0000950130-95-001611.txt : 19950816
0000950130-95-001611.hdr.sgml : 19950816
ACCESSION NUMBER: 0000950130-95-001611
CONFORMED SUBMISSION TYPE: DEFC14A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 19950815
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: DEFC14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-14699
FILM NUMBER: 95564123
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: 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: DEFC14A
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
DEFC14A
1
AMENDMENT #4 TO SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. 4)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] CONFIDENTIAL, FOR USE OF THE
[_] Preliminary Proxy Statement COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MARIETTA CORPORATION
------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MARIETTA CORPORATION
------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[_] 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:
Notes:
MARIETTA CORPORATION
37 HUNTINGTON STREET
CORTLAND, NEW YORK 13045
(607) 753-6746
----------------
ANNUAL MEETING
AUGUST 31, 1995
August 14, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Marietta Corporation to be held at the Holiday Inn, 2 River Street, Route 13
and Interstate 81, Cortland, New York at 10:00 A.M. on Thursday, August 31,
1995. Your Board of Directors and management look forward to greeting
personally those shareholders able to attend.
At the Meeting, Marietta's shareholders will elect nine directors. In
electing these directors, all shareholders will be making a critical choice
for the future of the Company and their investment.
Your Board, together with its financial and legal advisors, is exploring a
broad range of financial alternatives in an effort to enhance shareholder
value. On June 16, 1995, the Company received two conditional offers to
acquire all of the Company's Common Stock, one from Dickstein Partners, Inc.
and its related and other entities ("Dickstein"), at $11.00 per share in cash
(the "Dickstein Proposal"), and the other from Florescue Family Corporation
("Florescue") at $12.30 per share in cash (the "Florescue Proposal"). Both the
Dickstein Proposal, which was subsequently withdrawn, and the Florescue
Proposal contained conditions that the Board believed were not reasonable
under the circumstances. Although the Florescue Proposal expired in accordance
with its terms, the Company's representatives are continuing to negotiate with
Florescue.
Your Board has determined that if by September 30, 1995, no agreement for
the sale of all of the Common Stock is entered into by the Company, either
with Florescue or any other bidder, the Board will suspend its efforts to seek
a buyer for the Company. Thereafter, the Board will continue to work to
enhance shareholder value by concentrating Marietta's resources on its
operations and on improving its core businesses and financial results. In
addition, your Board continues to evaluate other potential transactions,
including a partial sale of assets by the Company or a recapitalization
transaction such as a special dividend or a repurchase by the Company of a
portion of its shares.
On July 31, 1995, Dickstein announced that he was withdrawing the Dickstein
Proposal and proposed that Marietta acquire up to 2,000,000 shares of Common
Stock at a modest premium over market through a Marietta financed self-tender.
Dickstein has indicated that in such self-tender he would not tender any
shares of Common Stock, thereby increasing his ownership of your Company
through a transaction financed by Marietta.
Your Board believes that all Marietta shareholders will be better served by
allowing your Board to continue to control and complete the process now
underway. In direct contrast, Dickstein's proposed self-tender would enable
him to significantly increase his ownership of your Company at no additional
cost to Dickstein. At this time your Board believes that a self-tender is not
in the best interests of the Company or of its shareholders other than
Dickstein.
YOUR BOARD STRONGLY RECOMMENDS A VOTE "FOR" YOUR BOARD'S NOMINEES BECAUSE
YOUR BOARD BELIEVES THAT IT IS BEST ABLE TO TAKE THOSE ACTIONS WHICH ARE IN
THE BEST INTERESTS OF ALL MARIETTA SHAREHOLDERS. YOUR BOARD URGES YOU TO
REJECT ANY DICKSTEIN SOLICITATION AND NOT SIGN OR RETURN ANY BLUE PROXY CARD
SENT TO YOU BY DICKSTEIN. DO NOT PERMIT DICKSTEIN TO TAKE CONTROL OF YOUR
COMPANY UNLESS HE IS WILLING TO PAY FOR YOUR SHARES.
THE BOARD URGES YOU TO REJECT THE DICKSTEIN PROXY SOLICITATION.
Enclosed with this letter is the Company's Notice of Annual Meeting of
Shareholders and Proxy Statement and a WHITE proxy card. You should read these
materials for a more complete description of the matters to be considered at
the Meeting. Then, take a moment to sign, mark, date and mail your WHITE proxy
in the postage-paid envelope provided.
We strongly urge you to vote in favor of the nominees proposed by your
Board. Please sign, mark, date and mail the enclosed WHITE proxy card in the
enclosed envelope to support your Board's nominees. Please act today to ensure
that your proxy is received in time to be counted. Remember, mailing in your
proxy will not prevent you from voting at the Meeting if you plan to attend.
On behalf of your Board, thank you for your continued support.
Sincerely,
/s/ Stephen D. Tannen
Stephen D. Tannen
President and Chief Executive Officer
IMPORTANT
Your vote is important. Regardless of the number of shares of Common Stock
you own, please vote as recommended by your Board by taking these two simple
steps:
1. PLEASE SIGN, MARK, DATE AND PROMPTLY MAIL THE ENCLOSED WHITE PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
2. DO NOT RETURN ANY BLUE PROXY CARDS SENT TO YOU BY DICKSTEIN. IF YOU
VOTED DICKSTEIN'S BLUE PROXY CARD BEFORE RECEIVING YOUR WHITE PROXY CARD,
YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE SIMPLY BY SIGNING, MARKING, DATING
AND MAILING THE ENCLOSED WHITE PROXY CARD. THIS WILL CANCEL YOUR EARLIER
VOTE SINCE ONLY YOUR LATEST DATED PROXY CARD WILL COUNT AT THE MEETING.
If you own your shares in the name of a brokerage firm, only your broker can
vote your shares on your behalf and only after receiving your specific
instructions. Please call your broker and instruct him/her to execute a WHITE
card on your behalf. You should also promptly sign, mark, date and mail your
WHITE card when you receive it from your broker. Please do so for each
separate account you maintain. You should return your WHITE proxy card at once
to ensure that your vote is counted. This will not prevent you from voting in
person at the meeting should you attend. IF YOU HAVE ANY QUESTIONS OR REQUIRE
ASSISTANCE IN VOTING YOUR SHARES, PLEASE CALL:
D. F. KING & CO., INC.
77 WATER STREET
NEW YORK, NY 10005
(212) 269-5550 (COLLECT)
CALL TOLL FREE (800) 359-5559
MARIETTA CORPORATION
37 HUNTINGTON STREET
CORTLAND, NEW YORK 13045
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 31, 1995
----------------
Notice is Hereby Given to the shareholders of Marietta Corporation, a New
York corporation ("Marietta" or the "Company"), that the Annual Meeting of
Shareholders will be held at the Holiday Inn, 2 River Street, Route 13 and
Interstate 81, Cortland, New York at 10:00 A.M. on Thursday, August 31, 1995,
for the following purposes:
1. To elect a board of nine (9) directors to serve until the next Annual
Meeting of Shareholders or until their respective successors are elected and
qualified; and
2. To transact such other business as may properly come before the meeting or
any postponement or adjournment thereof.
Only shareholders of record at the close of business on Friday, July 28, 1995
are entitled to notice of and to vote at the meeting or any adjournment
thereof. The stock transfer books will not be closed.
A copy of the Annual Report for the fiscal year ended October 1, 1994,
together with copies of the Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended December 31, 1994, April 1, 1995 and July 1, 1995,
accompanies this Notice.
By Order of the Board of Directors,
Ronald C. DeMeo
Secretary
Cortland, New York
August 14, 1995
IMPORTANT
THIS YEAR'S ANNUAL MEETING MAY INVOLVE A PROXY CONTEST FOR CONTROL OF YOUR
COMPANY. WE URGE YOU TO REJECT ANY SOLICITATION BY DICKSTEIN PARTNERS,
INC. AND RELATED AND OTHER ENTITIES (COLLECTIVELY "DICKSTEIN"). DO NOT
SIGN OR RETURN ANY BLUE PROXY CARD SENT TO YOU BY DICKSTEIN OR ANY OTHER
PERSON.
TO SUPPORT YOUR BOARD OF DIRECTORS, PLEASE SIGN, MARK, DATE AND PROMPTLY
MAIL YOUR WHITE PROXY CARD IN THE RETURN ENVELOPE. IF YOU HAVE ANY
QUESTIONS OR NEED ASSISTANCE, PLEASE CALL D.F. KING & CO., INC., WHICH IS
ASSISTING YOUR BOARD OF DIRECTORS, TOLL-FREE, AT 800-359-5559.
A WHITE PROXY CARD AND POSTAGE-PAID ENVELOPE ARE ENCLOSED FOR YOUR USE. WE
URGE EACH SHAREHOLDER TO VOTE PROMPTLY BY SIGNING, MARKING, DATING AND
MAILING THE WHITE PROXY CARD, REGARDLESS OF THE NUMBER OF SHARES HELD BY
SUCH SHAREHOLDER. YOUR VOTE IS IMPORTANT--PLEASE ACT TODAY!
MARIETTA CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
The enclosed WHITE Proxy card is solicited by the Board of Directors (the
"Board") of MARIETTA CORPORATION ("Marietta" or the "Company") for use at the
Annual Meeting of Shareholders (the "Meeting"), to be held on Thursday, August
31, 1995, at 10:00 A.M. at the Holiday Inn, 2 River Street, Route 13 and
Interstate 81, Cortland, New York. Any shareholder giving a Proxy has the power
to revoke it at any time before it is voted by executing another Proxy bearing
a later date or by giving written notice of revocation to the Company addressed
to the Secretary prior to the Meeting or by oral or written notice at the
Meeting.
The mailing address of the Company's principal executive office is 37
Huntington Street, Cortland, New York 13045. The approximate date on which this
Proxy Statement and form of Proxy are first being sent or given to shareholders
is August 14, 1995.
IMPORTANT
YOUR BOARD BELIEVES THAT IT IS IN THE BEST INTERESTS OF MARIETTA
SHAREHOLDERS TO ELECT THE BOARD'S NOMINEES. YOUR BOARD URGES YOU TO REJECT
ANY SOLICITATION BY DICKSTEIN PARTNERS, INC. AND RELATED AND OTHER ENTITIES
(COLLECTIVELY "DICKSTEIN"). DO NOT SIGN OR RETURN ANY BLUE PROXY CARD SENT TO
YOU BY DICKSTEIN.
AS PREVIOUSLY ANNOUNCED, YOUR BOARD HAS DETERMINED TO SEEK A BUYER FOR YOUR
COMPANY. YOUR BOARD HAS DETERMINED THAT IF BY SEPTEMBER 30, 1995 NO AGREEMENT
FOR THE SALE OF ALL OF THE COMMON STOCK OF MARIETTA IS ENTERED INTO BY THE
COMPANY, IT WILL SUSPEND ITS EFFORTS TO SEEK A BUYER. THEREAFTER, THE BOARD
WILL CONTINUE TO WORK TO ENHANCE SHAREHOLDER VALUE BY CONCENTRATING
MARIETTA'S RESOURCES ON ITS OPERATIONS AND ON IMPROVING ITS CORE BUSINESSES
AND FINANCIAL RESULTS. IN ADDITION, YOUR BOARD CONTINUES TO EVALUATE OTHER
POTENTIAL TRANSACTIONS, INCLUDING A PARTIAL SALE OF ASSETS BY THE COMPANY OR
A RECAPITALIZATION TRANSACTION SUCH AS A SPECIAL DIVIDEND OR A REPURCHASE BY
THE COMPANY OF A PORTION OF ITS SHARES. DICKSTEIN HAS INDICATED THAT HE MAY
ATTEMPT TO TAKE CONTROL OF YOUR COMPANY THROUGH A PROXY CONTEST AND HAS
PROPOSED THAT YOUR COMPANY MAKE A SELF-TENDER FOR UP TO 2,000,000 SHARES OF
COMMON STOCK. YOUR BOARD DOES NOT BELIEVE THAT AT THIS TIME IT IS IN THE BEST
INTERESTS OF ALL SHAREHOLDERS TO BURDEN YOUR COMPANY WITH THE LEVERAGE
REQUIRED TO FINANCE SUCH A SELF-TENDER. ACCORDINGLY, YOUR BOARD BELIEVES THAT
IT WOULD BE INAPPROPRIATE AT THIS TIME TO ENGAGE IN A SELF-TENDER WHICH MIGHT
WEAKEN THE FUTURE FINANCIAL HEALTH AND STABILITY OF YOUR COMPANY.
