their Common Stock of the Company), no officers or
persons have made any recommendations in support or in opposition other than as
set forth in this Statement.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) Under the BCL, the Public Shareholders of the Company do not have rights to
dissent from adoption of the Merger Plan. However under BCL (S)910(a)(2), the
Public Shareholders have a right to dissent to the amount of the consideration
being offered by the Parent and to file a written dissent in accordance with BCL
(S)623(c). This latter section of the BCL requires the shareholder who elects to
dissent from a merger to file a written notice of such election to dissent
within twenty days after the giving to him
13
<PAGE>
of a copy of the plan of merger or exchange or an outline of the material
features thereof under section 905. (A copy of that notice will be sent to each
Public Shareholder and is attached as an exhibit hereto) A shareholder may not
dissent as to less than all of the shares, as to which he has a right to
dissent, held by him of record, that he owns beneficially. Such rights, if the
statutory procedures are complied with, could lead to a judicial determination
of the fair value (excluding any element of appreciation or depreciation in
anticipation of the accomplishment of the merger) required to be paid in cash to
such dissenting holders ('dissenting shareholders') for their shares
('dissenting shares'). Any such judicial determination of the fair value of
dissenting shares could be based upon considerations other than or in addition
to the market value of the shares and the factors used to determine the Merger
Consideration to be paid in the merger, including asset values and the
investment value of the dissenting shares. The value so determined could be more
or less than the merger consideration paid pursuant to the merger.
Shareholders electing to dissent must demand payment for their shares by
completing the letter of transmittal and dissenters demand for payment form
included herewith and returning such documents as instructed therein, together
with their certificates representing dissenting shares and any other required
documents by March 9, 1997.
(b) Not applicable.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) Concerning the Company/Financial Information: Exhibits (g)(1) and (g)(2)
are incorporated herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) None.
(b) Not applicable.
ITEM 16. ADDITIONAL INFORMATION.
Not applicable.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not applicable.
(b)(1) Fair Value Report of American Capital Group, Inc.
14
<PAGE>
(b)(2) Consent of Albert Simon from American Capital Group, Inc. and resume
(c) none
(d) Form of Letter to Shareholders of the Company.
(d)(1) Form of Letter of Transmittal from Shareholder.
(d)(2) Form of Dissenters Demand for Payment Form.
(d)(3) Form of Notice of Adoption of Plan of Merger to be included with the
Letter of Transmittal.
(d)(4) Form of Notice of Merger to be delivered to record shareholders of the
Company following the Effective Date of the Merger.
(d)(5) Plan of Merger adopted by the Board of Directors of Parent on January 15,
1997.
(d)(6) Text of Press Release issued by the Company on January 15, 1997.
(d)(7) Text of Sections 623, 902, 905, and 910 of the New York Business
Corporation Law.
(e) See Discussions under Item 13(a).
(f) Not applicable.
(g)(1) Audited financial statements for the two fiscal years required to be
filed with the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 are incorporated by reference.
(g)(2) Unaudited condensed financial statements required to be included in the
Company's Quarterly Report on Form 10-Q for the nine (9) months ended
September 30, 1996 are incorporated by reference.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: January 31, 1997 Spectex Industries, Inc.
By: /s/ Michael Oberlander
________________________
Michael Oberlander, Pres.
15
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: January 31, 1997 Nnewco-King, Inc.
By: /s/ Michael Oberlander
_________________________
Michael Oberlander, Pres.
16
<PAGE>
EXHIBIT 99(d)(3)
FROM THE BOARD OF DIRECTORS OF NNEWCO-KING, INC.
To the Stockholders of Spectex Industries, Inc.
NOTICE IS HEREBY GIVEN that, at a meeting of the Board of Directors of
Nnewco-King, Inc., duly held on the ____ day of January, 1997, at which a quorum
was present, a resolution, of which the following is a copy, to merge with
Spectex Industries Inc. and to assume all of its obligations, was duly adopted:
"WHEREAS, this Company, Nnewco-King, Inc., is a newly created company,
organized under the laws of the State of New York, and owns in excess of 90% of
the outstanding shares of Spectex Industries, Inc. ("Spectex"), a publicly held
company organized under the laws of the State of New York.
"WHEREAS, the total outstanding stock of Spectex consists of 4,538,520 shares
all of which are of one class, and 4,101,711 shares of which stock are owned by
this Company, and this Company now owns at least 90% per centum of the
outstanding shares of stock of Spectex, and it is deemed advisable that this
Company shall acquire and become and be possessed of all the estate, property
rights, privileges and franchises of said ;
"WHEREAS, the Company together with Spectex has retained the services of
the American Capital Group, Inc. and Alfred Simon to advise both companies as to
a fair consideration to be paid to the other Public Shareholders of Spectex for
their shares.
"AND WHEREAS Alfred Simon has informed the Boards of Directors of Spectex
and the Company that after analysis he believes that $.10 per share is a fair
consideration for the stock of the other shareholders.
NOW, THEREFORE, be it
"RESOLVED, That this Company merge and assume all the obligations of Spectex
pursuant to the plan of merger attached hereto and made a part hereof; and be it
further
"RESOLVED, That the terms and conditions of said merger are as described in
the attached plan of merger incorporated herein as if fully set forth."
"Upon the surrender of each share of stock of Spectex not owned by Nnewco-
King, the holder thereof shall be paid by this Company the sum of ten cents
($.10) in cash; and be it further
"Upon the lapse of 30 days from the date of notice of this intent to merge
this Company with Spectex being sent to the shareholders of Spectex, the Company
will cancel all shares of Spectex and continue to be obligated to make cash
payments of as set forth above to the holders of shares of Spectex as and when
they notify the Company of their address and entitlement to such
<PAGE>
payment and it is further"
"RESOLVED, That the President or a Vice-President and the Secretary or
Treasurer of this Company be and they hereby are authorized and directed to make
and execute in the name and under the seal of this Company a Certificate of
Ownership and of the adoption of these resolutions and the date of adoption
thereof, and to file the same in the office of the Secretary of State of the
State of New York; and be it further
"RESOLVED, That the officers of this Company be and they hereby are empowered
and directed to do all and any acts and things whatsoever, whether within the
State of New York or elsewhere, which may be in any way requisite or proper for
the full and complete accomplishment of said merger, and that prior to the
filing of a Certificate of Ownership a copy of these resolutions and notice of
the adoption thereof be mailed to each stockholder of record of said ."
