-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JdJBZjhFng1CeUIb4n7wFjfZXvq9xbAAa9v07Yd+jVrTdtQ6wHf4MOYXrtTbXvS/ kyakkolMiIKckpmJ9utHOg== 0000922423-95-000126.txt : 19950616 0000922423-95-000126.hdr.sgml : 19950616 ACCESSION NUMBER: 0000922423-95-000126 CONFORMED SUBMISSION TYPE: PRRN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950615 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MARIETTA CORP CENTRAL INDEX KEY: 0000792969 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 161074992 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: PRRN14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14699 FILM NUMBER: 95547250 BUSINESS ADDRESS: STREET 1: 37 HUNTINGTON ST CITY: CORTLAND STATE: NY ZIP: 13045 BUSINESS PHONE: 6077536746 MAIL ADDRESS: STREET 1: 37 HUNTINGTON STREET CITY: CORTLAND STATE: NY ZIP: 13045 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DICKSTEIN PARTNERS INC CENTRAL INDEX KEY: 0000922415 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133537972 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRRN14A BUSINESS ADDRESS: STREET 1: 9 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 MAIL ADDRESS: STREET 1: 9 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 PRRN14A 1 PRELIMINARY PROXY MATERIALS SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant / / Filed by a Party other than the Registrant /x/ Check the appropriate box: /x/ Preliminary Proxy Statement /_/ Definitive Proxy Statement /_/ Definitive Additional Materials /x/ Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Marietta Corporation (Name of Registrant as Specified In Its Charter) Dickstein Partners Inc. (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): /_/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2). /x/ $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).* * Previously paid. PAGE /_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ________________________________________________________________ (2) Aggregate number of securities to which transaction applies: ________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:(1) ________________________________________________________________ (4) Proposed maximum aggregate value of transaction: ________________________________________________________________ ________________ (1) Set forth the amount on which the filing fee is calculated and state how it was determined /_/ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount Previously Paid: ________________________________________________________________ (2) Form, Schedule or Registration Statement No.: ________________________________________________________________ (3) Filing Party: ________________________________________________________________ (4) Date Filed: ________________________________________________________________ REVISED PRELIMINARY COPIES, DATED JUNE 14, 1995 1995 ANNUAL MEETING OF SHAREHOLDERS of MARIETTA CORPORATION _______________________ PROXY STATEMENT of DICKSTEIN PARTNERS INC. ________________________ This Proxy Statement and the accompanying Letter to Shareholders and BLUE Annual Meeting proxy card are furnished in connection with the solicitation of proxies by Dickstein Partners Inc. ("Dickstein Partners") to be used at the 1995 Annual Meeting of Shareholders of Marietta Corporation ("Marietta") to be held at the Holiday Inn, 2 River Street, Route 13 and Interstate 81, Cortland, New York at 10:00 am on Friday, July 14, 1995 and at any adjournments or postponements thereof (the "Annual Meeting"). At the Annual Meeting, seven Directors of Marietta will be elected. Dickstein Partners is soliciting your proxy in support of the election of the seven nominees of Dickstein Partners named below (the "Dickstein Nominees") as the Directors of Marietta. DICKSTEIN PARTNERS HAS MADE A PROPOSAL TO ACQUIRE PURSUANT TO A MERGER ALL OF THE OUTSTANDING SHARES OF MARIETTA FOR $11 PER SHARE IN CASH. SEE "PROPOSED ACQUISITION." ALL DICKSTEIN NOMINEES ARE COMMITTED TO A PROGRAM OF OFFERING MARIETTA FOR SALE, AND SELLING MARIETTA, TO THE BUYER WHO IS WILLING TO PAY THE HIGHEST PRICE, SO LONG AS THE PRICE IS AT LEAST $11 PER SHARE OF MARIETTA COMMON STOCK. The record date for determining shareholders entitled to notice of and to vote at the Annual Meeting is June 16, 1995 (the "Record Date"). Shareholders of record at the close of business on the Record Date will be entitled to one vote at the Annual Meeting for each share of Marietta Common Stock, par value $.01 per share (the "Shares"), held on the Record Date. According to the preliminary proxy statement of Marietta filed with the Securities and Exchange Commission on June 13, 1995, PAGE there were 3,596,049 Shares issued and outstanding as of the close of business on the Record Date. Dickstein Partners manages private investment funds. As of the date of this Proxy Statement, two of these funds, Dickstein & Co., L.P. and Dickstein International Limited (collectively, the "Dickstein Funds"), beneficially own in the aggregate 508,000 Shares, or 14.1% of the outstanding Shares. The address of Dickstein Partners Inc. is 9 West 57th Street, New York, New York 10019, and its telephone number is (212) 754-4000. Calibre Capital Advisors, Inc. ("Calibre"), a private investment firm, may be deemed to be a participant in the solicitation by Dickstein Partners. As of the date of this Proxy Statement, Calibre beneficially owns 18,000 Shares, or 0.5% of the outstanding Shares. The address of Calibre is 66 East 80th Street, New York, New York 10021, and its telephone number is (212) 861-8845. ______________________________ This Proxy Statement, the accompanying Letter to Shareholders and the BLUE Annual Meeting proxy card are first being furnished to Marietta shareholders on or about June ___, 1995. The principal executive offices of Marietta are located at 37 Huntington Street, Cortland, New York 13045. IMPORTANT At the Annual Meeting, Dickstein Partners will seek to elect the Dickstein Nominees as the Directors of Marietta. The election of the Dickstein Nominees requires the affirmative vote of a plurality of the votes cast, assuming a quorum is present or otherwise represented at the Annual Meeting. Dickstein Partners urges you to mark, sign, date and return the enclosed BLUE Annual Meeting proxy card to vote for election of the Dickstein Nominees. A vote for the Dickstein Nominees is a vote for Directors who are committed to a program of offering Marietta for sale, and selling Marietta, to the buyer who is willing to pay the highest price, so long as the price is at least $11 per Share. -2- PAGE DICKSTEIN PARTNERS URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY MARIETTA. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PROXY BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING TO DICKSTEIN PARTNERS, C/O MACKENZIE PARTNERS, INC., 156 FIFTH AVENUE, NEW YORK 10010, OR TO THE SECRETARY OF MARIETTA, OR BY VOTING IN PERSON AT THE ANNUAL MEETING. SEE "PROXY PROCEDURES" BELOW. THE DICKSTEIN NOMINEES SUPPORT THE SALE OF MARIETTA All Dickstein Nominees are committed to a sale of Marietta to the buyer who is willing to pay the highest price, so long as the price is at least $11 per Share. If elected, the Dickstein Nominees will, subject to their fiduciary duties, seek to cause Marietta to offer itself for sale, and to consummate a sale, to the buyer who is willing to pay the highest price, so long as the price is at least $11 per Share. As indicated under "Proposed Acquisition," Dickstein Partners and Calibre have proposed to acquire, by means of a merger, 100% of the outstanding stock of Marietta at a price of $11 per Share in cash. If, like us, you believe that you should have the opportunity to receive for all of your Shares the highest price that a buyer is currently willing to pay, so long as the price is at least $11 per Share, Dickstein Partners urges you to vote your BLUE Annual Meeting proxy card FOR each of the Dickstein Nominees. ELECTION OF DIRECTORS According to Marietta's preliminary proxy state- ment, seven Directors, constituting the entire Board of Directors of Marietta, will be elected at the Annual Meeting. Dickstein Partners proposes that Marietta shareholders elect the Dickstein Nominees as the Directors of Marietta at the Annual Meeting. If all Dickstein Nominees are elected, the Dickstein Nominees would constitute the entire Board of Directors of Marietta. The Dickstein Nominees are listed below and have furnished the following information concerning their principal occupations or employment and certain other matters. Each Dickstein Nominee, if elected, would