YOUR BOARD BELIEVES THAT IT IS NOT IN THE BEST INTERESTS OF THE COMPANY OR
ITS SHAREHOLDERS TO ALLOW DICKSTEIN, WHO HAD PREVIOUSLY MADE A CONDITIONAL
PROPOSAL TO ACQUIRE THE COMPANY WHICH WAS SUBSEQUENTLY WITHDRAWN, TO CONTROL
THE COMPANY.
YOUR VOTE IS IMPORTANT, REGARDLESS OF HOW MANY SHARES YOU OWN. WHETHER OR
NOT YOU HAVE PREVIOUSLY SIGNED A BLUE PROXY CARD SENT BY DICKSTEIN, THE BOARD
URGES YOU TO SUPPORT YOUR BOARD BY SIGNING, MARKING, DATING AND PROMPTLY
MAILING THE ENCLOSED WHITE PROXY CARD. BY DOING SO, YOU WILL REVOKE ANY
EARLIER DATED BLUE PROXY CARD SOLICITED BY DICKSTEIN WHICH YOU MAY HAVE
SIGNED.
REMEMBER, IT WILL NOT HELP YOUR BOARD TO RETURN A DICKSTEIN BLUE PROXY CARD
VOTING TO "WITHHOLD AUTHORITY." DO NOT RETURN ANY BLUE CARD SENT TO YOU BY
DICKSTEIN. THE ONLY WAY TO SUPPORT YOUR BOARD'S NOMINEES IS TO VOTE "FOR"
THOSE NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER, OR OTHER NOMINEE, WE
URGE YOU TO CONTACT THE PARTY RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT HIM OR
HER TO VOTE "FOR" YOUR BOARD'S NOMINEES ON THE ENCLOSED WHITE PROXY CARD. YOU
SHOULD ALSO SIGN, MARK, DATE AND MAIL YOUR WHITE PROXY CARD ONCE YOU RECEIVE
IT FROM YOUR BANK OR BROKER TO ENSURE YOUR VOTE IS COUNTED.
1
BACKGROUND OF RECENT EVENTS
On January 17, 1995, Mark Dickstein, the president of Dickstein Partners,
Inc. advised the Company by telephone that Dickstein proposed to acquire all of
the outstanding stock of Marietta. Following the call, Mr. Dickstein sent a
letter to the Company outlining Dickstein's unsolicited conditional proposal to
acquire by means of a cash merger, all of the common stock (the "Common
Stock"), of Marietta at a price of $11 per share (the "Dickstein Proposal").
In a report, dated January 20, 1995, and filed on Schedule 13D with the
Securities and Exchange Commission (the "SEC"), Dickstein stated that he would
pursue the acquisition of the Company. Such report indicated that Dickstein
beneficially owned an aggregate of 526,000 shares of Common Stock.
Such report further stated that on January 19, 1995, Dickstein had filed
preliminary proxy materials with the SEC stating Dickstein's intention, at the
Company's 1995 annual meeting of shareholders, to propose an alternative slate
of his own directors. The report also stated that the nominees of Dickstein
(the "Dickstein Nominees") "would be committed to a program of offering the
Company for sale, and selling the Company, to the buyer who is willing to pay
the highest price, so long as the price is at least $11 per share."
On January 25, 1995, following the announcement of the Dickstein Proposal,
your Board engaged the services of Goldman, Sachs & Co. ("Goldman Sachs"),
internationally recognized investment bankers, to evaluate the Dickstein
Proposal and to render financial advisory services to the Company.
On March 13, 1995, the Company announced that the Board had unanimously
rejected the Dickstein Proposal. At such time, the Board did not believe that
accepting an unsolicited proposal subject, among other conditions, to financing
and due diligence conditions, was in the best interests of all shareholders.
After its rejection of the Dickstein Proposal, the Board of Directors
instructed management, together with its financial and legal advisors, to
explore possible financial alternatives available to Marietta including, among
others, a merger, an acquisition or disposition of assets or securities, a
recapitalization or other form of business combination. In connection with this
process, over 100 parties were contacted. A number of parties, including
Dickstein, subject to confidentiality agreements, inspected the Company's books
and records, visited its facilities and met with members of senior management.
As of June 16, 1995, the process produced various proposals including two
conditional offers to acquire all of the Common Stock, one from Dickstein at
$11.00 per share in cash (the "Dickstein Proposal"), and the other from
Florescue Family Corporation ("Florescue") at $12.30 per share in cash (the
"Florescue Proposal"). The Dickstein Proposal was subject to various
conditions, including obtaining financing and the Company meeting certain
financial performance goals during the remaining quarters of its 1995 fiscal
year. In addition, the Dickstein Proposal provided for a breakup fee payable to
Dickstein in the amount of $3.5 million if Dickstein did not buy the Company
(Dickstein subsequently offered to reduce such fee to $1.75 million). The
Florescue Proposal was also subject to various conditions, including obtaining
financing and completion of its due diligence review of the Company. Based upon
the various conditions contained in each Proposal, the Company believed that
accepting either Proposal would constitute the grant--for no consideration--of
a "risk-free option" to acquire the Company and that the existing conditions in
each offer were not reasonable under the circumstances; however, it authorized
its representatives to continue discussions with Dickstein and Florescue to
determine if more reasonable terms could be agreed to which in the Board's
opinion would be in the best interests of all shareholders.
On June 23, 1995, the Board determined that it would recommend to
shareholders that the highest offer containing reasonable conditions be
accepted, provided that such offer was at least $11.00 per share in cash for
all shares of Marietta and that the bidder demonstrate to the Board that it had
the financial ability to complete the transaction.
On July 31, 1995, Dickstein further amended his Schedule 13D filed with the
SEC, in which Dickstein stated that he was withdrawing the Dickstein Proposal
and proposed that Marietta acquire up to
2
2,000,000 shares of Common Stock at a modest premium over market through a
self-tender. Dickstein has indicated that in such self-tender he would not
tender any shares of Common Stock owned by him, thereby increasing his
ownership of your Company through a transaction financed by your Company.
Dickstein also stated that he expects his expenses to be reimbursed by your
Company. The Board believes these expenses could be significant.
Although the Florescue Proposal expired in accordance with its terms, the
Company's representatives are continuing to negotiate with Florescue. The Board
has further determined that if by September 30, 1995, no agreement for the sale
of all of the Common Stock is entered into by the Company, either with
Florescue or any other bidder, the Board will suspend its efforts to seek a
buyer for the Company. Thereafter, the Board will continue to work to enhance
shareholder value by concentrating Marietta's resources on its operations and
on improving its core businesses and financial results. In addition, your Board
continues to evaluate other potential transactions, including a partial sale of
assets by the Company or a recapitalization transaction such as a special
dividend or a repurchase by the Company of a portion of its shares. Your Board
does not believe it is appropriate at this time to effect a transaction such as
the self-tender proposed by Dickstein for a material amount of the Company's
outstanding shares, which would require your Company to incur significant
indebtedness that might weaken your Company's financial condition.
The Board agreed to nominate Barry W. Florescue and Charles W. Miersch, two
nominees designated by Florescue, for election to the Board at the Meeting. The
Board believed that in light of Florescue's significant investment in the
Company it was appropriate to offer Florescue representation on your Board.
YOUR BOARD STRONGLY RECOMMENDS A VOTE "FOR" YOUR BOARD'S NOMINEES BECAUSE
YOUR BOARD BELIEVES THAT IT IS BEST ABLE TO TAKE THOSE ACTIONS WHICH ARE IN THE
BEST INTERESTS OF ALL MARIETTA SHAREHOLDERS. YOUR BOARD URGES YOU TO REJECT ANY
DICKSTEIN SOLICITATION AND NOT SIGN OR RETURN ANY BLUE PROXY CARD SENT TO YOU
BY DICKSTEIN. DO NOT PERMIT DICKSTEIN TO TAKE CONTROL OF YOUR COMPANY UNLESS HE
IS WILLING TO PAY FOR YOUR SHARES.
WHY IT IS IMPORTANT THAT YOU VOTE "FOR" YOUR BOARD'S NOMINEES
Your Company is currently experiencing operational difficulties in its core
businesses, particularly its contract packaging business. Your Board believes
these difficulties are short-term in nature and that actions which it has
already taken (including a price increase effective August 15, 1995 to offset
higher material costs and the making of capital expenditures to improve
productivity and efficiency at its soap manufacturing facility) will correct
many of these difficulties. However, your Board intends to complete the current
process of seeking a buyer for all outstanding shares of Common Stock. If by
September 30, 1995, no agreement for the sale of all of the Common Stock is
entered into by the Company, either with Florescue or any other bidder, the
Board will suspend its efforts to seek a buyer for the Company. Thereafter,
your Board will continue to work to enhance shareholder value by concentrating
Marietta's resources on its operations and on improving its core businesses and
financial results. In addition, your Board continues to evaluate other
potential transactions, including a partial sale of assets by the Company or a
recapitalization transaction such as a special dividend or a repurchase by the
Company of a portion of its shares. Your Board does not believe it is
appropriate at this time to effect a transaction such as the self-tender
proposed by Dickstein for a material amount of the Company's outstanding
shares, which would require your Company to incur significant indebtedness that
might weaken your Company's financial condition.
Your Board will not be bullied into carrying out a transaction that it
believes at this time is financially imprudent and not in the best long-term
interests of all of its shareholders.
In summary, your Board is committed to the following platform:
1. Your Board will continue to concentrate Marietta's resources on its
operations and on improving its core businesses.
2. Your Board will complete the current process of seeking a buyer for all
outstanding shares of Marietta. If by September 30, 1995, no agreement for the
sale of all of the Common Stock is entered into by the Company, either with
Florescue or any other bidder, the Board will suspend its efforts to seek a
buyer for
3
the Company. In addition, your Board continues to evaluate other potential
transactions, including a partial sale of assets by the Company or a
recapitalization transaction such as a special dividend or a repurchase by the
Company of a portion of its shares.
3. Your Board, currently with five independent directors among its seven
members, opposes ceding control of your Company to one shareholder group with
its own self-interested agenda.
YOUR BOARD STRONGLY RECOMMENDS THAT IT BE PERMITTED TO CONTINUE TO CONTROL
THE PROCESS NOW UNDERWAY. AT THIS TIME YOUR BOARD BELIEVES THAT A SELF-TENDER
IS NOT IN THE BEST INTERESTS OF THE COMPANY OR OF ITS SHAREHOLDERS OTHER THAN
DICKSTEIN. YOUR BOARD DOES NOT BELIEVE THAT AT THIS TIME A SELF-TENDER IS THE
FINANCIAL ALTERNATIVE THAT WOULD BEST ENHANCE THE VALUE FOR ALL OF MARIETTA'S
SHAREHOLDERS.
In determining whose nominees to vote for, we urge you to consider these
important facts:
. Your Board's Nominees have considerable experience and are committed to
take those actions that are in the best interests of all Marietta
shareholders.
. Dickstein wants to obtain control of your Company, in the Board's view,
at no additional cost to him.
. Dickstein intends to cause the Company to incur potentially significant
additional costs by reimbursing him for all of his expenses--which the
Company believes could be significant.
. The Board Dickstein wants to replace--your directors--currently includes
five independent directors among its seven members, all of whom have
considerable experience and are dedicated to working for the interests of
all shareholders.
. 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 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.
ASK YOURSELF IF YOU WANT DICKSTEIN AND THE DICKSTEIN NOMINEES TO TAKE CONTROL
OF YOUR COMPANY AND YOUR INVESTMENT IN IT.
VOTING
The persons named as proxies are Stephen D. Tannen and Frank Magrone, both of
whom are currently directors of the Company. Shares of Common Stock represented
at the Meeting by the enclosed WHITE Proxy will be voted in the manner
specified by the shareholder. In the absence of specification, the shares of
Common Stock will be voted FOR the election of each of the nine persons
nominated by the Board of Directors of the Company to serve as directors, and,
in the discretion of the proxies, on other business which may properly come
before the Meeting.
Only shareholders of record at the close of business on July 28, 1995 (the
"Record Date") will be entitled to notice of and to vote at the Meeting or any
postponement or adjournment thereof. On the Record Date, the issued and
outstanding securities of the Company entitled to vote at such Meeting
consisted of 3,596,049 shares of Common Stock. The presence in person or by
properly executed proxy of the holders of a majority
4
of the outstanding shares of Common Stock entitled to vote at the Meeting is
necessary to constitute a quorum. Directors are elected by a plurality of the
votes cast in person or by proxy at the Meeting. Each outstanding share is
entitled to one vote which may be cast in person or by proxy duly authorized in
writing.
The shareholders vote at the Meeting by casting ballots (in person or by
proxy) which are tabulated by a person who is appointed by the Board of
Directors before the Meeting to serve as the inspector of election at the
Meeting and who has executed and verified an oath of office. Abstentions and
broker non-votes are included in the determination of the number of shares of
Common Stock present at the Meeting for quorum purposes. Abstentions and broker
non-votes are not counted in the tabulations of the votes cast on proposals
presented to shareholders at the Meeting.