"RESOLVED, that Alfred Simon's suggested merger price of $.10 per share is
deemed to be fair consideration; and that said officers are empowered to make
all necessary filings with any governmental agencies including the SEC and the
NASD.
<PAGE>
This notice is given pursuant to the requirements of Section 905 of the
Business Corporation Law of the State of New York, and is being mailed to each
stockholder of record of December 31, 1996.
By order of the Board of Directors of Nnewco-King, Inc.
COUNTY OF KINGS
STATE OF NEW YORK ss:
____________________________, being duly sworn, deposes and says: I am an
Assistant Secretary of Nnewco-King, Inc., a corporation organized and existing
under the laws of the State of New York. On ______________, ___________ 1997, I
mailed to all the stockholders of record of Spectex Industries, Inc. and Nnewco-
King, Inc., a copy of the resolution and notice of adoption thereof, hereto
annexed marked Exhibit "A", by depositing the same, duly enclosed in securely
sealed postage prepaid envelopes, one addressed to each such stockholder at his
address as the same appears on the books of in the United States Post Office
box.
Attached hereto, marked Exhibit "B" is a list setting forth the names and
addresses of each stockholder of record of Spectex and Nnewco-King, Inc. to whom
said resolution and notice was so mailed.
<PAGE>
EXHIBIT 99(d)(4)
FROM THE BOARD OF DIRECTORS OF NNEWCO-KING, INC.
To the Stockholders of Spectex Industries, Inc.
NOTICE IS HEREBY GIVEN that, a certificate of merger between Spectex
Industries, Inc. and this Company has been filed with the Secretary of State of
Albany and is effective now. A copy of the same is enclosed herewith.
By order of the Board of Directors of Nnewco-King, Inc.
<PAGE>
EXHIBIT 99(d)(5)
Plan of Merger of
SPECTEX INDUSTRIES INC.
into
NNEWCO-KING, INC.
1. The Board of Directors of NNEWCO-KING, Inc. (" the Corporation") have
adopted the following plan of merger.
FIRST: The Corporation, a corporation of the State of New York, the surviving
corporation owns at least 90 percent of the outstanding shares of Spectex
Industries, Inc. ("Spectex"), a corporation of the State of New York.
SECOND: As to said subsidiary corporation, the designation and number of
outstanding shares and the number of such shares owned by the surviving
corporation are as follows:
The Corporation owns 4,101,711 of Spectex which is approximately 92% of the
total outstanding shares.
THIRD: The aforesaid subsidiary Spectex shall be merged into the Corporation,
which shall be the surviving corporation. After the merger, the Corporation
will change its name to Spectex Industries, Inc. and Spectex will cease to exist
and all its shares will be cancelled.
FOURTH: The terms and conditions of the merger, including the cash or other
consideration to be paid or delivered in exchange for the shares of the Spectex
not owned by the Corporation, are as follows:
(a) The sum of $.10 (ten cents) per share, in cash, shall he paid to each
holder (other than the Corporation or shareholders who own more than 1,000
shares of Spectex and wish to exchange those shares pursuant to the next sub-
paragraph b) of shares of Spectex, in respect of each such share held by such
holder, and the certificate for such shares shall be surrendered and cancelled.
(b) Any Spectex shareholder (other than the Corporation) who owns more than
1,000 shares of Spectex may forego cash exchange mentioned in the preceding sub-
paragraph and exchange all of his her shares for common shares of the
Corporation at a rate of 1,000 shares of Spectex for one share of the
Corporation, but the ownership of more than 1,500 shares of Spectex will entitle
such a shareholder to
<PAGE>
one additional shares of the Corporation. Ownership of any 501 shares of Spectex
over a thousand will entitle the holder to one additional share of the
Corporation (e.g., ownership of 2,000 shares entitles one to two shares of the
Corporation but ownership of 2,501 of Spectex shares entitles the owner to three
shares of the Corporation.
(c) All the issued and outstanding shares of the Corporation, the surviving
corporation, shall remain unchanged in the hands of the holders thereof as
issued and outstanding shares of the surviving corporation.
(d)Except as hereinafter provided in Article Fifth of this plan of merger, no
cash or other consideration shall he
paid or delivered for shares of Spectex, held by the Corporation, and the
certificates for such shares shall be surrendered and cancelled.
(e)The certificate of incorporation and bylaws of the surviving corporation
shall remain unchanged until
amended or changed as provided therein or as provided by
law.
FIFTH: (a) All the property, real and personal, rights, privileges,
immunities, powers, purposes, franchises, patents, licenses, trademarks,
registrations, causes of action, and every other asset of Spectex including any
amounts receivable from the Corporation shall be transferred to, vest in, and
devolve upon the Corporation, the surviving corporation, without further act or
deed and every interest of the surviving corporation, and Spectex shall be as
effectively the property of the Corporation, surviving corporation as they were
of the surviving corporation and of Spectex, respectively.
(b)The surviving corporation shall assume and be liable for all the
liabilities, obligations, and penalties of each of the constituent corporations
including, without limiting the foregoing, the payments required to be wade
under Subdivision (a) of Article Fourth of the Plan of Merger or Sections 910
and 623 of the New York Business Corporation Law.
2. (a) The certificate of incorporation of NNEWCO-KING, Inc. was filed in the
Department of State on January 15, 1997.
(b)The certificate of incorporation of Spectex Industries, Inc., was filed
in the Department of State on July 9, 1965 and amended with the new name on July
7, 1972.
<PAGE>
3. The holders of those shares of Spectex not owned by the surviving
corporation were given a copy of the plan of merger on February_____, 1997.
4. The name of the NNEWCO-KING, Inc. shall be changed to Spectex Industries,
Inc.
5. Spectex Industries Inc. shall cease to exist and be merger into the
Corporation upon the filing of this certificate of merger with the Secretary of
State of New York.
NNEWCO-KING, Inc.
By:___________________________
President
By:
___________________________
Secretary
VERIFICATION
STATE OF NEW YORK
COUNTY OF KINGS SS:.
__________________, being first duly affirming, deposes and says that he is the
Secretary of NNEWCO-KING, Inc., that he has read the foregoing certificate and
knows the contents thereof, and that the statements therein contained are true.