hold office until the 1996 Annual Meeting of Shareholders and until a successor has been elected and qualified or until his earlier death, resignation or removal. Although Dickstein Partners has no reason to believe that any of the Dickstein Nominees will be unable to serve as a director, if any one or more the Dickstein Nominees is not available for election, the persons named on the BLUE Annual -3- PAGE Meeting proxy card will vote for the election of such other nominees as may be proposed by Dickstein Partners. Dickstein Nominees for Directors Mark Dickstein, age 36, has been the President of Dickstein Partners since prior to 1989 and is primarily responsible for the operations of the Dickstein Funds. He is the Chairman of the Board of Carson Pirie Scott & Co., a midwest department store chain. He is also director of KinderCare Learning Centers, Inc., the largest provider of proprietary child care in the United States, and Zale Corporation, a national jewelry retailer. Carson Pirie Scott & Co., KinderCare Learning Centers, Inc. and Zale Corporation are publicly held. Mr. Dickstein's business address is c/o Dickstein Partners Inc., 9 West 57th Street, New York, New York 10019. Jeffrey E. Ginsberg, age 31, has since 1994 been managing general partner of APEX Site Management, a company that he co-founded and that assists real property owners in attracting telecommunications tenants. Prior to that, since 1991, Mr. Ginsberg was a co-founder and Director of Acquisitions of Horizon Cellular Group, an operator of fourteen cellular telephone systems. From 1989 through 1991, Mr. Ginsberg was associated with Block B Cellular Corporation, a cellular telephone operator that he co-founded. From 1988 to 1991, Mr. Ginsberg was also a principal of First Eastern Merchant Banking Group, an investment banking and venture capital firm specializing in telecommunications. Mr. Ginsberg's business address is 200 S. Broad Street, Philadelphia, Pennsylvania 19102. Lawrence E. Golub, age 35, has since 1994 been President of Golub Associates Incorporated, an investment and financial advisory firm that he founded and owns. From 1993 to 1994, Mr. Golub was a Managing Director of Bankers Trust Company, where he participated in structuring, recapitalizing, hedging and selling public and private equity investments. From 1992 to 1993, Mr. Golub was a White House Fellow, serving as Special Assistant to the Secretary of Health and Human Services and as policy coordinator for the President's cabinet-level health care reform group. Mr. Golub was a Managing Director of Wasserstein Perella & Co., Inc. from 1990 to 1992, specializing in corporate finance, and was a Vice President of Allen & Company Incorporated, a private investment banking firm, from 1985 to 1990. -4- PAGE Samuel L. Katz, age 29, has been a Vice President of Dickstein Partners since July 1993. Previously, since February 1992, Mr. Katz was the Co-Chairman of Saber Capital Inc., a firm making private equity investments. Before that, since 1988, Mr. Katz was an Associate and then a Vice President of The Blackstone Group, an investment and merchant bank, where he focused on leveraged buyout transactions. Mr. Katz's business address is c/o Dickstein Partners Inc., 9 West 57th Street, New York, New York 10019. Ira W. Krauss, age 49, is President of First Sterling Corporation, a position he has held since 1983. First Sterling Corporation is engaged in real estate operation and development. Mr. Krauss also serves as President of the Board of Education of the Borough of New Providence, New Jersey. Mr. Krauss's business address is c/o First Sterling Corporation, 900 Third Avenue, New York, New York 10022. Howard R. Shapiro, age 40, has since 1994 been President of Calibre, a private investment firm that he founded and owns. Previously, since 1985, Mr. Shapiro was a Vice President of Manufacturers Hanover Trust Company, where he was involved in financing for leveraged acquisitions, recapitalizations and distressed corporate credits. Mr. Shapiro's business address is c/o Calibre Capital Advisors, Inc., 66 East 80th Street, New York, New York, 10021. Ralph E. Stewart, age 47, has since 1993 been a private management consultant. From 1992 to 1993 he was President and Chief Operating Officer of Abex Inc., and from 1989 to 1992 he was President and Chief Executive Officer of Pneumo Abex Corp., both of which are manufacturers of aerospace and automotive components. From 1986 to 1989, Mr. Stewart was a Group Vice President of Pullman Co., a manufacturer of transportation equipment and material handling and fluid power products. Mr. Stewart's address is 3037 Bonnie Brae Crescent, Flossmoor, Illinois 60422. In September 1990, the Commodity Futures Trading Commission (the "CFTC") initiated an administrative proceeding against Mr. Dickstein alleging that in 1987 certain of his personal commodities trading activities were in violation of applicable laws. Specifically, the CFTC claimed that Mr. Dickstein, in his capacity as a local floor trader, aided and abetted another floor trader in, among other things, non- competitive trading and defrauding such floor trader's customers. Without admitting or denying the CFTC's allegations, Mr. Dickstein settled this matter in September 1991. As part of -5- PAGE the settlement, Mr. Dickstein agreed not to engage in commodities transactions for a period of one year, and for two additional years not to trade on the floor of any commodities exchange. Mr. Dickstein also had his commodities floor brokerage license revoked and paid a $150,000 civil penalty. It is anticipated that each of the Dickstein Nominees, upon his election as a director of Marietta, will receive director's fees consistent with Marietta's past practice. According to Marietta's preliminary proxy statement, Directors who are not employees of Marietta receive $500 per month plus $300 for each meeting attended of the board or any committee plus reimbursement for travel expenses. It is expected that each Dickstein Nominee who serves on the independent committee of the Board of Directors formed to evaluate acquisition proposals will be assured of receiving a minimum of $10,000 of fees for his period of service. See "Proposed Acquisition." In addition, Dickstein Partners has agreed to indemnify each of the Dickstein Nominees against any claims and expenses, including legal fees, arising out of his participation in the proxy solicitation for his election. Except as set forth above or under "Proposed Acquisition -- Certain Arrangements" below, none of Dickstein Partners, Calibre, the Dickstein Nominees or any of their respective associates (i) has any arrangements or understandings with any person or persons with respect to any future employment by Marietta or its affiliates, or with respect to any future transactions to which Marietta or any of its affiliates may be a party; (ii) has carried on any occupation or employment with Marietta or any corporation or organization which is or was a parent, subsidiary or other affiliate of Marietta; (iii) has received any cash compensation, cash bonuses, deferred compensation, compensation pursuant to plans, or other compensation, from, or in respect of, services rendered to or on behalf of Marietta; (iv) since October 1, 1993, has engaged in or has a direct or indirect material interest in any transaction or series of similar transactions to which Marietta or any of its subsidiaries was or is a party in which the dollar amount involved exceeded, or is expected to exceed, $60,000 in the aggregate; (v) since October 1, 1993, has been indebted to Marietta or any of its subsidiaries in an amount in excess of $60,000; or (vi) is a party adverse to Marietta or any of its subsidiaries in any material proceedings or has a material interest adverse to the interests of Marietta or any of its subsidiaries in any such proceedings. No family relationships exist among the Dickstein Nominees or between any of the Dickstein Nominees and any Director or executive officer of Marietta. -6- PAGE Certain additional information relating to, among other things, the ownership, purchase and sale of securities of Marietta by Dickstein Partners, Calibre, the Dickstein Nominees and their respective associates, or arrangements with respect thereto, is set forth in "Proposed Acquisition -- Certain Arrangements" and "Security Ownership of Dickstein Partners, Calibre and Affiliates" and in Schedule II. Voting Procedures Election of the Dickstein Nominees requires the affirmative vote of a plurality of the votes cast in the election at the Annual Meeting, assuming a quorum