The stock transfer books will not be closed. Shareholders are urged to
complete, sign, date and mail the enclosed Proxy as promptly as possible to
ensure that their shares are represented and voted at the Meeting.
Whether or not you plan to attend the Meeting, you are urged to vote by
proxy. Duly executed and unrevoked proxies received by the Company prior to the
Meeting will be voted in accordance with shareholders' specifications marked
thereon. If no specifications are marked thereon, the WHITE PROXIES distributed
by the Marietta Board will be voted FOR THE ELECTION OF THE BOARD'S NOMINEES.
Any shareholder giving a proxy may revoke it at any time prior to voting at the
Meeting by delivering written notice to the Secretary of the Company, by
submitting a subsequently dated proxy or by voting in person at the Meeting.
A shareholder may, with respect to the election of Directors, (i) vote for
the election of all nominees proposed by the Board, (ii) withhold authority to
vote for all such nominees or (iii) withhold authority to vote for any of such
nominees by so indicating in the appropriate space on the proxy. The
affirmative vote of a plurality of the shares of Common Stock present in person
or by proxy at the Meeting and entitled to vote in the election of directors is
required to elect Directors. Thus, assuming a quorum is present, the nine
persons receiving the greatest number of votes will be elected to serve as
Directors. Non-voted shares of Common Stock (which includes shares of Common
Stock as to which brokers or other nominees are not provided with instructions,
otherwise known as "broker non-votes") with respect to the election of
directors will not affect the outcome of the election of directors.
ELECTION OF DIRECTORS
Nine directors of the Company are to be elected to serve until the next
Meeting of Shareholders or until the election and qualification of their
respective successors. With the exception of Messrs. Florescue and Miersch, all
the nominees named below currently serve as Directors of the Company. The
persons named in the accompanying Proxy intend to vote (unless authority to
vote for directors is withheld in such Proxy) all duly executed proxies
unrevoked at the time of the exercise thereof for the election to the Board of
all of the nominees named below, each of whom consented to be named herein and
to serve as a director if elected at the meeting. In the event that any nominee
should become unavailable prior to the annual meeting, the Proxy will be voted
for a substitute nominee designated by the Board of Directors if a substitute
nominee is designated. Listed below is certain information with respect to each
current nominee for election as a director. For information concerning the
number of shares of Common Stock beneficially owned by each nominee, see
"Security Ownership of Management".
Unless otherwise instructed, the proxy holders will vote the WHITE proxies
received by them FOR the election of the nominees of the Company named below.
Shareholders do not have the right to cumulate votes in the election of
directors. In the event that any nominee of the company is unable or declines
to serve as a director at the time of the Meeting, a contingency not presently
anticipated, the proxies will be voted for any nominee who shall be designated
by the present Board of Directors to fill the vacancy.
THE BOARD OF DIRECTORS STRONGLY RECOMMENDS A VOTE "FOR" THE BOARD'S NOMINEES
AS DIRECTORS OF THE COMPANY. IN ORDER THAT YOU CONTINUE TO HAVE DIRECTORS WHO
WILL WORK IN THE BEST INTERESTS OF ALL SHAREHOLDERS, WE URGE YOU NOT TO SIGN
ANY PROXY CARDS SENT TO YOU BY DICKSTEIN.
5
NOMINEES FOR DIRECTORS
BUSINESS EXPERIENCE
NAME AGE DURING THE PAST FIVE YEARS
---- --- --------------------------
Robert C. Buhrmaster 47 President, Chief Executive Officer, and Director of
Director (since 1993) Jostens, Inc., a publicly held manufacturer of
school and recognition products, since 1994;
President, Chief Operating Officer and Director of
Jostens, Inc. from 1993 to 1994; Executive Vice
President and Chief Staff Officer of Jostens, Inc.
from 1992 to 1993; Senior Vice President of
Corning, Inc., a manufacturer of specialty glass
and related inorganic materials, until 1992.
Ronald C. DeMeo 46 Secretary of the Company since 1991 and Senior Vice
Director (since 1988) President of Marketing and Sales of the Company
since 1988.
Barry W. Florescue 50 Independent businessman and private investor in a
variety of industries; Chairman of the Board, BMD
Management Company, a management, accounting, and
administrative services company since its inception
in 1987; Chairman of the Board of Century Financial
Group, Inc., a bank holding company (the owner of
Century Bank, FSB, a federal savings bank based in
Sarasota, Florida), since 1989; Chairman of the
Board and Director of International Poultry
Corporation, Inc., a publicly held operator and
franchisor of retail prepared foods specializing in
poultry, since August 1995; Chairman of the Board,
President and Chief Executive Officer of Hanover
Direct, Inc. (formerly known as The Horn & Hardart
Company) from 1977 to 1988. Mr. Florescue is a
Certified Public Accountant, received a bachelor's
degree in accounting from the University of
Rochester and an M.B.A. in finance from New York
University.
Dominic J. La Rosa 52 Director of J.B. Williams Co., Inc., a consumer
Director (since 1992) products company, from 1993 until July 1995;
President and Chief Executive Officer of J.B.
Williams Co., Inc. from 1993 to March 1995;
Management Consultant from 1992 to 1993; President,
Aromatic Industries Division of The Mennen Company,
a manufacturer of health and beauty aids, from 1989
to 1992; General Manager, Personal Care Division of
The Mennen Company, until 1989.
Frank Magrone 60 Executive Vice President and Director of Maidenform
Director (since 1980) Worldwide, Inc., a manufacturer of women's intimate
apparel, since April 1995; President, Chief
Operating Officer and Director of NCC Industries,
Inc., a publicly held manufacturer of women's
intimate apparel, until April 1995.
Charles W. Miersch 47 Chairman, Century Bank, FSB, a federal savings bank
based in Sarasota, Florida, since September 1991;
Director, Century Financial Group, Inc., a bank
holding Company, since September 1991; Associate
Dean, University of Rochester, since 1984.
Leonard J. Sichel 58 Retired; a Director of the Company from 1992 to
Director (since 1994) 1993; Vice Chairman and Chief Financial Officer of
The Mennen Company, a manufacturer of health and
beauty aids, from 1989 to 1992; Executive Vice
President and Chief Financial Officer of The Mennen
Company until 1989.
Stephen D. Tannen 48 President and Chief Executive Officer of the
Director (since 1992) Company since November 1994; Management Consultant
during 1994; President and Chief Operating Officer
of Riddell Sports Inc., a publicly held
manufacturer of athletic equipment, from 1992 to
1994; Management Consultant from 1990 to 1992;
President, Chief Executive Officer and Director of
TSS Ltd., a provider of in-store marketing services
to consumer products companies, from 1988 to 1990.
Thomas D. Walsh 47 Associate with Huver and Associates, Inc., a
Director (since 1980) structured settlement company, since 1993; Vice
President of Tucker Anthony Incorporated, a stock
brokerage firm, until 1993.
Mr. Florescue was an executive officer of eight affiliated entities that
operated a total of nine fast food franchise restaurants. On January 3, 1991,
such entities filed for protection under Chapter 11 of the United States
Bankruptcy Code. With respect to two of such entities, the bankruptcy
proceeding was dismissed and the restaurants closed. The franchisor repurchased
six restaurants from five of such entities pursuant to confirmed plans of
reorganization. One entity was reorganized and continues to operate a
franchise.
There are no family relationships between any director of the Company, any
person nominated to become a director, or any executive officer of the Company.
6
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors has an Audit Committee which consists of Messrs.
Sichel, Magrone and Walsh; a Compensation Committee which consists of Messrs.
La Rosa, Magrone and Walsh; a Stock Option Committee which consists of Messrs.
Walsh and Magrone; a Nominating Committee which consists of Messrs. DeMeo, La
Rosa, Magrone, Sichel and Buhrmaster; and an Executive Committee which consists
of Messrs. Buhrmaster, Magrone and Tannen. John S. Nadolski served on the
Compensation, Nominating and Executive Committees until his resignation from
the Board on February 14, 1994. See Note 6 to the Summary Compensation Table.
The functions of the Audit Committee include discussions with the
representatives of the firm of independent accountants retained by the Company
regarding the scope of the audit of the Company conducted by such firm and
meetings with management of the Company with respect to financial matters
pertaining to the Company. The Audit Committee makes periodic reports to the
Board of Directors of its actions and findings. The Compensation Committee
formulates and submits recommendations to the Board of Directors on all matters
related to the salaries, bonuses, fringe benefits or other compensation of the
executive officers of the Company. The Compensation Committee also formulates
and submits recommendations to the Stock Option Committee on matters relating
to the granting of stock options by the Company. The Stock Option Committee
administers the Company's Stock Option Plans. The Nominating Committee screens
and selects nominees for vacancies on the Board of Directors as they occur. The
Nominating Committee will consider nominee recommendations made by the
shareholders of the Company. The names of any such nominee should be sent to
the attention of the Company's Corporate Secretary, Marietta Corporation, 37
Huntington Street, Cortland, NY 13045. The Executive Committee has all the
powers and authority of the Board of Directors in the management of the
business and affairs of the Company except those powers which by law cannot be
delegated by the Board of Directors. During fiscal 1994, the Board of Directors
held ten meetings. All directors attended at least 75% of the total number of
such meetings of the Board and at least 75% of the total number of meetings of
each Board committee or committees on which such director served.
Directors who are not employees of the Company receive $500 per month plus
$300 for each meeting attended of the Board or any committee of the Board and
are reimbursed for all travel expenses to and from meetings. Directors who are
also full-time employees of the Company do not receive any compensation for
serving as directors of the Company.
7
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished with respect to shares of Common Stock
beneficially owned as of August 1, 1995 by each of the members of and nominees
for the Board of Directors of the Company, by the two persons serving as Chief
Executive Officer of the Company during the fiscal year 1994 and the Company's
other four most highly compensated executive officers at the end of fiscal year
1994 (such two persons serving as Chief Executive Officer of the Company and
such other four executive officers being hereinafter referred to as the "Named
Executive Officers"), and by all directors and executive officers of the
Company as a group.
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) OF CLASS(2)
------------------------ -------------------------- -----------
John S. Nadolski(3)(4)(5)............. 330,268 9.1%
Barry W. Florescue.................... 314,365 8.6
Frank Magrone(6)(7)................... 60,314 1.7
Ronald C. DeMeo(6)(8)................. 41,732 1.1
David P. Hempson(6)(9)................ 37,761 1.0
Chesterfield F. Seibert Sr.(3)........ 17,193 (12)
Thomas D. Walsh(3)(6)(8).............. 22,858 (12)
Timothy J. McCabe, Jr.(6)............. 1,712 (12)
Robert C. Buhrmaster(8)............... 7,077 (12)
Philip A. Shager(10).................. 5,358 (12)
Dominic J. La Rosa(8)................. 2,077 (12)
Stephen D. Tannen(8).................. 2,077 (12)
Charles W. Miersch.................... 1,000 (12)
Leonard J. Sichel..................... 0 0.0
All executive officers and directors
as a group (13 persons)(3)(4)(5)(6)
(7)(8)(9)(10)(11).................... 843,360 23.1
--------
(1) All persons listed have sole voting and investment power with respect to
their shares unless otherwise indicated.
(2) Based on the number of shares of Common Stock outstanding at, or acquirable
within 60 days of, August 1, 1995.
(3) See "Compensation Committee Interlocks and Insider Participation" for a
discussion of loans from the Company to certain of its executive officers
and directors.
(4) See Note 6 to the Summary Compensation Table.
(5) Includes 8,000 shares of Common Stock held by the two children of Mr.
Nadolski, as to which Mr. Nadolski disclaims beneficial ownership.
(6) Includes options to purchase 8,160 shares of Common Stock granted on
February 9, 1989 to each of Messrs. DeMeo, Hempson, Magrone and Walsh, all
of which are currently exercisable.
(7) Includes options to purchase 8,308 shares of Common Stock granted on
December 1, 1993, to Mr. Magrone, 4,154 of which are currently exercisable.
(8) Includes options to purchase 4,154 shares of Common Stock granted on
December 1, 1993, to Messrs. Buhrmaster, DeMeo, La Rosa, Tannen and Walsh,
2,077 of which are currently exercisable by each such person.
(9) Includes 400 shares of Common Stock held by the two children of Mr.
Hempson, as to which Mr. Hempson disclaims beneficial ownership, and
includes 300 shares of Common Stock held by Mr. Hempson jointly with his
spouse.
(10) Includes options to purchase 5,000 shares of Common Stock granted on May
10, 1993 to Mr. Shager, 3,333 of which are currently exercisable.