Affirmed to before me this
______ day of _____________, 1997
<PAGE>
EXHIBIT 99(d)(6)
FOR IMMEDIATE RELEASE TO THE PRESS
On January 15, 1997, shareholders of Spectex Industries, Inc. (SCXI)
exchanged all their shares amounting to 4,101,711 or just over 90% of the
outstanding shares for all the stock of a newly incorporated closely held
company, Nnewco-King, Inc. Such an exchange of stock was to facilitate the
taking of Spectex private by merging it into Nnewco-ing. Under New York Law the
new parent will not have to obtain consent of the remaining public shareholders
of Spectex.
Nnewco-King, Inc. will buy all the outstanding shares of the public
shareholders for $.10 per share. The companies will file notice with the SEC in
the coming weeks and thereafter mail copies of the appropriate documents to
every shareholder of record. After the merger Spectex will no longer exist, but
the new company, Nnewco-King, Inc will assume the business and operate as did
Spectex did before the merger.
Dated January 31, 1997
/s/ Michael Oberlander
________________________________
Michael Oberlander, President of
Spectex Industries and Nnewco-
King, Inc.
<PAGE>
EXHIBIT 99(d)(7)
NY CLS Bus Corp @ 623 (1996)
@ 623. Procedure to enforce shareholder's right to receive payment for shares
(a) A shareholder intending to enforce his right under a section of this
chapter to receive payment for his shares if the proposed corporate action
referred to therein is taken shall file with the corporation, before the meeting
of shareholders at which the action is submitted to a vote, or at such meeting
but before the vote, written objection to the action. The objection shall
include a notice of his election to dissent, his name and residence address, the
number and classes of shares as to which he dissents and a demand for payment of
the fair value of his shares if the action is taken. Such objection is not
required from any shareholder to whom the corporation did not give notice of
such meeting in accordance with this chapter or where the proposed action is
authorized by written consent of shareholders without a meeting.
(b) Within ten days after the shareholders' authorization date, which term as
used in this section means the date on which the shareholders' vote authorizing
such action was taken, or the date on which such consent without a meeting was
obtained from the requisite shareholders, the corporation shall give written
notice of such authorization or consent by registered mail to each shareholder
who filed written objection or from whom written objection was not required,
excepting any shareholder who voted for or consented in writing to the proposed
action and who thereby is deemed to have elected not to enforce his right to
receive payment for his shares.
(c) Within twenty days after the giving of notice to him, any shareholder from
whom written objection was not required and who elects to dissent shall file
with the corporation a written notice of such election, stating his name and
residence address, the number and classes of shares as to which he dissents and
a demand for payment of the fair value of his shares. Any shareholder who elects
to dissent from a merger under section 905 (Merger of subsidiary corporation) or
paragraph (c) of section 907 (Merger or consolidation of domestic and foreign
corporations) or from a share exchange under paragraph (g) of section 913 (Share
exchanges) shall file a written notice of such election to dissent within twenty
days after the giving to him of a copy of the plan of merger or exchange or an
outline of the material features thereof under section 905 or 913.
(d) A shareholder may not dissent as to less than all of the shares, as to which
he has a right to dissent, held by him of record, that he owns beneficially. A
nominee or fiduciary may not dissent on behalf of any beneficial owner as to
less than all of the shares of such owner, as to which such nominee or fiduciary
has
<PAGE>
a right to dissent, held of record by such nominee or fiduciary.
(e) Upon consummation of the corporate action, the shareholder shall cease to
have any of the rights of a shareholder except the right to be paid the fair
value of his shares and any other rights under this section. A notice of
election may be withdrawn by the shareholder at any time prior to his acceptance
in writing of an offer made by the corporation, as provided in paragraph (g),
but in no case later than sixty days from the date of consummation of the
corporate action except that if the corporation fails to make a timely offer, as
provided in paragraph (g), the time for withdrawing a notice of election shall
be extended until sixty days from the date an offer is made. Upon expiration of
such time, withdrawal of a notice of election shall require the written consent
of the corporation. In order to be effective, withdrawal of a notice of election
must be accompanied by the return to the corporation of any advance payment made
to the shareholder as provided in paragraph (g). If a notice of election is
withdrawn, or the corporate action is rescinded, or a court shall determine that
the shareholder is not entitled to receive payment for his shares, or the
shareholder shall otherwise lose his dissenters' rights, he shall not have the
right to receive payment for his shares and he shall be reinstated to all his
rights as a shareholder as of the consummation of the corporate action,
including any intervening preemptive rights and the right to payment of any
intervening dividend or other distribution or, if any such rights have expired
or any such dividend or distribution other than in cash has been completed, in
lieu thereof, at the election of the corporation, the fair value thereof in cash
as determined by the board as of the time of such expiration or completion, but
without prejudice otherwise to any corporate proceedings that may have been
taken in the interim.
(f) At the time of filing the notice of election to dissent or within one month
thereafter the shareholder of shares represented by certificates shall submit
the certificates representing his shares to the corporation, or to its transfer
agent, which shall forthwith note conspicuously thereon that a notice of
election has been filed and shall return the certificates to the shareholder or
other person who submitted them on his behalf. Any shareholder of shares
represented by certificates who fails to submit his certificates for such
notation as herein specified shall, at the option of the corporation exercised
by written notice to him within forty-five days from the date of filing of such
notice of election to dissent, lose his dissenter's rights unless a court, for
good cause shown, shall otherwise direct. Upon transfer of a certificate bearing
such notation, each new certificate issued therefor shall bear a similar
notation together with the name of the original dissenting holder of the shares
and a transferee shall acquire no rights in the corporation except those which
the original dissenting shareholder had at the time of transfer.