is present or otherwise represented at the Annual Meeting. Shares voted as abstentions and "broker non-votes" are considered present at the Annual Meeting for the purposes of determining the presence of a quorum. "Broker non-votes" relate to shares of stock held of record by a broker as to which no discretionary authority or voting directions exist. The accompanying BLUE Annual Meeting proxy card will be voted at the Annual Meeting in accordance with your instructions on such card. You may vote FOR the election of each of the Dickstein Nominees as Directors of Marietta or withhold authority to vote for the election of all the Dickstein Nominees by marking the proper box on the BLUE Annual Meeting proxy card. You may also withhold your vote from any one or more of the Dickstein Nominees by writing the name of such nominee(s) in the space provided on the BLUE Annual Meeting proxy card. IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES REPRESENTED BY THE BLUE ANNUAL MEETING PROXY CARD FOR THE ELECTION OF ALL THE DICKSTEIN NOMINEES PROVIDED THAT YOU HAVE SIGNED AND DATED THE PROXY CARD. The Dickstein Funds and Calibre, which in the aggregate own approximately 14.6% of the Shares outstanding, will vote their Shares FOR the election of the Dickstein Nominees. Dickstein Partners believes that it is in your best interest to elect the Dickstein Nominees at the Annual Meeting. All Dickstein Nominees are committed to a program of offering Marietta for sale, and selling Marietta, to the buyer who is willing to pay the highest price, so long as the price is at least $11 per Share. DICKSTEIN PARTNERS STRONGLY RECOMMENDS A VOTE FOR THE ELECTION OF THE DICKSTEIN NOMINEES. -7- PAGE OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING Dickstein Partners is not aware of any other matters to be brought before the Annual Meeting. Should other proposals be brought before the Annual Meeting, the persons named on the BLUE Annual Meeting proxy card will abstain from voting on such proposals unless such proposals adversely affect the interests of Dickstein Partners as determined by Dickstein Partners in its sole discretion, in which event such persons will vote on such proposals at their discretion. The vote required for approval of any other matter that may be submitted to shareholders will be as prescribed by Marietta's charter or bylaws or by applicable law. Generally, shares voted as abstentions and shares with respect to which a broker submits a "broker non-vote" on a matter are not counted in calculating the number of votes cast on the matter and have the effect of reducing the number of votes required for approval of the matter. PROXY PROCEDURES Shareholders are urged to mark, sign and date the enclosed BLUE Annual Meeting proxy card and return it to Dickstein Partners, c/o MacKenzie Partners, Inc., 156 Fifth Avenue, 9th Floor, New York, New York 10010 in the enclosed envelope in time to be voted at the Annual Meeting. Execution of the BLUE Annual Meeting proxy card will not affect your right to attend the Annual Meeting and to vote in person. Any proxy may be revoked at any time prior to the Annual Meeting by delivering a written notice of revocation or a later dated proxy. Only your latest dated proxy for the Annual Meeting will count. Only holders of record as of the close of business on the Record Date will be entitled to vote. If you were a shareholder of record on the Record Date, you may vote your shares at the Annual Meeting even if you have sold your shares after the Record Date. Accordingly, please vote the shares held by you on the Record Date, or grant a proxy to vote such shares, on the BLUE Annual Meeting proxy card, even if you have sold your shares after the Record Date. If any of your Shares are held in the name of a brokerage firm, bank, bank nominee or other institution on the Record Date, only it can vote such Shares and only upon receipt of your specific instructions. Accordingly, please contact the person responsible for your account and instruct that person to have the BLUE Annual Meeting proxy card executed on your behalf. -8- PROPOSED ACQUISITION On January 17, 1995, Mark Dickstein, the President of Dickstein Partners, telephoned Marietta and spoke with Philip A. Shager, Chief Accounting Officer and Treasurer of Marietta. Mr. Dickstein advised Mr. Shager that Dickstein Partners and Calibre proposed to acquire all of the outstanding stock of Marietta. Following the telephone call, Mr. Dickstein sent a letter on behalf of Dickstein Partners to Chesterfield F. Siebert Sr., then Chairman of the Board of Marietta. The letter reflects a good faith proposal that Dickstein Partners and Calibre would expect to consummate upon execution of definitive transaction documentation with Marietta. Prior to the execution of such documentation, the proposal is subject to change or withdrawal. The letter read, in part, as follows: "As I mentioned to Philip Shager by phone earlier today, Dickstein Partners Inc. and Calibre Capital Advisors, Inc. propose to acquire, by means of an all cash merger, 100% of the stock of Marietta Corporation at a price of $11 per share. We ask that you afford us the opportunity to meet with you in the next day or two so that we can introduce ourselves personally and discuss this proposal with you. Based on our review of Marietta Corporation's publicly available information, we believe $11 per share to be a fair price for the company. However, if we are able to review Marietta Corporation's non-public information there is a strong possibility that we would be prepared to improve the terms of our proposal. . . The acquisition would be subject to the negotiation of a definitive agreement and other customary conditions. We would honor Marietta's existing employment agreements and our present intention is to retain the existing management team. We stand ready to expeditiously complete this transaction, with your cooperation. As much as we desire to accomplish our objective amicably, as a precautionary measure, we are filing with the Securities and Exchange Commission preliminary proxy material that would enable us to propose an alternate slate of -9- directors at the upcoming shareholders' meeting if we do not reach agreement with the existing board. Our nominees would run on a platform that the Company should be sold at the best available price, but not less than $11 per share. . . ." On January 18, 1995, Mr. Dickstein spoke by telephone to Stephen D. Tannen, President and Chief Executive Officer of Marietta, and reiterated what he had told Mr. Shager the previous day and certain points contained in the letter to Mr. Siebert. In February 1995, Marietta disclosed in a public filing with the Securities and Exchange Commission that it had retained Goldman Sachs & Co. to serve as its investment advisor, for minimum compensation of $1.5 million. Between January 25 and March 2, representatives of Dickstein Partners had several conversations with Mr. Tannen and/or Goldman Sachs & Co. concerning the acquisition proposal of Dickstein Partners and Calibre and the Annual Meeting. On March 3, 1995, Mr. Dickstein sent a letter to Mr. Tannen, which read, in part, as follows: "More than six weeks have passed since we and Calibre Capital Advisors made our proposal to acquire Marietta. In our proposal letter, as well as in a number of conversations with you and Goldman Sachs, we have repeatedly requested the opportunity to discuss our proposal with the Company. We have also sought access to Marietta's non-public information, with a view to possibly increasing our bid price of $11 per share -- itself roughly 50% over last December's market prices. In response, you have merely urged us to be patient. Meanwhile, since we made our proposal, the Company has announced the following: o Both revenues and earnings for the first quarter of fiscal 1995 were less than in the corresponding quarter of last year. o In the first quarter, the Company suffered a loss of $166,126 on its securities investments -- this on the heels of a $670,681 securities portfolio loss in 1994. Combined, these represent a loss of 29% on investments purchased at $2,890,504. 