(11) Includes Mr. Nadolski, who does not presently serve as an executive
officer or director of the Company. See Note 6 to the Summary Compensation
Table.
(12) Less than 1.0%.
8
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to persons
known by the Company to own of record or beneficially more than 5% of the
Company's outstanding Common Stock as of August 8, 1995.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(/1/) OF CLASS(/2/)
------------------- ------------------------- -------------
Dickstein & Co., L.P.(/3/).......... 347,900 9.7%
c/o Dickstein Partners Inc.
9 West 57th Street
New York, New York 10019
Dickstein International 160,100 4.5
Limited(/3/).......................
129 Front Street
Hamilton HM 12, Bermuda
John S. Nadolski(/4/)............... 330,268 9.2
3855 Highland Road
Cortland, New York 13045
Elliot Associates(/5/).............. 277,525 7.7
712 Fifth Avenue
New York, New York 10019
Barry W. Florescue(/6/)............. 314,365 8.7
701 Southeast 6th Avenue
Delray Beach, Florida 33483
Mentor Partners, L.P.(/7/).......... 207,800 5.8
500 Park Avenue
New York, New York 10022
--------
(1) All persons listed above have sole voting and dispositive power with
respect to their shares unless otherwise indicated.
(2) Based on the number of shares of Common Stock outstanding at, or acquirable
within 60 days of, August 1, 1995.
(3) Information as to the holdings of Dickstein & Co., L.P. and Dickstein
International Limited is based upon a report on Schedule 13D, as amended,
filed with the SEC jointly by Mr. Dickstein, Dickstein Partners Inc.,
Dickstein & Co. L.P., Dickstein Partners L.P., Dickstein International
Limited, Calibre Capital Advisors, Inc. and Howard R. Shapiro.
(4) See Notes 3, 4 and 5 under "Security Ownership of Management". Information
as to the holdings of John S. Nadolski is based upon Amendment No. 5, dated
February 1, 1994, to a report on Schedule 13G, dated April 28, 1989, filed
with the SEC by Mr. Nadolski.
(5) Information as to the holdings of Elliot Associates, L.P. ("Elliot"), is
based upon a report on Amendment No. 2 to Schedule 13D filed on or about
July 21, 1995. Such report was filed with the SEC jointly by Elliot,
Westgate International, L.P. and Martley International, Inc.
(6) Information as to the holdings of Barry W. Florescue is based upon a report
on Schedule 13D, dated October 3, 1994, as amended, filed with the SEC
jointly by Mr. Florescue, 286 Bridge Street, Inc. ("286 Bridge Street") and
Florescue Family Corporation ("FFC"). Such report indicates that Mr.
Florescue has the sole power (i) to vote or direct the voting of, and (ii)
to dispose or to direct the disposition of, all 314,365 shares beneficially
owned by him, and that, of the 314,365 shares beneficially owned by Mr.
Florescue, 20,500 shares are owned directly by him and 129,900 and 161,965
shares, respectively, are owned by 286 Bridge Street and FFC. Such reports
further indicate that each of 286 Bridge Street and FFC has the sole power
(i) to vote or to direct the voting of, and (ii) to dispose or to direct
disposition of, the 129,900 and 161,965 shares, respectively, beneficially
owned by it. Such reports also state that Mr. Florescue, as the President
and the majority stockholder of each of 286 Bridge Street and FFC, has the
power to direct the voting and disposition of the investments of each of
286 Bridge Street and FFC, including the shares of Common Stock, and,
accordingly, may be deemed the beneficial owner of any shares of Common
Stock owned by 286 Bridge Street and FFC by virtue of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(7) Information as to the holdings of Mentor Partners L.P. ("Mentor"), is based
on a report on a Schedule 13D filed on or about August 8, 1995. Such report
was filed with the SEC on behalf of Mentor with respect to shares owned by
Mentor and Mentor Offshore Fund Limited. The general partner of Mentor is
WTG & Co., L.P. ("WTG") and the general partner of WTG is D. Tisch & Co.,
Inc., all of the Common Stock of which is owned by Daniel R. Tisch.
9
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company for each
of the Company's last three completed fiscal years to the Named Executive
Officers:
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION(2)
ANNUAL COMPENSATION -----------------------------
AWARDS PAYOUTS
-----------------------------------------------------------------------------------------------------------
OTHER SECURITIES ALL OTHER
ANNUAL RESTRICTED UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL FISCAL SALARY BONUS(1) COMPEN- STOCK OPTIONS/ PAYOUTS SATION(3)
POSITION YEAR ($) ($) SATION ($) AWARDS ($) SARS (#) ($) ($)
-----------------------------------------------------------------------------------------------------------
Chesterfield F. Seibert,
Sr., 1994 $189,923 $ 55,888 -- -- 8,308 -- 428
Chairman and Chief 1993 70,000 0 -- -- -- -- --
Executive Officer(4) 1992 72,583(5) 0 -- -- -- -- --
John S. Nadolski, 1994 83,075 553,000(7) -- -- -- -- 2,396
President and Chief 1993 229,320 80,000 -- -- -- -- 3,160
Executive Officer(6) 1992 225,000 73,878 -- -- -- -- 2,573
Ronald C. DeMeo,
Secretary and Senior
Vice 1994 104,998 159,225 -- -- 4,154 -- 3,087
President of Marketing 1993 101,813 155,035 -- -- -- -- 2,382
and Sales 1992 95,000 150,339 -- -- -- -- 2,835
David P. Hempson,
Executive Vice 1994 165,171 485,777 -- -- -- -- 1,683
President 1993 152,730 26,880 -- -- -- -- 1,982
of Operations 1992 149,312(8) 4,721 -- -- -- -- 1,617
Timothy J. McCabe, Jr., 1994 92,282 16,735 -- -- -- -- 1,387
Vice President of Guest 1993 89,514 23,622 -- -- -- -- 1,327
Amenity Sales(9) 1992 78,458 10,893 -- -- -- -- 1,058
Philip A. Shager, 1994 142,817 47,525 -- -- -- -- 486
Treasurer and Chief 1993 56,532 10,100 -- -- 5,000 -- 169
Accounting Officer 1992 -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) Amounts in this column for Mr. DeMeo for fiscal year 1994 include bonuses
paid under the Company's Profit Sharing Incentive Program described below
under the caption "Profit Sharing Incentive Program." In the case of each
of Messrs. Seibert, Hempson, McCabe and Shager for fiscal year 1994, the
bonus amounts listed were paid under the Company's Executive Incentive
Compensation and Management Stock Grants Program as described below under
the caption "Executive Incentive Compensation and Management Stock Grants",
with 60% of each such bonus being paid in cash and the remaining 40% of
each such bonus being provided to such parties by a grant of shares of
Common Stock. In the case of Messrs. Hempson and Shager for fiscal year
1994, the bonus amounts listed also included bonuses payable pursuant to
the terms of Mr. Hempson's previous employment agreement with the Company
and Mr. Shager's current employment agreement with the Company, as
described below under the caption "Employment Agreements with Executive
Officers."
(2) The Company did not provide restricted stock awards, stock appreciation
rights or long-term incentive payouts to the Named Executive Officers
during its last three completed fiscal years.
(3) Amounts in this column represent (i) the Company's matching contribution
under its 401(k) plan for Messrs. Nadolski, DeMeo, Hempson, and McCabe in
the amounts of $1,631, $2,730, $1,119, and $1,072, respectively, and (ii)
premium payments on Company-provided term life insurance for Messrs.
Seibert, Nadolski, DeMeo, Hempson, McCabe and Shager in the amounts of
$428, $765, $357, $564, $315 and $486, respectively.
(4) Mr. Seibert was named the Chairman, pro tem of the Company in April, 1992
and Chairman and Chief Executive Officer of the Company on February 14,
1994. Mr. Seibert resigned as Chief Executive Officer on November 16, 1994
and as Chairman and Director on January 30, 1995.
10
(5) This amount includes payments of $583 made to Mr. Seibert as a director of
the Company.
(6) On February 14, 1994, Mr. Nadolski resigned as a director and was granted a
leave of absence as an executive officer of the Company following a Grand
Jury indictment. On October 5, 1994, he was convicted of violations of the
federal securities laws relating to false statements contained in financial
reports of the Company for the first quarter of fiscal 1989 and for the
fiscal year ended September 30, 1989 and fraud in connection with the
purchase or sale of securities. Mr. Nadolski resigned from the Company in
February 1995.
(7) Pursuant to Mr. Nadolski's employment agreement, he was to have received
$553,000 as additional compensation upon the expiration of such agreement
on February 9, 1994. The Company and Mr. Nadolski agreed to defer without
prejudice the payment of such additional compensation pending the review of
certain matters by the Board of Directors, including the criminal
proceeding against Mr. Nadolski which resulted in his conviction on October
5, 1994. See Note 6 above.
(8) Inclusive of $27,882 which was repaid by Mr. Hempson during 1992 by way of
salary reductions because of excess payments previously provided to him in
fiscal years 1989, 1990 and 1991.
(9) Mr. McCabe resigned from the Company effective June 30, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information concerning the grants of stock
options to each of the Named Executive Officers during fiscal year 1994:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
----------------------------------------------------------------------------------------------------
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK
PRICE
APPRECIATION
FOR OPTION TERM
INDIVIDUAL GRANTS (3)
------------------------------------------------------ ----------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(1) (#) FISCAL YEAR(2) ($/SH) DATE 5% ($) 10% ($)
---- -------------- ---------------- ----------- ---------- ------- --------
Chesterfield F. Seibert
Sr (4)................. 8,308 49% $8.00 11/29/2003 $41,789 $105,927
John S. Nadolski........ -- -- -- -- -- --
Ronald C. DeMeo......... 4,154 24.5% $8.00 11/29/2003 $20,895 $ 52,964
David P. Hempson........ -- -- -- -- -- --
Timothy J. McCabe, Jr... -- -- -- -- -- --
Philip A. Shager........ -- -- -- -- -- --
--------
(1) All options granted in fiscal year 1994 to Messrs. Seibert and DeMeo vest
in two equal installments on November 30, 1994 and November 30, 1995, and
were not awarded with tandem stock appreciation rights. All such options
are non-qualified and were granted under the Marietta Corporation 1986
Stock Option Plan. Upon a change in control of the Company (as defined in
the applicable option agreements), such options shall be immediately
exercisable. Such options are subject to certain forfeiture provisions if
the optionee's employment with the Company is terminated and he resigns
from the Board or refuses to stand for reelection, and such options may be
subject to adjustment or termination in the event of certain changes in the
Common Stock.
(2) During fiscal year 1994, the Company granted to employees options to
purchase a total of 16,962 shares of Common Stock.
(3) These assumed rates of appreciation are provided in order to comply with
requirements of the SEC, and do not represent the Company's expectation as
to the actual rate of appreciation of the Common Stock. The actual value of
the options will depend on the performance of the Common Stock, and may be
greater or less than the amounts shown.
(4) Upon his resignation on January 30, 1995, Mr. Seibert forfeited such
options.
11
AGGREGATED OPTION/STOCK APPRECIATION RIGHT EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/STOCK APPRECIATION RIGHT VALUES
The following table provides information concerning the exercise of stock
options and stock appreciation rights ("SARs") during fiscal year 1994 by each
of the Named Executive Officers and the fiscal year-end value of unexercised
options and SARs held by each of such Named Executive Officers:
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS AT
FISCAL YEAR-END(1) (#) FISCAL YEAR-END(1)(2) ($)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- -------------
Chesterfield F. Seibert
Sr. (3)................ 0 $ 0 12,314 4,154 $4,154 $4,154
John S. Nadolski........ 0 0 0 0 0 0
Ronald C. DeMeo......... 0 0 10,237 2,077 2,077 2,077
David P. Hempson........ 0 0 8,160 0 0 0
Timothy J. McCabe, Jr.
(4).................... 0 0 8,160 0 0 0
Philip A. Shager........ 0 0 1,667 3,333 1,250 2,500
--------
(1) The amounts listed in these columns indicate the number and value of
unexercised options held by each of the Named Executive Officers as of
October 1, 1994. As of such date, none of such officers held any SARs.
(2) Options are "in-the-money" if, on October 1, 1994, the per share market
price of the Common Stock exceeded the per share exercise price of such
options. On October 1, 1994, the market price per share, as reported on the
NASDAQ National Marketing System, was $9.00 per share. The value of such
in-the-money options is calculated by determining the difference between
the aggregate market price of the Common Stock covered by the options on
October 1, 1994, and the aggregate exercise price of the options.
(3) Upon his resignation on January 30, 1995 Mr. Seibert forfeited all of such
options.