(g) Within fifteen days after the expiration of the period within which
shareholders may file their notices of election to dissent,
<PAGE>
or within fifteen days after the proposed corporate action is consummated,
whichever is later (but in no case later than ninety days from the shareholders'
authorization date), the corporation or, in the case of a merger or
consolidation, the surviving or new corporation, shall make a written offer by
registered mail to each shareholder who has filed such notice of election to pay
for his shares at a specified price which the corporation considers to be their
fair value. Such offer shall be accompanied by a statement setting forth the
aggregate number of shares with respect to which notices of election to dissent
have been received and the aggregate number of holders of such shares. If the
corporate action has been consummated, such offer shall also be accompanied by
(1) advance payment to each such shareholder who has submitted the certificates
representing his shares to the corporation, as provided in paragraph (f), of an
amount equal to eighty percent of the amount of such offer, or (2) as to each
shareholder who has not yet submitted his certificates a statement that advance
payment to him of an amount equal to eighty percent of the amount of such offer
will be made by the corporation promptly upon submission of his certificates. If
the corporate action has not been consummated at the time of the making of the
offer, such advance payment or statement as to advance payment shall be sent to
each shareholder entitled thereto forthwith upon consummation of the corporate
action. Every advance payment or statement as to advance payment shall include
advice to the shareholder to the effect that acceptance of such payment does not
constitute a waiver of any dissenters' rights. If the corporate action has not
been consummated upon the expiration of the ninety day period after the
shareholders' authorization date, the offer may be conditioned upon the
consummation of such action. Such offer shall be made at the same price per
share to all dissenting shareholders of the same class, or if divided into
series, of the same series and shall be accompanied by a balance sheet of the
corporation whose shares the dissenting shareholder holds as of the latest
available date, which shall not be earlier than twelve months before the making
of such offer, and a profit and loss statement or statements for not less than a
twelve month period ended on the date of such balance sheet or, if the
corporation was not in existence throughout such twelve month period, for the
portion thereof during which it was in existence. Notwithstanding the foregoing,
the corporation shall not be required to furnish a balance sheet or profit and
loss statement or statements to any shareholder to whom such balance sheet or
profit and loss statement or statements were previously furnished, nor if in
connection with obtaining the shareholders' authorization for or consent to the
proposed corporate action the shareholders were furnished with a proxy or
information statement, which included financial statements, pursuant to
Regulation 14A or Regulation 14C of the United States Securities and Exchange
Commission. If within thirty days after the making of such offer, the
corporation making the offer and any shareholder agree upon the price to be paid
for his shares, payment therefor shall be made within sixty days after the
making of such offer or the consummation of the proposed corporate action,
whichever is later, upon the surrender of the certificates [fig 1] for any such
shares
<PAGE>
represented by certificates.
(h) The following procedure shall apply if the corporation fails to make such
offer within such period of fifteen days, or if it makes the offer and any
dissenting shareholder or shareholders fail to agree with it within the period
of thirty days thereafter upon the price to be paid for their shares:
(1) The corporation shall, within twenty days after the expiration of
whichever is applicable of the two periods last mentioned, institute a special
proceeding in the supreme court in the judicial district in which the office of
the corporation is located to determine the rights of dissenting shareholders
and to fix the fair value of their shares. If, in the case of merger or
consolidation, the surviving or new corporation is a foreign corporation without
an office in this state, such proceeding shall be brought in the county where
the office of the domestic corporation, whose shares are to be valued, was
located.
(2) If the corporation fails to institute such proceeding within such period
of twenty days, any dissenting shareholder may institute such proceeding for the
same purpose not later than thirty days after the expiration of such twenty day
period. If such proceeding is not instituted within such thirty day period, all
dissenter's rights shall be lost unless the supreme court, for good cause shown,
shall otherwise direct.
(3) All dissenting shareholders, excepting those who, as provided in
paragraph (g), have agreed with the corporation upon the price to be paid for
their shares, shall be made parties to such proceeding, which shall have the
effect of an action quasi in rem against their shares. The corporation shall
serve a copy of the petition in such proceeding upon each dissenting shareholder
who is a resident of this state in the manner provided by law for the service of
a summons, and upon each nonresident dissenting shareholder either by registered
mail and publication, or in such other manner as is permitted by law. The
jurisdiction of the court shall be plenary and exclusive.
(4) The court shall determine whether each dissenting shareholder, as to whom
the corporation requests the court to make such determination, is entitled to
receive payment for his shares. If the corporation does not request any such
determination or if the court finds that any dissenting shareholder is so
entitled, it shall proceed to fix the value of the shares, which, for the
purposes of this section, shall be the fair value as of the close of business on
the day prior to the shareholders' authorization date. In fixing the fair value
of the shares, the court shall consider the nature of the transaction giving
rise to the shareholder's right to receive payment for shares and its effects on
the corporation and its shareholders, the concepts and methods then customary in
the relevant securities and financial markets for determining fair value of
shares of a corporation engaging in a similar transaction under comparable
circumstances and all other relevant factors. The court shall determine the fair
value of the
<PAGE>
shares without a jury and without referral to an appraiser or referee. Upon
application by the corporation or by any shareholder who is a party to the
proceeding, the court may, in its discretion, permit pretrial disclosure,
including, but not limited to, disclosure of any expert's reports relating to
the fair value of the shares whether or not intended for use at the trial in the
proceeding and notwithstanding subdivision (d) of section 3101 of the civil
practice law and rules.
(5) The final order in the proceeding shall be entered against the
corporation in favor of each dissenting shareholder who is a party to the
proceeding and is entitled thereto for the value of his shares so determined.
(6) The final order shall include an allowance for interest at such rate as
the court finds to be equitable, from the date the corporate action was
consummated to the date of payment. In determining the rate of interest, the
court shall consider all relevant factors, including the rate of interest which
the corporation would have had to pay to borrow money during the pendency of the
proceeding. If the court finds that the refusal of any shareholder to accept the
corporate offer of payment for his shares was arbitrary, vexatious or otherwise
not in good faith, no interest shall be allowed to him.
(7) Each party to such proceeding shall bear its own costs and expenses,
including the fees and expenses of its counsel and of any experts employed by
it. Notwithstanding the foregoing, the court may, in its discretion, apportion
and assess all or any part of the costs, expenses and fees incurred by the
corporation against any or all of the dissenting shareholders who are parties to
the proceeding, including any who have withdrawn their notices of election as
provided in paragraph (e), if the court finds that their refusal to accept the
corporate offer was arbitrary, vexatious or otherwise not in good faith. The
court may, in its discretion, apportion and assess all or any part of the costs,
expenses and fees incurred by any or all of the dissenting shareholders who are
parties to the proceeding against the corporation if the court finds any of the
following: (A) that the fair value of the shares as determined materially
exceeds the amount which the corporation offered to pay; (B) that no offer or
required advance payment was made by the corporation; (C) that the corporation
failed to institute the special proceeding within the period specified therefor;
or (D) that the action of the corporation in complying with its obligations as
provided in this section was arbitrary, vexatious or otherwise not in good
faith. In making any determination as provided in clause (A), the court may
consider the dollar amount or the percentage, or both, by which the fair value
of the shares as determined exceeds the corporate offer.