10 PAGE o According to the self-styled `Raid Defense Fee Letter 6' annexed to the latest 10-Q, the Company has retained Goldman Sachs, for minimum compensation of $1.5 million. From both an expense and a suitability standpoint, we question the wisdom of selecting Goldman. While $1.5 million represents a minute contribution to Goldman's earnings, it equates to 67% of Marietta's earnings for the last four quarters. And while Goldman is well known for its blue-chip clientele, we wonder what experience Goldman has with companies of Marietta's size, and what degree of attention Goldman is providing this engagement. o The 90,000 options awarded you last November, at a $7.00 exercise price, were subject to shareholder approval at the upcoming annual meeting. Since the announcement of our offer, the Board has granted you corresponding stock appreciation rights (valued at $360,000 at our bid price) that are designed to circumvent the requirement of shareholder approval. o The Company also reported in its first- quarter 10-Q, without explanation, that 1995 capital expenditures will be approximately $6 million, $3.6 million of which had already been authorized. This is triple the average for the last six years and twice last year's level -- a surprisingly huge increase in capital investment, in the face of flat, if not declining, sales and earnings. . This announcement came as a particular surprise because as recently as December 23, 1994 Marietta stated in its 10-K: `The Company believes that it has sufficient production capacity to meet its anticipated growth for the foreseeable future.' And while the 10-K mentioned in one sentence that there would be -11- significant capital improvements in 1995, the only example given was $1.5 million of construction on the Olive Branch facility. The 10-K is devoid of any suggestion that capital expenditures were about to increase dramatically over the prior year's level. . Further, we doubt that such a significant capital-expenditure decision -- one that may well inhibit the price that can be offered by ourselves or other potential bidders -- could not be delayed until the Board decided (or allowed the shareholders to decide) whether to put the Company up for sale. Against the backdrop of these developments and the lack of any response to our offer, your call for patience has begun to ring hollow. . . . In addition, on behalf of Dickstein & Co., L.P. and Dickstein International Limited (which together own more than 14% of Marietta's shares), please be advised that we expect the Board to comply with its responsibility, under Section 603 of the New York Corporation Law, to conduct an election of directors by May 1, 1995." -12- PAGE On March 13, 1995, Marietta announced that it had rejected the acquisition proposal of Dickstein Partners and Calibre. In this connection, Marietta said that its Board of Directors had received an opinion from Goldman Sachs & Co. that the consideration offered was inadequate. Marietta also said that it had instructed its management to explore "possible financial alternatives available to Marietta," which might include "a merger, an acquisition or disposition of assets or securities, a recapitalization or other form of business combination transaction." Marietta indicated that as part of this process it may engage in discussions with Dickstein Partners. Following Marietta's announcement, representatives of Dickstein Partners had conversations with Marietta and Goldman Sachs & Co., in which Dickstein Partners continued to request confidential information of Marietta which might allow Dickstein Partners and Calibre to improve their acquisition proposal. Dickstein Partners also made two requests to receive a form of confidentiality agreement from Marietta, before the confidential information became available for dissemination. The requests were made so that the confidentiality agreement could be negotiated and finalized without delaying the furnishing of information to Dickstein Partners and Calibre. Both requests were refused. Dickstein Partners was assured by Marietta that it would be treated fairly with other prospective bidders and potential financing sources and that it would receive nonpublic information concerning Marietta as soon as it was available to others. Dickstein Partners also reiterated its expectation that Marietta would convene a timely shareholders meeting for election of directors as required by law. On March 31, 1995, Mr. Dickstein sent a letter to the Board of Directors of Marietta asking the Board to call the Annual Meeting, which read, in part, as follows: "We write again to ask that you call an annual meeting of Marietta's shareholders to be held not later than May 1, 1995, as we believe you are required to do. We insist at a minimum that you presently advise the shareholders when the meeting will be held. Section 603 of the New York Business Corporation Law establishes the foundation of corporate democracy for New York corporations like Marietta -- that directors should stand for election at least once every 13 months. As a United States Federal District Court observed in construing Section 603, `under New York law, annual meetings are contemplated to occur no later than thirteen months after the last such meeting -13- PAGE . . . .' Ocilla Industries Inc. v. Katz, 677 F. Supp. 1291, 1301 (E.D.N.Y. 1987). Since last year's annual meeting was held on March 29, 1994, the 13-month period will end on April 29, 1995, a Saturday. We would not object if the meeting were held on the following business day, May 1. Timely annual elections, in addition to being an absolute legal right, represent the only practical opportunity for shareholders to ensure that their interests and wishes are properly represented by the directors. This accountability is especially important where, as here, the corporation faces an important decision and directors own a minute portion of the stock (and much of what they own was purchased with Company -- funded loans that have yet to be repaid). . . . Those proxy materials were promptly filed and have since been cleared by the S.E.C.'s staff. Faced with the prospect of an election contest, the Board has indefinitely postponed the annual meeting. In discussions we had with CEO Steven Tannen or Goldman Sachs on January 25, February 2, February 7, February 8, and March 2, we were informed that no meeting date had been set, and that no prediction could be made concerning when the meeting would be held. We wrote to Mr. Tannen on March 3 to raise a variety of concerns. In our letter, we called upon the Board `to comply with its responsibility, under Section 603 of the New York Business Corporation Law, to conduct an election of directors by May 1, 1995.' Since then, we have learned through public filings that at least two other shareholder groups -- those including Barry Florescue and Elliott Associates -- have independently voiced concern about the delay in the annual meeting (as well as sharing other concerns raised in our March 3 letter). Our group, the Florescue group and the Elliott Associates group, while independent of each other, own in the aggregate nearly 30% of the outstanding shares. The Board has yet to respond to our demands for an annual meeting. -14- On March 20, we again inquired of Goldman Sachs concerning the status of the meeting. We were informed on this occasion that the Company does not share our view that the meeting needs to be held by May 1. As a result, it was mutually agreed that a conference call would be held on March 27 for the specific purpose of affording our respective counsel the opportunity to exchange views on this point. Although the time of the call had been cleared with all participants, we were informed when the call was placed that the Company's counsel, Rubin, Baum & Levin, was unavailable. Nonetheless, we and our counsel outlined for Goldman Sachs the legal basis for our view and requested through Goldman that Rubin Baum advise us whether they disagree. We have yet to hear their response. Despite this prolonged and patient effort on our part, we find ourselves a month away from the May 1 date without the Company having even filed its own preliminary proxy material with the S.E.C. You have obviously decided not to hold a timely annual meeting, but rather to ignore both your statutory duty and the requests of holders of 30% of the shares. To reiterate: We insist that the Board convene the annual meeting of shareholders by May 1. In any case, the Board should at least advise its shareholders at this time when the next election of directors will be held. The delay in convening the shareholders' meeting is all the more consequential given other developments (or lack thereof) in the 2 1/2 months since we and Calibre made our acquisition proposal. The Company has embarked on a surprisingly large $6 million capital expenditure program for fiscal 1995 -- a program that the Company has made no effort to explain and that could adversely impact the price that we or other potential bidders could offer for