(4) Upon his resignation on June 30, 1995 Mr. McCabe forfeited all of such
options.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The executive compensation philosophy, plans and programs of the Company are
under the supervision of the Compensation Committee (the "Committee") which is
composed of the directors named below. John S. Nadolski served on the Committee
during fiscal 1994 but resigned from the Board of Directors on February 14,
1994. See Note 6 to the Summary Compensation Table. The Committee has furnished
the following report on executive compensation.
COMPENSATION PHILOSOPHY
The goals of the Committee are to align executive compensation with business
objectives and performance, and to enable the Company to attract, retain, and
reward executive officers whose contributions are vital to the long-term
success of the Company.
The Committee has structured the executive compensation program to embody
four principles, each of which is considered equally important:
1. The Company pays competitively.
2. The Company rewards sustained performance.
3. The Company pays to motivate executives to develop and implement
strategic and operational initiatives.
4. The Company seeks to align the financial interests of the executives
with the long-term interests of shareholders through programs that result
in common stock ownership by executives.
Based on these principles, the executive compensation program has been
designed to generate compensation from several sources--salaries, annual cash
incentive awards, and long-term incentives in the form of equity awards.
12
EXECUTIVE OFFICER COMPENSATION
The Company has a compensation program consisting of both cash and equity
based compensation. The Company determines the salary or salary ranges and
yearly bonuses for its executive officers by reviewing published surveys of
executive compensation by manufacturing companies with comparable sales. In
order to attract and retain highly-qualified executive officers, the Company
has entered into employment agreements for varying terms with most of such
executive officers. See the discussion below under the caption "Employment
Agreements with Executive Officers." Those employment agreements provide for a
fixed base salary and either discretionary bonuses or bonuses based on
quantitative performance measures. Actual compensation is based on factors such
as the executive's individual performance, the Company's performance relative
to competitors in the guest amenity and custom packaging industries, new
product introductions, and cost of living adjustments. The Company provides
long-term incentives for its executive officers to remain in the employ of the
Company through the occasional grant of stock options. The Committee makes
suggestions to the Stock Option Committee and the Board as to the terms on
which options and shares of Common Stock should be made available to executive
officers. These grants, which are based on factors such as competitive industry
practice, the recent performance of the Company (including increases in sales
and profitability) and the position, level and performance of the executive
officer, provide individuals with an incentive to maximize their efforts on
behalf of the Company and make significant contributions to the Company's
operations. The Committee does not consider previous grants to executive
officers among such factors. No single factor is considered more significant
than any other factor in the granting of options.
Effective for the 1993 fiscal year and subsequent fiscal years, the Company
adopted an Executive Incentive Compensation and Management Stock Grants Program
which is intended to reward the Company's participating executive officers and
other officers of the Company who have contributed to the expansion of the
Company's business and to its profitability. See the discussion below under the
caption "Executive Incentive Compensation and Management Stock Grants." This
Program provides such officers with both cash and equity based bonuses in an
aggregate amount equal to 5% of the Company's operating profit during the
applicable fiscal year. 60% of the bonus provided to each officer participating
in the Program is payable in cash and the remaining 40% of each such bonus is
paid pursuant to a grant of shares of Common Stock. Effective for the 1994
fiscal year, if the Company's operating profit for a particular fiscal year
does not exceed its operating profit for the preceding fiscal year, no bonuses
will be provided to such officers of the Company pursuant to the Executive
Incentive Compensation and Management Stock Grants Program. In fiscal 1994, the
Company's operating profit exceeded its operating profit in fiscal 1993 and,
accordingly, bonuses were paid to participants in the Executive Incentive
Compensation and Management Stock Grants Program. The Senior Vice President of
Marketing and Sales, pursuant to his employment agreement, receives commissions
based on the net sales of the custom packaging sales force in lieu of any bonus
under this Program.
Any member of the Committee who is also an executive officer of the Company
is prohibited from participating in any discussion of the Committee, or from
voting for or against any proposal or recommendation, which relates to any
employment agreement, compensation package or cash or equity based benefit
which could personally benefit such officer.
CHIEF EXECUTIVE OFFICER COMPENSATION
John S. Nadolski was Chief Executive Officer of the Company until he
requested, and was granted, a leave of absence on February 14, 1994. Until such
time, he received a base salary of $225,000 under the terms of his five-year
employment agreement with the Company that was entered into February 9, 1989.
See "Employment Agreements with Executive Officers" below. Effective upon Mr.
Nadolski's leave of absence, the Company appointed Chesterfield F. Seibert Sr.,
its Chairman, to assume duties formerly performed by Mr. Nadolski and elected
him to the additional office of Chief Executive Officer. Mr. Seibert served as
Chief Executive Officer of the Company while the Company conducted a search for
a permanent Chief Executive Officer. In November 1994, the Company elected
Steven D. Tannen, a director of the Company, to the offices of President and
Chief Executive Officer. During the period Mr. Seibert served as Chief
Executive Officer of the Company, Mr. Seibert was paid at the annual rate of
$200,000 per year and participated in the Executive Incentive Compensation and
Management Stock Grants Program. The Compensation Committee believed
13
that such amount represented the appropriate mid-point of base compensation
paid to chief executive officers of manufacturing companies with comparable
sales based on published surveys. For fiscal 1994 Mr. Seibert received a bonus
pursuant to the Executive Incentive Compensation and Management Stock Grants
Program. He received the 40% share to which the President is entitled under
such Program, prorated for the portion of the fiscal year in which he served as
Chief Executive Officer. Mr. Seibert received an option to acquire 8,308 shares
of Common Stock on December 1, 1993 prior to his service as Chief Executive
Officer. Such option was granted to Mr. Seibert in recognition of his service
on the Board and was deemed by the Board to be fair and reasonable under the
circumstances and was intended to increase his equity participation in the
Company. The amount of such grant was also based on the number of shares
remaining available for grant under the Company's 1986 Stock Option Plan.
EFFECT OF SECTION 162(M) OF THE INTERNAL REVENUE CODE
The Compensation Committee has reviewed the impact of Section 162(m) of the
Internal Revenue Code on the Company. This provision limits the amount of
compensation that the Company may deduct from its taxable income for any year
to $1 million dollars for any of its five most highly compensated executive
officers. None of the Company's executive officers received compensation in
excess of $1 million dollars in 1994.
The Compensation Committee did not evaluate Mr. Seibert's performance as
Chief Executive Officer of the Company while the search for a permanent Chief
Executive Officer was being conducted.
Compensation Committee
Thomas D. Walsh, Chairman
Dominic J. La Rosa
Frank Magrone
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Dominic J. La Rosa, Frank Magrone
and Thomas D. Walsh, none of whom has ever served as an officer or employee of
the Company. Chesterfield F. Seibert Sr., Chief Executive Officer of the
Corporation from February 14, 1994 until November 11, 1994 and Chairman of the
Company from April 1992 until January 30, 1995, served on the Compensation
Committee until his resignation on January 30, 1995. During a portion of fiscal
year 1994, John S. Nadolski, the then-President and Chief Executive Officer of
the Company and a director of the Company, also served as a member of the
Compensation Committee. No executive officer of the Company served during
fiscal year 1994 (i) as a member of the compensation committee or other board
committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors of another entity, one of whose
executive officers served on the Compensation Committee of the Company; (ii) as
a director of another entity, one of whose executive officers served on the
Compensation Committee of the Company; or (iii) as a member of the compensation
committee or other board committee performing equivalent functions or, in the
absence of any such committee, the entire board of directors of another entity,
one of whose executive officers served as a director of the Company.
On February 9, 1989, John S. Nadolski purchased 30,000 shares of Common
Stock, previously held by the Company in its treasury, pursuant to a stock
purchase agreement with the Company. The purchase price of $367,500 was paid by
Mr. Nadolski by the payment of $3,000 in cash and the delivery of a promissory
note in the principal amount of $364,500. That promissory note bore interest,
payable semi-annually, at the rate of 9% per annum and was due and payable in
one installment on February 9, 1994. The Company and Mr. Nadolski extended the
maturity date of Mr. Nadolski's promissory note until February 9, 1996. The
Company and Mr. Nadolski further agreed that during such period, interest shall
accrue on the promissory note at a variable rate per annum equal to 1.35% above
the three-month London Interbank Offered Rate ("LIBOR") in effect on the first
business day of each calendar quarter, and such interest shall be payable in
full on February 9, 1996. In the event that the Company pays to Mr. Nadolski
the additional compensation which has been deferred by the Company as discussed
below under the caption "Employment Agreements
14
with Executive Officers," Mr. Nadolski's promissory note shall become
immediately due and payable. See Note 6 to the Summary Compensation Table.
In June 1994, the Company advanced to Mr. Nadolski the sum of $253,870 to
enable him to pay certain legal expenses incurred by him in connection with his
defense of certain civil actions, regulatory reviews and the criminal
proceeding which resulted in Mr. Nadolski's conviction on October 5, 1994 of
violations of the federal securities laws relating to false statements
contained in financial reports of the Company for the first quarter of fiscal
1989 and for the fiscal year ended September 30, 1989 and fraud in connection
with the purchase and sale of securities. See Note 6 to the Summary
Compensation Table. On April 4, 1995, Mr. Nadolski repaid such $253,870
advanced to him.
On February 9, 1989, Chesterfield F. Seibert Sr. and Thomas D. Walsh each
purchased 10,000 shares of Common Stock, previously held by the Company in its
treasury, pursuant to stock purchase agreements between the Company and each of
them. The purchase price of $122,500 was paid by each of Messrs. Seibert and
Walsh by the payment of $1,000 in cash and the delivery of a promissory note in
the principal amount of $121,500. Each of their promissory notes bore interest,
payable semi-annually, at the rate of 9% per annum and was due and payable in
one installment on February 9, 1994. The Company has agreed with each of
Messrs. Seibert and Walsh to extend the maturity date of such promissory notes
until February 9, 1996, except that in the event that Mr. Seibert or Mr. Walsh
resigns his position on the Board of Directors of the Company or refuses to
stand for re-election, his promissory note becomes due and payable 30 days
after such resignation or refusal to stand for re-election and, in the event of
his death or disability, his promissory note becomes due and payable six months
after such event. The Company has further agreed with each of Messrs. Seibert
and Walsh that until maturity, interest shall accrue on the promissory notes at
a variable rate per annum equal to 1.35% above the three-month LIBOR in effect
on the first business day of each calendar quarter, and such interest shall be
payable semiannually. Following Mr. Seibert's resignation on January 30, 1995,
the Company agreed to extend the maturity date of his promissory note beyond
the 30 day due date, until August 9, 1995.
15
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock for the last five fiscal years with the cumulative total
return of companies on the NASDAQ Stock Market (U.S.) and the cumulative total
return of Guest Supply, Inc., a company determined to be a peer issuer of the
Company:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
(GRAPH)
* CUMULATIVE TOTAL RETURN ASSUMES AN INITIAL INVESTMENT OF $100.00.
FISCAL YEARS
------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
------------------------------------------------------------------------------------------------
Marietta Corporation.............. $100.00 $47.06 $ 23.53 $ 32.94 $ 35.29 $ 42.35
------------------------------------------------------------------------------------------------
NASDAQ Stock Market (U.S)(1)...... $100.00 $74.44 $117.05 $131.13 $171.75 $172.20
------------------------------------------------------------------------------------------------
Guest Supply, Inc.(2)............. $100.00 $38.16 $ 85.53 $ 57.89 $106.58 $199.34
(1) Total return calculations for the NASDAQ Stock Market (U.S.) were obtained
from the NASDAQ Stock Market.
(2) The determination to regard Guest Supply, Inc. as a peer issuer of the
Company was approved by the Company's Board of Directors.
16
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Effective upon Chesterfield F. Seibert Sr.'s appointment on February 14, 1994
as Chairman of the Board and Chief Executive Officer of the Company, the
Company agreed to pay him an annual base salary of $200,000 during the period
that he served as the Company's Chief Executive Officer. Prior to such
appointment, the Company paid $1,500 to Mr. Seibert for each day that he
performed duties on behalf of the Company in his then-capacity as the Company's
Chairman, pro tem. Mr. Seibert received cash and equity compensation in the
aggregate amount of $55,888 pursuant to the Executive Incentive Compensation
and Management Stock Grants Program in respect of fiscal year 1994. Mr. Seibert
resigned as Chief Executive Officer on November 11, 1994 and as Chairman on
January 30, 1995.
John S. Nadolski had been employed as a senior executive by the Company under
an employment agreement for a period of five years commencing February 9, 1989.