(8) Within sixty days after final determination of the proceeding, the
corporation shall pay to each dissenting shareholder the amount found to be due
him, upon surrender of the certificates [fig 1] for any such shares represented
by certificates.
<PAGE>
(i) Shares acquired by the corporation upon the payment of the agreed value
therefor or of the amount due under the final order, as provided in this
section, shall become treasury shares or be cancelled as provided in section 515
(Reacquired shares), except that, in the case of a merger or consolidation, they
may be held and disposed of as the plan of merger or consolidation may otherwise
provide.
(j) No payment shall be made to a dissenting shareholder under this section at a
time when the corporation is insolvent or when such payment would make it
insolvent. In such event, the dissenting shareholder shall, at his option:
(1) Withdraw his notice of election, which shall in such event be deemed
withdrawn with the written consent of the corporation; or
(2) Retain his status as a claimant against the corporation and, if it is
liquidated, be subordinated to the rights of creditors of the corporation, but
have rights superior to the non-dissenting shareholders, and if it is not
liquidated, retain his right to be paid for his shares, which right the
corporation shall be obliged to satisfy when the restrictions of this paragraph
do not apply.
(3) The dissenting shareholder shall exercise such option under subparagraph
(1) or (2) by written notice filed with the corporation within thirty days after
the corporation has given him written notice that payment for his shares cannot
be made because of the restrictions of this paragraph. If the dissenting
shareholder fails to exercise such option as provided, the corporation shall
exercise the option by written notice given to him within twenty days after the
expiration of such period of thirty days.
(k) The enforcement by a shareholder of his right to receive payment for his
shares in the manner provided herein shall exclude the enforcement by such
shareholder of any other right to which he might otherwise be entitled by virtue
of share ownership, except as provided in paragraph (e), and except that this
section shall not exclude the right of such shareholder to bring or maintain an
appropriate action to obtain relief on the ground that such corporate action
will be or is unlawful or fraudulent as to him.
(l) Except as otherwise expressly provided in this section, any notice to be
given by a corporation to a shareholder under this section shall be given in the
manner provided in section 605 (Notice of meetings of shareholders).
<PAGE>
New York Consolidated Laws Service
Copyright (c) 1996, Lawyers Cooperative Publishing
*** THIS SECTION IS CURRENT THROUGH HC. 254, 09/01/96
***
BUSINESS CORPORATION LAW
ARTICLE 9. MERGER OR CONSOLIDATION; GUARANTEE; DISPOSITION OF ASSETS [fig 1] ;
SHARE EXCHANGES
NY CLS Bus Corp @ 902 (1996)
@ 902. Plan of merger or consolidation
(a) The board of each corporation proposing to participate in a merger or
consolidation under section 901 (Power of merger or consolidation) shall adopt a
plan of merger or consolidation, setting forth:
(1) The name of each constituent corporation and, if the name of any of them
has been changed, the name under which it was formed; and the name of the
surviving corporation, or the name, or the method of determining it, of the
consolidated corporation.
(2) As to each constituent corporation, the designation and number of
outstanding shares of each class and series, specifying the classes and series
entitled to vote and further specifying each class and series, if any, entitled
to vote as a class; and, if the number of any such shares is subject to change
prior to the effective date of the merger or consolidation, the manner in which
such change may occur.
(3) The terms and conditions of the proposed merger or consolidation,
including the manner and basis of converting the shares of each constituent
corporation into shares, bonds or other securities of the surviving or
consolidated corporation, or the cash or other consideration to be paid or
delivered in exchange for shares of each constituent corporation, or a
combination thereof.
(4) In case of merger, a statement of any amendments or changes in the
certificate of incorporation of the surviving corporation to be effected by such
merger; in case of consolidation, all statements required to be included in a
certificate of incorporation for a corporation formed under this chapter, except
statements as to facts not available at the time the plan of consolidation is
adopted by the board.
(5) Such other provisions with respect to the proposed merger or
consolidation as the board considers necessary or desirable.
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BUSINESS CORPORATION LAW
ARTICLE 9. MERGER OR CONSOLIDATION; GUARANTEE; DISPOSITION OF ASSETS SHARE
EXCHANGES
NY CLS Bus Corp @ 905 (1996)
@ 905. Merger of parent and subsidiary [fig 1] corporations
(a) Any domestic corporation owning at least ninety percent of the
outstanding shares of each class of another domestic corporation or corporations
may either merge such other corporation or corporations into itself without the
authorization of the shareholders of any such corporation [fig 1] or merge
itself and one or more of such other corporations into one of such other
corporations with the authorization of the parent corporation's shareholders in
accordance with paragraph (a) of section 903 (Authorization by shareholders). In
either case, the board of such parent corporation shall adopt a plan of merger,
setting forth:
(1) The name of each [fig 1] corporation to be merged and the name of the
surviving corporation, and if the name of any of them has been changed, the name
under which it was formed.
(2) The designation and number of outstanding shares of each class of each
[fig 1] corporation to be merged and the number of such shares of each class, if
any, owned by the surviving corporation; and if the number of any such shares is
subject to change prior to the effective date of the merger, the manner in which
such change may occur.
(3) The terms and conditions of the proposed merger, including the manner and
basis of converting the shares of each subsidiary corporation to be merged not
owned by the [fig 1] parent corporation into shares, bonds or other securities
of the surviving corporation, or the cash or other consideration to be paid or
delivered in exchange for shares of each such subsidiary corporation, or a
combination thereof.
(4) (Added, L 1991) If the parent corporation is not the surviving
corporation, provision for the pro rata issuance of shares of the surviving
corporation to the shareholders of the parent corporation on surrender of any
certificates therefor.
(5) (Added, L 1991) If the parent corporation is not the surviving
corporation, a statement of any amendments or changes in the certificate of
incorporation of the surviving corporation to be effected by the merger.
(6) Such other provisions with respect to the proposed merger as the board
considers necessary or desirable.