the Company. Meanwhile, despite our many requests, the Company has failed to discuss our proposal with us, to provide us with due-diligence information, or even to provide us with a draft of a confidentiality agreement. . . ." -15- PAGE As of April 10, 1995, Dickstein Partners had not received any proposed confidentiality agreement or information from Marietta. On that date, in response to a call by representatives of Dickstein Partners to Goldman Sachs & Co., Dickstein Partners was informed that confidentiality agreements had already been sent to other persons, some of whom had executed the agreements and received nonpublic information concerning Marietta. On April 11, 1995, Dickstein Partners received a proposed confidentiality agreement from Marietta. As a condition to its receiving nonpublic information from Marietta under the proposed agreement, Dickstein Partners would have been required to agree that, unless invited by Marietta, neither Dickstein Partners nor its affiliates would propose any transaction between or involving Dickstein Partners and Marietta and/or its security holders, whether by merger, tender offer or otherwise; acquire, or assist any other persons in acquiring, control of Marietta or its assets, whether by solicitation of proxies or otherwise; or request or demand the call of a special or annual meeting of shareholders. On April 13, 1995, Mr. Dickstein sent a letter to the Board of Directors of Marietta on the unacceptability of the proposed confidentiality agreement and the fairness of the process by which Marietta was exploring its financial alternatives. The letter read, in part, as follows: ". . . We have repeatedly contacted your chief executive officer, Mr. Tannen, and your financial adviser, Goldman, Sachs & Co., with a view to obtaining . . . more-detailed nonpublic information. Following your announcement on March 13 that Marietta was exploring its financial alternatives, both Mr. Tannen and Goldman Sachs assured us that Marietta would deal with us in a fair and evenhanded manner vis-a-vis other bidders or financing sources in Marietta's efforts to maximize shareholder value. Specifically, we were repeatedly assured that we would receive the detailed nonpublic information as soon as it was available (and no later than any other prospective bidder or financing source). When we repeatedly asked to see a draft confidentiality agreement, we were told that Marietta's counsel was too busy to prepare a three-page draft, but that we would receive one as soon as it was ready and that counsel for Marietta would then immediately meet with our counsel to resolve any differences `in an afternoon.' -16- PAGE We placed our most recent follow-up call to Goldman Sachs on April 10. In response to our inquiry, we were told that confidentiality agreements had already been sent the prior week to other interested parties, some of whom had already signed the agreements and received the information we had been seeking -- despite all the prior assurances that we would receive the confidentiality agreement as soon as it was ready and not later than anyone else. Finally, we received on April 11 the confidentiality agreement that we are being asked to sign. The agreement would prohibit us for one year from (among other things) proposing any transaction between us and the Company and/or its security holders, acquiring control of the Company (by solicitation of proxies or otherwise), or requesting a shareholders' meeting -- all this despite the fact that we had already proposed to acquire the Company, expressed our intention to solicit proxies to replace the present directors, and demanded that the Board of Directors call the annual meeting of shareholders. We, of course, will agree to none of these prohibitions -- as your representatives well knew all along, even as they assured us that any issues on the confidentiality agreement would be easily resolved. The proposed confidentiality agreement is, plain and simple, an attempt to exclude us -- the only announced bidder for the Company and the holder of nearly 15% of its outstanding shares -- from participating on an equal footing with other interested parties in the process that the Company is conducting to explore its financial alternatives. This transparent effort to exclude us is plainly detrimental to Marietta's public shareholders and we believe is in breach of your fiduciary duties to shareholders. It also flies in the face of assurances made to us that the process would be conducted fairly and that we would be given as much opportunity as anyone else to make our best offer. It is hard to understand how the Board of Directors, consistent with its fiduciary duty to shareholders, could exclude us, a serious and responsible bidder, from the process and not give us the information we need to make our best bid. . . . -17- PAGE Over the past two months we have given Marietta the benefit of any doubt regarding its assurances as to how the exploration-of-financial-alternatives process would be conducted and how we would be treated. At this point we cannot help but feel that Marietta has dealt with us in bad faith. We insist that you do whatever is necessary, consistent with reasonable commercial practice, to obtain the best offers from all responsible persons who express an interest in acquiring Marietta, including ourselves, and not to favor any one person over any other. We believe your fiduciary duty to shareholders requires you to do no less." On April 17, 1995, Dickstein & Co. and Dickstein International filed a petition in New York State Supreme Court, County of Cortland, for an order directing the Company to convene an annual meeting of Marietta's shareholders. On April 18, 1995, the court issued an order to show cause scheduling a hearing on the petition for April 27, 1995. On April 18, 1995, Mr. Dickstein sent a letter to the Board of Directors of Marietta in respect of the failure to convene the Annual Meeting, which read, in part, as follows: "We have on numerous occasions asked that you convene a timely annual meeting of Marietta's share- holders. You have neither called a meeting nor afforded us the elementary courtesy of a response to our requests. It is now impossible for you to hold the meeting by the statutorily mandated day of April 29. You have therefore left us no choice but to bring suit to compel the holding of the meeting. We demand that you act immediately to convene the shareholders' meeting on the earliest possible date, rather than waiting for the court to order you to do so -- as we have no doubt it will. Your failure to call a meeting is already a breach of fiduciary duty. Every day that you unlawfully perpetuate your purported term of office beyond April 29 -- whether by continued delay in calling the meeting, or by calling the meeting for other than the earliest possible date -- will entail an additional breach of duty. . . ." On April 24, 1995, after the Dickstein Funds commenced legal action to compel the Annual Meeting, the Board of Directors of Marietta scheduled the meeting for July 14, 1995, more than fifteen months after Marietta's previous annual meeting. In its decision on the action of the Dickstein Funds, the court affirmed -18- PAGE that shareholders of Marietta had the clear legal right to require the Board to set the Annual Meeting not later than the end of April 1995, since under New York law annual meetings of a corporation are contemplated to be held no later than thirteen months after the previous annual meeting. While the court declined to accelerate the date of the Annual Meeting set by the Board, the court issued an order of mandamus requiring that the Annual Meeting be held on July 14, 1995, thereby precluding further delay. On May 11, 1995, Mr. Dickstein sent a letter to the Board of Directors of Marietta, again seeking to enter into confidentiality arrangements with Marietta on terms addressing Marietta's concerns while enabling Dickstein Partners and Calibre to participate fairly in the bidding process. On May 15, 1995, Marietta and Dickstein Partners and Calibre executed a confidentiality agreement containing no standstill provisions. Subsequently, Dickstein Partners and Calibre have been provided access to non-public information concerning Marietta. Dickstein Partners and Calibre have had discussions with Marietta and its representatives concerning their acquisition proposal and, in furtherance of the proposal, are participating as a bidder in Marietta's process of "exploring financial alternatives." Dickstein Partners continues to seek to negotiate with Marietta regarding