Pursuant to his employment agreement, Mr. Nadolski was to have received
$553,000 as additional compensation upon the expiration of such agreement on
February 9, 1994. The Company and Mr. Nadolski agreed to defer without
prejudice the payment of such $553,000 additional compensation pending the
review of certain matters by the Board of Directors, including the criminal
proceeding against Mr. Nadolski which resulted in his conviction on October 5,
1994. See Note 6 to the Summary Compensation Table. In the event that such
additional compensation is paid to Mr. Nadolski, the Company has agreed to pay
interest thereon at a variable rate per annum equal to 1.35% above the three-
month LIBOR in effect on the first business day of each calendar quarter, from
February 10, 1994 through the date of payment. In February 1995 the Company
accepted Mr. Nadolski's resignation as an executive officer from which position
he had taken an unpaid leave of absence.
Ronald C. DeMeo is employed as a senior executive by the Company under an
employment agreement which expires on September 30, 1996. The agreement
provides for automatic renewals for one-year periods commencing October 1, 1996
unless prior notice of termination is given in accordance with such agreement.
Pursuant to the employment agreement, Mr. DeMeo receives an annual base salary
of $115,000. Mr. DeMeo also receives commissions based on the net sales of the
custom packaging sales force. If, immediately after a Change in Control (as
defined below) of the Company, (x) Mr. DeMeo's employment is terminated other
than by reason of his death, disability or for cause, or (y) Mr. DeMeo is not
offered a position which is substantially equivalent to his position prior to
such Change in Control and which is at a location within 25 miles of the
location he performed such duties prior to such Change in Control, and he
elects to terminate his employment agreement, Mr. DeMeo is entitled to receive
a severance benefit equal to two months base salary multiplied by his years of
employment with the Company (currently 13 years). Upon a termination of Mr.
DeMeo's employment by reason of Mr. DeMeo's death, disability or expiration of
the term of his employment agreement, he is entitled to receive a severance
benefit equal to two months' base salary multiplied by his years of employment
with the Company (currently 13 years).
Philip A. Shager is employed as a senior executive by the Company under an
employment agreement commencing May 10, 1993 and expiring October 10, 1997.
Pursuant to his employment agreement, Mr. Shager will receive an annual base
salary of $147,000 plus annual cost of living increases. Mr. Shager will
receive guaranteed bonuses of $20,911.66 during each of 1994, 1995 and 1996
(provided that each such bonus shall be paid immediately upon (i) the
termination of Mr. Shager's employment by reason of his death or disability, or
(ii) the payment of a severance benefit as described below), and is also
entitled to receive additional bonus compensation as the Board of Directors
shall deem advisable. Mr. Shager received cash and equity compensation in the
aggregate amounts of $26,613 and $10,100 pursuant to the Executive Incentive
Compensation and Management Stock Grants Program in respect of fiscal years
1994 and 1993, respectively. Upon a termination of Mr. Shager's employment
without cause or by reason of his not being offered a substantially equivalent
position after a Change in Control of the Company, he is entitled to receive a
severance benefit equal to the greater of (i) his base salary then in effect
multiplied by two, and (ii) his base salary then in effect through the
expiration of his employment agreement. If, immediately after a Change in
17
Control of the Company, (x) Mr. Shager's employment is terminated other than
for cause, or (y) Mr. Shager is not offered a position which is substantially
equivalent to his position prior to such Change in Control and which is at a
location within 25 miles of the location he performed such duties prior to such
Change in Control, and he elects to terminate his employment agreement, Mr.
Shager is entitled to receive a severance benefit equal to the greater of (i)
his base salary then in effect multiplied by two, and (ii) the balance of his
base salary then in effect through the expiration of his employment agreement.
Upon a termination of Mr. Shager's employment by reason of his disability, he
is entitled to receive a severance benefit equal to his base salary then in
effect.
David P. Hempson is employed as a senior executive by the Company under an
employment agreement which commenced February 9, 1994 and expires December 31,
1998. Pursuant to his employment agreement, Mr. Hempson receives an annual base
salary of $170,000 plus annual cost of living increases. Mr. Hempson is also
entitled to receive bonus compensation as the Board of Directors shall deem
advisable. Mr. Hempson received cash and equity compensation in the aggregate
amounts of $30,777 and $26,880 pursuant to the Executive Incentive Compensation
and Management Stock Grants Program in respect of fiscal years 1994 and 1993,
respectively. On February 9, 1994, Mr. Hempson received $455,000 as additional
compensation upon the expiration of his previous employment agreement. Mr.
Hempson was entitled to receive such additional compensation upon completion of
the five-year term of such previous agreement.
Timothy J. McCabe, Jr. was employed, until his resignation from the Company
effective June 30, 1995, as a senior executive of the Company under an
employment agreement for a period of three years commencing October 1, 1992.
Mr. McCabe's employment agreement provided for an annual base salary of $95,160
plus annual cost of living increases. Mr. McCabe was also entitled to receive
bonus compensation if certain annual sales and gross profit margin goals were
attained by the Company. Effective for fiscal year 1993, Mr. McCabe agreed to
forego the annual bonus compensation to which he was entitled under his
employment agreement in consideration of the bonuses provided to him pursuant
to the Executive Incentive Compensation and Management Stock Grants Program.
Mr. McCabe received cash and equity compensation in the aggregate amounts of
$16,735 and $23,622 pursuant to the Executive Incentive Compensation and
Management Stock Grants Program in respect of fiscal years 1994 and 1993,
respectively.
Stephen D. Tannen is employed as a senior executive by the Company under an
employment agreement for a three-year term which commenced November 16, 1994.
The agreement provides for an annual base salary of $250,000, plus annual cost-
of-living increases. It also provides that Mr. Tannen will be entitled to
receive incentive compensation for the 1995 fiscal year in the full amount of
the greater of (x) $75,000 and (y) the amount calculated as follows: if the
Company's Net Income (as defined below) in the 1995 fiscal year equals or
exceeds $5,135,000: an amount equal to 35% of Mr. Tannen's annual base salary
then in effect, plus, for each additional $395,000 of Net Income for such
fiscal year, an amount equal to 10% percent of his annual base salary then in
effect; provided, however, that in no event shall Mr. Tannen's incentive
compensation pursuant to this provision exceed $250,000. "Net Income" means the
net income of the Company as shown in its annual audited financial statements,
before accrual for income taxes and for such incentive compensation payable to
Mr. Tannen or to other senior executives of the Company who are compensated on
a similar basis. For the fiscal years 1996 and 1997, Mr. Tannen is entitled to
receive incentive compensation in amounts based on formulas and goals set forth
in a business plan which shall be approved by the Board of Directors of the
Company prior to the commencement of each such fiscal year. Mr. Tannen may also
receive additional compensation, whether in base salary, by bonus or otherwise,
as the Board of Directors shall deem advisable. If, immediately after a Change
in Control of the Company, (x) Mr. Tannen's employment is terminated other than
for cause, or (y) Mr. Tannen is not offered a position which is substantially
equivalent to his position prior to such Change in Control and which is at a
location within 25 miles of the location he performed such duties prior to such
Change in Control, and he elects to terminate his employment agreement, Mr.
Tannen is entitled to receive a severance benefit equal to the greater of (i)
his
18
base salary then in effect, and (ii) the balance of his base salary then in
effect through the expiration of his employment agreement. Upon a termination
of Mr. Tannen's employment by reason of his disability, he is entitled to
receive a severance benefit equal to his base salary then in effect.
A "Change in Control" is deemed to have occurred if: (a) following either (i)
the acquisition of 30% of the voting securities of the Company by any person or
persons (together with all affiliates of such person or persons), whether by
tender or exchange offer or otherwise, (ii) a proxy contest for the election of
directors of the Company, or (iii) a merger, consolidation or other disposition
of all or substantially all of the business or assets of the Company, the
persons constituting the Board of Directors of the Company immediately prior to
the initiation of such event cease to constitute a majority of the Board of
Directors of the Company upon the occurrence of such event or within eighteen
months after such event, and such change in the persons constituting the Board
of Directors of the Company shall not have been approved by the persons
constituting the Board of Directors immediately prior to the initiation of such
event; or (b) a sale, transfer or other disposition of all or substantially all
of the business or assets of the Company to a person or entity not controlled
by or under common control with the Company shall have been consummated.
The total cost of satisfying the Company's Change in Control obligations
under all outstanding options and cash only stock appreciation rights (based
upon an assumed market price of the Common Stock of $8.00), is $95,625. A
Change in Control will not entitle any executive officer of the Company to
receive any payment from the Company. However, the employment agreements of
certain executive officers provide that under specified circumstances (such as
the Company's failure to offer such executive officer a position substantially
equivalent to his position prior to the Change in Control), such executive
officers will be entitled to a payment from the Company. The aggregate cost of
satisfying all such obligations would be $1,587,943.
All employment agreements require the Company to furnish health, life and
disability insurance and, in the event the employee becomes disabled, to
provide for salary continuation to supplement disability payments provided by
insurance.
STOCK OPTION PLANS
In March 1986, the Company adopted The 1986 Incentive Stock Option Plan
pursuant to which options to purchase up to 100,000 shares may be granted to
key management employees (including officers) of the Company during the period
ending March 31, 1996. As of October 1, 1994, no options had been granted under
this Plan. Options granted under The 1986 Incentive Stock Option Plan are
intended to be "incentive stock options" within the meaning of Section 422A of
the Internal Revenue Code (the "Code"). The 1986 Incentive Stock Option Plan
provides that it is to be administered by certain members of the Board of
Directors or other "disinterested persons" (as defined under the Exchange Act)
who determine the persons who are to receive options, the number of shares to
be subject to each option, the duration of each option, and the option price of
each option. Each option granted under The 1986 Incentive Stock Option Plan may
be exercisable in whole or in installments from the date of grant or after a
waiting period, as determined by the administrators of the Plan. Options may
not be transferred other than by will or the laws of descent and distribution,
and during the lifetime of an optionee may be exercised only by the optionee.
The exercise price of the option may not be less than 100% of the fair market
value of the Company's Common Stock on the date of grant (110% in the case of
options granted to holders of 10% or more of the voting power of the Company's
Common Stock). No optionee may be granted incentive stock options in any
calendar year to purchase shares having a fair market value (determined as of
the date of grant) which exceeds $100,000 plus any "unused limit carryover" as
defined by Section 422A of the Code."
In March 1986, the Company also adopted The 1986 Stock Option Plan, a non-
statutory plan. Pursuant to this Plan, options to purchase up to 100,000 shares
of Common Stock may be granted to key employees and independent contractors
(including officers and directors) of the Company or its subsidiaries during
the
19
period ending March 31, 1996. This Plan is administered by the Board of
Directors which determines the persons who are to receive options, the number
of shares to be subject to each option, the duration of each option, and the
option price of each option. The exercise price of the option may not be less
than 100% of the fair market value of the Company's Common Stock on the date of
grant (110% in the case of options granted to holders of 10% or more of the
voting power of the Company's Common Stock). As of August 1, 1995, there were
outstanding under the Plan options to purchase an aggregate of 76,218 shares of
Common Stock. Such options were granted to certain executive officers and
directors of the Company.
In March 1986, the Company also adopted The 1986 Employee Stock Purchase Plan
(the "Purchase Plan"). Under the Purchase Plan, an aggregate of 100,000 shares
of the Common Stock has been reserved for purchase by eligible employees of the
Company. From time to time, but not more frequently than once during any 12-
month period, the Board of Directors will fix a date on which the Company will
make an offer to eligible employees of options to purchase shares. The Purchase
Plan allows all full-time employees to authorize payroll deductions to be
applied toward purchases of shares of Common Stock. The purchase price of the
Common Stock under the Purchase Plan is 85% of the fair market value of the
Company's Common Stock on the date the option is granted. As of August 1, 1995,
22,621 shares have been purchased under this plan. The Purchase Plan is
intended to qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Code.
In connection with Mr. Tannen's employment by the Company, on December 6,
1994, the Stock Option Committee of the Board granted him options (the
"Options"), subject to shareholder approval, to purchase 90,000 shares of
Common Stock. Subsequently, Mr. Tannen and the Company agreed that in the event
that the grant of the Options were not approved by the shareholders he would
receive cash-only stock appreciation rights (the "Rights") for 90,000 shares of
Common Stock, having a term of 10 years, and based on an increase in the market
value of the Common Stock above $7.00 per share. The maximum amount payable to
Mr. Tannen pursuant to the Rights is $630,000. The Rights would vest through
November 1997. All of the Rights would become exercisable immediately upon the
occurrence of certain events, including the termination by the Company of Mr.
Tannen's employment without cause or by reason of his death or disability, or
upon a Change in Control of the Company. During June 1995, Mr. Tannen and the
Company determined to terminate the Options. Accordingly, the Company and Mr.
Tannen agreed that the Rights would be deemed granted.