(b) If the surviving corporation is the parent corporation, a [fig 1] copy of
such plan of merger or an outline of the material features thereof shall be
given, personally or by mail, to all holders of shares of each subsidiary
corporation to be merged not owned by the [fig 2] parent corporation, unless the
giving of such copy or outline has
<PAGE>
been waived by such holders.
(c) A certificate of merger, entitled "Certificate of merger of . . . into . . .
(names of corporations) under section 905 of the Business Corporation Law",
shall be signed, verified and delivered to the department of state by the
surviving corporation. If the surviving corporation is the parent corporation
and such corporation does not own all shares of each subsidiary corporation to
be merged, such certificate shall be delivered not less than thirty days after
the giving of a copy or outline of the material features of the plan of merger
to shareholders of each such subsidiary corporation, or at any time after the
waiving thereof by the holders of all of the outstanding shares of each such
subsidiary corporation not owned by the surviving corporation. The certificate
shall set forth:
(1) The statements required by subparagraphs (a) (1), (2), (4) and (5) of
this section.
(2) The effective date of the merger if other than the date of filing of the
certificate of merger by the department of state.
(3) The date when the certificate of incorporation of each constituent
corporation was filed by the department of state.
(4) A statement that the plan of merger was adopted by the board of directors
of the parent corporation.
(5) If the surviving corporation is the parent corporation and such
corporation does not own all the shares of each subsidiary corporation to be
merged, either the date of the giving to holders of shares of each such
subsidiary corporation not owned by the surviving corporation of a copy of the
plan of merger or an outline of the material features thereof, or a statement
that the giving of such copy or outline has been waived, if such is the case.
(6) (Added, L 1991) If the parent corporation is not the surviving
corporation, a statement that the proposed merger has been approved by the
shareholders of the parent corporation in accordance with paragraph (a) of
section 903 (Authorization by shareholders).
(d) The surviving corporation shall thereafter cause a copy of such certificate,
certified by the department of state, to be filed in the office of the clerk of
each county in which the office of a constituent corporation, other than the
surviving corporation, is located, and in the office of the official who is the
recording officer of each county in this state in which real property of a
constituent corporation, other than the surviving corporation, is situated.
(e) Paragraph (b) of section 903 (Authorization by shareholders) shall apply to
a merger under this section.
(f) The right of merger granted by this section to certain
<PAGE>
corporations shall not preclude the exercise by such corporations of any other
right of merger or consolidation under this article.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
BUSINESS CORPORATION LAW
ARTICLE 9. Merger or Consolidation; Guarantee; Disposition of Assets Share
Exchanges NY CLS Bus Corp @ 910 (1996)
@ 910. Right of shareholder to receive payment for shares upon merger or
consolidation, or sale, lease, exchange or other disposition of assets, or share
exchange
(a) A shareholder of a domestic corporation shall, subject to and by
complying with section 623 (Procedure to enforce shareholder's right to receive
payment for shares), have the right to receive payment of the fair value of his
shares and the other rights and benefits provided by such section, in the
following cases:
(1) Any shareholder entitled to vote who does not assent to the taking of an
action specified in subparagraphs (A), (B) and (C).
(A) Any plan of merger or consolidation to which the corporation is a
party; except that the right to receive payment of the fair value of his shares
shall not be available:
(i) To a shareholder of the [fig 1] parent corporation in a merger
authorized by section 905 (Merger of parent and subsidiary [fig 2]
corporations), or paragraph (c) of section 907 (Merger or consolidation of
domestic and foreign corporations); and
(ii) To a shareholder of the surviving corporation in a merger
authorized by this article, other than a merger specified in subparagraph (i),
unless such merger effects one or more of the changes specified in subparagraph
(b) (6) of section 806 (Provisions as to certain proceedings) in the rights of
the shares held by such shareholder.
(B) Any sale, lease, exchange or other disposition of all or substantially
all of the assets of a corporation which requires shareholder approval under
section 909 (Sale, lease, exchange or other disposition of assets) other than a
transaction wholly for cash where the shareholders' approval thereof is
conditioned upon the dissolution of the corporation and the distribution of
substantially all of its net assets to the shareholders in accordance with their
respective interests within one year after the date of such transaction.
(C) Any share exchange authorized by section 913 in which the corporation
is participating as a subject corporation; except that the right to receive
payment of the fair value of his shares shall not be available to a shareholder
whose shares have not been acquired in the exchange.
<PAGE>
(2) Any shareholder of the subsidiary corporation in a merger authorized by
section 905 or paragraph (c) of section 907, or in a share exchange authorized
by paragraph (g) of section 913, who files with the corporation a written notice
of election to dissent as provided in paragraph (c) of section 623.
<PAGE>
EXHIBIT 99(b)(1)
AMERICAN CAPITAL GROUP
334 West 87th Street
Suite 6A
New York, NY 10024
212-787-2272
December 19, 1996
Mr. Michael Oberlander
Chairman of the Board
Spectex Industries, Inc.
505 Carroll Street
Brooklyn, New York 11215
Dear Mr. Oberlander,
You have requested that I conduct such investigation as I consider
appropriate in order to render an opinion to the Board of Directors of
Spectex as to the fairness of the cash payment of ten cents ($ 0.10) per
share to the holders of approximately 9% of the outstanding shares of
Spectex. You requested that in rendering my opinion I use and rely upon
financial statements, information and documents furnished to me orally
and in writing by Spectex, its affiliates, employees, independent
auditors, and representatives without myself conducting an independent
audit or investigation of these items. I have reviewed the Company's
audited and unaudited financial statements prepared by the Company's
regular certified public accountants and the company's filed statements
with the SEC.
I considered the following valuation approaches to determine the fairness
of the price to be paid to the public shareholders: (1) current market
price; (2) historic market prices; (3) going concern value; (4) book
value; (5) liquidation value; and (6) the recent sale of a potential
controlling block of Spectex shares.
Current Market Price. The closing bid price on December 12, 1996, was
15.6 cents as reported by IDD Information Services and five cents as
reported by the National Quotation Bureau. However these prices are not
representative of the price a seller could expect to receive, as since
September 1, 1996, there was only one trade of 2,500 shares in November.
Historic Market Price.
Average quarterly bid price: 1994 $0.076
1995 0.145
first half 1996 0.033
Average weekly closing bid Sept. 1 to Dec.6, 1996 0.142
Again, these do not necessarily represent the price a seller could have
received due to the small volume of transactions.