the acquisition proposal. Such negotiations could result in, among other things, termination of this proxy solicitation and submission of a different acquisition proposal to Marietta. Although Dickstein Partners does not presently intend, in the event the Dickstein Nominees are elected, to alter the terms of the proposed acquisition to provide for the issuance of securities or other consideration in exchange for Shares, it is possible that, depending on the facts and circumstances existing at the time, the terms might be altered in this or other respects. As indicated elsewhere in this Proxy Statement, the Dickstein Nominees, if elected, will, subject to their fiduciary duties, seek to cause Marietta to offer itself for sale, and to consummate a sale, to the buyer who is willing to pay the highest price, so long as the price is at least $11 per Share. There can be no assurance, however, that a buyer other than Dickstein Partners and Calibre will offer to purchase Marietta at all or for a price that is higher than the price offered by Dickstein and Calibre. It is anticipated that if the Dickstein Nominees are elected, the board will form a committee of directors, each of whom is independent of Dickstein Partners and Calibre and has no economic interest in the acquisition of Marietta, to consider, negotiate and determine to recommend approval of the terms of a sale of Marietta. The members of such an independent committee -19- are currently expected to be Messrs. Bock, Ginsberg, Golub and Krauss. The independent committee will establish procedures, possibly including auctioning or actively shopping Marietta, to maximize the price at which Marietta may be sold. It is anticipated that a sale of Marietta, including a sale to Dickstein Partners and Calibre, would be subject to a separate vote of shareholders at a later time, although if a buyer approved by the board of directors were to acquire 90% or more of the outstanding Shares, an acquisition could be effected without a shareholder vote pursuant to applicable provisions of the New York Business Corporation law. Certain Arrangements Dickstein Partners (on behalf of the Dickstein Funds), Calibre and Howard Shapiro, President of Calibre and a Dickstein Nominee, have entered into a Memorandum of Understanding, dated January 3, 1995 (the "Memorandum"), confirming their intention to pursue, on a joint basis, the acquisition of Marietta (the "Acquisition"). Under the Memorandum, the interests of Dickstein Partners and Calibre in Marietta following the Acquisition would be in proportion to their respective cash investments in the Shares purchased by them. The Memorandum provides that Dickstein Partners reserves total discretion over its own investment and voting decisions and over the conduct of the Acquisition, and Calibre reserves total discretion over its investment and voting decisions and its participation in the Acquisition. The Memorandum further provides that, after consummation of the Acquisition when Marietta is no longer a publicly-held company, and so long as Calibre maintains its investment in Marietta, Dickstein Partners will cause Mr. Shapiro to be elected as a director of Marietta and to receive a fee of $100,000 per annum for his services as a director. In addition, Dickstein Partners has agreed to pay to Calibre a contingent fee equal to 11% of the net profits realized by Dickstein Partners on its investment in Marietta. A non- refundable advance of $125,000 on the contingent fee is payable by Dickstein Partners to Calibre upon consummation of the Acquisition. Under the Memorandum, Calibre will have the right, on certain occasions subsequent to the Acquisition when Marietta is no longer a publicly-held company, to sell its Shares to Marietta at then current fair market value. In the event that Dickstein Partners arranges to sell any portion of its investment in Marietta, in either a privately negotiated transaction or pursuant to a public offering, Calibre will have the right to participate, and Dickstein may require Calibre to participate, in such a sale on a pro rata basis. -20- PAGE The Memorandum provides that, until Dickstein Partners terminates its participation with Calibre in respect of Marietta, Dickstein Partners will bear all the expenses of the parties. Following consummation of the Acquisition when Marietta is no longer a publicly-held company, Dickstein will be entitled to receive reasonable and customary expenses incurred in connection with the management of Marietta, and it and/or its partners and principals will be entitled to receive up to $100,000 per year in the aggregate for performance of duties as directors and other bona fide services to Marietta. Dickstein Partners has the right at any time, by written notice, to terminate the collaboration between Dickstein Partners and Calibre contemplated by the Memorandum. If Dickstein Partners terminates such collaboration, Calibre will nonetheless retain its rights under the Memorandum, except as otherwise provided. Dickstein has agreed to indemnify Calibre against claims asserted on account of alleged wrongful acts or omissions arising in connection with the matters described in the Memorandum, including the purchase of Shares contemplated thereby. It is anticipated that Dickstein Partners will engage Ralph Stewart, a Dickstein Nominee, as a consultant to assist in any due diligence review of Marietta conducted in connection with the proposed acquisition of Marietta by Dickstein Partners and Calibre. It is also anticipated that Mr. Stewart would serve as a management consultant to Dickstein Partners in respect of Marietta for a limited period following consummation of such an acquisition. Mr. Stewart would be compensated on a per diem basis at the rate of approximately $1,000 per day, plus reimbursement of expenses. Except as aforesaid or as provided under "Election of Directors" above, none of Dickstein Partners, Calibre, the Dickstein Nominees nor any of their respective associates is, or since October 1, 1993 has been, a party to any contract, arrangement or understanding with any person with respect to securities of Marietta. Change in Control Based upon publicly available information concerning Marietta, the following would be the consequences of a change in control of Marietta occasioned by the election of the Dickstein Nominees to a majority of the board of directors of Marietta (a "Dickstein Change of Control"). Upon the occurrence of a Dickstein Change of Control without the approval of the existing directors of Marietta, all outstanding unvested stock options of Marietta would become -21- PAGE immediately exercisable. As of June 1, 1995, there were outstanding stock options to acquire 84,378 Shares, of which options with respect to at least 16,206 Shares had not yet vested. Marietta has granted to Stephen D. Tannen, Marietta's President and Chief Executive Officer, cash-only stock appreciation rights in respect of 90,000 Shares, with a base price of $7.00 per share and subject to a maximum amount payable of $630,000. The stock appreciation rights, which otherwise would vest through November 1997, would become immediately excisable upon the occurrence of a Dickstein Change of Control without the approval of the existing directors of Marietta. SOLICITATION OF PROXIES Proxies may be solicited by mail, advertisement, telephone or telecopier or in person. Solicitations may be made by directors, officers and employees of Dickstein Partners or Calibre, none of whom will receive additional compensation for such solicitations. Dickstein Partners has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all its solicitation materials to the beneficial owners of the Shares they hold of record. Dickstein Partners will reimburse these record holders for customary clerical and mailing expenses incurred by them in forwarding these materials to their customers. Dickstein Partners has retained MacKenzie Partners, Inc. (the "Agent") for solicitation and advisory services in connection with the solicitation, for which the Agent is to receive a fee of $________, together with reimbursement for its reasonable out-of-pocket expenses. Dickstein Partners has also agreed to indemnify the Agent against certain liabilities and expenses, including liabilities and expenses under the federal securities laws. The Agent will solicit proxies for the Annual Meeting from individuals, brokers, banks, bank nominees and other institutional holders. It is anticipated that the Agent will employ approximately 35 persons to solicit shareholders for the Annual Meeting. Certain information about