PROFIT SHARING INCENTIVE PROGRAM
In October 1985, the Company adopted a Profit Sharing Incentive Program.
Under the terms of this Program, when the Company's net income for any quarter
exceeds 6% of the Company's net sales, the Company will pay to each eligible
employee, during the next succeeding quarter an amount equal to the product of
one-half of the employee's quarterly salary and the net profit percentage as
defined. For the purposes of this Program, net profit percentage is defined to
be equal to net income as defined divided by net sales. Net income is defined
to be equal to the Company's net income as shown on its financial statements
before accrual for either income taxes or for additional salary payable to
employees who are compensated on a performance basis. The Company retains the
right to terminate the Program at any time in its sole discretion. For the
fiscal year ended October 1, 1994, the Company's employees received
approximately $196,000 from the Profit Sharing Incentive Program.
EXECUTIVE INCENTIVE COMPENSATION AND MANAGEMENT STOCK GRANTS
In November 1993, the Board of Directors approved an Executive Incentive
Compensation and Management Stock Grants Program which was recommended to it by
the Company's Compensation Committee. Under this Program the executive officers
of the Company and certain other officers of the
20
Company are entitled to cash and equity-based bonuses in an aggregate amount
equal to 5% of the Company's operating profit during the applicable fiscal
year. The President of the Company is entitled to 40% of the yearly bonus
payments distributed pursuant to this Program and the other eligible officers
of the Company are entitled to share the remaining 60% of such bonus payments
on a pro rata basis based on their respective salaries. Any bonus not paid to
an officer otherwise eligible to participate in this program is not paid to the
other participating officers by the Company. Pursuant to the employment
agreement between the Company and Stephen D. Tannen, the Company's President
and Chief Executive Officer, for fiscal year 1995 Mr. Tannen will receive a
bonus pursuant to a formula set forth in his employment agreement in lieu of
any bonus pursuant to this program. In addition, the Senior Vice President of
Marketing and Sales, pursuant to the terms of his employment agreement with the
Company, receives commissions based on the net sales of the custom packaging
sales force in lieu of any bonus pursuant to this program. Sixty percent of the
bonus provided to each eligible officer under the program is payable in cash.
The remaining 40% of each such bonus is paid by a grant of shares of Common
Stock based on the market value of such shares on the date of such grant.
Effective for the 1994 fiscal year, if in any fiscal year the Company's
operating profit does not exceed its operating profit for the immediately
preceding fiscal year, no bonuses will be paid to officers of the Company
pursuant to this program in respect of such fiscal year. For the fiscal year
ended October 1, 1994, the Company's executive officers and certain other
officers were paid bonuses totalling $152,670 pursuant to this Program.
RELATED PARTY TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation."
INDEPENDENT ACCOUNTANTS
The Company has engaged the accounting firm of Deloitte & Touche to serve as
its independent accountants to audit the financial statements of the Company
and its subsidiaries for the fiscal year ending September 30, 1995. This
decision was approved by the Audit Committee of the Company's Board of
Directors. Deloitte & Touche also served as the independent accountants for the
Company and its subsidiaries during their 1994, 1993 and 1992 fiscal years.
Representatives from Deloitte & Touche are expected to be present at the
shareholders' meeting. They will have an opportunity to make a statement at the
meeting if they so desire, and are expected to be available to respond to
appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished
to the Company by each person who, at any time during the fiscal year ended
October 1, 1994, was a director, executive officer or beneficial owner of more
than 10% of the Company's Common Stock with respect to the fiscal year ended
October 1, 1994, and Forms 5 and amendments thereto furnished to the Company by
such persons with respect to such fiscal year, and written representations from
certain of such persons that no Forms 5 were required for such persons, the
Company believes that during and with respect to the fiscal year ended October
1, 1994, all filing requirements under Section 16(a) of the Exchange Act,
applicable to its directors, executive officers and the beneficial owners of
more than 10% of the Company's Common Stock were complied with.
SOLICITATION OF PROXIES
The cost of soliciting proxies for the Meeting is being borne by Marietta.
Marietta has retained D.F. King & Co., Inc. ("D.F. King") for solicitation and
advisory services in connection with the solicitation, for which D.F. King is
to receive a fee estimated at $50,000, together with reimbursement for its
reasonable out-of-pocket expenses. Marietta has also agreed to indemnify D.F.
King against certain liabilities and expenses, including liabilities under the
federal securities laws. It is anticipated that D.F. King will utilize
approximately 50 persons to solicit shareholders for the Meeting.
21
Costs incidental to these solicitations of proxies include expenditures for
printing, postage, legal, accounting, public relations, soliciting, advertising
and related expenses and are expected to be approximately $30,000 in addition
to the fees of D.F. King (excluding the amount normally expended by Marietta
for the solicitation of proxies at its annual meeting). Total costs incurred to
date in furtherance of or in connection with these solicitations of proxies are
approximately $15,000.
Proxies may be solicited by mail, advertisement, telephone or other
electronic methods and in person. Solicitations may be made by directors,
officers, investor relations personnel and other employees of Marietta, none of
whom will receive additional compensation for such solicitations. Marietta will
request banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all of its solicitation materials to the beneficial owners of the
shares of Common Stock they hold of record. Marietta will reimburse these
record holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
Certain information about the directors, nominees and executive officers of
Marietta and certain employees and other representatives of Marietta who may
also solicit proxies is set forth in the attached Schedule I. Schedule II sets
forth certain information relating to shares of Common Stock owned by such
parties and certain transactions between any of them and Marietta.
FINANCIAL ADVISOR
Pursuant to a letter agreement, dated January 25, 1995, the Company retained
Goldman Sachs as the Company's financial advisors in reviewing financial
alternatives available to the Company. Pursuant to this agreement, the Company
agreed to pay: (a) A fee of $250,000 which shall be creditable against any
transaction fee payable under subparagraph (c) below and, except under certain
circumstances, any transaction fee payable under subparagraph (d) below; (b) if
at least 30% of the outstanding stock of the Company is acquired by any person
or group, including the Company, in one or a series of transactions by means of
a tender offer or merger, private or open market purchases of stock or
otherwise, or if all or substantially all of the assets of the Company are
transferred, in one or a series of transactions, by way of a sale, distribution
or liquidation, the Company shall pay, or cause to be paid, to Goldman Sachs an
additional fee equal to 3.75% of the aggregate value of all such transactions;
(c) if the Company or any other entity formed or owned in substantial part or
controlled by the Company or one or more members of senior management of the
Company or any employee benefit plan of the Company or any of its subsidiaries
(a "Related Entity") effects a transaction or series of transactions not
covered by subparagraph (b) above and (i) at least 30% of the aggregate market
value of the Company as of January 25, 1995 is transferred to the stockholders
of the Company through (A) a merger with, purchase of assets by, or other
combination with a Related Entity, (B) a reclassification of stock, (C) a
purchase of stock, (D) a distribution of cash, securities or other assets
(including, without limitation, a distribution of all or a portion of stock in
one or more of its subsidiaries), (E) a plan of partial liquidation or (F) any
similar transactions or combinations of the foregoing and (ii) the public
stockholders of the Company retain an equity interest in the Company or, if the
Company does not survive in the transactions described above, in the surviving
entity (a "Recapitalization"), the Company shall pay, or cause to be paid, to
Goldman Sachs an additional fee equal to 3.75% of the aggregate value of the
Recapitalization, defined as the per share value in cash, securities, and other
assets received by the stockholders (including shares of stock continued to be
held by the Company's stockholders) times the number of shares of stock
included therein; (d) in the event that the Company acquires all or a
substantial portion of the securities or assets of another company or sells,
distributes or liquidates all or a substantial portion of the assets of the
Company, including any pension-related assets, or sells or distributes
securities of the Company, whether such distribution is made by dividend or
otherwise, and no fee has become payable or been paid to Goldman Sachs with
respect to any transaction pursuant to subparagraphs (b) and (c) above, the
Company shall pay, or cause to be paid, to Goldman Sachs a fee of 3.75% of the
aggregate value of the transaction, if the aggregate value of such transaction
is $50 million or less, 3.00% if the aggregate value of such transaction is
$100 million and 2.00% if the aggregate value of such transaction is $200
million (prorated
22
for transaction amounts within these ranges); and (e) in the event no
transaction of the type described in subparagraphs (b) or (c) in consummated by
January 25, 1996, the Company shall pay, or cause to be paid, to Goldman Sachs
in cash an additional financial advisory fee of $1,250,000. If in excess of 50%
of the Common Stock is acquired by any person or group, including the Company,
in a transaction under subparagraph (b) above, such aggregate value shall be
determined as if such acquisition were of 100% of the Common Stock (including
all contingently issuable shares).
The Agreement with Goldman Sachs may be terminated at any time by either
party thereto, with or without cause, effective upon receipt of written notice
by the non-terminating party. Goldman Sachs shall be entitled to the fees set
forth above if, at any time prior to the expiration of one year after such
termination, a transaction of the type contemplated by clause (b), (c) or (d)
above is consummated and, in the case of a transaction contemplated by clause
(b) or (d), there was contact with the acquiring party, or any affiliate
thereof, regarding such a transaction during the period of Goldman Sachs'
engagement; provided, however, in the event Goldman Sachs terminates the
Agreement without cause, no fee shall be payable to Goldman Sachs.
The Company has also agreed to reimburse Goldman Sachs for their reasonable
out-of-pocket expenses, including the fees and disbursements of legal counsel
plus any sales, use or similar taxes (including additions to such taxes, if
any) arising in connection with their engagement by the Company. In addition,
the Company has agreed to indemnify Goldman Sachs against certain liabilities,
including liabilities under the federal securities laws.
Goldman Sachs will also act as exclusive financial advisor in connection with
any proxy solicitation by Dickstein, for which Goldman Sachs will not receive
additional compensation.
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders to be held during 1996 must be received by the Company
before November 1, 1995 in order to be considered for inclusion in the
Company's proxy and proxy statement relating to said meeting.
OTHER MATTERS
The management of the Company knows of no business other than that referred
to in the foregoing Notice of Annual Meeting of Shareholders and Proxy
Statement which may come before the meeting. Should any other matters come
before the meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in accordance with their judgment on such
matters. The Company's Annual Report to Shareholders, which includes the
Company's audited financial statements for the fiscal year ended October 1,
1994, is being mailed concurrently herewith to all of the Company's
shareholders of record.
A copy of the Company's annual report on Form 10-K for the fiscal year ended
October 1, 1994 filed with the SEC, including the financial statements but
excluding exhibits, will be provided without charge to each person whose proxy
is being solicited upon written request of such person. Requests for copies of
such report should be directed to Marietta Corporation, 37 Huntington Street,
Cortland, New York 13045, Attention: Director of Investor Relations.
23
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS,
AND CERTAIN EMPLOYEES AND OTHER REPRESENTATIVES OF MARIETTA
The following table sets forth the name and the present principal occupation
or employment (except with respect to the directors and Messrs. Florescue and
Miersch, whose principal occupation is set forth in the Proxy Statement), and
the name, principal business and address of any corporation or other
organization in which such employment is carried on, of (1) the directors and
executive officers of Marietta and (2) certain other employees and other
representatives of Marietta who may assist in soliciting proxies from Marietta
shareholders. Unless otherwise indicated below or in the Proxy Statement, the
principal business address of each such person is 37 Huntington Street,
Cortland, New York 13045, and such person is an employee of Marietta. Directors
are indicated with a single asterisk.
NAME AND PRINCIPAL PRESENT OFFICE OR OTHER PRINCIPAL
BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
------------------ ---------------------------------
Robert C. Buhrmaster*..................
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Ronald C. DeMeo*.......................
Dominic J. La Rosa*....................
J.B. Williams Company, Inc.
65 Harristown Road
Glen Rock, NJ 07452
Frank Magrone*.........................
NCC Industries, Inc.
165 Main Street
Cortland, NY 13045
Leonard J. Sichel*.....................
14 Normandy Parkway
Convent Station, NJ 07961
Stephen D. Tannen*.....................
Thomas D. Walsh*.......................
Huver and Associates, Inc.
6110 Executive Boulevard, Suite 100
Rockville, MD 20852
Barry W. Florescue.....................
701 Southeast 6th Avenue
Suite 204
Delray Beach, Florida 33483
Charles W. Miersch.....................