Going Concern Value. For the five years ending 12-31-95, Spectex reported
a cumulative net loss of $ 536,000, or an average annual loss of $107,000.
If we eliminate 1992, which contained nonrecurring losses and substitute
1990, there is a cumulative five year profit of $ 116,000, or an average
annual profit of $ 23,000.
<PAGE>
AMERICAN CAPITAL GROUP
In the last full year, 1995, there was a $ 148,000 loss, and for the nine
months ended 9-30-96, Spectex reported a $ 163,000 loss verses a $ 3,000
profit in the same 1995 period. Management expects losses equal to or
greater than the 1995 level to continue into the foreseeable future. My
estimate of the going concern value therefore ranges between zero and
eight times the $ 23,000 five year average annual profit described above,
or $184,000, or $ 0.04 per share.
Net Book Value. At 9-30-96, the reported shareholder's equity was
calculated at $ 0.86 per share. However this figure is not meaningful as
Spectex is unprofitable and is expected to remain unprofitable. Also, if
various accounts are adjusted to their realizable or liquidation value the
net book value is reduced to the range of a deficit to $ 0.07 per share.
Liquidation Value. Spectex primarily consists of two operating
subsidiaries, the 100% owned J&A Knitting and the 51% owned J&J Farms. If
liquidated, Spectex is computed to produce a $ 362,000 deficit. However,
if J&A Apparel alone were to liquidate I compute a deficit of $ 417,000,
and J&J Farms could then be sold as a separate going concern. J&J Farms
reported earnings for the five years ending 12-31-95 which fluctuated
between an $ 80,000 loss and a $ 105,000 profit. For the twelve months
ending 9-30-96, I compute J&J's profit at $ 118,000. A sale of J&J might
be arranged by Spectex at about twelve times $ 118,000, or $ 1,416,000.
Spectex should then realize 51% of this amount or $ 722,000, from which it
would have to pay out its deficit on the liquidation of J&A of $ 417,000.
This course would yield $ 305,000, or $ 0.07 per share.
Recent Sale of Block. On February 29, 1996, 1,707,450 shares, or 41.6% of
the outstanding shares of Spectex, were sold as a single block at a public
auction for $ 158,939, or $0.09 per share, by Michael Oberlander. As a
potential controlling block these shares would be expected to sell at a
premium to the shares of the public shareholders.
Based on these valuation techniques I opine that the offer for Spectex
shares of $ 0.10 per share to the public shareholders is fair.
Very truly yours,
/s/ Alfred L. Simon
Alfred L. Simon
<PAGE>
AMERICAN CAPITAL GROUP
Alfred L. Simon has thirty-two years of diverse experience as an
investment banker, financial analyst, chief financial officer and
Certified Public Accountant which makes him uniquely qualified to opine on
the value of Spectex Industries, Inc. shares.
As an investment banker Mr. Simon determined the value of scores of
companies, public and private, for transactions such as initial public
offerings, venture capital investments, leveraged buyouts, mergers,
acquisitions, expert witness in civil lawsuits and the valuation of a
subsidiary of a public company being acquired by the controlling
shareholder's brother to determine the fairness of the transaction to the
public shareholders. Previously, as a financial analyst and director of
research of a brokerage and asset management company, Mr. Simon and his
department were charged with determining the value of hundreds of public
companies for investment decision making by institutional and public
investors. Mr. Simon also gleaned an expert knowledge of the preparation
and understanding of financial statements as a chief financial officer and
a CPA.
In addition, Mr. Simon's academic achievements - Harvard MBA, CPA
certification and NASD registered Supervisory Analyst - gives him a strong
theoretical knowledge of the valuation of companies.
<PAGE>
AMERICAN CAPITAL GROUP
FORENSIC INVESTMENT BANKING
expert witness, fairness opinions, valuations,
business-reorganization plans
ALFRED L. SIMON
Experience and Qualifications
INVESTMENT BANKING 1978-Present
Initiate and implement mergers and acquisitions, public offerings and
private placements. Evaluate and price companies for these transactions
and prepare valuation reports and fairness opinions where required.
Assist attorneys in securities cases by evaluating transactions,
suggesting questions for depositions and preparing affidavits and
fairness opinions. Temporary CEO of NYSE securities firm. On Board of
Directors of several public companies.
MANAGING DIRECTOR American Capital Group
DIRECTOR PUBLIC OFFERINGS Gruntal & Co.
DIRECTOR CORPORATE FINANCE Mabon, Nugent & Co.
DIRECTOR CORPORATE FINANCE Philips, Appel & Walden, Inc.
WALL STREET RESEARCH 1973-1977
Trained and supervised analysts in the preparation of research reports
for institutional investors which evaluated the relative and absolute
valuation of companies and industry groups. Analyzed Economic and stock
market trends and the value of various classes of securities. Made
investment decisions on Investment Policy Committee.
CO-DIRECTOR RESEARCH Sanford C. Bernstein & Co.
CORPORATE FINANCIAL MANAGEMENT 1966-1972
CHIEF FINANCIAL OFFICER Arcata Research Corp.
ASSISTANT CONTROLLER, ASSISTANT TREASURER I.O.S. Ltd.
AUDIT, MANAGEMENT SERVICES 1962-1965
CPA Ernst & Whinney
EDUCATION
MBA HARVARD GRADUATE SCHOOL OF BUSINESS ADMINISTRATION 1971
Certified Public Accountant
General Securities Principal Series 24
Financial and Operations Principal Series 27
Supervisory Analyst
<PAGE>
AMERICAN CAPITAL GROUP
ALFRED L. SIMON
MANAGING DIRECTOR
AMERICAN CAPITAL GROUP
BIOGRAPHICAL OUTLINE
INVESTMENT BANKING BACKGROUND 1978 - PRESENT
REPRESENTATIVE TRANSACTIONS:
MERGERS AND ACQUISITIONS
-Restructured $50 million ASE company through a divestiture and
acquisition increasing revenues 53% and profits 150%.
-Merger of two public computer retailing chains.
-Sale of NYSE chain store company to Canadian firm.
-Sale of regional franchisee to NYSE restaurant company.
-Two stage tender offer for ASE firm to acquire OTC manufacturer.
-Acquisition by NYSE financial firm of two fast food franchises.
-Established ESOP for leveraged buy-out of OTC shoe producer.
-Advisor to acquisition search effort of Fortune 200 firm.
MANAGED PUBLIC OFFERINGS
-Leasing Company, $19 million secondary after $5 million IPO.
-Temporary personnel firm, IPO.
-Israeli manufacturing company, IPO.
-Energy firm, first IPO with exchange listing before offering.
-Medical technology firm, underwritten rights offering.
-NYSE financial service firm, $39 million convertible debenture.
PRIVATE PLACEMENTS/BANK FINANCING
-Notes and warrants for producer of nuclear protective products.
-Negotiated 50% increase in bank line and private equity eliminating need
for IPO by telemarketing firm.
-$50 million debt package for acquisition by jewelry manufacturer.
-Subordinated notes and bank loan for leveraged ESOP.
-Preferred stock for software firm after restructuring debt.
WALL STREET RESEARCH DIRECTOR 1973-1977
CHIEF FINANCIAL OFFICER; ASST CONTROLLER & TREASURER 1966-1972
AUDIT SUPERVISOR BIG-EIGHT CPA FIRM 1962-1965
AFFILIATIONS
V.P. Investment Banking Gruntal & Co. Inc.
V.P. Director, Corporate Finance Philips, Appel & Walden, Inc.
V.P. Director of Research Sanford C. Bernstein & Co.
V.P. Finance, Control, Administration Arcata Research Corp.
Audit Supervisor Ernst & Whinney
EDUCATION
Harvard Graduate School of Business Administration
Certified Public Accountant, New York State
<PAGE>
EXHIBIT 99(b)(2)
AMERICAN CAPITAL GROUP
334 West 87th STREET
SUITE 6A
NEW YORK, NY 10024
212-787-2272
January 10, 1997
Mr. Michael Oberlander
Chairman of the Board
Spectex Industries, Inc.
505 Carroll Street
Brooklyn, New York 11215
Dear Mr. OBERLANDER,
I consent to the inclusion in the Company's Form 13-e filing of my letter
to Michael Oberlander, Chairman of the Board of Directors of Spectex
Industries, Inc. dated December 19, 1996, concerning the fairness of the
cash payment to the public shareholders for their stock.
Very truly yours,
/s/ Alfred L. Simon
Alfred L. Simon
ALS\sp
<PAGE>
EXHIBIT 99(d)
NNEWCO-KING, INC.
505 CARROLL STREET
BROOKLYN NEW YORK, 11215
January 17, 1997
To The Shareholders of Spectex Industries, Inc.
As of January 17, 1997, this company, Nnewco-King, Inc. became the parent
and primary stockholder of Spectex Industries, Inc ("Spectex"). Nnewco-King
owns more than 90% of the Spectex shares.
Under the law of New York, this company has decided to merge Spectex into
this Company. This decision can be made without your consent. The New York law
requires us to provide you with a fair consideration payment for your stock.
Upon advise of an appraiser hired for this purpose this Company has determined
that $.10 (ten cents) per share is the appropriate price. His report is
attached to the Form 13-e enclosed.
Enclosed for your review is the Form 13-e which this Company and Spectex
have jointly filed with the SEC on January , 1997, the plan of merger, your
consent form to accept the payment of $.10 per share, notices for the return of
the shares and a form should you dissent and feel that $.10 per share is unfair
compensation.
Should you desire to accept the $.10 per share payment, then fill out the
enclosed acceptance form and return it with your shares duly endoresed to
Nnewco-King, Inc. Should you decide to decline and dissent, then fill out the
dissenter's form and your shares should be returned to the Transfer agent.
Within 30 days of this notice, the Certificate of Merger will be filed and
Spectex will cease to exist.
Very truly yours,
Michael Oberlander, President of Nnewco-King, Inc.
<PAGE>
EXHIBIT 99(d)(1)
TO: NNEWCO, INC.
505 CARROLL STREET
BROOKLYN NY 11215
THE UNDERSIGNED, BEING THE OWNER OF _____ SHARES OF STOCK OF SPECTEX
INDUSTRIES, INC., A NEW YORK CORPORATION, EVIDENCED BY CERTIFICATES NOS.
______________________________________ [LIST ALL OF THEM] , ACCEPTS THE OFFER OF
THE NNEWCO-KING, INC. MADE ON JANUARY 15, 1997, TO PURCHASE THE SHARES OF THE
UNDERSIGNED AT A PRICE OF TEN CENTS ($.10) PER SHARE.
ENCLOSED HEREWITH ARE SHARE CERTIFICATES NOS. __________
______________________________________ [LIST ALL].
I CERTIFY THAT MY TAXPAYER ID NUMBER OR MY SOCIAL SECURITY NUMBER IS
__________________________________________________.
DATED ___________________ , 1997.
_________________________
NAME OF SHAREHOLDER OF
SPECTEX INDUSTRIES, INC.
<PAGE>
EXHIBIT 99(d)(2)
TO: NNEWCO, INC.
505 CARROLL STREET
BROOKLYN NY 11215
PLEASE TAKE NOTICE that, I, the undersigned, _______________
__________________________ (your name), residing at ___________
______________________________________________ (your address) a shareholder of
Spectex Industries, Inc., having received a notice and the plan of the merger of
this corporation into Nnewco-King, Inc., dated January 15, 1997, elect to
dissent therefrom and demand payment of the fair value for my shares as provided
by Section 623 of the Business Corporation Law of the State of New York.
The undersigned, being the owner of _____ shares of stock of Spectex
Industries, Inc., a New York corporation, evidenced by certificates Nos.
______________________________________ [list all of them] , rejects the offer of
the Nnewco-King, Inc. made on January 15, 1997, to purchase the shares of the
undersigned at a price of ten cents ($.10) per share.
I understand that I must reject the offer for all of my shares.
I understand that according to the New York Business Corporation Law I must
return my shares to the transfer agent so that they will marked as shares to
which I have dissented. I will return the shares to Registrar and Transfer
Company, 10 Commerce Drive, Cranford NJ 07016-3572.
Enclosed herewith are share certificates Nos. __________
______________________________________ [list all].
Dated ___________________ , 1997.
_________________________
Name of Shareholder of
Spectex Industries, Inc.
Address:_________________
_________________