directors and officers of Dickstein Partners and Calibre who, in each case, may also assist in soliciting proxies, is set forth in the attached Schedule I. The entire expense of soliciting proxies for the Annual Meeting is being borne by Dickstein Partners. Dickstein Partners may seek reimbursement for such expenses from Marietta, but does not expect that the question of such reimbursement will be submitted to a vote of shareholders. Costs incidental to this -22- PAGE solicitation of proxies include expenditures for printing, postage, legal, accounting, public relations, advertising and related expenses and are expected to be approximately $________; costs incurred to the date of this Proxy Statement are approximately $_________. If Dickstein Partners should withdraw, or materially change the terms of, this solicitation of proxies prior to the Annual Meeting, Dickstein Partners will supplement this Proxy Statement or otherwise publicly disseminate information regarding such withdrawal or change and, in appropriate circumstances, will provide shareholders with a reasonable opportunity to revoke their proxies prior to the Annual Meeting. SECURITY OWNERSHIP OF DICKSTEIN PARTNERS, CALIBRE AND AFFILIATES As of the date of this Proxy Statement, the Dickstein Funds beneficially own an aggregate of 508,000 Shares, representing approximately 14.1% of the Shares outstanding on the Record Date. The Shares beneficially owned by the Dickstein Funds are owned as set forth in the following table: Shares Percentage Name and Address of Beneficially of Shares Beneficial Owner Owned Outstanding - ------------------- ------------ ----------- Dickstein & Co., L.P. 347,900 9.7% c/o Dickstein Partners Inc. 9 West 57th Street New York, New York 10019 Dickstein International Limited 160,100 4.4% 129 Front Street Hamilton HM 12, Bermuda Dickstein Partners is the general partner of Dickstein Partners, L.P., which is the general partner of Dickstein & Co., L.P. Dickstein Partners is also the advisor to Dickstein International Limited. Mark Dickstein, a Dickstein Nominee, is the President and sole stockholder of Dickstein Partners. By reason of such relationships, Dickstein Partners, L.P. may be deemed to beneficially own the Shares owned by Dickstein & Co., L.P., and Dickstein Partners and Mark Dickstein may be deemed to beneficially own the shares owned by Dickstein & Co., L.P., and Dickstein International Limited. Each of Dickstein Partners, L.P., Dickstein Partners and Mark Dickstein disclaims beneficial ownership of the Shares which it or he may be deemed -23- PAGE to own by reason of such relationships, except to the extent of its or his actual economic interest in the Dickstein Funds. The Dickstein Funds invest primarily in special situations, including the purchase of securities and other obligations of companies that are financially distressed or have recently emerged from bankruptcy, and risk-arbitrage transactions. As of the date of this Proxy Statement, Calibre beneficially owns an aggregate of 18,000 Shares, representing approximately 0.5% of the Shares outstanding on the Record Date. Mr. Howard Shapiro, a Dickstein Nominee, may be deemed to beneficially own the Shares owned by Calibre. Except as set forth above, none of Dickstein Partners, Calibre, any of the Dickstein Nominees or any of their respective associates owns beneficially or of record any securities of Marietta or any of its subsidiaries. Schedule II sets forth certain additional information relating to the Shares beneficially owned by the Dickstein Funds and Calibre. OTHER INFORMATION Security Ownership of Certain Beneficial Owners Certain information regarding Shares held by Marietta's directors, nominees, management and other 5% shareholders is contained in Marietta's preliminary proxy statement and is incorporated herein by reference. Proposals of Security Holders Information concerning the date by which proposals of security holders intended to be presented at the next annual meeting of shareholders of Marietta must be received by Marietta for inclusion in Marietta's proxy statement and form of proxy for that meeting will be contained in Marietta's definitive proxy statement and is incorporated herein by reference. Dickstein Partners assumes no responsibility for the accuracy or completeness of any information contained herein which is based on, or incorporated by reference to, Marietta's preliminary or definitive proxy statement or other public filings. -24- PAGE ________________________________ PLEASE INDICATE YOUR SUPPORT OF THE DICKSTEIN NOMINEES BY COMPLETING, SIGNING AND DATING THE ENCLOSED BLUE ANNUAL MEETING PROXY CARD AND RETURN IT PROMPTLY TO MACKENZIE PARTNERS, INC., 156 FIFTH AVENUE, 9TH FLOOR, NEW YORK, NEW YORK 10010 IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES DICKSTEIN PARTNERS INC. June 14, 1995 -25- PAGE SCHEDULE I INFORMATION CONCERNING DIRECTORS AND OFFICERS OF DICKSTEIN PARTNERS AND CALIBRE The following table sets forth the name and the present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is carried on, of the directors and officers of Dickstein Partners and Calibre who, in each case, may also solicit proxies from Marietta shareholders. The principal business address of each of the sole director and the officers of Dickstein Partners named below is c/o Dickstein Partners Inc., 9 West 57th Street, New York, New York 10019, and the principal business address of each of the sole director and the officers of Calibre named below is c/o Calibre Capital Advisors, Inc., 66 East 80th Street, New York, New York 10021. Director and Officers of Dickstein Partners Inc. Present Principal Occupation or Name and Positions Held Employment - ----------------------- ------------------------------- Mark Dickstein President and Sole Director President and Sole Director of Dickstein Partners Inc. Tod Black Vice President of Dickstein Vice President Partners Ind. David Brail Vice President of Dickstein Vice President Partners Inc. Mark D. Brodsky Vice President of Dickstein Vice President Partners Inc. Alan S. Cooper Vice President and General Vice President and General Counsel of Dickstein Partners Counsel Inc. Steven Cornick Vice President of Dickstein Vice President Partners Inc. Edward Farr Vice President of Dickstein Vice President Partners Inc. Samuel L. Katz Vice President of Dickstein Vice President Partners Inc. S-I-1 PAGE Present Principal Occupation or Name and Positions Held Employment - ----------------------- ------------------------------- Mark Kaufman Vice President of Dickstein Vice President Partners Inc. Arthur Wrubel Vice President of Dickstein Vice President Partners Inc. Director and Officers of Calibre Capital Advisors, Inc. Present Principal Occupation or Name and Positions Held Employment - ----------------------- ------------------------------- Howard R. Shapiro President and Sole Director of President and Sole Director Calibre Capital Advisors, Inc. Susan E. Buechley Vice President of Calibre Vice President Capital Advisors, Inc. S-I-2 PAGE SCHEDULE II SHARES HELD BY DICKSTEIN PARTNERS, CALIBRE, THEIR RESPECTIVE DIRECTORS AND OFFICERS, AND THE DICKSTEIN NOMINEES Except as disclosed in this Schedule or in the accompanying Proxy Statement, none of Dickstein Partners, Calibre, any of their respective directors or officers named in Schedule I or the Dickstein Nominees, or any of their respective associates, owns any securities of Marietta or any subsidiary of Marietta, beneficially or of record, has purchased or sold any of such securities within the past two years or is or was within the past year a party to any contract, arrangement or understanding with any person with respect to any such securities. Shares purchased by Dickstein & Co., L.P. and Dickstein International Limited were funded out of these entities' working capital, which may at any time include margin loans made by brokerage firms in the ordinary course of their business. Dickstein & Co., L.P. Number of Shares Date Purchased Sold 1/4/95 100,000 1/12/95 79,500 1/13/95 8,500 1/16/95 42,500 1/17/95 117,400 Dickstein International Limited Number of Shares Date Purchased Sold 1/4/95 46,000 1/12/95 36,500 1/13/95 4,000 1/16/95 19,500 1/17/95 54,100 S-II-1 PAGE Calibre Capital Advisors, Inc. Number of Shares Date Purchased Sold 10/6/94 3,000 10/18/94 500 10/27/94 5,000 10/28/94 1,100 11/16/94 3,000 11/18/94 2,000 11/23/94 3,000 S-II-2 PAGE IMPORTANT Your proxy is important. No matter how many Shares you own, please give Dickstein Partners your proxy FOR the election of the Dickstein Nominees by: MARKING the enclosed BLUE Annual Meeting proxy card, SIGNING the enclosed BLUE Annual Meeting proxy card, DATING the enclosed BLUE Annual Meeting proxy card and MAILING the enclosed BLUE Annual Meeting proxy card TODAY in the envelope provided (no postage is required if mailed in the United States). If you have already submitted a proxy to Marietta for the Annual Meeting, you may change your vote to a vote FOR the election of the Dickstein Nominees by marking, signing, dating and returning the enclosed BLUE proxy card for the Annual Meeting, which must be dated after any proxy you may have submitted to Marietta. Only your latest dated proxy for the Annual Meeting will count at such meeting. If you have any questions or require any additional information concerning this Proxy Statement or the proposal by the Dickstein Group to acquire Marietta, please contact MacKenzie Partners, Inc. at the address set forth below or Dickstein Partners at (212) 754-4000. IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK NOMINEE OR OTHER SUCH INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO HAVE THE BLUE ANNUAL MEETING PROXY CARD EXECUTED ON YOUR BEHALF. MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 Tel: (212) 929-5500 (call collect) or Call Toll-Free (800) 322-2885 PAGE IMPORTANT If your shares are registered in your own name, you may mail or fax your BLUE proxy card (both sides) to MacKenzie Partners, Inc. at the address or fax number listed below. If your shares are held in "street name" held by your brokerage firm or bank immediately instruct your broker or bank representative to sign Dickstein Partners' BLUE proxy card on your behalf. If you have any questions on voting your shares, please call: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, NY 10010 CALL TOLL-FREE (800) 322-2885 FAX: (212) 929-0308 PAGE MARIETTA CORPORATION ANNUAL MEETING OF SHAREHOLDERS THIS PROXY IS SOLICITED BY DICKSTEIN PARTNERS INC. The undersigned shareholder of Marietta Corporation hereby appoints each of Mark D. Brodsky and Alan S. Cooper, and each of them with full power of substitution, for and in the name of the undersigned, to represent and to vote, as designated below, all shares of common stock of Marietta Corporation that the undersigned is entitled to vote if personally present at the 1995 Annual Meeting of Shareholders of Marietta Corporation to be held on July 14, 1995 at 10:00 A.M. at The Holiday Inn, 2 River Street, Route 13 and Interstate 81, Cortland, New York, and at any adjournment or postponement thereof. The undersigned hereby revokes any previous proxies with respect to the matters covered by this Proxy. DICKSTEIN PARTNERS INC. RECOMMENDS A VOTE FOR ELECTION OF ITS NOMINEES NAMED BELOW. (Please mark each proposal with an "X" in the appropriate box) ELECTION OF DIRECTORS: Election of Mark Dickstein, Jeffrey E. Ginsberg, Lawrence E. Golub, Samuel L. Katz, Ira W. Krauss, Howard R. Shapiro and Ralph E. Stewart. /_/ FOR all nominees except as /_/ WITHHOLD AUTHORITY for all marked below nominees (INSTRUCTION: To withhold authority to vote for one or more nominees, mark FOR above and print the name(s) of the person(s) with respect to whom you wish to withhold authority in the space provided below.) _________________________________________________________________ IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. PAGE PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE PROVIDED. This Proxy, when properly executed, will be voted in the manner marked herein by the undersigned shareholder. IF NO MARKING IS MADE, THIS PROXY WILL BE DEEMED TO BE A DIRECTION TO VOTE FOR THE NOMINEES OF DICKSTEIN PARTNERS. Please date and sign this proxy exactly as your name appears hereon. ____________________________________ (Signature) ____________________________________ (Signature, if held jointly) ____________________________________ (Title) Dated:______________________________ When shares are held by joint tenants, both should sign. When signing as attorney-in-fact, executor, administrator, trustee, guardian, corporate officer or partner, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. To vote in accordance with the Dickstein Partners recommendation, just sign and date this proxy; no boxes need to be checked. PAGE DICKSTEIN PARTNERS INC. Mark Dickstein Tel: (212) 754-4000 President Fax: (212) 754-5825 June [ ], 1995 Dear Fellow Marietta Shareholders: At the Marietta Corporation shareholders' meeting on July 14, you will decide who will serve as the directors of the Company for the ensuing year. We solicit your vote for our nominees, who are committed to a program of offering Marietta for sale and selling Marietta to the highest bidder so long as the price is at least $11 per share. On January 17, 1995, Dickstein Partners and Calibre Capital Advisors announced their interest in acquiring all of the shares of Marietta they do not already own for $11 per share in cash. Dickstein Partners and Calibre own an aggregate of 14.6% of the outstanding shares. Dickstein Partners earnestly believes that a sale of Marietta to the highest bidder represents the best opportunity to maximize the value of your shares. The $11 price we have offered is fully 50% above market prices a month before we announced our acquisition proposal. The incumbent Marietta board of directors, with the assistance of its investment banker, Goldman Sachs & Co., has already had five months to evaluate and respond to our acquisition proposal, to solicit others, and to explore its other alternatives. During that period, Marietta has shared confidential information with us and other potential bidders, and we continue to have discussions with Marietta concerning our offer. However, the incumbent board has never publicly committed itself to a sale of the Company at a minimum of $11 per share (or, for that matter, at any price). Further, while no other party has publicly offered $11 or more per share for Marietta, the incumbent Board last March rejected our offer. In light of this history, the upcoming annual meeting will present shareholders with a pivotal choice. At the meeting, you can elect a slate of directors that is publicly committed to seeking the sale of the Company for the highest price obtainable, so long as the price is at least $11 per share. Your alternative is to re-elect the incumbent directors, who: o Continue to equivocate, even in the proxy materials they are mailing you, about whether Marietta will be sold or will remain an independent company. PAGE o Have a negligible equity stake in the Company. o Have presided over disappointing operating results. In particular, comparing the second quarter of this year to last year's, the Company's operating income dropped from a positive $901,000 to a negative $99,000, and earnings per share dropped from 16 cents to zero. o Announced (shortly after we submitted our acquisition proposal) that the current fiscal year's capital expenditures will be $6 million ($1.64 per share) -- twice the prior year's level and triple the average for the last six years. Such a dramatic increase in capital expenditures could easily inhibit the sale of the Company or lower the price that bidders are prepared to pay. o Have agreed to pay Goldman Sachs a fee of about $1,750,000 (nearly 50 cents per share) if our $11 per share bid succeeds, and $140,000 more for each $1.00 per share increase in acquisition price. You are now faced with a clear choice. Do you wish to re-elect the incumbent directors, who have over the last five months accomplished nothing in response to an acquisition proposal and who still equivocate as to whether, when and how they will act? Or would you rather elect a board, which is committed to putting the Company up for sale and selling it to the highest bidder, so long as that price is at least $11 per share? The choice is yours. We urge you to vote your BLUE Annual Meeting proxy card FOR each of the nominees proposed by Dickstein Partners and mail it promptly in the enclosed envelope. Please review the accompanying proxy materials for information concerning Dickstein Partners, our nominees, and our and Calibre's joint proposal to acquire Marietta. If you require any further information or have questions, please call us directly at (212) 754-4000 or call MacKenzie Partners, Inc. at the numbers listed below. We appreciate your prompt consideration of this important matter. Very truly yours, MARK DICKSTEIN President PAGE If you have questions or need assistance in voting your shares, please contact: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll-Free 800-322-2885 -----END PRIVACY-ENHANCED MESSAGE-----