375 Spinnaker Lane
Webster, NY 14580
David P. Hempson....................... Executive Vice President of Operations
Philip A. Shager....................... Treasurer and Chief Accounting Officer
Thomas M. Fairhurst.................... Vice President of Marketing
Wallace B. Bruce....................... Vice President
11170 Green Valley Drive
Olive Branch, MS 38654
Alan D. James.......................... Assistant Treasurer
1
NAME AND PRINCIPAL PRESENT OFFICE OR OTHER PRINCIPAL
BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
------------------ ---------------------------------
Jide Zeitlin................................. Vice President
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Scott Ullem.................................. Investment Banker
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Walter Loh................................... Investment Banker
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
2
SCHEDULE II
SECURITIES HELD BY MARIETTA DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS,
CERTAIN EMPLOYEES AND OTHER REPRESENTATIVES OF MARIETTA
AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND MARIETTA
The shares of Common Stock owned by Marietta's directors and Barry W.
Florescue, Charles Miersch, David P. Hempson and Philip A. Shager are set forth
in the Proxy Statement. The following officers and employees of Marietta are
the beneficial owners of the following shares of Common Stock:
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)
------------------------ -----------------------
Wallace B. Bruce....................................... 0
Thomas M. Fairhurst(2)................................. 568
Alan D. James.......................................... 1,994
--------
(1) All persons listed have sole voting and investment power with respect to
their shares.
(2) Includes options to purchase 5,000 shares granted on April 5, 1995, none of
which are currently exercisable.
The following table sets forth information concerning all purchases and sales
of securities of the Company by directors, nominees, officers and certain staff
members since August 1, 1993:
DATE OF NUMBER OF SHARES
NAME TRANSACTION NATURE OF TRANSACTION OF COMMON STOCK
---- ----------- --------------------- ----------------
DIRECTORS:
Robert C. Buhrmaster...... 12/01/93 (1) (1)
Ronald C. DeMeo........... 12/01/93 (1) (1)
04/18/95 (2) 1,495
Dominic J. LaRosa......... 12/01/93 (1) (1)
Frank Magrone............. 12/01/93 (3) (3)
Leonard J. Sichel(4)......
Stephen D. Tannen......... 12/01/93 (1) (1)
12/06/94 (5) (5)
Thomas D. Walsh........... 12/01/93 (1) (1)
NOMINEES:
Barry W. Florescue........ 02/11/94 (7) 2,000
02/16/94 (7) 4,700
02/18/94 (7) 1,000
02/22/94 (7) 8,300
02/22/94 (7) 830
02/23/94 (7) 4,000
02/24/94 (7) 5,000
02/24/94 (7) 5,000
02/28/94 (7) 2,500
03/02/94 (7) 4,000
03/08/94 (7) 5,000
03/09/94 (7) 2,000
03/09/94 (7) 2,000
03/09/94 (7) 2,000
03/10/94 (7) 800
03/10/94 (7) 1,000
03/10/94 (7) 1,700
03/15/94 (7) 800
03/16/94 (7) 2,000
03/16/94 (7) 2,000
1
DATE OF NUMBER OF SHARES
NAME TRANSACTION NATURE OF TRANSACTION OF COMMON STOCK
---- ----------- --------------------- ----------------
03/17/94 (7) 1,735
03/21/94 (7) 1,500
03/23/94 (7) 3,000
03/28/94 (7) 700
03/30/94 (7) 2,500
03/30/94 (7) 2,000
04/05/94 (7) 3,000
04/13/94 (7) 2,000
04/13/94 (7) 1,000
04/15/94 (7) 1,000
04/18/94 (7) 600
04/19/94 (7) 1,000
04/19/94 (7) 2,000
04/21/94 (7) 1,500
04/22/94 (7) 2,000
04/28/94 (7) 2,000
05/03/94 (7) 1,000
05/04/94 (7) 2,000
05/04/94 (7) 300
05/05/94 (7) 1,000
05/05/94 (7) 2,000
05/05/94 (7) 2,000
05/06/94 (7) 2,000
05/06/94 (7) 200
05/17/94 (7) 2,000
05/24/94 (7) 700
05/24/94 (7) 1,000
06/01/94 (7) 3,000
06/02/94 (7) 2,000
06/03/94 (7) 2,500
06/08/94 (7) 3,000
06/08/94 (7) 1,000
06/14/94 (7) 800
06/17/94 (7) 1,000
06/17/94 (7) 2,000
06/20/94 (7) 25,000
06/21/94 (7) 2,000
06/24/94 (7) 2,000
07/13/94 (7) 1,000
07/18/94 (7) 5,000
07/20/94 (7) 5,000
07/28/94 (7) 1,000
07/28/94 (7) 3,000
08/01/94 (7) 1,000
08/02/94 (7) 1,000
08/02/94 (7) 1,500
08/03/94 (7) 1,000
08/05/94 (7) 1,000
08/30/94 (7) 2,500
08/31/94 (7) 1,000
09/08/94 (7) 2,500
09/19/94 (7) 3,000
09/22/94 (7) 1,000
09/26/94 (7) 3,000
09/26/94 (7) 5,000
2
DATE OF NUMBER OF SHARES
NAME TRANSACTION NATURE OF TRANSACTION OF COMMON STOCK
---- ----------- --------------------- ----------------
09/26/94 (7) 7,000
09/28/94 (7) 5,000
10/20/94 (7) 2,500
11/02/94 (7) 50,000
11/08/94 (7) 10,000
11/08/94 (7) 10,000
12/06/94 (7) 200
12/08/94 (7) 2,000
12/08/94 (7) 6,000
12/12/94 (7) 1,000
12/13/94 (7) 1,000
12/14/94 (7) 2,300
12/14/94 (7) 500
12/15/94 (7) 1,000
12/15/94 (7) 1,000
12/20/94 (7) 1,000
12/22/94 (7) 1,000
12/29/94 (7) 3,000
01/03/95 (7) 2,000
01/04/95 (7) 2,000
01/10/95 (7) 2,500
01/12/95 (7) 3,000
01/12/95 (7) 3,000
01/20/95 (7) 10,000
02/03/95 (7) 2,000
02/10/95 (7) 2,000
02/13/95 (7) 2,000
05/12/95 (7) 200
Charles W. Miersch...... 12/7/94 Purchase 1,000
OFFICERS:
Wallace B. Bruce(4).....
Thomas M. Fairhurst..... 12/08/94 Employee Stock Bonus 568
04/05/95 (6) (6)
David P. Hempson........ 12/16/93 Employee Stock Bonus 1,344
12/08/94 Employee Stock Bonus 1,758
Timothy J. McCabe, Jr... 12/16/93 Employee Stock Bonus 756
11/18/94 Sale 216
12/08/94 Employee Stock Bonus 956
04/18/95 (2) 526
06/05/95 Sale 526
Philip A. Shager........ 12/16/93 Employee Stock Bonus 505
12/08/94 Employee Stock Bonus 1,520
CERTAIN CORPORATE STAFF
MEMBERS:
Alan D. James........... 07/22/93 (2) 192
12/16/93 Employee Stock Bonus 612
04/29/94 (2) 164
12/08/94 Employee Stock Bonus 725
04/18/95 (2) 199
3
--------
(1) Grant of options to purchase 4,154 shares of Common Stock under the
Marietta Corporation 1986 Stock Option Plan. The options became exercisable
with respect to 2,077 shares on November 30, 1994, and become exercisable
with respect to the remaining 2,077 shares on November 30, 1995.
(2) Purchase pursuant to Marietta Corporation 1986 Employee Stock Purchase
Plan.
(3) Grant of options to purchase 8,308 shares of Common Stock under the
Marietta Corporation 1986 Stock Option Plan. The options became exercisable
with respect to 4,154 shares on November 30, 1994, and become exercisable
with respect to the remaining 4,154 shares on November 30, 1995.
(4) No securities owned.
(5) Grant of options to purchase 90,000 shares of Common Stock. The options
were to become exercisable in increments of 30,000 on November 8, 1995,
November 8, 1996, and November 8, 1997, respectively. Such options were
terminated and Mr. Tannen received in lieu thereof 90,000 cash-only stock
appreciation rights, exercisable in increments of 30,000 on November 28,
1995, November 28, 1996, and November 28, 1997, respectively.
(6) Grant of options to purchase 5,000 shares of Common Stock under the
Marietta Corporation 1986 Stock Option Plan. The options become exercisable
in increments of 1,667 shares on April 4, 1996 and April 4, 1997,
respectively, and 1,666 shares on April 4, 1998.
(7) Purchase by Mr. Florescue or an entity controlled by Mr. Florescue.
Stephen D. Tannen and Frank Magrone have agreed to serve as the proxies on
the White proxy card.
Except as disclosed in this Schedule or in the Proxy Statement, none of
Marietta, any of its directors, nominees or executive officers, or the
employees or other representatives of Marietta named in Schedule I 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. Except as
disclosed in this Schedule or in the Proxy Statement, to the knowledge of
Marietta, its directors, nominees and executive officers or the employees and
other representatives of Marietta named in Schedule I, none of their associates
beneficially owns, directly or indirectly, any securities of Marietta.
Other than as disclosed in this Schedule and in the Proxy Statement, to the
knowledge of Marietta, none of Marietta, any of its directors, nominees or
executive officers, or the employees or other representatives of Marietta named
in Schedule I has any substantial interest direct or indirect, by security
holdings or otherwise, in any matter to be acted upon at the Meeting.
Other than as disclosed in this Schedule and in the Proxy Statement, to the
knowledge of Marietta, none of Marietta, any of its directors, nominees or
executive officers, or the employees or other representatives of Marietta named
in Schedule I is, or has been within the past year, a party to any contract,
arrangement or understanding with any person with respect to any class of
securities of Marietta, including, but not limited to, joint ventures, loan or
option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies.
Other than as set forth in this Schedule or in the Proxy Statement, to the
knowledge of Marietta, none of Marietta, any of its directors, nominees or
executive officers, or the employees or other representatives of Marietta named
in Schedule I, or any of their associates, has had or will have a direct or
indirect material interest in any transaction or series of similar transactions
since the beginning of Marietta's last fiscal year or any currently proposed
transactions, or series of similar transactions, to which Marietta or any of
its subsidiaries was or is to be a party in which the amount involved exceeds
$60,000.
Other than as set forth in this Schedule and in the Proxy Statement, to the
knowledge of Marietta, none of Marietta, any of its directors, nominees or
executive officers, or the employees or other representatives of Marietta named
in Schedule I, or any of their associates, 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 will or may be a party.
4
IMPORTANT
Your vote is important. Regardless of the number of shares of Marietta
Common Stock you own, please vote as recommended by your Board of
Directors by taking these two simple steps:
1. PLEASE SIGN, MARK, DATE AND PROMPTLY MAIL THE ENCLOSED WHITE PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
2. DO NOT RETURN ANY PROXY CARDS SENT TO YOU BY DICKSTEIN.
IF YOU VOTED DICKSTEIN'S PROXY CARD BEFORE RECEIVING YOUR MARIETTA WHITE
PROXY CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE SIMPLY BY SIGNING,
MARKING, DATING AND MAILING THE ENCLOSED WHITE PROXY CARD. THIS WILL
CANCEL YOUR EARLIER VOTE SINCE ONLY YOUR LATEST DATE PROXY CARD WILL COUNT
AT THE ANNUAL MEETING.
If you own your shares in the name of a brokerage firm, only your broker
can vote your shares on your behalf and only after receiving your specific
instructions. Please call your broker and instruct him/her to execute a
WHITE card on your behalf. You should also promptly sign, mark, date and
mail your WHITE card when you receive it from your broker. Please do so
for each separate account you maintain. You should return your WHITE proxy
card at once to ensure that your vote is counted. This will not prevent
you from voting in person at the meeting should you attend.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CALL D.F. KING & CO., INC., WHICH IS ASSISTING US, TOLL-FREE AT 1-
800-359-5559.
PROXY
MARIETTA CORPORATION
37 Huntington Street, Cortland, New York 13045
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints STEPHEN D. TANNEN and FRANK MAGRONE as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of MARIETTA CORPORATION held of record by the undersigned on July 28,
1995 at the Annual Meeting of Shareholders to be held on August 31, 1995 or any
postponement(s) or adjournment(s) thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 1.
1. Election of Directors [_] FOR all nominees listed [_] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed below
(Instruction--To withhold authority to vote for any individual nominee mark FOR
above and write the name(s) of the nominee(s) with respect to whom you wish to
withhold authority to vote here.)
_______________________________________________________________________________
RONALD C. DEMEO, FRANK MAGRONE, THOMAS D. WALSH, DOMINIC J. LA ROSA,
LEONARD J. SICHEL, STEPHEN D. TANNEN, ROBERT C. BUHRMASTER,
BARRY W. FLORESCUE, CHARLES MIERSCH
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment(s)
thereof.
(Continued and To Be Signed on Other Side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
Please sign exactly as name appears
herein. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by Presi-
dent or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
----------------------------------------
Signature
----------------------------------------
Signature (if held jointly)
Dated ____________________________, 1995
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE